NewsCzech Republic drafts law on class actions

The Czech Ministry of Justice has just finalised the draft act on class actions, which is based on an EU Directive and promises a faster, easier, more efficient and more budget-friendly solution for consumers in disputes against entrepreneurs. The Czech Republic was obliged to implement this regulation no later than 25 December 2022, and is already behind schedule in the legislative process.

According to the ministry, adopting the Draft will reduce caseloads on courts and strengthen legal certainty in court decisions. The Draft also establishes a registry of on-going class actions.

The Draft includes an opt-in option according to which affected consumers must actively enter into a class action to claim their rights. The Draft further enables exclusively registered non-profit subjects, regardless of their legal form, to file a claim before the court and represent all involved consumers.

According to the Draft, class actions will require at least 20 consumers to take part. The claimant will be the non-profit subject, not the consumers, and must represent the will of the consumers involved, fund the case, and bear all risks. The claimant may receive compensation for their risks and costs.

The Draft brings long-awaited legal rules, which – it is hoped – will effectively secure rights for consumers. We will monitor developments throughout the legislative process of this Draft Act.

This article was written by CMS partner Tomáš Matĕjovský and associate Filip Gvozdek, and was first published on CMS Law-Now on January 3, 2023, available here.