1. LEGAL SYSTEM

The Czech legal system is based on the codified principles of civil law. The cardinal source of law is written legislature and its main areas are codified. The forms of court proceedings are prescribed in Act No. 99/1963 Coll., Civil Procedure Code ("Civil Procedure Code"), and in Act No. 292/2013 Coll., on Special Civil Proceedings ("Special Civil Proceedings Act"). Although judicial precedents (i.e., interpretation by the courts) are generally non-binding, the Supreme Court of the Czech Republic regularly comments on case decisions to provide guidance and establish uniformity among the lower courts, which are likely to adhere to these.

On 1 January 2014 the long-awaited Act No. 89/2012 Coll., Civil Code ("Civil Code") came into effect, and brought many changes into the Czech legal system. Simultaneously, the Civil Procedure Code was recently modified and amended. One of the most significant modifications is the change of terminology (due to the new Civil Code) and several other changes (such as which court is the court of first instance in particular cases or the modification of forms of enforcement of judgments).

Civil dispute proceedings are divided into two groups: (a) "indisputable (nesporné) proceedings", e.g. inheritance proceedings, trust fund proceedings or legal capacity proceedings, which are governed by the Special Civil Proceedings Act; and (b) "disputable (sporné) proceedings" which are governed by the Civil Procedure Code.

Next to the regulation of civil dispute proceedings, Act No. 150/2002 Coll., Code of Administrative Justice also provides for the possibility to submit a claim against an administrative body.

The Czech Republic is a member of the European Union and therefore is bound by European legislature, in particular by EU Regulation No. 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters ("Brussels I bis") and EU Regulation No. 593/2008 on the law applicable to contractual obligations ("Rome I").

The Czech Republic has a four-tier system of courts and two instance proceedings. The Czech court system is composed of district courts, regional courts, two high courts, two supreme courts as well as the Constitutional Court of the Czech Republic which stands separately from the other (i.e. general) courts. The courts in the Czech Republic operate independently from each other. The first supreme court (Supreme Court of the Czech Republic) is responsible for civil (including commercial) and criminal matters while the second supreme court (Supreme Administrative Court of the Czech Republic) is responsible for administrative matters (including taxes). Court proceedings are oral and public, with exemptions stated by the law (juvenile justice). The procedure is based on an inquisitorial system with features of the adversarial system. There is no jury.

Each court handles civil (including labour), commercial and criminal matters. In general, cases are first heard before the district court while the regional court serves as an appellate court. However, the regional court may also act as a court of first instance (especially in some commercial disputes) in cases where an appeal is decided by the high courts. Administrative proceedings are carried out by the regional and the Supreme Administrative Court. Currently in the Czech Republic, there are 86 district courts and 8 regional courts.

The general as well as the specific jurisdiction is stipulated in the Civil Procedure Code, in the Special Civil Proceedings Act and in the Code of Administrative Justice.

In appropriate cases, it is possible to submit a petition to the district or regional courts for granting interim measures of protection, such as a preliminary injunction.

Currently, legal proceedings in the Czech court system are generally viewed as being rather slow. Depending on the complexity of the case, a dispute may take anywhere from a few months to a couple of years before a final settlement. Generally, under Czech civil procedure law, there are no prescribed periods within which the courts are obliged to decide (with the exemption of procedural acts such as preliminary injunctions or decisions in commercial register matters, etc.).

Disputes involving a claim for payment of a specific amount usually take a shorter period of time. For example, the court may decide to make a judgment based strictly on the application for a payment order, without a hearing or examining the defendant. The court may issue the payment order if the exercised right follows from the facts stated by the claimant; however, an explicit demand by the claimant is not required, and the payment order has the same effect as a final judgment in the matter. The court may also issue an order to pay a bill (cheque) without a hearing, if the claimant submits an original copy of a bill of exchange, or cheque, whose authenticity is uncontested. It is also possible to issue an electronic order for payment or a European order for payment

Generally in the Czech legal system, the only legal remedy against a judgment by a court of first instance is an appeal. The devolutionary effect of the appeal applies under Czech law. This means that the contested decision of a lower level court will be resolved by the appellate court; however, reconsideration is possible, and certain appellate decisions can be resolved by the first instance court.

A party may appeal most decisions of the first instance courts. On appeal, a party may challenge any procedural irregularities or the erroneous application of substantive law, and in some very rare and specific situations it may be possible to offer new facts and evidence in support of the appeal.

