When it comes to litigating in Hungary, foreign parties often only take into account the court duties and attorney's fees as costs. However, in addition to these, there may be additional expenses that may come as a surprise. In order to avoid this, in our short article, we will summarise the costs of litigating in Hungary.
The use of electronic documents is very popular in the field of labour law among both employers and employees. Although e-signatures may seem like a good and simple solution for many labour law documents, it is worth first examining the regulations applicable to the documents. In this article we will introduce the general regulations on the labour law documents and in our next article we will examine the judicial practice in relation to different kind of documents.
In its recent judgment of 2 March 2023, the CJEU ruled on the concepts of daily and weekly rest period and their relation. The judgment fundamentally contradicts the approach reinforced in the Hungarian Labour Code this year; therefore the legislator has to change the concept of rest periods to comply with the EU Working Time Directive.
Celebrating their partnership agreement signed last year, the Permanent Arbitration Court attached to the Hungarian Chamber of Commerce and Industry (HCAC) and Jus Mundi organized a half-day conference together with the Hungarian Arbitration Association in Budapest, on 4 May 2023, with the title ‘Confidentiality and Transparency in International Arbitration’. This blog post sheds light on the background and summarises the main topics of the conference.
From 1st July 2023, a new law on the registry of legal persons, including companies and civil law organisations (“Registration Act”) will enter into force in Hungary. What are the key features of the new law? Will it be possible to register a company within 1 hour in Hungary from July 2023? This article highlights the major changes that the Registration Act will introduce.
The „start-up capital” of the limited liability company (LLC) is the initial capital which is the totality of the capital contributions provided by the shareholders. In this article we will examine the rules on the capital contribution.
The General Data Protection Regulation (‘GDPR’) offers more types of remedies to individuals whose rights were infringed. Can those remedies be exercised parallelly, or shall the person concerned choose among them? The Court of Justice of the European Union (‘CJEU’) provides an answer to this question in its fresh decision, delivered in a Hungarian case.
Foreign creditors often come to us with saying that they have a debtor in Hungary, or that the debtor has assets in Hungary and intends to initiate legal proceedings against it. When analysing the initiation of a civil action, the question often arises whether the debtor can be sued in Hungary?
In this article we summarise the key points of forming a limited liability company (LLC) in Hungary. We present the steps and costs of the formation procedure. If the necessary documents are available, the company formation will not take more than a few days.
In company law, we often encounter the requirement of written documents. From the first moment, i.e. the establishment of the company, through the operation of the company, until its termination, as we presented in our last article. In this article, we will examine the provisions related to the companies established online, and we will explore how we can make electronic legal declarations on behalf of the company.
Do employers have to pay for overtime if it was not expressly ordered by them? Can employers legally exclude in company documents the payment for overtime performed without their consent? In our article we examine these issues based on the case law of Hungarian labour courts
Non-competition agreements are popular for protecting the employer’s economic interest in Hungary. While employers try to secure their businesses as much as possible by stipulating excessive restrictions in the non-compete clauses, it is not always the right tactic, as shown by a recent decision of a Hungarian appellate court. The analysis of this decision provides a perfect opportunity to see how not to fall into the pitfall of an invalid non-competition agreement in Hungary.
The aim of the liquidation procedure is to dissolve an insolvent debtor without legal succession and satisfy its credits, not to recover claims. However, creditors in Hungary use liquidation applications instead of or as well as classical court procedures (i.e., orders for payment and civil litigation) to recover monetary claims from debtors. How to recover a claim by way of a liquidation procedure and why to choose this procedure instead of the above-mentioned classical procedures?
In this article we summarize the key-points of the limited liability company (LLC) formation in Hungary. By presenting the main features of the Hungarian LLC, we show why it is the favourite company form among foreign investors.
If you, as a Hungarian company, want to recover your claim against your Hungarian debtor, there is a question of which proceedings to initiate against the debtor. In this short article we give 3 reasons why you should choose order for payment procedure for collecting claims in Hungary.
Finding the most appropriate company form is essential for every business. Hungarian company law offers a wide range of company forms available for foreign entrepreneurs and investors. We prepared this summary to help you to find the form that mostly fits your business goals.
If you have a debtor in Hungary, there are more legal options to recover your claim. In this short summary we provide a brief overview of the most efficient legal ways of debt collection in Hungary.
Hungary is a popular target for investing in the Central Eastern European region thanks to the 9% tax on capital gains for SMEs and 15% personal income tax for individuals, which tax rates are among the lowest for both businesses and private individuals across Europe. However, there are extra requirements for foreigners that are important to pay attention to. In order to avoid unpleasant surprises, we would like to draw your attention to the following when you are setting up your company in Hungary as a foreigner.
In the recent years of crisis, it's becoming more and more common that your business partners fail to pay your invoices. After getting bored of their excuses or silences, there comes a time when you have to put pressure on your debtor. At that point, you either hire a law firm or turn to one of the many debt collection agencies offering “simple and cheap, yet efficient” solutions. But are the latter solutions really that effective? Is it worth entrusting a debt collection agency in Hungary? In our article, we bring up three reasons why you should hire rather a law firm in Hungary instead of a collection agency.
Sometimes it happens in business life that the other party does not pay. In case the creditor takes legal action to recover the debt, it is very important to prove his claim against the debtor, which is usually based on written evidence. In this article, we examine how can the creditor use electronic texts or other communication to prove its claim during debt collection in Hungary.
Trade secrets are protected on more levels in Hungary. While the Business Secret Act provides general protection, the Labour Code protects the business secrets of employers in the employment context. Yet this abundance can cause problems when it comes to the question which court is competent to protect employer’s rights in case of theft of trade secrets by an ex-employee. Can an employer file a damage claim against an ex-employee and a competing company as co-defendants in front of the commercial court? Or is it the labour court which is competent to hear the case? A fresh decision of the Hungarian Supreme Court, analysed in this short article, deals with these questions.
What can the judge do if the facts support the claimant's claim, but the party incorrectly stated the legal title of the claim? Can the court award the claimant's claim on the correct legal title? The Civil Procedure Code, which has been in force since 2018, provides a clear answer to this question, and in our short article we will explore the issue of the limits of action by legal title through a recent decision of the Supreme Court.
As we pointed out in our last article, the rules on writing set out in the Civil Code are a guideline for all areas of law. Therefore, in our series of articles, we will start the examination of the areas of law with civil law. If we take a look at the judicial practice in Hungary we will see that in civil law, compared to other areas of law, there is a stricter approach and that text-based communication often does not meet the legal criteria of written form in civil law .
The General Data Protection Regulation (‘GDPR’) offers more types of remedies to individuals whose rights were infringed. Can those remedies be exercised parallelly, or shall the person concerned choose among them? The Court of Justice of the European Union (‘CJEU’) provides an answer to this question in its fresh decision, delivered in a Hungarian case.
In addition to facilitating the provability of facts and statements, recording the declarations in writing is also a condition of validity in many cases, so its significance is undeniable. When we think of a writing format the first thing to come to mind is hand-signed documents. However, since the development of technology, various digital solutions, such as electronic signatures, e-mail or SMS, have become more and more widespread. However, the question is whether these modern solutions really meet the criteria for writing. Given that this is a relatively recent and constantly evolving issue, to which we can find different answers in each area of law, we will explore this topic in a series of articles, what may be interesting to all market player. In this article we will present the legal basis of writing and find out in which cases it is mandatory. We will then go around what are the challengers of the "traditional" written form due to modernization. And finally, we present which areas of law we will examine in detail in our series.
At the beginning of the year, several important provisions of the Labour Code were amended, and the changes affect all employers in Hungary. It is recommended for the employers to review whether the labour templates, policies and HR processes of company comply with the amended rules. In our article, we describe the main changes by providing a non-exhaustive summary.
The Hungarian Arbitration Association held its general annual meeting on 16 December 2022. After the general meeting, the managing partner of our firm, dr.Richard Schmidt made an online presentation with the title „Double of quits – competing arbitration and choice-of-court agreements”.
The Civil Law Committee of the Hungarian Academy of Sciences and the Faculty of Law and Political Sciences of the Károli Gáspár University of the Reformed Church organized an online conference with the title “Review of arbitral awards under European Law” on 15 November 2022. Among more outstanding Hungarian lawyers, our managing partner, Richárd Schmidt made a presentation on the conference.
Can a valid, but inapplicable choice-of-court clause, be regarded as a "tacit" jurisdiction agreement? Is it sufficient to establish the jurisdiction of the courts of a member state under the Brussels I Regulation? This article addresses these questions based on a judgment that the Hungarian Supreme Court delivered in a cross-border dispute between a Hungarian claimant and a Romanian defendant.
In the first part of our article, we explained that in case of outsourcing of tasks to an external company, in addition to its benefits, a special labour law rule, the so called “transfer of employment” must also be taken into account. We highlighted that the employer must be cautious if it is possible that material or human resources will be taken over by the external company, as it is possible that special labour law rules will come into effect due to the takeover of resources. In this article, we examine the aspects of takeover based on the relevant Hungarian and EU case law.
In October 2022, our managing partner, dr.Richard Schmidt participated in the annual conference of International Law Firms in Dubai, and made a presentation on recent issues of enforcing asymmetrical arbitration and jurisdiction clauses in international dispute resolution.
The only thing more annoying than an award-debtor concealing their assets after successful arbitral proceedings is an award-debtor trying to further frustrate the award-enforcement by concluding a choice-of-court agreement. But does this kind of jurisdiction clause extend to the non-signatory award-creditor? This article analyses the recent decision of a Hungarian appellate court, delivered under the EU Brussels Ibis Regulation,(1) in which the court had to rule on the personal scope of a jurisdiction clause.
In connection with the outsourcing of tasks to an external company, which is popular these days, everyone thinks of the savings, smaller company size, and less responsibility. However, a special labour law rule must also be taken into account in connection with outsourcing, because the legal consequences of an unlawfully executed process can be more costly than the savings expected from it. In order to avoid this scenario, in this article we examine the legal background of the mentioned special labour law rule, and in the second part of the article, its practical operation, based on Hungarian and EU judicial practice.
The Court of Justice of the European Union (CJEU) has recently addressed the issue of the possibility of retaining traffic and location data in two of its decisions. As many people know, personal data is highly protected and can only be retained in specific cases and in a specific way. The question is whether the protection of this data is also a priority in cases where it is needed for the prevention of crime. In this article, we will present the recent CJEU judgments dealing with the above issues, which are also relevant for the Hungarian legislation.
Business life involves a variety of contracts that are not regulated by the civil codes in continental jurisdictions. In cases where the parties conclude a so-called "atypical contract", it is for the judge to decide whether the default rules of a nominated contract regulated by the Civil Code can be applied in a gap-filling function. The recent decision of a Hungarian appellate court, which was also published in the Hungarian Collection of Court Decisions, analysed whether a workforce supplier could invoke the rules applicable to agency contracts to support their damage claim under Hungarian law.
We visited our client, TE Hungary at its Hungarian plant in Esztergom. Mr. Zsolt Csányi, company manager guided us through the labyrinth of production halls, showing us the manufacturing processes and also the new plant extension project, in which our firm provides full contractual and construction law legal support to TE Hungary.
As the well-known proverb says humans make mistakes. Thus, it can happen that a contract prepared by the employer contains clauses that do not represent his real will. What measures can the employer take in such cases under Hungarian labour law? Is the employee expected to point out the error? The recent judgement of the Hungarian Supreme Court answers these questions.
