As is already well known, the Municipal Court in Prague annulled with effect from 27 April four measures of the Ministry of Health, which restricted the free movement of persons, retail and services. The court declared the measures illegal, which opens the possibility for entrepreneurs who could not do business as a result of measures taken by the Ministry of Health, to claim damages, lost profits and non-pecuniary damage pursuant to Act No. 82/98 Coll., on liability for damage caused by the exercise of official authority by a decision or maladministration.

On the basis of the above-mentioned law, the persons affected by the repealed government measures acquire the right to compensation for damage, lost profits and non-pecuniary damage.

We recommend entrepreneurs to start gathering evidence for the application of the relevant refunds, at least for the period of effectiveness of the repealed measures, i.e. for the period from 23 March 2020 to 27 April 2020.

In addition, many entrepreneurs will apply the state's liability for damage under the crisis law for the period when the measures were in force (and will continue to apply in the future) under the crisis law.

Many entrepreneurs have already entered into a settlement agreement under the Antivirus program, stating that they waive the right to compensation for the difference between the total wage costs and the amount paid by the Labor Office under the Antivirus program. This is up to 20% or 40% of the total wage costs, depending on which Antivirus mode was chosen. It is also possible that a similar settlement agreement will be included in other state support agreements that entrepreneurs conclude with the state. In the current situation, we consider such a settlement to be completely contrary to good morals especially given that most entrepreneurs, who are undoubtedly in the position of a weaker party, have under duress and distress asked for help from the state. Therefore, we are now inclined to the opinion that the claims subject to this settlement are also enforceable against the state (despite the signed settlement).

The Act on State Liability for Damage explicitly allows (in fact, to the state acting with due care it gives an obligation!) to claim the costs incurred from the official/agent who caused the damage by his or her actions. It will be interesting to see the attitude of the state in a situation where it will have to decide on the exercise of these claims against the persons concerned.

The situation may still change in connection with the announced cassation complaint, which the Ministry of Health plans to file against the decision of the Municipal Court in Prague. However, given the prevailing opinion of lawyers, this complaint of the Ministry will probably not be successful.

We will be happy to help you with any steps you may have in this context.