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JILT 2002 (2) - Tommaso Scannicchio


Contents

Abstract

1.

Introduction

2.

The Case

3.

The Problem of 'Electronic Evidence'

3.1

Digital Signatures

3.2

'Mechanical Reproduction'

4.

The Admissibility of Electronic Data as Evidence

5.

Decree n.10

6.

Conclusion

Notes and References

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Important Decision of the Italian Supreme Court of Cassazione in the Matter of Electronic Documents: Italian Supreme Court of Cassazione?

September 6, 2001 - Case 11445/2001
 

Dr. Tommaso Scannicchio
Bari, Italy
Visiting Fellow
University of Essex, Dept of Law

Abstract

With a decision of 6 September 2001, the Italian Supreme Court has clarified the troublesome problem of admission of electronic documents as evidence.

The issue had created great concern among practitioners, also in the international commerce arena, in so far as the Italian regulation on the matter provided for two separated effects of the 'informatic document' as evidence. First, whenever assisted by a digital signature it was equated to a handwritten document, complying with the requirement of written form; second, it was given the effect of a 'mechanic reproduction' whenever consistent with the 'requirements of the present regulation'.

As the said regulation is concerned almost exclusively with digital signature and certification, many academics had concluded that a digital signature was mandatorily required for the production of any effects of an electronic document, be that an 'original' handwritten declaration or the reproduction of a fact. After the judgment, it is clear that evidence supplied through any representation of acts, facts or things created or stored by way of electronic means has the same value so far recognized by the Courts to telefax, photocopies, and the like, even if it does not bear any signature; be that digital or electronic. This conclusion is confirmed by recent legislation of February 2002.

Apart from this, questions about validity and effects of a contract itself (and not as evidence) are yet to be submitted to the attention of the Court and therefore are still to be dealt with by the previous regulations, which requires the use of a digital signature for an electronic contract (i.e. any kind of agreement concluded by using electronic means) to be legally binding and enforceable.

Keywords: Electronic Evidence, Electronic Contract, Digital Signature, Advanced Electronic Signature, Contract Validity, Contract Form, 'Writing', Electronic Commerce, European Union Directives, Conflict of Laws, Italy Supreme Court, Recent Cases.


This is a Case Note published on 16 August 2002.

Citation: Scannicchio T, 'Important Decision of the Italian Supreme Court of Cassazione in the Matter of Electronic Documents', The Journal of Information, Law and Technology (JILT) 2002 (2), <http://elj.warwick.ac.uk/jilt/02-2/scannicchio.html>. New citation as at 1/1/04: <http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/2002_2/scannicchio/>.



1. Introduction

Employment - legitimate dismissal - Motorway Corporation asserting undue appropriation of passengers' fares - Data from electronic tickets distribution system alleged as evidence - admissibility of 'electronic document' as evidence ? Validity end effects of an 'electronic contract'.

In a decision of 6 September 2001, the Italian Supreme Court has clarified a troublesome problem about the admission of electronic documents as evidence; it is worth to point out though, that the decision may affect also the substantive value and the binding force of a promise. Under Italian law of electronic commerce the evidentiary issue and the validity and the effect of an 'electronic contract' are strictly interlinked, as far as both depend on the equivalence between the electronic and the 'written' form. It will be seen that even after this decision, the question concerning validity of an electronic contract in Italy is far from seeing its solution[1].

2. The Case

In the case, the plaintiff - an employee of the Italian Highway Company (Societa Italiana Autostrade S.p.A ) who had been dismissed on the ground of bypassing the electronic ticket distribution and recovery system - had challenged the Appeal judgment on the ground of lack of evidentiary value of the electronic data provided for by the defendant central mainframe. According to the plaintiff the electronic data - which had evidenced that the pre-magnetized tickets issued by the plaintiff, had not been accounted for (the tickets had been stolen) by the electronic till - did not comply with the requirement of the Italian Act for the recognition of evidentiary value to 'informatic documents' (hereinafter 'electronic documents').

