A Guide to Handling Consumer Claims and Complaints Under Czech Law

Fundamental Pillars of the Claims Process: What You as a Seller Need to Know

It is crucial to realize that you, as the seller, are exclusively liable to the buyer for defects in the goods. The customer brings their claim to you, not to the manufacturer, importer, or an external service center. Furthermore, legislation is constantly evolving. A significant amendment effective from January 2023 has further strengthened consumer rights and placed new obligations on businesses, especially regarding proving the origin of a defect.

For many companies that serve both corporate clients and end customers (including sole proprietors, who can be considered consumers in many cases), the safest and most effective strategy is to align internal processes with the stricter rules for consumers. This approach minimizes the risk of error and simplifies procedures for your employees.

At ARROWS, we monitor legislative changes for you. For our clients, which include more than 150 joint-stock companies and 250 limited liability companies, we ensure that their internal processes and documentation are always in compliance with current Czech legislation.

Accepting a Claim: The First Step You Cannot Get Wrong

Accepting a claim is your legal obligation, which cannot be refused. Even if the customer's claim seems unfounded at first glance, you must accept the claim and initiate the claims process. This initial contact is key for the subsequent procedure and your legal protection.

Where and How to Accept a Claim?

The law stipulates that you are obliged to accept a claim at any of your business premises where it is possible with regard to the range of goods sold, and also at your registered office. Throughout business hours, an employee authorized to handle claims must be present at the premises. This employee does not have to decide on the claim immediately, but must be able to properly document it with the customer.

What Is a Claim Report and Why Is It So Important?

When a claim is filed, you are obliged to issue a written confirmation to the customer, known as a claim report. This document is not a mere formality but your key legal shield. It protects you from later disputes about what was claimed and when.

The claim report must contain:

• The date the claim was filed.

• Identification details of both you and the customer.

• A precise description of the claimed goods.

• A detailed description of the alleged defect (how it manifests).

• The method of resolution requested by the customer.

A carefully drafted report defines the scope of the dispute. If the customer later claims to have reported another defect, you have proof of the original content of their claim. You can find details on conflict resolution in the section dedicated to commercial and court disputes. It is also important to remember that you cannot require the customer to hand over the goods in their original packaging.

The ARROWS law firm prepares standardized internal guidelines and template claim reports for its clients. This ensures that your employees always proceed uniformly and in a legally correct manner, which minimizes the risk of human error and future disputes.

Pressing Deadlines: How to Calculate Them Correctly and When to Decide?

Time plays a crucial role in the claims process. The law sets strict deadlines, the failure of which has fatal consequences for the seller. Did you know that similarly strict rules apply to the defense against a payment order in commercial disputes? It is therefore essential to know them and have a system in place for tracking them.

How Quickly Must You Decide on a Claim?

You must decide on a claim immediately, or within three working days in complex cases. This period does not include the time reasonably required for a professional assessment of the defect (e.g., the time needed for diagnostics at a service center). The myth that you have 30 days for everything is dangerous and can lead to a breach of the law. The 30-day period applies to the complete resolution.

What Is the Overall Deadline for Resolution?

The claim, including the removal of the defect, must be resolved no later than 30 calendar days from the date it was filed, unless you explicitly agree on a longer period with the consumer. The period begins on the day following the filing of the claim. If the end of the period falls on a weekend or public holiday, it is moved to the next working day.

What Are the Consequences of Missing the Deadline?

The expiration of the 30-day period is considered a material breach of contract. In such a case, the customer automatically acquires the right to withdraw from the purchase contract and demand a refund, or to request a reasonable discount. It does not matter whether the defect is repairable or whether you missed the deadline by a single day.

Do Not Forget the Information Obligation

A key obligation that companies often forget is to actively inform the customer about the resolution of their claim. It is not enough to have the goods repaired and ready for collection. You must demonstrably notify the customer (e.g., by email, SMS) that their claim has been resolved and in what manner. If you fail to do so within the 30-day period, the claim is considered unresolved, with all the ensuing consequences.

The lawyers at ARROWS help clients implement robust systems for recording and tracking claims, which automatically monitor key deadlines and prevent them from being missed.

The Most Common Mistakes in the Claims Process and How to Avoid Them

Many companies make the same, easily overlooked mistakes that can cost them significant money and reputation. The following table summarizes the most common risks and shows how they can be prevented with professional legal support.

Justified or Unjustified? When You Can Reject a Claim

Although you must accept every claim, it does not mean you must always approve it. The law defines clear reasons why you are not liable for a defect. However, the key is to know who bears the burden of proof.

On What Basis Can a Claim Be Rejected?

You can justifiably reject a claim if the defect is caused by:

• Normal wear and tear of the item caused by its usual use.

• The buyer themselves, for example, through incorrect use, mechanical damage, or failure to follow the instruction manual.

• For used goods, liability does not cover defects corresponding to the degree of previous use or wear.

• For goods sold at a discount, a claim cannot be made for the defect for which the discount was provided and of which the customer was notified.

Beware of the Burden of Proof

A fundamental change in legislation concerns proving the origin of a defect. If a defect appears on the goods within the first year of receipt, it is presumed that the goods were already defective upon receipt. In such a case, it is up to you as the seller to prove otherwise. A mere assertion that the customer caused the defect themselves is not enough. To rebut this legal presumption, an expert opinion or an expert report is usually required. Only after the first year has passed does the burden of proof shift to the customer.