The court of second instance will either deny or allow the appeal. If the appeal proceeds, the court will review the factual and legal aspects of the case which have been considered by the court of first instance, and may accept new facts and evidence. The court is not restricted by the submission of the appellant, nor is the court bound by the reasoning stated in the appeal. The court is only bound by the scope of the appeal. According to the rules of appellate procedure, after reconsidering the relevant facts, the court will either (i) affirm the first instance judgment; or (ii) overrule the judgment and change the ruling. Furthermore, the appeal court can annul or vacate the previous decision and remand the matter to the court of the first instance, or terminate the proceeding.

In addition to the appeal procedure which is an ordinary remedy, Czech law allows the use of extraordinary legal remedies under a strictly defined set of conditions such as: revision (pertaining to legal aspects), petition for retrial (dealing with factual aspects), and petition for nullity (dealing with procedure aspects).

Court fees are based on the Court Fees Act and depend on the amount in dispute. If the amount in dispute is:

-up to CZK 20,000, the court fee is CZK 1,000;

-from CZK 20,000 to CZK 40,000,000, the court fee is 5% of the total value of the claims;

-higher than CZK 40,000,000, the court fee is CZK 2,000,000 and 1% of the value exceeding CZK 40,000,000. The value higher than CZK 250,000,000 is not taken into account.

Litigation costs mainly include court costs, attorneys' fees, and expenses for expert opinions, evidence and language translations/interpretations, which are normally paid by the unsuccessful party.

Any individual that receives a valid judgment and is entitled to request performance of the judgment from another person may, in the absence of voluntary execution or performance within the period specified in the judgment, file a petition for enforcement of the judgment. The execution can be carried out on the basis of a court order or with a private (self-employed) judicial executor. There are also several pecuniary forms of judicial enforcement including wage deductions, an order to pay from an account at a specified financial institution, a sale of assets, a sale of enterprise, a sale of movable assets and real estate, management of real estate or a judicial lien. In addition, there are non-monetary forms of enforcement that include clearance of real estate, seizure of property, division of common property, performance of works or suspension of a driving license.

The legal provisions covering business crimes went through an enormous development lately. The area of business crime and the criminal offences falling within this area have been extended and the sanctions made more restrictive. Concurrently, the criminal liability of legal entities has been introduced by Act No. 418/2011 Coll, on Corporate Criminal Liability. In cases of fraud (in particular credit fraud), embezzlement, bribery, or breach of duty in property administration, business crime plays a substantive role in the Czech Republic.

In comparison with civil proceedings, criminal proceedings are distinctly faster and also cheaper (there are no court fees). Parties attempt to initiate criminal proceedings for various reasons; one reason is often to get hold of information which only the State Prosecutor can access and which would be otherwise unknown to the victim of the crime. Thus, business crime victims often initiate criminal proceedings to gain access to evidence, in order to use this in civil proceedings (which may be carried on concurrently).

The victim claiming damages in the criminal proceeding does not need to specify the amount of damages and if the harm is proven, the proceedings to recover damages are usually very fast.

In criminal cases there are also two instances; whereby an appeal against the first instance decision is possible. Nevertheless, there are no separate criminal courts in the Czech Republic for particular crimes. Criminal cases are decided by specialized judges and panels. In the Czech Republic criminal proceedings are initiated by the police, as the police are obliged to conduct all necessary investigations to reveal the fact that a crime was committed. Anyone may file a criminal complaint of a crime being committed to the State Prosecutor's Office or to the police, in which case the police are supervised by the State Prosecutor. If the justified facts suggest that a crime was committed, the police initiate the criminal prosecution immediately. A copy of the decision to initiate the criminal prosecution is served to the accused no later than the beginning of the first interrogation and within 48 (forty eight) hours to the State Prosecutor and the defence counsel.

The preliminary proceedings are led by the State Prosecutor and only he/she can either submit the indictment to the court, in case he/she has enough evidence proving the guilt of the accused, or discontinue the criminal proceedings.

After studying the indictment submitted by the State Prosecutor, the judge orders a trial (hlavní líčení). The trial is the most important part of the criminal prosecution. Within the proceedings the State Prosecutor is obliged to prove the guilt of the accused while the principle in dubio pro reo applies – if the authorities cannot sufficiently prove the facts, it shall be assumed that the facts are not proven. The accused has the right, but not an obligation, to prove his/her innocence. The judge evaluates the evidence (e.g., examination of witnesses, examination of the accused, expert opinions). In business crime proceedings the most important evidence includes the examination of witnesses, expert opinions and economic analyses – it is often important to prove the correctness of final accounts, or other sophisticated economic evidence. Moreover it is very important to establish whether the offence was intentional or caused through negligence. The trial ends with a judgment – either a guilty verdict (a sentence) or a verdict of not guilty (an acquittal) or another procedural decision (e.g. abatement, postponement or settlement if possible).

