Pl. ÚS 26/24
The complainant, Milion Chvilek, z. s., submitted a constitutional complaint seeking the annulment of the Supreme Court's resolution and the judgment of the High Court in Prague. The general courts relied on previous case law that examined whether, in accordance with Section 135 (2) of the Civil Code, as effective from 1 January 2014, a legal entity could successfully seek satisfaction for non-pecuniary harm caused by unlawful interference with its reputation. Given that the legislator did not include unlawful interference with a legal entity's reputation among the expressly defined instances entitling the entity to compensation for non-pecuniary harm under Section 2894 (2) of the Civil Code, the Supreme Court concluded in this case that legal entities do not possess such a right under the “new” Civil Code.
The complainant argued that the courts' conclusion – namely, that it, as a legal entity, did not have the right to seek satisfaction for non-pecuniary harm caused solely by unlawful interference with its reputation – was unconstitutional. The First Panel of the Constitutional Court referred the case to the Plenum, which has now examined whether the applied provisions of Sections 135 and 2894(2) of the Civil Code comply with the constitutional order.
The Constitutional Court (Justice Rapporteur Jaromír Jirsa) dismissed the proposal to annul Sections 135 and 2894(2) of the Civil Code (statement I). However, the Constitutional Court simultaneously held that effective protection of a legal entity's reputation, constitutionally guaranteed under Article 10 (1) of the Charter of Fundamental Rights and Freedoms, requires the analogous application of the same remedies available for protection against unfair competition under Section 2988 of the Civil Code, including the option to seek appropriate satisfaction (statement II).
Legal entities have the right to protect their reputation. Article 10 (1) of the Charter guarantees everyone the right to have their human dignity, personal honour, reputation, and name protected. Although certain rights, such as human dignity and personal honour, are inherently exclusive to natural persons, this does not imply that the protection of reputation (and name) cannot also be constitutionally guaranteed to legal entities. Legal entities are not merely artificial legal constructs for their own sake; rather, they primarily serve as instruments through which individuals can pursue their interests. Reputation plays a critical role in how legal entities participate in legal relationships and fulfil the rights of the individuals associated within them. Unlawful interference with reputation can cause legal entities both pecuniary damage and non-pecuniary harm.
Protection of constitutionally guaranteed rights must not be theoretical or illusory but practical and effective. Denying legal entities the possibility to seek appropriate satisfaction for non-pecuniary harm constitutes a statutory limitation on their fundamental right to reputation protection, as it deprives them of the opportunity to remedy non-pecuniary harm suffered. Moreover, alternative measures cannot be considered sufficiently effective remedies.
Such a limitation of access to effective protection is disproportionate. Although the legislator's restrictive approach to compensating non-pecuniary harm suffered by legal entities may aim to prevent excessive or abusive claims, this goal could also have been achieved through less restrictive measures, particularly through judicial decision-making practice (furthermore, a fixed lump-sum compensation, as applied to infringements of intellectual property rights, could have been considered).
Above all, the current legislative approach leads to inconsistent distinctions in protecting the reputation of legal entities and compensating for the non-pecuniary harm they suffer. While the set of cases allowing compensation for non-pecuniary harm is indeed the outcome of legislative policy considerations, such choices must not be arbitrary when they concern constitutional rights and limitations to their effectiveness. Inconsistent approaches weaken the systematic coherence of legal protection, potentially resulting in injustice and divergent resolutions of similar cases without reasonable justification. Furthermore, cases involving compensable non-pecuniary harm predominantly relate to legal entities' commercial relationships or interferences with protected interests of primarily pecuniary nature, which can usually be remedied through damages. This particularly disadvantages non-profit legal entities, which are more likely (sometimes exclusively) to suffer harm of a non-pecuniary nature.
According to the Constitutional Court, legislation preventing legal entities from claiming appropriate satisfaction for non-pecuniary harm caused by damage to their reputation is unconstitutional. However, the most suitable method to rectify this unconstitutional situation is not to annul the reviewed provisions or parts thereof but rather to develop the law through analogy, for which the necessary conditions are fulfilled. Thus, the same remedies applicable to unfair competition under Section 2988 of the Civil Code, including the option to claim appropriate satisfaction, must apply by analogy in protecting legal entities' reputations.
The Constitutional Court further declared that the right to protect reputation should not be misused, for instance, by initiating strategic litigation against public participation (SLAPP). The purpose of such strategic lawsuits is to restrict or penalise the exercise of freedom of expression on matters of public interest and related political rights – typically targeting journalists, trade unions, academics, civic activists, and whistleblowers. The consequence of such lawsuits can be a weakening of free public debate and civil society, which are explicitly endorsed in the preamble to the Constitution, and which form an important safeguard of democracy and the rule of law. It is primarily the responsibility of the courts, in individual cases, to differentiate legitimate exercise of rights deserving protection from harassment and abuse of rights, which do not merit protection. In specific cases, courts must carefully balance the right to reputation protection against the rights to freedom of expression and information under Article 17 of the Charter.