The loss of a right within the system of private punitive remedies

Abstract

Moving from the intent to govern general clauses more rigorously than in the past, the following research assumes that the loss of a right may result, stricto iure, from the application of a civil penalty, provided for by the legislator or conventionally determined. Thus, it does not seem that the use of the objective good faith, as in the German theory of Verwirkung, may lead the interpreter to rule the loss of the right irreparably, without adequate review of the voluntas legis or where no explicit dismissive intention of disposable situation can be found. On the contrary, the loss of a right seems to be, more properly, a heteronomous penalty only for the cases characterized by conducts of misuse of powers. I. The Loss of a Right as a Case of Renonciation Tacite In the Italian system the loss of a legal situation or of a whole legal relationship mostly depends on the parties’ intentions (the most relevant examples being the withdrawal, the termination of contract by mutual consent, the unilateral termination, the renunciation). In other cases, it depends on a specific legal provision. Consider the failure to perform a contract and the remedies against it; the ways, other than performance, to settle an obligation, in which either the parties’ intentions or the objective fact (Art 1256 Civil Code) determine the termination of the relationship. Finally, limitation and prescription periods – which revolve around the passage of time – may also cause the loss of a right. This articulated scenario begs the question: is there a grey area in which the termination of legal subjective situations may occur for reasons other than explicit renunciation or expiration of the limitation period? This question generates anxiety and concern in modern lawyers, particularly as the predictability and certainty of the legal system would be potentially impaired should the loss of a right be permitted without limitations. Pushing the limits of termination would result in permitting the loss of a right in unforeseeable circumstances, even in cases in which the parties did not mean to lose the right or a given limitation period has not expired.1 \uf02a Associate Professor of Private Law, Roma Tre University. 1 See F. Festi, Il divieto di ‘venire contro il fatto proprio’ (Milano: Giuffrè, 2007), 140-142, especially 243, which argues that connecting the loss of the right to the failure to exercise it in 2019] The Loss of a Right 152 These understandable concerns are symptomatic of the conclusions reached by Italian courts on the issue. An emblematic Court of Cassation decision reads that ‘a delay in the exercise of the right, even where it is attributable to the holder and it is such as to create the debtor’s reasonable expectation that the right will no longer be exercised, cannot determine the rejection of the application for the exercise of the right itself, unless there has been an unequivocal renunciation and, obviously, unless the limitation period has expired’.2 Thus, a delay in the exercise of the legal situation is relevant only in the event of renunciation or expiration of a given limitation period. The issue outlined before immediately requires an analysis of the orthodox view which notoriously focuses on the varieties of objective good faith and, in particular, on the loss of a right due to the unfair delay in its exercise.3 This is the so-called Verwirkung theory, which German courts widely use in their decisions. Where a party delays the exercise of a right (even before the limitation period has expired) and thus triggers a reasonable expectation in the other party that the right will no longer be exercised, the former may lose its right due to the judicial application of the good faith clause.4 This theory has gained currency in an undetermined period of time would entail conferring on courts the power to establish deadlines arbitrarily and without review. 2 In such way, Corte di Cassazione 15 March 2004 no 5240, Foro italiano, 1397 (2004), with commentary by G. Colangelo; F. Astone, ‘Ritardo nell’esercizio del credito, Verwirkung e buona fede’ Rivista di diritto civile, 603 (2004). Opinion later worked on by Id, Venire contra factum proprium. Divieto di contraddizione e dovere di coerenza nei rapporti tra privati (Napoli: Jovene editore, 2006); L. Racheli, ‘Ritardo sleale nell’esercizio del diritto (Verwirkung): tra buona fede, abuso del diritto e prescrizione’ Giustizia civile, 2179 (2005). 3 Monographs on the issue, although with different approaches, were authored by F. Ranieri, Rinuncia tacita e Verwirkung. Tutela dell’affidamento e decadenza da un diritto (Padova: CEDAM, 1971). Later in Id, ‘Verwirkung et renonciation tacite. Quelques remarques de droit comparé’, in D. Bastian, Mélanges en l’honnerur de Daniel Bastian. Droit de sociétés (Parigi: Librairies techniques, 1974), I, 427; Id, ‘Eccezione di dolo generale’ Digesto delle discipline privatistiche sezione civile (Torino: UTET, 1991), VII, 311, and, more recently, in Id, ‘Bonne foi et exercice du droit dans la tradition du civil law’ Revue de droit international et de droit comparé, 1055 (1998). As well as, by S. Patti, Profili della tolleranza nel diritto privato (Napoli: Jovene editore, 1978), 5 (later in Id, ‘Abuso del diritto’ Digesto delle discipline privatistiche sezione civile (Torino: UTET, 1987), I, 1; Id, ‘Verwirkung’ Digesto delle discipline privatistiche sezione civile (Torino: UTET, 1999), XIX, 722. 