The legal environment in the Czech Republic is currently undergoing significant changes, primarily focusing on the implementation of the NIS2 cybersecurity Directive, whistleblowing legislation, tax reform, and class actions, according to Rowan Legal Partner Josef Donat.
"The implementation of the NIS2 cybersecurity Directive has sparked extensive discussions," Donat notes. "The regulator for cybersecurity has published the first draft of the resolution, according to which the transition from NIS1 to the new act will significantly increase the number of governed entities from 500 to 6,000, creating a vast market with new obligations and compliance requirements. As a result," he notes, "we anticipate a lot of work and new clients in the coming 12 to 18 months."
"The implementation of whistleblowing measures has been slightly delayed, but a new law is expected to come into effect in August," Donat continues. "With the law nearing implementation, clients are now becoming aware of their obligations and are keen to establish comprehensive whistleblowing systems within their companies."
"In addition, there is a significant tax reform underway, which holds great importance from a legal standpoint," Donat adds. "The introduction of new legislation, encompassing a substantial amount of content, is expected. These changes include various tax increases and decreases, which will have implications for businesses and individuals," he says.
Furthermore, Donat emphasizes that there is anticipation surrounding the finalization of regulations on class actions: "As of now, the details are not yet finalized, and the legal community eagerly awaits the official version, including crucial aspects such as the opt-in and opt-out decision. This development has the potential to significantly impact how disputes are handled and resolved by lawyers. The final wording, as determined by the Ministry of Justice, will definitely be of interest to legal professionals in the field."
Another major talking point in the Czech Republic is the impact of AI, specifically ChatGPT, on legal services. "Recently, the bar expressed concern regarding the use of ChatGPT, and AI tools in general, for providing legal services," Donat points out. "The discussions are expected to continue for several weeks as there are concerns about the potential issues surrounding its daily use by some colleagues, particularly in meeting the necessary requirements." He explains "there are concerns that the majority of AI tools currently available may not comply with bar regulations, especially concerning confidentiality. However, it is interesting to see how things will unfold and how the regulations in this area will develop."
Finally, Donat points out "the Czech Data Protection Authority has imposed the highest fine ever recorded, amounting to EUR 13.7 million, which is one of the 20 highest GDPR fines ever imposed by EU authorities. The recipient of this substantial penalty is Avast, a company that merged with Norton a few years ago." He highlights that "Avast was found guilty of selling customer data to third parties, a significant issue in the Czech Republic. The magnitude of the fine has shocked everyone, as there is no precedent for such a substantial penalty in our country," he notes. "Even though this is a first-instance decision that was appealed, it is our hope that companies will become more cognizant of the importance of data protection in light of this high-profile incident."