According to the Presidential Decree 10 November 1997, n. 513 (hereinafter, Decree 1997), an 'informatic document' is:

'...the electronic representation of an act, fact or data bearing a legal effect?'.

The word 'electronic' is generally referred to the visible representation of data (e.g. according to the definition of 'writing' in the UK Interpretation Act), rather than to the raw binary data in the device memory or magnetized and optical supports. The electronic data (document), their storage into a data retrieval system and their transmission by electronic devices are deemed to be:

' valid and effective for every legal effect?' provided that they comply with the 'requirements of the present regulation' (art 2).

These requirements, as it will be seen below, consist mainly in the presence of an electronic signature[2].

3. The Problem of 'Electronic Evidence'

It is to be noted that the problem of 'electronic evidence' had created great concern among practitioners, even in the international commerce arena, after the Italian regulations of 1997 on the matter. Contrary to the approach of major European countries this Italian statute firmly holds the equivalence between 'writing' and electronic form. Art. 4.1, states that the electronic document bearing the elements provided for by the act 'satisfies the legal requirements of written form' (within the Electronics Communication act, by example, it is not specified if an electronic statement is 'writing'). Concerns stem from the circumstance that the 'validity and effectiveness' of an electronic communication (art. 2) seems to be strictly interlinked with its deemed quality of 'handwritten document' (art 4.1). Therefore the said quality (and compliance to related requirements) seems to be requested for each and every effect of an electronic communication, whilst of course the Italian civil code does not require 'writing' as a general element of validity, except for a small number of agreements, generally dealing with real property interests. As a matter of fact the Italian civil code does neither define nor require 'writing' as far as statements and declarations of will are concerned. It only defines and requires a classified number of 'written forms', such as a 'private written act' an 'authentic signature' or a 'public act', as a requirement of validity for specific promises[3].

In matter of evidence the relevant rules (art 5) provided for two separated effects of the so-called 'informatic document'. First (subsec. 1), whenever accompanied by a 'digital signature'[4] the communication or data was equated to a 'handwritten' document complying with the requirement of written form[5]; second (subsec. 2), it was given the effect of a 'mechanical reproduction'[6], whenever consistent with the 'requirements of the present regulation'.

3.1 Digital Signatures

As stated above the very 'requirement' envisaged in the Decree 513-97 concerns almost exclusively the need for a digital signature in order to confer legal effectiveness to any kind of (original) document. This is so because counsel to the Italian legislator had advised to adopt, as the normal standard for a secure signature under Italian law, what were the higher standards of security under the UNCITRAL model law on electronic commerce and the UE draft schemes. Therefore the 'requirements of the present regulation' are concerned almost exclusively with the technical procedures for the digital signature and certification to be effective. Moreover the digital signature was not defined in general, by reference to a number of criteria capable to perform the authentication and integrity function as in the UE directive, the Uncitral Model Law, or the Electronic Communications Act. The Decree 513-1997 allowed only a species of digital signature, formed according to a number of specific requirements (the 'requirements of the present regulation') set out in the Act itself and further specified in the Statutory Instrument, issued by the Secretary of State under the powers conferred by art. 3 of the Decree[7].

3.2 'Mechanical Reproduction'

On this basis, many academics had concluded that a digital signature was mandatory under both the headings of art. 5, i.e. for the production of any effects whatsoever of the electronic document, be that an 'original' equivalent of the handwritten declaration or the reproduction of a fact. This conclusion is supported by art 4 of the 1997 Act that, in dealing with the substantial value of the electronic document as a valid one (i.e. assisted by the quality of 'written' document) required again compliance with 'the requirements provided for by the present regulation'. As art. 4 refers, beyond any doubt, to a signed document it seems again that the 'requirements' is... the digital signature, insofar this is the only possible signature under the Decree 513 1997 and 445-2000.

Finally it is to be pointed out that at the moment of the judgement, the 1997 Decree had been already repealed and substituted by the Decree 445-2000, even if the last did not apply to the proceedings already started. The 2000 Act is mainly a rationalisation of previous legislation, but just on this point it contains a significant innovation. Art. 8 of the new Act gather both art. 4 and 5 of the previous Decree of 1997 by making it clear that the:

'electronic document? complies with the legal requirements of written form and has evidentiary value ?' only if it has been '?subscribed by way of digital signature'.

