COVID-19: Consequences on Dispute Resolution in the Czech Republic

By Michaela Hermanova

04-2020

Like many other countries all over the world, the Czech Republic is currently undergoing an unprecedented nationwide lockdown. The Czech Government has declared a state of emergency and a number of extraordinary measures have been adopted. But what are their implications for dispute resolution in the Czech Republic?

1. Pending litigations

Currently, Czech courts remain open and court hearings are not generally prohibited. However, the Ministry of Justice has issued a recommendation (available in Czech here) to limit the physical presence of employees, judges and the public at courts. According to the recommendation, judges should postpone scheduled oral hearings where possible and only schedule new hearings if necessary (e.g. due to limitation and prescription periods). The Ministry also recommends that court employees work from home as often as possible and that public access to courthouses is limited.

In line with the Ministry's recommendation, a large portion of hearings has in fact been postponed. Not sure if your hearing is still on? Select the relevant court and insert your case No. here to check if a hearing is scheduled in your case in the next 30 days. If your hearing has not yet been postponed you can request the court to do so. In the current situation the court will be very likely to grant postponement.

The Presidents of individual courts have also adopted measures to mitigate the pandemic (available in Czech here). Most courts restrict access to courthouses by only admitting individuals summoned to a hearing who agree to make a declaration of no recent travel to COVID-19 risk areas. Courthouse guards are also instructed to carry out random body temperature checks. The public is encouraged to contact the courts remotely rather than in person. Some courts only accept submissions delivered by individuals in person in limited working hours and some do not accept them at all. We believe this should not cause any major problems because all Czech based legal entities, all Czech attorneys, as well as some individuals have an electronic mailbox (so-called "data mailbox") which they can use to make electronic submissions. Submissions can also be mailed by post or by an e-mail with an e-signature. Similarly, acceptance of cash or card payments in person is limited but remote payments are available as usual.

2. Court deadlines

All court deadlines are still in place. Courts will not extend or remit deadlines of their own accord.

Deadlines imposed by the court, such as a deadline for a party to provide their written statement, can also be extended by the court at the concerned party's request. Currently, the courts are likely to grant reasonable extensions in justified cases. These can include illness of the party or their representative, child care due to school closures or similar. Most court imposed deadlines can be extended even after they expire.

Statutory deadlines, such as deadlines to appeal, cannot be extended by a judge. However most of them can be remitted. A party who has missed a statutory deadline can make the relevant action late and at the same time make a justified request for a remission of the deadline. The action must be made within 15 days from the end of the event preventing the party from making the action on time. For example, if a party missed a deadline to appeal because they were hospitalised on the last day of the deadline they can still file the appeal together with a request for a remission within 15 days from their release from hospital.

Some statutory deadlines, such as the deadline to file an extraordinary appeal to the Supreme Court, cannot be extended nor remitted. Remission is also not available in the case of court imposed deadlines.

The Czech Parliament is currently discussing a number of new acts concerning the current COVID-19 pandemic, commonly called "lex covid". See here for an overview of the draft lex covid. According to the proposed wording, it should be possible to remit certain court imposed deadlines, as well as all statutory deadlines missed due to the anti-COVID-19 extraordinary measures even if remission would normally not be available. The 15-day deadline should also be extended. It should not expire sooner than 15 days after the relevant extraordinary measure is cancelled, and at the same time, it should not expire sooner than 15 days after the current state of emergency is discontinued.

3. Enforcement of judgements

So far, no direct changes to enforcement proceedings have been adopted. Due to the current situation, however, a number of businesses, as well as individuals might find themselves temporarily unable to pay the enforced receivable or to otherwise perform under the enforcement order. In such cases, the debtor should consider requesting a temporary suspension of the enforcement. The Ministry of Justice has even prepared a downloadable template request for the suspension due to the COVID-19 pandemic (available here in Czech).

In the draft lex covid, two changes are proposed with respect to enforcement proceedings. Firstly, it should be possible to remit certain deadlines if these are missed due to the anti-COVID-19 extraordinary measures even if remission would not normally be available. Secondly, enforcement agents would be obliged to terminate lengthy unsuccessful enforcement proceedings. This measure was already proposed in the standard legislative process, but as it seemed urgent to the legislator it was incorporated into the proposed lex covid and therefore discussed in the Parliament in an expedited legislative process.

4. Statute of Limitation

The limitation period can be suspended due to a force majeure event preventing exercise of a right in the last six months of the limitation period. In such cases the limitation period is suspended for the duration of the force majeure event. Once the limitation period is resumed it will continue to run at least for another six months.

In general, the COVID-19 pandemic, as well as the related extraordinary measures, will most likely constitute a force majeure event. But do they prevent parties from exercising their rights? We believe that in most cases they do not. Despite the current restrictions, individuals and entities are still able to claim their rights at court. If, on the other hand, an individual could not claim their right because they were quarantined as part of the anti-COVID-19 measures they might be able to rely on the suspension of the statute of limitation.

5. Initiations of new court proceedings & Preliminary injunctions

Even though the courts are running at a limited capacity it is still possible to initiate court proceedings as usual. Submissions can still be made to the courts in the standard ways, such as via data mailboxes without signature, via post with a wet signature and via e-mail with e-signature. Only personal delivery of a submission to the court can be restricted by the limited working hours of the court's register. Limitations also apply to payments of the court fees made in person at the courthouse, but remote payment options are fully available.

In urgent cases where an interim measure is required the parties can still apply for a preliminary injunction. The courts should decide on the application without undue delay (usually seven days at first instance courts) without an oral hearing. When applying for a preliminary injunction a deposit is collected by the court. A bank transfer is recommended for the payment as the court's cash registry might currently be working under limited hours. 

6. Arbitrations & Mediations

Similarly to the courts, alternative dispute resolution forums also aim to limit physical presence of the parties. The President of the Arbitration Court has cancelled all scheduled oral hearings and limited other operations of the court. However, the court offers on-line arbitration which should not be affected by the President's instruction.

Currently, we are missing clear guidance as to how the anti-COVID-19 extraordinary measures affect physical mediation sessions. According to the Ministry of Justice, attorneys and other legal professionals are allowed to provide their services in their offices despite the anti-COVID-19 extraordinary measures. While the Ministry does not mention mediators specifically, we believe that some of the arguments apply to registered mediators as well, and therefore mediators could be able to run mediation sessions in person. That being said, it is still recommended to avoid personal contact where possible. That is why a number of mediators are now offering online dispute resolution.

Last reviewed: 09 April 2020