Developments in Hungarian Constitutional Law: The Year 2016 in Review

Editor’s Note: Today we publish the 2016 Report on Hungarian constitutional law, which appears in the larger 44-country Global Review of Constitutional Law, now available here in a smaller file size for downloading and emailing.

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—Eszter Bodnár, Assistant Professor at Eötvös Loránd University; Fruzsina Gárdos-Orosz, Senior Research Fellow at the Hungarian Academy of Sciences Centre for Social Sciences; Zoltán Pozsár-Szentmiklósy, Assistant Professor at Eötvös Loránd University

I. Overview

The Hungarian Constitutional Court (Court, CC) finished 355 cases in 2016. Only one-fourth of them resulted in a decision on the merits, and only a fragment ended with an annulment of the unconstitutional legal act or court decision.

In this year-in-review, we would like to give a short overview of the most important decisions of the Court in 2016 and give some information about the political and legal background where the Court operates. We also point out the most important controversies that characterize this year’s case law and seek some conclusions.

II. The Constitution and the Constitutional Court

The Hungarian Fundamental Law effective from 1 January 2012 and Act CLI of 2011 on the Constitutional Court have significantly modified the competencies of the Constitutional Court and the role of the different institutions in initiating constitutional review. Changes implemented already by the amendments to the former Constitution in 2010 and 2011 stayed in force concerning the government coalition gaining fundamental influence in nominating judges and limiting the competence of the Court regarding economic and financial constitutionality issues. The president of the Court was formerly elected by the judges for three years, but with the reform, the president became elected by the Parliament for the duration of the whole term of his office. Finally, an amendment raised the number of judges from 11 to 15 without any justifiable pressing need.

Among several changes, the Fundamental Law introduced three types of constitutional complaints and abolished the formerly existing actio popularis. The system of actio popularis meant that it was a legal possibility for everyone to turn to the Constitutional Court without personal interest claiming that law, a legal provision or regulation was contrary to a constitutional provision (abstract ex-post facto review).

The solemn aim of the new constitutional complaint mechanisms was to protect against personal injuries caused by ordinary courts and provide a possibility for constitutional review also in cases where the complainant cannot turn to the ordinary court. Moreover, the Constitutional Court may supervise the constitutionality of legal provisions when applied in certain judicial cases and lead to an unconstitutional court decision. Judicial referral as it existed before 2012 stayed in force, which means that judges in pending cases turn to the Constitutional Court in case they state that an applicable piece of law is unconstitutional.

Originally, besides the ombudsman (who initiated almost all procedures of this kind after 2012), the Government and a one-fourth minority of the MPs (from 2010 the latter would need the cooperation of all parliamentary opposition groups) were entitled to initiate the abstract ex-post facto review procedure of the Constitutional Court. From March 2013, with the entering into force of the Fourth Amendment to the Fundamental Law, the Head of the Curia and the Chief Public Prosecutor can also submit a proposal for a review of constitutionality. The new regulation can still be qualified in this regard as a very restrictive one as to the control of legislation especially in comparison to the former solutions.

III. Constitutional Controversies

As a result of a constitutional amendment in November 2010, a serious limitation of the competences of the Constitutional Court was introduced. According to this amendment, the Constitutional Court may assess the constitutionality of acts related to the state budget, central taxes, duties and contributions, custom duties, and central conditions for local taxes exclusively in connection with the rights to life and human dignity, the protection of personal data, the freedom of thought, conscience and religion, or with rights related to Hungarian citizenship. Also, the Court may only annul these acts in cases of violation of the above-mentioned rights. The restriction of the Constitutional Court’s competences was the answer of the alliance of the governing parties to a CC decision, which annulled a law on a certain tax imposed with retroactive effect. From 2010 to 2013, the two-thirds majority having the competence to adopt constitutional amendments overruled other decisions of the CC as well.[1] As a result of the new system, the control of the legislation and the government (strictly cooperating with each other in this parliamentary democracy) became more difficult as the initiatives for the constitutional review of the problematic pieces of legislation became more frequent in procedures attached to concrete judicial cases, launched in constitutional complaint procedures. The high non-admissibility of these constitutional complaints meant a severe restriction on the number of cases examined on the merits by the Constitutional Court.[2]

Although the new provisions in the Fundamental Law on the competencies of the Constitutional Court provide for several procedures to initiate the review of a piece of legislation, in reality, due to the above-mentioned “court-packing” and the modified ways of the election of the members and the president, plus due to the competence restrictions, the Constitutional Court has lost much of its actual relevance compared to the period before 2010.

