RICERCA ITALIANA     

Technological progress and changes in the law. The accomodation of techniques and models for legal protection of basic rights in the main contemporary legal systems.

Università degli Studi di Roma "La Sapienza"

Abstract

The development of the new technologies and the growing confidence of private individuals in the transactions carried out by technological means, produced its effects both in the area of financial instruments' dealing and services of investment (in which the phenomenon of entering into contracts through the internet is getting widespread) and in the area of the protection of the individual's right to privacy. Beyond requesting urgently a de iure condendo change in the legal course, in order to protect the savers, we would like to deepen the de iure condito choices made by the main contemporary legal systems up to now.
If, on one side, the advent of new methodologies of distant-sale of financial services creates new opportunity for issuing and intermediary investors, on the other side it can favour the rising of new kind of risks. The necessity of a regulation that cares about the necessity of not refraining new development opportunities, contextually guaranteeing the respect of minimal rules for the protection of the investor is, therefore, above all necessary in those international contexts, such as the European Union (EU), in which the principle of harmonization of different legislations is the general rule.
In the European Council of Lisbon, which took place on 23 and 24 of March 2000, has been set the deadline for the achievement of an integrated European market of financial services in 2005, in order to facilitate the access to investment capital and to make European economy competitive for real. In 2001 the European Commission had expressed some lines of action necessary to the development of trans-national performance of financial services, such as the one encouraging the consumers to put their trust in the systems of trans-national causes resolution.
Therefore, it appears clear that the security in electronic communications becomes a main point. <<<

Principal Investigator

Diego CORAPI Universita' degli Studi di ROMA

Research Objectives

The main target is to verify the accomodation of techniques and models for legal protection of basic rights in the main contemporary legal systems in the light of the actual technological progress and changes in the law.
The ultimate objective is to identify what legal protection techniques are most suited to ensure protection of the right to privacy in electronic communications, such protection to be informed by the principle of its actual effectiveness.
We would like to verify the possibility for the definition of a sort of code for the consumer-investor protection in long distance contracts, that would systematically regulate the subject (including the special protection for the case where the object of the contract is a financial service). We would also like to understand if this opportunity will be exploited, or if we will witness the umpteenth phenomenon of normative stratification, such to make the whole regulatory structure, as a matter of fact, nearly unsuitable in practice. <<<

First Results

It will be divided into three distinct phases of progressive development, of four months each.
The first phase will assess the European perspective in this field, taking into account the obligation imposed on EU Member States to implement in their national legal orders Directive 2002/65/EC concerning "the distance marketing of consumer financial services" (implementation of the Directive was envisaged by 09.10.2004 by the Community legislator). Our analysis of the European model will be conducted by examining the Italian, French, English, German and Spanish legal systems. The second phase of the research will be devoted to a comparison between the European and the United States' models.
The third and final phase of the research will be dedicated to drawing conclusions from the investigation, with special reference to the need for international coordination in the protection of savings and in protection of the rights of individual investors.
The Padua research programme will be structured in four phases of progressive development, each one of three months. The first phase will investigate the legal instruments that are currently suited to ensuring protection against spam in American law. In this phase the situation pre- and post-Can Spam Act 2003 will be taken into account, with regard also to the relationship between federal law and the law of the single American States. Our aim in this phase is to assess the operational effect of the new federal law, also in the light of improvements that it currently requires. In this connection the contribution offered by the Federal Trade Commission will be fundamental; the Commission has been charged with drawing up an implementing programme for the new legislation by summer 2004, for presentation to Congress.
The second phase of the research will assess the situation in terms of legislation and case law of the main legal systems of the European Union, taking into account the different function of those sources within the systems, and at the same time assessing the situation in the light of the obligation imposed on EU Member States to implement Directive 2002/58/EC concerning "the processing of personal data and the protection of privacy in the electronic communications sector". Our analysis of the European model will be conducted by examining the Italian, French, English, German and Spanish legal systems, comparing the European model with the developments that United States and Australian law have recently brought about in the sphere of the personal data protection in electronic communications (respectively the Can Spam Act of 2003 the Spam Bill of 2003).
The third phase will be devoted specifically to the legal issues arising in the Italian legal system. In this regard, Article 12 of the Legge Comunitaria 2003 (Law No. 306 of 31.10.2003) has delegated the Italian Government with power to implement EC Directive 2002/58, mentioned above. At the same time this requirement must be coordinated with the impact stemming from the entry into force of the Italian "Privacy Code" in January 2004 (Legislative Decree No.196 of 30.6.2003) as well as with the functions reserved by law to the office of Guarantor for personal data protection.
The importance of the issue in Italian law takes on particular significance if we bear in mind that also in our legal order, the economic impact affected by the problem of security in electronic communications is growing and is also correlated with the phenomenon of e-commerce. Another significant fact is that electronic communications are starting to become the usual means of communication even in the sphere of the Public Administration (in this regard, see the directives issued by the Italian Minister for Technological Innovation).
The fourth and final phase of the research programme will be devoted to extracting the overall results of the investigation, with special regard to the requirements for coordination in international protection against spamming and the need for protection to be implemented at different levels: international, national, technological and self-regulatory. <<<

