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Certain extraordinary measures have been cancelled by the court. What will be the practical impacts?

The Municipal Court in Prague cancelled four measures of the Ministry of Health with effect from 27 April. At the same time, the Government started to gradually loosen the current restrictions. The court decision will thus probably have the most serious practical impact in the area of the State’s liability for damage as the judgement indirectly increased the State’s exposure to potential claims of entrepreneurs demanding compensation for damage incurred as a result of the adopted extraordinary measures.

The application for cancellation concerned four extraordinary measures of the Ministry of Health, two restricting retail sales and two limiting free movement of persons. The applicant argued that the Ministry had exceeded the limits of its competence and powers when it issued the relevant measures. Moreover, the measures had not been published in advance and the parties involved were thus unable to comment on them. This is why the applicant considered the measures unreviewable, incomprehensible (due to numerous ambiguities), disproportionate and chaotic.

The dispute also concerned the actual form of the adopted measures. While the Ministry considered them a legal regulation, the court ultimately agreed with the applicant’s opinion that they were “measures of general nature”. The court sided with the applicant in many points and ruled on 23 April that the measures had not been adopted in a manner envisaged by the law. The court concluded that only the Government had the competence to impose restrictions of such a nature and that such restrictions could only be imposed under the Crisis Management Act. The fact that the restrictions were adopted by the Ministry of Health was contrary to the rule of law and functioning of a democratic State, including the separation of powers. Nonetheless, in view of the purpose the measures followed, the court decided to postpone the effects of their cancellation, specifically to 27 April. The judgment is final; the Ministry could contest it by a cassation complaint filed with the Supreme Administrative Court. In fact, the Ministry has already stated that it will use this option.

But on 24 April, the Government already abandoned the strict restriction of free movement of persons and cross-border travel (which was not under scrutiny in the judicial review) and adopted new, looser measures instead. The Government further decided to speed up the scheduled gradual opening of businesses. This judgement was among the reasons why the Government asked the Chamber of Deputies to extend the state of emergency and the Chamber complied – the emergency state would apply until 17 May.

In practical terms, the judgement thus primarily streamlines possible claims for damages. If the extraordinary measures were issued by the Ministry of Health under the Protection of Public Health Act, it would be very difficult – even in theory – to claim that the State compensate any damage caused by such measures. The Government, on the other hand, issues such measures under the Crisis Management Act, which (unlike the Public Health Protection Act) contains special provisions on the State’s liability for damage. On top of that, given that the extraordinary measures were cancelled by the court, the State might also be held liable under a special law for damage caused by maladministration or an unlawful decision. The court’s decision thus certainly increased the chances of successfully claiming compensation from the State in connection with the emergency measures, although we will probably have to await the decision of the Supreme Administrative Court in this regard. Proposals have even been presented for a special law on general indemnification for emergency measures that would explicitly address this unprecedented situation.