1st ICAI 2020

International Conference on Automotive Industry 2020

Mladá Boleslav, Czech Republic

to other “targets” of group actions, such as banks, securities traders, telephone operators or energy suppliers, in the case of the automotive industry not only material damage, but also immaterial damage, including bodily injury, are more likely to be subject to collective redress. The damages paid in this category are extremely costly especially in the US, but a substantial increase in evaluation can also be witnessed in the Czech Republic. There is whole variety of risks arising from collective action litigation against the well-established corporations in the automotive industry. The risks of the financial losses caused by awarded damages as a result of an unfavourable court decision are not always the most serious threat. The reputation risk involved is frequently a more serious factor leading in the majority of cases to the avoidance of risky court proceedings by settlement agreements. As the US experience illustrates, the large proportion of settlements achieved during the initial certification process prior to any relevant assessments of the merit of the case (Carlton Fields, 2019). There is no doubt that in many such cases the pressure on the defendant multiplied by the media coverage create the position in which settlements are concluded even in cases with fairly good chances of success for the defending party. Media coverage may potentially affect the social atmosphere, public thinking and, at the end of the day, critically jeopardise the brand and business even in cases of no real merit. The responsibility of the media in this respect will be extreme and the automotive industry in the Czech Republic has to implement new forms and methods of media strategy and communication not only for the group litigation strategies but importantly also as the instruments of prevention. 4.2 The fishing expeditions problem The potential critical danger for the automotive industry is posed by the large- scale application of the disclosure rights granted by the ACP in the form of court- ordered disclosure. This procedural instrument is introduced in order to improve the information asymmetry of the parties. According to this principle, the court may order the defending party to disclose requested information relevant to the case. The scope of this duty is potentially very wide and not limited by the confidential or classified regime of documents. Legislation provides for the specific forms of semi-public, expert witness only, sworn representatives of parties only and other special forms in which even the confidential information can be revealed. The court order can be addressed not only to the defendant or plaintiff but importantly also to any third party. Non- fulfilment of this duty is penalised. More significantly the court is also granted the discretion to recognise the relevant facts for which the documents were not submitted as being proven. The use of the disclosure obligation is assessed by the judge on a case- by-case basis with regards to the reasonability, necessary extent and forms of disclosure. Despite the ACP safeguarding mechanisms, such as financial deposit of the requesting party or special liability for disclosure damages, the abuse of the disclosure obligation can never be completely eliminated. In extreme forms, the compensatory proceedings disclosure requests can be potentially abused for purposes of extensive data gathering in a so-called “fishing expedition” – an aggressive effort to obtain large scale information of strategic importance with the intention of future abuse especially in economic competition.

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