Hungary Small Claims Court: A Professional's Guide

The Basics of Small Claims Court in Hungary

What is Small Claims Court?

The small claims court in Hungary is a judicial institution handling civil cases involving small financial disputes. It was designed to provide a simplified and expedited procedure for litigants to resolve conflicts involving small sums of money. However, since January 1, 2018, Hungary has not had a specific procedure applicable to small claims alone, and general rules now apply to small claim enforcement.

The Role of the Small Claims Court in the Hungarian Judicial System

The small claims court plays a crucial role within the Hungarian judicial system. Before 2018, small claims court procedures were available in proceedings for the recovery of claims not exceeding HUF 1 million. However, since the repeal of Act III of 1952 on the Code of Civil Procedure, the efficient and fast resolution of small claims has been integrated within regular civil litigation framework handled by district courts.

When to Use the Small Claims Court in Hungary

Prior to 2018, small claims court was used when a claimant sought to enforce a contentious claim not surpassing HUF 1 million. This may have followed an opposition to a payment order or when a claimant wanted to enforce the claim after an order for payment procedure. As of now, these issues are addressed under the general civil procedure rules.

The Court and Statutes Governing Small Claims Court in Hungary

Small claims had previously been governed by Act III of 1952 on the Code of Civil Procedure, however, with effect from January 1, 2018, this Act was replaced by Act CXXX of 2016 on the Code of Civil Procedure. Consequently, the statutes and court rules relating to small claims in Hungary are now encased within this larger context of civil procedure and are adjudicated by district courts.

The Court Rules Applicable for Small Claims Court in Hungary

The court rules for small claims in Hungary were clearly demarcated before January 1, 2018. However, the repeal of the specific small claim procedures has meant that these cases are now dealt with using general rules of civil proceedings. These include rules around submission of applications, rules concerning the taking of evidence, conducting of hearings, reimbursement of costs and rights to appeal.

Small Claims Court Limit Hungary

In Hungary, the type of cases that can be brought before a small claims court, known as Monetary Claims, are disputes involving a statement of opposition to an order for payment. These cases arise when a specific order for payment is contested and subsequently, the claimant must take the case to court to enforce the claim.

There are some specific cases which cannot be adjudicated by Hungary's small claims court. Types of cases that small claims courts do not handle include divorce, custody issues, bankruptcy, name change cases, lawsuits against the federal government, emergency relief, and domestic relations disputes. These matters require different legal procedures and are handled by different court systems.

Monetary Limits

According to Hungary's legal parameters for a small claim, the small claims procedure can be availed in proceedings for recovery of claims not exceeding HUF 1 million. It's critical to note that this limit is enforceable and adhered to strictly. Any claim exceeding this amount won’t fit under the small claims category and will, therefore, navigate a different legal pathway.

Following an opposition to an order for payment, if the case becomes contentious, or follows an order for payment procedure, the claimant can bring the case before the court to enforce the claim in the small claims procedure.

These cases are typically handled by district courts following a written procedure, with a hearing conducted by the court. Upholding the ‘loser pays’ principle, the losing party generally must reimburse the costs to the winning party following the judgment.

Exemptions and Assistance

There are several provisions under the Hungarian law to provide assistance to those who need it while filing a case in the small claims court. Natural persons, in particular those who are financially constrained can obtain full or partial exemption from the payment of these costs.

Moreover, in accordance with the Act on Duties, parties may be entitled to concessions with respect to court charges including possible exemption or the right to defer them. If necessary, individuals in need are also entitled to employ a legal assistant or advocate under the provisions of the Act on Legal Aid to enable them to effectively enforce their rights.

Statute of Limitations and Other Deadlines at the Small Claims Court in Hungary

In Hungary, deadlines play a significant role in civil law procedures. Two key types exist: substantive law deadlines involving rules on limitations and appelate process, and procedural law deadlines. Both can be statutory or judicially determined.

The commencement of a time limit is usually triggered by a specific event or action, such as notification of party involved. Distinctively, time limits can be classified as subjective, where the time bound starts upon party notification, or objective, where the time limit is independent of notification.

Adherence to these deadlines is critical, as failure to comply with substantive law deadlines can result in a forfeiture of rights, whereas non-compliance with procedural law deadlines can typically be rectified via a restitutio in integrum application. Importantly, if a deadline's final day falls on a non-working day, the expiry is deferred until the following working day.

Calculation and Start of Time Limits

Methods of transmission or document servicing do not affect the commencement of time calculation. In instances where time limits are expressed in days, the starting day is not counted.

Extensions may be granted by the court in critical scenarios, however, only statutory time limits can be extended in legally defined cases.

Consequences of Missing Deadlines

The legal implications of missing a deadline vary, but generally, it invalidates procedural actions. To rectify such defaults, one can apply for a restitutio in integrum within 15 days from the day the defaulter becomes aware of the obstacle or it is removed, but the application for restitutio in integrum must not exceed three months after the default.

Excuses for defaulting may be considered valid if uncontrollable reasons prevent the parties from being reachable. However, the legal consequences invoked by missing deadlines are predefined by law.

Do You Need a Small Claims Lawyer in Hungary?

The role of attorneys in small claims court in Hungary is not explicitly mandated, however, their assistance can be of immense value. Small claims court cases follow the general rules of civil procedure in Hungary. An attorney can help navigate through these rules, elucidating specific details and ensuring all procedures are correctly followed.