Due to the recent amendment of the Companies Act with effect from 1 August 2022, EU citizens and companies can form a limited liability company or a branch office in Hungary fully online, in a fast-track registration procedure. The new provisions make it easier and faster to start a business in Hungary, even if there is minor restriction in relation with capital contributions. In this article we sum up the most important new rules.
In business, it often happens that the parties enter into a contract with a choice of court agreement for eventual legal disputes and then, years or even decades later, the legal dispute occurs. What is the effect of changes that have occurred in legislation on the choice of court agreement? Will the applicability of the choice of court agreement be decided according to the rules in force at the time of the conclusion of the contract or those applicable when the lawsuit was initiated? A recent decision of the Hungarian Supreme Court allows for an analysis of these questions.(1)
While the reviewing of questions of law by higher courts is generally permitted at the judicial remedy stages of civil litigation in Hungary, questions of fact, and the free deliberation of evidence, can only be reviewed exceptionally by the Hungarian Supreme Court under well settled case law. Is this rule also applicable under the new Civil Procedure Code? This article answers this question by analysing the recent judgment of the Supreme Court in a case concerning the impacts of covid-19 on the Hungarian phase of the Giro d'Italia cycling race.
At the end of our series of articles on working time, we come to the issue that generates the most dispute between the employer and the employee about working time, the overtime. While in the case of a factory worker, it is most often evident to compensate for the extra work, in managerial or career-promising positions, it is often considered an inherent part of the employment and the employee is expected to handle the issue of working hours "flexibly". In our article, we will find out whether an employer can legally avoid paying wage supplement related to overtime in Hungary.
The assignment of claims is a common practice in business, yet under Hungarian law, it has not been made clear what rights are transferred to the new owner of the claim, and what claims can be litigated by the assignee. It is also unclear whether the assignor and assignee can determine the extent of the rights transferred by assignment. Due to a recent decision of the Hungarian Supreme Court, analysed in this article, this situation has become clearer.
In the latest part of our series, we discussed the rules of irregular work scheduling, i.e. working time banking and payroll period in Hungary. In this article, we discuss the cases when employer transfers the right to schedule working time to the employee in whole or in part. In view of the COVID-19 pandemic situation and the widespread Home Office working arrangement, this type of working time schedule is becoming more and more popular, so we consider important to examine this institution.
In the previous article of our series, we presented the regular work schedule by the employer, which most often means an 8-hour working time per day. However, in many cases the effective functioning of the employer cannot be achieved in this system, and it becomes necessary to schedule working time more freely. In this article we will discuss the irregular work schedule which serves the above purpose, and which is implemented by the working time banking and the payroll period under Hungarian labour law, which, despite their practical advantages, are not so well known.
Based on the basic principle of international civil litigation, a person can usually be sued only in the courts of their own country. However, this makes it very difficult for a claimant who wants to enforce their rights against several defendants living in different countries. Can the jurisdiction of the Hungarian courts that exists in respect of a domestic defendant (the so-called "anchor defendant") be extended to foreign defendants as well? This article analyses the practical application of the new rules enforced in 2018 based on a recent decision of the Hungarian Supreme Court.
Our managing partner Richard Schmidt gave a lecture on asymmetric arbitration and jurisdiction agreements at a conference organized by his Alma mater, the Pázmány Péter Catholic University Faculty of Law and Political Sciences.
In our previous article, we examined the basic concepts of working time and clarified when we are talking about it, to make the complex system of working time understandable. This time we will examine the amount of working time that can be allocated and rules governing working time scheduling. First, we will clarify the exact lengths of time we can allocate, and then we will go around the types of work schedules and the conditions related to them.
A common reason for the failure of debt recovery is that the debtor company's managing director, during years of legal proceedings, takes the company's assets and then bankrupts the company. How does the Hungarian Bankruptcy Act and the provisions of the Civil Code of Procedure support creditors who are usually "in the dark"? This article answers this question by examining a recent Hungarian appellate court judgment.
Following the ruling of Court of Justice of the European Union in 2020, invalidating the Privacy Shield, it has become significantly more difficult to comply with the GDPR for companies transferring personal data from the EU to the US. What changes will the new Transatlantic Privacy Shield Framework announced last month with a view to replace Privacy Shield bring for these EU companies? In this short article, we explain the principles of the new Framework and answer the above question.
It is not the first time on the Smartlegal blog that we publish a series of articles about a complex labour law topic. After our series on dismissal, we are now examining the details of another cornerstone of labour law, the working time. In connection with this topic there are also many misconceptions in the public awareness, which may cause serious financial consequences on the side of the employer. Since working time is a variable and complex topic, we will analyse it in a series of articles to give you a comprehensive picture.
In case the employer terminates the employment relationship unlawfully, he shall reimburse the damage caused by the termination, including the loss of salary of the employee. However, the employee shall mitigate damages by registering as job-seeker, and actively searching for other job opportunities. In its latest decision, the Hungarian Supreme Court addressed how extensive is the duty of the employee to mitigate damages.
One of the major innovations of the new Civil Procedure Code ("CPC"), which entered into force in 2018, was the introduction of the so-called "substantive legal guidance by the court", under which the judge may "assist" the parties under certain conditions to define the framework of the dispute as soon as possible and to bring the dispute to a conclusion within a reasonable time. Can the judicial assistance extend to the type of action that the plaintiff may bring? We examine the above question in the light of a recent decision of the Curia.
Conflict of laws issues can have a pivotal effect on the effectiveness of arbitration when state courts are asked to enforce arbitration agreements. Has the approach of Hungarian courts crystalized in the last years in this respect? Can the contemporary Hungarian judicial practice and the new domestic legislation be characterized as arbitration friendly? This post provides the answers to these questions.
In its most recent decision , the Curia (the Supreme Court of Hungary) examined whether the requirement of equal treatment related to age can be considered in cases where the employer terminates the employment of a retired employee solely because of his age, without giving reason. In this article we examine the answer given by the Curia in connection with this question.
Can a company be sued for copyright infringement committed by its employee, a member or an agent if the offender committed the infringement while acting within the scope of the company's activities? Does the well-settled domestic case law on infringement of personality rights allow proceedings to be brought against both the legal person and the offender applicable? This article analyses a recent decision of the Hungarian Supreme Court(1) that provides answers to these questions.
As a result of the COVID-19, the working from home is the “new normal” for many employees, therefore statutory regulation of distance work has become essential. After the "temporary" rules so far, the Parliament regulated the issues of working from home in December 2021. Based on the new law, the current regulations live on in the Labour Code after the end of the state of emergency, with effect from 1st June 2022. In this article we summarize the most important rules in effect.
In its recent decision, the Hungarian Supreme Court examined whether liquidation proceedings can be started against a debtor who received online invoices via email and failed to pay them. Is the principle of free evaluation of evidence in civil litigation also valid in insolvency proceedings in Hungary? Are contract provisions relating to the service of contractual notices applicable in such cases? This article analyses the decision and answers the above questions
Our Managing Partner, dr. Richard Schmidt has been listed as international arbitrator practitioner at the Vienna International Arbitration Centre, with effect from 1st January 2022.
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.
As it is known, the probationary period is typically 3 months long in Hungary. However, many employers feel that the employee's competence cannot be properly assessed during this time. So employers wonder whether it is possible to determine a longer probationary period or extend the 3-months’ probationary period, or if there is any other solution in the above case. In this article we address these issues of Hungarian labour law.
Under what conditions can a minority shareholder sue the managing director on behalf of the company if the majority of shareholders do not support the motion? Should these conditions be interpreted restrictively or broadly? This article analyses the above questions in the context of a recent Supreme Court judgment.
In part IV of our series of articles on the reasons for termination of the employer, we have already mentioned the qualification-based change as reason for termination in connection with the operation of the employer. Since qualification-based change is perhaps the least known reason dismissal, we summarise the Hungarian judicial practice in this article.
Our managing partner, dr.Richard Schmidt held a webinar on the international and domestic court practice of the New York Arbitration Convention. The event was co-organised by the Legal Section of the Hungarian Chamber of Commerce and Industry and the Hungarian Lawyers’ Association.
The Supreme Court recently ruled in the case of a British Academy of Film and Television Arts award-winning composer who sued a French company in Hungary because of the illegal use of his music in video games distributed on online platforms. Besides the issue of the Hungarian courts' jurisdiction on a matter involving a foreign defendant and international copyright infringements, the other issue was whether the original licence granted by the claimant covered these different modes of exploitation.
In its recent judgment, the Hungarian Supreme Court addressed the question whether the immediate termination is lawful if it refers to several minor infringements of the employee already sanctioned by the employer prior to the termination. In our short article we analyse the decision of the Supreme Court and the relevant judicial practice.
The non-compete agreement may provide protection of the legitimate economic interests of the employer even after the termination of employment relationship. However, the Hungarian Labour Code lays down strict requirements for the agreement. In our article we analyse a recent decision of the Supreme Court about the importance of the precise determination of the compensation, so you as an employer can conclude a valid non-compete agreement.
During summer 2021, the European Commission published two new "standard contractual clauses" on data protection regulation, which can be applied on the one hand, to the legal relationship between data controllers and data processors covered by the GDPR , and to the transfers of personal data to third countries, on the other. In this article, we answer the questions: what these SCCs regulate, how do they differ from the previous SCCs and how can your company use the new SCCs?
Drawing a well-defined line of demarcation between domestic and international public policy when enforcing foreign arbitral awards sends a clear pro-arbitration message from national courts in any jurisdiction. Does Hungarian case law come close to this level of sophistication? This post analyses this question in the context of procedural public policy, and it does so based on two recent appellate court decisions rendered in the context of enforcement of arbitral awards in accordance with the New York Convention.
Our Colleague, Anita Vereb made a presentation at the debate meeting of the Hungarian Labour Law Association called „The right to freedom of expression in the employment relationship” about the court practice of employee opinions published on social media platforms.
Can the shareholder of a company assert claim on its own right against a third-party causing damage to the company, by contending that the damage suffered by the company has also decreased the value of its share? To what extent can the right to access to court limited in the name of the sound administration of justice? We address these questions by analysing a recent judgment of the Hungarian Supreme Court.
Our Managing Partner, Richard Schmidt LL.M, held a webinar on asymmetrical jurisdiction and arbitration agreements in international dispute resolution, co-organised by the Hungarian Arbitration Association, the Essec Business School and the Hungarian Bar Association.
Refusal of employer 's instructions, unjustified absence, intentional damage: some cases where the justification for dismissing an employee is relatively easy to determine. What happens, however, if the employee does not commit a severe breach of duty similar to the one above, but his or her colleagues consider him incompatible, with whom it is impossible to cooperate, or even afraid of him or her. Can dismissal be justified by behaviour that is incompatible with others and creates disharmony in the working environment? In our article, we seek the answer to this question in the light of Hungarian judicial practice.
Can a judge be disqualified from deciding a legal dispute on the grounds of bias if they have delivered a judgment which is unfavourable to the plaintiff in another case? Can a court be biased if a plaintiff has challenged a previous decision thereof before the European Court of Human Rights (ECtHR)? This article answers these questions by analysing a recent Supreme Court judgment
In the recent weeks, a number of questions have been arisen whether the employer may know the data contained by the „immunity card”, which aim is to certify immunity to coronavirus. Is the employer entitled to request information from the employee regarding the immunity card or store the information concerning its employee? In this article we answer the above questions on the basis of the information („Information”) of Hungarian National Authority for Data Protection and Freedom of Information.
