In a decision (file no. 25 CDO 5764 / 2017) on 13 November 2019, the Czech Supreme Court  considered the liability of municipalities of the city of Prague. The municipalities’ broad power to manage the city‘s assets with which they are entrusted also implies a duty to comply with asset management systems to prevent any harm to health, property, nature and the environment. 

There is therefore no reason to waive the municipalities’ liability if they breach their obligation to manage the city’s assets and they cause damage through their actions or omissions. Nor should all responsibility be  transferred to the city of Prague as the owner or the city be obliged to undertake independent professional property maintenance or, in the case at hand, take appropriate measures to prevent snow and ice falling from the roofs of buildings entrusted to municipal management.

The authorisation of Prague’s municipalities to act on their own behalf and account in legal relations confirms their legal personhood. Their entrustment with the management of the city’s assets does not in principle exclude the compensation of affected victims since the municipalities have their own budget (sec. 4(3) of the Act on the Capital City of Prague) which they manage and from whose funds they settle all their contractual obligations (sec. 10 of the statute). They may also use such funds to cover obligations arising from potential tortious liability, a point explicitly dealt with in sec. 3 (2) of the Act on the Capital City.

At the same time, this duty does not absolve the city of Prague from all current liability for damage arising in the management of assets entrusted to the municipalities. As a general rule, the first sentence of Article 11 (3) of the Charter of Fundamental Rights and Freedoms implies an owner’s obligation to provide compensation for damage resulting from the use or exploitation of its property (i.e. the duty accompanying ownership rights). This liability is not affected by the specific regulation of the city of Prague’s assets or the scope of the municipalities’ powers since the statute establishes the municipality as a so-called auxiliary person with sui generis rights. As such, it makes the city liable for the municipality’s potential breach of legal obligations as if it had committed such conduct itself, i.e. jointly and severally with the municipality.

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