ITALY: An Introduction to Public Law

STATE OF PLAY IN ITALY 

New opportunities and incentives for the legal industry are emerging in the current context, which is still recovering from the COVID-19 pandemic. However, it seems clear that the lessons drawn from 2020 and 2021 will help pave the way for fundamental changes in the way law firms operate and interact with customers. As a result, we face a significant cultural challenge that stems from a new vision of the lawyer archetype that will transcend the characteristics of those who have traditionally practised the profession, focusing on key aspects such as work organisation, specialisation and technological innovation.

The pandemic also enabled us to identify and assess which aspects of the legal system are the most susceptible to variations, as well as which sectors require the most relevant renovation and improvement. This resulted in additional expectations, especially those linked to environmental preservation and long-term sustainability, which will be key challenges on the road to recovery.

1. Developments in the near future 

On 13 August 2021, following the positive assessment of the National Recovery and Resilience Plan (“Piano Nazionale di Ripresa e Resilienza” – PNRR), the European Commission granted Italy 24.9 billion euros as pre-financing (of which 8.957 billion euros in grants and 15.937 billion euros in loans). The plan identifies six macro-areas, defined as 'missions', to which the funds are to be allocated:
- “Digitisation, Innovation, Competitiveness, Culture”;
- “Green Revolution and Ecological Transition”;
- “Infrastructure for Sustainable Mobility”;
- “Education and Research”,
- “Inclusion and Cohesion”;
- “Health”.

Thus, the PNRR provides for a long list of structural reforms and investments to be made, distributed in various areas. These include the development of ports, logistics, and maritime transport; digitisation measures for the safety of roads and highways, quality of living and social infrastructure; protection and enhancement of water resources; construction of new waste management facilities and remediation of “orphan sites”.

In this framework, precise and in-depth knowledge of the law, as well as a thorough awareness of the options and operational tools available, become essential.

2. The legal market overview 

Looking at some of the areas to which we devote our activity on a daily basis, we would like to give a brief overview of the legal market from the perspective of public law and of the topics that we consider of major interest and with significant opportunities for development.

2.1 Real estate 

Due to the global sanitary crisis caused by the coronavirus pandemic, all markets, including the real estate business, were put on hold.

However, the outlook for Italy in 2022 is extremely positive, as the real estate sector is undergoing a revolution in terms of services and management thanks to various incentives aimed at increasing the recovery, regeneration and renovation of buildings and urban areas that are applicable to existing assets.

In this regard, it is worth noting that the Italian legislature has implemented a number of measures, including the so-called Superbonus, which is a benefit adopted by Legislative Decree 19 May 2020, No. 34 ("Decreto Rilancio") to ensure that buildings are more efficient and safer.

The Law 30 December 2021, No. 234 (“Budget Law 2022”) confirmed this incentive until 30 June 2022, after which there would be a further extension that varies depending on the beneficiary.

Another notable measure, in keeping with current environmental protection regulations, is the so-called Ecobonus, which is awarded for the completion of works that improve building energy efficiency.

Furthermore, the PNRR considers the real estate sector as having a critical role to play in accomplishing the plan's goals, particularly sustainability.

The latter is tied to urban regeneration, as PNRR's Mission 5 “Inclusion and Cohesion” makes clear. In compliance with the EU framework for the European Green Deal, urban redevelopment would also allow for the planning of contemporary, ESG-compliant buildings.

In this regard, PNRR's Mission 2 “Green Revolution and Ecological Transition” includes a plan to replace obsolete school buildings in order to promote: reduced energy consumption and pollutant emissions; increased seismic safety of buildings and the development of green areas; school environment planning involving all stakeholders with the goal of positively impacting teachers' and students' teaching and learning; and sustainable development.

The initiative also involves investments in the strongly growing student housing sector and improvements on court buildings with the goal of enhancing energy efficiency and lessening the structures' seismic risk.

In addition, the PNRR seeks to encourage quick energy conversion of the building stock through a series of incentives, encouraging in-depth renovation and transformation into "nearly zero-energy buildings" (nZEB), in line with the national building stock's energy requalification strategy.

A "National Boroughs Plan" is also being considered. This would be a program to aid the economic and social growth of disadvantaged areas through cultural regeneration of small towns and tourism revitalisation, as well as efforts to restore old Italian parks and gardens.

In this context, having a thorough understanding of the market from the inside out, as well as all of the intricacies that may apply to certain clients and different sorts of transactions, is essential.

Legal expertise service in this field is fundamental, both in terms of assessing the feasibility of corporate operations and in terms of support during the works, which includes the administrative process aimed at approving the interventions.

2.2 Public procurement 

In the domain of public tenders, Legislative Decree 31 May 2021, No. 77, also known as the "Simplification Decree bis", established a number of rules aimed at making it easier to meet the PNRR's targets and objectives.

Firstly, the Simplification Decree bis devotes the entire Title IV to public procurement, including important simplification measures, valid until 30 June 2023, regarding the awarding of public contracts below the EU threshold and replacing those already provided for by the previous Decree-Law 16 July 2020, No. 76 ("Simplification Decree").

