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New Civil Procedure Act In Hungary

New Civil Procedure Act In Hungary

Briefings
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The codification of the new Hungarian Civil Procedure Act has commenced in 2014, for the purpose of which several working committees have been set up. As a result of the preparatory works, the Hungarian Government accepted the bill on the new Civil Procedure Act in 2015, and following a professional debate, the Minister of Justice submitted it to the Parliament on 2 September 2016. 

The main objectives of the bill are to increase the efficiency of the civil procedures, to promote the conclusion of out-of-court settlements and various alternative dispute resolution processes, to introduce the divided structure of the procedure, to increase the professionalism by introducing mandatory legal representation in the procedures before the regional courts and to strengthen the role of computerization in civil procedures.

The bill indicates new fundamental principles, for instance the ‘process supporting’ and ‘truthfulness’ obligation of the parties. As a main novelty, the bill introduces a divided process structure starting with an appearance phase (in Hungarian: “perfelvételi szakasz”) and then continuing with the hearing phase (in Hungarian: “érdemi tárgyalási szakasz”). Following the closure of the appearance phase, in principle, there will not be any possibility to amend the claim and the defence. In contrary to the current Civil Procedure Act, the bill ensures general competence for the regional court, while the district (i.e. lower level) court will have competence only in the processes listed in the act. In addition, the bill introduces two forms of collective enforcement of claims: processes initiated on the basis of public interest and associated litigation. 

The bill contains specific provisions for the competence of the courts relating to the process based on a contractual claim between a company and a consumer. In case the process was initiated by the company against the consumer, the court of the domicile of the defendant has exclusive competence. However, in case of a process initiated by the consumer against the company, the consumer has the possibility to choose whether to initiate the process at the court of his domicile or of the domicile or seat of the company (i.e. “alternative competence”).  

The bill on the new Civil Procedure Act is expected to be accepted by the Parliament in December 2016 and it will enter into force as of 1 January 2018.

By Levente Csengery, Partner, KCG Partners Law Firm