News in Civil Proceedings Act

Few days ago a draft no. 107 was submitted to the Parliament containing another from many amendments to Act no. 99/1963 Coll. Civil Proceedings Act and Act no. 120/2001 Coll. Act on Enforcement Proceedings. The purpose of these amendments is to lift the burden of the excessive amount of petty lawsuits (which are initiated only to obtain the reimbursement of legal costs) from the courts, thus putting a stop to a co-caller "receivables business". 

The core of the proposed draft is the amendment that the parties shall no longer have a right for reimbursement of the fees for legal representation if the claim concerns a monetary performance not exceeding CZK 10.000 (principal without accessories). Courts may however decide to grant the reimbursement of the costs or a part thereof if there are specific circumstances of the case or a specific situation of the parties.

This amendment brings a risk that even if a creditor does not participate in the "receivables business" and enforces his claims in a legitimate manner, he may still not obtain a reimbursement of his legal representation costs. Creditors will have to address this issue by better regulation of their contractual relationship with debtors.