After several condemnations from the European Parliament, the Hungarian legislature has introduced a new legal remedy to get financial compensation from the state in the case of excessively long civil litigations, so that the injured parties will not need to apply to the European Court of Human Rights (ECHR) for redress. This article summarises the main features of this new remedy and its potential effects on litigations in Hungary.

1. Background

Hungary acceded to the European Convention on Human Rights (the "Convention") after the country's change of political regime in 1990; the Convention was incorporated into the domestic legal system in 1993.⁽¹⁾

Based on the Convention, Hungarian litigation has sought to ensure the right to:

• a trial within a reasonable time; and
• an effective remedy in the event of a violation of this right.⁽²⁾

In addition, when the new Fundamental Law was adopted in 2011, the legislature explicitly stipulated that the right to a fair trial within a reasonable time was a fundamental right, making its privileged and protected state evident.⁽³⁾

According to statistics, the average length of Hungarian civil lawsuits is acceptable in both EU and international comparisons; moreover, the number of "lengthy" civil cases has decreased by 33% in the past four years, after the introduction of new Code of Civil Procedure in 2018.⁽⁴⁾

Nevertheless, there are cases that last for years that do not meet the aforementioned expectations of the judiciary system.

In addition, the ECHR has repeatedly condemned Hungary in recent decades for failing to:

• provide effective remedies to prevent excessively long proceedings; and
• give redress.

In the Gazsó v Hungary judgment,⁽⁵⁾ which was based on a 10-year labour lawsuit, the ECHR explicitly called on Hungary to establish a domestic redress system that could address the structural deficiencies identified in the judgment in an appropriate manner, in accordance with the principles set out in ECHR case law.

In response to the ECHR's request, the Hungarian legislature finally passed a law on compensation for lengthy proceedings in Autumn 2021.⁽⁶⁾ The law, which will enter into force in January 2022, will introduce monetary compensation for claimants due to lengthy proceedings, as well as a special non-litigious procedure to enforce the claim for compensation.

2. Financial compensation – new remedy

It is important that the law establishes a new type of legal consequence to compensate for the inconvenience caused due to the excessive length of proceedings, which is available for litigants in ongoing cases as well.

The claim for this financial compensation will be a new, unique remedy that is a stand-alone legal institution for the protection of the aforementioned fundamental right, separate from both the courts' liability for damages and the protection of personal rights.⁽⁷⁾

Given that the basis of the financial compensation is neither the pecuniary damage caused by the delay⁽⁸⁾ nor the infringement of personal rights,⁽⁹⁾ but the violation of the aforementioned specific fundamental right, the claim for financial compensation can be enforced independently of or in parallel with the claim for pecuniary damages and non-pecuniary damages in connection with the violation of personal rights in court proceedings.

3. Excessive length substantiating compensation

The new law specifically defines the "reasonable duration" for finishing each stage of the proceedings, as well as for the entire litigation, the exceeding of which will justify the claim for financial compensation. The reasonable durations are:

• 30 months for the proceeding at first instance;
• 18 months for the proceeding at second instance;
• 12 months for the judicial review by the Supreme Court; and
• 60 months for the whole procedure from commencement until final judgment.

The law sets shorter periods for certain special lawsuits, such as:

• employment lawsuits;
• press correction;
• personal-status lawsuits; and
• child-support lawsuits.

The legislation contains other important rules regarding calculating procedure length:

• The duration of repeated hearings, judicial review, legal-unity complaint procedures and retrial shall be included in the total length of the proceedings.
• Based on the circumstances of the individual case, the court may determine shorter or longer periods than the general rules mentioned above.

If the calculated length⁽¹⁰⁾ of the proceeding or a procedural stage exceeds the "reasonable time" set by the law, the party will be entitled to financial compensation for the duration of the entire proceedings or the stage in which the delay occurred.⁽¹¹⁾

This means that the compensation covers not only the period in excess of the reasonable time allotted, but also the entire duration of the proceedings or procedural stage.

4. Extent and enforcement of financial compensation claims

The amount of financial compensation is currently 400 forint ($1.23) for each day of the procedure.⁽¹²⁾ For the inconvenience due to excessively lengthy litigation, approximately 146,000 forint ($448.12) financial compensation can be awarded annually during the proceedings, which is lower than the compensation usually awarded by the ECHR, which is €1,000 to €1500 per year.⁽¹³⁾

The claim for financial compensation can be enforced in a written, non-litigious procedure regulated under the new law, the duration of which is expected to be five to six months. This is shorter than the complaint procedure before the ECHR, which can take years. For many, the fact that the domestic proceeding is conducted in Hungarian can also be an advantage over the ECHR.

5. Comment

One of the most important novelties of this new financial compensation is the objective character of the remedy.

While the civil liability of the courts under Hungarian law has subjective elements that play key roles – since a judge's error and a causal link between the error and damage sustained must be proven the injured party – the new remedy is based on an objective criterion, specifically, the length of the civil proceedings.

Subjective considerations come into play only when the "reasonable time" of the procedure is evaluated on the basis of the individual circumstances of the case, but it is important to preserve the new remedy's flexibility. However, if the litigation exceeds this determined time limit, the compensation is due, regardless of the cause of the delay (eg, a fault of the judge or the expert witness failing to submit their report in due time).

In addition, when it comes to civil liability, under Hungarian civil law, in certain circumstances, exemption from liability is also possible. However, the new remedy for lengthy civil proceedings does not regulate such an exception.

From the perspective of litigants, the question remains as to whether this modest sum can be a fair consideration for the court delays. It depends on the interest at stake; while the €1 per day in financial compensation can be fair in litigations involving smaller pecuniary claims, this amount is negligible in case of major business disputes or in cases which involve non-pecuniary interests.

However, examining the whole issue from the courts' perspective, this new remedy can have an overall positive effect on the courts, which have now been advised on the ideal official length of court proceedings from the legislature.

The "reasonable duration" of the civil proceedings introduced by the new law will serve as a benchmark in ongoing and future litigations, and potentially will have a positive effect on the length of civil proceedings both in smaller litigations and in major business-to-business disputes.

 

 

(1) Hungary was the first post-communist country to join the European Council and it signed the Convention and Fundamental Freedoms on 6 November 1990. The Convention and its eight protocols were ratified on 5 November 1992 and incorporated into the Hungarian legal system through Act 31 of 1993.

(2) Based on articles 6 and 13 of the Convention.

(3) Article 28 of the Fundamental Law.

(4) In the statistics published by the National Office for the Judiciary, a procedure is considered "lengthy" if it is longer than:

• two years at first instance;
• one year at second instance; and
• six months before the high courts.

(5) Complaint 48322/12.

(6) Act 94 of 2021, on the compensation for excessively lengthy civil proceedings.

(7) The reason for the dogmatic distinction is that for the new legal consequence, the party may not exculpate themselves from the liability, which is different from other legal consequences such as pecuniary damages or non-pecuniary damages for the violation of personal rights, which are based on the rules of liability for damages.

(8) Section 6:549 of the Civil Code, "Liability for damage caused in the course of exercising judicial powers".

(9) Section 2:52 of the Civil Code, "Grievance award".

(10) The law sets out the periods that must be disregarded when calculating the period – namely:

• delay unnecessarily caused by the applicant; and
• delay by the court if the applicant has not objected to it.

(11) Ibid.

(12) According to Decree 372/2021 (VI 30).

(13) The length of civil and criminal proceedings in ECHR case law (Council of Europe Publishing).