Litigation, boom in first instance appeals: +35% in six months

The alert rebounds along the 103 first instance tax courts. The year 2024 is likely to close the accounts with a new surge of appeals, with effects destined to put a brake on the goal of the National Recovery and Resilience Plan (NRPR) to cut the litigation of the Supreme Court, an emergency for more than a decade. Estimates described as 'pessimistic' by ministerial circles themselves, speak of a forecast of 200,000 new disputes compared to 138,377 in 2023. But even if we want to be less tragic, the figures for the first half of the year do not point to encouraging scenarios: between January and June there were 109,727 new first instance cases, while in the same period last year there were 81,564. An increase of 34.53% that seems to have at least two culprits, the repeal of mediation and the facilitated definition, and one victim, the taxpayers.

The cocktail of the two measures, launched with the aim of disposing of and speeding up the tax process, is producing indirect and unforeseen effects. Those who decided not to adhere to the facilitated settlement - due to lack of convenience - were given an 11-month suspension of the deadline to file an appeal. As a result, all the new disputes (among the definable ones) that could have come in 2023 are raining down on the lower courts this year. The repeal of mediation for proceedings up to EUR 50,000 in value, on the other hand, has meant that the 90 days available for reaching an agreement between the tax authorities and taxpayers have disappeared, with the result that appeals are now pouring into the court system immediately.

The increase may open up a political issue of no small importance. We promised the European Union that we would reduce the mass of legitimacy cases by 2022. And instead two years later we find ourselves with unbudgeted increases in litigation running towards the Supreme Court, while we are preparing for the first competition for professional judges (146 posts), with admissions not before 2026, and the announced reduction of judicial offices (unification of the Courts of First Instance and cutting the detached sections of the second).

It must be said that for insiders, this boom on the first degree is temporary because temporary is the effect that the facilitated definition at least produces. Moreover, the Courts are working to try to absorb the surge. Just think that out of these first 81,564 appeals, the judges - to date still lay people and with part-time commitment - have defined 85,995. Yet, things may not be so simple for two reasons: this large productivity risks not being directly proportional to the final quality of the judgments, with the result of triggering an uncontrolled flow of appeals to the next two levels; the number of backlogs of appeals, i.e. still to be defined, has risen from 157,896 on 31 December 2023 to 173,827 in the first quarter of 2024 and 181,765 in this second quarter.

On 16 April, Deputy Minister of the Economy Maurizio Leo addressed the Plenum of the Presidential Council of Tax Justice (Cpgt), accompanied by Deputy Chief of Cabinet Italo Volpe, Chief Secretary Edoardo Arrigo, Head of the Legislative Office of Finance Umberto Maiello, Legal Counsel Antonella Lariccia, and Director General of the Tax Justice Department Fiorenzo Sirianni. He expressed 'concern' about the surge that even then - the close of the first quarter of 2024 - marked a 38 per cent increase in new appeals. "We should make sure that there is no increase in litigation," said Leo, "but using deflative tools". The measures in the field are there: there is the strengthening of conciliation, extended to the Court of Cassation, and also necessary lis pendens, to stem the proliferation of fac-similar cases. But to understand what impact they will have in terms of reducing appeals we will have to wait until the end of the year. In the meantime, the emergency is now.