Based on individual jurisdictions, there are basically two principles that apply regarding who bears the cost of court proceedings. It is either the "American rule" principle, in which each party bears its own costs irrespective of which party was successful in the case or "the losing party pays" principle. According to Czech law, the latter principle applies. However, even success in a case does not necessarily mean that the winning party can claim all costs incurred in connection with the proceedings.
In the Czech Republic, the amount of costs for court proceedings that can be claimed by the winning party is stipulated by law based on the value of the dispute. The amount of the costs may therefore in individual cases significantly differ and this amount in most cases will not cover all the incurred costs.
More importantly, according to the Czech Civil Procedure Code, before filing a petition with the court, a plaintiff must send the defendant a so called "pre-trial request". If the plaintiff fails to do so, or if the pre-trial request does not contain all formal and material requirements, the plaintiff will not be entitled to court costs even if he or she was successful on the merit of the petition.
Each pre-trial request must include
- What and why? – Information on the due obligation and its title. The pre-trial request should be in this respect considered as a "small petition".
- Dispatch, not delivery – It is sufficient to send the pre-trial request to the last known address of the debtor. Although a pre-trial request in the form of an e- mail may be sufficient in some cases, it is highly recommended to send the request via registered post, as the plaintiff may be later obliged to prove the dispatch of the request before the court.
- 3.7-day period – The plaintiff has to send the pre-trial request at least 7 days prior to the filing of the petition.
- The petition threat – It has been interpreted by the Czech courts that the pre-trial request has to contain an explicit threat that in case the debtor does not fulfil his obligation in the given period, the plaintiff will file a petition with the relevant court.
If the circumstances of the case justify it, the court may at its discretion grant the plaintiff the right to the costs of the proceedings even if the plaintiff failed to send the pre-trial request. This may happen for example in cases where the plaintiff acquired a receivable just before the end of the statute- barred period and the required seven days would lead to expiry of such period.
The pre-trial request is a necessary prerequisite only for the right to the costs of the proceedings. Even if the pre-trial request is not sent, the plaintiff may still be successful on the merits of the petition.
Therefore, it is highly recommended to send a pre-trial request before the filing of every petition, including arbitration petitions.