Czech Judicial Independence, the State, and the case of the former C.S. Funds

08.09.2022

The Czech Union of Judges is right to condemn the actions of the Minister of Justice, Pavel Blazek, when he prevented the appointment of judge Ales Novotny as deputy chair of the Regional Court in Brno. Justifying the decision not to promote the judge, the Justice Ministry cited the ''material damage to the Czech state incurred'' because of judge Novotny's previous rulings. The minister alleges he was motivated by the fact that the judge's decisions were often unlawful and that the Czech Republic was subsequently liable for damages related to judicial malpractice.

Whatever the merits, or otherwise, of Minister Blazek's actions, it highlights how politicians can damage a judge's career if they don't like his/her rulings and how Czech judicial independence is compromised. The promotion or disciplinary action against judges should be a matter for the judiciary, and the judiciary alone; without political interference. The role of any Minister of Justice should be to promote and defend judicial independence, not undermine it.

The issue of judicial independence touches a ''raw nerve'' here at AKRO investiční společnost, a.s., where we have been seeking compensation for the 50,000 investors in the former C. S. Funds who, in 1997, were defrauded of more than CZK 1.2bn (Eur 50m) following repeated acts of maladministration by officials. Twenty-five years later, these investors have received neither an apology nor compensation from the State.

After a series of perverse and contradictory judgements, AKRO has twice sought (unsuccessfully) to have the case taken-up by the European Court of Human Rights, not least for what we perceive was the absence of a fair trial. At times, certain judges have given the impression of being desperate to find in favour of the state- as if their careers indeed depended on it. So surreal has the case become, we even published a parody likening the certain court proceedings to the fictional court in Lewis Carrol's Alice in Wonderland. Another interesting article we wrote about the Czech judiciary is here.

Of course, these concerns would be less if judges weren't state employees, and the court system wasn't administratively and financially dependent on the state, and judicial promotions weren't influenced by the state.

Few have confidence in the independence of the Czech judiciary. I have yet to meet anyone working inside or outside the judicial system who doesn't privately express grave reservations about the independence of the judiciary, especially in cases involving the state. It wasn't so long ago, there were mass demonstrations following the appointment of a new Justice Minister, just as the former Prime Minister, Andrey Babis, was being investigated for subsidy fraud. Similarly, the appointment of the current Justice Minister, Blazek, was also seen as controversial: Questioned by the police over his role in the so-called ''Stoka'' (''Gutter'') kickback scheme in Brno, Blazek, after being appointed as Justice Minister, was then in a position to make changes in the state prosecutor's office at Olomouc that is overseeing the ''Gutter'' investigation.

Clearly, it could be argued that the State has a vested interest in the current status quo, however, it is hoped the current government will look at the broader issue of trust in the judiciary. Similarly, the issue of judicial independence needs to be a major topic during the upcoming Presidential elections.

Jeremy Monk

Investment Director,

AKRO investiční společnost, a.s.

Prague. 8th September, 2022

Email: monk@akro.cz

Disclaimer

This article does not constitute investment advice or a recommendation to buy or sell any security.