This article analyses a recent Supreme Court decision(1) and seeks to answer the following questions: - Can a defendant which is domiciled abroad be sued in Hungary under the EU Brussels Recast Regulation (1215/2012/EU) in the event of defective performance of an international sales contract if the place of performance is abroad? - Can the jurisdiction of a Hungarian court be established based on the fact that a lower court expressly established its jurisdiction at the beginning of the litigation? - How is the Ex Works (EXW) clause to be interpreted within the meaning of the EU Brussels I Regulation?
In the event of a longer leave of a worker, it is common for employers to hire a replacement worker with fixed term contract to make up for the missing workforce. When the replaced worker returns, a labour dispute may arise. In the legal case presented in our article, the Supreme Court examined how the employment relationship of the replacement employee terminates at the end of the replacement. From our article you can learn about the decision of the Supreme Court and what to look for as an employer to make the closing of the replacement smooth. (In our article, we examine the court decision published under No. BH 2021.2.51)
The Supreme Court recently concluded that the res judicata effect of a final judgment precludes the claimant from starting new litigation on the same legal grounds for a part of the claim which was not sought in the preceding lawsuit. This article answers the following questions: - Is this judgment reconcilable with case law? - How will this judgment affect party autonomy in civil litigation? - How will this judgment affect test cases in Hungary?
Our managing partner, dr.Richard Schmidt has recently participated as national reporter in a project, launched by the International Council for Commercial Arbitration, focusing on the legality of remote hearings in international arbitration.
Our Managing Partner, dr. Richard Schmidt has been enrolled on the list of arbitrators of the Arbitration Court attached to the Hungarian Chamber of Commerce and Industry, with effect from 1st February 2021. In connection with the above, our colleague, dr.Anita Vereb made a short interview with Richard about arbitration in Hungary.
After three years, the legislature has finally amended the Civil Code of Procedure (CCP), which took effect in 2018 and has since been criticised for sacrificing fundamental rights in favour of accelerated civil proceedings. This article examines the key changes, which took effect on 1 January 2021, and whether a fairer balance has been reached between form and content in civil litigation.
Termination of employment is a sensitive area and the process is not always smooth. It can happen in an escalated situation that both parties give notice of termination or a party later changes its previous declaration. The employer must also be prepared for such situations, as it is not uncommon for an employee to take legal action after a poorly coordinated dismissal, in which case the final farewell takes place in a courtroom.
In the recent past, the Court of Justice of the European Union had to deal with the question whether an accommodation operator registered to Booking.com can sue the latter because of abuse of dominant position. In this short article we analyse the background of the case and the decisions of the Court of Justice of the European Union.
In its recent decision, the Curia dealt with questions, which may affect many employer in Hungary. Whether the non-compete clause of an employment contract, obliging the employee to pay a fixed amount damages in case of breach of the non-competition agreement, is valid? We analyse the decision in our short article.
Since in the middle of summer 2020, the Court of Justice of the EU (CJEU) invalidated the Privacy Shield and put into question the applicability of the standard contractual clauses, we were wating for guidance from the European Data Protection Board (EDPR) how to transfer personal data to non-EEA countries in a GDPR-compliant way. Finally, the EDPB broke the silence and provided a 6-step guide which we summarize in this short article.
Black Friday is once again around us: the time when online shops and the consumer protection authority cash in some extra income every year. We guess you’ve already read about the extreme discounts and the record-breaking fines by the authorities, so in our article, we will explain, that without your knowledge, your own business can easily step into the field of consumer protection, in which case, your contracts are subject to special rules. In our article, we show you how you can recognize these situations and, of course, summarize the obligations.
Can parties stipulate in a commercial lease that a user charge amounting to three times the monthly rent will apply if the lessee fails to vacate the leased premises? Further, can a judge qualify such an excessive fee as a penalty which the court can reduce? This article analyses a recent Supreme Court decision in order to address these questions.
It is often the case that the employer does not clearly regulate the employment relationship of the employees, which later leads to an employment lawsuit. This happened in the case before the Hungarian Supreme Court, where a legal dispute arose in connection with the employee's work schedule, the stake is the payment of several million forints of overtime work compensation to the employee. In our short article, we analyze the Supreme Court’s decision and draw conclusions on how the employer can avoid similar situations.
In its recent decision, the Curia dealt with the issue concerning what are the consequences if you fail to put in writing the employment contract which contains a probationary period clause. Is the probationary period clause valid or invalid in that case? We analyse the decision in our short article and answer the question above.
Although the UK has already left the EU 9 months ago, EU legislation is still applicable to the country during the transitional period until the end of the year, so in practice we have not yet faced the post-Brexit legal environment. Due to the protracted process, businesses in the EU may easily overlook the fact that, as of January 2021, they will no longer be able to transfer personal data to the UK as they used to. However, until the end of the year, there is still time to settle the legality of data transfer to UK, the possibilities of which are analysed in our short article.
From September 2020 the rules, which regulate the status of the adult educators and the organisation of adult educations have changed. There are significantly more educations, which are considered as adult education and performing an adult education entails a lot more obligation. The changes affect almost every employer who organises certain kind of educations for its employees. We summarize the most important changes concerning the adult education.
Cross-border online sale of medicinal products is a recurring issue before the Court of Justice of the European Union. This is no coincidence, as trade in medicines is a strictly regulated area in all Member States, which can easily conflict with the EU principle of freedom to provide services, and in the end, the "price" of excessive national restrictions is borne by the consumers. In our article, we summarize the recent ruling of the Court of Justice of the European Union on the limitation of the principle.
The parties usually establish the employment relationship for an unlimited period. However, in certain cases, for various reasons, like business or organisational considerations, it seems to be better to conclude a fixed-term labour contract. In this article we summarize what you as an employer shall consider in Hungary in case you would hire someone for a fixed period.
Messi hit the legal news again, this time not because of his tax issues. In September, the match between the EUIPO and the world-famous football player, which was ongoing since 2011, finally ended. Messi won the match, as the European Court of Justice ruled that because of his significant reputation, his name can be registered as a trademark despite the fact that it is similar to several earlier trademarks, which is otherwise a ground for exclusion. In our short article, we summarise the details of the case and the legal significance of the decision.
What are the main risks if you employ your staff at different employer, within or outside the company group? Is that a new legal relationship, is remuneration payable for that, or the “good old” labour contract can cover this situation? In a recent judgement the Hungarian Supreme Court Curia addressed these questions. In our short article we analyse the judgement and summarize what you as an employer should consider if you would like to temporary reassign your employee.
Can parties' conduct during litigation amount to an implied choice-of-law agreement based on EU Regulation 593/2008 (Rome I Regulation)? This article analyses a recent Supreme Court judgment concerning this question.(1)
The legal debate surrounding the “infamous” legislative amendment in 2015 introducing the right to unilaterally increase land rents has taken another turn. In its decision this spring, the Hungarian Supreme Court disregarded the previous decision of the Constitutional Court on this matter and omitted the application of the disputed provision when deciding a legal issue. Our article will discuss the significance of the decision, as well as the contradiction between the two highest organs of the judiciary.
In certain cases, the Hungarian Labour Code does not require the dismissal to be justified by Employer. But what, if despite that, the employer gives justification for the dismissal? Is it possible for the Labour Court to review the legality of such non-mandatory justification? And can the defect of this non-mandatory justification render the dismissal unlawful? In its recent decision, the Hungarian Supreme Court examined the above question concerning that analyse the decision in our article.
Travel restrictions to Hungary (“Travel Restrictions”) can be regulated on unilateral, bilateral or multilateral level. So far, we have knowledge about one unilateral and three bilateral travel restrictions adopted by the Hungarian government, so this overview will be focused on these. However, given the fast-changing nature of the situation, it can be the case that more bilateral agreement will be adopted, that change the current legal environment.
Can employers withhold the wage of employees because of an ongoing internal investigation? Is the suspicion that the employee caused damage sufficient to hold back mone, or the payment cannot be refused in this case? We analyse the recent decision of the Hungarian Supreme Court and answer this question in this article.
The recent judgement of the European Court of Justice (CJEU) invalidating the EU-US Privacy Shield raised several questions concerning international personal data transfers. Companies who normally transfer personal data to the U.S. and use U.S.-based service providers are asking themselves: are we still allowed to do this? If not, what should we do now? In this short article we will explain the judgement of the CJEU and the current situation.
The European Union adopted the so called P2B (Platform-to-business) Regulation, providing enhanced protection to the business users against dominant online intermediation service providers like Amazon, eBay, Booking.com and other similar online marketplaces. In this short article we summarize the most important provisions of the Regulation applicable from 12th July 2020.
Due to the protective measures of the EU Recast Brussels I Regulation (1215/2012), persons domiciled in an EU member state can be sued in another member state only in limited cases. One of these exceptions is the jurisdiction granted by the regulation to the courts of the place of the performance of a contract. However, does this exception apply in cases of legal succession or subrogation? The Supreme Court addressed this issue in a recent decision.
The „start-up capital” of the limited liability company is the initial capital which is the totality of the capital contributions provided by the shareholders. Since the shareholders may declare that the capital contribution shall only be provided after the establishment of the company in a later date, the painful situation might occur that the shareholder does not provide or only partly provides the capital contribution. Given that this may create unwanted consequences, the settlement of the capital-related problem is the common interest of the shareholders. In this article we summarize the possible methods to solve this issue.
Whether the lack of handover makes the dismissal unlawful based on the recent judgment of the Hungarian Supreme Court? What happens in case the employee fails to take over the dismissal? We address these issues in our article by analysing a recent judgment of Hungarian Supreme Court.
The Data Protection Authority imposed the highest fine ever in Hungary against Digi Távközlési és Szolgáltató Kft. because of the infringement of the GDPR. Let’s see what led to the record fine of HUF 100 Million.
After the bill, passed in 2018 on restrictions of foreign investments, Hungary further limits the domestic investments of the foreigners because of the COVID-19. The new decree extends the scope of the investments to be notified and introduces fines, too. We explain the most important provisions of the decree in this article.
In the emergency situation due to COVID-19 the rules of the civil litigation were modified: the most important change was that courts did not held court hearings at all or only through electronic telecommunication channels. Because of the moderation of the epidemic, from 1st June 2020 the civil litigations can return to “normality” with a few slight changes. In our short article we summarize the new rules.
According to the Labour Code, if the executive unlawfully terminates his employment, the employer is automatically entitled to damages equals to twelve months’ absentee fee without proving the actual damage. Can this rule be applied in an opposite situation? We explain the recent decision of the Curia which answers to this question.
On 11 March 2020, the Hungarian Government declared a state of emergency in Hungary , which is still in force until revocation. In the last two months, nearly 100 government decrees have been adopted in connection with the pandemic, nearly a third of which are economic measures. In our article, without going into the very details, we summarize the most important measures affecting businesses to give economic operators a comprehensive picture of the benefits and reliefs available in different areas.
Is the employee considered as an executive employee if though the parties qualify the employee as executive, but refer to the wrong provision of the Labour Code? Does the will of the parties or their contractual declaration matter in this case? We analyse the latest decision of the Curia in our short article.
In a judgement published recently, the Curia examined the question whether it may be the justified reason of the extraordinary dismissal if the employee operates a webpage closely related to one of the activities of the employer. In our short article we summarize the decision of the Curia and shortly analyse what lessons you as an employer can learn from this case.
While COVID-19 has been dominating the headlines, a new act, which entered into force on 1 April 2020 and fundamentally reforms the role of judge-made law in Hungary, has received less attention. This article examines why this landmark bill was passed, the extent to which it means the adoption of common law and what its potential impact will be on litigation in Hungary.