The changes mentioned in Part II have led to a change in understanding the protection of the constitution and the protection of constitutionality differently. We explain the result of this different understanding in Part IV with the 2016 cases. Interpretation of the CC has changed significantly towards a more deferential understanding of constitutionality. To summarize, not only the institutional challenges or the changes in the competence of the Court are worth mentioning when it comes to the Hungarian Constitutional Court but also, partly as a result of this, the actual composition of the judicial body. The change in the composition has led to a change in the understanding of constitutionality. The cases below will show that the majority of the Court is willing to accept political proposals formulated as legislative acts and show deference for the legislative majority in sensitive cases. Sovereignty, democracy or the rule of law are understood differently from earlier concepts developed by the CC. This process is accelerated by the Fundamental Law’s closing and miscellaneous provisions where it is declared that Constitutional Court decisions issued prior to the entry into force of the Fundamental Law are repealed. Not only has the relation to former case law changed significantly in recent years but also the relation of the Hungarian constitutional order to its European and international counterparts. In 2016 the CC made reservations in the majority opinion with regard to the law of the European Union and dissenting opinions questioned the relevance of ECtHR decisions in the domestic constitutional interpretation of fundamental rights. It is also a major dilemma of 2016 how the interpretation of the constitution is ruled by the Fundamental Law. The Fundamental Law declares in Article R (3) that the provisions of the Fundamental Law shall be interpreted in accordance with their purposes, with the Avowal of National Faith (Preamble), and with the achievements of our historical constitution. In 2016, the Constitutional Court has started to take this provision seriously as we will see in Decision 22/2016 (XII. 5.) below.

IV. Major Cases

A. Decisions on elections and direct democracy’s impact on political competition

In 2014, for the first time Hungarian citizens without residency in Hungary could participate in parliamentary elections and vote by postal voting. At the same time, postal voting is not allowed to Hungarian citizens residing in Hungary but who are abroad on election day. In Decision 3086/2016 (IV. 26.), the CC held that this difference in treatment did not violate the right to free elections (Article XXIII of Fundamental Law) and the right to non-discrimination (Article XV).

According to the Court, the residence requirement expresses that residents have a more intensive connection to the political community so it can be expected that those voters will be at home on election day or go to an embassy or a consulate to cast a vote. The other argument was that although the possibility of voting by post seems to be an advantage, it should be regarded together with the electoral system, which gives non-resident voters only one vote for party lists (while resident voters can vote both for single member candidates and party lists), which is a disadvantage for non-resident voters. The easier method of voting was therefore considered by the Court to be a form of compensation for them. In our opinion, this raises serious concerns as to the principle of effective citizenship: that while ensuring an advantage for the non-resident voters, the law brought the resident voters into a relatively disadvantageous position.[3]

In Decision 3130/2016 (VI. 29.), the CC upheld the resolution of Parliament that ordered a national referendum on the question ‘Do you want the European Union to be able to mandate the obligatory resettlement of non-Hungarian citizens into Hungary even without the approval of the Parliament?’ The Court held that according to the Constitutional Court Act, it can only examine the formal procedure of the Parliament (which was constitutional) but cannot review the constitutionality of the subject of the referendum approved by the National Election Commission and the Supreme Court (Curia). However, the CC also rejected the constitutional complaints challenging the Curia’s decision approving the referendum question.[4] According to the CC, the petitioners had no standing to challenge the decision of the Curia because as simple voters their fundamental rights were not affected by the decision. We argue in line with many constitutional scholars that the decision of the CC was far too deferential because the question asked on the referendum was unconstitutional. The Fundamental Law does not allow voting on questions that do not belong to the competence of the parliament. Among other constitutional problems, this question can hardly be regarded as a purely Hungarian legislative issue.[5]]

B. Increasing restrictions on political communication rights

The freedom of assembly is regulated in Hungary by an act adopted in 1989 as a huge step in the democratic transition process. According to the very liberal regulation, an ex-ante ban on assembly is possible only in two cases: if according to the police it seriously endangers the proper functioning of the representative state institutions or courts, or if the circulation of traffic cannot be secured by another route. Any other problem that might emerge during the event (like the violation of rights of others or the risk of a crime) can result in the dispersing of the event. In Decision 13/2016 (VII. 18.), the CC, however, held that the police acted lawfully and constitutionally when it used a new, non-codified reason to enact a prior restraint on a demonstration in front of the home of the prime minister (the reason was the assumed violation of the privacy of the inhabitants in the neighbouring district). The CC also argued that there was an unconstitutional omission, meaning that the Parliament should amend the act on the freedom of assembly in order to regulate the cases when the freedom of assembly and the right to privacy are in collision.

On the contrary, in Decision 14/2016 (VII. 18.), the CC annulled the decisions of the police and the court supervising it that forbade a demonstration based on hypothetical grounds (assuming that it would be dangerous and would violate others’ rights). However, the CC affirmed that there is an unconstitutional omission and prescribed that the Parliament implement safeguards to ensure the peaceful character of demonstrations and resolve the collision of the freedom of assembly with other fundamental rights, primarily by restricting the first more.