The direct awarding threshold for service and supply contracts has been raised to 139,000 euros, including engineering and architectural services and project works.

The number of economic operators who must be consulted as part of the negotiation procedure without a tender notice is reduced in works contracts. The above-mentioned Decree in particular establishes a new threshold - between 150,000 and 1 million euros - below which only five operators must be consulted, as well as a requirement that contracts exceeding 1 million euros and up to the EU threshold request only 10 operators instead of the previously required 15.

The legislator also weighed in on the topic of subcontracting limits, striking a compromise between European rules aimed at enabling small and medium-sized businesses access to the market and national opposition.

Article 49 of the Simplification Decree bis provides a temporary exception from Article 105 of the Public Contract Code, which increases the overall restriction on subcontracting to 50% of the total amount of contracts for public works, services, and supplies until 31 October 2021 (40 percent according to the latest version of the "Sblocca Cantieri" Decree). As of November 10, 2021, all general and planned constraints for subcontracting, including with regard to so-called super-specialised works, have been eliminated under the revision to Article 105 of the Public Contract Code.

In addition to the liberalisation of subcontracting, some counter-limits have been added to protect the most vulnerable parties and prevent circumvention by economic operators, such as the obligation to guarantee the same quality and performance standards as those set out in the contract, and to pay workers an economic and regulatory treatment not less favourable than that provided by the main contractor.

2.3 Energy sector 

The Simplification Decree bis contains some significant innovations aimed at achieving the European goals of decarbonisation and increased energy production from renewable sources set out in the 2030 National Integrated Energy and Climate Plan ("Piano Nazionale Integrato per l'Energia e il Clima 2030" – PNIEC). A new Annex I-bis has been added to Part Two of Legislative Decree 3 April 2006, No. 152 (the "Environmental Code") to identify the actions mentioned in the PNIEC, listing the works, plants, and infrastructures required to meet the PNIEC's targets (e.g. plants for the production of energy from renewable sources, energy efficiency projects, infrastructures for hydrogen production, transport and storage).

The Decree also made a number of adjustments to the regulatory and normative components of the above-mentioned actions in order to speed up and simplify their implementation.

Articles 30 to 32, in particular, simplify authorisation procedures for the installation of wind power plants, solar, geothermal, and biogas plants.

First and foremost, the Ministry of Culture must participate in the single procedure - and thus in the Conference of Services ("Conferenza di Servizi") convened by the Region or the Ministry of Economic Development to decide on the authorisation requests - in relation to projects involving renewable energy plants and the works and infrastructures related to their construction and operation that are located in precluded areas.

Furthermore, Article 32 of the Simplifications Decree bis alters Article 5 of the Legislative Decree No. 28 of 2011, identifying non-substantial interventions, and thus subject only to the procedure of the communication relating to the free building activity.

The simplification of authorisation and environmental assessment procedures for photovoltaic installations with a capacity of up to 20MW in industrial, productive, or commercial areas, the transfer of repowering procedures to PAS, and the reintroduction of incentives for so-called agri-voltaics are all worth noting.

2.4 Telecommunications 

The Minister for Technological Innovation and Digital Transition and the Ministry of Economic Development approved on 25 May 2021, at the kick-off meeting of the Inter-Ministerial Committee for Digital Transition, the Italian Strategy for ultra-wideband called "Towards the Gigabite Society", which defined the actions necessary to achieve the digital transformation objectives and to promote the development of fixed and mobile telecommunications infrastructures.

The concrete objective of such strategy, as indicated in the PNRR, is to bring connectivity to one Gbit/second throughout the country by 2026, which is ahead of the European objectives set at 2030. The strategy is therefore composed of seven interventions, two of which are already underway and provided for in the 2015 Strategy (“White areas Plan” and “Voucher Plan”) and five Plans approved by the Council of Ministers on 29 April 2021 in the PNRR.

The latter are: 1) "Italy at 1 Giga" Plan (PNRR resources 3,863.5 million euros); 2) "Italy 5G" Plan (PNRR resources 2,020 million euros); 3) Plan "Connected Schools" (PNRR resources 261 million euros); 4) Plan "Connected Health" (PNRR resources 501.5 million euros); 5) Plan "Smaller Islands" (PNRR resources 60.5 million euros).

The investment will be accompanied by the simplification of authorisation procedures - to accelerate the diffusion of infrastructures on the territory - and regulatory amendments, recognising fixed and mobile high-speed infrastructures as strategic.

2.5 Health law 

The pandemic highlighted the limits of the Europe healthcare sector in many countries, including Italy, due to funding cuts in recent years and a procurement system characterised by a high degree of complexity in its interpretation and application.

It follows that a new system able to respond promptly and effectively to unforeseen events and emergencies has to be implemented, as well as a comprehensive regulation, and a process of digitalisation able to provide a timely analysis of needs and to manage stocks.

2022 is therefore the greatest opportunity ever to adapt healthcare to the demands of community, firstly by adopting a procurement system focused on innovation and long-term planning capable of creating value for citizens, patients and economic operators.

