Czech

Czech Republic

The Czech Republic

Exacting of claims in the Czech Republic

The possibilities of debt recovery in the Czech Republic are in these ways:

1.    By informal way through collecting companies
2.    Through judicial enforcement of court decision provided by the courá
3.    Per execution proceedings providing by Judicial Officers

1. Amicable Recovery

There is certain amount of companies offering so called amicable recovery of debts in the Czech Republic. These companies can be registered in the Association of the collecting agencies of the Czech Republic which was founded in 2002. Association is a member of Federation of European National Collection Associations. Association has its own ethical Code which should be followed in collecting proceedings. This Code requires compliance of law and legal order of the Czech Republic, respect of debtor's personal integrity and doing business such a way to develop and support respect and credibility in collecting agencies proceedings. It also declares quick, efficient and professional administration of collecting cases.
The essence of Amicable recovery of the debts is primarily reminding process. This process is held mostly per written correspondence, contact by phone, by e-mails or personal visit debtors by especially trained staffs. Reminding takes place on different levels and intensity. The consequences of failure to make payment are always accented (quantification of future costs for judicial enforcement of decision or execution proceeding). If there is concluded even no agreement of paying or installment calendar with the debtor collecting company recommends the creditor next possible steps : judicial execution of execution proceeding.
The amicable recovery companies had none of powers listed in Execution Code. This is the main legal order for Judicial Officers. They are not allowed to enter debtor's properties, to do inventory of debtor's personal assets or to block debtor's wage or bank accounts. They have no legal help for affecting any of debtor's actives.
It is informal way of collecting debts which is more or less dependent on debtor's good will to pay his debts. The costs connected with this informal way of claims' exaction are in subject of contractual covenants between amicable recovery company and creditor. The costs are provided mostly by the debtor during recovery.

2. Judicial enforcement of court decision provided by courts

First of the two ways of collecting claims is strictly directed by legal orders is judicial enforcement of decision (by Civil Procedure Code Nr. 99/1963 Coll.). Since 1st January 2013 judicial enforcement of decision was mostly delegated from courts to private Judical Officers. After this change is possible to use courts only for enforcements of decisions' modalities listed in Civil Procedure Code (e.g.alimonies, evictions)
If the debtor doesn't pay voluntarily what the judgement debt requires the court can order and effect the execution of judgement:

a) raising of a minor,
b) an order to execute judgement by evicting a tenant from the flat and removing him into a substitute dwelling,
c) banishing from common dwelling and no contact with the creditor,
d) executives of European Community,
e) foreign judgement (european execution title).

Judicial enforcement of decision caries out enforcement agent. He is a member of court staff and follows arbitrator's instructions.In case of enforcement of decision is fully in creditor's competention to choose the modality of the judgement execution. The enforcement of decision can be ordered only in the measure proposed by creditor.
The creditor is obliged to pay the court costs connected with filling a motion of judgment enforcment based on Code of Court Fees Nr. 549/1991 Coll. following fee:

compulsory payment till sum of money:

A) up to CZK 20,000 included CZK 1,000
B) between CZK 20,001 and CZK 40,000,000 5 % of the base
C) over CZK 40,000,000 CZK 2,000,000 + 1 % of the base over CZK 40,000,000; sum of money over CZK 250,000,000 is not included in the base
D) enforcement of decision by evicting CZK 3,000
E) other occasions CZK 2,000

If the creditor is represented by attorney-at-law (advocat, solicitor) in subjects of enforcement judgments, the attorney's fee is regulated by public notice provided by Ministry of Justice Nr. 484/2000 Coll., attorney's fee:

a) in cases where the matter of an obligation has monetary character the attorney's fee is:

up to CZK 100 CZK 500
CZK 101 - CZK 500 CZK 750
CZK 501 - CZK 1,000 CZK 1,250
CZK 1,001 - CZK 2,000 CZK 1,875
CZK 2,001 - CZK 5,000 CZK 2,400
CZK 5,001 - CZK 10,000 CZK 3,750
CZK 10,001 - CZK 200,000 CZK 3,750 + 8,5 % from sum over 10,000
CZK 200,001 - CZK 10,000,000 CZK 19,900 + 1 % from sum over 200,000
over CZK 10,000,000 CZK 17,900 + 0,075 % from sum over 10,000,000

b) in cases where the matter of an obligation is different than monetary duties the attorney's fee is CZK 5,000.

c) During carrying out or suspention of judgment execution the attorney's fee is CZK 5,000.

3. Execution proceedings providing by Judicial Officers

Second of the two ways of claims' exaction, which is strictly directed by legal orders is execution proceeding provided by Judicial Officers.