A guilty verdict may be appealed by the accused or by the State Prosecutor, while an acquittal may be appealed only by the State Prosecutor. The accused can appeal the decision of the court of lower instance before the court of higher instance (e.g. from the district court to the regional court).

The appellate court reviews the legality and justification only of those sentences of the judgment against which an appeal was filed, including the correctness of the criminal proceedings in terms of alleged errors. The appellate court can (a) uphold the appeal; or (b) revoke the contested judgment. Furthermore, the appellate court may deviate from the factual findings of the court of the first instance only if it presents important evidence for the factual findings which were already presented during the main trial, or if it presents new evidence.

The criminal law enforcement authorities are the court, the State Prosecutor and the police. Simple cases before the district court are decided by sole professional judges and in difficult cases by a panel of one professional judge and two lay judges. The main "player" is the State Prosecutor, which is the only body capable of bringing a criminal action – the indictment. The organization of the State Prosecutor's Office corresponds to the organization of the courts (i.e. district, regional, high and Supreme State Prosecutor's Office). The State Prosecutors' Office is a part of the Ministry of Justice.

If the business crime caused damages, the injured party may ask for a remedy within the criminal proceedings (adhezní řízení) or may initiate separate civil proceedings. The surrender of the unjust enrichment may also be required. Civil and criminal proceedings may therefore run concurrently. The court in the civil proceedings is bound by the verdict of the criminal court. Under the Act No. 45/2013 Coll., on Victims of Crimes, effective from 1 August 2013, a new specific role of the "victim" was established. The main difference between a victim and an injured party is that a victim may only be an individual and thus in a specific situation a bereaved person may also be considered a victim. Under this Act the victim of a business crime benefits from new rights. For example, the victim may make a statement regarding the impact of the crime on his/her life which may help the court to decide about the appropriate and fair judgment. Moreover, the victim may be defended by a principal for free (newly, the principal may be a legal entity or an organization specialized in providing social services). In addition to the defending principal the victim may also have a confidant who helps the victim to deal with the consequences of the crime.

Every party may apply for the production of evidence in criminal proceedings, i.e., the State Prosecutor, the accused, or the victim. The judge can even call for the production of evidence which nobody applied for. The judge decides if the production of evidence is important, or if this is redundant and therefore merely an obstruction to the proceedings.

The victim may (if approved by the judge) question the accused, but only after the judge has already finished the examination.

Interim injunctions may be granted during the proceedings. These represent an enumerative area of duties that the court may grant to the accused within the criminal proceeding. The aim of these interim injunctions is to secure the rights and freedom of the victim such as life, freedom or human dignity. The court can grant interim injunctions only if there is enough evidence proving the guilt of the accused. Types of interim injunctions include e.g. a ban on contact with the victim, a ban on entry into a common residence with the victim or a ban on traveling abroad.

If the documents were legally gained within the criminal proceeding, they can be used further in the civil proceedings. The principle of free evaluation of the evidence (zásada volného hodnocení důkazů) applies particularly in the criminal proceedings. Therefore, the evidence might be anything which is able to contribute to the clarification of the crime and which is admitted by the court as evidence.

Compared to civil proceedings criminal proceedings are usually significantly faster. Generally, the time frame for the criminal proceeding depends on the complexity and the uniqueness of the case. Simple cases are decided by the court of first instance within 1 (one) year and by the appellate court within 18 (eighteen) months. Complex cases, especially those regarding business, may take a longer time. The court itself is not bound by any statutory period of time.

Contrary to civil proceedings, in criminal proceedings court fees do not exist; ergo criminal proceedings are initiated ex officio. On the other hand, the accused has to bear the costs for any expert's opinion (if not required by the court itself) and the attorney's fees. The attorneys specialized in criminal proceedings may bill their hourly rate to the client, but the court will adjudicate only a fee prescribed by the secondary legislation.

Corporate Criminal Liability

The Act No. 418/2011 Coll, on Corporate Criminal Liability, effective from 1 January 2012 implemented the requirements set out by EU Directive 2009/52/EU, so called "direct liability of legal entities". Under this Act, a legal entity may be prosecuted if the crime has been committed by one of the persons listed in this Act and which is imputable to the legal entity. The commitment of a crime by actions of (a) a statutory body of the legal entity; (b) a member of the statutory body; (c) a person acting in a managerial capacity carrying out management or control activities; or (d) a person exercising a decisive influence over the management of the legal entity is imputable to the legal entity.

