1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

the European Commission (Wegner and Oberhammer and Berger, 2016 and 2018). The Czech based private financial group has currently collected cases concerning more than 5,000 trucks from dozens of companies based on the assignment of all individual claims (Litfin, 2018). The lack of appropriate legislative framework for collective action potentially promotes the risks arising especially from the uncontrolled forms and methods of litigation financing (Hensler, 2014; Hill, 2015) leading to potential abuse of the litigation. In properly regulated collective proceedings, the systems financing the plaintiff, potential conflict of interest and remuneration schemes are under scrutiny, together with compensation settlements, which have to be approved by a court with regard to the criteria of fairness. 3. The Czech Quest for Collective Action The Czech Republic belongs to a minority of EU member-states that have so far not adopted the collective compensatory legislation (Cseres, 2015, Nagy, 2019). In the past, the absence of an instrument of collective compensatory redress in the Czech Republic resulted in significant litigation failures. The first attempt of this kind, where a quasi-group action was organised, concerned the putative unfairness of bank fees (Česká bankovní asociace, 2014). It ended in significant failure in 2013 for the almost 2,500 plaintiffs, who were forced to pay court costs, despite the guarantees of their legal representatives. The breach of trust and negative media coverage significantly affected public opinion. There has not been a successful case of a similar nature and scope adjudicated in the Czech Republic since. In compliance with the minimum principles of the draft of the EU Directive on representative actions for the protection of collective interests (European Parliament, 2019), (hereinafter referred to as the “DRA”), the Czech government proposed originally an ambitious project. The original governmental objectives introduced the complex compensatory litigation instrument involving both the opt-in and opt-out schemes, both the representative and collective actions applicable not only to the area of consumer protection but importantly also to many other areas including but not limited to business-to-business relationships or labour law. The initial draft of the Act on Collective Proceedings (hereinafter referred to as the “ACP”) prepared by Ministry of Justice, however, was widely criticised and later substantially amended. The investor character elements of the draft, such as administrators’ financing of group proceedings, were removed during 2019. The current version of the ACP draft significantly limited the applicability of this legislation only to consumer protection (Ministerstvo spravedlnosti, 2020). Principal modifications of the original governmental intention are currently raising the questions of the very concept of this legislation. The proposals for the return to earlier stages of legislative debate in order to clarify the very fundamental concept of the ACP project are not rare (ČTK, 2020). 3.1 The spectre of US class action There is no doubt that American culture is more litigious in comparison to European standards. Class action spending increased to $ 2.46 billion in 2018, accounting

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