The basic legal order which declares execution proceeding is Execution Code  Nr. 120/2001 Coll. on Judicial Officers and exectorial activity and on amandments to other acts. In execution proceeding the claim is collected at the hand of Judicial Officer.

The Judicial Officer can be appointed from among citizens of the Czech Republic who:

a) are fully legally competent;
b) have already graduated from the Faculty of Law of the university and are resident in the Czech Republic;
c) have no criminal record;
d) have at least three years of working executor’s experience; and
e) have passed the executor’s exam.

There is total of 147 Judicial Officers operating in whole area of the Czech Republic. The Minister of Justice appoints the executor upon the nomination by the Judicial Officers Chamber within 1 month from the delivery of the Chamber nomination.

The Chamber is an autonomous professional organization, which associates all executors and keeps the list of executors, the candidates and the junior clerks. Judicial Officer becomes a member of the Chamber at the moment of his appointment.

The Chamber has the following authorities:

a) General Assembly
b) Board
c) President
d) Committees (audit, disciplinary, legal, testing)

The Chamber grants supervision over the Judicial Officer’s activities and over the administration of execution offices. The Chamber is authorised to maintain regular inspection of execution offices, to examine the documents and deeds, to require written statements in scheduled time limits about manner of state control and to enter the Judicial Officer office's place after the previous notification to judicial officer or his nominee.

The Ministry of Justice grants the state supervision over execution activities and Judicial Officer’s activities like drawing up documents and perform other activities according to this law. Another state supervision over Judicial Officer's proceeding is pursued by Chairman of District Court in whose circuit was the Judicial Officer appointed. Judicial Officer proceeding can be suspended by Minister of Justice if there was a commencement of criminal prosecution in the manner of crime related with execution proceeding.

The execution procedure starts upon nomination. The execution procedure starts on the day that the nomination for an execution mandate is delivered to the Judicial Officer or to the relevant court together with the Judicial Officer’s specification. Judicial Officer can start to perform the execution only after the court authorizes him to perform it.

Executive titles are:

1) an enforceable court judgement of a court or other authority in charge of criminal proceedings if it admits a right or affects property,
2) an enforceable court judgement of administrative justice,
3) an enforceable arbitration award,
4) an enforceable judgement of state and agreements approved by them,
5) a notary’s record and an executor’s record including the agreement to the enforcement, written according to the special legal regulation,
6) an enforceable judgement of public administration and local self-government incl. assessments, statements of outstanding payments concerning the matter of taxes and fees, and also reconciliation agreed by these authorities,
7) an enforceable judgement and statement of outstanding payments concerning all matters of medical insurance and social security, another enforceable judgement and the agreed reconciliation and documents the effecting of which is admitted by the law,
8) judgement of the European Communities,
9) other enforcable judgements and settlements and records their judicial power allowed by law

The execution can be performed only by the ways mentioned in Execution Code. The way of execution performance is determined by Judicial Officer.

An execution that states that some amount of money must be paid can be performed by

a) the garnishment of a portion of wages and other incomes,
b) ordering the debt,
c) the sale of chattels personal and real estates,
d) the sale of a company,
e) the establishment of executor's pledge on real estates

A way of execution that states a duty other than to pay some amount of money depends on the stated duty. This execution can be performed via

a) eviction,
b) the removal of an object,
c) the division of a common object,
d) the compulsory performance of work or acts.

An execution with the sale of a security can be performed, in the case of a guaranteed claim, with the sale of secured chattels personal and real estates.

During execution proceeding can the Judical Officer asks for co-operation of parties to an action. According to this co-operation he chooses the most propriet way of claim exaction. The parties contain mostly from: central register of citizens, courts, municipalities, notaries, police of the Czech Republic, governmental agencies, banks, post offices, insurance companies, real estate registers, etc.

In the matter of costs in execution proceeding we define:

1) costs of execution = executionary compensation + reimbursement of cash expenditure + value added tax (VAT)
2) costs of creditor = cash expenditure + representation fee

1) executionary compensation for exaction of monetary claims

The remuneration for the performance of the execution imposing the payment of an amount of money shall amount to:

up to CZK 3,000,000 of the base 15 %
of the excess amount up to CZK 40,000,000 of the base 10 %
of the excess amount up to CZK 50,000,000 of the base 5 %
of the excess amount up to CZK 250,000,000 of the base 1 %

The sum exceeding CZK 250,000,000 shall not be included in the base.

The remuneration written above shall amount to at least CZK 3,000 (cca 120 EUR). The remuneration for the performance of the execution imposing the payment of an amount of money shall be based on the amount of the performance recovered by the Judicial Officer.