The commitment of a crime by an employee or a person having a similar status is imputable to the legal entity only if (a) this person has acted according to the instructions of the above-mentioned bodies or persons; (b) the above-mentioned bodies or persons have not performed sufficient control over the activity of employees or other subordinates; or (c) have not taken sufficient measures to avoid or avert the consequences of the committed crime.

All crimes as set out in the Criminal Code give rise to prosecution with the exception of those crimes enlisted in an enumerative list contained in this Act.

Legal entities are mostly subject to financial sanctions for any violation of the law. The ultimate sanction is the dissolution of the legal entity.

According to publicly accessible information only very few proceedings with legal entities are waiting to be heard before the courts in the Czech Republic at the moment.

According to the insolvency law (Act No. 182/2006 Coll. the Insolvency Act), a debtor is bankrupt if it has payable financial liabilities in arrears more than 30 (thirty) days and is unable to satisfy these obligations. An entrepreneur or other legal entity is considered bankrupt if it has become over-indebted, i.e., the debtor's liabilities exceed the debtor's assets. In all situations, the Insolvency Act requires a plurality of creditors.

An application for the opening of insolvency may be filed either by the debtor itself or by any of its creditors. The Insolvency Act incorporates several forms of solutions to insolvency, including: (a) straight bankruptcy proceedings (Konkurs); (b) reorganization (Reorganizace); (c) debt relief or discharge from debts (Oddlužení); and (d) special forms of insolvency solutions (e.g. insolvency of a financial institution). In addition to the new forms of solutions to insolvency, the Insolvency Act implements the use of the Insolvency Register, which is a public register that contains a list of debtors and creditors and the documentation related to each insolvency case.

Insolvency proceedings are published on the website of the Czech Ministry of Justice at http://www.justice.cz.

The insolvency courts are not separate courts; instead, they are specialized departments within the regional courts. The role of the insolvency courts is to supervise and approve any measures undertaken by the insolvency receiver and the creditors. The ultimate aim of the bankruptcy is to achieve a proportional satisfaction of the creditors from the debtor's property belonging to the bankruptcy estate.

On the other hand, reorganization serves the satisfaction of creditors by preservation of the debtor’s business. In general, a reorganization is possible only for large debtors whose total annual net turnover in the previous accounting period has reached at least CZK 50 million (i.e. approximately EUR 2 million), or for those that employ more than 50 employees. With the consent of the majority of secured and unsecured creditors, reorganization is also permissible for smaller companies subject to other conditions.

The debt relief is applicable only to non-business debtors and makes available a discharge from the balance of the debtor's liabilities, provided that a part (at least 30%) of the debts is repaid.

Arbitration in the Czech Republic is governed by Act No. 216/1994 Coll., on Arbitration Proceedings and the Implementation of Arbitral Awards (Arbitration Act) and applies to both domestic and international arbitration proceedings.

Under the Arbitration Act, a permanent court of arbitration may only be established by an Act of Parliament (Article 13 Arbitration Act). A permanent arbitration court is empowered to enact its own statute and rules of arbitration, which shall be published in the Commercial Bulletin.

Currently, three permanent arbitral institutions have been founded in the Czech Republic, the main one of which is the Arbitration Court attached to the Economic Chamber of the Czech Republic and the Agricultural Chamber of the Czech Republic (the “Arbitration Court”), founded in 1949. The other two are the Exchange Court of Arbitration and the Arbitration Court of the Czech Moravian Commodity Exchange Kladno.

The Arbitration Court is the major permanent arbitral institution in the Czech Republic and administers both domestic and international disputes. It adopted its Rules of the Arbitration Court effective as of 1 July 2012 and also offers several rules for specific cases such as Additional Procedures for On-line Arbitration Rules for Domestic Healthcare Payments Disputes, Additional Procedures for Consumer Disputes or Rules

for .cz domain name dispute resolution. The Arbitration Court is the only arbitration court in the world

for .eu domain name dispute resolution. All currently effective Rules and Additional Procedures, with the exemption of those applicable to consumer and healthcare payments disputes, are available in English on the Arbitration Court’s website (http://en.soud.cz/rules). The rules differ on various issues including procedure, fees charged and the language and place in which proceedings are heard.

Pursuant to the Arbitration Act, the parties may conclude an arbitration agreement that governs any or all disputes between them arising from their contractual relationship. In the agreement, the parties may agree whether the arbitration shall be decided by one or more arbitrators, or by an established arbitral institution. The parties may also specify in their agreement what procedural rules, or substantive law will apply to the resolution of the dispute.

