Constitutional Court strengthens legal entities’ right to reputation protection
In its recent ruling, the Constitutional Court significantly strengthened the protection of reputation for legal entities. In the event of unlawful interference with their reputation, legal entities may now seek adequate satisfaction for non-pecuniary damage. This interpretation of the Civil Code applies to all pending and future litigations.
Under currently valid legislation, when defending themselves against unlawful interference with their reputation, commercial corporations, associations, and other legal entities can only demand the perpetrator refrain from the unlawful act or remove its consequences. However, these remedies have often proved inadequate, particularly considering how fast any misleading or false information can spread in today's digital age. Another option legal entities had was to seek compensation for pecuniary damage or restitution of unjust enrichment but they had to prove the occurrence and amount of damage and the causal link between the unlawful interference and the damage, which often proves very difficult, especially for non-profit organisations. However, unlike natural persons, legal persons have not yet been able to seek adequate satisfaction for non-pecuniary damage caused by interference with their reputation.
In its landmark ruling Pl. ÚS 26/24 of 15 January 2025, the Constitutional Court declared this situation unconstitutional because it did not provide legal entities with sufficiently effective means to protect their reputation. In this context, the Constitutional Court noted that reputation is not just an abstract value but a fundamental prerequisite for a legal entity’s functioning in commercial and legal relations. The Constitutional Court emphasised that the right to adequate satisfaction for non-pecuniary damage, such as an apology or financial compensation, is a key instrument for the protection of reputation and can contribute significantly to its effectiveness when other means fail.
Please note that the Constitutional Court did not abolish the relevant provisions of the Civil Code but allowed for their constitutionally compliant interpretation. Legal entities now may seek satisfaction for non-pecuniary damage analogously with the rules of protection against unfair competition.
The Constitutional Court also warned of the risk of abusing the protection of reputation by strategic lawsuits against public participation (SLAPP) aiming to limit freedom of speech and participation in public debate. It is therefore up to the courts to carefully consider in each individual case whether the action is justified or vexatious.