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Powers of conciliation boards extended from 1 January

Under Hungarian law, conciliation boards were set up more than two decades ago, which provide a fast, efficient and inexpensive forum for dispute resolution compared to litigation in specific cases. The competence of the conciliation boards in relation to goods and services covers (i) the quality and safety of the services; (ii) application of product liability rules; and (iii) conclusion and performance of contracts. This type of conciliation can only be initiated by the consumer as an individual.

There are two possible outcomes of the procedure, depending on whether the company involved in the dispute declares that it will abide by the decision of the conciliation panel. If the company declares in advance that it does not accept the decision, the procedure ends with a non-binding recommendation. If the company submits to the decision, the procedure is closed by a binding decision, or if the parties can reach an agreement.

As of 1 January 2024, the rules described above have partially changed and the conciliation boards have extended powers. In the event of a dispute with a value not exceeding HUF 200,000, the company may be prosecuted irrespective of the declaration of submission. Upon request of the consumer, a personal hearing can also be held. With the change in legislation, businesses are likely to seek to resolve disputes with consumers within their own organisation.

Further changes are also expected as the Budapest Chamber of Commerce and Industry has submitted draft legislation to the Ministry of Justice to allow micro, small and medium-sized enterprises to also use this alternative dispute resolution forum.