Reimbursement of cash expenditure

In connection with the execution of enforcement activity, the Judicial Officer is entitled to reimbursement of cash expenses in a minimal sum of CZK 3,500 (cca 140 EUR). Such reimbursement shall include legal and other fees, travel expenses, postage, payments to persons carrying out the transport of items, telecommunication charges, expertise and professional terms, translations, copies, photocopies and reimbursement of costs of inserting data into the central information systems or acquiring data from the central information systems.

Should the amount of cash expenditures of the Judicial Officer reasonably incurred in connection with the performance of the execution activities exceed CZK 3,500, the Judicial Officer shall be entitled to the reimbursement of cash expenditures in full instead of the reimbursement written in previous section. The Judicial Officer shall be obliged to prove those expenditure.

Reduced costs of execution

A.
If the debtor :
1. meets the enforcement of claims and covers the security for reduced costs of execution and costs of creditor, and
2. does like that till 30 days of deliver notice that payment be made,

the compensation is 50 % of compensation in case of exaction of monetary claims.
In case of non monetary claims the executionary compensation is 30 % of compensation.

B.
If the debtor:
1. meets the enforcement of claims and covers the security for reduced costs of execution and costs of creditor, and
2. does like that till 30 days of deliver notice that payment be made, and
3. the exacted performance is not superior to CZK 10,000,

the compensation belongig to the judicial officer is 50 % of compensation (resp. 30 % - see above) and the reimbursement of cash expenditure in lump-sum CZK 1,750 (50 %).

2) Costs of creditor

If the creditor is represented by attorney-at-law (advocat, solicitor) in subjects of enforcement judgments, the attorney's compensation is regulated by publice notice provided by Ministry of Justice Nr. 484/2000 Coll., attorney's fee:

A) up to CZK 20,000 included CZK 1,000
B) between CZK 20,001 and CZK 40,000,000 5 % of the base
C) over CZK 40,000,000 CZK 2,000,000 + 1 % of the base over CZK 40,000,000; sum of money over CZK 250,000,000 is not included in the base
D) enforcement of decision by evicting CZK 3,000
E) other occasions CZK 2,000

If the creditor is represented by attorney-at-law (advocat, solicitor) in subjects of enforcement judgments, the attorney's fee is regulated by public notice provided by Ministry of Justice Nr. 484/2000 Coll., attorney's fee:

a) in cases where the matter of an obligation has monetary character the attorney's fee is:

up to CZK 100 CZK 500
CZK 101 - CZK 500 CZK 750
CZK 501 - CZK 1,000 CZK 1,250
CZK 1,001 - CZK 2,000 CZK 1,875
CZK 2,001 - CZK 5,000 CZK 2,400
CZK 5,001 - CZK 10,000 CZK 3,750
CZK 10,001 - CZK 200,000 CZK 3,750 + 8,5 % from sum over 10,000
CZK 200,001 - CZK 10,000,000 CZK 19,900 + 1 % from sum over 200,000
over CZK 10,000,000 CZK 17,900 + 0,075 % from sum over 10,000,000

b) in cases where the matter of an obligation is different than monetary duties the attorney's fee is CZK 5,000.
c) During carrying out or suspention of judgement execution the attorney's fee is CZK 5,000.

Central register of executions

Central register of executions allows to get information about specific execution proceedings. It helps to find out if the execution proceeding was ordered to the specific subject in accordance with the Execution Code, which Judicial Officer was charged with carrying out the execution, what enforcement of claims is in question, when the execution proceeding started, if the proceeding was suspended or postponed by final decision etc.

Central register of executions is pursued and administrated by Judicial Officers Chamber of the Czech Republic. The register is remotely accessible public list. Judicial Officers are oblige to write there following information:

a) notice of execution proceeding start,
b) notice if proceeding was suspended or postponed by final decision,
c) auction rules,
d) erasure of information written in Central register of execution and for its pursue and administration is regulated by regulation of Ministry of Justice Nr. 329/2008 Coll. on Central register of executions as amended.

Information about notice of execution proceeding start shall be done until 3 days since the Judicial Officer wrote into the register of started executions resolution to order execution. Information about suspension g or postponement of execution proceeding shall be done until 3 days since the Judicial Officer get to know about legal power of these decisions. Other information shall be done until 5 working days since the Judicial Officer gets to know them.

The Judicial Officer must remove all information about the execution proceeding from the register after 15 days from the day of ending of execution proceeding. Websites of Central register of execution can be found on www.ceecr.cz. This service is chargeable.

Prague, April 30, 2013