Do you have debtors in the Czech republic?

If your British company is facing unpaid invoices from a Czech business partner, you need a clear strategy to navigate the local legal landscape. The post-Brexit environment has introduced new complexities, but effective debt recovery in the Czech Republic is achievable with the right expertise. This guide provides specific answers and a step-by-step approach to securing payment, written by the English-speaking lawyers at ARROWS, a leading Czech law firm in Prague, EU.

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

The Smart First Move: Strategic Pre-Litigation in the Czech Republic

Before initiating formal court proceedings, a professional, out-of-court approach is the most strategic and cost-effective first step in the Czech Republic. This amicable phase is not a sign of weakness; it is a calculated business decision that preserves valuable commercial relationships, avoids costly court fees, and is often the fastest path to payment. Experienced legal specialists find that up to 95% of commercial debt cases here can be resolved successfully without ever entering a courtroom.

However, this pre-litigation stage involves a critical procedural step that is unique to Czech law and often overlooked by foreign creditors, with severe financial consequences.

The Mandatory Czech Pre-Action Letter (Předžalobní výzva)

Under § 142a of the Czech Code of Civil Procedure, a creditor is legally required to send a specific pre-action letter, known as a předžalobní výzva, to the debtor at least seven days before filing a claim in court. This is not merely a suggestion or a best practice; it is a mandatory prerequisite for the recovery of your legal costs should you succeed in court.

To be legally compliant, this letter must contain several essential elements derived from judicial practice. It must clearly identify both the creditor and the debtor, state the precise amount of the debt, and specify the legal basis for the claim, such as referencing the contract or specific unpaid invoices. It must also provide a clear deadline for payment and explicitly warn the debtor that failure to pay will result in the initiation of court proceedings.

The financial consequences of failing to send this specific, legally compliant notice are severe. A Czech court will refuse to award you, the creditor, your legal costs, even if you win the case on its merits. This procedural misstep could force your company to pay all its own legal fees, a significant financial blow that could easily negate the benefit of a successful claim. This single rule underscores that effective cross-border debt collection requires deep local knowledge, not just a simple translation of a standard UK letter before action.

ARROWS ensures this critical step is handled flawlessly. We draft the předžalobní výzva to meet all legal requirements and manage its formal delivery via registered post or the debtor's official data box (datová schránka), creating an undeniable record for the court and protecting your right to full cost recovery.

FAQ – Legal Tips on Czech Pre-Action Letters

1. Is a simple email reminder enough to satisfy the legal requirement?
No, a simple email is insufficient. To secure your right to recover legal costs, you must send a formal letter with specific, legally required content to the debtor's official or last known address. This creates the necessary proof of compliance for the court. For expert guidance on drafting and sending a compliant letter, contact us at office@arws.cz.

2. What happens if I file a lawsuit without sending the 7-day notice?
You will almost certainly forfeit your right to have the debtor pay your legal fees, even if the court rules entirely in your favor. This could turn a legal victory into a financial loss. Protect your financial interests by emailing office@arws.cz for professional assistance before taking any court action.

Navigating the Czech Courts: Your Procedural Options

When amicable negotiations do not yield results, the Czech legal system offers efficient judicial pathways to secure payment. Understanding these options, particularly the powerful fast-track procedure and what happens when a debtor decides to fight back, is crucial for any British company seeking to recover funds.

The Fast-Track Solution: The Payment Order (Platební rozkaz)

For undisputed monetary claims, the most effective tool in the Czech legal system is the "Order for Payment Procedure," which results in a platební rozkaz. This is a streamlined, document-based judicial process that allows a court to issue a binding payment order without holding a formal hearing. The judge's decision is based solely on the evidence submitted by the creditor.

The process begins by filing a formal application with the competent district court. Unlike some administrative debt recovery procedures in other European countries, a Czech judge must be personally convinced from the submitted facts and documentary evidence that the creditor's claim is justified before issuing the order. Success, therefore, hinges on providing strong, clear, and persuasive evidence, including signed contracts, issued invoices, confirmed delivery notes, and any correspondence where the debtor acknowledges the debt.

