The Hungarian Judicial Practice of Assessing the Unfairness of Contractual Terms in Foreign Currency Loan Litigations

Abstract

There is no doubt that the foreign currency loan litigations have been at the heart of the Hungarian civil justice in the second decade of the 21st century. When the financial crisis struck Hungary in 2008, the Hungarian Forint continuously depreciated against the EUR and Swiss Francs that resulted a significant increase of the monthly debt payments. The massive collapsing of foreign-currency-based loans and huge losses by citizens have led to numerous litigations before the Hungarian courts. The overwhelming majority of these actions aimed at establishing the invalidity of retail consumer contracts based on the fault of financial institutions and lack of proper information. On the one hand, intensive legislative work began to balance consumer protection and other interests, and on the other hand, courts adjudicated these cases and the uniform conduct of courts were enhanced through uniformity decisions of the Kúria (Supreme Court of Hungary). In litigation, particular emphasis was placed on providing consumers with adequate information and judicial review of unfair contract terms. Since the regulation of this area has been heavily sourced by the EU law, the courts have in many cases referred questions for a preliminary ruling to the Court of Justice of the European Union. The first such request was the Kásler case (C-26/13) that was followed by a dozen other inquiries. This paper examines the effects of the decisions made on the basis of the judgements and presents the most frequently invoked unfair contract terms and their Hungarian judicial practice.