CZECH REPUBLIC Law and Practice Contributed by: Robert Němec, Michal Sylla, Viktor Glatz and Adéla Šmahelová, PRK Partners
apt with respect to the Collective Proceedings Act. As such, an action under the Collective Proceedings Act is referred to herein as a “collective action”. Collec- tive actions and actions for the protection of collec- tive interests of consumers are jointly referred to as “representative actions”. Proceedings for the protection of collective interests of consumers available under the Code of Civil Pro- cedure as a transposition of Article 8 of the RAD may be defined, albeit with some specifics, as proceed- ings governed by general rules of Czech civil proce- dure whereby a qualified entity, acting on behalf of all potentially concerned consumers, may seek that a trader be ordered to cease a certain practice or for the court to declare that an infringement of a legal obliga- tion occurred. Individual consumers are not required to express their wish to be represented by the quali- fied entity. The qualified entity is neither required to prove actual loss or damage on the part of the indi- vidual consumers nor intent or negligence on the part of the trader. In contrast to the collective proceedings, this protection is limited only to consumers as natural persons and does not extend to small businesses. 3. Procedure for Bringing Collective Redress/Class Actions 3.1 Mechanisms for Bringing Collective Redress/Class Actions Actions under the Collective Proceedings Act According to the Collective Proceedings Act, it is only possible to seek collective redress through qualified entities – authorised non-profit organisations regis- tered in a list of qualified entities maintained by the Ministry of Industry and Trade, or a list of qualified entities enabled to bring domestic representative actions at national level maintained by the European Commission. Claimants must be represented by a legal counsel throughout the course of the proceedings. A collective action is admissible if: • the claimant is a qualified registered entity;
• the claimant acts in the interest of the group and is not in a conflict of interest; • the group has at least ten members (although the court shall be able to rule on the admissibility of a collective action even before ten members have registered their claims); • the asserted rights or legitimate interests of the group members are based on a similar factual and legal basis; • it was not filed with an abusive intent; and • it is not financed by a third party who is a competi- tor of the defendant, is dependent on the defend- ant, or unduly influences the claimant in a way that would harm the interests of the group. Since the collective action mechanism is new to Czech law, it remains to be seen what approach Czech courts will take in relation to the assessment of similarity. According to the definition contained in Section 2 of the Collective Proceedings Act, “similar factual and legal basis means decisive facts that are either identical or sufficiently similar to make it practi- cal for the rights or legitimate interests based on these decisive facts to be heard and decided in collective proceedings”. Such a definition gives judges relative freedom in assessing and deciding whether or not certain claims are sufficiently similar. Nevertheless, when interpreting similarity, the judgment of the Court of Justice of the European Union in case C 450/22 must be taken into account, as it states that it is not necessary for the claims to be identical. For instance, similarity cannot be excluded merely because the contracts were concluded at different times or under different rules. Therefore, collective actions concern- ing claims with a lower degree of homogeneity or only a certain level of similarity may still be found admis- sible. Collective actions may be brought in order to enforce an obligation or to determine whether a legal rela- tionship or right exists or not. Actions to enforce an obligation can seek both injunctive and redress meas- ures – ie, measures to provide any remedies such as compensation, replacement, price reduction or reimbursement. Actions to determine whether a legal relationship or right exists are actions for declaratory relief allowing claims leading, for example, to contract termination or annulment.
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