Utilizing legal expertise, the attorney assists in making the claim contentious effectively by presenting the facts, and compiling and submitting the necessary evidence before the critical deadlines. Any changes to the application or countersuing requires comprehensive understanding of the legal system, for which the assistance of a lawyer can be crucial. They can also assist in understanding the judgment and its repercussions, and if necessary, proceed with an appeal.

Considering the 'loser pays' principle usually applies, engaging a lawyer to build a strong case up front can potentially mitigate significant costs later. Thus, while not mandatory, the role of a lawyer is strongly advised for small claims court proceedings in Hungary.

Resolving cross border disputes in Hungary with the European Small Claims Procedure

For those looking to settle small claims within Hungary that involve parties from different European Union (EU) Member States, the European Small Claims Procedure (ESCP) provides an efficient and accessible solution. Let’s delve into the details to understand how the ESCP can be employed in Hungary to resolve cross-border disputes.

What is the European Small Claims Procedure?

Established by the EU, the ESCP is a streamlined process designed to assist in settling cross-border disputes involving amounts up to €5,000. To initiate the ESCP, the claimant fills out Claim Form A, which the court is obliged to send to the defendant within 14 days, provided it's complete. The defendant then has 30 days to respond. The court can subsequently request further evidence or hold an oral hearing if necessary. Once a judgement has been passed, it can be enforced in any EU Member State.

Remarkably, a case using the ESCP is deemed as 'cross-border' if one party involved is domiciled or habitually resides in a Member State other than Hungary. The key factor determining the 'cross-border' status is based on the situation at the date the Claim Form is lodges with the competent court or tribunal.

Limitations of the European Small Claims Procedure

It's essential to understand the limitations that ECCP presents. Firstly, this procedure is only applicable to claims that do not exceed €5,000, a limit observed across most Member States. In the event a counterclaim surpasses this limit, the claim and counterclaim revert to national procedural law.

Secondly, the ESCP covers 'civil and commercial' issues, barring a few specified exclusions. These restrictions range from revenue, customs, administrative matters to liability of a state for acts or omissions in exercising state authority. Certain matters classified under civil and commercial issues such as bankruptcy, social security, arbitration, among others, also fall outside of the scope of the ESCP.

Resolving a dispute in Hungary using the ESCP: A step-by-step guide

Step 1: Obtain Claim Form A from the European Small Claims Court and fill it out. If you wish for an oral hearing, list your request on this form.

Step 2: Identify the EU Member State that has the competent jurisdiction over your case and then find the specific court within this jurisdiction.

Step 3: Submit your Claim Form to the court, along with any supporting documents, and pay the applicable court fees. The language requirements must be met and claims in different currencies duly converted.

Step 4: The court will review your application form, determine its relevance within the scope of the ESCP, and assess its validity.

Step 5: The court sends the Answer Form (Form C) to the defendant, and any response or counterclaims are communicated back to you, the claimant.

Step 6: The court may request additional information or conduct oral hearings if deemed necessary. The judgement is then issued based on the provided evidence and information.

Step 7: After the judgement, all requirements for enforcing it are fulfilled, after which communication to both parties is made. Any enforcement procedures follow the rules of the relevant EU Member State.

By understanding and following the above guide, business owners and professionals doing business in Hungary can leverage the ESCP as a viable recourse for resolving small claims involving cross-border disputes.

<h2>Can You Appeal Small Claims Court Verdicts in Hungary?</h2> <p>Every legal system aims to provide a fair outcome through its judicial process, and the Small Claims Court in Hungary is no exception. There could be situations where a participant might feel unfairly treated due to misinterpretation of law or procedural anomalies. Naturally, one is inclined to consider an appeal. However, it's crucial to understand that avenues for appeal in Hungary's smaller claims court system significantly differ from its counterparts in rest of the Europe.</p> <h3>Appellate Procedure in Hungarian Small Claims Court</h3> <p>In Hungary, there is a generally limited pathway for appealing decisions from the small claims court. Unlike some of its European peers where appeals in all instances are permitted, Hungarian law tends to refrain from offering such a blanket provision. The rationale behind this restricted right of appeal is to avoid excessive strain on the judicial system and to expedite smaller claims.</p> <p>However, Hungary's law creates a provision for appeals resulting from cases where there appears to be a serious breach of procedural rules or an incorrect application of legislation. This ensures that the right to fair trial and justice is upheld. The interpretation of "serious breach" or "inaccurate application" of law is an intrinsic factor and can be subjective based on the specific circumstances of the case at hand. </p> <p>Although it may seem limiting, this rule, in fact, strikes a balance between providing an avenue for redress if fairness is egregiously compromised, and avoiding potential abuses or overburdening of the court system with appeals over relatively minor disputes.</p> <h3>Understanding the Appeal Restrictions</h3> <p>The absence of a broad right of appeal shouldn't be interpreted as if the Hungarian Small Claims Court lacks accountability or is rigid. In fact, it emphasizes the importance given to make accurate and fair rulings in the first instance. This contributes to efficiency, ensuring disputes are settled quickly — a vital aspect for business owners and professionals dealing with relatively minor financial disputes.</p> <p>This characteristic of Hungarian law aligns with the very purpose of the small claims court, which is to provide a faster resolution to smaller civil disputes where the stakes aren’t excessively high. Nonetheless, it does safeguard the fundamental rights of litigants by establishing an appeals procedure where the process or interpretation of the law are seriously questioned.</p> <p>In conclusion, while the opportunity to appeal a ruling from the Small Claims Court in Hungary is limited, the presence of this restricted right of appeal helps maintain the delicate balance between judicial efficiency and the protection of legal rights.</p>