CZECH REPUBLIC Trends and Developments Contributed by: Robert Němec, Michal Sylla, Viktor Glatz and Adéla Šmahelová, PRK Partners
with less than ten employees and annual turnover not exceeding CZK50,000,000 (EUR2,000,000). This unexpected modification potentially creates a loop- hole that could undermine consumer protection. Spe- cifically, these “consumers” might include entities that aggregate and register multiple individual claims for enforcement purposes. The maximum remuneration for a successful claimant is capped at 16% of the total awarded amount (or CZK2,500,000). However, small businesses collecting and registering individual claims face no such restrictions on their potential remunera- tion agreements with consumers. As a result, a con- sumer could find themselves not only paying up to 16% to the claimant but potentially forfeiting an addi- tional 25% to the small business that merely facilitated the registration of the claim based on assignment. This scenario suggests that the legislature’s original intent to protect consumers by limiting remuneration may be effectively circumvented by the broadened definition of a consumer. Register of Collective Proceedings Both the Collective Proceedings Act and the Ancillary Act envisage that all relevant information on collective action proceedings and proceedings on the protection of consumer interests shall be published in a register of representative proceedings. The detailed form of the register, the method of its administration and the scope of publication shall be determined by a decree of the Ministry of Justice. The register shall be similar to the insolvency register that has existed in the Czech Republic since 2008. However, the relevant decree has not been passed yet, and the register still does not exist in the form anticipated by the new legislation. The Ministry of Jus- tice publishes the information about filed representa- tive actions on its website. According to the Ministry, this procedure is outlined in Section 83 of the Collec- tive Proceedings Act, which states that if it is not pos- sible to publish information in the register, the Ministry will provide an alternative platform allowing remote access to the information and documents. At a minimum, the following information about col- lective action proceedings must be published in the register:
• case number of the collective proceedings; • designation of the court competent to hear the col- lective proceedings; • identification details of the parties, and where applicable, also their legal representatives; • subject matter of the collective proceedings and the factual basis of the collective action; • criteria for membership in the group; • date on which the collective action was filed; • date on which the collective proceedings on the merits were initiated – ie, when the collective claim was admitted; and • other documents that are required to be published in the register of collective proceedings either by law or by a court decision. After the collective action is declared admissible, the court must, inter alia, publish the collective action, the decision on admissibility of the collective action, the decision on the merits as well as the termination of proceedings, or settlement proposal. Parties to the proceedings, especially the claimant, also have information duties. The claimant must publish infor- mation about the initiation and course of the proceed- ings, both on its website as well as by other means determined by the court. The defendant is obliged to inform registered group members about the outcome of the proceedings in the event that the representative action is at least partially successful; otherwise, the obligation lies with the claimant. The method, scope, and form of publication shall be determined by the court in such a way that the highest possible level of awareness is ensured for all members of the group, including potential members who do not reside in the Czech Republic, while also respecting the rights of the defendant – this may include publication in national or local media, radio and television broadcasts, other websites, etc. If possible, the court may require the claimants to notify the members of the group indi- vidually. The Municipal Court in Prague, the High Court in Prague and the Supreme Court will have access to the register of collective proceedings. Other courts (especially district courts) and administrative authori- ties will be allowed to access the register for consulta- tion purposes only.
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