Hungary: A Dispute Resolution Overview

In recent years, the developments with the most significant impact on domestic litigation have been the introduction of a limited precedent system, the substantial increase in procedural costs, and the restructuring of the legal supervision procedure before the highest court level.

These changes fundamentally affect both access to justice and the manner in which it is exercised, reshape the framework of judicial operation, and, as a result, open up new perspectives. Accordingly, the following section provides a brief overview of these system-level changes.

The Limited Precedent System and Its Challenges

Although it took place five years ago, the most significant development in Hungarian civil procedural law remains the introduction of the limited precedent system in April 2020. This system represents a hybrid model that combines elements of both the common law and continental legal traditions.

At the lower court level, the limited precedent system requires that if a court departs from a published decision of the Supreme Court of Hungary (Curia), it must explain in its judgment the reasons for doing so.

Lower courts are not strictly bound by the Curia’s published decisions. However, a departure from such a decision constitutes a specific ground for judicial review by the Curia. It is ultimately for the Curia to decide whether a deviation from its previous precedent is justified.

Importantly, the Curia itself may not depart from its previous precedent within a judicial review procedure. If it considers that a change to its earlier position is warranted, it must initiate a law-unification procedure to formally overrule its prior precedent.

To ensure the effective operation of the limited precedent system, a new form of legal remedy has also been introduced, the uniformity complaint procedure (jogegységi panasz eljárás). This remedy may be used when the Curia departs from one of its previous precedent-setting decisions without initiating a law-unification procedure.

The introduction of the limited precedent system means that both judges and litigating lawyers must be familiar with the Curia’s published decisions since 2012, as these decisions serve as a quasi-binding interpretation of the written law.

This is no small task; however, the rapidly evolving digital landscape offers appropriate tools to address this challenge, provided they are applied with the requisite expertise. Clients therefore need to choose a legal service provider that is adequately prepared to meet this challenge, both in terms of professional competence and available resources.

The increasing prominence of this system also clearly reflects the evolving role of the Curia, as a result of which its function as an extraordinary judicial remedy forum is being progressively narrowed, both at the statutory level and in judicial practice.

Increase in Costs Associated with Litigation

Another significant recent development affecting litigation in Hungary is the substantial increase in the costs associated with legal proceedings.

As of January 2025, the rate of the court fee for civil proceedings changed. Prior to the amendment, the court fee of the first instance procedure was set at 6% of the value of the case, with a maximum of HUF1.5 million.

As a result of the new regulations, court fees for the first instance proceedings, to be paid when filing a suit, now increase progressively, with no upper limit. In cases with exceptionally high subject-matter values, the increase is particularly substantial. For a claim of HUF5 billion, it is approximately HUF31 million; and for a claim of HUF10 billion, the fee to initiate the lawsuit rises to approximately HUF56 million.

Not only has the amount of the court fee increased, but the legal costs that the losing party must reimburse to the winning party have also risen significantly in recent years.

Previously, it was common practice for courts to moderate the actual legal costs incurred. However, this practice often resulted in the amount recoverable by the winning party being disconnected from the real market situation.

Recognising this anomaly, in April 2024 the Curia issued a precedent-setting decision and, following the Curia’s guidance, the legislature also responded to the situation. The new regulation on attorney fees still allows for the reduction of attorney fees that are disproportionate to the work performed or clearly excessive, now tying such reductions to a detailed substantive analysis and a reasoned justification based on specific case data. Courts may reduce only those fees that are unrelated to the asserted legal claim or charged at an unnecessary or disproportionate level, and only upon request.

The substantial increase in both court filing fees and the legal costs recoverable by the winning party has made litigation more expensive in Hungary.

This trend is already reflected in statistical data, as the number of newly initiated proceedings has decreased compared to previous years, and the resolution of cases, in general, has also became faster.

Furthermore, the increase of costs associated with litigation may increase the popularity of litigation funding.

Amendments to the Rules on Legal Supervision Procedures before the Curia

As of 1 January 2026, an amendment to the Civil Procedure Code introduced a new concept for regulating the judicial review procedure, reflecting the Curia’s evolving role, which increasingly focuses on ensuring the uniformity of law rather than acting as a third-instance court in individual legal disputes.

Under the new rules, judicial review in monetary cases will only be available with the Curia’s explicit permission, thereby providing a realistic opportunity for the Supreme Court to take a position on the legal question in dispute in any given case, where a significant legal question arises.

Another important change concerns the Curia’s powers in judicial review. If the second-instance court has upheld the first-instance judgment, and the Curia finds that the decision contains a legal error affecting the merits of the case, the Curia may annul the decision and instruct the first- or second-instance court to conduct new proceedings and deliver a new judgment. In such cases, the Curia will no longer have the power to annul and simultaneously issue a new judgment of its own. This limited cassation power ensures that when the Curia adopts a new interpretation of the law that differs from the consistent rulings of lower courts, the parties’ right to a fair hearing and to challenge the decision is preserved.

The clear intention of the amendment is to prevent the Curia from delivering “surprise judgments”. The legislative-level recognition of this consideration is a promising development. One of the most significant issues in recent decades, based on practical experience, has been that in numerous cases the Curia adopted decisions based on a legal interpretation entirely different from that of the lower courts, without the parties having had any opportunity to properly present their case or set out their legal position in relation to that interpretation.

From our perspective, we trust that this development will, in the long term, substantially enhance legal certainty and, from an investment standpoint, make both Hungary and dispute resolution through the ordinary court system more attractive.