With the enactment of the so called Bassanini Laws (Law no. 59 of 15/03/97 on Administrative Federalism and Law no. 127 of 15/05/97 on Simplification of the Bureaucracy), an important step has been taken toward the simplification and decentralisation of the bureaucratic system in our country, with possibly spectacular repercussions for the whole system of relations between the public and private sectors, even though under condition of the enactment of a series of regulations which are necessary to implement the principles contained in such laws. Among the various reforms expected to enter into force, it is especially worth mentioning the provision of a form of automatic liquidation of damages arising from delays in the issuance of administrative measures as well as in carrying out the related procedures.

This provision, together with the rule already in force concerning the completion of administrative procedures (introduced by Law no. 241/90) truly constitutes something completely new in the Italian system of law, especially when one considers that up until now, except in particular cases, not even the most blatant breach of a legitimate interest was considered worthy of compensation given that a cause of action existed for the private citizen only in the event of a breach, by a public agency, of a specific and actual private right.

The revolutionary nature of this innovation, for those who have to deal with public agencies in relation to a business activity of whatever nature, is manifest.

Of equal importance, on the other hand, is the authority to be granted, pursuant to Article 11(g), to Administrative Courts (i.e., to Region Administrative Tribunals and to the Conseil d'Etat) with regard to the award of monetary compensation as a result of a finding of a breach of legitimate interest by an administrative measure. In other words, according to the abovementioned law, the Government must extend the jurisdiction of the Administrative Courts to the determination of damages which result from a defective or invalid administrative measure, or the failure to adopt a due measure.

The interested party shall have, therefore, the opportunity to ask for the annulment of the defective administrative measure and for damages suffered as a result therefrom; while presently it is necessary to raise, when possible, a subsequent and separate civil action for damages in the ordinary courts. This development is clearly of great interest, because it allows the concentration of the decision both issues in the same proceedings, and will allow the plaintiffs to profit from the relative expeditiousness of the procedure applicable in Administrative Courts, so reducing the time and costs involved.

In addition, it is highly unlikely that damages would be refused by the Administrative Courts in the event that an interim suspension of the challenged administrative measure has been obtained, given that the legal grounds for such suspension is precisely the Court's finding that damages are suffered. For these reasons, both domestic and foreign companies ought to be aware of the increased legal protection now granted by the Italian system of law to businesses and private citizens dealing with public bodies or requiring administrative measures to be taken in their favour, such as concessions or authorisations, in spite of the traditional reluctance which is still prevalent in Italian SME to litigate cases against government or communal authorities.

For further information contact Studio Legale Sutti .

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