Incorrect Adverse Credit Reporting: A Bank Can Be Liable for Negligence
Archive case commentary. The translation retains the original discussion and dates.
Source: Altalex
http://www.altalex.com/documents/news/2012/04/23/errata-segnalazione-come-cattivo-pagatore-la-banca-risponde-a-titolo-di-colpa
A borrower takes out a mortgage and pays every instalment on time. Nevertheless, the bank reports the borrower as a bad payer to EURISC, the private database banks use to exchange customers’ financial histories and identify insolvency risks. Despite punctual payment, it specifically reports three missed instalments, damaging the customer’s commercial reputation, potentially preventing further borrowing and jeopardising existing credit facilities.
On discovering this, the borrower requests immediate correction—which the bank makes—and appropriate compensation for reputational harm. Settlement fails, and proceedings follow before the Licata branch of the Agrigento Court. In Judgment No. 393 of 16 November 2009, the court dismisses the damages claim because the bank’s intentional wrongdoing was not proved.
The court appears to apply criminal-law categories in a civil case. Criminal damage under Article 635 of the Italian Criminal Code requires intent; negligent damage does not attract that criminal sanction.
In civil law, however, negligence is a principal basis of liability and allocation of damage costs. The judge need not demand the frankly formidable proof of deliberate misconduct by a bank reporting inaccurate information. Article 2043 of the Civil Code, concerning negligent non-contractual wrongdoing, is relevant, but so is the mortgage contract. Accurate reporting may be argued to constitute an ancillary contractual obligation, bringing the case within contractual liability and its more favourable evidential rules, including for incorrect EURISC reporting.
The outcome was positive. The Supreme Court corrected the clear error, finding the borrower’s direct appeal on points of law manifestly well-founded: negligence would suffice to establish possible bank liability; intentional wrongdoing was not required.
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