Within our legal system, the greatest obstacle to the development of third-party litigation funding has been identified in the hard-to-predict (and often particularly long) duration of proceedings, which prevents a probable evaluation of the return on investment. However, this phenomenon is beginning to take hold in our system as well, albeit through investments that can currently be described as sporadic and not yet well-rooted, with a few exceptions. In particular, it has been noted that new, purely domestic funds have begun to appear on the Italian market, directing their activities toward arbitration and domestic litigation. Indeed, Italian litigation presents, much like that of other legal systems, significant advantages: case costs are relatively contained, a factor that certainly represents an advantage in terms of return on investment within the context of third-party litigation funding.
Antitrust and litigation funding: a privileged sector
In this context, among the most significant sectors for litigation funding, antitrust law infringements and the related actions for damages can be unanimously identified, for two sets of reasons.
The first lies in recent jurisprudential and regulatory interventions that have reshaped the landscape of antitrust litigation. As is well known, the introduction of the competition law – Law no. 287 of October 10, 1990 – did not have a particularly high impact in terms of caseload volume. On the contrary, the real development of the phenomenon is due to the judgments of the Court of Justice of the European Union of September 20, 2001, case no. C-453/99, and of July 13, 2006, case no. C-295/04, which were followed by Directive 2014/104/EU, implemented via Legislative Decree no. 3/2017, concerning actions for damages for anticompetitive activities.
For the development of litigation and third-party litigation funding, the role now played by the Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato – AGCM), which holds jurisdiction over the matter, appears particularly relevant. It has been provided that the decision issued by the Authority carries binding value for national judges, although it naturally remains subject to appeal before the administrative court. Prior to this regulatory intervention, the AGCM's decision could only be considered an administrative act, freely evaluable by the ordinary judge called upon to rule on the action for damages, who was therefore tasked with establishing the unlawful conduct, consequently lengthening the duration of the proceedings. Evidently, the circumstance that the AGCM's decision – issued within a proceeding less complex and less costly than one carried out in court – can have binding value makes antitrust litigation particularly favorable for the development of the third-party litigation funding phenomenon.
The second element concerns the reform of the Class Action, originally provided for by the Consumer Code under Art. 140-bis and profoundly modified by Law no. 31/2019 which, by inserting Title VIII-bis of Book IV into the Code of Civil Procedure, with Articles 840-bis et seq., extended active legal standing in collective proceedings to non-consumer subjects as well, provided it remains within the scope of business activity, for the protection of homogenous individual rights harmed by acts or behaviors put in place by enterprises or operators of public services or public utility.
Antitrust: the regulations
The regulations must naturally be read together with antitrust discipline and, in particular, with the rules concerning the burden of proof, which is lightened in cases of antitrust cartels since a system of simple presumptions applies regarding the damage and the causal link between the damage and the harmful conduct, though evidence to the contrary is admissible.
Although a significant volume of activity before the AGCM cannot be observed at the moment, the introduction of collective action into our legal system has allowed for an embryonic development of third-party litigation funding precisely within class actions for damages suffered due to cartel cases. In fact, the launch of collective actions on the domestic market for damages caused by the violation of antitrust regulations following AGCM decisions can be observed, directed by funds specialized in litigation funding.
A well-known and particularly recent case is decision no. 27849 of 2019 by the AGCM, which sanctioned numerous companies for having "implemented an agreement restrictive of competition by object contrary to Article 101 TFEU, consisting of a single, complex agreement continued over time aimed at heavily distorting competitive dynamics in the market for the production and marketing of corrugated cardboard sheets." A vast number of companies were involved in the Authority's decision, which also includes some cases of leniency applicants, just as the sanctions issued against the involved subjects were very high.
Therefore, the bond between the role played by the Italian Competition Authority and private enforcement – heavily incentivized by the new procedural tools made available by recent legislative updates – is evident. The result is, in fact, an increase in the deterrent value of the action for damages, which reinforces the measure, finally binding upon the judge of the merits, issued by the administrative Authority. All these elements do nothing but confirm the antitrust sector as one of the most suitable for the development of third-party litigation funding.