Measures taken due to the corona virus in recent weeks in Hungary affected the enforcement of securities over real estate, as well. The Governmental Decree regarding this matter provides more assistance to the Debtors who got into trouble due to State of Emergency to overcome the difficult period and may affect indirectly the enforcement proceedings started earlier, weakening the chances of creditors to satisfy their secured claims within reasonable time.
In the difficult economic situation triggered by the coronavirus in several European countries the state takes over the payment of certain part of the employees’ salaries. Based on the government decree published on Good Friday, and already modified on 21st April, finally there is a possibility in Hungary as well to request support from the State in case of employment in reduced working time. In this article we summarize the characteristics of the support and the most important eligibility criteria.
The coronavirus and the state of emergency ordered by the Hungarian government to fight this epidemic affects every part of our life. Civil and business litigations are not exceptions either. In our short article we summarize what are the most relevant changes in the ongoing and envisaged court procedures in Hungary.
Although efforts are being made around the world to curb the spread of the epidemic, it can already be seen that entire sectors of the economy have to face a difficult situation, which is also affecting companies ’contracts. For example, many businesses request the reduction of the rent for the premises they lease for business, due to the coronavirus situation. The question arises as to whether there is another option for amendment if the parties fail to reach a mutual agreement.
The coronavirus is already having its unfortunate impacts in the whole world and there is almost no sector which has not been rocked by the effects of the virus. In this rather difficult situation, it is questionable for the employer how to manage their resources and how to protect their employees. The decree of the government effective from 19th March 2020 gives certain tools to the employers which may help them to optimize their operations and to defend their employees. In our short article we summarize these measures.
Can the conduct of the parties during litigation amount to an implied choice-of-law agreement based on the Rome I Regulation? We analyse the fresh judgment of the Hungarian Supreme Court in this article.
The worldwide coronavirus epidemic is causing serious problems in the economy as well, businesses in sensitive sectors fear a total loss of income for months. For this reason, the Hungarian Government introduced a ban on termination and rent increase for commercial lease contract in case the lessee operates in specific, sensitive sectors. However, there are several legal uncertainties surrounding the measure, which will be discussed in our brief article.
The coronavirus has appeared in Hungary as well: when writing this article 9 infected and 67 quarantined persons are registered. Because of the virus, the employers may have headaches, too since often it is not obvious how the situation shall be handled from labour law perspective. In this short article we explain the relevant legal provisions by presenting some typical cases.
The coronavirus has significant impact on the whole world economy, including the sale of goods. Whether the epidemic is considered as a force majeure event, which automatically exempts from liability to perform an international sale contract? We answer this question under the Vienna Sales Convention and its judicial practice.
Can a party commence litigation in Hungary despite a jurisdictional agreement in favour of a court of a non-EU state which is optional for one of the parties? The Supreme Court recently answered this question in a case which highlights the negative effects of such asymmetric choice-of-court agreements.
You are reading the final part of our series on “lawful dismissal”. This article examines with a case study approach, that in practice, what violations may justify immediate termination, i.e. what shall be meant under the Labour Code definition “grave violation of a substantive obligation”.
The supervisory authorities in Europe controlling compliance with the GDPR have not sat on their hands in the last couple of months. In this short article we collected five interesting cases from the recent past. The wide discretionary powers of the data protection authority is well illustrated by the fact that sometimes the GDPR fine was only EUR 2000, but in another case a company has been fined for EUR 11,5 Million! Continue reading if you would like to avoid the same or similar expensive errors.
In the last two articles of our series on “lawful dismissal” we present the most severe sanction that can be applied to an employee, the immediate (formerly: extraordinary) termination. This measure is applied in serious incidents only, so many employers believe that they will not need to use the sanction. But, as we know, the devil does not sleep and it is in the details, so the employer needs to be prepared for this scenario as well to avoid further inconvenience.
Is a penalty for delayed performance enforceable if the purchaser fails to reserve its rights immediately? Or is enforceability excluded only if the purchaser expressly waives its right? This article analyses the Supreme Court's judgment in a recent construction dispute, in which the court appears to have maintained its estoppel-based practice despite recent legislative changes.
In the previous articles on the lawful dismissal, we discussed that, ranging from the employee’s behaviour to the employer’s reorganization, there can be many legitimate reasons for dismissal by the employer. However, irrespective of the legitimate reason, the employment relationship cannot be terminated if the employee is protected against dismissal by law (i.e. the Labour Code). From our article, you can learn about these protections.
Can the unfairness of cross-border claim be reviewed ex officio in case of consumer contracts in such a simplified procedure, like the European order for payment procedure? In our article, we analyse the recent judgement of the Court of Justice of the European Union in the Bondora case and its possible effects on cross-border debt recovery, covering also the Hungarian legal regulations.
You can hear a lot of stories where the debtor “escaped with the money”, the construction contractor “disappeared” or the debtor company’s assets have been hidden. Essentially, failure to pay is a breach of contract, which is subject to civil action, eg. litigation. However, if a transaction is suspected to be a scam, criminal proceedings may be brought against the defaulting debtor, for example, for fraud, which we examine in this article.
In its recently published decision, the Hungarian Data Protection Authority (NAIH) has dealt with the questions of the usage of the corporate email account for private purposes and the monitoring of the e-mail account. As the topic can affect every employer, who provides an e-mail account for its employees for working purposes, we summarize the most important conclusions of the decision in our short article.
In the previous articles on the lawful dismissal, we explained dismissal for employee-related reasons. However, that is only half of the whole picture, because in many cases the employer dismisses employees for reasons of reorganization or redundancy. Justification must meet strict rules to be lawful in this case as well, the details of which we explore in this article based on case law of Hungarian labour courts.
Our managing partner Richard Schmidt gave a lecture on the law governing the arbitration agreement at a conference organized by his Alma mater, the Pázmány Péter Catholic University Faculty of Law and Political Sciences.
Can you dismiss your employee, if caught on hidden camera while stealing cash? In its recent decision, the European Court of Human Rights answered this question in the affirmative, however it is doubtful, whether this ruling is compatible with strengthening data protection in the EU, particularly following the entry into force of the General Data Protection Regulation (GDPR) of the European Union.
In our previous article we have examined the cases in which an employer may terminate the employment due to an employee's inappropriate behaviour or attitude. But what if inadequate work or the lack of expected results is not because of the misbehaviour or bad attitude of the employee, but because of not having the knowledge or skills needed to perform the job properly. What can an employer do in this case? What can be the basis for a legal termination? From our article, you can get the answer to these questions.
How to balance between the employer’s business interests and the employee’s right to freedom of expression? Can the employer restrict the employee’s freedom of expression and terminate his employment because of a blogpost? The European Court of Human Rights (ECHR) addressed these questions in his fresh judgement brought in the case of a Hungarian applicant. In this short article we summarize the facts of the case and the findings of the Court.
Although, considering the current labour market in Hungary, employers are trying to keep the employees at the company, there may be situations where the employment relation cannot be maintained due to behaviour or attitude. In our previous article we explained that a dismissal by the employer is far from a simple move, as the legitimate justification must meet a number of criteria. In the present article, we examine the grounds for termination based on the behaviour of the employee.
From salary to vacation leave, an employment relationship can have many sensitive parts. However, labour disputes mostly arise around the termination of the employment by the employer and specifically in connection with the justification of dismissal. Since the fault of the justification will result in unlawful termination, leading to important pecuniary consequences, in our forthcoming article series, we summarise the rules governing employment terminations and the related case-law of the Hungarian courts. In the first part we present the general rules for justifying employee termination.
The case law of Hungarian construction disputes in the last years sheds light on the intention of courts to protect the “weaker party”. The Supreme Court has already started to protect subcontractors by declaring certain contract terms invalid, and its recent decision even places more risks at general contractors. How to cope with these challenges in Hungary? We address this question in our article.
Whether weekly or once a year, to another continent or just across the city, work related travel concerns every single employment relationship. Despite its importance, Hungarian regulations are unclear about work related travel, which can easily be the source of an unpleasant labour dispute. To avoid this, from our article you can learn if your business is properly accounting for business travel.
For companies operating internationally or with foreign background, it is common to work with documents in a foreign language and to sign corporate documents and contracts abroad. Although it is insignificant in the daily life of a company, the situation is different if you want to use a document signed abroad or in foreign language in a litigation or in other legal proceedings, as the foreign document has to comply with special rules. In our short article we will summarize what should you consider if you want to use foreign documents before the Hungarian authorities.
Employers often use non-compete agreement in Hungary, but labour courts frequently declare them invalid. Can a training course serve as compensation of the agreement? Or what to do, if it turns out after years, that the leaving colleague does not mean a real and serious threat for your company? In its opinion published recently, the Hungarian Supreme Court gave a guidance on non-compete agreements, which we summarise in this article.
This post analyses the decisions of Hungarian courts, rendered under the New York Convention (“Convention”) and published in the last two decades. The decisions were initially made available to the international arbitration community in the ICCA Yearbook of Commercial Arbitration series. This case law of 20 years is summarized below by identifying the main directions of the application of the Convention in Hungary.
The loss of confidence was a frequently used reason of termination by employers, which was not defined by the Labour Code, therefore it is for the judicial practice to give substance to it. We summarize in our article, in which case was well-founded the termination based on loss of confidence in the practice of Labour Courts.
Even winning a lawsuit and having the positive judgment in your hands are of no use if the debtor company is terminated in the meantime. In this case, the "winning" judgment will only be a worthless piece of paper, despite that you have spent a fortune on debt recovery. In this short article, we summarize the most important rules and deadlines so that you can avoid staying empty-handed at the end of the debt collection in Hungary despite winning the lawsuit.
During this summer, the Hungarian Supreme Court (Curia) made a judgement in a case, where the central question was whether the monitoring of the employee’s own cell phone used for job-related purposes by the employer was lawful. Although the legal framework was slightly modified lately because of the entering into force of the GDPR, the case can offer important lessons. Read our short article if you would like to know whether you can monitor your employee’s cell phone which he uses for job related purposes.
In the recent days you may have heard the name of Amazon mostly because of the rainforest fires in Brazil. But if you operate a web shop, or just plan to do it, you will be more interested by the Amazon case in Luxembourg. Indeed, the Court of Justice of the European Union has delivered a judgment in the summer, which sheds light on how customer relation with online buyers should be maintained by web-shops in the EU
Before the summer break the Court of Justice of the European Union made a decision in a data protection related matter which concerned Facebook as well. The decision may be interesting and useful for everybody who embeds of his website the Facebook “Like” button. In our short article we summarize the most important findings of the Court.
It has been one of the most annoying things for Hungarian companies that they had to pay Value Added Tax (VAT) in case of unpaid claims as well, so even if the invoice has never been paid by the business partner. Fortunately, from 2020, the above rules will change, and it will be possible to refund the VAT already paid on uncollectible claims. In our article we summarize the details.
Operating video surveillance in a GDPR-compliant way can be a real challenge for data controllers in Hungary. A key aspect of the compliance with the GDPR is how the controller informs the data subjects (e.g. employees or customers) about the CCTV surveillance. Luckily, the European Data Protection Board which is the data protection authority of the EU has recently published a guideline on this issue. Read our short summary so that you know what to include in your camera privacy notice.
One of the annoying things in business is when your invoices are not paid by your business partners. After getting bored of their excuses, there comes a time when you have to put pressure on your debtor. At that point, you either entrust a law firm or turn to one of the many debt collection agencies offering “simple and cheap, yet efficient” solutions. Are the latter solutions really that effective? Is it worth entrusting a debt collection agency in Hungary? In our article, we bring up three reasons why hire rather a law firm in Hungary instead collection agencies.