The parties may agree to arbitrate disputes that have already arisen (compromise or submission agreement), or disputes that may arise in the future. However, in order for an arbitration agreement to be valid, it must be concluded in writing between the parties. The written component is deemed to be met if the agreement is contained in a telegram, a telex or another electronic means of communication. The agreement does not have to be signed, but the will of both parties to enter into the agreement must be clear.

Since the Act No. 257/2016 Coll., on Consumer Credit ("Consumer Credit Act"), came into effect on 1 December 2016, a total ban has been introduced on arbitration as a dispute resolution mechanism between credit providers and consumers. From this time onwards, all consumer credit disputes may be resolved by civil courts only.

In arbitration proceedings, decisions regarding property disputes can only be issued in: (a) disputes linked to the enforcement of the decision; (b) disputes arising within the course of insolvency proceedings; and (c) competence disputes. Disputes relating to personal status, marital status, family law matters and administrative matters are not arbitrable.

The parties are free to agree on the substantive law, the procedural rules, the seat and language of arbitration. In addition, the parties are free to agree on the number of arbitrators and their method of appointment. However, there must always be an odd number of arbitrators.

Arbitral tribunals do not have the authority to order interim measures of protection, or to grant injunctions in support of the enforcement of arbitral awards. Article 22 of the Arbitration Act therefore provides the courts with jurisdiction, upon application by any party, to order a preliminary measure or injunction if, during or prior to the commencement of arbitration proceedings, circumstances arise which are likely to jeopardize the enforcement of the arbitral award.

Generally, arbitral awards are enforceable by the courts and private (self-employed) judicial executors in the same manner as court judgments.

Arbitral awards may very rarely be challenged before the courts. The valid grounds for setting aside an arbitral award include the following:

-the award has been issued in a case in which no valid arbitration agreement has been concluded (lack of jurisdiction);

-the arbitration agreement is not valid for other reasons, has been terminated or does not concern the subject matter in dispute (lack of competence);

-an arbitrator participated in the arbitration proceedings whose appointment was neither based on the arbitration agreement nor on any agreement between the parties, or the individual appointed as the arbitrator did not possess the legal capacity to act as arbitrator;

-the award was not adopted by a majority of the arbitrators;

-a party was not given the opportunity to plead its case before the arbitral tribunal;

-the award obligated a party to an action that was not requested by the other party, or to an action which is not permitted under domestic law; or

-it is determined that reasons exist, which provide a sufficient justification for reopening the case.

Council Regulation 1215/2012 deals with the recognition and enforcement of judicial decisions in civil and commercial matters. According to this Regulation, decisions issued by a court of any EU Member State shall be recognized by other EU Member States without a special procedure. Czech judicial decisions dealing with civil and commercial matters that were issued prior to the Czech Republic's entry into the EU, and decisions given in connection with proceedings initiated before entry into the EU, cannot normally be enforced in any other EU Member State.

Furthermore, since 21 October 2005 and the enactment of EC Regulation No. 805/2004 of the European Parliament, any European Enforcement Order for an uncontested claim is valid in the Czech Republic unless:

-pursuant to Act No. 91/2012 Coll., on International Private and Procedural Law effective from 1 January 2014, the provisions of the Act shall apply unless an international treaty or European law binding on the Czech Republic stipulates otherwise. Pursuant to the Czech Act on International Private and Procedural Law, decisions of foreign authorities as well as foreign judicial settlements and foreign notary deeds shall be effective in the Czech Republic if they are final and conclusive, confirmed by the foreign authority and recognized by Czech authorities. However, foreign decisions shall not be recognized or enforced if the foreign decision impedes the exclusive jurisdiction of the Czech Courts, the proceedings could not have been conducted under the authority of the foreign state; and, the provisions concerning the competence of the Czech Courts have been applied to the consideration of jurisdiction of the foreign authority;

-a final and conclusive decision has been issued by Czech authorities, or a final and conclusive decision of an authority of the third state has been recognized in the Czech Republic;

-the authority of the foreign state failed to allow the party against whom the judgment or the award is to be enforced, to participate in the proceedings, especially if the participant was not personally served with notice of the lawsuit or the writ of summons;

-recognition of the foreign award would violate Czech public order; or,

-reciprocity of the award is not guaranteed, or reciprocity is not required because the foreign decision is not directed against a Czech citizen or a Czech legal entity, or if a Czech legal entity has agreed in writing that the foreign court has a competence (property disputes).

