Easier recovery of debts through payment orders
On 1 July 2024, the Act on Collective Civil Proceedings came into force, enacting the process of collective enforcement of consumer rights in the Czech Republic. However, together with the act, legislators passed completely unrelated amendments that partly change the regulation of payment orders and delivery service to persons who have no permanent residence and are therefore registered at competent authorities. Although these changes are subtle, they will have a significant practical impact.
The basic elements of the law on class actions are summarised here.
A fundamental change is that both payment orders and electronic payment orders (EPR in Czech) can now also be delivered by fiction via a data mailbox. Up until now, if a defendant failed to log in to their data box, the court would cancel the payment order. Under the new rules, the payment order will now be deemed as having been served on the tenth day after the delivery of the data message. This also applies to natural persons who have voluntarily set up a data box and self-employed persons whose data boxes were set up automatically. If someone does not regularly collect their messages from their data boxes, they may fall prey to the pitfalls of payment orders. Should defendants fail to file a protest in time, their payment order will have the effect of a final judgment, while further procedural defence against such a decision is essentially minimised.
The limit on the amount of the EPR to a maximum of CZK 1 million has also been abolished. Now, an EPR can be filed for any amount (i.e., even exceeding CZK 1 million), just like a standard payment order. The EPR has stricter legal regulation in some respect: e.g., the court will reject it entirely if it does not contain all prescribed essential elements. On the other hand, it offers the claimant a reduction in costs in the form of a court fee lower by 1% of the total amount claimed.
The amendment also facilitates the service of court decisions to persons without a permanent residence but with a registration address at the competent authority. In the past, it was not possible to use this address for delivery service, and the person always had to provide an address where documents could be sent, which often resulted in documents being returned as undeliverable. Under the new rules, the courts may use the address of the registering authority. That authority will then post a notice on the official notice board asking the addressee to collect the document or request that it be sent to another address. If the addressee does not respond to the notice within 10 days of its publication, the document shall be deemed to have been served even if the addressee was not aware about the delivered document. However, neither the first documents to be served in proceedings nor documents for which substituted service is excluded may be served at the registering authority. The change will therefore not facilitate the service of payment orders. Nevertheless, it may bring more flexibility to ordinary court proceedings.