Quo Vadis, new Civil Code?

Before the all new Czech Civil Code come into force as of January 1, 2014, the public and especially legal professionals expressed their worries about how it would be applied and interpreted in practice. This was mainly due to lack of implementing legislation and disunity in several changes introduced by the code. The recurring discussions and attempts to postpone the effectiveness of the code turned out to be vain and thus the new Civil Code became effective as originally intended.

The first months of the life of the code did not soothe the initial worries. The Ministry of Justice decided to solve this situation by amending the Civil Code only several months after its entry into force.

Legal practitioners expected purely technical changes, which would eliminate basic ambiguities or inconsistencies of its provisions. However, instead of the expected technical amendment the authors presented the first part of the so called „big” amendment, which concerned several hundreds of sections of the act including its basic principles. After being made available to the public in August 2014, the draft raised a huge wave of backlash of legal professionals and various institutions. The arguments of the critics were grounded on the fact that the proposed changes were extensive and in many cases not considered necessary. The Ministry of Justice initiated public discussion regarding changes foreseen in the amendment. However, since the pressure against adoption of the amendment was more than strong, after months of discussions the “big” amendment fell into oblivion.

Following the unsuccessful attempt, the Ministry of Justice decided to take one step back and to draft the so called „small” or “urgent” amendment. It was supposed to be aimed at dealing with problematic areas, the solution of which was perceived as urgent, such as legal capacity, form of power of attorney, participation of spouses in business corporations, pre-emption right of co-owners or trusts.

The “small” amendment, like the “big” one, encountered criticism based on the argument that the draft seemed to be a random choice of specific sections and the proposed solutions were arguable. Areas causing practical problems were neglected.

Despite the prevailing refusal of the amendment by legal professionals and institutions, the Ministry of Justice succeeded to get it through. At the beginning of September 2015 the “small” amendment was adopted by the Governmental Legislative Council and thus it can be expected to be adopted by the Parliament in the coming months.

Since the effectiveness of the new Civil Code, a few problematic questions have already been solved in practice or via court decisions. One example is the disputable form of a power of attorney. However, there still remains a vast area of questionable issues, which will have to be solved by future judicature. This will undoubtedly take several years.

The practical impact of the above described uncertainty is that legal advisors are left to provide legal advice to their clients pursuant to their best knowledge and belief and they have no other choice but to hope, that the courts will take the same view.

Mgr. Denisa Molnár