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Last update: 24-01-2007
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Enforcement of judgements - Hungary

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TABLE OF CONTENTS

1. What does enforcement mean in civil and commercial matters? 1.
2. What are the conditions under which an enforceable title or decision may be issued? 2.
2.1. The procedure 2.1.
2.2. The substantive conditions 2.2.
3. Object and nature of enforcement measures 3.
3.1. What types of assets can be subject to enforcement? 3.1.
3.2. What are the effects of enforcement measures? 3.2.
3.3. How long are such measures valid? 3.3.
4. Is there a possibility of appeal against a decision granting such a measure? 4.

 

1. What does enforcement mean in civil and commercial matters?

Please define the term enforcement

Enforcement is a civil non-litigious procedure through which the state exercises the fulfilment of obligations included in court decisions and other documents defined by law by applying coercive measures.

Please summarize the enforcement measures that may make the defendant do something, refrain from doing something or fulfil payment

Coercive measures partly limit debtors’ property rights and partly their personal rights; coercive measures against property can be taken by courts and bailiffs, while coercive measures at the personal level can be applied by the police, based on the provisions of courts and bailiffs. The most important coercive measures against property are the following:

  • assignment of wages or other earnings,
  • attachment and sales of personal assets,
  • deprivation of sums handled by financial institutions, blocking bank accounts,
  • attachment of debtor’s claim against third parties,
  • attachment and sale of real estates,
  • imposing fines.

2. What are the conditions under which an enforceable title or decision may be issued?

2.1. The procedure
Are both judicial and non-judicial decisions enforceable?

It is mainly judicial decisions that can be executed through court enforcement. Non-judicial decisions that can be executed by judicial enforcement include the decisions of the various judicial bodies (e.g. notaries’ orders, the decisions of disciplinary authorities) and obligations defined by public documents (e.g. notaries’ documents). At the same time, the majority of non-judicial decisions are decisions made by administrative bodies, which can be executed through administrative enforcement.

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Is a court order necessary for the authorization of enforcement?

According to the general rules, it is not necessary to have a formal court order for the authorization of enforcement; courts order enforcement by issuing what is known as an enforceable document. In certain cases, enforcement is ordered by a writ of execution as, for example, in the case of ordering insurance measures.

Which court is competent to order enforcement?

According to the general rules, enforcement is ordered by the court of first instance that is acting in the case that is the basis for the enforcement. If the basis for the enforcement is not a court decision but some other document (e.g. notary’s document) the local court competent according to the debtor’s domicile or seat – or, in the absence of these, the location of the debtor’s assets that are subject to enforcement – is entitled to order enforcement. On the basis of a foreign court decision, the local court operating at the headquarters of the county court competent according to the debtor’s domicile, seat, or, in the absence of these, the location of the debtor’s assets that are subject to enforcement, or, in the case of Budapest, the Central District Court of Buda, is entitled to order execution. Other rules concerning competence are defined by Act LIII of 1994 on the Enforcement of Court Decisions.

Please describe the status, roles, responsibilities and powers of enforcement agents

Enforcement measures are implemented by bailiffs (independent court bailiffs and county court bailiffs), whose measures are binding on everyone; bailiffs are officials and perform official tasks.

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On the basis of the general rules, claims of civil law are enforced by independent court bailiffs. They have independent legal status and are appointed by the Minister of Justice to join a given local court in a given area of competence, are not employed by the state and their income is paid by clients as remuneration for their work.

County court bailiffs act in order to collect judicial claims due to the state and are employed by county courts as judicial employees. Their area of competence is the same as that of the county court employing them and the administrative licences related to them are dealt with by the president of the county court.

Can applications for enforcement be submitted through a lawyer or any other legal professional?

Applications for enforcement can be submitted to courts in harmony with the general rules of civil procedures: they can be submitted through a lawyer, although legal representation is not obligatory in these procedures.

Please indicate the scale of costs for the different types of enforcement measures

Costs emerging in the course of enforcement mainly consist of the bailiff’s fee, enforcement charge and expenses that are regulated by Decree No. 14/1994 (IX. 8.) IM of the Ministry of Justice on Judicial Enforcement Fees. Fees are in harmony with the amount of collectible monetary claim: the collection of a larger sum of monetary claim is accompanied by a higher fee, while in the case of performing a determined act fees are calculated based on the amount of time that the bailiff’s activities require. Bailiffs are entitled for the reimbursement of expenses for their documented cash expenses emerging in relation to the performance of enforcement – defined in the decree; furthermore, they are entitled for 50% of their fee as flat charge. The amount of the enforcement charge is based on the sum of claim collected by the bailiff, while in the case of performing a determined act, the amount of the enforcement charge is set. Cost allowances available in the frameworks of legal assistance are also applied in enforcement procedures; consequently, in the event of proving legal title it is possible for the party applying for enforcement not to pay the enforcement costs in advance and receive exemption from paying the court stamp duty of ordering the enforcement.