Pursuant to the Czech Act on Arbitration, arbitral awards issued abroad shall be recognized and enforced by Czech Courts in the Czech Republic if reciprocity is guaranteed. Recognition of a foreign arbitral award does not require a special decision. The courts may only decline to recognize and enforce the foreign arbitral award under limited conditions based on the petition of the party obliged by the award.

The Czech Republic is a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, with the reservations that the Convention will only be applied to the recognition and enforcement of awards made in the territory of another contracting state and with regard to awards made in the territory of non-contracting states, the Convention will only be applied to the extent to which those states grant reciprocal treatment.

The Czech Republic is also a party to the 1961 European Convention on International Commercial Arbitration.

2. LITIGATION

3. BUSINESS CRIME

4. INSOLVENCY

5. ARBITRATION

6. ENFORCEMENT OF FOREIGN JUDGMENTS AND ARBITRAL AWARDS

7. PRACTICE TIPS

PRACTICE TIPS

TYPE OF PROCEEDINGS

PROCEDURE AND ASSUMPTIONS

The Czech Code of Civil Procedure does not provide for a special proceeding for collective redress. Consumer organizations may file, on behalf of consumers, claims against unlawful behaviour. However they cannot sue for damages. In such cases, each consumer must file a separate action.

Class actions are not permitted in the Czech Republic.

Pro Bono System

Mandatory Representation

by Counsel

Document Production

In civil litigation (in particular in case of actions for performance), the court adjudicates on the basis of evidence submitted/offered by the parties. In non-contentious proceedings (e.g. proceedings on personal status), evidence may be produced even though the parties do not offer to present evidence.

-The duration of court proceedings depends on the number of hearings and the extent of evidence.

-A third instance is not permissible in the Czech Republic. A legally effective judgment may be contested by so called appellate review in the Supreme Court. The appellate review is an extraordinary remedy.

Simple cases: first instance: 1 year; second instance: 8 to 12 months.

Complex cases: first instance: 1 to 2 years: second instance: 1 to 2 years.

Yes. The law prescribes compulsory representation by an attorney-at-law in cases of appellate review proceedings at the Supreme Court.

Yes. There is legal aid for people who cannot afford the costs of legal proceedings. Legal aid ex officio is provided for by the Czech Bar Association and governed by the Bar Act.

Court fees are based on the Court Fees Act. In general, the court fee is calculated based on the amount in dispute. If the amount in dispute is:

-up to CZK 20,000, the court fee is CZK 1,000;

-from CZK 20,000 to CZK 40,000,000, the court fee is 5% of the total value of the claim up to a maximum amount of CZK 2,000,000;

-above CZK 40,000,000, the court fee is CZK 2,000,000 plus 1 % of the value exceeding CZK 40,000,000. A value higher than CZK 250,000,000 is not taken into account.

Court fees for electronic compulsory payment orders also depend on the amount in dispute. If the amount in dispute is:

-up to CZK 10,000, the court fee is CZK 400;

-from CZK 10,000 to CZK 20,000, the court fee is CZK 800;

-above CZK 20,000, the court fee is equal to 4%.

The electronic compulsory payment order may be issued only if the amount in dispute does not exceed CZK 1,000,000

Assumptions based on an amount in dispute of EUR 1,000,000: first instance: preparation of the claim/responses, court hearings, preparation of the hearings (meetings with client, witnesses, correspondence with client): In total EUR 25,000 to 40,000; second instance: preparation of the appeal/responses, court hearing: In total EUR 7,000 to 15,000.

Assumptions based on an amount in dispute of EUR 10,000,000: first instance: preparation of the claim/responses, court hearings, preparation of the hearings (meetings with client, witnesses, correspondence with client): In total EUR 50,000 to 200,000; second instance: preparation of the appeal/responses, court hearings: In total EUR 20,000 to 50,000.

There are no civil jury trials in Czech Republic.

-Documents shall be submitted in Czech. Czech translations must be attached to documents in foreign languages.

-The court is entitled to ask the parties or third parties to submit other documents besides documents referred to as evidence.

-One copy of documents (documentary evidence) shall be submitted to the court. The counter-party is obliged to make their own copies using the copies from the court file at its own expense.

Approximate Costs

COURT FEES

ATTORNEYS’

FEES (NET)

Simple case

Complex case

STANDARD CIVIL PROCEEDINGS

class actions

-Litigation costs include court fees, attorneys' fees, and expenses for expert opinions and witnesses.

-Court fees at the first and second instances are due at the court's request after the action/ap- peal has been filed.

