Italian Law: 'Developments in Joint and Several Liability..."

Joint and Several Liability of Parties to Private Independent Contractor Agreements

The Italian Government has enacted Decree Law No. 25 of 17 March 2017, which significantly amends the principle of the liability of the parties to private independent contractor agreements.

In order to adopt a stricter position regarding the liability of the parties arising out of such contracts, Italian law has restored joint and several liability on the part of independent contractors – or on their subcontractors – and on their customers, provided that the purchaser is not a private individual, but a legal entity.

For up to two years after termination of the contract, both the purchaser and the independent contractor – together with any sub contractor – shall be jointly and severally liable to the full extent of the injuries or other adverse outcomes caused in performing their agreement. Joint and several liability also affects their relationship with workers employed for performing the obligations set out in their agreement, regardless of whether such relationship was of a contractual nature. Thus, any employee will be entitled to seek compensation for unpaid salary, social security contribution, and insurance premiums from the independent contractor (and its subcontractor) – that is from his or her employer – as well as from the purchaser. Nonetheless, only the breaching party will be liable for its obligations and may be penalised by the imposition of civil penalties.

This recent regulation has continued the process started by the 2016 reform of the law on public procurement, responding to increased demand for workers’ protection in carrying out works required under such contracts.

Italian law is thus geared towards workers’ protection, also by eliminating the right previously granted to purchasers, who could be required to pay only after both the independent contractor and its sub contractors have been asked. The purchaser can only bring action against them in order to recover any sum paid as a compensation.

Furthermore, until the recent amendment, the Italian law allowed Collective Agreements to exclude or limit such liability of the purchaser arising from private independent contractor agreements.
Prior to its conversion into a law, we believe that such amendment introduced a strict penalisation for companies that purchase from independent contractors. Purchasers may accordingly be subject to any claim arising from independent contractor and sub contractors’ breach of contract, especially in the event that the latter are found in a state of insolvency.

For further information, contact:

Avv. Lucia Scomparin

Bussoletti, Nuzzo & Associati

t: +39 06 47825044

e: lucia.scomparin@bnassociati.it