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The Buzz from the Czech Republic

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Zdenek Tomicek, Partner in the Czech office of CEE Attorneys, turned first to the intended amendment to the Execution Procedure Act proposed by the Czech Ministry of Justice, which could oblige creditors to provide monetary guarantees of costs of the Court Executor in the proceedings — which would then be forfeited if execution turned out to be impossible.

“I understand the reason for this amendment, but the problem is,” Tomicek said, “this will also be applicable to B2B creditors, who are not always aware of debtor assets and public sources are very limited with this respect.” As a result, creditors who win their claims — which should, after all, put them in a better position — will have to provide guarantees to the executors, providing additional risk to them.

Tomicek said this will, on top of everything else, have a significant effect for lawyers and law firms who also provide debt collection services, who will have to explain to clients that yet another fee is required of them.

Tomicek also agreed with previous The Buzz sources who expressed frustration with the Czech judiciary, noting that judges — especially at the lowest level — are simply not regularly trained, and from time to time fail to refer to the judicial practice of higher courts in reaching their verdicts. Tomicek rolled his eyes, saying “sometimes it’s frustrating.”

The legal market itself is strong, at the moment, Tomicek said, especially with the continued rebound of the real estate and financial services markets. There’s a continued need for international or regional firms in the Czech Republic, he said, but the particular kind of firms needed is changing. The major international players “from the 1990s” are too expensive, he said, pointing out that one or two seem to be closing their doors and withdrawing from the country every year. They’re being replaced, he reported, by smaller regional players, staffed by lawyers who trained at major international firms during the big-payday years, but are now able to offer their services at considerably lower prices. As a result, “small Czech law firms are more and more involved in the market,” which Tomicek called “a good thing for the Czech market — better if Czechs are successful here than just foreign lawyers.”

Finally, Tomicek referred to the comments about the changing demands and expectations of young lawyers that were made in the article about the Hungarian Round Table that appeared in the April 2016 issue of the CEE Legal Matters magazine. He said his colleagues are witnessing an identical phenomenon in the Czech Republic: New lawyers who “come out from law school, know nothing about the practice, but ask when they can go home.” He called it a “sad question,” and explained, “I understand asking about money — but when to go home?” He agreed with the comments by Zoltan Lengyel of Allen & Overy in that April 2016 Round Table that it’s up to the law firms to adapt, and asked, simply, “but how??”