A few days prior to the first anniversary of the entry into force of the GDPR the Hungarian Data Protection Authority imposed the biggest data protection fine in Hungary so far. The target was the biggest Hungarian festival organizer company thanks to whom the public may enjoy the SZIGET, the VOLT or the Balaton Sound Festival. The Data Protection Authority reviewed the check-in system of the festival and the data processing in relation with the check-in. In our short article we summarize the mistakes the Authority identified.
The initiation of a liquidation procedure is an effective debt collection method, since the debtor may only avoid being liquidated by paying the claim if the conditions specified in the Act on Bankruptcy Proceedings and Liquidation (Bankruptcy Act) are met. For this reason, in the case of liquidation, one of the most common defences of the debtor is the reference to offsetting. But can the debtor refer to offsetting without limitation during liquidation? In our short article we answer this question.
Construction trusteeship, as mandatory collateral management of major construction projects in Hungary, strives for protecting subcontractors against non-paying general contractor, by allowing direct payments from employer under certain conditions. How does it work in practice and what are the limits of subcontractor protection? We address these issues in this article.
Do you plan to register a word or slogan as a trademark in Hungary? You should be careful, if you plan to refer to your company’s activities, because using general and describing words may cause problems either during the registration procedure, or later when someone else wishes to use your trademark. This time we will focus on the importance of having a unique trademark.
What can be the basis of deletion if somebody has a registered trademark which is identical to the name of a world-famous footballer? What are the factors to consider when assessing whether the trademark applicant acted in bad faith? In his fresh judgement, the Court of Justice of the European Union gave answer to these questions and we shortly summarize them.
In business, signing a contract or making a declaration on behalf of a company is daily task. During this “routine” process, the parties often do not check whether the signatory of the other party can represent the company. Is the contract valid in Hungary if the signatory has no signing authority, or it is limited? Who, what and from whom can claim in such a case? In our article, you will find the answers to these questions.
Remuneration is one of the cornerstones of an employment relationship for both parties. It is not a new practice that employers seek other ways to increase the consideration of workers without modifying the base wage. The so-called “semi-official” solutions can be dangerous for the employer, because an employment ending badly can easily be the beginning of a labour dispute. In our article, we will show you smart salary solutions compliant with the Hungarian labour law.
In May 2019 the European Court of Justice condemned again the Hungarian Land Act of 2014 cancelling usufructs on arable lands in Hungary without providing any compensation for right-holders. What is the “added value” of this second judgment, and why it is important for investors seeking damages for losing usufructs on lands?
Are you negotiating on salary with a new colleague in Hungary? Even if salary is subject to free negotiation, a higher salary for the same work can cause a tension in wage levels. In our short article we summarize the fresh decision of the Curia which can serve as a compass in relation with the applicability of the equal pay principle.
This May we participated in the European Conference of International Law Firms in Milan, where our managing partner Richard Schmidt held a presentation to members of ILF on recent developments of European Data Protection Law. The presentation focused on the lessons learnt from the first GDPR fines imposed by the national data protection authorities of various European jurisdictions in the 1st year of GDPR.
Collateral management is a key issue in every construction project. In Hungary a special regime, the so-called construction trusteeship protects the interest of the participants of major private construction projects, and secures that contractors and subcontractors receive their remuneration for the work performed.
In case trademarked goods have been put on the market by the proprietor or with his consent in the EEA, the exhaustion rule allows the parallel importer to further commercialize those products. However, this is not the case, if the trademark proprietor has legitimate reasons to oppose the commercialization. In this article we summarize the main cases when the proprietor can prohibit the use of the trademark.
Is it considered as a trademark infringement if a similar sign as the trademark has been put on products which are different from those for which the trademark is registered? Can the trademark-owner prevent such a usage? The European Court of Justice answered those questions in his very fresh judgement which revolved around a toothpaste. In our article we summarize the decision of the Court.
The Hungarian Supreme Court has made a decision in an employment related legal dispute whether the employer can process the data of the employee’s private life, and if so, then what can be the basis and the extent, and how can such data be processed. If you hire employees, you cannot avoid to process their personal data every day. This judgement can be a guidance for you to know what can be the limits of data processing if they contain sensitive data.
A trademark right gives the proprietor the sole right to use and exploit the trademark and to prohibit others form using that trademark. However, there is an exception from this general prohibition, which is the principle of exhaustion giving possibility for parallel importers to commercialize trademarked goods. In this article we summarize when trademark rights are exhausted under the EU law.
It is not an April’s fool joke that almost one year after the GDPR entering into force, finally the Hungarian Parliament adopted the GDPR implementation act on 1st April. The act harmonizes various areas of the Hungarian legal system with the GDPR as it will amend more than 80 legal sources. In this short article we collected the 5 most important provisions of the implementation act.
In a fresh judgement of the Curia the main question was how to define the working place in the labour contract. At first sight, this seems quite simple and it might be surprising why such a question needed to be decided by the highest forum. However, from our article summarizing the decisions of the Curia you will see that even a simple question can be misunderstood and can cost a fortune for the employer.
If you believe that the highest judicial forum of the EU only deals with matters that are far from everyday life, you have missed the recent decisions of the Court of Justice of the EU. Last year, the Court has drawn significant conclusions on copyright in a case concerning the taste of a cheese product, and now, in a legal dispute surrounding a returned mattress, the Court gave important guidance on online purchases. The decision concerns both consumers and sellers, so our short article is worth reading for everyone.
“I only believe in statistics that I doctored myself” goes the famous quote attributed to Winston S. Churchill. Well, it is out of question that the late British prime minister has not participated in the publication of the Hungarian Court Statistics for 2018, it is worth to have a look at the figures, how the New Civil Procedure Code has changed the appetite for litigation in 2018 in Hungary.
Our law firm provides legal services to Hirschmann Car Communication Kft. from March. In order to understand better out Client’s operations, our colleagues travelled to Békéscsaba to visit our new client.
The European Commission makes a thorough investigation on a particular field from a consumer protection view, and issues a report about the results. Topics like airlines, electronic devices and consumer loans have already been discussed before. This time the report is made on online shopping, that can be useful for those who run an online store. In our current article we will introduce you three things to avoid when you operate an online shop.
In case of leasing an office, warehouse or other industrial property, lessees often make significant investments to the premises, which can easily result in a dispute when the contract is terminated. From our article, you can learn what should you to take into account as a lessor in relation to investments made by lessees.
To what extent shall the engineer be independent and impartial under FIDIC construction contracts? Are the same standards applicable to the members of the dispute board? Do they have an obligation of disclosure? We address these questions in the light of the Hungarian court practice.
The Hungarian data protection authority, the NAIH has imposed the first data protection fine in December 2018 which was based on the infringement of the GDPR. It appears that in relation with the „first cuckoo” the NAIH applied the so called „early bird” discount known as a marketing strategy. Indeed, the fine was not particularly high considering that it should be imposed because of the infringement of data subject rights. Well, let’s see the details of the case.
Changing your supplier is a common situation in business. Can you switch between suppliers without restrictions, if there is no fixed term or exclusive contract? Do you have to purchase from the supplier during the notice period? What are the risks of failing to give purchase orders? In our article, we answer the above questions by analysing the Hungarian judicial practice.
Infringement of the public order is one of the “most popular grounds” of challenging arbitral awards in Hungary. Whether this ground shall be invoked by the parties or it can be considered by the state court from its own motion? What is the standard of review of Hungarian state courts? We summarise the answers in this article.
The ink on the French data protection authority’s decision in the Google-case is not even dry and the German antitrust authority has already imposed sanctions against the other ’giant’ Facebook because of its unlawful data processing activities. I suppose you wonder what is the connection between the data protection and the economic competition? Well, read our short article and you will know the answer.
Just a week before entering into force of the EU – Japan Economic Partnership Agreement, the European Commission decided that Japan shall be considered as a safe country under the GDPR. What does it mean to be safe? Why is it important? In our latest article you can read about the effects of this decision.
It has not been a good start for McDonald’s this year, as in January, the news that the major company has lost its EU trademark protecting BIG MAC spread like wildfire. Since the decision can be subject to an appeal, it would be premature to consider the loss of the trademark as a fact, however, the lesson can already be drawn, which we present in our article along with the details of the case.
What is the standard of review of Hungarian state Courts, when arbitral awards are challenged on the basis of procedural grounds? What are the most frequently invoked procedural faults? We address these question in our article.
During the preparation of the GDPR, it was often pointed out in professional circles that Google and Facebook are the primary targets of the strictest data protection regime of the world. Well, a little more than half a year after the GDPR entered into force, the sword of the French data protection authority has hit Google. Let’s see why the authority awarded the tech-giant with a modest fine of 50 Million Euros?
Which artworks are protected in the European Union by copyright? Due to the constant development of technology and art the answer shall be reconsidered from time-to time. In our article we address this question on the basis of the landmark judgments of the European Court of Justice delivered in the field of copyright.
Can the executive employee undertake a non-competition obligation after the termination of the employment for free? It seems that the Hungarian Supreme Court finds the limits of party autonomy elsewhere than the legislator. We summarise the merits of the judgment in our article.
The Court of Justice of the European Union has ruled in a case, where the main question was whether the taste of a cheese product may be eligible for copyright protection under EU law. We summarize the case and answer the question what constitutes a “work of art” under EU copyright law.
How domestic and international arbitral awards are enforced in Hungary? On what basis can be the enforcement refused? What kind of remedies are available against the “exequatur”? We summarise the answers for these question in this article.
The new law modification in Hungary widely known as „slave law” has become a big issue recently. What will be the yearly overtime limit? 250 hours? 300 hours? 400 hours? Is it possible from now on to organize working weeks with 6 days? We would like to clarify the frequently heard urban legends, so that you can prepare your company to the new regulation.
On 1st January 2019 the Act on the Control of Investments Detrimental to the Interests of Hungarian National Security entered into force. On the basis of the new law investors who are considered as “foreign” have to report their newly acquired interest in Hungarian companies. Pursuant to the Act, the Minister of the Interior may prohibit the acquisition or may withdraw the right of the company to pursue a certain activity. In our article, we summarize the most important information regarding the new law.
What kind of decisions can the arbitral tribunal make in Hungary? Which substantive law is applied? What are the requirements as to the form and content of arbitral awards? What kind of awards may be rendered, and what are the differences between them? We address these issues in this article.
Have you ever experienced that if you deal with a topic excessively you start to see it everywhere? For me, it was clearly the GDPR that filtered into my private life. This gave me the idea to collect the GDPR “fails” of the year that me or my colleagues experienced. Of course, “our GDPR infringers” have not played as big as Facebook and his “little” buddies, but maybe our stories will show you how easy it is to slip on a banana peel when it comes to GDPR compliance.
The Christmas shopping fever began with Black Friday in late November, and not only the buyers are trying to exploit this period of discounts, but also the sellers. During this season the Competition Authority is also curious about the incredible sales and should they find any breach, their “surprise” to the seller will be a fine of ten millions of HUF. During the inspections of recent years, big companies have been caught in the authority's net such as Extreme Digital, Media Markt, Alzo or Lidl. If you are a seller or operate an e-shop, it is as easy to slip into a legal pitfall as slipping on ice. That's why we've collected the most important rules for discounts attracting customers and how to operate a compliant e-shop. Thus, you can avoid paying your end-of-year earnings to the Competition Authority.
On what grounds can arbitrators be challenged and removed in Hungary? What are the main features of the challenge procedure? What is the difference in case of institutional arbitration? What happens if an arbitrator becomes incapable of performing his duties? We address these question in our article.
Who can be arbitrator in Hungary? How and when the arbitral tribunal is constituted, and what happens if one of the parties fails to appoint arbitrator? What are the basic obligations of arbitrators and how does their mandate terminate? We address these questions in this article.
