Blog » LITIGATION IN HUNGARY AT FIRST INSTANCE – PREPARATORY AND TRIAL PHASE
LITIGATION IN HUNGARY AT FIRST INSTANCE – PREPARATORY AND TRIAL PHASE
05 October 2018
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 2 parts of the first instance court procedure
Hungarian courts faced with high case load in last years, which lengthened the average civil procedure. The most important objective of the CPC is to accelerate the civil litigation, and to this end the legislator has divided the first instance procedure into 2 parts,
- the preparatory phase and
- the trial phase.
In the preparatory phase, the court identifies the frameworks of the legal dispute, while in the trial phase the court conducts the evidentiary procedure, and at the end, it delivers the judgment. In each phase the law provides strict deadlines for the parties.
The litigation is started by the claimant by sending the claim letter to the court.
The claim letter shall contain i) the determined claim of the claimant; ii) the identification of the right exercised, by way of indicating its legal basis; iii) the statement of facts underlying the claim and the right exercised; iv) the legal reasoning regarding the connection between the right exercised, the claim and the statement of facts; and v) the evidences or motion for evidences regarding the statement of fact.
The court examines the claim letter, whether it has jurisdiction, competence to hear the dispute, and checks whether the claim letter complies with the CPC, and if needed, it sends back to the claimant for clarification. In practice, it takes cca 1-3 months.
Statement of defence
After that the court sends the claim letter to the defendant, who has 45 days to draft his statement of defence. This deadline may be extended upon request of the defendant by 45 days.
The statement of defence shall contain a) the formal defence (reasons for terminating the procedure, e.g. lack of jurisdiction) and b) substantive defence, covering all objections based on substantive law, including i) disputing the statement of facts, ii) the evidences and motions for evidences; iii) disputing the legal reasoning in relation with the claim, its legal basis and the underlying facts; iv) the facts, the evidences underlying the defence and the motions for evidences.
Further written preparation
After the court receives the statement of defence, it i) either orders further written preparation or ii) it schedules a preparatory hearing.
In case further written preparation is decided, the claimant shall submit its answer in relation with the statement of defence and the defendant can also submit counter-answer within a deadline precised by the judge.
The preparatory hearing is very important milestone of the litigation, since it is held with the purpose to define the legal frameworks of the dispute and to identify the facts to be proved in the trial phase.
The parties have to receive the court order summoning them to the preparatory hearing at least 15 days before the scheduled day of the hearing. Each party shall ensure that it is represented properly during a hearing, not only by a lawyer, but by a person (e.g. a managing director), who has the necessary knowledge of the facts, to make the necessary declarations and observations to the other parties’ declarations.
The proper legal representation at the preparatory hearing is crucial, because in case the party or its lawyer is not present, there is a presumption that he does not contend the statements of fact or statement of law of the other party, made during the preparatory hearing.
In addition to the participation of the lawyer at the preparatory hearing, the personal participation of the competent party representative is also crucial, because the party has to make its fact statements, and react to the other party’s statement of facts during the preparatory hearing. The judge adjourns the preparatory hearing only under exceptional circumstances.
The preparatory phase is closed by the judge with a so-called closing order.
This is a very important milestone of the first instance procedure, because after the closing order is made, the modification of claim and counterclaim, the statement of defence, and the submission of new evidences or motions for evidences is very limited.
After delivering the closing order, the judge opens the second phase of the litigation, which is the so-called “trial phase”, by scheduling the day of the next court hearing.
In the trial phase the court conducts the evidentiary procedure, within the framework defined during the preparatory phase, and decides the case.
In the framework of the evidentiary procedure the following main events may take place
- the parties are personally heard by the judge
- the witnesses are heard by the judge
- the experts are appointed and heard by the judge
- the judge conducts local survey (rare in practice)
In case the judge considers that the case is mature for rendering a decision, it closes the trial phase and delivers the first instance judgment.
The judge has two opportunities to announce the judgment.
The judge can announce the judgment right after closing the trial phase, on the same day. In this case the judge announces the judgment orally, in the presence of the parties, and sends the written judgment to the parties within 1-month.
The judge can also adjourn the last court hearing and schedule a next hearing within 30 days for announcing the judgment. In this case the judge has to take over the witten judgment to the parties’ representatives on the next hearing.
The time limit for submitting an appeal against the judgment runs from the day when the parties’ representatives received the written judgment.
By dividing the first instance court procedure into two parts, the CPC has made a major step towards speeding up litigations in Hungary. The clear distinction between the objectives and the subject-matter of the preparatory phase and the trial phase will hopefully serve the acceleration of the civil litigations in Hungary.
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