Collective Actions: An Opportunity for Consumers

Consumer disputes often remain unresolved because consumers are not interested and often do not have enough funds to enforce their claims before the courts. This shall now change. A new act on collective civil court proceedings introduces the collective actions to Czech procedural law. Disputes concerning rights or interests of several persons (especially consumers) shall now be decided within one civil proceeding.

A comprehensive framework enables the effective collective enforcement of consume rights against entrepreneurs.

In collective civil court proceedings, several separate claims with similar factual and legal basis will be combined into one. The increase in the total value of the sued amount shall motivates consumers to join and claim their rights. They will become part of a larger group with a stronger legal status and don´t have to bear the whole legal costs.

It is to be noted that the act allows not only consumers, but also some business entities to participate in collective proceedings. These are entrepreneurs with fewer than 10 employees and an annual turnover of less than CZK 50 million.

In the first instance, only the Municipal Court in Prague has jurisdiction to hear collective actions. This approach aims to ensure uniform, cost-effective and efficient handling of such specific disputes.

As with classic civil court proceedings, the parties here are the plaintiff and the defendant. However, not every injured consumer is considered a plaintiff, but only entity specially designated for that purpose which acts for the benefit of the participating consumers. A lawyer must always represent this legal entity.

Collective proceedings are based on the so-called opt-in principle. This means that persons asserting their claims must actively register for collective proceedings. This is done through a standardized form, which needs to be filled out and addressed to the plaintiff. A minimum of 10 registered consumers is required at any time. If the number of participating group members falls below this number, the court will stop the proceedings.

The act also introduces a new public register, the so-called collective proceedings register. It contains a chronological list of individual collective proceedings in which the admissibility of the collective action was decided.

By Mgr. Jana Kostěncová

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