Private Law Enforcement in a Formalist Legal Environment: The Italian Sai-Fondiaria Case

36 Pages Posted: 9 Mar 2008

See all articles by Paolo Giudici

Paolo Giudici

Free University of Bozen, Bolzano - School of Economics and Management; European Corporate Governance Institute (ECGI)

Date Written: February 2008


The Sai-Fondiaria case is Italy's most significant action in concert case. In this case public enforcement was unable to prevent the concerting parties from reaching their target. Minority shareholders therefore sued, even though Italian mandatory bid rules (MBRs) do not contain any specific rule concerning minority shareholders' entitlement to damages. At stake is private enforcement of MBRs. Courts and scholars are called to establish whether the law contains an implied right of action in favour of minority shareholders. The problem has also arisen in other European countries, where it is the object of much current debate.

The Milan Tribunal thinks that minority shareholders have a right to damages, whereas the view of the Court of Appeal is diametrically opposed. Needless to say, both positions have considerable support amongst legal writers. Since deterrence arguments are still taboo with regards to private remedies, traditional interpretive canons and concepts are being employed in the debate: on one side to disguise deterrence ideas underpinning the reasoning; on the other, to retort using radical formalism, with its built-in bias against legal change. In this paper I analyze the case, the decisions and the comments. I suggest how deterrence arguments can be appropriately adopted in the reasoning of civil law courts and propose how the case should be decided in favour of minority shareholders, with beneficial effects on private enforcement status. I also analyze the recent amendments to MBRs that implement the Takeover Directive and endanger the future of private enforcement in this area of law.

Keywords: deterrence, private enforcement, public enforcement, mandatory bid rules, takeover regulation, compensation, law & economics, investor protection, securities regulation, directors liability, financial scandals, minority shareholders, Italy, interpretive theories, jurisprudence, legal discourse

JEL Classification: G38, K22, K41, K42

Suggested Citation

Giudici, Paolo, Private Law Enforcement in a Formalist Legal Environment: The Italian Sai-Fondiaria Case (February 2008). ECGI - Law Working Paper No. 094/2008, Available at SSRN: or

Paolo Giudici (Contact Author)

Free University of Bozen, Bolzano - School of Economics and Management ( email )

Via Sernesi/Sernesistra├če 1
39100 Bozen-Bolzano (BZ)
+39 0471 013140 (Phone)
+39 0471 013009 (Fax)

European Corporate Governance Institute (ECGI) ( email )

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