Conflict of interest creates legal uncertainty. Experts call for revision of the law
19 \ 11 \ 2025
The Prague Chamber of Commerce organized a conference on the topic of "Conflict of interest in public procurement and the provision of subsidies." Experts from the legal, academic, and business spheres agreed that the current legal regulation of conflicts of interest is insufficient, inconsistent with other laws, and creates legal uncertainty in practice for contracting authorities, entrepreneurs, and subsidy providers. This results in concerns about decision-making, delayed projects, the risk of corrections to European subsidies, and an environment in which honest companies compete with fears that they will be disqualified due to unclear interpretations.
Experts emphasized that conflict of interest is not just a legal term or a moral problem for politicians, but a practical risk factor that affects the fairness of public procurement and the use of subsidies on a daily basis.
"Conflict of interest is a red light warning of a loss of transparency, public money, and public trust. It is not always corruption, but it is always a potential advantage that undermines confidence in fair competition," said Jaromír Císař from the Portos law and consulting firm.
According to Jaromír Císař and others, the uncertainty of interpretation means that public contractors often do not know whether to exclude the most advantageous bid, and officials are afraid to sign even completely standard decisions.
The conflict of interest law is still not linked to the rest of the system
According to experts, one of the main problems is the lack of coordination between the Conflict of Interest Act (159/2006 Coll.) and the Public Procurement Act and budgetary rules. Furthermore, the ambiguity of interpretation gives rise to legal risks, which are then transferred to municipalities, regions, and entrepreneurs.
"In Europe, conflict of interest is understood as a threat to objectivity, not as an automatic obstacle based solely on ownership structure. However, Czech law works with mechanical criteria that are not linked to real procurement processes. The result is chaos, different interpretations, and public institutions' fear of signing anything," said Michal Tomášek, professor of European law.
Contracting authorities: Ambiguous rules paralyze decision-making
The Railway Research Institute, which represents both contracting authorities and suppliers, has confirmed that legal uncertainty regarding conflicts of interest complicates decision-making, prolongs project preparation, and increases costs.
"Every major project today undergoes several legal assessments. Contracting authorities are under pressure to prevent even the apparent risk of a conflict of interest, which leads to delays and caution that make the system inefficient and significantly more expensive. A clear methodology would be a huge relief for all parties," said Martin Bělčík, CEO of Výzkumný Ústav Železniční a.s.
According to him, legal uncertainty also affects companies: inconsistent interpretations between authorities and supervisory bodies lead to the rejection of bids, fears of reputational damage, and a loss of motivation to participate in competitions.
What to change: clear methodology, linking laws, understandable rules
According to experts, three steps in particular would improve the system:
Link the conflict of interest law with public procurement law.
Introduce uniform methodologies for subsidy providers and contracting authorities.
Define the differences between entitlement and non-entitlement subsidies.
"A law that everyone understands—officials, entrepreneurs, and citizens alike—is the foundation of trust. If we want to protect public funds and equal opportunities for companies, we must simplify the rules, link them together, and explain them clearly," said Prof. Tomášek.
"Today, only formal ownership is often assessed, not real influence. At the same time, situations where a real conflict of interest can harm the public interest are overlooked. Modernization of the law is essential," added Jaromír Císař.
"The solution to conflicts of interest does not lie in stacks of paper. What matters is the actual loss of control and influence. In Canada and the US, there are 'blind trust' models that work thanks to an independent administrator and a strong supervisory mechanism. This safeguard is lacking in the Czech Republic," concludes Jaromír Císař.
Source: Prague Chamber of Commerce press release
