The new draft law in the Czech Republic aims to reduce consumer scams. It provides for class actions against unfair entrepreneurs. To date, dishonest entrepreneurs can harm hundreds or thousands of customers with total impunity in the case of negligible amounts. The only real penalty is negative reviews on the Internet, because recovering small amounts is not economically viable for the consumer.
However, the draft law in question has several issues to be resolved in order for it to become effective. At the moment, in fact, only non-profit legal entities can bring legal actions on behalf of consumers.
As a result, legal action becomes expensive and non-profit associations will not have the means to defend consumer rights. Furthermore, the aspect related to legal expenses must be resolved. In fact, that these will be borne by the consumer and will be deducted from the amount assigned in the event of a positive outcome of the legal action itself.
Conversely, if consumers lose, they will have to pay compensation for the costs. In any case, therefore, the consumer will have to pay an amount for the legal action.
As Jiří Kučera explains, it must be noted that this is still only a draft and the final form of the law could therefore eliminate these obstacles. This happening, however, is probably an optimistic idea given the short time for passage of the law and the development to date.
Kucera, our partner in Czech Republic, has expertise in the field of constitutional law, privacy protection and media law. He founded his own law firm, in which he specializes at foreign investments, public procurements, wealth management, real estates, international commerce.