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Powers of Conciliation Boards Extended from January 1

Powers of Conciliation Boards Extended from January 1

Hungary
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Under Hungarian law, conciliation boards were set up more than two decades ago, which provide a fast, efficient and inexpensive forum for dispute resolution compared to litigation in specific cases. The competence of the conciliation boards in relation to goods and services covers (i) the quality and safety of the services; (ii) application of product liability rules; and (iii) conclusion and performance of contracts. This type of conciliation can only be initiated by the consumer as an individual.

There are two possible outcomes of the procedure, depending on whether the company involved in the dispute declares that it will abide by the decision of the conciliation panel. If the company declares in advance that it does not accept the decision, the procedure ends with a non-binding recommendation. If the company submits to the decision, the procedure is closed by a binding decision, or if the parties can reach an agreement.

As of 1 January 2024, the rules described above have partially changed and the conciliation boards have extended powers. In the event of a dispute with a value not exceeding HUF 200,000, the company may be prosecuted irrespective of the declaration of submission. Upon request of the consumer, a personal hearing can also be held. With the change in legislation, businesses are likely to seek to resolve disputes with consumers within their own organisation.

Further changes are also expected as the Budapest Chamber of Commerce and Industry has submitted draft legislation to the Ministry of Justice to allow micro, small and medium-sized enterprises to also use this alternative dispute resolution forum.

By Bálint Éberhardt, Attorney at Law, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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