Whether a mobile payment system can be nationalized in an EU member state relying on the doctrine of services of general economic interest? The Luxembourg court this time examined the Hungarian national mobile payment system. We analyze the reasons of the decision in our article.
Do use GPS tracking in your company cars? Do control your employees in home-office by measuring keyboard or mouse activity? You should use these devices with care, because according to the latest guidance of the Hungarian National Authority for Data Protection and Freedom of Information (NAIH) you might need an impact assessment before setting up such system, to be compliant with GDPR.
In which cases does Hungarian law govern an international arbitration agreement? What are the basic requirements of formal and substantive validity of an arbitration agreement under Hungarian law? What are the consequences of a valid arbitration agreement in Hungary? We address these question in this article.
Do you operate an e-shop in Hungary, but you refuse to sell your products to a German customer? By doing so you might be noncompliant with the EU law, more specifically with the Geo-blocking Regulation which prohibits certain forms of discrimination in cross-border sales. In this article we explain you the key elements of the new law which will be applicable from 3rd December 2018.
Our managing partner Richard Schmidt made a joint presentation on the General Data Protection Regulation for French entrepreneurs and directors at the club DEFH, together with Mr.Julien Thomas, IT professional and founder of YourOSoft.
We have arrived at a very important milestone in the history of our Office, and we are glad to inform you that this year we celebrate our 10th Anniversary. Looking back, our Office went through a long improvement until the formation of our present profile: providing legal support in domestic and international commercial law issues.
How the arbitration procedure is started in Hungary? Until which point is it possible to modify the claim and the statement of defence? What are the consequences of the default of the claimant and the respondent? When oral hearing is mandatory? We summarise the answers among others to these question in our present article.
Can the government take your clients by setting up a new state monopoly? What are the boundaries of state intervention into the free market under the European Convention on Human Rights? We address these questions by summarizing the ruling of the Strasbourg Human Rights’ court in the Hungarian schoolbook market case.
Do you operate video cameras for observing employees or customers? Do the cameras make recordings or is it only a live broadcasting? If you think that a warning sticker about CCTV operation solves all the problems related to GDPR, that’s a big mistake. In our newest article we explain one of the decisions of the Data Protection Authority in Hungary.
What are the basic procedural principles of arbitration proceedings in Hungary? To which extent are the parties free to choose procedural rules? What is the applicable law and is there any time limit to deliver the arbitral award? We address among others these question in this article.
On what grounds can arbitral awards be set aside by state courts in Hungary? What is the deadline for starting the setting aside procedure, which court is competent to try the case, and what are the main features of the procedure? We summarise the answers to these questions in this article.
During our GDPR compliance projects I often hear from clients that they copy or scan the identity cards of their employees. It may not be my most thrilling article, but I find it important to clarify once and for all that is a bad practice as it is against the GDPR and the recommendations of the Hungarian Data Protection Authority. Below I shortly explain you why copying ID cards is problematic and what you should do instead.
Has your debtor just gone bankrupt? Has he alienated his assets to a foreign company before that? When can you sue the latter in your home country for concealment of assets to avoid an expensive foreign litigation? In its judgment in the Feniks case the Court of Justice of the European Union, answers the above question, which we summarise in our article.
The new Civil Procedure Code (CPC) entered into force on 1st January 2018, with the aim to accelerate civil and business litigations in Hungary. One of its means is the strong limitation of modification of claims and submitting evidences during the procedure. We summarise the most important provisions in this subject below.
It only spotted some weeks ago that the UK Information Commissioner’s Office (ICO) has issued its first GDPR formal notice. The target was AggregateIQ Data Services, a Canadian company who allegedly processed UK citizens data for political advertising. Read our article to know the details of the case and to find our why I find it particularly interesting.
When we talk about work, employment relationship comes to everyone’s mind first, although you can work for someone’s interest in other ways outside the “9-5”, monthly paid job system, for example by an engagement contract. Whether you are an employer or an employee, you need to know what the differences are between the two most common forms of working, especially because in some cases the employment authority or the court may re-classify the engagement as employment and may impose a significant fine on the principal.
The new Civil Procedure Code (CPC) entered into force on 1st January 2018, has reformed significantly the Hungarian Civil litigation in order to speed up litigations. One of its major novelty is the division of the first instance court procedure into 2 parts, the preparatory phase and the trial phase. We summarise the most important features of these two phases of first instance court procedure below.
The Hungarian Arbitration Act entered into force on 1st January 2018. In this article we summarise its material scope (arbitrability), territorial scope and its other general provisions, like interpretation, the rules of written communications.
You may have heard that British Airways suffered a serious data breach some weeks ago. As they reported the data of 380.000 passengers have been compromised during a 16 days period. The case was widely reflected in media and some press-organs talked about the possibility of a record GDPR fine and class-action against BA. Given that the breach is still under investigation, I do not wish to speculate on the fines but rather summarize how I see British Airways (BA) handled the data breach and what you can learn from it.
If business secrets are mentioned, most people think of big companies and tenders worth millions. Nevertheless, not only big companies are affected by leaks of confidential information, causing serious disturbance and financial loss. If you think this problem cannot affect your business, this article is for you. In our article, we will show you what can be considered as a a business secret, how you can protect this information, and what are your options when the breach has already occurred.
Arbitration in Hungary is governed by different sources of law. In addition to the sources of international and national law, the rules of proceedings of permanent arbitration institutions, and the case law of state courts and arbitration tribunals must be also considered.
I hope that the Hungarian Basketball Association is better at the game than at data protection. Indeed, based on the fresh decision of the Hungarian Data Protection Authority they have serious problems with the latter and their data protection faults have been “awarded” with a fine. Let’s see the mistakes of the Association your company should avoid.
There are many requirements for international road transportation. These usually concern the carrier, but in some cases you also have obligations as a recipient and failure to comply with them may result in a fine. In this article, we tell you how you can avoid the “fine trap” set by the authority, in case your company is waiting for a shipment from outside the EU.
We are no longer keeping it secret: in August, the new law on the protection of business secrets entered into force, which, unlike the fragmented rules that have been applied so far, will protect business secrets and know-how in Hungary more uniformly and effectively. We summarize the most important aspects of the new law in our article.
For a long period, it was very comfortable in cross-border litigations that in most cases translation was necessary the Hungarian state advanced such costs, or even provided translation entirely for free. However, this possibility came to an end with the new civil procedure act. If you plan to start a cross-border litigation, or need translation in a Hungarian litigation for any reason, better to prepare for extra costs from now on.
The new Hungarian Arbitration Act, effective from 1st January 2018 introduced important changes in relation with commercial arbitration in Hungary. Whether the new law will change the former restrictive case law regarding the effect of insolvency to arbitration proceedings? We address this question in our latest article.
The Devil is always in the details. The truth of the old adage is proven by the new bill adopted by the Hungarian Parliament during the hot summer sessions of July 2018. The new law amending the Bankruptcy Act modifies only one section of the liquidation procedure, but it will further erode the already low paying moral in Hungary, giving more months of grace to non-paying debtors.
Are you under the scope of GDPR if you collect personal data only in paper format? Are you data controller if it is not you who determine for your business partner what kind of personal data should be collected, and you do not even have access to data? You can get the answers from our article which summarizes the EU Court’s judgement in the case of the Jehovah’s Witnesses Community.
The New Arbitration Act, entered into force on 1st January 2018 has introduced major changes in the field of interim measures in arbitration proceedings in Hungary, rarely used in practice. Whether these changes will make interim measures more popular in arbitration proceedings in the future?
Besides having a website, vast majority of businesses have company pages on the social networks like Facebook, Linkedin, etc. Do you become a data controller, being primarily responsible for data processing, if you get “only” statistical information of your visitors? The Court of Justice of the European Union addressed this question in its recent ruling.
In the last months preceding the entering into force of GDPR, the market was inundated with various service providers promising data protection compliance: data protection experts, counsels, IT experts, etc. Besides these providers, lawyers and law firms, experienced in the field of data protection also provide GDPR compliance services. We summarize the reason why you should involve them in your GDPR compliance project.
Do you need re-confirmation of client consent already given in each case because of the GDPR? Before sending thousands of e-mails to clients in your database to obtain their consent again, read our article to avoid throwing the baby out with the bath water!
In the recent past the Hungarian Data Protection Authority imposed a fine of 2 Million Hungarian Forints against Telekom, a major Hungarian telecommunication company, because of his unlawful direct marketing activity. Although the decision has been made before the entering into force of the GDPR, it is worth to examine the mistakes of Telekom. Indeed, the fine would have been much higher if it was imposed after the GDPR.
Businesses come, businesses go, and there are times when you reach a point when you decide it is better to finish your business in Hungary. Similar to creating a company, closing a company is also a legal procedure at the court of registration. You will need professional help in this issue: a lawyer and an accountant. Let’s see how it goes.
Some GDPR myths make you see a problem where you should not, or what is even worse, they prevent you from detecting a problem when you should. To have a successful GDPR compliance project, you should avoid both above faults. To help you, we debunk the 5 GDPR myths that we faced the most often during our compliance projects.
Can illegal recordings be used at court as evidence? What is more important: the protection of a voice recording, as a personal data, or the professional decision of a court case, in which the illegal recording is used as evidence? These questions were addressed in the Hungarian Supreme Court’s latest ruling.
How often did the Hungarian Data Protection Authority impose penalties in the last five years? What was the average amount of penalties? Will be there any change after 25th May 2018, when the GDPR comes into force? We addressed these questions in our presentation made at BELGABIZ.
Can the raw material supplier be liable for defects, if the specification is incomplete, but he knows what the end-product is? Who has to prove this under the Vienna Convention on the International sale of goods? These questions were decided by the Hungarian Supreme Court in the case of our Italian client, against a Hungarian company.
If data leakage, data theft or other breach happens at your company and it is likely to result in a risk to the data subjects’ rights, you have to report it to the supervisory authority. If this risk is likely to be high you shall as well inform the affected persons. In this article we mention 5 things that you need to consider when you decide about whether you should notify the authority or the data subjects.
Auchan Hungary started this year with a HUF 15 Million data breach fine for operating CCTV at workplace in breach of data protection principles. Given that CCTV lies in the heart of GDPR entering into force in May 2018, it is worth to learn from the Auchan case so that you can avoid a similar penalty in Hungary.
You may think that a data breach incident can only be a consequence of a cybercriminal attack like malware or ransomware. However, among particular circumstances a simple human error, like losing a company laptop can be considered as a data breach. In this short article we explain you what exactly a data breach is and how to handle such an unwanted situation to be GDPR proof.
Can the employer open files on employee’s company notebook in a folder entitled “personal data”? Can the employer fire the employee if he founds a ton of sexual content? These were the key questions in the case Libert vs. France in front of The European Court of Human Rights. Read our article in which we summarise the judgment.
Last week during a GDPR related meeting with one of our clients, he told us: honestly, I have the feeling that this GDPR project is all about paperwork. Although it is not entirely true, we totally agree with our client that a huge part of the compliance project is drafting and adopting several documents. In this article we summarized the 5 basic types of documents that you must have in order to achieve GDPR-compliance.
Almost 4 years after the deletion of usufructs on agricultural lands of foreign investors in Hungary, the European Court of Justice ruled that the Hungarian Land Act breaches the free movement of capital. What are the reasons of the judgment? What can do those who suffered damage, but has not yet started litigation? We summarize the judgment and its consequences.
