We would like to present you some news from the field of legislation and case law from June 2024 and the preceding months. We will keep you informed of further changes in the upcoming months.
Criminal law
- Significant changes in substantive and procedural criminal law
On 1 January 2025, an amendment to Act No. 40/2009 Coll., the Criminal Code, and Act No. 141/1961 Coll., the Criminal Procedure Code, will enter into force. These amendments will significantly shift the concept of the crime of rape and other crimes against human dignity in the sexual sphere, and in this context will also strengthen the rights of victims in criminal proceedings.
According to the principle of "no means no," which was mentioned several times during the preparation and discussion of the amendment, rape will now be considered a criminal offense not only in cases of forceful coercion, but also for any sexual intercourse that occurs without the victim's consent (which does not need to be expressed verbally; a gesture, taking a defensive position, or other forms of non-verbal refusal will suffice). Additionally, the victim's inability to resist will also be considered grounds for this classification, including situations where the victim is in a state of severe debilitating stress, surprise, etc. This will also cover cases of intercourse where the perpetrator takes advantage of the fact that the other person is physically disabled or mentally ill. Responsibility for the crime of rape will arise only in cases of intercourse and other so-called penetrative acts. In other cases, the perpetrator's actions will be classified either as a crime of sexual assault or as a crime of sexual coercion, which will now be included among the offenses where failing to prevent the crime is also punishable, similar to the failure to prevent sexual abuse.
In connection with the above-mentioned changes, there has also been an amendment to the Criminal Procedure Code. The amendment introduces a requirement that courts must consider the victim's statement regarding the impact of the crime on their life when determining the severity of the offense based on the seriousness of its consequences. While making this statement remains optional, the Criminal Procedure Code will be updated to ensure that victims are informed of their right to make such a statement, are encouraged to submit it, and that its submission is taken into account during the criminal proceedings.
Another significant change in the criminal process is introduced by Act No. 165/2024 Coll., which came into effect on July 1, 2024. This law extensively amends the Act on Youth Justice in relation to proceedings involving children under the age of 15 who have committed an otherwise punishable act. The amendment strengthens their rights by requiring that police ensure the presence of a lawyer during the investigation of their actions, rather than waiting until the court hearing. To prevent the negative impacts that contact with the court can have on young children, the amendment establishes the right for the public prosecutor to refrain from filing a motion to initiate court proceedings or to refrain from imposing measures against the child even without a hearing.
Private law
- New criterion for assessing compensation for non-pecuniary damage
In deciding on the amount of compensation for non-pecuniary damage according to the current legal regulation, courts often use the methodology issued for this purpose by the Supreme Court. However, for older legal cases, they apply the older Regulation No. 440/2001 Coll. The Supreme Court recently addressed the issue of compensation for non-pecuniary damage according to this regulation in judgment file No. 30 Cdo 1032/2023, concluding that the condition of a particularly exceptional case worthy of extraordinary consideration applies when, due to a longer time lapse since the expiration of this regulation, there is a significant disparity between the amount of compensation that would be due according to this regulation and the amount that the victim could receive if the case were decided under the new legal regulation (i.e., if the new methodology were applied). In this case, the time lapse was more than eight years, and the non-pecuniary damage consisted of deterioration in both mental and physical health, among other things due to unlawful criminal prosecution.
- Consumer's right to repair defective goods
In early June, the European Parliament adopted a directive on common rules to support the repair of goods, establishing the consumer's right to repair. This right will arise for the consumer if a defect appears in the purchased goods during the warranty period for defective performance (usually two years). The seller will be required to offer the consumer a repair if it is cheaper than replacing the item. If the goods are repaired within this period, the time frame for exercising rights regarding defective performance will be extended by one year, which will further motivate consumers to opt for repairs. After this one-year extension, the rules for exercising the right to repair will vary depending on the type of goods. The directive also explicitly prohibits manufacturers from incorporating instruments into their products to shorten their lifespan, using contractual clauses or hardware or software solutions that make repairs difficult, and requires them to provide spare parts and repair tools at a reasonable price. The directive should also allow for the establishment of online platforms linking to information about repair shops or sellers of refurbished goods. Member states will have to transpose this directive into national law within 24 months.
- Unconstitutionality of the termination of liens on property that has passed into state ownership
In its judgment of May 28, 2024, file No. Pl. ÚS 31/21, the Constitutional Court concluded that the provision of Act No. 219/2000 Coll., on the property of the Czech Republic and its dealings in legal relations, which stipulates the extinguishment of lien rights to property that the state acquires through law, inheritance, a decision by an authority, etc., is in conflict with the constitution. In this case, the state acquired ownership of a property based on a decision by a criminal court imposing a penalty of confiscation of that property due to a crime. The perpetrator financed the property with a mortgage loan provided by a bank, which secured it with a lien on the relevant properties, intending to recover in the event that the perpetrator ceased making mortgage payments. However, the lien was extinguished due to the transfer of ownership of the properties to the state, which the court found to be unjust and unconstitutional under the circumstances, particularly given that the perpetrator owed the bank more than 20 million crowns, which were secured by the properties. Consequently, the relevant provision of the Act on the property of the Czech Republic was annulled.