You must provide the customer with a written and duly justified rejection for every claim. You must also never charge the customer any fee for diagnostics or for handling an unapproved claim. Such a practice is illegal.

In the case of disputed or financially significant claims, ARROWS provides clients with the preparation of expert legal opinions. These, supported by an expert report if necessary, provide a solid basis for rejecting an unjustified claim and significantly strengthen your position in any potential dispute.

Specifics of E-shops and International Sales: A New Dimension of Risks

Operating an e-shop and expanding into foreign markets brings specific legal challenges that differ from traditional brick-and-mortar sales. Knowledge of these nuances is key to minimizing risks.

E-shops: Withdrawal from the Contract vs. Claims

E-shop operators must strictly distinguish between two different legal concepts: the right to withdraw from the contract within 14 days and a claim for defective goods. Withdrawal from the contract is the customer's right to return goods purchased at a distance without giving a reason. However, this right has its exceptions, for example, for custom-made goods, unsealed hygiene products, or audio and video recordings.

Cross-Border Sales within the EU

If you sell goods to customers in other EU member states, you must respect harmonized consumer rights. These include a minimum two-year liability for defects. However, national regulations may differ in detail, for example, in the length of the period for resolving a claim. While it is 30 days in the Czech Republic, a general "reasonable period" may apply in other countries, which usually ranges from 4 to 6 weeks.

The Myth of the "Euro-Warranty"

Many entrepreneurs and customers mistakenly believe that there is a statutory "Euro-warranty" that would allow a customer to claim goods purchased, for example, in Germany at a Czech branch of the same brand. No such right exists by law. A claim must always be filed with the seller from whom the goods were purchased. The possibility of making a claim in another country is only given if the manufacturer or seller voluntarily offers it contractually.

Resolving international disputes is our specialty. Thanks to the ARROWS International network, which we have been building for more than ten years, we can effectively handle the legal affairs of our clients throughout most of Europe. Whether you are facing a claim from a foreign customer or a dispute with a supplier from another country, we will provide you with qualified legal representation directly in the given jurisdiction.

Cross-Border Trade and International Disputes

Expanding into foreign markets opens up new business opportunities, but at the same time multiplies legal risks. The following table shows where the greatest dangers lie and how a partner with a strong international background can protect you.

When the Process Gets Complicated: Disputes, Penalties, and the Role of the ČOI

Failure to comply with legal obligations is not just a theoretical risk. It can lead to very real and financially painful consequences, whether in the form of penalties from supervisory authorities or costly court disputes.

What Role Does the Czech Commercial Inspectorate (ČOI) Play?

The ČOI is the main supervisory authority for compliance with the Consumer Protection Act. Every year, it conducts thousands of inspections, which are often initiated by complaints from dissatisfied customers. Statistics show that violations are found in the vast majority of inspected entities, especially e-shops. Among the most common offenses are insufficient information about claim conditions and misleading commercial practices.

What Penalties Do You Face?

Fines from the ČOI can be devastating. For breaches of obligations in the claims process, such as failing to meet the 30-day deadline or not issuing a report, there is a risk of a penalty of up to CZK 3,000,000. In more serious cases, handled in administrative proceedings, fines can reach up to CZK 50,000,000.

What to Do When a Customer Disagrees with a Rejection?

If a customer disagrees with the rejection of a claim, they can turn to the out-of-court settlement of consumer disputes (ADR) system at the ČOI. This is a mediation process aimed at reaching an agreement. The outcome is not binding on the parties. If an agreement cannot be reached, the next and final instance is the court.

The moment you receive a notice from the ČOI or a pre-action letter from the customer's lawyer, it is crucial to react quickly and professionally. ARROWS provides expertise in representing clients before administrative authorities and courts. We will guide you through the entire process, protect your rights, and strive to minimize any potential damages.

Penalties and Legal Disputes

The final costs of a poorly managed claims process far exceed the value of a single returned product. This table shows the financial, legal, and reputational damages that can affect your company.

Prevention Is the Best Strategy: How ARROWS Can Help You Set Up a Bulletproof Claims Process

As this article shows, proper claims management is a complex discipline with significant legal and financial implications. Proactive preparation and process setup are incomparably more effective and cheaper than reactively solving problems and disputes. At ARROWS, we are a partner for companies that want certainty in this area. Our many years of experience providing services to a broad portfolio of clients, including more than 51 municipalities and regions, allow us to deliver services quickly and at a high quality.

Our specialists can help you with a whole range of tasks that will protect you from risks:

• Drafting customized internal guidelines and claim policies.

• Preparing complete documentation that will protect you from fines (template reports, forms).

• Legal consultations and audits of your existing processes.

• Preparation and review of business terms and contracts.

• Representation in courts and before administrative authorities, such as the ČOI.

• Obtaining necessary licenses and permits.

• Professional training for your employees and management, including certification.

In addition, we are happy to connect our clients if we see interesting business or investment opportunities, and we are always keen to hear your business ideas.

A properly set up claims process protects your finances and good reputation. Do not leave this key area to chance. Contact us, and our specialists will help you create a system that provides you with legal certainty. We will be happy to get in touch with you and discuss how we can help your business specifically.