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The Act on Public Construction Investments Entered into Force and a New Act to Simplify the Operation of the State

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On 19 July 2023, the Constitutional Court established that certain provisions of the act on public construction investments are unconstitutional, therefore, it could not enter into force as planned on 1 August 2023.

The act laid down detailed and comprehensive rules on the public works investment regime, some of which are also set out as cardinal provisions (in Hungarian: “sarkalatos rendelkezés”), the modification of which is only possible by the votes of the two-thirds of the present members of the Parliament. However, the bill allowed for derogations from its own rules in the provisions at issue, even by ministerial decree.

As a result, the bill was amended in line with the decision of the Constitutional Court. A cardinal provision has been added to the act ensuring the necessary flexibility in individual cases and authorizing the Government to grant exemptions from the obligations contained in certain specific provisions of the act or to grant benefits to certain specific actors of public investment. The Hungarian Parliament accepted the amended bill on 25 October 2023 and the act entered into force on 8 November 2023.

At the beginning of November 2023, the substantial part of the provisions of a new act on the provisions relating to further simplification of the operation of the State entered into force which amended several acts such as the Road Traffic Act, the Building Act and the Code of Civil Procedure. The act aims to significantly reduce the administrative burden on citizens and businesses. The administrative burden on businesses will be reduced by narrowing the scope of the various types of regulation, for example in the case of fire safety or accounting regulations. By transposing the emergency regulation on public hearings into law, the possibility is created to hold public hearings without the personal appearance of the persons concerned, by means of electronic communication or by publication on a website. The legislation is not new, as it was and is already being used by public authorities and municipalities during the coronavirus epidemic. The act also affects the public notification (in Hungarian: “hirdetmény”) of a decision taken by a public authority:  the public notification must be performed by means of notice if the customer is in an unknown location, if there are other unavoidable obstacles to notification, if an attempt to notify the customer is already unsuccessful, or if notification is required by law or government decree. For the convenience of customers, instead of publication on notice boards, in most cases, only the publication of decisions on a website will be regulated.

By Lidia Suveges, Attorney at law, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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