The creditor has several legal options to recover a debt in Italy. Aside from the ordinary legal proceeding, the creditor can file for a payment order (in Italian: procedimento per ingiunzione) which is a quicker and simpler procedure that can be used to recover a sum of money in Italy.
This Quickguide will provide an overview on the payment order procedure and will cover
What is a payment order procedure and why use it to recover a debt in Italy?
The payment order is a special, fast-track procedure sharing the same function as the ordinary legal proceeding in that it allows the claimant to obtain a court decision (in this case, an injunction) ordering the debtor to perform an obligation.
However, the payment order procedure follows a different structure that can be divided into two phases:
The first phase is conducted outside the presence of the debtor who is given notice of the payment order only after it has been issued by the court (also known as ex parte proceeding). Once issued, the creditor is responsible for serving the payment order on the debtor.
The second phase is considered only possible. It is initiated by the debtor to challenge the payment order and is done by serving a writ of summons on the creditor. If the debtor challenges the payment order, the matter will follow the rules of the ordinary legal proceeding.
If not challenged, the payment order becomes unappealable and can be used by the creditor to initiate the enforcement proceedings. The fact that the creditor can quickly obtain a title of execution (needed to start enforcement proceedings in Italy) is one of the reasons that make this procedure so convenient when it comes to recover a debt in Italy.
Additionally, the legal costs for this procedure are just a fraction of those needed for the ordinary proceeding.
Also, the same procedure can be followed for delivery of a specific quantity of fungible goods or a specific movable asset (e.g., a document).
When can a payment order be issued to recover a debt in Italy?
The payment order procedure is not suitable for all monetary claims. The law (Italian Civil Procedure Code) indicates under what circumstances the payment order procedure can be used to recover a debt in Italy. To this regard, the court will issue an injunction to pay if the debt is:
Specified in its amount
The debt must be already precisely defined, or easily quantifiable by the judge after a simple calculation, before filing for a payment order procedure.
This means that a creditor claiming for damages in tort will not be able to file for a payment order procedure because the loss must still be measured in economic terms. Conversely, the creditor can request a payment order to claim damages for breach of contract if the damages were previously determined in their amount with a liquidated damages clause. However, if the creditor claims any additional loss, he/she must file for an ordinary legal proceeding before the civil court to recover the debt.
Based on written evidence
This means that the creditor must provide written evidence of the claim at the time the request for a payment order is made. The law specifies what type of documents qualify as written evidence and these include promissory notes, commercial invoices, or authenticated extracts of the company’s accounting books.
The Italian Civil Procedure Code states that the judge can request the creditor to provide additional evidence if what has been presented is not sufficient to support the claim. If the creditor does not comply, the claim will be dismissed. However, the creditor is allowed to file for an ordinary legal proceeding even if the claim is dismissed.
What happens if the payment order is challenged by the debtor?
The payment order can be challenged by the debtor within 40 days after it has been served.
The debtor can still challenge the payment order even after the 40 days period has expired if he/she proves that didn’t have knowledge of the injunction in a timely manner due to
an irregularity in the notification, or
due to a fortuitus event, or
To challenge the payment order the debtor must serve on the creditor a writ of summons and start an ordinary legal proceeding.
If the claim is related to a matter which is subject to a compulsory alternative dispute resolution (ADR) (i.e., ADR is a pre-condition to commencing judicial proceedings) the creditor will be required to commence such proceeding.
If the ADR proceeding has a negative outcome, the matter will be decided by the court that will evaluate the claim and come to a final decision which either confirms or rejects (fully or just partially) the payment order.