Recodification of the Hungarian Civil Law

European Review of Private Law, 5/2007. page 702-722

6.         Conclusion

The Hungarian Government decided in 1998 that a new civil code shall replace the Civil Code in force, which was enacted in 1959. After lengthy discussions the first draft of the new Code was published at the end of 2006.

The legislator is well aware of the fact that this is not the best time for creating a new civil code. The European Commission is currently working on the thorough revision of the consumer acquis; and parallel to this work, it also launched the Common Frame of Reference project. Although it is difficult to predict the outcome of this project, it is very likely to lead to further harmonisation in the field of civil law, which will inevitably have significant effect on the Civil Code. Despite these con­siderations, the Hungarian Government decided that the new Code shall be prepared as the current Civil Code was amended more than 150 times.

The consumer law directives have already caused headache to the legislator. Since the level of abstractness of the directives is much lower than that of the Civil Code, it is very difficult to incorporate these directives into the Code. Although, the original intention was that all directives shall be embodied in the Civil Code, the outcome is very similar to the current regime. There are directives on the one hand which are regulated completely outside of the Code (e.g. the E-Commerce Directive), on the other hand there are directives, which are transposed in the Code (e.g. the Unfair Terms Directive). The third category consists of directives which are only partially implemented in the Code, while the provisions too detailed for the Civil Code are included in decrees.

The scope and the structure of the new Code will be different from the current Code. The Code will consist of books. Book I contains the general principles of civil law, while Book II regulates the law of persons. The most significant change in this area is that the new Code will include detailed rules on legal persons, which are intended to serve as model for the regulation of the various legal entities. Book III deals with family law, which is a significant novelty as this area was regulated outside the Civil Code. This new structure could enable the organic implementation of the main rules pertaining to family law. Book IV regulates property law. The draft incorporates the substantive rules of land registry rules, which are currently regu­lated in an act containing substantive and procedural rules, as well. The structure of the rules related to of the law of obligations (Book V) has also significantly changed. The current Civil Code does not regulate the law of obligations in general, only embodies rules regulating the law of contracts. This was the result of a clear choice made by the drafters of the Code. This draft, on the contrary, chooses a different solution: Part I of Book V contains the rules applicable to all obligations (e.g. pre­scription, rules on performance etc.), while Part II covers only the rules related to contracts. This may render the situation more clear with respect to obligations, however the draft Civil Code still does not define the rules applicable to juridical acts in property law.

The year 2007 will be a crucial one from the perspective of the draft Civil Code. If the key market players participate in the codification by expressing their needs, the new Civil Code may play a significant role in the removal of trade obstacles and may contribute to the reduction of legal uncertainty and, thus, lead to an enhanced economy with lower transaction costs and more easily accessible credit.

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