Changes in regulation of enforcement agents in the Czech Republic

The Czech Ministry of Justice is considering changing the regulation of enforcement agents. Concepts such as mandatory deposits from creditors and territoriality are discussed nowadays. These changes would have an impact on the market and its structure. The level of competition among different bailiffs would be influenced. There are significant differences among the enforcement agents nowadays and therefore institutional creditors cooperate with the same court bailiffs on a long term bases. There would not be the possibility of free choice after regulation introduction in the case of creditors. Territoriality means that the enforcement agents should solve only cases which are directly connected to their place of residence. The paper's aim is to forecast possible impacts on the market structure, all types of participants, creditors, debtors, as well as bailiffs or generally enforcement agents, and efficiency of an enforcement process which has an impact on the whole economy. The efficiency of the enforcement process can be characterized by time range, quality of enforcement and recovery rates of receivables. The prediction of the market structure is based on the classical microeconomic theory and current statistics provided by the Czech Ministry of Justice and Chamber of Executors Czech Republic. The prediction of recovery rates is not simple because these data are normally not available and generally published. Authors have the opportunity to work with unique data of several institutional creditors. This paper will work with some case studies which show a different level of recovery rate in the case of several institutional creditors. This level of recovery would be affected by the regulation. Quantification of future recovery rates is based on the current recovery rates and several authors' assumptions derived from the shift of the market structure. The paper's expected results would show differences between the states before and after regulation and therefore we can compare these situations. It is important to have arguments for or against regulation because there is not a general consensus. On one side there are proponents and on the other side there are opponents.

Paper is a research output of the project TD020190.