LITIGATION COSTS IN ITALY MUST INITIALLY BE BORNE BY EACH PARTY, BUT THE LOSING PARTY IS OBLIGED TO REIMBURSE HIS ADVERSARY'S EXPENSES, INCLUDING COUNSEL FEES. COSTS VARY WIDELY, DEPENDING ON THE OBJECT OF THE CLAIM, ITS VALUE, ITS LENGTH, AND OTHER FACTORS. LEGAL AID IS INADEQUATE IN AFFORDING ANY TYPE OF MEANINGFUL ASSISTANCE TO PARTIES WHO CANNOT AFFORD COUNSEL AND THE ITALIAN LEGAL SYSTEM DOES NOT PROVIDE SPECIAL COURTS FOR RESOLVING SPECIFIC CATEGORIES OF CASES. APPROACHES AIMED AT REDUCING COSTS WITHIN THE FORMAL JUDICIAL SYSTEM INCLUDE (1) SIMPLIFIED AND INFORMAL PROCEDURES FOR SMALL CLAIMS, ALTHOUGH THE UPPER LIMIT FOR SUCH CLAIMS IS SO LOW THE PROCEDURE IS SELDOM USED; (2) SIMPLIFIED PROCEDURES FOR LABOR DISPUTES; AND (3) IMMEDIATE ENFORCEMENT OF SEVERAL NEGOTIABLE INSTRUMENTS. ALTHOUGH JUDGES ARE REQUIRED TO ATTEMPT CONCILIATION AT THE FIRST HEARING, STATISTICS SHOW THAT CONCILIATION IS SELDOM ACHIEVED. SINCE THE ITALIAN CONSTITUTION GUARANTEES INDIVIDUALS THE RIGHT OF ACTION AND DEFENSE IN COURT, THERE IS NO PROVISION FOR COMPULSORY RESOLUTION OF DISPUTES IN FORUMS OUTSIDE THE FORMAL JUDICIAL SYSTEM, ALTHOUGH SOME GOVERNMENT AGENCIES PROVIDE FOR NONJUDICIAL MEANS OF DEALING WITH CITIZEN GRIEVANCES, WHICH IN SOME CASES MUST BE EXHAUSTED BEFORE FORMAL COURT ACTION IS PERMISSIBLE. MODIFICATIONS IN SUBSTANTIVE LAW WHICH HAVE HELPED REDUCE LITIGATION COSTS FOCUS ON 'NO-FAULT' DIVORCE AND EMPLOYMENT-INJURIES DISPUTES. ALTHOUGH THE ITALIAN SYSTEM DOES NOT AFFORD GROUP LITIGATION ANALAGOUS TO CLASS ACTION, TWO OR MORE CONNECTED CLAIMS CAN BE HANDLED AS A SINGLE CASE. HOWEVER, INDIVIDUALS OR GROUPS WHICH PROTECT COLLECTIVE INTERESTS MUST PAY THEIR OWN LEGAL FEES AND OTHER EXPENSES OF LITIGATION. FOOTNOTES ARE INCLUDED. (RCB)