Covid-19 impact on civil and insolvency matters

1 Covid-19 impact on civil proceedings

1.1 Time limits in civil proceedings

Several measures have been taken to alleviate the most urgent difficulties of citizens with regard to court proceedings, executions or insolvency proceedings. Extensive use of existing provisions of the codes of procedure on waiver of missed time limits in court proceedings, if the time limit was missed due to limitations resulting from the extraordinary measures (mandatory quarantines, restrictions on movement and gathering of persons).

1.2 Judicial organization and Judiciary

The Ministry of Justice recommended postponing all court hearings. If postponement not possible, it must be carried out strictly in line with the Government Regulation on State of Emergency. Public is excluded in court hearings and its movement within the court building restricted.

Information provided by courts via telephone/email.

Delay in legal proceedings resulting of the application of this recommendations will not be considered by MoJ as delays in the exercise of its supervisory powers.

Notarial service still available to the public, but work carried out in restricted mode.

1.3 EU Judicial Cooperation

Office for International Legal Protection of Children (Brussels IIa & Maintenance Regulation): The Office's agenda will be carried out in the state of emergency mode; all personal contact with the Office shall be replaced by written (written or electronic) and telephone contact; Office hours shall be limited to Mondays and Wednesdays from 9 am to 12 pm.

Czech Ministry of Justice (Central authority for Service of Document & Taking of Evidence Regulations): Staff members (including all contact points) are currently mostly working from home. Electronic communication/distance communication are strongly recommended. All time limits should be kept.

The only complication is the increasing restrictions on postal services in some States, which we try, in agreement with the Ministry of Foreign Affairs, to overcome by use of diplomatic channel for

service of judicial documents. Foreign Central authorities should advise the courts/competent authorities to send all requests on service of documents and taking of evidence directly to the competent courts and not via Central Authority (Ministry of Justice) as this will currently significantly shorten the time limits for successful execution of the request.

2 Insolvency related measures adopted or planned for adoption in member states after the outbreak of the pandemic

2.1 Substantive insolvency measures and related contracts affecting measure

2.1.1 Insolvency suspension

2.1.1.1 Suspension of duty to file for insolvency (debtors)

Suspension of debtor's duty to file for insolvency (in case of COVID-related bankruptcy occurred within 6 months from the end of governmental extraordinary measures).

2.1.1.2 Protection of debtors about insolvency filing from creditors

Creditor’s right to file for insolvency of a debtor suspended until 31-08-2020.

2.1.2 Claim enforcement suspension and contract termination suspension

2.1.2.1 General / specific moratoria on claims enforcement / certain types of claims enforcement

Extraordinary moratorium suspends enforcement orders and realization of collateral rights. It is easily accessible for debtors as it does not require a consent of creditors needed for first 3 months; then creditors´ consent needed for a further 3 months’ extension.

Second stage for extraordinary moratorium applications opened on 13-11-2020 (until 30-06-2021 and just for first-time applicants). The extension of first stage extraordinary moratorium does not require consent of creditors.

2.1.2.2 Suspension of contract termination (general / specific contracts)

Extraordinary moratorium also protects the debtor from the termination of contracts for the supply of energy, raw materials, goods and services, and allows the debtor to pay the obligations directly related to the maintenance of the business preferentially over older debts.

2.2 Civil, including insolvency courts suspension and procedural suspensions

Ministry of Justice recommended postponing all court hearings, when possible. Waiver of missed time limits in court proceedings, if the time limit was missed due to current limitations (such as mandatory quarantines or restrictions on movement).

2.3 Other insolvency measures (those relating to avoidance actions, reorganization plans, informal agreements, and others if appropriate)

As long as the debtors' obligation to file for insolvency is suspended, the running of claw-back periods relevant to actions for the avoidance of antecedent transactions will also be suspended. Enhanced protection of debtors against cancellation of on-going discharge proceedings due to drop in income has been enacted.

2.4 Related non-insolvency measures (payment deferrals, bank loans, social security, health insurance, business subsidies)

Loan instalments from April to October 2020 can be deferred and term of contracts would be automatically extended. No penalties or interest on arrears can arise during the period of protection.

Most of individual enforcement actions types conducted by bailiffs suspended until 31-01-2021.