Litigation-Related Legislative Changes in January and February
With effect from 28 January 2025, the court fees for initiating first-instance proceedings will be changed. This change will make it cheaper to initiate lower value claims, while higher value claims will become more expensive. As a result, alternative dispute resolution methods, particularly arbitration, may become more popular. From 8 February 2025, the Hungarian Supreme Court’s guidelines on attorneys’ fees will essentially be elevated to the level of legislation. As a result, prevailing parties can expect greater reimbursement of legal fees as part of litigation costs.
Changes to Court Fees
Currently, the court fee for initiating first-instance litigation is generally 6% of the claim value, capped at HUF 1,500,000. This means that even if the plaintiff’s claim is worth hundreds of millions of forints, the fee cannot exceed HUF 1,500,000 (approx. EUR 3,800).
However, from January 28, 2025, the court fee structure will change significantly. The legislator will abolish the HUF 1,500,000 cap and the 6% fee system. Instead, a nine-tier system will be introduced as follows:
| Claim Value | Fee Amount |
| Up to HUF 300,000 | HUF 18,000 |
| HUF 300,001–3,000,000 | HUF 18,000 + 4.5% of the amount over HUF 300,000 |
| HUF 3,000,001–10,000,000 | HUF 139,500 + 5% of the amount over HUF 3,000,000 |
| HUF 10,000,001–30,000,000 | HUF 489,500 + 7% of the amount over HUF 10,000,000 |
| HUF 30,000,001–50,000,000 | HUF 1,889,500 + 4.5% of the amount over HUF 30,000,000 |
| HUF 50,000,001–100,000,000 | HUF 2,789,500 + 2.5% of the amount over HUF 50,000,000 |
| HUF 100,000,001–250,000,000 | HUF 4,039,500 + 2% of the amount over HUF 100,000,000 |
| HUF 250,000,001–500,000,000 | HUF 7,039,500 + 0.5% of the amount over HUF 250,000,000 |
| Over HUF 500,000,001 | HUF 8,289,500 + 0.5% of the amount over HUF 500,000,000 |
For disputes related to residential property, if the claim value does not exceed HUF 250,000,000 (approx. EUR 620,000), half of the above fees, but at least HUF 489,500 (approx. EUR 1,300) must be paid.
In smaller-value cases (e.g., claims between EUR 20,000 and EUR 40,000), the court fee will decrease slightly compared to the current fee. However, for claims exceeding EUR 63,000 the fee will start to increase. For significant disputes with a claim value over EUR 1,200,000 initiating litigation will become considerably more expensive.
There is a growing consensus that parties will increasingly turn to alternative dispute resolution methods, such as arbitration and mediation, to resolve their disputes. The legislative change may also encourage parties to settle their disputes out of court.
It is important to note that the legislative change does not affect the fees for second-instance or review procedures. The fee for second-instance procedures remains 8% of the claim value, capped at HUF 2,500,000 (approx. EUR 6,300) and the review fee remains 10% of the claim value, capped at HUF 3,500,000 (approx. EUR 8,800). The change also does not affect the fees for cases where the fee is specifically determined by law (e.g., divorce cases).
Changes to Attorney Fees
If a party is represented by an attorney or law firm during litigation, the attorney fees are agreed upon in the engagement agreement between the client and the attorney. The agreement may include a fixed fee for the entire procedure, hourly billing, fees for specific procedural stages, or success fees.
Parties can claim the attorney fees stipulated in the engagement agreement as litigation costs or request the court to determine the attorney fees based on the claim value.
For a long time, judicial practice has reduced the claimed attorney fees, often preventing the prevailing party from passing the full cost onto the losing party. However, in the spring of 2024, the Hungarian Supreme Court significantly changed this practice (Pfv.II.20.887/2023/6).
The Hungarian Supreme Court ruled that fees based on hourly billing can only be reduced if they are significantly different from market rates and are clearly unreasonable. The court emphasized that the number of pages in submissions or the number of hours spent in hearings cannot be the basis for determining attorney fees, as other tasks (e.g., client consultations, preparation, document review) are also involved. The quality of the attorney’s work cannot be evaluated either, as this could lead to the conclusion that the attorney’s work was inadequate despite winning the case.
According to the Hungarian Supreme Court’s guidelines, the court’s reasoning for reducing litigation costs must be based on specific case data. This emphasis on detailed reasoning and the criteria set forth clearly favour prevailing parties, allowing them to pass on a greater portion of the attorney fees to the losing party than previously possible.
The Hungarian Supreme Court’s decision is precedential, and lower courts are expected to follow it. Most courts apply the Supreme Court’s guidelines, although there are occasional deviations.
Recognizing these developments, the Ministry of Justice has elevated the Supreme Court’s guidelines to the level of legislation with the issuance of IM Decree 17/2024 (XII.9.), effective from February 8, 2025.
Under the new decree, attorney fees can still be charged based on the engagement agreement between the attorney and the client, but there will also be the option to charge fees based on the claim value.
In the future, courts will have a much narrower scope to reduce the attorney fees claimed in litigation.
A significant change is that courts can only reduce the attorney fees claimed by the prevailing party at the request of the opposing party. The new regulation specifies two reasons for reducing attorney fees: if the fees are unrelated to the rights being enforced and therefore unnecessary, or if they are disproportionate to the actual work performed.
A key limitation is that attorney fees charged based on the engagement agreement can generally only be reduced by up to 50%. Greater reductions are only possible in exceptional cases where the fees are excessively high and unreasonable compared to market rates. The legislator has essentially elevated the Supreme Court’s requirements to the level of legislation by mandating detailed reasoning.
We believe that the legislative change regarding attorney fees will increase the likelihood that prevailing parties will be able to pass the full cost of attorney fees onto the losing party.
If you have any questions regarding litigation or dispute resolution, please do not hesitate to contact our colleagues.
This summary is for informational purposes only and does not cover all relevant issues. It does not constitute legal advice.
