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20 December 2020
newsletter
hungary

Will It Be Easier to Litigate in Hungary from 2021?

The Hungarian Parliament has adopted new rules reforming the 2018 civil procedural rules as of 1 January 2021.

Background

In 2018 a then-new procedural system was introduced to improve the efficiency of civil proceedings. The system was aimed at ensuring that the litigating parties as well as the court obtain all statements and evidence (or at least motions for evidence-taking) as soon as possible. This is the first stage of the proceeding, i.e. the preliminary phase. The subsequent phase is the hearing on merits, where evidence is examined, witnesses are questioned, and experts are involved.

To make the proceedings more efficient in this divided procedural system, the law prescribed many strict requirements concerning, among others, the exact content and filing method of the submissions, and severely regulated the consequences of presenting submission without prior judicial approval. These rigid rules resulted in severe judicial interpretation, where claims were often rejected upfront due to formal deficiencies without examining the merits. Statistics show that from 2018 litigation in Hungary became not only challenging but sometimes a matter of luck, leading to fewer claims brought before the courts.

New rules of the preliminary phase

Experience has shown that strict procedural requirements can sometimes lead to unreasonable results. Refining the regulation therefore became justified. As most of the anomalies arose during the preliminary phase, in this article we will deal only with the most important amendments concerning the first stage of the proceedings.

  • Relief for plaintiffs: less mandatory requirements for the content of the statement of claim

First, the recital of the new rules confirms that there is no need for claimants to indicate the structural elements prescribed by law (i.e. "introductory part", "substantive part" and "closing part") word-by-word in the statement of claim. The recital of the amendment also clarifies that no fixed order of the content within these structural parts is required.

The new rules abolish the mandatory requirements regarding the various data of the defendant that had to be indicated in the statement of claim. From 2021, the name and address/seat will be enough. Any other data may be indicated optionally.

In practice, most of the interpretation problems were caused by the requirement for the claims to be "precise" and, therefore, less "precise" claims led to upfront rejections. Moreover, it was also questionable whether the wording infringes the requirement of precise wording where, for example, a claim contained unnecessary elements or where it contained excessively precise elements. The new rules (and their recital) now clarify that the wording of the claim is acceptable if the claimant clearly indicates its request from the court, but there is no legislative intention to require a wording that can be "copy-pasted" to the judgment itself.

  • More room to remedy deficiencies

The new rules put less emphasis on upfront rejection and widen the possibilities to remedy the deficiencies of the statement of claim with respect to its content, formal elements and annexes. Even multiple errors in the statement of claim will not hinder the commencement of the proceedings. Correction will be possible during the preliminary phase if the court still lacks necessary elements from the statement of claim by ordering the claimant to supplement its submission.

In another welcome innovation, the new rules state that any issue concerning the merits of the case (e.g. whether the evidence is capable of substantiating the facts) may not be considered during the examination of the claim's admissibility. Instead, the preliminary examination should focus on whether the motions are formally well submitted.

  • More opportunities to submit written preparation

The 2018 procedural rules were inflexible as to additional written submissions: submission of preparatory briefs was only allowed in writing if the judge called upon the parties to do so. This rule in practice led to a trend where the litigating parties submitted standalone requests to the court seeking approval for an additional written submission. As these submissions were generally approved, the unnecessary rounds did not serve in any way to accelerate the proceedings.

The new rules allow the parties to submit amendments of the statement of claim/defence or corresponding submissions (e.g. motion for evidence-taking) without prior court order or approval. Also, from 2021, referring to new facts will not be considered as an amendment of the statement of claim/defence. Nevertheless, it is still not permitted to submit new factual assertations without prior approval from the judge even under the new rules, thus the effort to concentrate the number of submissions remains unchanged.

Takeaways

Relaxing the rules was in any event justified. First, the rigid interpretation in many cases undermined the interests of the parties seeking a court resolution for their civil law disputes. Second, the judicial practice was not unified. The concept of legal certainty, however, implies that the law must be interpreted and applied the same way irrespective of the acting judge or the court at stake, i.e. the outcome of the proceedings may not depend on where the claimant lodges its claim. Although the Supreme Court tried to conciliate the interpretational problems by issuing different working materials, the experience of recent years has shown that there was a strong need to simplify the regulation and make it more flexible.

First published on CEE Legal Matters, 17.12.2020

authors: Alexandra Bognar and Dora Balogh

Alexandra
Bognár

Attorney at Law

hungary

co-authors