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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

KCG Partners at a Glance

KCG Partners is a Hungarian business law firm providing a comprehensive range of legal services to international and local clients seeking local knowledge and global perspective. The firm comprises business-minded lawyers with sector-specific expertise, creating value for clients by applying a problem-solving approach and delivering innovative solutions.

The firm has a wealth of knowledge in corporate law, M&A, projects and construction, energy, real estate, tax, employment, litigation, privacy and forensics, securitization, estate planning and capital markets.

To address clients’ regional and international concerns, the firm maintains active working relationships with other outstanding independent law firms in Central and Eastern Europe, whilst senior counsel Mr. Blaise Pásztory brings over 40 years’ of US capital market and fund management experience.

KCG Partners Law Firm is the result of the teamwork of passionate and talented lawyers guided by the same principles and sharing the same values: 

  • Our most valuable asset is our people. They are the engine of our business and the key to our success.
  • We push boundaries by looking for innovative solutions that can empower our clients to achieve greater results.
  • We place our experience, commitment and professionalism to your service.
  • We are driven by our vision to shape and lead the Hungarian legal market and become a first choice law firm in our practice areas.

Firm's website: http://www.kcgpartners.com