The handling of claims for compensation is slow. Half of the claims was settled by the Ministry of Justice only after a six-month statutory deadline

Press release on audit No 21/38 – 3 October 2022

The SAO focused on how the Ministry of Justice (MoJ) spent funds on compensations of unlawful decisions or maladministration between the years 2016 and 2021. The auditors also focused on the interest paid by the Ministry for late payments and the costs of court proceedings. In particular, they examined a sample of 457 cases in which the State paid almost CZK 455 million to the injured parties. The so-called regression fees were also reviewed – the SAO looked into 42 cases amounting to more than CZK 80 million. The audit showed that the MoJ handled claims for compensation often with significant delays, and in a number of cases it addressed them only after the injured party had filed a claim.

In the audited years, the MoJ settled almost half of the claims for compensation after the statutory deadline of six months had expired. The extent of the delay ranged from a few days to one extreme case where the delay reached 1,145 days.

The most common reason for the delay was that the MoJ carried out the first step of the settlement action – the so-called investigation – only after the statutory six-month deadline had expired. This concerned 98 out of 278 files which were settled with a delay. In the vast majority of these cases, specifically in 88 cases, the Ministry launched its investigation when the injured party had filed a claim.

Delays are also linked with costs that the MoJ could have avoided by dealing with applications in a timely manner. This concerned the payment of default interest and the costs of court proceedings which the MoJ paid to injured parties in cases where it had failed to settle their claims within the statutory deadline. In total, this amounted to CZK 703,000 in the audited period.

If the Ministry had followed the deadlines linked to the processing of files, which was its duty, it could avoid or at least mitigate the abovementioned problems. However, as the auditors verified, the MoJ did not monitor or check the deadlines.

Between 2016 and 2021, the MoJ settled a total of 20,424 claims for compensation. Based on these claims, it spent a total of CZK 1.6 billion.

Communication Department
Supreme Audit Office

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