MOLNÁR ÉS ERDEI ÜGYVÉDI IRODA: Hungary: On the Way to the Precedent System? – Reform of the Court Procedures01/14/2021


Hungary: On the Way to the Precedent System? – Reform of the Court Procedures


On 1 April 2020 an amendment to Act CLXI of 2011 on the organisation and administration of the judicature (the “Judicature Act”) entered into force calmly in Hungary. This new piece of legislation, enacted by the Hungarian Parliament in December 2019, did not make too much noise in the legal public, although it should be considered as a very important milestone in the legal history of Hungary: by introducing a so-called “limited precedent system” it reforms profoundly the role of judge-made law.

In Hungarian law, similarly to other civil law systems, the primary source of law is statutory legislation. It means that when making its decision on a specific case, the judge places the situation before him under the statute’s abstract legal norm. Consequently, particular cases are resolved by referring to general rules. Although their starting point is the same (i.e. to make the same decision in similar cases), in the common law systems earlier judicial decisions serve for the judge as authorities to follow and only if there is no such controlling authority – as the current case differs from the earlier cases – the judge becomes free to “find” the law to be applied.

Evidently, none of the above solutions exists in a “chemically clean” form. For example case law plays a significant role in both the French and German judicial practice. On the other hand, you may find important statutes in English law, while in the United States the so-called “Restatements” function as authoritative codifications of the law.

Instead of dividing the legal systems into two strictly separated groups, it is more adequate to place them on an imaginary scale, with one endpoint being the purely statute-based, while the other being the pure precedent-based jurisprudence. By the recent reform Hungarian law moved on this scale to the direction of this latter endpoint.

It is to be noted that the reliance on judge-made customary law is not unprecedented in the Hungarian legal tradition. Until the mid-20th century, the Hungarian Royal Curia, the then supreme court in Hungary, had some limited legislative powers, as it could give some directions to this case law. The entry into force of the Civil Code in 1960 changed this situation and at that time statute became the primary source of Hungarian court decisions in civil law matters.

Evidently, it increases legal certainty if the application of law by the courts is uniform and so the outcome of the dispute is predictable. On the other hand, the judicial independence has an important constitutional value. There is a need to maintain the delicate balance between the freedom of the judge acting in a particular case and the demand of a nation-wide uniform jurisprudence. In Hungary this is the task of the Curia[1]. The introduction of decisions with precedent value basically changes this task. The importance of the reform may be the best way demonstrated by presenting the tools of the Curia before and after 1 April 2020.

The Situation Before the Introduction of the Limited Precedent System
Before 1 April 2020 judge-made law was not formally recognized in the Hungarian legal system, since upper court decisions were not listed by the Fundamental Law of Hungary[2] among the sources of law - although courts were prepossessed to make reference to the decisions of the Supreme Court (the Curia) in the motivation of their judgments. The Fundamental Law considered the ensuring of the unity of jurisprudence as task of the Curia[3], rather than the law-making and for this purpose the following tools were provided to the Hungarian highest court:
  • The Curia could issue so-called “Unity Decisions” (jogegységi határozatok) which were mandatory for lower courts and therefore functioned as quasi-statutes. The Curia did not use this heavy tool very often, the yearly average number of unity decisions remained under ten in each branch of law.
  • From time to time the Curia published its most important case decisions which were considered either affecting a wider range of the society or outstanding from the point of view of public interest. These “selected decisions” (válogatott döntések) were not mandatory, only “strongly recommended”, but lower courts in most cases adjusted their judgments to them. From 2012 decisions of some lower courts had also been published among the selected decisions if their importance required so.
  • The opinions of the different departments (“colleges”) of the Curia (kollégiumi vélemények) were to give directions in abstract legal issues and were not connected to individual cases. These opinions were not mandatory either, but were in practice followed by the lower courts.
  • In 2011 the summary opinions of case law analysis groups (joggyakorlat-elemző csoportok összefoglaló véleményei) was added to the list of tools. The main task of these groups was to analyze the jurisprudence relating to a specific legal institution. The summary opinions were discussed and then published by the concerned college of the Curia. These opinions also had some impact on the decision-making of the courts.
One may conclude that in practice judge-made law was already part of the system even before April 2020, as a sort of “secondary” law which filled with content the general statutory provisions and also filled the gaps of law. It may also be noted that most of the Curia’s tools were of administrative nature and of abstract direction rather than decisions in specific cases. This practice of issuing general directives by the upper courts was many times criticized by the Venice Commission in case of other countries. In addition, as Hungarian courts were in principle bound only by statute, the judges could any time disregard arguments based on earlier similar cases without any explanation if they did not agree or by saying that the facts of the case were different which created a higher level of uncertainty.

Main Elements of the Reform

The fundamental idea behind the judicial reform is that the Curia should perform its task to ensure the legal-unity by way of using its own decisions in specific cases rather than in the frame of administrative activities.

In line with this goal the role of the Curia was changed as of 1 April 2020 as follows:

  • It remained possible to issue unity decisions and college opinions and the legal nature and the binding force of these tools was not changed.
  • The distinction between important and ordinary case decisions was abolished and a so-called „limited precedent system” was introduced pursuant to which all published decisions of the Curia would be mandatory to the lower courts.
  • A new type of legal remedy, the so-called legal-unity complaint (jogegységi panasz) was introduced.

These two new elements are further discussed in this Article.

