CZECH REPUBLIC Law and Practice Contributed by: Robert Němec, Michal Sylla, Viktor Glatz and Adéla Šmahelová, PRK Partners
3.4 Class Members, Size and Mechanism – Opting In or Out Opt-in Mechanism Only an opt-in mechanism was adopted under the Collective Proceedings Act. Therefore, each individual consumer wanting to participate in the proceedings must proactively join the claimant group, which has been negatively received by consumer protection organisations that advocated the opt-out mechanism during the legislative process. During the legislative process, there were proposals to include an opt-out regime – eg, for the smallest claims under CZK10,000 per group member, but these proposals ultimately failed to gain approval. Group Members The Collective Proceedings Act distinguishes between group members and registered group members, with the former being anyone with the same or sufficiently similar claim against the defendant, and the latter being a group member who has chosen to opt in by registering their claim with the claimant in the collec- tive action proceedings using a form published by the Ministry of Justice. As already outlined in 3.1 Mechanisms for Bringing Collective Redress/Class Actions , the number of group members during the certification phase must be at least ten. After the collective action is found admissible and upon the expiration of the registration deadline, the number of registered group members must be at least ten. After the deadline for registration expires, a registered group member cannot withdraw their registration. However, the claimant may contest the group membership within one month of the list of registered members being submitted, and propose to the court that any member be excluded from the list. If the number of registered group members drops below ten at any stage of the proceedings on the merits, the collective action proceedings shall be terminated. Procedural Rights The Collective Proceedings Act restricts the proce- dural rights of registered group members. Registered group members are formally not parties to the pro- ceedings and can, with some exceptions, only make statements in the proceedings through the claimant. However, the court may allow registered group mem-
the infringement of a legal obligation. However, it remains uncertain whether this requirement applies to the actions for the protection of collective interests of consumers and the issue of pressing legal interest will need to be clarified by the courts. 3.3 Standing As mentioned in 3.1 Mechanisms for Bringing Col- lective Redress/Class Actions , only organisations registered in the list of qualified entities may have standing to bring a representative action (both the col- lective actions and claims for protection of the collec- tive interests of consumers). Requirements which the claimants need to meet in order to be registered in the list of qualified entities and in order for the collective action to be admissible are based on Article 4 of the RAD, generally aiming to reduce the risk that collective action proceedings will be abused. In order to meet the requirements, the qualified entity must demonstrate at least 12 months of actual public activity in the area of consumer protection, avoid being declared insolvent, and have a legitimate interest in bringing a representative action. Further requirements include that the claimant should act in the interests of the group, file the representative action without abu- sive intentions (regarding, for example, competition matters) and avoid conflicts of interest. The consum- ers must be informed of fulfilling the requirements on the claimant’s website. Finally, the claimant must also have appropriate sources of funding (see 3.9 Funding and Costs ). The current definition of a consumer as both a natural person and a small business also raises questions as to the defendant’s standing to be sued. Since small businesses are considered consumers and a consum- er is defined as a natural person under the Collective Proceedings Act, it is questionable whether a small business may be sued in collective action proceed- ings at all. However, it remains to be seen how Czech courts will address this issue.
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