Civil Court of Bari issues order on retroactive application of Article 2407 of the Italian Civil Code

On 12 April 2025, Law No. 35/2025, amending Article 2407 of the Italian Civil Code, came into force. It introduces:

• limits on the liability of internal auditors based on remuneration; and
• a five-year limitation period for bringing liability actions running from the date of filing the auditors' report attached to the financial statements for the financial year in which the damage occurred.

As we discussed in previous DeRisk articles, several doubts have been raised as to the retroactive application of this provision.

The case at issue concerns a preventive seizure requested by the bankruptcy receiver of a company against former directors and statutory auditors. According to the bankruptcy receiver, the company had been in a state of decline since 2017: the directors had unlawfully continued the company's activities for years, violating the obligation to provide a true and fair view in the financial statements since 2017, with particular reference to the value of shareholdings, and receivables and payables. The statutory auditors, despite the irregularities ascertained since 2015, hadn’t correctly fulfilled their supervisory obligations. They’d failed to report the matter pursuant to Article 2409 of the Italian Civil Code and hadn’t requested the liquidation of the company pursuant to Article 2485 of the Italian Civil Code.

In upholding the application for preventive seizure filed by the receiver, the Court of Bari noted the following with regard to amended Article 2407 of the Italian Civil Code:

• With regard to the limits on the liability of auditors, “... it is considered that the new text of paragraph 2 of Article 2407 of the Italian Civil Code also applies to events prior to the entry into force of the law itself, as it is a procedural provision in the broad sense because it merely indicates to the judge a criterion for quantifying the damage (maximum limit), without such an interpretation affecting the very existence of the right to compensation for damage, limiting only the amount with respect to persons who are in any case jointly and severally liable with the directors.”
• In reaching this conclusion, the Court of Bari referred to orders nos. 2552/2024 and 8069/2024, in which the Court of Cassation held that the criterion for quantifying damages based on the “difference in net assets” referred to in Article 2486(3) of the Italian Civil Code also applies to proceedings pending at the time of entry into force of that provision of 2019.
• In calculating the ceiling on the liability of auditors, the reference in Law 35/2025 to “remuneration received” means that the net annual remuneration received by the statutory auditor must be taken into consideration.
• With regard to the limitation period, retroactive application has been excluded, since “... the provision on the limitation period governs a substantive legal institution and the legislator has not provided for the applicability of the new legislation to pending proceedings...” Article 11 of Preleggi contained in the Italian Civil Code provides that “the law does not provide for the future.”

Following the entry into force of Article 2407 of the Italian Civil Code, several scholars have questioned whether the provision can also apply to external auditors. Amendments are being discussed on this and on the retroactive application of the new provision.

In the meantime, we will be monitoring the upcoming court rulings.