In order to meet these urgent and imperative challenges, the PNRR devotes the sixth mission to health, for which investments of 15.6 billion euros are allocated from the European fund for recovery (Next Generation EU). The PNRR's 'Health' mission is thus divided into two parts: proximity networks, intermediate structures, and telemedicine for territorial health care (7 billion euros); innovation, research and digitisation of the National Health Service (8.63 billion euros).

The main interventions envisaged are as follows:
- The reform of territorial health care and the structural standards necessary for the implementation of a new organisational model of the territorial care network (creation of territorial structures such as Community House and Community Hospital);
- The reform of the legislation regarding the new institutional structure of prevention in the health sector, embracing the “One Health" approach;
- The reorganisation of the network of research and care institutions of a scientific nature;
- Infrastructural investments dedicated to persons with disabilities and the elderly, starting with the non-self-sufficient.

In such a way, the PNRR intends to launch a reform to pursue a new healthcare strategy, which will enable Italy to achieve adequate quality standards of care, in line with other European Countries, and which will increasingly consider the National Healthcare System as part of a broader community welfare system.

2.6 Environmental law 

In the aftermath of the COVID-19 pandemic, the focus on sustainability and the Green Deal has grown exponentially.

It is worth mentioning firstly that the proposal to alter the Italian constitutional text to include a particular clause on the conservation of the environment, biodiversity, and ecosystems as proof of how the environment is a significant issue on the road to recovery.

The Senate and the Chamber of Deputies have in fact approved the draft of a Constitutional Law, which would add the following paragraph to Article 9: ‘[the Republic] protects the environment, biodiversity and ecosystems, also in the interest of future generations. The law of the State regulates the terms and conditions for the protection of animals’.

Furthermore, the increased incentive to invest in sustainability is reflected in the National Recovery and Resilience Plan, which considers the green transition to be a critical guideline for future development. The second Mission, dubbed “Green Revolution and Ecological Transition”, focuses on the major themes of sustainable agriculture, circular economy, energy transition, sustainable mobility, building energy efficiency, water resources, and pollution, with the goal of improving the economic system's sustainability and ensuring a fair and inclusive transition to zero environmental impact. To achieve these goals, the Environment Code has undergone some significant changes in the last year, including:

- The simplification measures to promote the circular economy and to accelerate environmental procedures (e.g., amendments to the Environment Impact Assessment (EIA) and Strategic Environment Assessment (SEA) regulations, the institution of the EIA Technical Commission for the National Recovery and Resilience Plan and the national energy and climate plan projects, and simplification measures for the redevelopment of industrial sites);
- The institution of a new Ministry for Green Transition, to which some of the competencies previously held by the Ministry for Economic Development have been transferred, particularly in the field of energy and climate change.

Additionally, Europe's interest in environmental concerns is fuelled by the current need to take immediate action to combat climate change and its consequences. In this regard, it should be noted that the EU recently passed an ambitious climate law (Regulation (EU) 2021/1119 - the European Climate Law) which codifies the EU's goal of becoming climate neutral by 2050, as well as an intermediate goal of reducing net greenhouse gas (GHG) emissions by at least 55 percent by 2030.

2.7. Sports law 

It should be noted that during the year 2021 several legislative decrees on sports were adopted (such as Legislative Decrees No. 36; No. 37; No. 38; No. 40).

In detail, Decree No. 38 of 28 February 2021 regulates a new procedure for the construction and modernisation of sports facilities, providing for a cooperation between the parties who intend to carry out the intervention, the competent administration, and the sports club.

In addition, as a further demonstration of Italy's commitment to the fight against doping in sport, NADO Italia has adopted the Anti-Doping Sporting Code - a technical document of the WADA World Anti-Doping Code and related International Standards - in force since 1 January 2021.

Sport is also a key area for the PNRR, which dedicates two programs to invest in new sports facilities and to promote social inclusion through sport.

More specifically, the 'Sport and Social Inclusion' program allocates 700 million euros, 50% of which is to be spent on energy efficiency in existing facilities, while the 'Enhancement of School Sports Infrastructures' program invests 300 million euros in energy efficiency measures for public infrastructures, innovative energy demonstration projects, and support measures.

Furthermore, in view of the 2026 Winter Olympics in Milan-Cortina, Italy is preparing to provide the necessary and adequate facilities for an event that will be watched by millions of spectators and will take place between the regions of Lombardy, Veneto and Trentino Alto Adige.

3. Conclusions 

The impacts of the pandemic on the legal market have been far-reaching and long-lasting in the last few years. This scenario has a significant impact on the way many lawyers practice and how courts administer justice. Although it is easy to focus on all of COVID-19's negative consequences for the legal profession, it is feasible that there will be a long-term positive impact on the organisation of law firms.

The prospect of the profession's future predicts that tomorrow's successful structures will be more technologically advanced, faster to respond to changes, more innovative and continually focused on identifying new market opportunities, increasing their specialisation and innovation, in order to remain a reference point for consultancy and judicial activity necessary to support companies and to grow their business.