Timescale

12 months

National and international background

The scientific starting point consists of a body of legislation, case-law and academic writing that, in the legal area, dealt with both the effect of the new technologies on the financial markets' functioning and the saving and consumer protection, assuming that the consumers are non-professional people who do invest. Concerning the first issue, the coming of the internet and the continuous progress of the data processing systems facilitated both exchanges at any operative level and immediate capital transfer between individuals belonging to different national legal systems. In addition to this, more investments are made through the internet by entering into "typical" e-contracts.
The state of art both on a national and an international level shows marked differences for what concerns the object of legal protection in this area.
At European level, article 3, paragraph 1-t), ECT, as amended by the Treaties of Maastricht and Amsterdam, explicitly provides "a contribution to the strengthening of consumer protection", with no distinction regarding the content or the object of the goods, products or services. For that purpose the ECT describes the "non professional saver" as the "natural person who acts for scopes not related to the company or professional activity possibly carried out", regarding him/her, in the end, as a financial and products "consumer".
A European legal definition of the consumer-investor may be found in the Directive 97/9/CE, where it is said that the consumer-investor is "any person who has entrusted money or instruments to an investment firm in connection with investments business".
On a domestically Italian level, instead, a regulation of public interests in the market seems to be more present than the one on individual's saving protection. Thus, article 5, D.Lgs. 58/98 (TUF) - containing provisions on financial market and corporate governance - ameliorates the previous system (article 4, D.Lgs. 415/96), pursuing a double aim (contextual but not homogeneous): "the protection of the investors", on condition that it is related to "the stability, the competitiveness and the good course of the financial system". The perspective that characterises the Italian norm is the protection of the public interests subtended from the rules of the market, and the norm is aimed to the definition of both the role and the behaviours of subjects qualified as "economical dealers"; however the norm does not adequately deal with the jurisdictional protection of those subjects acting as "investors". In the text of the TUF, the consumers are not named at all, and the protection of the savers comes to play an indirect and reflected role.
The perspective seems to further change if we look at the common law systems, in particular at the legal system of the United States of America.
Within this frame, is not only found a regulation that aims to the market regulation as a primary purpose, and that, according to the traditional civil law world's partitions, relates to the economical public law. Indeed, from the mere analysis of § 23 of the American Federal Rule it would already seem possible to derive a perspective suitable to supply models of an effective judicial protection of the investors, through the definition of the prerequisites of the protection itself (the "prerequisites to a class action"), to allow one or more members of a class to act or to be agreed as representative parts of a wider range of subjects. The interests of the class seem to be protected by the action of the individuals in a collective dimension, since only through a joint action (both inhibitory and upon the merits) it is possible to let the category of the investors have more weight, considering that the investor class represents not only the single individual but of all the subjects who, having put their trust in the market, preferred to invest their money in investment companies, rather than save it.
The scientific basis providing the starting point for the research programme consists, furthermore, of a body of legislation, case law and academic writing concerning the protection of privacy in electronic communications, with special reference to the spamming phonomenon. The state of the art on this problem in the national and international arena reveals that the phenomenon correlated to sending unwanted e-mail messages has been identified and legally categorised in common law legal systems for some time, especially in the United States legal system. It has only more recently begun to engage European legal systems, which are now becoming increasingly involved. The birth of Internet in the United States and the technological advances correlated to its use make the United States of America the federal legal order requiring examination in depth in the initial phase of the research. In this ambit, and from the angle of litigation connected to the phenomenon, a phase can be noted that preceded the entry into force of the recent federal American law (the so-called Can Spam Act of 2003), during which causes of action were essentially based on trespass to chattels, with claims being made for relief in the form of injunctions and damages, followed by a new, recent phase starting in March 2004. Just as this research project is being prepared, some of the most important providers in the world (America Online (AOL), Microsoft, Yahoo and EarthLink) have commenced proceedings against spammers under the new federal legislation. At the present time, we are only in a position to know what the pleadings are in the respective cases, but by the time the research project is examined by the board, the case will already have led to a determination of the new shape of protection according to the U.S. federal law. <<<