Accounting Law and Responsibility
Anyone who is accused of having caused economic harm to the public entity due to fraud or gross negligence in the context of an employment or service relationship with a public administration is subject to litigation related to accounting responsibility.
As part of the accounting process, Telchini & Mayr has assisted public officials belonging to the top establishments in Municipalities, Provinces, and Regions, as well as private citizens linked to the Administration through contractual relationships.
The accounting responsibility assumptions, first set out in Art. 52 of R.D. no. 1214 of 12/7/1934 and subsequently by Art. 1 of Italian Law n. 20/1994, are:
- Unlawful conduct on the part of a subject linked to the P.A. through an employment or service relationship, committed in the performance of activities for institutional purposes.
- The existence of the psychological element of intent or gross negligence on the part of the agent.
- The recurrence of a concrete and economically appreciable damage for the treasury.
- The causal link between the conduct and the damaging event.
The action is carried out by the Regional Prosecutor and the judgment is before the relevant Court of Auditors for the territory.
From a temporal point of view, the dispute for damage to revenue is subject to the expiration terms predefined by the legislator: "The right to compensation for damages expires, in any case, in five years, starting from the date on which the damaging event occurred, or, in case of malicious concealment of the damage, from the date of its discovery"(Article 1 paragraph 2 of Italian Law 20/1994).
The recent reform of the accounting process implemented with Italian Legislative Decree no. 174 of 26 August 2016 reorganized the complex legal framework under a single "Accounting legal code", updating the previous provisions in light of the principles of due process, as well as raising the procedural guarantees to protect the accused.
Judgment of administrative accounting responsibility
The judgment calls for a first pre-trial phase (see Part II Title I of Italian Legislative Decree 174/2016) by the Regional Prosecutor who, having received the news of revenue damage, which pursuant to Art. 51 of Italian Legislative Decree 174/2016 must be "specific and concrete", initiates the investigation, delegating, if necessary, the assessment activity to the Italian Financial Police, which may also carry out inspections, document seizures, and personal hearings. In this context, the right of defence is guaranteed by the right to lodge a complaint before the jurisdictional section against the ablative measures (Article 62 of Italian Legislative Decree 174/2016).
The preliminary phase may conclude with the immediate filing due to inconsistency of notification of damage, or with an "invitation to deduce" which consists of a formal notice to the accused, who is invited to present counter-arguments within 45 days of notification of the act. Article. 67 of Italian Legislative Decree 174/2016 states that in the invitation to deduce, the “essential elements of the matter, of each disputed conduct and of its causal contribution to the occurrence of the alleged damage must be explained".
The accused, who at this stage is invited to be assisted by a lawyer, can therefore respond to the objections by presenting counter-arguments and producing documentation in his defence, as well as asking to be heard personally by the Regional Prosecutor.
The Public Prosecutor will then be able to file the proceeding on the basis of the defensive arguments presented, or issue the introductory summons to the proceedings, which is communicated to the accused, together with the decree setting the hearing before the Court with jurisdiction.
The hearing phase in front of the Court sees the defence as protagonist, who appears in court, verifying the correctness of the procedure and opposing the necessary procedural objections. In this phase the written defences are set out, which anticipate all substantive arguments and conclusions that will then be subject to discussion, and it is necessary to enclose all methods of proof, which for court purposes are essentially of a documentary nature.
The discussion hearing is the central moment of the hearing since the arguments presented up to that point only in written form are treated in contradictory terms, developing the arguments of the written defences from a logical and legal point of view. It is in this decisive phase that the conviction of the Court is formed. At the end of the oral contributions the Court meets in the council chamber to reach a decision, which will then be deposited in the registry and communicated to the parties.
The unsuccessful party may appeal the sentence of first instance with which the territorial Court pronounces the decision that the defendant must pay an amount as revenue damage or absolves him from the obligation, before the Central Jurisdictional Appellate Section with seat in Rome.