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2.2. The substantive conditions
What criteria do courts apply for the authorization of enforcement measures concerning claims?

Courts authorize judicial enforcement if the resolution serving as the basis of enforcement is of binding force, final or can be preliminarily implemented and the deadline of performance stated in it is over.

According to a special rule, in the event of collecting child support enforcement concerning overdue child support instalments due for more than six months can be authorized if the party applying for enforcement supposes that the child support arrears can derive from the debtor’s fraudulent behaviour or he/she failed to realize it owing to some good cause. In the course of enforcing a foreign decision courts also examine whether the realization of such decision is allowed by laws, international treaties, reciprocities or the European Union’s norms.

What criteria do courts apply for the authorization of enforcement measures concerning debtors?

Concerning debtors courts consider the data provided by the party applying for enforcement by filling out the official application form for enforcement, consequently

  • the debtor’s name and data necessary for his/her identification,
  • depending on the circumstances of the case, the debtor’ domicile, workplace or seat and site and the location of his assets constituting the subject of enforcement (the party applying for enforcement is required to provide at least one of these data).

Authorization of the enforcement is only possible if the debtor’s data described above are available to the court.

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3. Object and nature of enforcement measures

3.1. What types of assets can be subject to enforcement?
Enforcement action may be taken against the following assets:
  • money in bank accounts, but in case of private persons the law ensures exemption from enforcement up to a certain amount of money.
  • tangible movable property, but no property items indispensable for living can be subject to distraint that are exempted from enforcement by law, for example
  • necessary clothing,
    • furniture equivalent to the number of the debtor’s family members,
    • medication required due to the debtor’s illness, etc.
  • immovable property (regardless of its nature, field of use, the rights and prohibitions charged on such immovable property and facts entered in the real estate registry); but any immovable property is exempt from enforcement that, in the course of the liquidation procedure, cannot be considered as an item belonging to the debtor’s property.
  • Beyond what has been listed above the following can also be subject to enforcement: the debtor’s wages, pension or other earnings (a certain rate of exemption is also valid in this area), business shares, third-party debt and so on.
3.2. What are the effects of enforcement measures?
Can debtors who fail to comply with the requirements of court orders dispose of their property?

In the case of attaching tangible property and bank accounts, the debtor’s right to dispose of property ceases; in the event that the attached property is also subject to distraint, it ceases to be in the debtor’s possession. If some immovable is distrained, the debtor can dispose of the immovable; he can alienate it but only charged with the enforcement right.

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Are sanctions imposed on debtors who fail to comply with the measures?

The court imposes a penalty of maximum HUF 500,000 on the debtor if he/she fails to perform his/her obligation stipulated by law or hinders enforcement measures with his/her behaviour.

If in the course of performing enforcement acts the debtor resists physically, the bailiff turns to the police that can apply coercive measures against the debtor.

If the debtor hinders the bailiff’s proceedings with an active behaviour (violently), he/she can be held criminally reliable. The debtor also commits a crime by abstracting attached items from enforcement, removing the seal applied in the course of enforcement or opening the closed place serving for the custody of attached, distrained or blocked items (offence of breaking a seal).

Which are the obligations of banks in terms of disclosing information and blocking accounts?

Banks are obliged to disclose information about the debtor and his/her monetary assets required by the bailiff and according to the bailiff’s order transfer the stated sum of money from the debtor’s bank account to the bailiff and in certain cases block the bank account. Banks assume civil reliability for performing such measures.

What sanctions are applied against third parties in the event of refusing to perform measures?

If a bank fails to perform its obligation deriving from enforcement, it can be obliged to pay penalty and the claim not collected due to its default. As well as each other person obliged to participate in the procedure, the debtor’s employer assumes similar liability for performing the attachment of earnings ordered by the bailiff.

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3.3. How long are such measures valid?
Is there a deadline prescribed by law or defined by a court warrant?

