Many businesses had to shut down or limit their operations in relation to restrictive Covid-19 measures. In this context, there has been a lively social debate on the subject of claims for damages in connection with government measures (later by the Ministry of Health) against the state. Can you therefore have a claim against the State for compensation and, if so, how and when should it be exercised?

First, it must be emphasized that such a claim does indeed arise from the law – namely the provision of § 36 of the Crisis Act, according to which the state is obliged to compensate the damage caused to legal and natural persons in causal connection with crisis measures (i.e.: the state of emergency). This responsibility of the state is determined by law as objective and therefore it is not necessary to prove its mens rea – the injured party must only prove the occurrence of the damage, its amount (quantum) and causal connection with the crisis measure. E.g. the operator of a shop located in a shopping center that has been closed by a crisis measure is entitled to compensation from the state for the damage incurred, including lost profits. Sounds simple – but is it?

It is apparent from the media proclamations of the members of the government that they became aware of this fact about one week after the announcement of the state of emergency and they immediately started to solve this “problem”. Crisis measures were extended after 24 March 2020 by a measure of the Ministry of Health – this inconspicuous change in form has the effect that from 24 March 2020 crisis measures are no longer announced under the Crisis Act, but under the Public Health Protection Act. The main difference here lies in the fact that the Public Health Protection Act no longer grants natural and legal persons the right to compensation (unlike the Crisis Act).

It follows from the above that the future of the enforcement of the claim for damages is uncertain. The courts will have to decide whether or not the change in the form of the announced measures was lawful and thus whether there is a claim for damages only for the period up to 24 March 2020 or for the time period beyond this fateful date. So, what can we recommend now?

  1. Carefully document the damage incurred and its amount, e.g.: communication regarding terminated contracts, confirmation from business partners of termination of contracts due to restrictive measures, record of sales for the same period from last year, etc.
  2. Minimize damage – you are legally obliged to do this: for example, restaurants can sell “out the window” or deliver food, a passenger carrier that specializes in transporting people from the airport can temporarily deliver food, etc.
  3. Take advantage of programs offered in connection with the pandemic: e.g.: Antivirus program, compensation bonus for self-employed persons, contribution to paid wages, interest-free loans from ČMZRB or the possibility of postponing rent or installments of loans and mortgages
  4. Most importantly, be sure to claim your damages in time if you decide to do so. These applications can be expected to end up before the courts in most cases and the process will be considerably delayed – unfortunately, it cannot be expected that any compensation would still have any effect in coping with the current crisis situation. On the other hand, the right to claim compensation exists and its enforcement is entirely legitimate, but it should be borne in mind that the claim must be exercised within a limitation period of 6 months.