Member Article

What does "state of emergency" actually meanand what are the powers of the Government in the regard? Can someone claim damages incurred in relation to the state of emergency?

State of Emergency

With effect from 12 March 2020 at 2 pm, the Government of the Czech Republic (the “Government”) has declared a state of emergency for 30 days for the territory of the Czech Republic due to health threats related to the presence of coronavirus in the Czech Republic (Government Resolution No. 194 of 12. 3.2020). This declaration of a state of emergency has not affected the emergency measures issued and in force until now by the Ministry of Health, which means that these measures remain valid and must be observed. An overview of these measures in force is also included in the schedule hereto. A natural, legal or self-employed person who fails to comply with the obligation imposed by extraordinary measures to protect the health of individuals during an epidemic issued pursuant to Act No. 258/2000 Coll., On Public Health Protection and on Amendments to Certain Related Acts, as amended (the “Act on Public Health Protection”) commits an offense for which a fine of up to CZK 3,000,000 may be imposed.

The Government declares a state of emergency on the basis of Constitutional Act No. 110/1998 Coll., On the Security of the Czech Republic, as amended, in the case of, inter alia, hazards that significantly endanger lives, health or property values or internal order and safety. At the same time as the declaration of the state of emergency, the government must define which rights and to what extent they are limited and which obligations and to what extent they are imposed. In this regard, the Government in its resolution on the declaration of emergency ordered crisis measures, the specific implementation of which will be determined by separate Government resolutions.

The Government is entitled to restrict personal rights during an emergency. It may also order the evacuation of persons and property from a designated area, prohibit entry, stay and movement in designated areas, decide to impose work assistance or the obligation to provide material means to deal with a crisis situation, or decide to carry out constructions, landscaping or removal of constructions to mitigate or avert a public emergency resulting from a crisis situation.

In particular, the Government has decided on a total of 14 emergency measures issued pursuant to Act No. 240/2000 Coll., On Crisis Management and on Amendments to Certain Acts (the Crisis Act), as amended (the "Crisis Act") whose current list as of March 14, 2020 can be found in the schedule attached. Individuals who do not abstain from activities prohibited by emergency measures during a crisis state will commit an offense for which a fine of CZK 2,000,000 may be imposed. Legal or self-employed natural persons who do not abstain from activities prohibited by emergency measures may be fined up to CZK 3,000,000.

Compensation for damage claimed against the State

Pursuant to Section 36(1) of the Crisis Act, thestate is obliged to compensate for the damage causedto legal and natural persons in causal connectionwith the crisis measures implemented under this act. This is a special legal regulation of damages for which the state is responsible, which is governed by the Crisis Act and not Act No. 82/1998 Coll. (on liability for damage caused in the exercise of public authority by decision or maladministration) or by a general regulation (the "Civil Code"). The Crisis Act establishes state liability for damage regardless of fault (so-called objective liability) and the difference from Act No. 82/1998 Coll. is that it does not require that the damage be caused by an unlawful decision or maladministration. This special responsibility is based on the simultaneous fulfilment of the following prerequisites: (1) the implementation of the crisis measure, (2) the occurrence of damage, and (3) the causal link between the crisis measure and the occurrence of damage. The state can only be relieved of liability if it proves (the burden of proof lies on it) that the injured party caused the damage itself.

This relatively strictly formulated state liability is connected with the obligation of the entitled person to claim damages first with the competent crisis management authority, within the statutory period of 6 months from the time when it became aware of the damage, within 5 years at the latest from the time of occurrence of the damage. By its time expiration, the claim expires (so-called slippage) by law, even if the claim is justified. Only the Czech Republiccan be a defendant in damages proceedings caused in connection with crisis measures (Cf. judgment of the Supreme Court of the Czech Republic of 17 June 2009, file no. No. 25 Cdo 1649/2007).

It follows from the foregoing that the Crisis Act combines a six-month and a five-year period in which a claim must be made. Their relationship is such that they run independently of each other and the claim ceases when one of them expires. The six-month preclusion period is subjective in nature, since the beginning of its running depends on the moment when the victim was demonstrably aware that the damage had occurred at his/her expense (and not only about the insured event). This presupposes that the injured person has learned that he or she has suffered damage of a certain type and extent, which can be objectively expressed in monetary terms (he or she does not need to know the extent of the damage accurately, for example, based on expert judgment) and reasonably applied in court. Please note that any action or legal dispute with an insurance company regarding the payment of insurance benefits has no effect on the beginning of this period. The beginning of this period of time does not shift to a later period, because according to the decision-making practice of the Supreme Court it does not translate into any knowledge that the injured party suffered harm and to what extent (Cf. eg the judgment of the Supreme Court of the Czech Republic of 22 October 2009, file no. No. 25 Cdo 3798/2007).

For the sake of completeness, we state that the Crisis Act allows for compensation for damages beyond the deadline for filing applications in cases worthy of special consideration. However, this procedure cannot be claimed in court proceedings; it must be applied for exclusively to the crisis management authority, and the injured party does not have automatic legal entitlement to do so