This country-specific Q&A provides an overview of Litigation laws and regulations applicable in Czech Republic.
What are the main methods of resolving disputes in your jurisdiction?
The predominant method of resolving disputes in the Czech Republic is civil proceedings, with the main alternative options being arbitration and mediation.
If civil proceedings are initiated and a judge deems it appropriate, they may order the parties to have an obligatory first meeting with a registered mediator. The parties, however, are not forced to proceed with mediation and if, following the first obligatory meeting, they do not agree to proceed, the standard litigation proceedings continue.
Despite the fact that there are many times more court proceedings than arbitration proceedings or mediation sessions initiated each year, arbitration remains quite popular in commercial disputes. That is, i.a. due to the existence of the well-known Arbitration Court attached to the Economic Chamber of the Czech Republic and Agrarian Chamber of Czech Republic, which is seated in Prague.
What are the main procedural rules governing litigation in your jurisdiction?
The rules governing the litigation proceedings are contained mainly in:
Act No.: 99/1963 of the Collection, Civil Procedure Code, as amended, containing the general provisions regarding litigation proceedings and enforcement proceedings;
Act No.: 292/2013 of the Collection, on Special Litigation Proceedings, as amended, containing additional rules for several special kinds of proceedings (e.g. on the sale of collateral throughout the court proceedings, on the annulment of a decision of a general meeting of a legal entity, on the disqualification of a person from statutory bodies of legal entities, etc.);
Act No.: 216/1994 of the Collection, on Arbitration Proceedings and Enforcement of Arbitral Awards, as amended;
Act No.: 120/2001 of the Collection, on Private Enforcement Officers and Private Enforcement Proceedings, as amended;
The main principles governing Czech litigation are as follows:
The principle of equality – the parties have equal status before the court, e.g. they shall have equal procedural rights, equal opportunity to present arguments and evidence or comment on the arguments and evidence of the counterparty, etc.
The adversarial principle – the parties must claim relevant circumstances and provide evidence supporting their statements.
The principle of public access – court hearings are public with few exceptions (protection of minors, morality, commercial secrets, classified information, etc.).
The principle of orality – generally, an oral hearing must be held and evidence must be taken by the judge at an oral hearing. The parties, however, usually rely heavily on their written submission and refer to them at the oral hearings.
The principle of concentration – the parties may state relevant circumstances and propose evidence only until a cut-off date (typically at the end of the first oral hearing, usually preceded by at least 1 round of written submissions). Circumstances claimed and evidence proposed after this time should be disregarded. Some exceptions apply, however, e.g. when it was impossible to propose such evidence sooner, when a judge invites a party to supplement allegations and evidence, or when the purpose of such evidence is to question the credibility of another previously submitted piece of evidence. This principle, however, does not apply in all proceedings.
What is the structure and organisation of local courts dealing with claims in your jurisdiction? What is the final court of appeal?
The Czech court system is divided into a system of (i) general courts, (ii) administrative courts, and (iii) the Constitutional Court.
The court system of is composed of four ‘levels’:
district courts, which have general civil jurisdiction as courts of first instance;
regional courts, which act as courts of first instance in some more complex civil cases (e.g. commercial disputes related to unfair competition, securities, intellectual property, etc.) and in administrative disputes, and further as appellate courts against the first instance decisions of district courts;
high courts, which decide on appeals against the civil first instance decisions of the regional courts; and
the Supreme Court, which decides on extraordinary appeals against the decisions of either of the appellate courts (on questions of law only), and the Supreme Administrative Court, which serves as the sole appellate instance engaged in administrative disputes.
The Constitutional Court stands outside the system of the general courts and decides on complaints regarding material interference with fundamental rights in all matters, provided that all other available remedies have been (unsuccessfully) exhausted by the complainant.
How long does it typically take from commencing proceedings to get to trial in your jurisdiction?
There are no official statistics on how long it takes to get from the initiation of proceedings (filing of a statement of claim with a court) to the first oral hearing (trial). Nevertheless, in 2021, the average overall length of the first instance proceedings before the district courts was statistically about 9 months and before the regional courts about 3-3,5 years. The average length of appellate proceedings was 4-12 months (depending on the appellate court).
Administrative court proceedings usually last 2-3 years.
Are hearings held in public and are documents filed at court available to the public in your jurisdiction? Are there any exceptions?
The general public may attend any oral hearings or obtain the anonymised final decisions.
