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Magyar Nemzet demands better lawyers in FX loan trials

August 29th, 2014
In a second criticism of the Ministry of National Development within four weeks, the number one pro-government daily suggests that the state is being represented by incompetent but expensive lawyers in lawsuits filed by banks in order to prove that their forex loan contracts have been fair and transparent.
By the legal deadline set by the forex loan act adopted by parliament in June, almost a hundred of lawsuits have been filed by financial institutions to prove that their general contract rules have been fair and transparent and thus they do not have to refund the unilaterally imposed instalment hikes to their debtors. Earlier this year, the Kúria (Supreme Court) decided that unless a series of severe conditions are met, the contract rules authorizing the banks to unilaterally increase the amount of the outstanding debt and of the instalments were to be judged null and void. In order to avoid hundreds of thousands of lawsuits, Parliament enacted a law declaring the “presumption of unfairness”, compelling the banks to challenge that presumption if they want to avoid refunding the debtors. (See BudaPost, July 2.)  In the first few trials, the court has swiftly rejected the claims put forward by the banks in the first instance. In the very first case, however, the lawyers representing the state did not realise that they were being outsmarted by their opponent, a small regional bank. The court rejected the bank’s request to suspend the trial and refer the law itself to the Constitutional Court. Meanwhile, however, the verdict aknowledged that the bank had negotiated individual conditions with its clients and thus the law presuming the illegality of the general contract conditions was not to be applied in this particular case.
In his Magyar Nemzet editorial, Gábor D. Horváth warns that the Ministry of National Development might be spending huge amounts of money on incompetent lawyers. It awarded the job to big law offices, which subcontracted less known lawyers, whose fees were in some instances reduced by the courts as unrealistically high. Meanwhile, Horváth remarks, some of those lawyers have admitted their inexperience in banking matters. He specifically mentions the example of the first forex banking trial where the lawyers representing the government didn’t even notice that as a result of the verdict, debtors will have to try and sue the bank one by one. “This is going badly wrong”, he writes, but the Ministry could still change the course of the events, by choosing some of the hundreds of chambers active in representing forex debtors throughout Hungary. (On a recent conflict between Magyar Nemzet and the Ministry of Development see BudaPost, August 1)


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