Efficiency of Judicial System and Administration in Hungary

The index measuring trust in the judicial system has significantly decreased in Hungary since the change of regime in 1989-90: people complain not only about the length and the quality of legal cases but also about high administrative costs and choking bureaucracy. According to the data collected by the official evaluation of European judicial systems, presented last year, Hungary is amongst those European countries in which the overall budget of justice was reduced by the government due to the financial and economic crisis. Other countries of this list include, inter alia, Albania, Serbia, Bulgaria and Macedonia – the countries that fall aside the set of Western-European states are the ones that Hungary traditionally regards as points of reference. Besides this, Hungary has also spent less than 2% of the budget on legal aid, resulting in extremely low figures when we examine the number of legal aid cases and the average amount of legal aid allocated per cases.

Okay, the judicial system in Hungary is more or less underfunded, that’s quite obvious. But what about effectiveness? First of all, how can we define effectiveness when it comes to the judiciary system? If we accept the definition created by Professor Anthony Arnull from the University of Birmingham, we can say that a tribunal or court is effective if it is capable of making rightful and intellectually-founded decisions within a reasonable time.

One of the declared goals of the judicial reform in Hungary, designed and implemented by the national conservative Fidesz-KDNP government in 2011 was to ‘establish the basis of a modern and effective system which is compatible in the European Union as well’. The newly created National Judicial Office was equipped with a wide range of tools to appoint and move judges and cases and to deal with human recourses and budgetary issues, while the president of this centralized and powerful unit bears full personal responsibility for his or her decisions. Effectiveness remains the ideology between the separation of the professional and administrative management of the court system, too. The reform process as a whole received severe criticism from organizations like the Venice Commission or the Hungarian Helsinki Committee concerning the issue of the independence of jurisdiction from the government.

On the other hand, the foremost mentioned separating step of the reorganization was welcomed by the Transparency International. However, even they draw attention to the lack of electronic and on-line case management and judicial office routine, claiming that their implementation could improve effectiveness. In 2013, new projects from EU-funds were presented, aiming to create the possibility to register and track civil organizations and to deal with bankruptcy and wind-up cases on-line.


A nearly 120 years-old courthouse in a small Hungarian town. Prospects of renewal?

When we examine the length of legal cases in Hungary, we can clearly see that long court procedures dragging on cause enormous trouble for the justice system, even endangering the right to a fair trial by exceeding the ‘reasonable period of time’, which is defined as one of its criteria. Although the number of human rights infringements related to the prolongation of the judicial procedures is relatively small, the problem of length remains one of the major factors destroying general trust and satisfaction in jurisdiction. Besides, the judiciary has to struggle with a deteriorating infrastructure and a constant pressure from cultural conservatives and order-minded people, who demand governmental intervention to its independence when they find a court verdict too ‘soft’, mostly in connection with criminal cases involving brutality.

And the cross section of economy and court regulation? In 2012, several laws related to firms were changed with the aim of creating a transparent regulation which is given the right to examine extensively Hungarian companies’ financial background. Besides this, helping small and medium-size companies to appear on the market without greater obstacles remained in the focus of the right-wing government, whose rhetoric widely uses the middle-class run SMEs and the strengthening of their role as a reference point.

In some respects, the government do make their functioning easier: for instance, according to a World Bank report from last year, establishing a firm takes up an average of four days in Hungary, which means that this Central-European country occupies the 9th best place on the list of states organized according to time needed to start a new business.

However, a new negative trend seems to emerge: rules of registering a new company become much harsher – the reasoning behind them being to protect the interests of creditors and to introduce zero tolerance concerning economic misuses. Although empty firms without capital did spread rapidly in recent years, stricter rules are making the life of ‘good companies’ tougher as well. Firm registration process now requires not only the tax ID, but also personal data of its managers and directors. Moreover, incorporating a foreign company at the Companies Registry often needs so much translation prepared and strict rules to obey (like attaching a maximum three-month-old copy of the register) that they simply cannot stay within the deadline – which is a path leading straight towards being fined by government authorities since the judicial authorities responsible for issuing and collecting the penalties have no right to deliberate at all. The straw that breaks the camel’s back can be the compulsory adjustment regarding company data taking effect in February 2013, which will mean an average €43-56 cost basically to each and every Hungarian company.

Daniel Kovarek