Czech Class Actions Act already effective: pitfalls associated with publicity
The Czech Class Actions Act1 became effective on 1 July 2024. Previous articles have provided an overview of key aspects of the new legislation and subjects of these proceedings. This part will focus on the challenges related to the publicity of class actions and explore ways in which companies, as defendants, can protect themselves from negative impacts.
Who will publish information?
Czech law provides that two platforms will publish information on class actions: (i) the competent court and (ii) the non-profit organisations eligible to file class actions and act as the claimant2 (the "NGO").
After the a class action is certified3, the court publishes the main information in the online register of class actions, accessible at (https://hromadnerizeni.justice.cz/rizeni-mezi-podnikateli-a-spotrebiteli/). As at the date of this article, no class action has been certified in the Czech Republic yet.
NGOs are generally required to inform consumers on their website about (i) class actions they intend to file, (ii) class actions they have filed, and (iii) the results of class actions that have been decided. The limits and rules on the manner, extent and form of communication are set in the court's ruling once the class action is certified. Until then, NGOs are obliged to inform consumers, but the manner, extent and form are at their discretion. They may use their websites, online marketing tools, national newspapers or broadcasting to promote the class actions they intend to file to gather as many class members as possible.
Available defences
In addition to general remedies such as compensation for damages and remedies for unfair competition, the Czech Class Actions Act provides a special remedy for defendants whose rights are being infringed upon by the NGO due to publications made after the certification of a class action. If the NGO oversteps the limits or rules of publication set out by the court in the certification ruling, the defendant may ask the court to order the NGO to refrain from such actions and remedy the non-compliance. If the NGO does not comply with the order, it may be fined up to CZK 5m (approx. EUR 200,000).
However, Czech law does not provide any special regulation or remedies for publications made before a class action is certified. The risk of defamatory or otherwise negative effect is high. Although the defendant may successfully fight the certification of class action, the information on the potential existence of certain claims will already be publicly available. The only limits in this regard stem from the general regulations on marketing and unfair competition practices. The same applies to defence mechanisms. Defendants may use general remedies against defamation or unfair competition, seek general compensation for harm, or request the court to issue preliminary injunctions.
Any precautions to take?
To prevent any negative impact from the publicity of a class action, it is important to regularly monitor the websites of relevant NGOs. If a company suspects potential defamation or unfair competition practices, it should investigate potential remedies, such as seeking an injunction to stop these activities.
Footnotes
1 Act No. 179/2024 Coll., on Collective Civil Proceedings.
2 Entities registered with the Czech Ministry of Industry and Commerce (the "Ministry") or with the European Commission.
3 The certification part of the proceedings is the first stage when the court assesses the formal requirements of the admissibility of a class action.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
