Nearly twelve years have passed since the government decided, in April 1998, to commence the codification of a new Civil Code. The declared aim was the creation of a new and comprehensive system of rules for modern Hungarian private law to replace the Civil Code of 1959.
The new Civil Code was finally enacted in November 2009 following many problems, but as a result of widespread criticism it was unclear until now whether and when the code will actually come into force. Despite the major concerns expressed, on 15 February 2010 parliament decided on the code coming into force in two stages on 1 May 2010 and 1 January 2011. The act on the bringing into force of the code is still awaiting execution by the state president, however.
"What takes a long time will turn out to be good", as the saying goes. Whether or not this saying also applies to the mammoth project of the new Civil Code will only become clear in the future. The stony path to the enactment of the code, the continued concerns of state president Sólyom (the former president of the constitutional court) and the vigorous criticism from political and expert circles certainly give reason to doubt the quality of the code. It is also to be expected that the new Civil Code will be subject to further (and comprehensive) amendments. Let us start, however, with the history of the code. After the decision of 1998, a codification committee composed of representatives of state bodies, individual legal professions and university professors was employed.
In 2006 a first draft, together with justification, was put forward. In the summer of 2007 the Justice Ministry informed the codification committee that the bill would be drawn up by the ministry. It was finally presented to parliament in spring 2008. The codification committee then ended its work, but published its own "experts' draft". This is in part the same as the Civil Code that will now be coming into force, but is different on many key points.
The bill of the version now going to come into force was first enacted by parliament on 21 September 2009, but President László Sólyom refused to execute this bill as a result of numerous concerns. As a result, the bill was reworked, in part in view of these concerns, and was once again enacted by parliament on 9 November 2009. Afterwards it was executed by Sólyom (who still made his fundamental concerns known) and it was finally published as the Act CXX from 2009 on the Civil Code. The coming into force of the new Civil Code is not itself laid down in the text of the Act, which is why special legislation on its coming into force was required. Such an act to bring it into force was first enacted in December 2009, but was not then authorised by the state president.
Following reworking, the act bringing the new Civil Code into force was enacted once again on 15 February 2010. If the state president executes it on this occasion, the new Civil Code will come into force in two stages; on 1 May 2010 and 1 January 2011. Even this is a not particularly opportune means of regulating the situation, as between May and December 2010 parts of the new and the hitherto existing Civil Codes will be applicable. Also, the short amount of time for preparing to adapt to the new rules will present the public and above all businesses with significant problems.
Structure of new Civil Code
The new Civil Code is split into seven books. What is also new is that the numbering is no longer continuous (sec. 1, sec. 2, etc.), but rather first of all the book reference is given and then with each book the numbering starts anew (sec. 1:1, sec. 1:2, sec. 2:1, sec. 2:2, etc.). The new Civil Code does not have a comprehensive summary, but rather a few general provisions in the first book. After this comes the second book on individual rights. Only the first two books will come into force on 1 May 2010. The third book deals with family law, which will no longer be regulated in a separate act. The fourth book deals with property law, the fifth book the law of obligations, while the law of succession is laid down in the sixth book. In the seventh book individual final provisions are laid down, e.g. definitions. Books three to seven will not come into force before 1 January 2011.
Significant changes
In principle the new Civil Code is tied into the provisions and rules of private law developed up until the present. However, the new Civil Code contains many innovations which are set to fit the changes in corporate, economic and social relations over the last two decades, and which were therefore considered necessary by the legislature. One example of this is the protection of personality rights, the classification of company shares as property, the law relating to securities, consumer protection, standard terms and conditions, product liability, and compensation. New types of contracts have also found their way into the Civil Code, for example leasing and factoring, as has the concept of trusts. In the coming editions of The Budapest Times we will present in greater detail selected parts of the Civil Code that are of particular importance for business activities.
Andreas Köhler, partner Law firm Kővári Tercsák Salans www.salans.com
Add as favourites (61) | Views: 907
Comment on this article
Only registered users can write comments. Please login or register.