The Hungarian Media Act states that a reporter cannot add an opinion to the news. In Decision 3264/2016 (XII. 14.), the CC held this provision is not against the right to free expression and freedom of the press unless it makes clear that this is not a fact but an opinion of someone. So it upheld the decision of the Curia that decided that a political party cannot be tagged as “far-right” in the news report because this adjective constitutes an opinion and not a fact.

It would seem that the CC expanded the freedom of the press in Decision 19/2016 (X. 28.) by stating that the media has a right to broadcast ‘public service advertisements’ (not-for-profit advertisements with a public purpose). However, in the concrete case, the CC annulled a Curia decision where the Curia found that the advertisements of the Government on campaigning to encourage voters to participate in the above-mentioned migration quota referendum initiated by the Government were illegal. The Curia held that public service advertisements were just a means to circumvent the strict campaign regulation and to ensure an illegal advantage for the Government in the campaign. The CC annulled this important Curia decision.

C. Wrestling with other state institutions for the protection of informational rights

In two consecutive decisions [Decision 16/2016 (X. 20.) and Decision 17/2016 (X. 20.)], the CC upheld its position that photographs showing police actions shall be published without prior permission of the police officers concerned. In the two similar constitutional complaints, press organs initiated the examination of the judgments of ordinary courts as these declared that the press organs violated the law by publishing photographs of police officers in action without their prior permission. In its reasoning, the CC pointed out that the conditions for publishing such photographs, as declared by the CC in a previous case [Decision 28/2014. (IX. 29.)] should be taken into consideration by the ordinary courts. As in these cases, the freedom of the press was in conflict with human dignity; balancing between the conflicting rights is unavoidable. Such photographs can usually be published if the publishing is not arbitrary, so it provides due information about contemporary events as public information about the exercise of executive power. According to the CC, in this case, the courts failed to balance properly between the conflicting rights. Their interpretations were not in accordance with the constitutional requirements. Moreover, the CC emphasized that while ordinary courts are in the position to examine the state of affairs, to evaluate the evidence and finally to decide in concrete cases, the interpretation of the CC on constitutional principles and on the scope of constitutional rights must be taken into consideration. It is worth adding that the ongoing discussion of the ordinary courts and the CC on the legality and the constitutionality of publishing photographs alike is far from ending.[6]

In Decision 8/2016 (IV. 6.), the CC declared that funds used by the foundations established and companies owned by the National Bank of Hungary are public funds; therefore the information regarding their expenditure shall be qualified as information in the public interest. The case was initiated by the president of Hungary (the head of the state) as an ex-ante review of the amendment to the Act on the National Bank of Hungary, which stipulated certain restrictions on public information. According to the amendment, data regarding the functioning of the companies owned by the National Bank were considered part of a decision-making process and therefore secret for 30 years while information regarding the functioning of the foundations established by the National Bank were deemed similarly. According to the CC, companies owned by the National Bank are indirectly owned by the state; therefore the information regarding their activity is by definition data of public interest. Concerning the foundations established by the National Bank, taking into consideration the source of their assets and their activity, the CC declared that their funds are public funds and are performing public tasks. The CC finally declared that the challenged provisions were unconstitutional, as there was no legitimate aim to limit the freedom of public information. Overall the decisions on the right to information show that the CC is often up to fight against the restrictive interpretation of ordinary courts or ready to challenge government attempts.

D. Selectivity in the protection of the rule of law

Decision 7/2016 (IV. 6.) examined the retroactive effect of certain provisions of the amendment to the Act on the Hungarian Post Office. The case was initiated by the president of Hungary as an ex-ante review. The new regulation introduced a limitation on the publicity of data regarding the business activity of the Hungarian Post Office and its companies in order to protect their business interests from other competitors present on the market. The constitutional dilemma could have been quite similar to the case of the amendment to the Act on the National Bank of Hungary: the president here did not object to the limitation of the public access to these data. The petition claimed simply that the retroactive introduction of the new provisions was unconstitutional. According to CC case law, a piece of legislation with retroactive effect is not always unconstitutional, but only when it has a punitive or more burdening effect. The CC argued in this 2016 case that the examined provisions have no punitive or burdening effect. As they are only of a clarifying nature to the conditions for exercising the freedom of information, the retroactive effect of the law was found constitutional.

