Conditional Discontinuation of Criminal Prosecution of Legal Persons
As of 1 July 2026, Act No. 270/2025 Coll. introduced a new diversion mechanism for legal entities – the conditional discontinuation of criminal prosecution under Sections 37b–37f of the Act on Criminal Liability of Legal Persons. Unlike existing diversion measures, which were originally designed primarily for natural persons, this new institute has been specifically tailored to corporate criminal liability.
The mechanism is available for all criminal offences, including serious and particularly serious crimes. Importantly, it may be applied even before formal criminal prosecution is initiated, enabling a legal person to avoid the significant reputational and commercial consequences often associated with being formally charged.
To benefit from the procedure, the legal person must consent to its application, compensate the injured party or surrender unjust enrichment (or otherwise take appropriate steps towards compensation), adopt measures to remedy the consequences of the offence, and pay a contribution to the crime victims assistance fund. The standard probationary period ranges from six months to two years. Notably, no confession or admission of guilt is required, and the legal person’s consent cannot be interpreted as an acknowledgment of criminal liability.
From a business perspective, the most significant innovation is the qualified form of the diversion. In such cases, the probationary period may be extended to up to five years, and the prosecutor or court may require the implementation of a tailored compliance and remediation programme. Compliance with the programme is subject to independent oversight by an approved auditor, attorney or compliance specialist. Additional obligations or restrictions may also be imposed, including limitations on participation in public procurement procedures or applications for public subsidies.
If the legal person fulfils all imposed obligations during the probationary period, criminal prosecution for the same conduct cannot be recommenced. Moreover, where no final decision is issued within one year following the expiry of the probationary period through no fault of the legal person, the diversion is deemed to have been successfully completed. Conversely, failure to comply with the imposed conditions may result in the commencement or continuation of criminal proceedings.
The new mechanism represents a significant shift in the Czech approach to corporate criminal liability. By creating a framework that combines remediation, compliance improvements and independent oversight, the legislation offers companies a meaningful opportunity to resolve criminal cases without a criminal conviction, while at the same time strengthening corporate compliance culture and preventing future misconduct.
