ITALY: The current trend of the Italian Courts on calculation of the agents' goodwill indemnity.

Fabio Bortolotti | ITALY | 2008-10-15

Fabio Bortolotti

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Following the Honyvem judgment, the Italian Supreme Court has now established the so-called principle of a ‘guaranteed minimum’, according to which, at the end of the relationship, the agent is entitled, at least, to the indemnity provided by Collective Agreements, and to the higher amount provided by Article 1751 of the civil code (which implemented the EC Directive), whenever he is able to prove the existence of the conditions set forth herein.

 

Lower Courts in many cases continue to apply the rules contained in Collective Agreements but, more and more often, they are required to make such a calculation within the framework of Article 1751 of the civil code.

 

Even if Courts have not established clear criteria of calculation yet, the current tendency seems to consider the maximum amount provided by Article 1751 civil code (i.e. the yearly commission, calculated on the average of the commissions earned by the agent during the last five years of the contractual relationship) and to reduce it, taking into account the conditions provided by Article 1751, as well as the specific circumstances of the case. Particularly, the Courts evaluate:

    1. The increase of the number of customers / volume of business with existing customers;
    2. If and to what extent the principal continues to derive substantial benefits from the business with the new customers;
    3. The commissions lost by the agent;
    4. Other circumstances (e.g. advertising / well-known trademark of the principal; non-competition obligation; agent’s behaviour; investments of the agent; duration of the contract etc.).

 

 

Fabio Bortolotti, IDI country expert for Italy

 

 

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