HUNGARY Law and Practice Contributed by: István Varga and Viktor Előd Cserép, PROVARIS Varga & Partners
Relevant Provisions in the Attorneys’ Act A relevant rule in the Attorneys’ Act provides that, without the consent of the obligor, attor- neys’ fees and expenses claims cannot be trans- ferred to third parties who are not entitled to know attorney-client privileged information that is necessary to enforce such claim (except if an enforceable deed has been issued for the claim). 2.2 Third-Party Funding: Lawsuits The types of lawsuits that are available for third- party funding is currently not regulated in Hun- garian law. It is to be assumed that monetary claims in commercial matters may be of rele- vance. Private individuals in need of legal repre- sentation may seek legal aid and exemptions. In practice, third-party funding from abroad plays a growing role – eg, in claims for the private enforcement of competition law and other claim types involving larger group interests. 2.3 Third-Party Funding for Plaintiff and Defendant As third-party funding is currently not regulated in Hungary there are no restrictions in place, both types appear in practice. 2.4 Minimum and Maximum Amounts of Third-Party Funding The question is currently not regulated in Hun- garian law. 2.5 Types of Costs Considered Under Third-Party Funding The question is currently not regulated in Hun- garian law. However, the funding of all litigation costs may be considered by funders and clients, including all costs that necessarily arise in con- nection with the enforcement of a claim in a law- suit, encompassing costs that arise before and after an action is brought. This may include court fees, attorneys’ fees, costs to be reimbursed to
the opposing party as well as any other relevant expenses. 2.6 Contingency Fees Attorneys’ fees are subject to the free agreement of the parties, hence contingency fees are also permitted. However, it is expressly mentioned in the Attorneys’ Act that success fees cannot be enforced in court to the extent they exceed two thirds of the attorneys’ fees that were in fact incurred. This does not mean that the parties cannot stipulate a higher success fee, but this will not be enforceable in court. 2.7 Time Limit for Obtaining Third-Party Funding This issue is currently not regulated in Hungar- ian law. 3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct No Direct Action in Case of Amounts in Dispute Under HUF3 million If the amount in dispute does not exceed HUF3 million (approximately EUR8,000), either an order for payment procedure must be initiated or an attempt at pre-trial settlement must be made. Order of Payment Procedures Any notary public has competence for order of payment procedures. The creditor must request that an enforceable deed be issued for the amount claimed. First, this request is served on the opposing party. If the latter files an objection, the file is transferred to the competent court, the plaintiff must file a full statement of claim with the court, pay the full amount of the advance on court fees and the procedure turns into a litigation procedure. If no objection is filed, the
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