If the judge finds the claim well-founded, the court issues the platební rozkaz. This order is then served on the debtor, who has 15 days from the date of delivery to either pay the full amount or file a formal objection. If the debtor takes no action, the order becomes a final and legally enforceable judgment, equivalent to a full court verdict.

A more cost-effective version of this procedure is the Electronic Payment Order (elektronický platební rozkaz), which has a lower court fee (4% of the claimed amount for larger claims, compared to 5% for a standard lawsuit). A significant recent legislative amendment removed the previous monetary cap of CZK 1 million, making this electronic procedure a powerful and efficient tool for large commercial claims as well.

When Your Debtor Fights Back: The Odpor (Objection)

The efficiency of the payment order procedure has a critical vulnerability: the debtor's right to object. Within the 15-day deadline, the debtor can file a formal objection, known as an odpor. For the debtor, this is a simple procedural step that does not require a detailed legal argument at the time of filing. However, its legal effect is immediate and profound.

The filing of an odpor automatically cancels the platební rozkaz in its entirety. The case is then instantly transformed from a simplified, document-based procedure into a standard civil lawsuit. This marks a critical turning point where the costs, complexity, and timeline of the case increase substantially. The court will schedule formal hearings where both parties present arguments, submit further evidence, and potentially call witnesses.

This "escalation trigger" means that a British creditor must be strategically prepared for a full-blown lawsuit from the very beginning. The initial application for a payment order should not be seen as a simple administrative task, but as the foundational step of a potential litigation battle. ARROWS prepares every case with this possibility in mind, ensuring your claim is robust enough to withstand this escalation and that we can seamlessly transition from a summary procedure to complex litigation without losing momentum.

The EU Alternative: European Payment Order (EOP)

For undisputed monetary claims between parties in different EU member states, the European Payment Order (EOP) offers a standardized alternative. A British creditor can file a single EOP application against a Czech debtor. If the debtor does not contest the claim, the resulting order is automatically recognized and enforceable in the Czech Republic without needing a separate declaration of enforceability (exequatur). However, like the Czech procedure, it is vulnerable; a simple statement of opposition from the debtor terminates the EOP process and transfers the case to ordinary Czech civil proceedings.

Risks and Penalties	How ARROWS Helps
Insufficient Evidence for Payment Order: Your application for a platební rozkaz is rejected by the judge, causing delays and wasted costs.	Evidence Package Review: Our lawyers meticulously review and structure your contracts, invoices, and correspondence to build a compelling, judge-ready case. Need your evidence reviewed? Write to office@arws.cz.
Debtor Files an Odpor (Objection): The fast-track process is cancelled, and your case escalates to a lengthy and expensive standard lawsuit, catching you unprepared.	Litigation Strategy & Representation: We anticipate this risk from the start, preparing your case for a full trial. We provide seamless representation in court to defend your claim. For immediate assistance, write to us at office@arws.cz.
Statute of Limitations Expires: Your claim becomes unenforceable because you waited too long. The general limitation period is three years.	Legal Deadlines Management: We assess the validity of your claim and ensure all actions are filed before the statutory deadline expires. To verify if your claim is still enforceable, contact us at office@arws.cz.
Procedural Errors in Filings: Incorrectly filed documents lead to dismissals or delays, increasing costs and frustration.	Drafting Legally Required Documentation: We handle all court filings, ensuring full compliance with the Czech Code of Civil Procedure to prevent avoidable setbacks. Get tailored legal solutions by writing to office@arws.cz.

A Post-Brexit Reality: Enforcing UK Judgments in Prague

For British companies that have already secured a judgment from a UK court, the process of making that judgment effective in the Czech Republic has fundamentally changed since Brexit. The simple, automatic recognition under the EU's Brussels Regulation is a thing of the past. Today, enforcement follows a new, two-track system, and the correct path depends entirely on when your original UK legal proceedings began.

This temporal fragmentation has created a new layer of complexity for UK creditors. A company might even hold two different UK judgments against the same Czech debtor that fall under entirely different enforcement regimes. This uncertainty requires expert navigation to ensure a UK judgment can be successfully converted into seized assets in the Czech Republic. As an international law firm operating from Prague, European Union, with a decade of experience building our ARROWS International network, we are uniquely positioned to manage this complex cross-border enforcement, whether under the new Hague Convention or Czech national law.

