Major amendment to Code of Administrative Justice
The Code of Administrative Justice is about to undergo a significant amendment to improve the efficiency and functioning of the administrative justice system. The initial draft of the Ministry of Justice contained major shortcomings that could make the position of individuals and legal persons as parties to proceedings more difficult. This was brought to the attention of the ministry during the comment procedure, and it thus had to modify the wording of the amendment. The bill will now be discussed in a government session.
Reimbursement of costs to the administrative authority
One of the most significant shortcomings of the amendment was that if the plaintiff (individual or legal person) lost, they would have to cover the costs of the proceedings of the administrative authority. This could significantly increase the plaintiffs’ costs, discourage them from bringing any action and, in principle, limit their access to the courts. In line with our criticism in the previous article, the Chamber of Tax Advisors explained in its comments that parties to the proceedings should not be forced to reimburse the costs to administrative authorities, as these are financed by the state and have resources and people to litigate. The ministry largely accepted the comments raised by several parties to this effect and changed the wording of the amendment so that the administrative authorities would only be entitled to the reimbursement of reasonably incurred out-of-pocket expenses according to Decree No. 254/2015 Coll., i.e., CZK 300 per act.
Limited review by the SAC
The original wording of the amendment significantly restricted access to the Supreme Administrative Court (SAC) by limiting the scope of cassation objections to legal objections only. However, the administrative justice system is specific in that regional administrative courts are the first independent institutions to assess the lawfulness of administrative authorities’ decisions. In tax disputes, it often happens that regional courts uphold tax authorities’ unlawful conduct, and the SAC then reprimands the regional courts, and reverses their decisions. Neither the administrative authorities nor the regional courts are infallible in establishing the facts. The ministry has recognised this, and it will therefore remain possible to file a cassation complaint with the SAC on factual grounds. However, the alleged deficiencies must affect the lawfulness of the decision.
The proposed extension of the grounds for inadmissibility of a cassation complaint according to which a cassation complaint would be admissible only if it significantly exceeded the complainant’s own interests, did fortunately not pass. Thus, the SAC will not be able to reject cassation complaints outright but will still have to deal with them on their merits.