On 19th October, 2015 the Chamber of Deputies submitted to the Senate Bulletin No. 139, a government bill amending Act No. 634/1992 Coll. on consumer protection, as amended (the “CPA”), and some other laws. Among other things, the bill is designed to fully transpose two pieces of European legislation - Directive 2005/29/EC on unfair business-to-consumer commercial practices and Directive 2013/11/EU on alternative dispute resolution for consumer disputes.
The most important change in the bill is the extension of the CPA’s scope to include extra-judicial settlement of consumer disputes. In response to newly implemented European legislation, the exemption that excluded the application of the ban on unfair commercial practices to what are known as liberal professions, i.e. business activities carried out subject to legislation other than the Trades Licensing Act (doctors, lawyers, auditors, etc.) is also repealed. Thus, as proposed by the bill, services provided outside the scope of the Trades Licensing Act will be subject to the ban on unfair commercial practices and to the CPA as a whole.
In accordance with the bill, a vendor must inform consumers of the alternative dispute resolution [ADR] body for consumer disputes that is responsible for a given type of offered, sold, provided or brokered product or service. The ADR bodies for consumer disputes are to be: the Financial Arbitrator in the area of financial services, the Czech Telecommunications Authority for electronic communications and postal services, the Energy Regulatory Office for electricity, gas and heat supply and the Czech Trade Inspection Authority – as the general consumer protection body – in other cases. Where none of the foregoing authorities has jurisdiction, the ADR body for consumer disputes will be the Czech Trade Inspection Authority or another entity authorized by the Ministry of Industry and Trade. The procedural treatment of consumer dispute resolution will thus be laid down in the respective special laws regulating individual ADR bodies for consumer disputes, with the exception of the Czech Trade Inspection Authority, whose procedures are treated in a new fourth section of the CPA. For cross-border disputes, the European Consumer Centre CR will help consumers access the appropriate ADR body for consumer disputes.
According to the bill, a consumer shall have the standing to file a petition to initiate ADR for a consumer dispute, but only where direct resolution of the consumer dispute with the vendor has already been attempted. Moreover, the consumer is subject to a one-year limitation period for the filing of a petition, which begins to run on the day on which the consumer first raised its claim against the vendor. After a petition is filed, the vendor will have fifteen days to respond, failing which it shall have committed an administrative offence.
The bill envisages a consumer dispute resolution deadline not exceeding 90 days, with the exception of especially complex disputes. The bill also envisages the possibility of terminating consumer dispute resolution by means of a private agreement between the consumer and vendor, a unilateral declaration of the consumer, the death of the consumer or the expiry of the dispute resolution deadline. As proposed by the bill, each party shall bear its own costs associated with the ADR of a consumer dispute.
According to the bill, the legal treatment of consumer protection oversight should also change in connection with the above mentioned inclusion of business activities carried out by members of liberal professions in the ambit of the CPA. Consumer protection oversight of professions carried out by members of professional associations should be performed by a body designated in a special regulation (typically, the Czech Bar Association, Czech Medical Association); moreover, fines for breaches of obligations stipulated by the CPA will be imposed in accordance with professional regulations. In practice, this change will significantly strengthen the oversight of the liberal professions as regards consumer protection.
The Senate discussed the government bill amending the CPA at its November 11th session and returned it to the Chamber of Deputies with motions to amend, though these are only grammatical or technical in nature and there have been no substantive changes in key items.