Jalsovszky Partner Tamas Feher and Managing Associate Peter Szilas talk about dispute resolution in Hungary in 2025.
CEELM: What types of disputes do you foresee will be most present in Hungary in 2025, and what do you expect will drive that activity?
Feher: Over the past few years, IT-related disputes have been on the rise, and we expect this trend to continue, driven by the central role technology plays in today’s economy. Specifically for 2025, the year is expected to bring significant turbulence. The European economic outlook is bleak, and Hungary could be particularly affected due to its substantial reliance on the automobile industry. As a result, we anticipate layoffs and payment difficulties, which may also have a ripple effect on companies indirectly connected to this sector. Consequently, we expect a rise in employment-related disputes as well as disputes arising from non-payments or bankruptcies.
CEELM: Are there any upcoming changes likely to impact disputes in the country in the year?
Szilas: At the beginning of the year, there was a notable change in Hungary regarding court fees. The previous capped system was replaced by a degressive, bracketed system without any caps. This means that, as the disputed amount increases, the cost of initiating a court case becomes higher. In addition, recent changes in court practices and legislation make it more likely for the prevailing party to recover their legal fees in full. These changes are likely to reshape the Hungarian dispute landscape. Arbitration may become more appealing, as it is now often cheaper than going through regular courts. There will also be less incentive to pursue uncertain claims, so settlements will likely become more common, and there may be a growing interest in third-party funding options.
CEELM: What would you identify as the biggest challenges faced by lawyers in handling disputes in Hungary at the moment, and how do these challenges impact your clients?
Feher: One of the main challenges faced by both dispute lawyers and their clients is the unpredictability of the procedural aspects, especially in ordinary courts. Despite the introduction of a more streamlined procedural framework in 2017 and a shift toward a system that makes departing from Supreme Court decisions difficult, it can still be hard to predict the time and costs involved in a case. While litigation should, in theory, follow a structured and well-choreographed process, this is often not the case in practice.
A key source of this uncertainty lies in the variability of judicial approaches. Some judges interpret procedural rules very strictly, while others are more flexible, leading to delays and unpredictability. For example, judges who readily accept excuses for late filings or witness no-shows can extend proceedings, resulting in higher costs and wasted time.
For clients, this could mean unexpected increases in both legal costs and the time required to resolve their cases.
CEELM: How likely is it in your view that these challenges will be addressed in 2025?
Szilas: There are a few things that help mitigate these issues.
Arbitration presents a more predictable alternative to ordinary courts. While the composition of the arbitral tribunal may still introduce some uncertainty, the parties have more control over the tribunal’s makeup, and they can agree on procedural matters in advance.
Even in the event that a client remains in litigation before ordinary courts, there are procedural tools available to expedite the process. Additionally, familiarity with the judge handling a case can help predict how the proceedings may unfold.
Where this is not possible, lawyers and clients can still find ways to manage litigation costs and delays. For example, contingency fees could be a useful approach in balancing costs.
Finally, the said increase in the costs of litigation and the increased incentive for alternative dispute resolution will likely reduce the workload on the regular courts – likely leading to quicker and more efficient procedures eventually.
This article was originally published in Issue 12.1 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
