Compensation claims over Czech anti-coronavirus measures rise, along with frustration

Illustrative photo: Gerd Altmann/Pixabay, CC0

Claims for damages due to anti-measures coronavirus are beginning to pile up at government ministries. Nearly two dozen entities are demanding a total of 188 million crowns in compensation from the Interior Ministry alone. Hundreds more a reportedly seeking to file joint actions.

Illustrative photo: Gerd Altmann/Pixabay,  CC0
Anyone seeking damages stemming from measures taken to combat Covid-19 has until August to do. While the number of applications continue to rise, so too is the frustration among entrepreneurs yet to receive compensation. Some confusion also reins as to exactly what damages can be claimed, and how much to reasonably expect to recover.

A survey by Czech Radio’s online server gives an idea of the level of concern among entrepreneurs as they take stock of their losses since mid-March, when closures and restrictions started, and look to navigate the legal and bureaucratic process.

Jan Julínek, who runs a touring theatre, lost 100 percent of his income when performances were banned as part of social-distancing measures. His theatre has received no subsidies, and while he wants to seek compensation he’s unsure how to calculate it.

“From one day to the next, we lost all our income, for the theatre and everybody working for it. We have to rent warehouses, workshops, and pay for operating expenses such as telephones, office space. Still, it's not as bad as having a stone theatre.”

Originally, the Czech government issued bans on the free movement of persons or closed shops on the basis of the Crisis Act. A week later, the cabinet changed the regime in a bid to avoid compensation claims, relying instead on the law on protecting public health, which does not explicitly provide for damages.

According to lawyer Tomáš Sokol, however, people can claim compensation under the Crisis Act, even in the case of extraordinary measures issued by the Ministry of Health. He told avoiding paying damages caused by emergency measures could be both illegal and unconstitutional. Sokol notes people only have six months to claim financial compensation, after which they will lose that right.

Illustrative photo: Jason Morrison/FreeImages
“If the government closed my shop on March 13, then I knew in the morning of March 14 how much money I had lost. And at that moment, the six months begin to tick away. So, people must count on filing claims for damages at the latest by August.”

Four measures issued by the Ministry of Health in mid-April were also annulled by the Municipal Court in Prague. Sokol says it is also possible to claim damages over maladministration. However, there is no statutory deadline for settlement of these claims, as the Crisis Act did not set one, and litigation could take years.

Meanwhile, people like shoemaker Pavel Dapecí, who had to close all his stores, are looking to file collective action through attorneys specializing in damages. They have a good chance of getting compensation for fixed costs, such as rent, utilities and equipment leases. Calculating lost profit – and getting at least partial compensation for it – will likely prove trickier.