What is the change? If a dispute arises between an e-shop operator (entrepreneur) and a consumer that cannot be resolved “voluntarily”, the consumer will have the right to ask for assistance from a specific state authority as an arbitrator. In most cases, this will be the Czech Trade Inspection Authority (CTIA). For example, in the field of financial services it is the financial arbitrator, but in telecommunications it is the Czech Telecommunications Office (CTU).
The subject matter of the case is, for example, an unacknowledged complaint or liability for damage caused by defective goods. Until now, in most cases, the consumer had to go straight to a traditional court, which led to delays and high litigation costs. For example, if an e-shop refused to accept a claim for CZK 1,000 worth of sneakers, the consumer had to invest 10 times the value of the shoes in court fees, expert fees and representation costs. In addition, some costs may not be recovered even if the consumer wins (e.g. entitlement to standard attorney’s fees).
What are the benefits of the new regulation?
The new system could resolve minor wrongs and lead the parties to a rational solution. There is no charge for the proceedings and each party bears its own costs. The intention is to make litigation cheaper for the consumer and to allow them to protect their rights more easily. The consumer can always contact the ‘arbitrator’ simply online. However, he or she must first solve the problem himself or herself, and can only contact the authority when he or she tries to reach an amicable solution with the e-shop operator directly.
In addition, the arbitration authority will be obliged to provide detailed information about the out-of-court settlement of consumer disputes on its website. The outcome should be known within 90 days of the submission, with the possibility of doubling the time limit for complex disputes.
Terms and Conditions
We will write new business terms for you, or check the existing ones. We guarantee the correctness of the document according to the new Civil Code. We act quickly, throughout the country. You will know the price in advance and you can pay only after the service has been provided.
How can the new regulation be a burden?
If an entrepreneur gets “stuck” and refuses to accept an amicable solution, nothing will actually change, only more administration. If the arbitrator is unable to get the entrepreneur to agree, the consumer will have no choice but to turn to the traditional courts. There, of course, the consumer can use the out-of-court procedure, but there is no guarantee of the outcome.
What specific obligations have been added for entrepreneurs?
If the entrepreneur does not respond to the proceedings and does not communicate at all, the judge may fine him up to CZK 1,000,000. However, in addition to the obligation to communicate in the proceedings, entrepreneurs have another obligation. They must inform their clients about the new option. Specifically, they must inform them about the entity competent to resolve out-of-court consumer disputes in the area of the products and services offered. The information must also include the website of such an entity, most often the CTIA. This information must be placed on the website and in the terms and conditions by the end of April 2016.