Lowering the Fees of Distrainors at the Expense of the Debtor or Creditor?

24. 8. 2016

A new regulation of the Ministry of Justice whose draft bill is being finalised at present and is expected to become effective on 1 January, 2016, proposes a reduction of distranor commissions and fees.

The status quo holds it that the commission is defined as 15% of the collected amount with debts not exceeding CZK 3m, whereas the Ministry proposes an introduction of a new limit of CZK 50,000 and a decrease of the commission by a third down to 10%. Also, the distrainors’ fees are to fall from CZK 3,000 to CZK 2,000 although original proposals aimed at a reduction of over 60%.

The Chamber of Distrainors of the Czech Republic reacts within the consultation on the draft bill stating that the decrease will sharpen the debtors’ sense that disrespecting the decisions of courts and other legal bodies may be advantageous and, should the debtor hold no possessions, the distrainment costs would be borne by the creditor.

The criticism of the draft bill also centres on the fact that it is neither conceptual nor systematic and the one-sided amendment does not reflect the real danger of distrainor offices being shut down in the future, which, in turn, will result in complications with effective collection of debts. Should the regulation be adopted without regard to the objections, the Chamber is ready to lodge an anti-constitutional complaint.

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