The Primary Solution (for New Cases): The Hague Judgments Convention 2019

The new primary framework for recognizing and enforcing judgments between the UK and the EU is the Hague Convention of 2 July 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

A critical detail for any British company is the timeline: this Convention only applies to judgments resulting from legal proceedings instituted on or after July 1, 2025. For cases that fall within this timeframe, the Convention provides a more streamlined and predictable path to enforcement. Its scope is broader than previous agreements, covering judgments arising from non-exclusive and asymmetric jurisdiction clauses, which are very common in international commercial contracts.

The practical process under the Convention involves presenting the Czech court with a complete and certified copy of the UK judgment, along with any documents necessary to establish that the judgment is effective and enforceable in the UK. Crucially, the Czech court will not conduct a review of the merits of the judgment; its role is to verify that the procedural requirements for recognition under the Convention have been met.

The Fallback Position (for Older Cases): The Czech Act on Private International Law

For UK judgments resulting from proceedings initiated before July 1, 2025, or in the rare cases not covered by the Hague Convention, enforcement is governed by Czech national law, specifically the Act on Private International Law (No. 91/2012 Coll.).

Under this regime, a foreign judgment in property matters is recognized without a special court decision; the Czech authorities simply take it into consideration as if it were a domestic judgment.27 However, this recognition is contingent on several conditions. The judgment must be final and enforceable in its country of origin, and there must be no grounds for refusal. These grounds include situations where the recognition would contravene Czech public policy, where the matter falls under the exclusive jurisdiction of Czech courts, or where the defendant was not properly served with documents and was thus deprived of the ability to defend themselves in the original proceedings.

While this national path is well-established, it is inherently less streamlined than the treaty-based Convention and requires careful management to ensure all local procedural requirements are met. ARROWS provides the expertise to navigate both of these parallel tracks, providing certainty and effective action regardless of when your UK judgment was obtained.

FAQ – Legal Tips on UK-CZ Judgment Enforcement

1. My UK court case started in 2024. Can I use the new Hague Convention?
No, the Hague Judgments Convention 2019 only applies to proceedings initiated on or after July 1, 2025. Your judgment will need to be recognized and enforced under the rules of the Czech Act on Private International Law. Our lawyers are experts in this procedure and can manage the entire process for you – email us at office@arws.cz.

2. Does the Czech court re-examine the facts of my UK case?
No. Under both the Hague Convention and Czech national law, Czech courts are prohibited from reviewing the merits of the original foreign judgment. Their role is strictly to verify that the conditions for recognition and enforcement have been met. For a smooth and efficient enforcement process, contact us at office@arws.cz.

Risks and Penalties	How ARROWS Helps
Applying the Wrong Legal Regime: Attempting to enforce a pre-2025 judgment under the new Hague Convention, leading to rejection, wasted time, and unnecessary costs.	Legal Analysis & Strategy: We determine the correct legal framework (Hague Convention vs. Czech National Law) based on your case's specific timeline and provide a clear legal opinion on the path forward. Want to understand your legal options? Email us at office@arws.cz.
Judgment Recognition Denied: A Czech court refuses to recognize your UK judgment due to procedural flaws, such as improper service of documents in the original UK case or a conflict with Czech public policy.	Representation Before Czech Authorities: We meticulously prepare and file the motion for recognition and enforcement, ensuring all documentation meets strict Czech legal standards to prevent any potential grounds for refusal. Need legal representation? Write to office@arws.cz.
Delays in Enforcement: The process stalls due to unfamiliarity with Czech court procedures, giving the debtor a window of opportunity to move or conceal assets before they can be seized.	Project Management of Enforcement: Our team manages the entire process, from the initial recognition filing to the final execution by a bailiff, leveraging our deep experience to navigate the system efficiently and act swiftly. For immediate assistance, write to us at office@arws.cz.

