Rethinking Death Compensation - Italy Ends Debate on Thanatological Damage
Many Italian insurers have feared a potential change to rules related to the legal framework on thanatological damage (compensation in the event of death) due to a possible redefinition of health and life by the Italian Supreme Civil Court (Corte di Cassazione). The change would have led to courts awarding damages not just to the relatives of the deceased, but also to the deceased (for his loss of life). Historically, the supreme civil court has defined health and life as two different “assets”, thus making only the loss of health compensable. In a positive ruling for insurers, the court reaffirmed that thanatological damage cannot be compensated in the Italian legal system because it needs to be connected to a damaged party that can claim it.
In Italy the right to compensation can only be claimed by its holder and it cannot be considered fully-formed in the case of immediate death. Despite differing opinions by a smaller part of the Italian legal community, this principle hasn’t been overturned for nine decades. But since January 2014 the court tried to overturn this ruling on the basis that thanatological damage deserved an “exception” in the legal system.
The court had been asked to decide on the compensation paid to the parents of someone who perished in a road accident. The court appeared to be trying to extend the system of compensation for fatal injuries in ruling that the deceased are entitled to receive compensation. This meant the deceased person should have the right to compensation for the loss of his or her life, and his or her heirs would then inherit this right. However, the court declared that it couldn’t evaluate the last item of compensation and transferred to the court of appeal the task concerning the amount of damages to be awarded. This ruling was strongly criticized in Italy by the main observers and legal experts. The contents of the 120-page long ruling weren’t persuasive, considering that its lengthy rationale appeared to lack a concrete basis. Many experts felt it had been written only with the aim of further extending Italy’s already generous compensation for fatal injuries. I talked about this topic once before in a blog about Italy’s compensation levels for fatal injuries exceeding those of other European countries.
Prior to July 2015, some lower courts (in Milan and Rome in 2014) also supported the conclusion that a deceased person couldn’t be entitled to receive compensation for his or her own death. Other courts, however, have awarded fairly significant damages: EUR 300,000 by a section of the Milan Court of Appeal, EUR 450,000 by the Tribunal of Vallo della Lucania and EUR 600,000 by the Tribunal of Cagliari.
In order to resolve this conflict, the president of the Supreme Civil Court decided in March 2014 to submit the case to the “united sections” of the Supreme Court (a panel of nine judges). The case had been discussed during the hearing held in June 2014 but the final decision was just issued in July 2015. The court released a short verdict that expressly declared, following the principle issued by the original 1925 verdict and confirmed several other times since, that thanatological damage cannot be compensated in the Italian legal system because it needs to be connected to a damaged party that can claim it. In the case of immediate death caused by an accident, the deceased wouldn’t have had the time to acquire the right - and therefore he cannot pass it on to his estate. This consideration also needs to be connected to the main function of the third-party liability rules of Italy’s civil law, which doesn’t serve a punitive function (practiced by criminal law) but is there to compensate loss.
In this ruling, the court also expressly mentions that the compensation function of the Italian civil law means that punitive damages have never been allowed by the country’s courts so far and won’t be in the future, due to the significant disproportion between suffered and compensated damages. Verdicts for punitive damages like the ones in the U.S. haven’t been enforced in Italy.
This ruling received a lot of praise most notably from the insurance industry in Italy, considering that the opposite ruling could have resulted in insurers re-evaluating open cases and significant increases in claims reserving and premiums.