Claims can be enforced within the term of limitation stipulated by civil law (the general term of limitation is five years), this term starts when a final court decision is made. For an application submitted after a claim has lapsed, the execution of the claim cannot be ordered and the formerly conducted proceedings cannot be started again. Any enforcement action can interrupt the prescription of a claim – similarly to the court procedure initiated in order to realize the claim – and prescription starts again.

4. Is there a possibility of appeal against a decision granting such a measure?

a) Withdrawal of the enforcement sheet and cancellation of the enforcement clause

If the court orders enforcement by issuing a so-called enforceable document, it is possible to withdraw the enforceable document, that is, the enforcement sheet or to cancel the enforcement clause as legal remedy if the court stated that the issuance of the enforceable document had no grounds.

  • Who can submit a request for the withdrawal of the enforcement sheet and the cancellation of the enforcement clause?

The withdrawal of the enforcement sheet and the cancellation of the enforcement clause can be requested by the debtor, the applicant for enforcement or it can be ordered ex officio by the court

  • Which competent court can requests be submitted to?

Requests must be submitted to the court ordering enforcement.

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  • What is the deadline for submitting requests?

No deadline is prescribed for the submission of requests; they can be submitted any time.

  • What is the consequence of requests?

If the court accepts the request, it issues a warrant to order the withdrawal of the enforcement sheet and the cancellation of the enforcement clause; the party is entitled to submit an appeal against the warrant.

b) Appeal against ordering enforcement

In cases when the authorization of enforcement occurs by a formal warrant, an appeal can be submitted against such warrant.

  • Who can contest the decision?

Appeals can be submitted by the debtor or the applicant for enforcement.

  • Which competent court can appeals be submitted to?

Appeals must be submitted to the court ordering enforcement and addressing the court of second instance. The court of appeal is competent for evaluating appeals.

  • What is the deadline for submitting appeals?

The deadline for the submission of appeals is the fifteenth day from the issuance of the warrant.

  • What is the consequence of appeals?

If the warrant of the court ordering enforcement is substantially right, the court of appeal approves it, while in a different case it changes it. In the case of offending the rules of procedure, the court of appeal annuls the warrant and directs the court ordering enforcement to make another decision.

c) Appeal against the warrant rejecting the issuance of an enforceable document
  • Who can contest the decision?

The applicant for enforcement can submit an appeal against the warrant rejecting the issuance of an enforceable document.

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  • What competent court can appeals be submitted to?

Appeals must be submitted to the court ordering enforcement and addressing the court appeal. The court of appeal is competent for evaluating appeals.

  • What is the deadline for submitting appeals?

The deadline for the submission of appeals is the fifteenth day from the issuance of the writ.

  • What is the consequence of appeals?

If the warrant of the court ordering enforcement is substantially right, the court of appeal approves it, while in a different case it changes it. In the case of offending the rules of procedure, the court of appeal annuls the warrant and directs the court ordering enforcement to make another decision.

After ordering enforcement, the bailiff performs coercive measures independently, no court authorization is necessary to carry out these actions. There is ground for special legal remedy, a so-called enforcement objection; it is submitted to the court by the debtor, the applicant for enforcement or some other interested party. Enforcement objections must be submitted within 15 days from the bailiff’s measures. If the applicant learnt about such measures later or was obstructed from submitting an enforcement objection beyond 15 days from the bailiff’s measures, the deadline of submitting an enforcement objection must be calculated from the date of learning about such measures or the removal of the obstacle. Beyond six months after the measures no enforcement objections can be submitted. Based on the objection accepted by it, the court annuls the measure violating the law, in the event of the bailiff’s default it orders the bailiff to perform the measure, in an opposite case it rejects the objection.

In addition to the above forms of legal remedy, it is also possible to terminate enforcement. Enforcement is terminated by the court’s warrant, if requested by the applicant for enforcement and such action does not injure any other party’s rights or is stipulated by another law. Enforcement is terminated, for example, if the debtor settles the claim. Enforcement is terminated by the court’s warrant even if it has been stated on the basis of a notarized document that a final decision had annulled the order to be executed.

In the enforcement procedure it is also possible for a third party, which lays a claim for some property item attached in the course of enforcement on the basis of his/her proprietary right or some other right hindering sale in the course of enforcement to initiate a so-called claim of exemption against the applicant for enforcement in order to remove the attachment of the given property item. If the court adopts such claim of exemption, it removes the attachment of the claimed property item. If the property item has already been sold, the prevailing party must be issued the sum of money equivalent with the purchase price.

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Last update: 24-01-2007

 
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