The new Act therefore unifies evidence and substance and, to both ends, requires a digital signature for the document to be legally effective.

In the event the Supreme Court refused both, the academic argument and the new law. It stated that subsection two of art. 5 relates also to 'Electronic documents ...missing a digital signature'. Under a strict interpretation the text of the subsection (2) only indicates the need for the 'requirements' of the regulation be complied with, without referring to the digital signature, as it is instead the case for subsec. 1. To reach so far, the Court was compelled to drop any conditions to the admissibility of an electronic (mechanical) representation as a mean of proof insofar, as mentioned above, it does not seem to exist any further condition whatsoever to the evidential value of the electronic data, but if related to the digital signature process. The Court therefore reached its conclusion looking at general principles of proof and to its own precedents, rather that deriving it from both the decrees.

4. The Admissibility of Electronic Data as Evidence

After this judgment, it is clear that evidence supplied through any representation of acts, facts or things created or stored by way of electronic means rests on the same grounds and has the same value so far recognized by the Courts to telefax, photocopies, magnetic tapes and the like, even if it does not bear any signature; be that digital or electronic. The Court also stated that the electronic evidence creates a rebuttable presumption about conformity of the representation to facts. This presumption can only be rebutted through detailed evidence. This position is very along the lines of the Directive 99/13 and the Electronic Communication Act (see the Explanatory notes, p.11)[8]. It may be therefore concluded that while Common law is a special attribute of English courts, common sense spreads also over the Italian Supreme Court.

On the other hand it is startling that the electronic document Decrees 1997 and 2000, that ought to realize this very effect, consistently hampered the Court in reaching its conclusion, because of the apparent identification between the 'electronic document' and the requirement of subscription by way of digital signature. More important, it is extremely clear that the regulations were at odds with the European directive 99/93. According to a strict interpretation, a document might well be denied in Italy substantial and evidential value if in electronic form; moreover the value was recognized only to a specific electronic form.

5. Decree n.10

It is well known that the European Court does not satisfy itself with national judicial interpretations as a mean to implement directives. This is the likely reason for the latest news on the matter of electronic subscription, the Decree n. 10, in force from the 22nd of February 2002. The latest Decree repeals one more time the rules about evidence referred to above. It introduces, at last, the 'electronic signature' (as a different entity from the advanced or 'digital' signature), defines it according to the European directive and implements, adopting the identical wording, the minimum obligation imposed by art 5.2 of the Directive as to its substantial and evidentiary value[9].

The Decree though, carries out also de maximis regulations.

First, it considers also electronic documents different from signed declarations, tributing them the status of evidence according to art. 2712 of the Italian Code, even if not assisted by electronic subscription; therefore the Supreme Court's judgment summed up above was given the status of Law.

Second, the Decree reaches over the Directive rule that imposes equivalence between a signature in electronic form and a handwritten signature[10]. In the Directive this obligation affects only:

'advanced electronic signatures which are based on a qualified certificate and which are created by a secure signature device'.

The Italian Decree boldly states that:

'the electronic document, subscribed by way of electronic signature, satisfies the legal requirements of written form'.

It is far from clear whether this enlargement was introduced for the sake of electronic commerce, or lies (again) over the assumption that some form of 'electronic' paper is due even where the civil code does not require any paper at all[11].

Be that as it may, the new text of art. 10 of the Decree 00-445 (as substituted by the Decree 02-12) brings the Italian system in line with the European Directive about electronic signatures as far as form and evidence are concerned (art. 7 of the Electronic Communication Act seems instead to deal only with evidence, form resting over general principles).

As stated, the result is achieved by providing for a legal equivalence between any electronic documents and a written declaration. As to electronic commerce though, it is to be stressed that a document, communication or data that evidence a contract, are not the contract itself[12]. Validity and effects of the contract itself were and are still dealt with in a different rule, art. 11, of the Decree 2000-445.