Public law
- Implementing regulations to the Building Act
In connection with the entry into force of a large part of the new Building Act on July 1, 2024, implementing regulations have been issued: the decree on construction requirements (No. 146/2024 Coll.), the decree on the implementation of certain provisions of the Building Act (No. 149/2024 Coll.), and the decree on territorial analytical materials, spatial planning documentation, and a unified standard (No. 157/2024 Coll.).
- Extraordinary waiver of penalty on health insurance premiums
On July 1, 2024, Act No. 152/2024 Coll., on the extraordinary cancellation of penalties for public health insurance contributions and the enforcement costs associated with the collection of these penalties under the Tax Code, will come into effect. It will be possible to waive penalties and enforcement costs under this law if enforcement was initiated no later than December 31, 2023, according to the Tax Code. The condition is that an individual must submit a written request to the health insurance company for the cancellation of penalties and enforcement costs by November 30, 2024, and must also fully pay the outstanding insurance contributions to which the penalties and enforcement costs relate by December 31, 2024, at the latest. Minor exceptions apply in cases where the payment of the outstanding contributions is arranged in installments. This law does not apply to legal entities.
Personal data
- Public consultation on camera systems in schools
The Office for Personal Data Protection (ÚOOÚ) has initiated a public consultation on the draft Recommendation regarding camera systems installed in schools and educational institutions. The ÚOOÚ considers the deployment of a camera system, not only in school premises, to be a significant intrusion into the right to privacy, and therefore deems it important to support schools by providing a detailed description related to camera systems. The deployment of camera systems in schools is permissible, with the legal basis from a personal data protection perspective typically being legitimate interest. Consent from data subjects is not required, and using consent as a legal basis for processing seems problematic in this case. However, defining the purpose of the camera system's deployment may be more complicated. The deployment of a camera system for the purpose of protecting property is generally acceptable. However, the ÚOOÚ considers it problematic to deploy such systems for safety, health protection, and prevention of bullying, pointing to the low effectiveness of camera systems in these contexts. Before deploying a camera system, the ÚOOÚ requires a so-called balancing test to be conducted, in which the administrator considers all possible solutions or their combinations, as well as the placement of cameras (for example, the ÚOOÚ deems placement in staff rooms or restrooms unacceptable, and leans towards keeping them turned off during lessons in classrooms), their number, operational mode, and other criteria for data setting and transmission. In all of this, the administrator should take into account the issue of monitoring employees in the workplace according to § 316 of the Labor Code.
Taxes
- Free heat supply is subject to VAT
On April 25, 2024, the Court of Justice of the European Union (CJEU) answered a preliminary question posed by the German Federal Financial Court regarding the supply of heat without consideration, stating that such supplies are subject to VAT. The case involved a situation where a company producing biogas used part of it as an energy source in its production and provided a portion free of charge to other parties. The CJEU endorsed the tax authority's approach, which assessed VAT on these supplies (determining the tax base based on the total costs incurred) on the grounds that, according to the directive, any transfer of goods without consideration is subject to VAT, and heat is considered a good for VAT purposes. The Czech General Financial Directorate had previously issued guidance on this issue, which has now proven to be entirely consistent with the CJEU's ruling. Regarding the determination of the tax base, the CJEU stated that the cost price should reflect all relevant factors and include indirect costs, aiming to approximate the purchase price as closely as possible.
- Assessment of permanent establishment for VAT purposes
V rozsudku ze dne 13. 6. 2024, C-533/22 (SC Adient Ltd & Co. KGIn the judgment of June 13, 2024, C-533/22 (SC Adient Ltd & Co. KG), the CJEU confirmed previous conclusions that, regarding the issue of a so-called passive establishment (i.e., an establishment capable of receiving services for VAT purposes), it should not be decisive whether the service provider and the recipient are part of the same group. The CJEU stated that the taxation of services at the location of a permanent establishment is an exception to the general rule for determining the place of supply, and therefore this exception needs to be interpreted restrictively and applied only when the conditions regarding the establishment's human and technological resources, which the service provider utilizes and must make available to the service recipient, are met. The mere fact that the recipient and the service provider are part of the same group does not, by itself, establish a passive establishment. According to the CJEU, it is also important to consider whether the employees of the provider are not, in fact, subordinated to the service recipient.
