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While our legal system provides rather broad protection to consumers, in practice consumers often face difficulties in enforcing their rights. In general, disputes arising between parties to consumer contracts are usually resolved by a court. However, in many cases consumers avoid litigation as it often involves considerable costs and time spent.
We would like to inform you about an interesting amendment to Act no. 634/1992 Coll., on consumer protection. Its draft (Chamber document no. 445), which has just been submitted to commence the legislative procedure, should secure higher efficiency for enforcing consumer rights. This amendment, submitted by the Ministry of Industry and Trade, should introduce, among others, a faster, more efficient and financially more favourable alternative for resolving consumer disputes.
As is common in consumer law, the amendment is a result of the Czech Republic’s duty to implement EU law, in this case Directive 2013/11/EU of the European Parliament and of the Council of 21 May 2013 on alternative dispute resolution for consumer disputes (with 9 July 2015 being prescribed as the deadline for completing the implementation). This amendment should also respond to Regulation (EU) No 524/2013 of the European Parliament and of the Council of 21 May 2013 on online dispute resolution for consumer disputes, which introduces the concept of an “online dispute resolution platform” effective from 9 January 2016. This platform will take the form of a website through which consumers will be able to file, free of charge, a complaint if they wish their dispute to be resolved out of court. After obtaining the necessary information, the platform will transfer the complaint to the competent out-of-court resolution entity.
Under the existing version of the amendment, sellers should inform consumers in a clear, comprehensible and readily accessible manner of the competent authority for out-of-court resolution of consumer disputes. Therefore, it will be necessary in future to amend existing commercial contracts and business conditions: under the current version of the draft amendment, commercial contracts and business conditions should be amended within three months from the effective date of the amended act. In addition to the current out-of-court dispute resolution entities (the Financial Arbitrator, the Czech Telecommunication Office and the Energy Regulatory Office) with competences regulated by special laws, the Czech Trade Inspection Authority should also now gain competence for all other consumer disputes.
It will be possible to commence out-of-court dispute resolution before the Czech Trade Inspection Authority only upon the consumer’s motion within one year from the first exercise of the (disputed) right against the seller. In contrast to similar current legislation, the duration of disputes will be limited to 90 days from their commencement (in particularly complicated cases it will be possible to extend this period by another 90 days) and out-of-court dispute resolution will be free of charge. Out-of-court dispute resolution should be closed either by a written agreement concluded between both parties, or by the consumer’s declaration on unilaterally terminating their participation in the dispute resolution. Thus, this procedure should not be similar to judicial proceedings (the Czech Trade Inspection Authority will have no decision-making powers) but instead it should introduce institutionalised conciliation for consumer disputes. Parties to the disputes should be helped to reach an agreement by professionally qualified, independent and impartial professionals from the Czech Trade Inspection Authority. Under the statute, the Czech Trade Inspection Authority will be authorised to prescribe a detailed procedure for out-of-court dispute resolution, the duty to inform the public of this procedure and the key elements of the provided out-of-court dispute resolution in a clear and comprehensible manner.
The procedures of the Czech Trade Inspection Authority should not replace judicial procedures, so consumers or trades will not be deprived of their right to seek remedy in court.
In the middle of September, three motions to amend the bill were added to the draft amendment. These motions deal with, for instance, the issue of a database containing information about the solvency and trustworthiness of consumers, or about the independence and impartiality of entities appointed for out-of-court dispute resolution. However, it can be expected that the amendment will differ slightly from its initial version towards the end of the legislation procedure.