The Hungarian Act on Fees and Duties will be changed significantly as of 28 January 2025, which will also affect the fees for court proceedings.
Under the previous rules, the fee for first-instance proceedings was 6% of the subject of the lawsuit, with a minimum of HUF 15,000 and a maximum of HUF 1.5 million. As a result of the changes, a banded system will be introduced, with a slight reduction for smaller-value cases and a significant increase for larger-value cases. The maximum fee amount will also be abolished, so that, for example, in a case with a value of HUF 100 million the court fee will be approximately HUF 2.8 million instead of HUF 1.5 million.
The changes have been met with mixed reactions, with many arguing that the price of court proceedings has not followed the general increase in prices in recent years. However, opponents of the changes expect that certain social groups will find it more difficult to enforce their rights.
Another significant change is the lawyers' fees in court proceedings. On the one hand, the rule of calculating the lawyer's fees according to the value of the case has changed, and they cannot be less than five times the amount of the public defender’s fees (HUF 7,000 in 2024), i.e. HUF 35,000. This is almost three times the previous rate. The rule on reducing the fee for work performed under an engagement contract will also change. In the past, the court was free to decide on reducing the fee, and the courts were often very superficial in explaining their reasons for doing so. Under the new rules, a reduction of the fee must be justified in detail, with a substantive analysis of why the fee is unjustified. However, a reduction below 50% is only possible if it is manifestly excessive and contrary to market conditions or common sense.
These amendments are a long-awaited change in the legal sector. The change may have been influenced by the 2024 decision of the Curia on the poor practice of the courts in reducing fees. The new rules enter into force on 8 February 2025 and will apply to cases initiated after that date.
By Bálint Éberhardt, Attorney at Law, KCG Partners Law Firm
