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Punitive damages are a common law typical legal compensation, more expected in the US system, which are granted to the damaged party at the court’s discretion with the aim of punishing the damaging party for having committed with malice or gross negligence a particularly serious and reprehensible act, generally a tort.

Punitive damages are paid and quantified exceeding the loss actually suffered and can be liquidated to an extent completely independent from compensatory damages or in an amount equal to a multiple of compensatory damages.

 Therefore, in the common law systems, punitive damages can be added to the compensatory damages, which are also provided for by the civil law systems and, like the name suggests, are aimed at compensating the injured party for loss or injury.

This different function of the two types of compensation and precisely the markedly sanctioning function of punitive damages has long founded the opposition of the Italian courts, aimed to protect a judicial system within which civil liability has been conceived as having a compensatory and not a punitive function.

The decisions on recognition of foreign judgments imposing punitive damages have constituted and still constitute today the main way through which the punitive damages could be recognized into the Italian judicial system and generally into the civil law systems.

The Italian Court of Cassation has repeatedly denied recognition of US courts judgments ordering the payment of punitive damages submitted for recognition and enforcement in Italy, deeming them contrary to the Italian public order. This on the argument of the unrelatedness of the idea of punishment and sanction to the compensation for damages since the Italian civil liability has been conceived as having the sole function of restoring the injured party.

However, with time a process is taking place that sees the traditional conception of civil liability losing ground. An initial revirement came with a decision in 2015 in which the Court of Cassation considered that the function of civil liability is not exhausted in repairing the injury suffered by the injured party.

By the decision n. 16601/2017 rendered in Joint Session the Italian Court of Cassation, to which the decision was submitted as it was considered to be of “the utmost importance”, made a bigger revirement of its position and within certain limits admitted the recognition of foreign decisions awarding punitive damages.

The Joint Session of the Court of Cassation ruled that under Italian law civil liability is not exclusively aimed at indemnifying the damaged person as the system also includes deterrent and sanctioning functions. Therefore, punitive damages are not per se contrary to Italian public policy.

According to such decision the recognition of a foreign decision awarding punitive damages is possible under the condition that it is rendered on the basis of law provisions that guarantee typicality and predictability of the cases of condemn and quantitative limits, also verifying proportionality between indemnifying and punitive damages and between punitive damages and sanctioned behaviour.

The decision also revealed that the notion of “public order” must be read balancing the control on the entry of foreign law provisions or decisions contrary to the domestic legal system and a promotional function of the values protected by international law.

Furthermore, the Italian legal system has introduced rules providing for compensation of an amount higher than the actual damage suffered, with a sanctioning nature and clear analogies with punitive damages. The art. 96 of the Italian Code of civil procedure foresees the faculty for the Judge to condemn the party in trial who has acted with bad faith or gross negligence, for instance having an useless dilatory behaviour, to the payment in favour of the other party of an equitably determined sum.

In conclusion, even if at the present time in the Italian judicial system we are far from being subjected to condemnation to material punitive damages, the direction taken by case law and the existence of standards that serve similar purposes show that Italian players must certainly consider the possibility of such damages being increasingly awarded with time, especially through the recognition of foreign judgments and the same direction can definitely be taken by other civil law jurisdictions.