The Hungarian customer protection authority has announced that e-shops will continue to be the primarily target of their inspections. Indeed, the experiences this year showed that 88% of the e-shops inspected infringed the mandatory consumer protection rules in Hungary. In this short article we summarize what are the most frequent infringements and what are their consequences.
Do you operate a small e-shop and think that GDPR and data protection concerns only giants like Amazon? Let’s just face it: you could not be more wrong. Think of the mere fact that your customers are private persons and you process at least their name, e-mail address and address. Before totally panicking from the realisation that GDPR applies to your e-shop, too, take a deep breath and read our 5 tips how your e-shop can be GDPR-compliant.
The above question emerged in front of the Curia (Hungarian Supreme Court) in a case where the basic issue was whether the Hungarian freight forwarder shall check the shipment taken over from the Chinese seller at loading, and if he is liable for the damage sustained by the buyer because there was a different product in the closed container.
Many companies have recognized the advantages of using CCTV, however, there may be many questions arising related to their usage: Do you have to apply the same rules to your employees and to your customers? Whom do you have to ask permission? How should you provide information? Where should you put your warning? We will give you answers to these questions in this article.
When, why and how can you start liquidation procedure against your non-paying customer in Hungary? How long can you register your claim? What are the chances that you get your money in liquidation? We summarized the 6 must-knows of liquidation procedures in Hungary in this article.
In legal texts you can see different terms referring to a company’s address: seat, place of business, premises, branch office, etc. Usually it is very hard to make differences from the context, and some of them seem to mean the same, because the most of the texts don’t tell you a definition. We will. Let’s see, what these words actually mean in Hungary.
Data protection authorities can impose administrative fines up to 20 Million Euro based on the EU GDPR. But what affects the actual amount that you have to pay in case of infringement? And how can you minimize the risk of an astronomic penalty? We gathered some hints in our latest article.
This was the basic question in a lawsuit in Austria filed by a private person against the social media giant. In this short article we explain the decision of the European Court which was published these days.
The new Hungarian Arbitration Act, entered into force on 1st January 2018 has reshaped the institutional landscape of Hungarian arbitration, and introduced some noteworthy changes in arbitral proceedings in order to increase the international competitiveness of Hungarian arbitration. We sum up the most important changes in this article.
From 2018 the small claim collection rules are changing in Hungary, and foreign creditors must comply with residency conditions so that they can start payment warrant procedure. At the same time, businesses do not have to waste time before starting litigation. Read our summary to know more on this topic!
When it comes to the sanctions under the EU General Data Protection Regulation, everybody speaks about the astronomic penalties up to 10-20 Million Euros, however, it is only one of the 10 corrective measures of the data protection authority. And in some case complying with non-financial corrective measures can be much more painful than simply paying penalty. So, we present the 9 non-financial corrective measures in this article.
Unlike the Hungarian Constitutional Court, who thinks not paying interest for money blocked on security deposit during a 10 years’ litigation is fine, the judges of the European Court of Human Rights seem to be closer to the business world, based on their recent ruling against Hungary. If you want to know how they calculate interest and compensation, do not miss our latest update!
From 2018, the threshold of the mandatory small claims regime is increased to HUF 3 Million in Hungary. In addition, foreign creditors must meet further residency conditions to start this cost-effective on-line debt collection method. But what to do if you do not meet these conditions? Read our latest article for the answer!
My Colleague Anita is dealing with data protection issues for a longer period of time and in December 2017 she has became a data protection officer. Now I am asking Anita about her experiences she has acquired during the course.
The European Court of Human Rights (ECHR) established in his fresh decision that the camera surveillance of lecture halls violated the professors’ right to privacy. Let’s see the details of the case and the findings of the Court.
The European Court of Human Rights usually condemns Hungary because of too slow legal proceedings, breaching the fair trial principle as human right. However, the latest judgment of the Court, condemning Hungary was delivered because of a too fast judicial decision.
Should you have employee permission for CCTV record at workplace? How to be compliant with data protection laws regarding video surveillance? What are the cases when the strict data protection rules do not apply? In this article we examine these questions on the basis of the EU Data Protection Regulation (GDPR).
On 1st January 2018 a new Civil Procedure Code enters into force in Hungary with the principal aim to speed up civil & business litigations, through divided litigation structure and important restrictions for the litigants. In this short article we collected the 5 most important changes which will affect you if you start a litigation in Hungary from 2018.
Just 10 years ago, the Hungarian registration tax case was brought before the European Court of Justice, where the national tax on second-hand cars imported from abroad has failed in Luxembourg. Hungary has no luck with taxes on foreign cars because in its recent judgement the EU Court has found that the Hungarian car tax also breaches EU law. The judgment will make happy rather international forwarding companies than Hungarian motorists, because the decision only applies to vehicles registered abroad, and passing through Hungary.
Our regular readers know that the clock is ticking, the General Data Protection Regulation will the part of our daily lives within 6 months. Despite this fact, the Hungarian SME sector seems quite unprepared for the changes. That is why we have decided to organize a small “conference” for our clients to raise their awareness on the GDPR and the necessary steps to be prepared.
It is hard to find anyone not using cloud services these days, but you might not think about the issues arising due to the storage of data in the cloud. If you want to choose the proper cloud service provider and avoid the huge fines of the European General Data Protection Regulation (GDPR), read this article, in which we gathered the key legal considerations before jumping into a cloud contract.
Online shopping is more and more trendy. While it is a very good opportunity, it has more risks for consumers than traditional retail shopping. For example, you cannot see the product in reality, so what if the shirt you ordered for your father as a Christmas present does not fit? The European Union recognized the risks of online shopping and adopted several consumer protection rules. In this short article I collected 5 issues you must include in your terms&conditions if you operate an E-shop in Hungary. Please note that these rules only apply if your buyer is a consumer (a natural person who is not acting for business purposes).
Online shopping is more and more popular among customers for certain reasons: it is more convenient and often cheaper than traditional shopping. Online shopping is not only an attractive alternative for the shoppers but for the traders, too. By opening an online shop, you can remove the need for expensive retail premises and customer-facing staff. Another huge advantage is that you can expand your market beyond local customers very quickly. Here are 4 things that you need to clarify if you decided to open an online shop in Hungary.
The Hungarian Data Protection Authority just published his decision about the unlawful data processing activities of the Church of Scientology Hungary. The Authority imposed the maximum level fine of 20Million Forints against the Church, taking into account the huge number of the persons concerned and the gravity of the infringements. Luckily for the Church, the decision was not based on the GDPR, otherwise the fine would not be 20 Million Forints but 20 Million Euros. Nevertheless, the mistakes of the Church would also infringe the GDPR, thus it is worth to mention and learn from them.
The D-Day of entering into force of the European General Data Protection Regulation (GDPR), 28th May 2018, is getting closer but the vast majority of Hungarian Small and Medium Sized enterprises is yet unprepared for the changes. For this reason, it was a perfect timing to organize a seminar by the Belgian Business Club in Hungary, where our managing partner Richard Schmidt was invited as a guest-speaker.
We are members of International Law Firms (ILF) a worldwide network of small & medium sized law forms around the world, with around 70 members from 50 jurisdictions. The goal of ILF is improving client service in cross border business legal issues. Every year there are annual and regional conferences where we can share our experiences, meet new people, new viewpoints, and make our community better.
In his fresh article the Guardian reported that a Japanese lady logged 159 hours of overtime in one month which lead to her death. In Japan this is not an isolated case, they even have a word for the death from overwork called ‘karoshi’. Of course, this is an extreme situation and European work culture is different. Nevertheless, it is worth to read the 4 must-knows about the legal conditions of overtime work in Hungary.
Nowadays we cannot imagine a workplace without Internet and e-mailing. Besides the countless benefits of these tools, the use of digital technology also carries significant risks for employers. Given that the Hungarian labour law is left behind by the faster-than-light developing new digital word, employers have to keep the pace in order to avoid future labour disputes. In this short article we tell you the five most important reasons why your company should have an Internet and E-mail policy.
In a very fresh judgement, the Strasbourg Court of Human Rights ruled that employers can monitor their employees’ messages only within certain limits. This judgement gave me the idea to collect 5 areas of the employment relationship where personal data of employees may be collected and processed and thus the principles of the GDPR such as lawfulness or purpose limitation should be taken into account.
An unsigned contract can cause serious problems, if any of the parties dispute its content later by ‘cherry picking’ contract terms. Nowadays, when the vast majority of commercial contracts is negotiated via e-mails, and parties often forget to sign hard copies, the risk is higher than in the good old times. Fortunately, the recent ruling of the Supreme Court in one of our clients’ case gives clear guidance in this issue.
My colleague, Viktória achieved great success in claiming compensation for air travelers whose flight was cancelled or delayed. As a frequent air passenger, it is worth to now your rights in relation with these unpleasant experiences. I am asking Viktória how and under what conditions you can get compensated.
The transfer of business shares in Hungarian Limited Liability Companies is an under-regulated domain of Hungarian company law, however there are some “opt-out” and “opt-in” restrictions that shareholders should bear in mind if they want to set up a working shareholders’ structure. We summarise the must-knows of this topic in this article.
Purchasing a property in Hungary can turn into a nightmare if you become aware after takeover that your apartment suffers from hidden defects. What can you do if you become aware of these defects only years after takeover? What kind of rights do you have and how long can you enforce those rights against the seller in Hungary? We will address these issues in the present article.
In Hungary, executives are a special group among the employees with a special labour-law regime. In this article we summarise the must-knows before hiring an executive officer under the Hungarian labour law regime as an employee.
Many are already familiar with the so called client gate and use it on a daily basis, it may be new that now the companies are required to register their own “gates” called company gate. The registration portal is already available and companies are obliged to make the registration until 30th August 2017. However, a grace period until the end of this year is provided and until this date companies can live a gate-free life. After 1st January 2018 those companies who have not entered the gate can expect sanctions. In this short article, we tell you what exactly is the company gate and how you can make the registration.
Global businesses belongs to our everyday life. We enjoy the advantages of our modern world, however, we must never forget its dangers. In this article we draw your attention to those basic points we suggest to check before doing business with a Hungarian company, to avoid losing money. Some of them may seem evident, however, our advices are based on real cases.
As we mentioned in our earlier article the General Data Protection Regulation (GDPR) will apply from May 2018 in the EU. That means that you have about 1 year to make your business compliant with the new rules. Otherwise your company faces fines up to 20 Million Euro, not to mention the reputational loss a data breach can cause. A compliance project is always difficult to start. Thus, we would like to make it easier for you by collecting the 5 most important topics that you need to understand and clarify at the beginning of your compliance project.
In a fast-changing legal environment like Hungary, you should always check whether your legal situation has been changed by reason of a new legislation, because courts tend to decide based on current legal environment if nobody invokes the principle of prohibition of retroactive justice.
Our followers may know that our Law Firm is the Hungarian member of the International Law Firms (ILF) which is a worldwide association of independent small and mid-sized law firms. This year, the regional conference of the ILF was held in the beautiful city of Vienna. Our Austrian Colleagues organized a professional conference where more than 25 members represented themselves.
I bet you know the situation when your employee calls in sick but you suspect that he is not actually ill. You are between a rock and a hard place. If you are not sympathetic with a truly ill employee, you will be the worst boss ever. But if you do not take actions against the employee who is not truly ill, workplace productivity and employee morale may suffer. Here is what you can and cannot do with sick-leave abusers in Hungary.
Doing business also means a lot of paper work. When signing company document in Hungary, it is important that the signature should not have any fault, because it may result in an invalid document, and can cause a loss of time and money. To avoid wasting time and money for administrative mistakes, read the must-knows we gathered in this article.
