The liability of statutory auditors in corporations: insights on the changes to the Italian civil code

The law, approved on March 12, 2025 by the Italian Parliament, aims to rebalance the powers and responsibilities of statutory auditors through:

• The elimination of joint liability with directors;
• The limitation of compensable damages from a monetary perspective (except in cases of fraud (dolo); and
• The introduction of a specific statute of limitations.

What changes are being made?

Article 2407 of the Italian Civil Code remains unchanged in respect of the duties of professionalism and diligence owed by statutory auditors and their responsibility for the truthfulness of their attestations (paragraphs one and three).

The main changes introduced by the reform include:

1. The rewording of paragraph two, which eliminates joint liability with directors (which many believe has led to the proliferation of lawsuits against statutory auditors merely to improve the chances of economic recovery) and limits the maximum compensable damages (whereas the previous legislation did not provide for any monetary limit).
   Now, except in the case of fraud (dolo), statutory auditors are liable for damages caused to the company, shareholders, creditors and third parties within the limits of a multiple of their annual remuneration, according to the following brackets:

   • Remuneration < EUR10,000: liability is limited to a maximum of 15 times the remuneration;

   • Remuneration  EUR10,000 - EUR50,000: liability is limited to a maximum of 12 times the remuneration; and

   • Remuneration  > EUR50,000: liability is limited to a maximum of 10 times the remuneration; and

2. The introduction of paragraph four, which provides for a statute of limitations of five years from the filing of the auditors’ report attached to the financial statements for the year in which the damage occurred, aligning it with the statute of limitations applicable to the liability of legal auditors (revisori legali) (Article 15, paragraph three, of Legislative Decree 39/2010).

The rationale behind the new regulation 

The reform aims to rebalance the responsibility of statutory auditors, allowing for differentiation based on the importance and complexity of the task actually performed, thus aligning with the system already in use in other European jurisdictions such as Greece, Poland and Germany.

The ultimate goal of the reform is to encourage engagement, responding to the long-standing requests from professionals in the sector who complained that liability was excessive and often disproportionate compared to the role actually performed, and also in light of a certain rigor shown by case law in assessing the liability of statutory auditors, which some have said has been evaluated almost as if it amounts to strict liability (responsabilità oggettiva). 

The amendment has been positively received, especially following the reform of the new Business Crisis Code (the old bankruptcy law), which significantly expanded the supervisory activity of the board of auditors, imposing on statutory auditors not just a mere ex post duty of control, but an actual proactive duty of supervision.

Some aspects to consider

1. Remuneration received or deliberated: although the reform refers to “received” remuneration, it would seem more reasonable to take “deliberated” remuneration as a reference, since, paradoxically, the failure to receive remuneration would render the rule completely inoperative;
2. The real scope of the limit of the multiple of the annual remuneration received: the limit provided by the provision seems to refer to every single damaging event caused by the statutory auditor, potentially referable to a multitude of parties (i.e., towards the company, shareholders, creditors and third parties). This could lead to some application difficulties in the calculation;
3. Retroactivity: the provision is not retroactive and does not apply to judgments pending at the time of its enactment. Some industry representatives have raised the need for a new amendment to make the provision retroactive to ensure equal treatment; and
4. Retroactivity: the provision is not retroactive and does not apply to judgments pending at the time of its enactment. Some industry representatives have raised the need for a new amendment to make the provision retroactive to ensure equal treatment; and

What about the legal auditors (revisori legali)?

To date, the reform refers only to auditors, and several parties have pointed out a disparity in treatment between statutory auditors and legal auditors (whose responsibility remains regulated by Legislative Decree No. 39/2010), especially considering that the limitations of the new Article 2407 also apply in cases where statutory auditors perform auditing functions. 

Moreover, in the course of the legislative process, the Government in the Justice Commission (Commissione di Giustizia) accepted two requests to consider the extension to legal auditors of liability limitations similar to those set out in Article 2407 of the Italian Civil Code. 

Therefore, a possible new legislative intervention to harmonize the regulations cannot be ruled out.

Conclusion

In conclusion, the recent reform of the liability of the board of statutory auditors represents an important step toward greater certainty in determining the civil liability of statutory auditors and has been described as a “historic milestone” by the president of the National Council of Chartered Accountants and Accounting Experts (Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili). 

However, the practical implementation of these changes will be crucial, and further regulatory adjustments may be necessary to ensure the law's full coherence and applicability.