The presence of the general public at an oral hearing may be restricted or prohibited by an order of the court, e.g. if classified information or commercial secrets are to be discussed or if the presence of the public would jeopardise other important interest of the parties.
Besides the parties, which have open access to the court file, the presiding judge may allow third persons who demonstrate their legal interest or another important reason to inspect the court file. Such cases, however, are quite rare.
Since 2022, the district, regional and high courts are supposed to publish their anonymised, final and binding, decisions in a database on the website: https://rozhodnuti.justice.cz/soudnirozhodnuti. The Supreme Court, the Supreme Administrative Court and the Constitutional Court have been publishing their (partially) anonymised decisions online for years.
In contrast, the awards issued in the arbitral proceedings are generally not published and the details of the disputes are therefore inaccessible to the general public.
What, if any, are the relevant limitation periods in your jurisdiction?
The Czech law recognises so-called ‘subjective’ and ‘objective’ limitation periods.
The objective limitation period usually last for 10 years and commences on the day the claim objectively became mature.
The subjective limitation period commences on the day the entitled person became, or could have and should have become aware of the existence of the claim, the (approximate) amount to be claimed and the identity of the counterparty. Typically, the subjective limitation period lasts 3 years but there are certain exceptions.
The court does not examine whether a claim is statute-barred on its own initiative. Any such objection must be raised by a party.
In some, rather exceptional, cases, the law directly provides that a right may have ceased to exist (i.e. is precluded, extinguished) if it is not exercised in due time. In such cases, the court will examine the timely exercise of the right on its own initiative.
What, if any, are the pre-action conduct requirements in your jurisdiction and what, if any, are the consequences of non-compliance?
The plaintiff should usually have sent a pre-trial notice, requesting the debtor to pay the debt.
However, a pre-trial notice is not a requirement for the initiation of proceedings per se. Nonetheless, if a defendant fulfils their monetary debt obligation without undue delay after a claim is filed with the court, and no pre-trial notice had been sent at least 7 days before the plaintiff commenced the proceedings, the plaintiff will be deprived of the reimbursement of the costs of the proceedings.
How are proceedings commenced in your jurisdiction? Is service necessary and, if so, is this done by the court (or its agent) or by the parties?
Court proceedings are commenced by the plaintiff’s filing of an action (statement of claim) with the relevant court. By the initiation of proceedings, the limitation periods regarding the submitted claim are suspended.
Communication with the court may be done in hardcopy via the mailroom, or electronically through the system of data boxes, or via e-mail with qualified electronic signature.
Service is not necessary for the commencement of proceedings. The court will deliver the action (statement of claim) to the defendant, usually together with an invitation for them to submit their statement of defence.
How does the court determine whether it has jurisdiction over a claim in your jurisdiction?
Czech law recognises local jurisdiction (i.e. the court of which location is apt to decide on a dispute) and substantive jurisdiction (i.e. whether the dispute shall be decided by a district or regional court as the court of first instance).
If a party wants to challenge the local jurisdiction, such challenge must be part of its first procedural act towards the court.
The substantive jurisdiction may be reviewed at any time during the proceedings.
Should the parties have concluded an arbitration agreement but, despite this, a court proceeding is initiated, the defendant must object against the court’s jurisdiction in their first act towards the court regarding the subject matter of the dispute. If the defendant fails to raise a timely objection, the court will disregard the arbitration agreement and will assume its jurisdiction.
How does the court determine which law governs the claims in your jurisdiction?
In the Czech Republic, the ‘iura novit curia’ or ‘‘the courts know the law’ principle applies, meaning that the courts determine ex officio which specific provisions of Czech law are applicable in certain disputes (but the parties can, and usually do, suggest their own legal assessment of the matter).
Said ‘iura novit curia’ principle also applies in international disputes, to the assessment of law applicable to the claim and other relevant issues. In general, the courts will follow the choice of law made by the parties or follow the rules of private international law contained in (mainly):
European Union Regulation No.: 593/2008, dated 17 June 2008, on the law applicable to contractual obligations (Rome I), as amended;
European Union Regulation No.: 864/2007, dated 11 July 2007, on the law applicable to non-contractual obligations (Rome II), as amended;
Czech Act No.: 91/2012 of the Collection, on private international law, as amended.
In what circumstances, if any, can claims be disposed of without a full trial in your jurisdiction?