As the E-commerce directive did not extend the home country rule also to private contracts (art. 1.4, 3), whilst the Judgments Recognition and Enforcement Regulation (Reg. 44/2000, 22 December) made the undertaker of a commercial activity subject to the jurisdiction of the forum where he 'directs such activities...', e-commerce traders operating towards the Italian market may find it interesting to know that the aforesaid art. 11 (Decree 445-2000) applies to validity and existence of electronic contracts the same equivalence between electronic and written promises that the Italian Supreme Court has just overruled as a matter of evidence. As A matter of fact the rule in question dictates that electronic contracts

'?concluded by way of a digital signature according to the regulations of the present statute are valid and effective to all legal effects'.

6. Conclusion

It seems therefore that while a contract may be evidenced by every electronic mean, to be legally binding and enforceable it must be concluded by using the digital signature. Art 11 of the Decree 2000-445 has not been repealed so far.

The conclusion that a digital, or at least an advanced electronic subscription, is an absolute requirement for the very existence of any contract whatsoever is very well supported by the letter of the Act. Therefore the Italian Supreme Court is likely to be called in one more time to save again the Italian E-commerce Act from itself[13].

Notes and References

1. See G. Toraldo, (2002) C.T.L.R. 4, N 65 for a comment in English. Recent Italian legislation of February 2002 (see below), the decisive distinction between 'digital' and 'electronic' signature and the relationship ? peculiar to the Italian legal system ? between evidence and form as a substantial element of contract's validity ? are not taken into account in that first comment.

2. The above-mentioned Decree has recently been substituted by a new Statute (Presidential Decree 28 December 2000, n. 445, Testo unico delle disposizioni legislative e regolamentari in materia di documentazione amministrativa, hereinafter 'Decree 2000-445'). The new text is mainly a re-collection and re-organization of previous Statutes and regulations and has not changed the definitions quoted above (art.1 b; art.8.1).

3. Vice versa the 1997 act wants a communication to comply with its requirements (i.e. electronic signature) even in order to be simple 'writing'. The Act did not expressly limit the requirements of written form to electronic documents where the same form is requested by the Civil Code as an element of validity (or proof). This limitation must be inferred, and the inference is hampered by the fact that simple electronic document (art.2) and 'written' (i.e. provided with the requirements for equivalence to handwritten signature) electronic document (art.4.1) are interlinked and defined by the same wording.

It will be seen that the Presidential decree 445-2000 confirms these concerns and the problem is solved, as far as evidence is concerned, only in the implementation act of the European directive 99-13 (Dlgs n. 14 of 10 February 2002).

4. It is now clear that a 'digital' signature is a particular genus of electronic signature pertaining to the 'advanced electronic signature', formed by use of a 'secure signature verification device'; both as defined under the Directive 1999/93/EC, art 2, nn. 2 and 6.

In principle the Italian concept of digital signature is along line the British one, as clarified by example in the Law Commission Advice, Formal Requirements in Commercial Transactions, 2001, p.14. It relies on the use of a public key encryption system involving a certification authority and can assure authentication of origin and integrity of the communication.

It is to be recalled though, that in 1997 the European directive had not been enacted yet. Therefore the Italian 'digital' signature was not conceived as a kind of the electronic signature but as the (only) electronic signature allowed in order to consider an electronic communication legally effective. As a matter of fact the relevant paragraph of the decree 513-97 was entitled to the 'digital signature' and there is no reference whatsoever in the Act to any 'electronic' signature at all (art.10).

5. Art.2702 of the Italian Civil Code considers a signed 'private writing' as evidence of the declaration's origin from the signatory if it has been 'acknowledged' by him. The presumption may be rebutted only under a particular and troublesome forgery proceeding. On the other hand if the party rejects to acknowledge the writing, it must be excluded by judicial consideration. The signature may be 'acknowledged' in advance, if a 'notary' certifies the signatory identity and the fact of signature (art. 2702, 2703), so as to become an 'authentic writing'.

