There is a risk of fragmentation in decision-making practices, warns mass litigation expert Barbora Kočtářová.

The government’s draft law on collective civil court proceedings (commonly referred to as mass litigation) is well prepared, yet it still poses certain risks. According to Barbora Kočtářová, head of the legal team at CÍSAŘ, ČEŠKA, SMUTNÝ and an expert on mass litigation, the draft opens the door to fragmentation in the courts’ decision-making practices.

The government’s draft law on collective civil court proceedings (commonly referred to as mass litigation) is well prepared, but still carries certain risks. According to Barbora Kočtářová, head of the legal team at CÍSAŘ, ČEŠKA, SMUTNÝ and an expert on mass litigation, the draft opens the door to fragmentation in the courts’ decision-making practices.

She stated this at a seminar held on Tuesday at the Constitutional and Legal Committee of the Chamber of Deputies (ÚPV), in cooperation with the law firm Císař, Češka, Smutný.

The draft law on mass litigation, which the Chamber of Deputies discussed in the first reading and which the ÚPV has scheduled for November, is, according to Kočtářová, a minimalist transposition of the relevant European directive, which she considers an appropriate solution. It is a new procedural tool with which we have no prior experience, and only practice will show whether it will need to be modified or expanded. Other European Union countries have also taken this approach, Kočtářová added.

She reminded that, unlike the original intentions of previous governments, the draft is based on the so-called opt-in principle, meaning active participation by the parties. It also explicitly includes confidentiality of information within the obligation to submit evidence and the use of evidentiary means contained in the Civil Procedure Code. Compared to the original draft, it imposes stricter requirements on organizations that will be allowed to file mass lawsuits. Their accreditation and supervision will be carried out by the Ministry of Industry and Trade, and the court will verify the intent in the initial stage of the entire proceeding.

Although Kočtářová considers the draft to be well prepared, she also pointed out problematic areas. Primarily, the draft allows for multiple proceedings to be conducted on the same matter. According to Kočtářová, this will lead to fragmentation in judicial practice and thus contradicts the very purpose of the draft.

Legally established retroactive effect?

A possible solution, according to Kočtářová, would be for the court to conduct proceedings on the first-filed lawsuit, while others would be suspended until the decision on it.

Deputy President of the Supreme Court Petr Šuk Photo: Supreme Court

Another issue is that the draft does not limit retroactive effect, allowing claims from the past to be sued, except for claims that are barred by limitation. "I believe a specific cutoff date should be set. For example, Slovakia has a three-year retroactive effect. Alternatively, November 2020, when the relevant directive was adopted," Kočtářová added.

Representatives of the judiciary also spoke at the seminar. They warned of possible risks of the draft from the perspective of judicial practice.

According to Deputy President of the Supreme Court Petr Šuk, it is reasonable to expect specialization, with mass litigation to be handled by the Municipal Court in Prague at first instance and the High Court in Prague on appeal. However, the deadlines set by the draft are absolutely unrealistic.

Unrealistic proposals

The draft foresees that the decision within the so-called certification procedure, where the court verifies the intent, must be issued within two months from the start of proceedings. "I say outright that the Municipal Court in Prague will not be able to meet this deadline, it is too short. I see the same problem with the two-month deadline for the decision on appeal. Again, it is unrealistic," Šuk said, adding that there should be no deadlines in the draft at all.

According to Šuk, it is also inappropriate that the defendant has no right to appeal against the certification of the organization representing the plaintiff. He also considers the five-percent fee threshold on the awarded amount unrealistic. The assessment and determination of the fee should be entrusted to the court by the legislator. Šuk also questioned why the draft only allows mandatory representation by an attorney and does not allow persons with legal education, such as employees of the subject, to represent the party in court.

Deputy President of the Regional Court in Prague Jiří Grygar pointed out that the demanding agenda of mass litigation cannot be handled under the current insufficient staffing of specialized court personnel. It is also necessary to speed up work on introducing electronic court files, as the volume of case material in mass proceedings is expected to be extraordinary. According to Grygar, it is also questionable how the court will realistically fulfill the legal obligation to publish the factual basis of mass litigation..

Article from the website: Česká justice