ITALY: The European Court declares that the calculation of the indemnity introduced by the collective agreements is contrary to the European directive.

Fabio Bortolotti | ITALY | 2006-04-19

Fabio Bortolotti

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Under the collective agreements condemned by the Court, agents were entitled to receive an indemnity amounting to a percentage (about 5%) of all the commissions earned during the life of the contract, without considering the customers brought by the agent and the benefits obtained by the principal (as required by the European directive and by Article 1751 of the civil code which implements that directive).

The Court argued that the goodwill indemnity cannot be replaced by an indemnity determined in accordance with criteria other than those prescribed by article 17 of the European directive, unless it is established that the application of such an agreement guarantees the commercial agent, in every case, an indemnity equal to or greater than that which results from the application of Article 17.

This means that the calculation system provided by the collective agreements can no more be applied and that one must revert to the criteria of Article 1751 of the civil code.

The organizations of the agents and the principals are now studying if they can modify the collective agreements in order to conform to the judgment, but, considering the position taken by the Court, it is unlikely that any calculation criterion agreed upon before the contract is terminated, can meet the requirements of Article 17 (as interpreted by the Court), unless it warrants to all agents the maximum amount (one year of commission), which would obviously make little sense.


Fabio Bortolotti, IDI country expert for Italy.


The text of the judgement of the European Court of Justice can be found in the database of the EC Judgements and Decisions (in the Eu Section of the IDI website).


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