There are several options for how to dispose of a claim without a trial (oral hearing).
First, the court may issue a payment order, electronic payment order or a European payment order (their respective specific requirements differ slightly) if the claim is sufficiently based on the facts and evidence presented by the plaintiff in their statement of claim. Should the defendant raise objections against the payment order, standard proceedings will follow.
Second, if the defendant fails to file their statement of defence upon the request of the court in the stipulated deadline, or if it acknowledges the claim in the proceedings, the court shall issue an ‘acknowledgement judgment’ without the need to take or discuss evidence at a hearing.
Third, if the defendant fails to attend the first oral hearing, the court may, upon the claimant’s request, issue a default judgment.
Fourth, the court may approve a settlement reached between the parties either before or after the commencement of proceedings. Such approved settlement will be incorporated into a decision of the court and is directly enforceable.
Fifth, there is no need to hold an oral hearing if (i) the case can be decided based on the documentary evidence submitted by the parties, and (ii) the parties waive their rights to present their case at an oral hearing or agree that no hearing will be held.
What, if any, are the main types of interim remedies available in your jurisdiction?
In general, the parties may seek any interim measure necessary to protect their rights or the enforcement of the potential final decision; nevertheless, no one may seek such interim measure that would effectively substitute for the final resolution of the dispute on merits.
Interim measures are always issued in aid of ongoing or future proceedings. Thus, if a motion for an interim measure is filed before the commencement of proceedings, the court will instruct the applicant to commence the standard proceeding within a certain time limit, otherwise, the interim measure will cease to exist.
After a claim has been commenced, what written documents must (or can) the parties submit in your jurisdiction? What is the usual timetable?
Typically, within 2 months after a statement of claim is submitted to the court and the proceedings are thereby initiated, the court will invite the defendant to file its statement of defence. Another round(s) of statements may follow depending on the complexity of the matter. If the court invites a party to comment on the other party’s submission, it usually gives a time limit of 15-30 days to file such comments; nevertheless, the parties may submit their statements without the need of such invitation from the court.
Czech law does not recognise a ‘discovery’ phase of proceedings. Thus, typically, both parties must offer the evidence they are relying on until the cut-off date (for exceptions see question No. 14) and submit a power of attorney if they are represented. The cut-off date, however, applies to the identification of the evidence, while the physical or electronical copy thereof may be submitted to the court thereafter.
Generally, the parties must identify all of the evidence they want to rely on before the end of the first oral hearing (the cut-off date). Nevertheless, the courts often extend the cut-off date upon a request of either party.
What, if any, are the rules for disclosure of documents in your jurisdiction? Are there any exceptions (e.g. on grounds of privilege, confidentiality or public interest)?
Czech law does not recognise a ‘discovery’ phase of a proceedings. Thus, typically, each party must submit the evidence that it relies on.
Nevertheless, upon the application of either party, the counterparty or a third party may be ordered by the court to submit a certain piece of evidence or to provide information about the case if the requesting party:
shows that it does not (and cannot) possess the requested information or evidence;
proves that the party to-be-ordered has the requested information or evidence at its disposal; and
sufficiently shows that the requested evidence or information is likely able to substantiate its case.
If a party fails to abide by the court’s order to provide such piece of evidence or information, it is to be taken into consideration when assessing the evidence, typically to the detriment of the party in breach of the order.
In general, only the duty of confidentiality recognised (imposed) by statutory law may serve as a justification for a non-disclosure of evidence upon the order of a court.
How is witness evidence dealt with in your jurisdiction (and in particular, do witnesses give oral and/or written evidence and what, if any, are the rules on cross-examination)? Are depositions permitted?
Witnesses testify in person at oral hearings. Testimony via a video call is also possible, but not very common.
Anybody who is summoned by a court must attend the scheduled hearing. If a witness fails to appear, they may receive a fine from the court and/or be brought in by the police authorities. Witnesses are obliged to tell the truth and breach of such obligation (perjury) is a criminal offence. The parties to the proceeding (and, in case of legal entities, their statutory representatives) may provide their testimony, nevertheless, they are not liable for perjury and their relationship to the party is taken into account when evaluating testimony.
The court is usually the first participant to examine a witness. Usually, the court asks the witness to describe everything they know about the relevant matter and then asks more direct questions. Thereafter, the court invites the party that first proposed the witness and, second, the counterparty, to examine them.
