Experts in venture capital, corporate law, and taxes from the law firm HAVEL & PARTNERS assisted the founders of the Slovak startup Luigi’s Box in setting up incentive plans (ESOP) for key collaborators of the startup.
Founded in Slovakia in 2016, Luigi’s Box specialises in developing technologies for personalized search and product recommendations in e-shops and online platforms. Their AI-based solutions are used in thousands of e-shops worldwide.
The legal advisory team was led by partner Jaroslav Baier and included managing associate Josef Bouchal, associate Andrea Mochorovská and junior associate Róbert Košala.
An ESOP is a management program that allows employees (or other collaborators) to participate in the company as shareholders, sharing in its success and value growth. It is a key motivational tool used by founders of promising startups.
The proper implementation of an ESOP often involves complex tax considerations. In this regard, close cooperation between legal and tax experts is crucial, a service that HAVEL & PARTNERS is well-equipped to provide.
Slovak law firm HAVEL & PARTNERS advised the Slovak state-owned joint stock company Slovak Investment Holding (SIH). SIH has recently become a major investor in InoBat, a company specialising in the research, development and manufacture of batteries for electric vehicles.
SIH provided InoBat with an equity investment of EUR 12 million, or approximately CZK 303 million, as part of the Series C investment round. The investment will be fully utilised in Slovakia, specifically in the company’s development centre and manufacturing plant in Voderady in the Trnava district. InoBat, which focuses on the automotive, commercial vehicle, motorsport, and aerospace sectors, is expected to manufacture its first batteries in the first quarter of this year.
Negotiations on the investment began last summer and lasted until approximately December 2023. The team consisting of the firm’s partners Ondřej Majer, Jaroslav Baier and associate Kristína Saktorová assisted the client both during the legal due diligence and in the negotiation of contractual documentation.
SIH is a joint stock company, wholly owned by the State. Its main mission is to support strategic public and private investments in Slovakia in the areas of infrastructure, energy efficiency, waste management, social economy, and small- and medium-sized enterprises (SMEs).
HAVEL & PARTNERS is the largest Czech law firm and the fourth largest law firm on the Slovak market. For the third time in a row, it was ranked as the largest law firm in the Intellectual Property and Competition Law categories. In the TOP 10 largest law firms ranking, which is compiled by the SME daily and The Slovak Spectator according to combined measurable criteria, HAVEL & PARTNERS is the largest Czech law firm, the third largest regional law firm, and the fourth largest law firm active on the Slovak market. In addition, this year it defended its victory from last year and for the third time in a row was ranked first in the Intellectual Property and Competition Law categories. This year it was ranked among the TOP 10 largest law firms in the Mergers and Acquisitions and Employment Law categories.
“We are very appreciative of being ranked among the TOP 10 largest law firms and are very pleased that we continue to strengthen our position as the largest Czech-Slovak law firm. These excellent results are a reflection of our intensive efforts and the excellent professionalism of our team,” said Jaroslav Havel, managing partner of the firm. “Together, we have proven that teamwork, integrity and uncompromising quality are the keys to success, and for that I thank all my colleagues. I would also like to thank all our clients for their long-standing trust, which continues to commit us to working to further improve and expand our legal, tax and advisory services and to remain a reliable partner to them,” Jaroslav Havel added.
Being ranked in the TOP 10 not only confirms the significant position of HAVEL & PARTNERS on the legal services market, but also reflects the high quality of the services provided, the exceptional versatility of the specialised teams and the cutting-edge know-how of the firm’s lawyers.
For the third time in a row, the firm won the Intellectual Property Law category, where it was ranked first among the largest and most prestigious law firms: “We are extremely pleased that we have again defended last year’s victory and continue to be ranked as one of the most successful legal practices in this category not only in Slovakia, but also abroad. We are also regularly recognized by prestigious foreign ratings IP Stars and World Trademark Review, which confirms that our work is of exceptionally high quality and that we are able to assist our clients in the most challenging cases not only in Slovakia, the Czech Republic, but also internationally,” commented partner Štěpán Štarha on this year’s victory. The team of 25 experienced lawyers and patent attorneys offers an unrivalled level of specialisation in their respective fields, with detailed knowledge of the market and the latest trends in the rapidly evolving digital world. The combination of specialisation in new technologies, intellectual property law with technology law and venture capital brings a synergy that allows us to offer clients unique and innovative solutions that move them forward and help them succeed in a highly competitive environment.
For the third time in a row, the firm also won the Competition Law category and thus became the most successful law firm in this field in Slovakia. “A big thank you to our clients. We greatly appreciate their trust. We believe that the quality of our services in the area of competition law is confirmed by our constantly growing and satisfied clients, as well as a number of prestigious local and international awards,” said partner Lenka Štiková Gachová.