6. This is a 'representation of facts or of things' by way of mechanical devices, such as photographs, photocopies, audio or video recordings and the like. They are full evidence of what represent, unless they are contested (Art.2712 code civ.). The Courts have clarified that the representation may concern also the fact of a binding declaration (e.g., a photocopy of a contract letter) and, only in this case, the rejection by the counterparts excludes every evidentiary value. When the object of the evidence are a fact or a thing, then the judge may consider the representation an element of proof, even if it is rejected. The last conclusion applies also when the record of a declaration is submitted as a mean to evidence a fact, rather than to establish the existence of a binding promise.

7. Art.3 of the 1997 Decree refers to 'elements of the electronic document' to be set out by Regulation of the Secretary of State. The Regulation was enacted in 1999 (DPCM 1999). It brings about a number of technical regulations about encryption procedures, certification and the like, that must be abode by in order to generate and use a digital signature.

In conclusion, by this proceeding and under such regulations, a biometric identification or a subscription not generated under DS or RS algorithms and/or by using the hash functions allowed by the Decree is not a digital signature. Hence, it was not an electronic signature either. See Zagami, Firma digitale e sicurezza giuridica, Cedam, 2000, for an in depth commentary to the 1997 decree and annexed technical regulations.

8. See Graham J.H. Smith (Bird & Bird), Internet Law and Regulation (3rd ed., 2002), p.480 for a summary of the UK position as to admissibility of electronic records as evidence.

9. Directive 99/93/CE, art 5:

2. Member States shall ensure that an electronic signature is not denied legal effectiveness and admissibility as evidence in legal proceedings solely on the grounds that it is:
- in electronic form, or
- not based upon a qualified certificate, or
- not based upon a qualified certificate issued by an accredited certification-service-provider, or
- not created by a secure signature-creation device.

Here follows an unofficial translation of art. 10 of the DLGS 22 February 2002, n.12
'Art.10 (L). (Form and effectiveness of the electronic document). -

1. The electronic document own the evidential value regulated by art. 2714 of the civil code as far as the things and facts that are represented by it are concerned.
2. The electronic document, subscribed by way of an electronic signature, satisfies the legal requirements of a handwritten signature. The same document shall be admissible in evidence, taking into account its features of security and quality?(omissis).
3. When an electronic document is subscribed by way of a digital signature or by another king of advanced electronic signature, and the signature is based on a qualified certificate, and it is created by a secure signature device, shall be full evidence, if not rebutted by a forgery proceeding, as to the authenticity of the declarations.
4. An electronic document, subscribed by way of electronic signature, shall not be denied legal effectiveness and admissibility as evidence solely on the ground that it is subscribed in electronic form, or the form is not based upon a qualified certificate, or it is not based upon a qualified certificate issued by an accredited certification. service-provider, or finally not created by a secure signature-creation device.

?..omissis

10. Article 5
Legal effects of electronic signatures
1. Member States shall ensure that advanced electronic signatures which are based on a qualified certificate and which are created by a secure-signature-creation device:
(a) satisfy the legal requirements of a signature in relation to data in electronic form in the same manner as a handwritten signature satisfies those requirements in relation to paper-based data; and
(b) are admissible as evidence in legal proceedings.

11. See above about the previous text of art.10 in the Decree 445-2000, where the same effect (written form) was derived from the digital signature. The new Decree gives the simple electronic signature the same value that the previous recognized to the digital subscription.

The difference between an electronic and digital or advanced signature rests now on the circumstance that the first may be rejected by the party against whom it is alleged; the second has an authentication value and can be rebutted only through a forgery proceeding. In other ways the decree confers to the advanced signature the value that the civil code recognizes to a notarized signature (art.2703 cod. civ.).

12. Compare e.g. the different wording and concepts respectively devoted to these two aspects by the Directives 93/99 (art.5) and 35/2000 (art.9).

13. It might be held, by example, that art. 11 just confirms validity of a digitally signed contract. It does not states a word about (un)validity - voidness of a contract concluded by a simple electronic signature. This English old style literal strict interpretation may well turn into a necessity for the Italian Courts.

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