There are no express rules for the examination and cross-examination of witnesses by the parties. Nevertheless, guiding, misleading, deceptive and irrelevant questions are generally prohibited and may be challenged by the counterparty and rejected by the court.
Czech law does not recognise party-organised depositions; even though they are not expressly prohibited, they are not used before the Czech courts. The courts are also sceptical of written witness statements and, if they are submitted by either party the court will still usually require the witness to provide oral testimony.
Is expert evidence permitted in your jurisdiction? If so, how is it dealt with (and in particular, are experts appointed by the court or the parties, and what duties do they owe)?
Expert opinions are permitted and heavily relied upon in particular in technical cases and in the process of determining the quantum in damages claims. Experts eligible to provide expert opinions are included in a public list maintained by the Ministry of Justice and sorted by their field of expertise. To be included on this list, an expert must pass a professional examination related to the relevant field of expertise. Such experts are obliged to act with due professional care, independently and impartially.
An expert may be appointed by a party or by the court. If an expert opinion prepared by a party-appointed expert complies with certain formal requirements, it is treated as the same as an expert opinion requested by the court.
Expert opinions are typically first submitted in writing. The expert is summoned to give their expert testimony at an oral hearing if the court has (or the parties raise) any objection to the expert opinion or if clarification is needed.
The court may not scrutinise the expert’s factual conclusions, nevertheless, the court must assess the expert opinion in the context of other evidence. If the reasoning of the expert is obviously flawed or incomplete, the court may order the expert to correct it, or request a review of the expert opinion. The review expert opinion is typically drawn up by a university or other scientific department and is also used when there are several conflicting expert opinions submitted into the given proceedings.
Can final and interim decisions be appealed in your jurisdiction? If so, to which court(s) and within what timescale?
Both interim and final decisions may be appealed (except for a few exceptions, typically in disputes with a value less then EUR 400). Appeals against the first instance decisions of district courts are decided by regional courts. Appeals against the civil decisions of regional courts as courts of first instance are decided by the high courts. An appeal must be filed within 15 days from the delivery of the decision of the court of first instance to the appellant. A decision that can no longer be appealed to the appellate court is final (legally binding).
Final decisions of the appellate courts may be subject to extraordinary appeal (on points of law), which is decided by the Supreme Court. An extraordinary appeal may be filed within 2 months from the delivery of the final decision of the appellate court to the appellant and may only concern issues of law.
What are the rules governing enforcement of foreign judgments in your jurisdiction?
The recognition and enforcement of foreign judgements differs depending on whether the judgments were rendered in an European Union member state or a non-European Union state.
Pursuant to the Brussels I Recast Regulation (European Union Regulation No.: 1215/2012), judgments issued by courts of other European Union member states will be directly recognised and enforced in the Czech Republic without any special procedure being required.
Judgments of non-European Union states are recognised by Czech courts only if they are final and binding under the laws of the issuing country. Czech courts will also refuse to recognise a non-European Union state judgment if: (i) under Czech law, the issue may only be adjudicated by Czech courts, (ii) lis pendens applies in favour of the Czech courts, (iii) a Czech or already-recognised foreign decision exists concerning the identical issue, (iv) it would be contrary to public policy (ordre public), or (v) the issuing country does not recognise Czech judgments (the last condition applies only if the judgment to-be-recognised relates to a Czech citizen).
In general, judgments of non-European Union states, issued in property disputes do not require special recognition proceedings and the fulfilment of the aforementioned requirements is assessed as a preliminary issue in the (e.g. judicial enforcement) proceedings into which the foreign judgment was submitted. Nevertheless, to be enforceable in the private enforcement proceedings (which is the preferred enforcement option in the Czech Republic, the other being the judicial enforcement), a declaration of enforceability must be either obtained prior to or filed for together with petition for the initiation of the enforcement proceedings.
The enforcement of foreign arbitral awards is similar to the enforcement of the non-European Union judgments. The New York Convention is applicable.
Can the costs of litigation (e.g. court costs, as well as the parties’ costs of instructing lawyers, experts and other professionals) be recovered from the other side in your jurisdiction?
The prevailing party will usually be awarded the recovery of its costs corresponding to its rate of success. Costs include legal fees, court fees, costs of experts, translators, etc.
