B u d a p e s t i Ü g y v é d i K a m a r a A l a p í t v a: Solatium doloris from the point of view of lawyer’s liability insurance in Hungary dr. Réti László President of the Budapest Bar Association AIDA Budapest Kollokvium November 28, 2014

Solatium doloris (Section 2:52 of the Hungarian Civil Code) Minister’s recital in the Hungarian Civil Code „indirect compensation for the violation of privacy rights by financial means and simultaneous private law punishment of it” Change: Burden of proof is simplified (previously: see Pf.III /1999., for the actual amount: BDT ) Judicial practice Attorney negligence: only negligence as a fact has to be proven: „the injured party’s constitutional right to enforce his claim through the court system was violated” (BH , BH

Solatium doloris (Section 2:52 of the Hungarian Civil Code) Question: Is there going to be a case on lawyer’s liability insurance?

What is violation of privacy rights? Section 251 of the Hungarian Civil Code: ”Violation of privacy rights means a) violation of life, physical integrity or health; b) violation of personal liberty, private life or private home; c) discrimination of a person; d) violation of honor and reputation; e) violation of the right of protection of personal secrets and data; f) violation of the right to bear a name; g) violation of the right to images and audio recordings.” + Section 2:47 of the Hungarian Civil Code [Right to commercial secrecy. Know-how] + Section 2:50 of the Hungarian Civil Code [Right in memoriam]

Types of compensation cases where compensation was paid by the Hungarian Lawyers’ Insurance and Relief Association Selling and buying of real estate30 % Legal representation23 % Successions17 % Missing deadlines13 % Lending related cases4 % Procedures related to companies4 % Stamp duty4 % Everything else5 %

Complaints connected to legal representation: rare, generally was awarded in relation to non pecuniary damages – this may change. Inferences: typical malpractice by attorneys rarely causes a violation of privacy rights. Experience: so far there has been no judicial practice

History of the law Section 6:470, paragraph (1) of the new Hungarian Civil Code = Section 559, paragraph (1) of the old Hungarian Civil Code: „the insured party shall be entitled, under a liability insurance policy, to request the insurance company to exempt him, in the manner and up to the limit specified in the policy, from paying for damages for which he is legally liable.” the different kinds of liability insurance laws are all based on the definition of damages contained in the Hungarian Civil Code > the solatium doloris (legal consequence) would not have fallen under the definition of damages > It would have been left out from the liability insurance collateral too

Corrections contained in the law For this reason already in 2013 the Act on Attorneys at Law was modified: Section 10, paragraphs (1)-(2) then – before entering into force – the new Hungarian Civil Code was modified: Section 6:470, paragraph (1) with this the extension of the scope of solatium doloris onto liability insurance became the norm

Unfair advertisements Unfair advertising practices in relation to solatium doloris in the field of lawyer’s liability insurance (against the market leading Hungarian Lawyers’ Insurance and Relief Association): reference as an extra service to the solatium doloris going beyond the duties required by law; misleading reference to the temporary rules

Temporary rule: Section 55, paragraph 2 of the Act on the temporary and delegated provisions concerning the entering into force of the Hungarian Civil Code For the temporary time (for contracts entered into before the new Hungarian Civil Code) only imposes liabilities on insurers in a rate and conditions they would have been obliged to pay for non pecuniary damages prior to coming into force of the Hungarian Civil Code;

Questions regarding advertising 4. Contrary to this: there is little to no difference, insurance companies entering the market have no portfolios based on the old Hungarian Civil Code, for the insured the Hungarian Lawyers’ Insurance and Relief Association favorably modified its insurance conditions on April 28, 2014 regardless of whether the contract was entered into at the time of the new or old Hungarian Civil Code in effect

Afterword The solatium doloris is a new concept that may bring about significant changes in the field of privacy rights. The problem in relation to the payment of the solatium doloris in the attorney – client relationship does not appear to be a central question. Open question: the repositioning of non-privacy right non pecuniary damages

Thank you for your attention!