Class actions will likely find a home in the Czech legal system

Streamlined trials, the fulfillment of the call for procedural economy, the unburdening of overworked courts – in short, an increase of efficiency in the judiciary. This, along with other benefits, is the promise held out by a newly proposed bill for a Class Actions Act. In what follows, we shall take a closer look at the legal institution of ‘class action’, what it means and how it might be implemented in domestic law.

Even today, Czech law contains elements of a collective (class or group) protection of rights. However, they are rather rudimentary, and for the most part not very efficient. In practice, there is no reasonable way in which the pursue the claims of numerous parties which are based on one and the same offense, i.e., based on what is known as a ‘mass event’: the enforcement of rights from mass events is too expensive; there is not a whole lot of trust in a consistent decision-making practice when it comes to the delivery of a verdict on many instances of essentially the same question; given the anticipation of only small awards to the individual, the route of collective enforcement is often not attractive financially. The justice ministry is now making efforts to change the situation, in the form of a new Class Actions Act which will provide a statutory framework for this special type of civil procedure.

The new bill takes a novel approach to a number of traditional principles of litigation. For instance, under the dispositive principle, it is upon the individual to decide to initiate a procedure, and then to pursue a chosen strategy. By contrast, the bill intends to strengthen the position of the courts: judges will no longer play the role of an impartial third party, but will moderate the individual steps taken by the person who acts (as the sole claimant) on behalf of the entire class or group, so as to ensure that the group as a whole suffers no loss or detriment.

Proceedings will only be commenced if the admissibility test is passed, under which a class action may be brought if a larger number of persons has claims which are sufficiently similar to fall within the same category, provided further that a class action appears to be a suitable way in which to resolve the dispute. The bill anticipates two different types of class action: opt-out (i.e., all members of the group of potential claimants automatically become parties to the proceedings, whereupon they may individually choose not to pursue their claims), and opt-in (i.e., injured parties must make expressly declare that they wish to accede to the action, and thus participate in the proceedings).

Incidentally, the bill is rather controversial: the Czech Bar Association and the Supreme Court, for instance, have spoken out against what they perceive to be shortcomings of the draft.

Explanatory memorandum regarding the bill for a Class Actions Act


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