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The Hungarian procedure laws face a remarkable change in 2018. While one has to wait until 1 July for the new Criminal Procedure Code; the new Code of Civil Procedure, the Code of Administrative Litigation and the Code of Administrative Procedure entered into force on 1 January. In this article, we analyze the provisions of Act CL of 2016 on the Code of Administrative Procedure (“CAP”).

1. Why was it necessary to adopt a new administrative procedure law?

The reasoning of the CAP provided by the legislator (“Reasoning”) declares that adopting a new administrative procedure law has been long awaited. This is due to the fact that the last few years proved that Act XCL of 2004 on the General Rules of the Administrative Proceedings and Services (“APA”) could not successfully become the adequate basis for the administrative procedures. According to the Reasoning, the following circumstances are to blame: (i) the APA was modified frequently, (ii) the APA included the details and auxiliary procedure rules (which fit more into lower level legal regulations), and (iii) more and more types of administrative procedure were excluded from the APA.

According to the Reasoning, the aim of the legislator was to create a new, generally usable, shorter and more transparent administrative procedure law; providing rules that shall be adaptable for any kind of procedure. Furthermore, the CAP leaves the details and auxiliary procedure rules to sectoral laws and lower level legal regulations.

The CAP seems to have achieved the legislator’s above aims (however, it should be noted that we cannot take the actual practice of the CAP into account yet).

2. Simplifying the procedure

In our opinion, the new regulation is indeed more transparent than that of the APA was.

It is an important formal novelty that a title belongs to every paragraph, which will most likely assist in finding the appropriate provisions and interpreting them.

One can detect the simplification of the procedure through the following example: while the APA detailed – with inadequate transparency and rather excessively – the procedures to which it does not apply and the procedures where deviation from its provisions is allowed, the CAP provides only a short list of those procedures to which it does not apply (such as infraction procedure, excise and customs administration) and allows for deviation only in cases specified in the CAP itself. This kind of regulation is not only more transparent, but it may also be an important step towards creating a standardized administrative procedure, provided that the list of the excluded (or partially excluded) procedures will not lengthen.

The regulation on the execution of the administrative procedure has also been simplified and shortened. While the APA provided a very detailed regulation on the execution, the CAP only determines the provisions different from the court execution procedure. The CAP designates the National Tax and Customs Administration of Hungary as the general executive body.

3. Shortening the procedure

It is not a coincidence that in the preparation of the new administrative procedure law, the legislator deemed important to create a shorter and more effective administrative procedure, considering that the excessive duration of the procedures was a major criticism towards the authorities.

In order to prevent the excessive duration of procedures, the CAP introduces an objective procedural deadline of 60 days (with the exception of the so-called summary procedure and automatized decisions). Within this deadline, the case shall not only be closed with a decision on the merits, but the authority shall also inform the clients about the decision. This deadline does not include the period of the suspension and of the stay of the procedure, the delay or omission of the clients.

The legislator introduces the – above-mentioned – summary procedure. In the case of this procedure, the relevant authority shall adopt a decision without delay, but within 8 days at the latest, on the condition that all evidence necessary for the decision is available to the authority by the submission of request and there is no adverse party involved in the procedure.

The automatized decision is a specific type of the summary procedure used in cases where the discretion of the authority is not required. In the case of this procedure, the relevant authority shall adopt a decision within 1 day. The automatized decision making is entirely electronic (with different formulars for each different case provided by the relevant authority). This procedure will be used mostly in simple cases as well as in issuing official certificates or documents.

It will be in the interest of the authorities to meet these deadlines due to the fact that the CAP inflicts sanctions on those authorities that fail to comply with them. The authority shall grant exemption from the payment of duties and other charges to the client requesting the procedure, or if the client has already paid, the authority shall decide on refunding the amount of duties and other charges or otherwise – if there are no duties or charges – on refunding HUF 10,000 to the client.

In order to render procedures involving more than one authority more effective, the CAP introduces a ‘one-stop-shop’ procedure where one of the authorities shall act as main authority and adopt the official decision, while the other authorities shall act as concerned authorities providing information and assist the main authority. Therefore, from now on, the client needs to contact only one authority.

It is another important change that the CAP makes the judicial review of the first instance authority’s decision a primary rule and allows for appealing to higher administrative authorities before litigation only in exceptional cases. The legislator justified this novelty with statistics on the number of appeals and judicial remedies. Such statistics conclude that only a small percentage of the clients submitted an appeal and when they did so, usually the second-instance procedure was followed by judicial remedy. Notwithstanding this, the remedy of the decisions in the administrative procedure remains intact to a degree, because upon the client’s appeal, the authority may remedy its own decision.

4. Summary

Notwithstanding the above-listed positive changes, it is worth noting that in order to create a practice that complies with the procedure described above, the following are also necessary: (i) the details and auxiliary procedure rules should also promote the efficiency of the procedure, (ii) the authorities should provide assistance and information to their clients even prior to the procedure (e.g. information on completing formulas prepared for automatized decision making).

Dr. Aliz Póczek

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