Author: Mgr. Jaroslav Heyduk, Mgr. Bohuslav Lichnovský, LL.M.,
For a long time, minor infringements of rights of customers were neglected by businesses. No sane customer would expend tens of thousands of CZK to pursue a minor claim at a court, be it infringements of rules for personal data processing (data leaks, invalid consents, misuse of data etc.), consumer rights (withdrawals under the New Deal for Consumers, rights from defective goods etc.) or environmental damage (air and water pollution etc.). And businesses were counting on it quite successfully.
This could now change quickly and radically due to two major changes – willingness of courts to award significant damages in these cases and introduction of class action act draft in the Czech Republic.
For example, Austrian citizen received compensation of EUR 800 because Austrian Post unlawfully collected and stored its personal data (just this!). And Czech citizen received compensation of EUR 400 in a similar case related to a password leak.
Combine this with the class action under which a single claim could be filed for all affected persons. Claim of one Austrian citizen could become a claim on behalf of all Austrian citizens and EUR 800 nuisance becomes an EUR 7 billion claim. A perfect motivator to improve general compliance with laws, but also a huge threat for businesses.
Even though the legislative process of the Czech class action act appears to be very painful and this act seems to be years away from enactment, don’t be complacent. Non-barred claims for present and historical violations time may still be pursued with a class action once the act is in force.
Businesses should audit their compliance with the customer related laws asap and address their exposure to these kind of claims. As this process will usually take several months, there is no time to waste. Do not count on passivity of customers either. Even at this point there are several entities which are actively organizing customers for these claims and this number will increase once others will recognise the potential of class actions.