Partner Robert Neruda added: “Winning the Competition Law category again confirms the excellence of our team of 28 top professionals, which has grown since 2010 into the largest competition law team in the region thanks to the trust of our clients. Last year we significantly strengthened our local presence in Slovakia and with a team of five experienced colleagues, we are thus able to serve even the largest projects and most demanding clients. The victory is a credit to all the colleagues, lawyers and economists of our firm who were involved in providing competition law advice in Slovakia.”
The firm defended its position this year and won again the Competition Law category also in the prestigious Law Firm of the Year competition.
Methodology:
The 10 largest law firms ranking in Slovakia was compiled in cooperation with the English newspaper The Slovak Spectator. Six criteria influenced the ranking (for the number of lawyers and the number of cases, data from 2022 were taken into account; for revenues and profit, the averages for 2020-2022 were taken into account). The weighting of each criterion was as follows: number of attorneys (30%); number of persons (excluding attorneys) with a law degree with more than three years’ experience (16%); number of persons (excluding attorneys) with a law degree with less than three years’ experience (8%); revenues from the sale of own products and services (23%); profit or loss after tax (7%); number of cases for which it has been paid a fee of EUR 20,000 – 50,000 (1 point) and a fee of more than EUR 50,000 (1.5 point) (16%).
Full results are available HERE.
Authors: Štěpán Štarha, Róbert Gašparovič, Martina Rievajová
On Friday, 14 April 2023, the Slovak Government approved a proposal for new consumer regulation. This is largely a transposition of several European directives that entail major changes for ordinary consumers and especially for traders across the entire B2C segment. If you are a seller or distributor of electrical appliances, smart devices, software, an app developer, run an e-shop or in any way act towards consumers, you should definitely pay attention. Although the legislative proposal is still awaiting the approval process in the National Council of the Slovak Republic, it is already possible to focus on selected changes and start preparing for them.
Currently, Slovak consumer regulation is inconsistently fragmented into several legal regulations, in many cases involving duplicate regulation of a single institute.
Unification and, in particular, clarification of this regulation should be achieved by transposition of three EU Directives, namely the so-called Omnibus Directive, Directive 2019/771 on certain aspects concerning contracts for the sale of goods (SGD), and Directive 2019/770 on certain aspects concerning contracts for the supply of digital content and digital services (DCD).
According to the legislative proposal, the changes will primarily be reflected in a unified draft of a single new Consumer Protection Act and an amendment to the Civil Code. However, other legislation will also be amended.
The proposal for new legislation introduces extended information obligations for traders. It should be noted at this point that the new Consumer Protection Act uses the term ‘trader’ instead of the previously inconsistently used terms ‘seller’ and ‘supplier’.
This includes, for example, the obligation to inform the consumer about after-sales service, including the obligation to provide the trader’s telephone number and email address. These must be contact details where the trader will actually be available.
If the e-shop uses automated decision-making and profiling to display offers of goods and services, it is obliged to inform the consumer about this fact in a comprehensible manner. This usually relates to the personalisation of prices of goods in the case of offers of flight tickets, accommodation, but also of general goods.
The extension of the information obligation also applies to reviews in the e-shops or on the website of the trader. If the trader wishes to indicate that reviews of its products come from consumers, it must ensure that this information is true. To that end, it is obliged to put in place mechanisms to verify that fact and inform the consumer of the selected mechanism on its website.
Another of the fundamental changes is the extension of the information obligations of traders to inform the consumer about the reduction in the price of goods – about the discount. This is in response to the misleading display of discounts on goods in promotional sales such as Black Friday.
The proposed legislation stipulates the obligation to display the previous price of the product on each discount notice. The previous price is, among other things, the lowest price of the product in the last 30 days. The display of previous prices should apply only to goods, i.e., movable items, but including, for example, electricity, water, and gas. Services or the supply of digital content should therefore not be subject to the obligation to display previous prices.
Also exempted from the obligation to display previous prices are goods which are liable to deteriorate or expire rapidly. This should include, in addition to the expected goods such as cut flowers, food, drinks, etc.
The new legislation will also directly affect sellers of smart products, i.e., goods with a digital element, such as smartphones, hybrid TVs or smart watches, and providers of digital content and services, suchas apps, software, but also e-books and audio files.
In particular, it is necessary to prepare for new types of contracts, such as the contract for supply of digital content or digital services. For this type of contracts, it should be possible for the consumer to purchase the digital service or content by providing his or her personal data to the trader.