The reimbursement of legal fees is determined based on a regulation issued by the Ministry of Justice, irrespective of a party’s fee arrangement with its legal counsel:
reimbursement is only awarded for the number of acts of legal service as specified in the regulation (consultation with the client, sending of a pre-trial notice, attendance at an oral hearing, submission of a statement with the court, etc.); and
the reimbursable amount for each act of legal service is, simply put, calculated as a percentage of the value of the dispute (however, the higher the disputed amount, the lower the percentage).
In many cases, the reimbursement of legal costs does not cover the actually incurred cost of legal services.
What, if any, are the collective redress (e.g. class action) mechanisms in your jurisdiction?
In compliance with European Union Directive No. 2020/1828, dated 25 November 2020, on representative actions for the protection of the collective interests of consumers, a law on class actions is currently being prepared. Unfortunately, the legislative bill has not yet even been proposed in Parliament and is still being drafted and discussed.
What, if any, are the mechanisms for joining third parties to ongoing proceedings and/or consolidating two sets of proceedings in your jurisdiction?
Czech law distinguishes 3 different mechanisms for joining third parties – main intervention, supportive intervention and consolidation of proceedings.
Main intervention – anyone who claims to be the holder of a right that is subject to a pending proceeding between other parties, may petition both parties of the pending proceeding to join thereto and become third independent party therein. Subsequently, the court will decide to which party the claimed right belongs, resolving the issue complexly.
Supportive intervention – anyone who claims that they have a legal interest in supporting either the plaintiff or defendant in an ongoing proceeding may join thereto, either on the side of the plaintiff or defendant. The court will rule on the admissibility of such intervention only upon a motion of either of the original parties.
Consolidation of proceedings – the court may order the consolidation of two or more proceedings into one proceeding in the interest of procedural efficiency.
Are third parties allowed to fund litigation in your jurisdiction? If so, are there any restrictions on this and can third party funders be made liable for the costs incurred by the other side?
Third-party funding is not specifically regulated by Czech law. Given the lack of regulation, the third-party funder is also not directly liable for the costs incurred by an opposing party and does not even need to be disclosed.
What has been the impact of the COVID-19 pandemic on litigation in your jurisdiction?
As in many other countries, the pandemic had a negative impact on court and other proceedings, causing delays particularly due to the inability to hold oral hearings and other restrictions imposed by the government. Nevertheless, the length of such delays is highly individual.
What is the main advantage and the main disadvantage of litigating international commercial disputes in your jurisdiction?
According to the European Union statistics, the average duration of Czech civil litigation proceeding is one of the shortest among all member states. Most cases before the district courts are resolved within 12 months from the filing the statement of claim and appellate proceedings last about 6 months on average.
Another advantage is the existence of accelerated procedures (see question No.: 11 above), e.g. the payment orders are usually issued within 1-2 months after the statement of claim is filed.
On the other hand, the justice system is composed almost exclusively of career-judges who often have no out-of-court experience, which may sometimes lead to more formal and less business-orientated judgments, although formalistic approach is often rejected by the higher courts. The proceedings may also be prolonged by (repeated) appeals or objections of procedural nature.
In comparison, arbitration proceedings are generally faster, less formal and may result in more business-oriented decisions. Thus, the Prague Arbitration Court attached to the Economic Chamber of the Czech Republic and Agrarian Chamber of Czech Republic is also regularly used by the parties to administer commercial disputes.
What is the most likely growth area for commercial disputes in your jurisdiction for the next 5 years?
Due to European Union regulation, the Czech Republic must pass the above-mentioned class action act that has so far been missing. Thus, a rise in class action suits can be expected (depending on the final wording of the future law).
Moreover, the Russian aggression against Ukraine and rising inflation have affected many supply chains and caused great disruption. These disruptions may lead to the rise of the related commercial disputes.
Finally, interesting commercial disputes may arise in connection with the European energy crisis – the fall and insolvency of several large energy distributors and solar-panel-installation companies has already occurred, leading to various commercial and consumer disputes.
What, if any, will be the impact of technology on commercial litigation in your jurisdiction in the next 5 years?
The electronic data box communication system has been used for years and it is a preferred means of communication with the courts among Czech professionals. The system is also being constantly improved, e.g. to enable the sending of high-volume messages.
The electronic collection of laws authorised by the state and electronic court files are in preparation. The latter, together with the improvements of the data box system, will significantly decrease the number of hard-copy filings.
In the coming years, we can also expect a deeper artificial intelligence implementation into legal work, which is rather at the beginning in the Czech conditions.
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