The Final Step: Turning Your Judgment into Cash (Exekuce)

Obtaining a final, enforceable judgment—whether from a Czech court or through the recognition of a UK judgment—is a major victory. However, it is not the end of the process. The final and most critical stage is turning that legal document into actual payment. In the Czech Republic, this is achieved through the enforcement process, known as exekuce.

Understanding the Czech Enforcement Process (Exekuce)

The exekuce process is initiated by filing an enforcement proposal based on an "enforceable title," such as a final Czech court judgment or a recognized foreign judgment. This proposal is submitted to a court-appointed private bailiff, known as a soudní exekutor, who is then authorized by the court to carry out the enforcement.

The Czech enforcement system is robust, but its effectiveness is directly linked to the debtor's solvency. Pursuing a debtor with no seizable assets can be a case of throwing good money after bad. Therefore, proactive due diligence is not an optional extra but a critical strategic step to ensure the entire legal effort is commercially viable.

The Powers of a Czech Bailiff (Soudní exekutor)

Once authorized by the court, a Czech exekutor has broad and extensive powers to seize nearly any asset belonging to the debtor company. This is a key advantage for creditors, as the scope of seizable assets is comprehensive. These powers include:

• Freezing and seizing funds from all known bank accounts.
• Placing liens on and forcing the sale of real estate, including commercial properties and land.
• Seizing and selling movable property, such as vehicles, machinery, and office equipment.
• Seizing and selling inventory and other company stock.
• Seizing company shares or the debtor's ownership stake in other companies.
• In some cases, seizing and managing the entire company enterprise to satisfy the debt.

Essential Due diligence: The Central Evidence of Executions (Centrální evidence exekucí - CEE)

Before committing to the time and expense of litigation, it is vital to assess the likelihood of a successful recovery. The Czech Republic offers a powerful tool for this purpose: the Centrální evidence exekucí (CEE), or Central Evidence of Executions.

The CEE is a public, online register maintained by the Chamber of Judicial Executors of the Czech Republic. It allows any person or company to check whether a specific Czech entity is already facing other enforcement proceedings.31 This information is invaluable. If a potential debtor is already subject to multiple enforcement orders, it may indicate severe financial distress, and the chances of a new creditor recovering their debt are significantly diminished.

Conducting a search in the CEE is a fundamental due diligence step that should be taken before entering into significant contracts or, crucially, before initiating legal action. ARROWS integrates CEE checks into our initial case assessment, providing our British clients with a realistic evaluation of their recovery prospects and helping them make informed, commercially sound decisions.

Risks and Penalties	How ARROWS Helps
Debtor is Insolvent or Has No Assets: You win your case and obtain an enforceable judgment, only to discover the debtor company is a shell with no assets to seize, making your judgment worthless.	Pre-Litigation Asset Investigation: We use tools like the Central Evidence of Executions (CEE) to assess a debtor's financial status and existing enforcement actions before you incur major legal costs, providing a clear risk assessment. Get tailored legal solutions by writing to office@arws.cz.
Debtor Attempts to Dissipate Assets: The debtor tries to sell property, transfer funds out of bank accounts, or hide valuable equipment after becoming aware of the impending enforcement.	Securing Interim Measures: We can apply to the court for interim measures to freeze the debtor's assets at an early stage, preventing their dissipation while the enforcement process is formally initiated. Do not hesitate to contact our firm – office@arws.cz.
Complex Enforcement on Specific Assets: Seizing non-cash assets like company shares, a business enterprise, or intellectual property requires specialized legal procedures and coordination.	Cooperation with Bailiffs (Exekutoři): We work with a network of trusted and effective bailiffs, managing the entire exekuce process to ensure all available assets are legally and efficiently seized to satisfy your claim. For immediate assistance, write to us at office@arws.cz.

 

Your Strategic Partner in Prague: Why British Companies Choose ARROWS

Recovering debts from a Czech counterparty requires more than just legal knowledge; it demands a strategic partner on the ground who understands both the local procedural intricacies and the cross-border challenges facing British businesses. The path to successful recovery is lined with potential pitfalls, from the mandatory předžalobní výzva to the complexities of the post-Brexit enforcement landscape.

