NEW ACT ON CIVIL PROCEDURES

Act CXXX of 2016 on Civil Procedures (CPA) will apply to all lawsuits that start after 1 January 2018 in labour and civil cases (other than public administration cases, which will be subject to Act I of 2017 on Public Administration Procedure, also taking effect on 1 January 2018).

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JÓKAY AND PARTNERS WIN HIGH-PROFILE COMPETITION AND PERSONALITY RIGHTS CASE

Jókay and Partners have recently won a case worth HUF 410,000,000 and involving violations of competition law, advertising law and personality rights, as well as economic and non-economic damages. In the final and binding judgment, the appeals court made several findings that have major significance.

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MODIFIED BANKRUPCTY ACT: SECURED CREDITORS ARE MOST AFFECTED

Under a long-awaited modification of Hungary’s Act XLIX of 1991 on Bankruptcy and Compulsory Liquidation Procedures (Bankruptcy Act), a larger number of creditors receive priority satisfaction in compulsory liquidation procedures starting from 1 July 2017. The main objective of the modification was to ensure that recipients of assignments and purchase options granted as loan security would have the same rights as other secured creditors, such as chargees, pledgees and mortgagees, and primarily the right to priority satisfaction in compulsory liquidation procedures.

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THE NEW EUROPEAN DATA PROTECTION REGULATION

Regulation (EU) 2016/679 of the European Parliament and of the Council (“GDPR”) was adopted in April 2016 and will be become directly applicable in all EU Member States on 25 May 2018, and therefore it will be a piece of legislation that is applied consistently throughout the EU. In the light of the strict sanctions (fines up to €20 million or 4% of a company’s worldwide annual sales revenue), it is a good idea to prepare for the application of the new rules in time, and it advisable to carry out a thorough audit to determine whether a company’s existing data processing practices are in line with the regulations.

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MAJOR INCREASE IN FINES IMPOSED ON AD AGENCIES

Starting from 1 January 2017, companies that publish advertisements are well advised to pay even more attention to their contracts with ad agencies, any related bonus policies and invoicing practices. Under certain new rules introduced on 1 January, fines for violations of the rules pertaining to ad agency activities may be imposed not only on the agencies themselves but also on the publishers of the ads. Additionally, the maximum permitted amount of the fine has increased fivefold.

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MERGER CONTROL REDESIGNED – MAJOR MODIFICATIONS TO THE COMPETITION ACT

A comprehensive modification of Hungary’s Act LVII on the Prohibition of Unfair and Restrictive Market Practices (“Competition Act”) was introduced on 16 December 2016. The modification, which is significant both in terms of its volume and its impact, is designed to reform two areas: antitrust damages and merger control.

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NEW RULES FOR STAFFING AND EMPLOYMENT AGENCIES

Government Decree No. 118/2001 on the registration of staffing and private employment agencies and conditions of their operation was modified as of 6 December 2016.

For staffing agencies, the most important change is that the amount of the mandatory security deposit has been increased from HUF 2 million to HUF 5 million. The fact that the increased amount of security deposit has been provided will have to be confirmed to the competent Government Office by presenting the original agreement on the deposit.

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HIGHER FINES AND IMPRISONMENT: TOUGHER RULES FOR MARKET MANIPULATION

Under the new EU regulations on market abuses that have been applicable since 3 July 2016, considerably heavier sanctions will be imposed for cases of market manipulation. In addition to a general toughening of the rules, the Directive and the Regulation allow authorities to investigate areas that were previously ignored (such as OTC transactions). The National Bank of Hungary has identified new and unregulated electronic trading platforms and technologies that have emerged on global financial markets as the cause for the introduction of the MAR/MAD II regime.

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