-Court fees exceeding CZK 5,000 must be paid by bank transfer to the court's bank account. Court fees not exceeding CZK 5,000 may be paid by duty stamps.

-Litigation costs are awarded against the losing party who must reimburse the winning party.

-The actual attorney fees of a party (depending on the fee agreement between attorney and client) may be substantially higher, but are of no relevance to the opposing party.

Approximate Duration

jury trials

Pro Bono System

jury trials

The accused shall be represented by counsel if

-the accused is (a) in custody, prison or protective treatment; (b) incapacitated or deprived of full legal capacity by a court decision); or (c) fugitive;

-if an agreement on guilt or punishment is being negotiated;

-if the court decides on extradition, transfer to another EU Member State, enforcement of a foreign criminal law decision or imposition of protective treatment; or

-if the offence is punishable with a minimum of five years of imprisonment (the accused may forfeit his/her right to the mandatory defence).

Each court has a list of counsels from which the counsels are chosen.

Yes.

-Documents shall be submitted in Czech. Czech translations must be attached to documents in foreign languages.

-The court is entitled to ask the parties or third par- ties to submit other documents besides docu- ments referred to as evidence.

-Copies of documents (documentary evidence) shall be submitted to the court. The counter-party is obliged to make their own copies using the copies from the court file at its own expense.

Document Production

Approximate Duration

The principle of free evaluation applies in criminal proceedings. Everything that can contribute to solv- ing the crime may be submitted as evidence.

Class actions are not permitted in the Czech Republic.

APPROXIMATE COSTS

Business Crime

Criminal proceedings are significantly faster than standard civil proceedings, but in very complex cases (e.g., in cases of business crime) the proceedings may be much longer.

Mandatory Representation

by Counsel

There are no court fees.

The accused may bear the costs for experts' opinions and attorney's fees. On the other hand, the attor- neys may bill in accordance with the secondary legislation and not their usually hourly rate.

There are no jury trials in the Czech Republic.

Simple cases: first instance: 6 months; second instance: 1 year.

Complex cases: first instance: 1 year; second instance: 1 to 1½ years.

class actions

The motion for preliminary injunction must be accompanied by all the evidence that the applicant bases the motion on.

For the purpose of securing damages that could arise as a result of preliminary injunction, the applicant is obliged to deposit a returnable security in the amount of CZK 10,000 at the court. In commercial matters, the amount is CZK 50,000.

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

Simple Case


Complex Case


Court fees are based on the Court Fees Act and amount to approximately CZK 1,000.

Assumptions: only the request for a preliminary injunction is filed: first instance EUR 3,000 to EUR 7,000; second instance: preparation of the appeal/responses, no court hearing: EUR 3,000 to EUR 6,000.

Assumptions: the request for a preliminary injunction is filed, meeting with the client: first instance: EUR 15,000 to EUR 30,000; second instance: preparation of the appeal/responses, meeting with the client: EUR 7,000 to EUR 15,000.

Approximate Duration

Preliminary Injunction Proceedings

First instance: the court shall make a decision no later than 7 days after the motion for a preliminary injunction has been filed; appellate proceedings: 2 to 8 months in second instance.

The arbitral tribunal evaluates all produced documents. The documents shall be submitted in the language in which the arbitration proceedings are conducted.

Arbitration fees are based on the Rules for Costs of Arbitration Proceedings and depend on the amount in dispute.

The following two estimates are based on the Rules for Costs of Arbitration Proceedings at the Arbitration Court attached to the Economic Cham- ber of the Czech Republic and to the Agricultural Chamber of the Czech Republic:

Assumption: sole arbitrator appointed and an amount in a dispute of EUR 1,000,000:

domestic disputes: arbitration fee EUR 30,000;

international disputes: arbitration fee (reduced by 30%) EUR 18,500 plus administrative fee (re- duced by 20%) EUR 15,000.

Assumption: sole arbitrator appointed and an amount in a dispute of EUR 10,000,000:

domestic disputes: arbitration fee EUR 40,000;

international disputes: arbitration fee (reduced by 30%) EUR 74,500 plus administrative fee (reduced by 20%) EUR 26,500.


Approximate Duration

APPROXIMATE COSTS

Procedural Costs

Simple Case

Complex Case


-The procedural costs depend on whether a sole arbitrator or an arbitral tribunal of three members is appointed, the complexity of the case, and the administrative charges.

-Arbitration costs are awarded against the losing party who must reimburse the winning party.

-Arbitration costs include fees, attorneys' fees and expenses for expert opinions and witnesses.