ARROWS provides the comprehensive expertise needed to navigate this entire process. We combine deep knowledge of the Czech Code of Civil Procedure with a sophisticated understanding of international private law. Our team has mastered the nuances of the fast-track platební rozkaz and is always prepared for the strategic pivot required when a debtor files an odpor. We are at the forefront of implementing the new Hague Judgments Convention 2019, while also possessing the long-standing experience to enforce older judgments under the Czech Act on Private International Law.

Our capabilities are enhanced by the ARROWS International network, a global alliance built over 10 years that allows us to handle complex matters across 90 countries. This international outlook is trusted by a substantial client base, including over 150 joint-stock companies and 250 limited liability companies who rely on our speed and high quality of service. We provide a full suite of services, from drafting preventative documentation and reviewing contracts to ensure robust jurisdiction clauses, to providing aggressive representation in court and diligent management of the final exekuce stage.

Don't let unpaid debts in the Czech Republic become a liability that drains your resources. As a leading Czech law firm in Prague, EU, we provide the clarity and strategic action required to protect your assets and secure what you are owed.

Contact our team of English-speaking lawyers today to discuss your case. Our lawyers are ready to assist you – email us at office@arws.cz.

FAQ – Most Common Legal Questions About Czech Debt Recovery

1. What is the statute of limitations for a commercial debt in the Czech Republic?
The general limitation period is three years, calculated from the invoice's original due date. It is critical to initiate legal action before this period expires, as a debtor can use it as a complete defense to your claim. A written acknowledgment of the debt by the debtor can restart the limitation period, creating a new 10-year term. To verify if your claim is still enforceable, contact our lawyers at office@arws.cz.

2. How is statutory interest on late payments calculated in the Czech Republic?
For business-to-business (B2B) transactions, the statutory interest rate is determined by government regulation that implements EU Directive 2011/7/EU. It is calculated as the Czech National Bank's repo rate (as of the first day of the six-month period in which the default occurred) plus 8 percentage points. For an exact calculation of the interest owed on your specific claim, write to us at office@arws.cz.

3. What are the typical costs of debt collection, and are they recoverable?
The primary costs are court fees and legal fees. Court fees are typically a percentage of the claimed amount (e.g., 4% for an electronic payment order or 5% for a standard lawsuit on larger claims). Legal fees can be agreed upon contractually or are based on the statutory 'Attorney's Tariff'. Crucially, if you are successful in court, these costs are generally recoverable from the debtor, but only if all procedural rules, including the mandatory pre-action letter, were followed correctly. For a detailed cost assessment of your case, email us at office@arws.cz.

4. How long does the debt recovery process in the Czech Republic usually take?
The timeline can vary dramatically depending on the debtor's actions. An amicable settlement might be reached in a few weeks. An uncontested platební rozkaz can result in an enforceable judgment within 2 to 6 months. However, if the debtor objects and the case proceeds to a contested, ordinary court proceeding, obtaining a final judgment can take one to three years. To discuss the fastest strategic path for your case, get tailored legal solutions by writing to office@arws.cz.

5. My contract has an exclusive English court jurisdiction clause. Is that a problem for enforcement in Prague?
Not necessarily, but the enforcement path depends on the contract date. Post-Brexit, exclusive jurisdiction clauses are generally enforced under the 2005 Hague Convention on Choice of Court Agreements. For contracts with non-exclusive or asymmetric clauses, the new 2019 Hague Judgments Convention will likely apply for proceedings started after July 1, 2025. Navigating the correct treaty is key to success. Need your contract's jurisdiction clause reviewed for enforceability? Contact us at office@arws.cz.

6. Can a Czech bailiff (exekutor) seize assets outside the Czech Republic?
A Czech exekutor's direct authority is limited to the territory of the Czech Republic. However, for debtors with assets in other EU countries, European legal instruments like the European Account Preservation Order can be used to freeze bank accounts across borders. Furthermore, international cooperation between bailiffs can be initiated based on bilateral agreements. For assistance with complex cross-border asset tracing and enforcement, do not hesitate to contact our firm – office@arws.cz.

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