Consumer claims in the event of defects in goods will also undergo a major change. These will no longer be differentiated as to whether the defect can be remedied or not, but it should be a unified and comprehensible system for the establishment and assertion of claims for defects in goods or services.
Novelties are also to be expected in the areas of exercising supervision and penalties.
The proposed regulation introduces a new type of penalty, usually for e-shops, which is the obligation to remove or change the content published in the online interface or even delete the domain. This type of penalty should be applied in the case of a threat to the collective interests of consumers or a risk of serious harm to such interests.
As regards financial penalties, they range from €200 to €2 million, or up to 5% of turnover, with the highest penalties being imposed, for example, in the case of repeated use of unfair practices.
The proposal for the new legislation has now been submitted to the National Council of the Slovak Republic. The proposal should be discussed by the National Council of the Slovak Republic during the next session, which will take place in the first half of May 2023, or at the last session before the summer holiday.
If the proposal for the new legislation were adopted in the currently known version, the changes would already be effective from 1 August 2023.
Indeed, the new regulation entails a large number of comprehensive changes that will have a major impact on B2C business and the entire retail sector. We therefore recommend that you start preparing for the changes.
We will be happy to capitalise on our experience with practical implementation of similar consumer regulation in the Czech Republic and other EU countries to also ensure compliance of your business with the new Slovak legislation, so we will be glad if you contact us.
Authors: Štěpán Štarha, Milan Černaj
The Slovak National Council approved an amendment to the Whistleblower Protection Act almost a year and a half after the deadline for transposition of the Directive of the European Parliament and of the Council (EU). It will take effect from 1 July 2023, and for certain obligations and penalties from 1 September 2023.
We therefore recommend that you prepare for the introduced changes now and thus minimize the risk of possible fines, the amount of which has been substantially increased by the amendment. Below is an overview of the substantial and practical changes.
Until now, the obligation to have an internal whistleblowing system in place has applied to:
From 1 September 2023, employers, regardless of the number of their employees, will also have such obligation, if they provide services in the field of:
And what is the internal whistleblowing system anyway? The entire range of the employer’s obligations and activities related to the implementation of internal processes and rules for the receipt of whisleblowing reports, their investigation, and the communication of the results of the investigation to whistleblowers within the statutory time limits. As part of the internal whistleblowing system, employers are also obliged to keep records of whistleblowing reports in a precisely specified scope for a period of 3 years.
An integral part of the system also includes the employer’s obligation to issue an internal guideline, the essentials of which are precisely stipulated in the Act. The amendment extends the details that must be provided for in the guideline – for example, details on taking measures against hindering of whistleblowing.
The current versions of the guidelines will therefore need to be updated by this September. The amendment also introduces a deadline for employers to acknowledge receipt of the report within 7 days of that receipt. From that moment, the 90-day period for the employer to investigate the report and follow up on it shall start running.
The Whistleblower Protection Office may impose a fine of up to EUR 50,000, or EUR 100,000 for employers with more than 250 employees if they fail to comply with these statutory conditions from 1 September 2023. The maximum amount of the fine has so far been EUR 20,000.
On 2nd anniversary of its existence, the Office will thus have a considerably increased room for consideration on the amount of fines. Although the Office’s practice to date has been accommodating to employers, we recommend that you prepare for the changes well in advance.
Under the Act, employers are required to fulfil the above obligations through a so-called ‘responsible person’. This may be a branch or a person within the organisation, or it may be another person or entity under contract. In a simplified way, responsible persons shall carry out and cover activities such as receiving, acknowledging, investigating, and keeping records of whistleblowing reports on behalf of the employer.
As the Act has so far required professional qualifications for the responsible person to perform these tasks, including his or her independence and impartiality from the employer, practice has shown that employers often find it much more appropriate to outsource these obligations to external companies specialising in whistleblowing. Such a complete and effective solution on the Czech and Slovak market under the name FairWhistle we have brought directly from HAVEL & PARTNERS.
It is the outsourcing of employers’ statutory obligations to experts that minimises the risk of potential penalties for deficiencies in the internal whistleblowing system, record-keeping, or the competence of the responsible person, etc. In the light of the new fines, this solution seems all the more appropriate.
However, the amendment differentiates the way of engaging external responsible persons according to the number of employees. Employers with fewer than 250 employees can use the services of whistleblowing specialists on a contractual basis as before to the full extent. However, under the amendment, employers must also designate a responsible person from within their own organisation. For larger employers, it will be necessary to set up a way of engaging whistleblowing specialists separately. HAVEL & PARTNERS’ Fair Whistle solution naturally covers all engagement and assistance options for employers.