-The action shall not be tried until the fees are paid.

-In general, a special tariff for arbitration fees and administrative fees (lump-sum reimbursement of the costs of the arbitration court) applies to international disputes; in domestic disputes, the arbitration fees are 5% of the disputed amount, subject to a cap of CZK 1,000,000 (approx. EUR 40,000). The arbitration fee for domestic disputes in a foreign language is 50% higher.

-The fee for accelerated arbitration proceedings is 50% higher (accelerated proceedings take approx. 3 months in domestic disputes and 4 months in international disputes).

-If a sole arbitrator is appointed in an international dispute, the arbitration fee is reduced by 30% and the administrative fee is reduced by 20%.

Assumptions based on an amount in dispute of EUR 1,000,000: preparation of the arbitration claim/responses, review of 100 pages of documents, nomination of the arbitral tribunal, preparation of the hearings (meetings with client, witnesses, correspondence with client): in total EUR 28,000 to EUR 60,000.

Assumptions based on an amount in dispute of EUR 10,000,000: preparation of the arbitration claim/responses, review of 500 pages of documents, nomination of the arbitral tribunal, preparation and review of expert opinions, preparation of hearings and participation in meetings, meetings with the client, witnesses, and correspondence with client: in total EUR 50,000 to EUR 200,000.

The duration of arbitration proceedings can also be influenced by an agreement to have the arbitration award reviewed by a new arbitral tribunal.

ATTORNEYS’

FEES (NET)

Simple Case

Complex Case


Document Production

Arbitration Proceedings

The usual duration of arbitration proceedings is between 6 months and 2 years.

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

-Judgments that fall outside the scope of application of the EC Regulation/Lugano Convention must be submitted in the original or in a copy issued by the court that rendered the judgment. A certified translation of the judgment must be submitted.

-For enforcement of awards under the New York Convention, the creditor must provide the court with the authenticated original award or a duly certified copy thereof and the original of the arbitration agreement or a duly certified copy thereof.

Enforcement of Foreign Judgments and Arbitral Awards

Approximate Duration

The court fees are based on the Court Fees Act.

In case of monetary performance, the fee is calculated based on the amount in dispute. If the amount in dispute is:

-up to CZK 20,000, the court fee is CZK 1,000;

-from CZK 20,000 to CZK 40,000,000, the court fee is 5% of the total value of the claims up to a maximum amount of CZK 2,000,000;

-above CZK 40,000,000, the court fee is CZK 2,000,000 and 1 % of the value exceeding CZK 40,000,000.

A value higher than CZK 250,000,000 is not taken into account.

Court fees in cases of non-monetary performance:

-clearance of real estate:  CZK 5,000;

-other forms of enforcement: CZK 2,000


Application for recognition/enforcement of a foreign judgment:

Simple case: EUR 500 to EUR 1,000.

Complex case: EUR 1,000 to EUR 3,000.

6 to 12 months until a decision on recognition and enforcement is rendered in first instance. 5 to 10 months if the decision is appealed.

The duration of execution proceedings depends mainly on whether the debtor has executable assets and whether execution measures are opposed by the debtor.

-Under EC Regulation 44/2001 and the Lugano Convention, the party seeking recognition/ enforcement must submit a copy of the judgment which should be accompanied by a Certificate of Authenticity issued either by the court that rendered the judgment or by another competent institution of the state of origin.

-Further, in order to avoid any delays, attaching a certified translation of the judgment is highly recommended.

APPROXIMATE COSTS

COURT FEES

ATTORNEYS’

FEES (NET)

Approximate Duration

There is no fee for filing the petition for the commencement of insolvency proceedings.

Filing of insolvency claim:

Simple case: EUR 600 to EUR 1,000.

Complex case: EUR 1,000 to EUR 3,000.00.

Insolvency Proceedings

The commencement of insolvency proceedings is published by edict (e.g., on the website of the Czech Ministry of Justice under http://www.justice.cz). In the edict, the period for the filing of insolvency claims is set.

If a debtor files an insolvency petition, the duty to make an advance payment for the costs of the insolvency proceedings amounting up to CZK 50,000 may be imposed on the debtor.

Filing of Insolvency Claims by Creditors

6 months to several years.

The insolvency proceedings are initiated on the day of service of the insolvency petition at the insolvency court. No decision on the commencement of insolvency proceedings is made, only a notice is published in the Insolvency Register.

CONTACT

OFFICE

Pobřežní 12

CZ - 186 00 Praha 8

+420 234 765 231

praha@wolftheiss.com

www.wolftheiss.com/offices/czech-republic