The Limited Precedent System

The introduction of the limited precedent system requires all Hungarian lower courts to follow the interpretation of law established by the Curia in its published decisions and may deviate from such decisions only in exceptional cases. In this latter case they have to expressly justify their reasons for doing so in their judgments.

In other words, the decisions of the Curia will not become full-force “legal sources”, since the judges remain free to make their own consideration on the matter, but it is for sure that a lower court would risk to deviate from any former decision of the Curia only in extremely justified cases. On the basis of the official commentary to the legislation one may conclude that there may be two valid grounds of such deviation: the different facts in the underlying cases and new economic and political conditions that have occurred since the precedent decision was rendered.

Pursuant to the new legislation precedents may also serve as independent grounds for appellate review. If any of the litigating parties thinks that a lower court intentionally or impliedly deviated from a former decision of the Curia, such deviation may be referred to in their review application (appeal or request for review). If, in the course of the review, the Curia finds that the deviation was not justified, it may overturn the judgment in order to comply with the precedent. It is quite important that the Curia itself may not deviate from its own former decisions either. Therefore, if it finds that the deviation did have a valid reason it must initiate a so-called “legal-unity review procedure” (jogegységi eljárás), in the frame of which a seven-member panel of the Curia would determine the “binding interpretation of the law”.

The Legal-unity Complaint

In the former appellate system the final and enforceable second instance judgment could be challenged before the Curia by a request for review and against the judgments of the Curia following such request the only possible remaining legal remedy was the constitutional law complaint to be addressed to the Constitutional Court – in case the judgment violated the Fundamental Law of Hungary.

The new legislation now introduced a new form of legal remedy which became available

  • if the lower courts had deviated from a former decision of the Curia, but the Curia itself did not overturn the judgment of the lower court (i.e. the Curia refused the claim or upheld the judgment); or
  • if it is the Curia itself, which was the first forum that deviated from its own former decision without initiating a legal-unity procedure.

The legal-unity complaint is decided by another extended (this time nine-member) panel of the Curia which first examines the admissibility of the complaint. In the course of the procedure the panel may even hold a hearing and may make the following decisions:

  • if the panel finds no deviation from the applicable precedent, it dismisses the complaint;
  • if it finds that there was a deviation but it was not justified, it repeals the challenged decision and instruct the lower court to render a new decision; or
  • if it finds that the deviation was justified, it upholds the decision, this decision qualifying as a unity decision to be published in the Official Gazet

Critical Remarks

The aim of the reform was to create a more transparent system for the sake of legal certainty and the positive character of this effort is hardly questionable. In addition, the introduction of the precedent system in Hungarian law is not a diabolic idea, since for the reason of application of EU law Hungarian lawyers may also have some experience with it and it has already been a common practice of lower courts to cite the decisions of the Curia in their judgments anyway.

Nevertheless, up till now, many critical remarks have been made in respect of the new system by practicing lawyers and judges as well as by legal scholars.

As of today the Curia has around 40 000 published decisions and there is an even higher number of unreported ones. As one of the principal elements of the reform was to abolish the difference between reported and unreported cases, these latter would also have the same authority from 1 April 2020. In addition, previously published decisions often set out inconsistent directions and are sometimes contradictory. Therefore it will be a difficult task for lawyers to identify which previous decisions are truly precedent-like and which are less so. It is also questionable whether such classical principles as posterior derogat priori and specialis derogat generali would apply to contradictory precedents.

The orientation among suddenly important precedents may be difficult to lawyers also because the enormous legal database has not yet been sufficiently organized. In addition, you may never know what the final conclusion of the court would be when a decision complying with a widely known reported case is challenged on the basis of an uncertain precedent suddenly dug out from the database just because the facts of this latter case are much closer to those of the matter to be decided by the court. These factors would rather make litigation more difficult in the short term and will result in the protraction of court procedures.

The other element of the reform that is heavily criticized is the establishment of the legal-unity review procedure, which is, in this form, unknown in other countries. If we look back to the entry into force of the new Code of Civil Procedure in 2018, its main concept was to accelerate the functioning of the judicature. Even according to judges of the Curia the introduction of this new form of legal remedy into a system that already contains three different levels of appellate review “falls into the category of legal luxury”[4]. One may quickly realize that the application for legal-unity procedure may easily become a fourth attempt to present legal arguments that were already rejected on all previous levels.

In addition, an eventual legal-unity procedure may lead to protracted uncertainty in the given case, if the legal-unity panel annuls a final judgment with reference to the aim to ensure the unity of the case law. Finally, it seems questionable how an organization may “control” itself, since in the legal-unity procedure judges of the Curia would revise the decisions of their own colleagues.

In summary, the goals of the reform may hardly be disputed, but the introduction of both the precedent system and the legal-unity procedure raise more questions than answer and therefore today it is doubtful to what extent the innovations introduced will be suitable for strengthening legal certainty in Hungary.

[1] The Supreme Court of Hungary was renamed to Curia (Kúria) in 2012

[2] The Fundamental Law of Hungary was enacted by the Hungarian Parliament in 2011 and replaced Act XX of 1949 on the Constitution of the Republic of Hungary

[3] Article 25 (3) of the Fundamental Law

[4] András Osztovits: Törvénymódosítás a bírósági joggyakorlat egységesítése érdekében – jó irányba tett rossz lépés? (Amendment of law aiming the unification of the court practice – a bad step in the right direction) - Magyar jog 2020/2. p. 72-80.