(Resolution of the Supreme Court of 10 December 2025, File No. 25 Cdo 548/2025)
The claimant sought from the defendant the performance of specified repairs to the building in which he owns a non-residential unit, as well as repairs to that unit itself, and further compensation for lost profit for a period of almost ten years, all in connection with moisture that, as a result of defects in the building, was damaging the said unit.
By its judgment, the District Court for Prague 6 dismissed the claim by which the claimant sought compensation for lost profit – this judgment was already the third judgment of the court of first instance in the matter, while in a previous judgment the court of first instance had ordered the defendant to carry out the repairs specified in the action and had dismissed the claim for payment of the requested amounts. By a decision of the appellate court, the judgment of the court of first instance was quashed in the part by which the claimant’s claim for compensation for lost profit had been dismissed, and the rulings concerning the performance of the repairs thus became final separately.
According to the established facts, the claimant purchased the non-residential unit in 2011 in good condition, and in 2012 the lease agreement concluded for it was terminated due to the unsatisfactory condition of the premises. An inspection carried out by the construction department revealed that the unit was affected by water penetration; however, it continued to fulfill its basic function arising from the manner of use permitted by the building authority, namely as a civil defense shelter. On 19 May 2016, a decision was issued changing the purpose of use of the non-residential unit from a decommissioned civil defense shelter to a storage facility for office supplies and marketing support materials.
The court of first instance stated that if an injured party asserts a claim for compensation for lost profit, he must prove that he had ensured the necessary prerequisites for the so-called regular course of events, i.e., that he was willing and able to carry out gainful activity. Lost profit cannot be derived merely from the alleged frustration of an intended business or other gainful plan. For part of the period for which lost profit was claimed, the premises in question did not at all meet the conditions for an economically gainful project. In the subsequent period, the claimant, according to the court, essentially resigned from any potential economic use of the property; he did not offer the unit for lease, although he could have, and it is therefore not possible for the defendant to compensate him for his potential profit.
The appellate court upheld the judgment of the court of first instance in this part. It concluded that in a situation where the claimant had not concluded a lease agreement with anyone, nor conducted any negotiations aimed at leasing the unit, it cannot be said that the regular course of events existed, as mere probability of an increase in assets is not sufficient to conclude that the claim is well-founded.
The claimant challenged the appellate court’s judgment by filing an appeal on a point of law, in which he stated that the unit could not have been leased due to moisture caused by the defendant and further emphasized that it is not possible to negotiate the lease of an item that is manifestly unfit for leasing.
The Supreme Court assessed the appeal on a point of law as inadmissible. It stated that during the period when the unit was approved for use as a civil defense shelter, it could not, in accordance with building regulations, be used for another purpose or leased as a storage facility. As regards the second period for which the claimant sought compensation for lost profit, the Supreme Court concluded that in the given case it was not possible, according to the regular course of events, to expect an increase in the claimant’s assets but for the breach of obligations on the part of the defendant. According to the established case law of the Supreme Court, lost profit constitutes damage consisting of the fact that, as a result of the damaging event, the injured party’s assets do not increase, although such an increase could have been expected with regard to the regular course of events; that is, the damaging event interfered with the course of events leading to a certain profit. The mere alleged frustration of an intended business plan is not sufficient.
The Supreme Court further recalled that when assessing a claim for compensation for lost profit, it is not decisive what hypothetical benefit the injured party lost, but what benefit was realistically attainable in the specific case. Mere probability of an increase in assets in the future is not sufficient, as it must be established with certainty that, but for the unlawful conduct of the tortfeasor, the injured party’s assets would have increased. In the circumstances of the present case, it was therefore not possible to conclude that the claimant had in fact lost a specific profit.
Legal Update 02/2026, download PDF here.