More than One out of Two Claims Brought Before the Financial Disputes Arbitrator Succeed

More than One out of Two Claims Brought Before the Financial Disputes Arbitrator Succeed

The compensation paid to Italian savers for financial disputes amounted to € 18 million in 2022, with an average compensation of € 28,000. These numbers have been published by the Financial Disputes Arbitrator (ACF), Consob’s body for the out-of-court settlements of disputes between intermediaries and their clients. The overall amounts of compensation awarded by the Arbitrator in its first six years of activity amount hence to € 142,5 million, with a claim acceptance rate of 57.5% in 2022. The rate of voluntary enforcement of the rulings by the succumbing intermediaries continues to be high (amounting to over 96% in the period 2017-2022), including 20 compensation awards for amounts ranging between € 150,000 and € 500,000 i.e. value limit of the  Financial Disputes Arbitrator’s jurisdiction).

The number of the appeals filed declines: in 2022 have been filed 1.115 appeals, in 20211.582.  Since the start of the Financial Disputes Arbitrator’s activity have been brought a total of 9.810 appeals.

Among the factors that favoured this trend are the progressive alignment of the intermediaries’ operating practices with the guidelines of the sector regulations issued by the ACF (which allowed to settle many conflicts at an early stage) and the norms introduced by Consob at the end of the year 2021, which have limited the scope of the ACF’s jurisdiction to disputes on investments made less than ten years prior to the filing of the claim.

Some data emerged in previous years have been confirmed in the year2022:

  • the quantitative prevalence of litigation initiated by savers in northern and southern regions of the country (41.4% and 40.9% respectively), compared to central Italy (16.9%), with a marginal presence (less than 1%) of claimants residing abroad;
  • the predominance of male claimants (68.4%), compared to 30.1% represented by women and the low incidence (1.5%) of appeals filed by legal entities;
  • the advanced age of the claimants, with over 70% of claimant having an age of more than 55 years and the low number of claimants under the age of 40 years;
  • the preference of claimants for legal assistance (over 65% of cases), which is symptomatic of the difficulty for many retail investors to advocate for themselves.

With regard to the intermediaries the following emerged:  in 2022 74 intermediaries were involved in proceedings and a total of 220 intermediaries have been called to answer for their actions in front of the Arbitrator so far, compared to 1.292 intermediaries who participate in the ACF system.

The conclusion of the proceedings within 180 days remains a priority goal also in the year 2023, while further goals are:

  • the promotion of discussion events between savers’ and intermediaries’ associations, in order to receive feedback on the services provided and suggestions for improvements;
  • the development of financial education initiatives tailored to the needs of retail investors;
  • the consolidation of cooperation with similar bodies or associations in order to share the good practices established and to ensure service standards that are in line with users’ expectations.