After seven years, the Supreme Court finally ended the first product-related class action promoted in Italy relating to a medical device (Codacons v Voden Medical Instruments SpA, judgment published on January 31 2018).
'Ego-test-Flu', a do-it-yourself test for the A flu virus (known as swine flu), was widely marketed in Italy by Voden Medical during the 2009 swine flu outbreak. The flu test was presented as "practical, simple and safe" with 99.1% sensitivity.
In early 2010 consumer association Codacons, acting on behalf of a claimant, sponsored the class action against Voden Medical, claiming product-related damage and damage due to unfair commercial practices.
On December 27 2010 the Court of Milan declared the class action to be admissible, limiting the relevant claims to unfair commercial practices. The Court of Milan order was the first decision in Italy to declare a class action admissible. However, based on the merits, the court dismissed the claim as groundless.
In 2013 the Milan Court of Appeal overruled the first-instance decision and ordered that Voden Medical reimburse €14.50 (equal to the cost of the flu test kit) as compensation for damages suffered by consumers. The decision was rendered on the grounds that the information and advertising material regarding the product were misleading, particularly because they failed to warn of the risk that the test could produce false-negative results. Voden Medical challenged the decision before the Supreme Court.
The Supreme Court rejected the appeal filed by Voden Medical against the Milan Court of Appeal decision.
The Supreme Court acknowledged that even a single claimant could represent the interests of a class of consumers which could have potentially purchased the product. Class actions are aimed at protecting consumers against unlawful conduct that could affect numerous individuals. In the case at hand, the advertising on Ego-test-Flu's packaging, as well as the instructions provided with the package insert, erroneously evoked in consumers the idea that the product could diagnose swine flu with the probability of success being close to 100%.
Class actions were introduced in Italy by Law 99/2009 and have been subsequently amended in recent years. The procedure is currently regulated by Article 140bis of the Consumer Code, according to which consumers may bring, directly or through a representative body, class actions to protect their collective or individual interests.
Before a class action can be decided on merits, the court should assess whether the class is admissible. It can declare the class action non-admissible if:
- the claim is manifestly groundless;
- there is a conflict of interest;
- the rights infringed are not homogenous; and
- the lead plaintiff is unable to adequately represent the interests of the class.
Class actions may be brought, among other things, to seek redress for the violation of rights arising from product liability, provided that such rights are homogenous for the entire class.
Unlike in the United States, Italy has adopted an opt-in model for class actions. Accordingly, if a class action is deemed to be admissible, the court will order the defendant to publish a notice at its own expense, so as to allow other potential members of the class to opt-in within a certain deadline (which cannot exceed 120 days from the publication of the class action notice). In this case, no opt-in had occurred and the Supreme Court ruled that the class need not be numerous.
This particular decision is noteworthy, despite the small sum awarded, because very few class actions have been declared admissible to date and even fewer cases have been upheld on the merits due to strict admissibility requirements.
The case law, although limited, appears to exclude commonality whenever the facts underlying the claim require the assessment of different individual circumstances – a situation which occurs often where health damages are sought. For these reasons, Italian consumer associations (which have been considered the driving force behind class actions) appear to have progressively lost interest in bringing class actions in Italy and are looking to the US-style class action regime which seems to be less restrictive.
The Supreme Court's recent judgment might reverse this trend. Considering the reform of class action law currently under the scrutiny of Parliament – which should enhance the effectiveness of class actions – companies which might be potential targets should start preparing to react.
For further information on this topic please contact Francesca Rolla, Christian Di Mauro or Mauro Teresi at Hogan Lovells Studio Legale by telephone (+39 02 7202 521) or email ([email protected], [email protected] or [email protected]). The Hogan Lovells Studio Legale website can be accessed at www.hoganlovells.com.
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