In December 2020, the EU Collective Redress Directive (CRD) was published after decades of discussion. It introduced a set of uniform standards to protect the collective interests of consumers through representative actions. Although the two-year implementation deadline of the CRD lapsed in December 2022, the legislative implementation process in the Czech Republic took longer than expected.

The CRD was finally transposed through the Act No. 179/2024 Coll., on Civil Class Proceedings (CCPA) and will take effect from 1 July 2023.

So what are the main principles of this new regulation?

Scope of application

Under the CCPA, it's possible to litigate disputes between consumers and businesses over rights or legitimate interests arising after 24 November 2020.

The CCPA upholds the relatively narrow concept of class actions and doesn't aim to introduce the equivalent of the US Class Action Lawsuits, which allow claims in different areas of law.

The CCPA limits its scope to disputes arising from B2C relationships and doesn't apply in other areas (eg in employment disputes). Typically, the CCPA allows representative action mainly in areas like consumer contracts/consumer protection, privacy/data protection or product liability.

Interestingly, the definition of a consumer in the CCPA also includes entrepreneurs with less than ten employees and annual turnover not exceeding CZK50 million. So these entrepreneurs can also pursue their interests as consumers under the CCPA.

Opt-in regime

The regulation is based on the opt-in principle, where consumers have to either actively register their claim in the collective proceedings or pursue their claims individually after the end of the collective proceedings. Consumers can join the collective proceedings at the time of filing of the representative action by the qualified entity (see below) or afterwards.

Status of the “participating group member”

Consumers who register their claim in the proceedings (known as participating group members) don't have the status of a party or intervening party and have very limited procedural rights. The rights they do have consist primarily of the right to be heard or the right to inspect the court file.

Legal standing and admissibility

The representative actions need to be filed exclusively by registered nonprofit entities that don’t distribute profits or other resources among their members, statutory or other bodies or founders. This corresponds to the concept of a qualified entity as envisaged in the CRD.

The court also has to assess a number of other admissibility criteria, eg that the nonprofit entity acting as the plaintiff has no conflict of interest, that the group has at least ten members, the alleged rights or legitimate interests of the members of the group are based on a similar factual basis and that the representative action was not brought with malicious intent.

Redress measures

By way of a representative action, it's possible to claim standard redress measures that are already recognized by the Code of Civil Procedure – ie generally financial or non-financial performance (eg repair, replacement) or determine whether or not a legal relationship or right exists.

Interim measures

The CCPA doesn't contain special regulation of interim measures. So the Code of Civil Procedure applies, where interim measures (requesting that the opposing party or a third-party cease and desist doing certain conduct) can be sought in cases where it’s necessary to temporarily regulate the parties' relations or where the enforcement of a potential judgment against the defendant might be jeopardized.

Disclosure

Although the proposed regime of disclosure of evidence is far from the concept of disclosure known to common law legal systems, the CCPA goes beyond what the Czech legal framework currently offers.

According to the CCPA, the court has the option to order the counterparty or third person to produce relevant and narrowly specified evidence under its control if the party seeking the evidence has essentially exhausted the evidence available to it. If the third person fails to disclose the evidence without just cause, the court can assess the relevant issue being proved to the detriment of the party who was obliged to disclose it.