If you want to use an apartment or flat as a seat of your company in Hungary you have more options, but be aware: the authority regularly checks the legal basis of the use of the company’s seat. At the same time, the careful planning of the use of company seat may help you to optimize your tax, so let’s see what kind of legal opportunities you have when you want to legally use your company seat.
Recently, more and more clients complain about employees who are resigning orally or without giving the necessary notice period. Unlawful resignation causes uncertainties, inconvenience or in the worst case, serious damages to the employer. In this short article, we collected the four must-knows about unlawful employee resignation in Hungary.
Creating a company in Hungary became very convenient and fast nowadays. However, there are some extra requirements for foreigners that can make this simple procedure longer and problematic, especially in the field of official documents issued and/or signed abroad. To avoid unpleasant surprises, we tell you the four most important thing you need to keep in mind as a foreigner when setting up your company in Hungary.
When planning to establish a company in Hungary, the corporate name is always a crucial question. We know that it is hard to come up with a good idea that fits your style and the goal of the organization. Yet, all that effort is just a waste of time, if the name does not comply with the requirements of Hungarian law. So we share the most important points to keep in mind when thinking about a company name.
As a foreign company who plans to do business in Hungary, it sounds a great idea to open a Hungarian branch office. The main reason for this is that you do not need to provide the minimum capital contribution. Even if at first glance, opening a branch office seems simpler and cheaper than founding a Hungarian LLC as subsidiary, yet there are strong reasons to do the latter. In these article we share with you these considerations.
Many believe that as a shareholder of a limited-liability company they will not be liable for the debts of the company with their own assets. In most cases this is true, yet there are situations, when the rule of limited liability shall not prevail and the shareholder of the LLC will be directly and unlimitedly liable for the company’s debts. In this short article we summarize the most important cases when the limited liability becomes unlimited.
I can imagine that when you hear the words data protection, you may not really be excited. What is worse you may skip to read this article. You probably think that when running your business, you have much bigger problems than data protection compliance. Still, I encourage you to give it 5 minutes and read through this short summary about the 5 most important impacts of the Data Protection Regulation (GDPR) on your business. The GDPR will only enter into force in May 2018 so this is the perfect time to familiarize yourself with the new rules.
Learn from others' mistake by reading the summary of a very fresh decision of the Supreme Court about an ordinary dismissal.
As the fresh members of the Belgian Business Club in Hungary we had the opportunity to introduce ourselves in the framework of a presentation.
Internet banking is part of our daily life, and sometimes it happens that you send money to the wrong person because of various reasons, such as mistyped bank account number or other error. If the wrong payment is done, it is good to know, how to find the “lucky guy” who possesses your money, and how to claim it back from him. In this article we shed light on this issue by showing that mistaken payment is not lost money.
What is enough basis for a Hungarian judge to issue a freezing injunction? Is the preliminary hearing of the parties obligatory before issuing the court order? What are the costs and time frame of the procedure?
Under special conditions, the shareholder of a terminated LLC will be directly and unlimitedly liable for the company’s debts. You might think that your debt recovery problem is then solved: if the debtor company is terminated, you will sue the shareholder. However, the devil is always in the details and certain conditions must be met in order to turn successfully against the shareholder. In this short article we tell you 4 things that you need to know if you decide to sue the shareholder of a terminated LLC in Hungary.
What kind of freezing injunctions can be sought in Hungarian business litigations, and what are their effects to the defendant?
Nothing is worse than a won court battle, if during litigation the defendant had time to dissipate its assets. To prevent this in a Hungarian business litigation, you can seek a freezing injunction, and your defendant cannot frustrate the judgment when it comes to enforcement. If you want to know the details read further this article, which is the first part of a three-part article series in this matter.
Imagine the situation that you have a non-prospering company without perspectives. The mass of non-paid invoices is just bigger and your company cannot pay taxes. In this case the best option just to shut down the company and say goodbye to Hungary thinking that you are not liable for your company’s debts. However, the situation is not so simple, and leaving just the company behind may be risky. In this short summary we summarise the legal aspects of company shutdown which is worth to read before the “close-shop”.
Works councils are often considered as meaningless bodies, although they could be a tool of harmonic cooperation at workplaces. Since the Hungarian Labour Code requires electing workers' representative at companies having 15+ employees and a works council in case of 50+ employees, it is worth to know their function, and the benefits & protection afforded to their members, to avoid unpleasant surprises as employer.
A minority shareholder often finds it hard to protect his interest without real decision-making power in the shareholders’ meeting. At the same time Hungarian company law offers a wide range of protective measures that every minority shareholder should know inside and out, in order to effectively safeguard its investment. We summarise these legal tools in this article.
If you would like to fire an employee, but the conduct of the employee does not exceed a certain the limit that justifies extraordinary termination, the only way under Hungarian Labour law to dismiss him is the ordinary termination. Given that a wrongful termination can have serious financial effects, it is worth to summarise the 5 must-knows for an employer in relation with ordinary dismissals, including the case law of Hungarian Labour courts.
Although, liquidation is one of the most powerful debt collection tools in Hungary for recovering solid claims, creditors often make mistakes that give rise to unfavourable court decision, declining liquidation request and directing the claim towards ordinary courts. Given that this means loss of valuable time, we gathered those common mistakes that you should avoid by any means.
Hungarian Labour Law confers on employees the right for free time, even during working hours. Even if the employer is not obliged to give a “smoke-break”, special regime applies to employees working in front of computers, as well as to employees with special needs like diabetes, pregnancy, etc. We summarise the key-points of this topic in this article.
There is no worse feeling after a won court case than realizing that your debtor is not going to pay, because it has no assets at all or, even worse, it has been already deleted from the company register. In this short article we provide you with 5 tips to avoid writing-off uncollectible debts in Hungary.
In most jurisdictions starting liquidation or bankruptcy against a non-paying debtor might be the very last step after having exhausted all other less threatening debt recovery methods. Although the result of the liquidation is the total financial destruction of debtor, this is a very popular debt recovery tool in Hungary for those creditors who have solid claim and would like get their money fast. We summarise details in this article.
The transfer of business shares in Hungarian Limited Liability Companies is an under-regulated domain of Hungarian company law, however there are some “opt-out” and “opt-in” restrictions that shareholders should bear in mind if they want to set up a working shareholders’ structure. We summarise the must-knows of this topic in this article.
Introduction of a new contract template - In strong cooperation with our Client our Law Firm developed a new supply contract template which will be used by our Client for domestic supplies. Our goal was to draft a contract which is easy to use but gives a wide range of legal protection to our Client’s business.
After having found the perfect location for your business you might think that all you need to do is to move in and start. However, before moving in the leased property, there is an important part of the process: negotiating the conditions of the lease. In this short article we share five tips with you in order to sign a favourable lease as tenant in Hungary.
One of the largest business risk is an employee who leaves the company with the information and know how acquired during his employment. Business owners should think about protecting their business in advance, before it is too late. We summarize the key points of non-compete clauses under Hungarian law in this résumé.
Based on recent surveys among employers, empathy, compromising skills and flexibility are the main advantages of hiring female employees, while pregnancy and child-related parental leave cause the vast majority of labour issues in Hungary. Since expectant female workers and mothers enjoy special protection under the Hungarian Labour Code we sum up the must-knows for employers in this domain.
Our law firm is the member of an international law firm association called International Law Firms (ILF). The goal of this organization is to improve the service of independent smaller and mid-sized law firms serving their clients’ needs in cross border business legal issues. Every year there are annual and regional conferences where we can share our experiences, meet new people, new viewpoints, and make our community better.
Wage costs represent significant part of the corporate expenditures. While employers are interested in decreasing these amounts, it is hardly reconcilable with employees’ interests to achieve higher salary. Given that salary is one of the most important motivating force, besides complying with the Labour Code, employers should avoid demotivating their workforce. In this short summary we gathered 5 tips how you can reduce your company’s labour costs without demotivating your employees and violating the Labour Code.
Having a registered trademark in Hungary is essential if you want to differentiate your product or service from your competitors and protect your local market. If you are before Hungarian market entry, forming a Hungarian Limited Liability Company, who will be the owner of the trademark, makes this protection even more effective. In this article we summarise what can be registered as trademark, how the registration goes, and what are the benefits of a registered trademark.
The worst nightmare of every creditor after a successful litigation is to find out that the debt cannot be recovered, because the debtor has no assets. However it might be that the case is not lost: in case that the court establishes that the contract is fraudulent, it has no legal effect in respect of the creditor. In our short summary, we address the question, when the contract shall be regarded us fraudulent under Hungarian case-law.
Wrongful termination of an employment contract is the most common trigger for lawsuits arising out of labour relationships. The following guide summarizes the most important rules of firing an employee in Hungary in order to help you to reduce your company’s exposure for unlawful firings and lower the risks of a costly labour litigation.
Your worst nightmare as logistic provider in Hungary is a situation when your carrier blocks or sells the shipment due to an unpaid invoice. This is even worse if the invoice in question is unfounded but you decide to pay it to prevent further problems as dissatisfied customers, and the like. To avoid this situation, you have to know the 5 most important tips for subcontractor claim handling under Hungarian law, that we gathered in this article.
One of the simplest ways to communicate basic yet important information and policies to employees is through the employee handbook. While a well-written employee handbook serves to proactively confirm company policies and it can be also a litigation prevention tool, not too many employers have one. In this short article we tell you what exactly an employee handbook is, why you should have one and some tips about what to include in your employee handbook.
In this short summary we tell the 5 must–know tips that a creditor should bear in mind before starting collecting debt in Hungary. There are different legal ways available, and by answering these questions you will be able to find the legal way that best matches your interests.
Arbitration is more and more popular way of settling business disputes worldwide, and in the past few years Hungary follows the same trend. In this article we summarize the pros and cons of arbitration in Hungary as compared to the litigation before state courts.
In the first part of this article we shared some useful information about civil and commercial litigation in Hungary, such as how to find the competent courts, what are the main costs of litigation and what are the types of evidences in the procedure. In this part we sum up what kind of judicial remedies are available in Hungary if the decision of the court is not favourable. Besides presenting the situations in which the remedies are available, we summarise the costs and deadline for lodging these complaints.
In this article we summarize the key-points of the limited liability company (LLC) formation in Hungary according to New Hungarian Civil Code. By presenting the main features of the Hungarian LLC, we show why it is the favourite company form among foreign investors, and after we outline the most important steps and costs of the company formation procedure.
In the world of globalization interconnection agreements between telecommunication operators have growing importance. Efficient interconnection is not only important for customers, but also to enable activities like electronic banking, e-commerce or mobile roaming. If you decided to enter into an interconnection agreement with a Hungarian operator, this short article may be a useful guideline for you.
International Law Firms (ILF) is an association of independent smaller and mid-sized law firms from all around the world. This organization gives the opportunity to lawyers to build international connections, know other countries’ legal system and culture, thus provide services for international clients more effectively.
Becoming an authorised economic operator (AEO) in the European Union is an outstanding opportunity for international traders to make their import - export administration faster, more convenient and to reduce the custom clearance related costs. We present the main features of AEO status by answering the most frequently asked questions about this topic.
Civil or commercial disputes often arise, and when they cannot be resolved through negotiation they turn into litigation before courts. In this article we share some useful information about civil and business litigation in Hungary.
In this short summary we sum up the 7 most important things that an employer needs to know before hiring an employee in Hungary.
Finding the most appropriate company form is essential for every business. Hungarian company law offers a wide range of company forms available for foreign entrepreneurs and investors. We prepared this summary to help you to find the form that mostly fits your business goals.