4 German scholarship on the issue is wide. See W. Siebert, Verwirkung und Unzulässigkeit der Rechtsausübung: ein rechtsvergleichender Beitrag zur Lehre von den Schranken der privaten Rechte und zur exceptio doli (§§ 226, 242, 826 BGB), unter besonderer Berücksichtigung des gewerblichen Rechtsschutzes (§ 1 UWG) (Marburg: Elwert, 1934). On which, recently for the Italian translation of the pages 83-106 see L. Di Nella and A. Addante, ‘Lineamenti della dottrina dell’inammissibilità dell’esercizio del diritto nell’ordinamento tedesco sulla base del diritto comparato’ Rassegna di diritto civile, 274 (2006). Verwirkung has also penetrated Swiss scholarship and case-law (see, inter alia, E. Merz, ‘Die Generalklausel von Treu und Glauben als Quelle der 153 The Italian Law Journal [Vol. 05 – No. 01 Spain too, where the retraso desleal theory has been developed,5 as well as in common law jurisdictions through the so-called estoppel (by representation or by acquiescence).6 These developments shed light on the peculiar aptitude of good faith and fair dealing to determine the loss of a right in private relationships. Italian scholars’ approach to the study of Verwirkung – in order to explore its possible transplant in the legal system through the application of objective good faith – is indicative of a tendency to stick to undisputed system categories (namely, renunciation). Thus, they have brought the Verwirkung within the fictio of the so-called tacit renunciation,7 thereby emphasizing the intentions behind the loss of a right.8 Filippo Ranieri’s analysis – which draws on the first German decisions concerning the loss of a right due to unfair delay in its exercise (in the context of the law of obligations, and then labor law, trademark and copyright law) –9 highlights that continental legal systems contain functional equivalents to the German doctrine of Verwirkung.10 His analysis focuses on French and Italian case-law to show that, while continental courts nominally pay deference to the principle of renunciation as an always voluntary act that cannot be presumed, they are sometimes ready to apply the doctrine of tacit renunciation (or acquiescence) to a right because they need to protect a party where the other party’s action or omission has generated an expectation or reliance on the loss of its right. Regardless of the definitions used, this doctrine represents an application of the same ratio decidendi underlying German decisions on Verwirkung.11 Accordingly, tacit renunciation amounts to a mere fictio to protect – through the paradigm of objective good faith – the party’s reliance on the loss of a right Rechtsschöpfung’ Zeit für schweizerisches Recht, 360 (1961). In Italy see, in addition to the authors cited in the footnote above, and inter alia, V. Tedeschi, ‘Decadenza’ Enciclopedia del diritto (Milano: Giuffrè: 1962), XI, 778, and also fn 47, who places Verwirkung based on the prohibition of venire contra factum proprium in an intermediate position between limitation period (based on the combination of non-activity with time) and the so-called acquiescence (whose effect depends on the party’s conduct, on which, amplius, see Id, ‘L’acquiescenza del creditore alla prestazione inesatta’, in E. Allorio et al, Studi in memoria di F. Vassalli (Torino: UTET, 1960), II, 1580. 5 Recently, see M.N. Tur Faúndez, Prohibición de ir contra los actos proprios y el retraso desleal (Cizuz Menor, Navarra: Aranzandi, 2011); in case-law, inter alia, see Tribunal Supremo 12 December 2011 no 872. 6 Outlined in the statement of an English court of 1862: ‘a man shall not be allowed to blow hot and cold to affirm at one time and deny at another making a claim on those to whom he has deluded to their disadvantage and founding that claim on the very matters of the delusion’ (available at https://tinyurl.com/y6pbub6x (last visited 28 May 2019)). 7 This is the idea behind the analysis by F. Ranieri, Rinuncia tacita n 3 above, 78. In Spain some believe that it may amount to a conventional novación extintiva: see Tribunal Supremo 13 September 2016 no 530. 8 F. Ranieri, Rinuncia tacita n 3 above, 126. 9 ibid 14, 31 (the leading cases RG 5 July 1923 and RG 27 January 1925 are here reported at page 17) and, for an analysis of Swiss law, see page 36. 10 F. Ranieri, Rinuncia tacita n 3 above, 72. 11 ibid 106; F. Ranieri, ‘Eccezione di dolo’ n 3 above, 327-329, especially fn 100. 2019] The Loss of a Right 154 which the other party’s conduct generated.12 At the same time, when German courts interpr