This approach places increased compliance demands on employers as they will need to prepare for the changes from 1 September 2023. Particularly in view of the fact that for breaches of obligations in this respect, employers with fewer than 250 employees may be fined up to EUR 50,000, while employers with more than 250 employees up to EUR 100,000.
According to the guidelines of the Directive, the amendment stipulates that the whistleblowing report concerning facts and information covered by a business secret shall not be considered as a breach of the statutory or contractual obligation to maintain confidentiality of the facts covered by a business secret.
The amendment already explicitly states that the external whistleblowing channel is the Whistleblower Protection Office, the prosecutor’s office or the competent administrative authority. Thus, a situation may arise where, for example, a business partner reports directly to the Office or to the prosecutor’s office the facts of which it has become aware when concluding or performing a contract. In such a case, it should not be possible to claim a breach of a business secret against the whistleblower.
Also, the amendment:
Due to many partial changes introduced by the amendment, it is not the purpose to include them all in this document.
HAVEL & PARTNERS’ Compliance team will be happy to guide you through the amendment to the Whistleblower Protection Act and provide you with legal advice. At the same time, we are ready to provide you with a comprehensive and tailor-made whistleblowing solution through Fair Whistle.
HAVEL & PARTNERS, the largest Czech-Slovak law firm, won the main award in the International Law Firm category and also won the Competition and Health Law categories in the 11th annual Law Firm of the Year 2023 competition in Slovakia. In 11 other categories, it ranked among the top-ranked law firms. The official announcement of the results took place on 26 April at a gala dinner organised by the publishing house EPRAVO Group, s. r. o., in cooperation with the weekly TREND at the Radisson Blu Carlton Hotel.
The firm has thus consolidated its exceptional position on the Slovak and Czech legal market, which is unique in Europe, and remains the most successful and comprehensive law firm in both countries. “This is an outstanding result in this competition in Slovakia – defending the main award and winning the Competition category, including winning the Health Law category, and 11 positions in the specialist categories among the top-ranked law firms confirms our versatility and the top quality of all our specialist teams,” said Jaroslav Havel, the firm’s managing partner, on the success in the competition. “We offer clients a comprehensive service that not only includes excellent knowledge of the law across all areas of law and business, but we can also combine it with tax advice, technology solutions, an innovative approach, PR, as well as exceptional business insight and business intelligence that can take a client’s business further,” he added.
“Our law firm is a reliable legal and tax partner not only in Slovakia and the Czech Republic, but our successes and capabilities go far beyond the borders of these two countries. Winning the Main Award in the International Law Firm category again therefore confirms that thanks to our unique knowledge of the legal and business environment and comprehensive services we are able to execute and manage cross-border transactions and projects anywhere in the world,” commented Ondřej Majer, the firm’s partner. “Thanks to top experts, superior language skills, exceptional know-how and a wide network of international contacts that we have been building for more than two decades, we currently offer comprehensive support to companies and entrepreneurs in 12 world languages. We have assisted our clients in more than 110 countries and up to 70% of our cases have an international element,” explained Štěpán Štarha, the firm’s partner.
The firm also defended its winning in the Competition category. “A big thank you to our clients. We greatly appreciate their trust. We believe that the quality of our services in the area of competition law is confirmed by our constantly growing and satisfied clientele,” said partner Lenka Štiková Gachová. Partner Robert Neruda added, “Last year we significantly strengthened our local presence in Slovakia and with a team of five experienced colleagues, we are able to serve even the largest projects and most demanding clients. This winning is a credit to all the colleagues, lawyers and economists of our firm who were involved in providing competition advice in Slovakia.” In 2022 and 2021, in the ranking of the TOP 10 largest law firms in Slovakia, compiled by SME daily and The Slovak Spectator, the firm’s Slovak office won the Competition category and thus became the most successful law firm in this area in Slovakia.
The Health Law category is new to the ranking in Slovakia since 2022, but our firm has been specialising in the pharmaceutical and healthcare (Life Sciences) sector and its legal regulation since 2009. “The firm’s experts have unique know-how, practical experience and a detailed overview of market standards. The team also works closely with the firm’s other specialist groups, which enables more efficient and faster delivery of top legal services in all other areas of law, always taking into account the specifics of the pharmaceutical and healthcare sectors,” explained Václav Audes, partner at the firm. “The quality of our services is evidenced by the award in the prestigious Law Firm of the Year competition in the Czech Republic, where the team won the Health Law category in 2021,” he added.
Law Firm of the Year is a prestigious specialist competition evaluating the legal services of law firms active in the Czech and Slovak Republics, organized by the publishing house EPRAVO Group, s.r.o. It was first announced in the Czech Republic in 2008, and since 2013 it has also been held in Slovakia in cooperation with the TREND weekly. Find out more about the competition here.