In Decision 23/2016 (XII.12.) the CC examined the constitutionality of the Act on the special reimbursement program open for capital market investors. Those investors who lost property due to the bankruptcy of big brokerage companies could take part in the reimbursement program. The loss was caused by systemic irregularities in brokerage activities. Due to the fact that the examined regulation contained limitations of the access to reimbursement in many aspects, dozens of constitutional complaints were submitted, claiming that the act in question limited the fundamental rights of the complainants (equal treatment, the right to property, the rule of law and the right to fair trial). The CC declared that the system of reimbursement established by the law is of an ex gratia nature based on equity, which constitutes no ground for such right-based claims. In other aspects, the CC found the regulation reasonable and based on public interest. The constitutional complaints were therefore rejected. The Constitutional Court in this decision also rejected the constitutional complaints of financial institutions as the ex gratia remedy for the loss investors were to be offered by all financial institutions. The institutions are to be compensated for this actual violation of their property rights only in a later stage, according to the Act CXXIV of 2015 on the stability of the capital market. Some financial institutions claimed that the measures implemented by the act were not proportionate concerning the limitation of their right to property, but the CC declared the constitutionality of the related, highly problematic provisions as well.

In several constitutional complaint decisions in 2016, the CC further declined to overturn the decisions of ordinary courts in cases concerning foreign currency loan contracts.[7] The economic crisis of 2008 and especially the rapid exchange rate depreciation of the Hungarian forint resulted in a significantly worsened situation of debtors. Legislative acts aiming to help the situation and related judicial decisions were reviewed by the Constitutional Court continuously. Novel constitutional ideas, unconventional constitutional measures and new doctrinal solutions were born in foreign currency loan-related decisions. In 2016, in constitutional complaint procedures, the CC enhanced its position developed already in 2014 and 2015. In its Decision 34/2014 (XI. 14.), it examined the unconstitutionality of the legislative act regulating basically two questions: whether exchange rate margins in foreign currency loan contracts are null and void and whether unilateral amendments to contracts are unfair.[8] According to the Constitutional Court, the rules did not attain the level of unconstitutionality either in the details or as a whole. The act did have a restrictive effect on the fundamental rights in question, but the restriction itself could not be considered unconstitutional under a proportionality test. In Decision 2/2015 (II. 2.), the petitioner judges claimed that the principle of separation of powers, right to fair trial, the rule of law and the legal certainty were breached in credit crunch related legislation.[9] The Constitutional Court rejected all judicial referrals. Later, the Constitutional Court concluded a great number of decisions on the subject of foreign currency loan crises legislation in 2015 and 2016 with regard to the various constitutional complaints. All claims were rejected,[10] although the CC itself acknowledged that the extraordinary emergency solutions were problematic from the rule of law point of view. They imposed an unreasonable burden on financial institutions with retroactive effect and furthermore did not allow for a fair trial.

E. The constitutional identity of Hungary defined as making reservations to EU law

In Decision 22/2016 (XII. 5.), the interpretation of the Fundamental Law had been requested from the Court by the ombudsman. As explained in the motion, the concrete constitutional issue was related to the European Union’s Council Decision (EU) 2015/1601 of 22 September 2015 on migration.

The CC established that the EU provides adequate protection for fundamental rights. The Constitutional Court, however, cannot set aside the protection of fundamental rights, and it must grant that the joint exercise of competences would not result in violating human dignity or the essential content of other fundamental rights.

The Court set two main limitations in the context of the question on the legal acts of the Union that extend beyond the jointly exercised competences. First, the joint exercise of competence shall not violate Hungary’s sovereignty; second, it shall not lead to the violation of its constitutional identity. The CC emphasized that the protection of constitutional identity should take the form of a constitutional dialogue based on the principles of equality and collegiality, implemented with each other’s mutual respect. The Constitutional Court established its competence for the examination of whether the joint exercise of powers by way of the institutions of the EU would violate human dignity, another fundamental right, the sovereignty of Hungary or its identity based on the country’s historical constitution.

The curiosity of the case is that this is the first time that the CC has ruled explicitly on the relation of EU law and the domestic constitution claiming that the Fundamental Law has ultimate supremacy in fundamental constitutional questions. Furthermore, the constitutional identity, the inviolable core of the constitution, has never been defined as such formerly. The country’s historical constitution as an element of the unamendable identity also poses new questions in the Hungarian constitutional order. If the Fundamental Law is amendable only up until it does not interfere with the historical constitution as a basis, the historical constitution not defined so far in the positive constitutional law in effect might have a new, stronger position at least as a tool of the constitutional interpretation.[11]

V. Conclusion

The above cases showed that the CC decided important matters in 2016, but relevant decisions were carefully designed not to impose undesirable constraints on the legislature.[12] There are considerable improvements with regard to the right to information, but on the other hand freedom of the press is limited. Retroactive effect of a piece of legislation is rarely found unconstitutional although the CC alludes to the rule of law in many decisions. The role of participatory democracy is underlined, but many decisions justify restrictions on actual democratic participation. On the other hand, participation is made possible in the form of a popular vote when it can have no legal consequence. Financial support is given in important cases, but the circumstances are not clear. Constitutional complaints remain the major competencies of the Constitutional Court to question the constitutionality of government actions. State institutions are not active in initiating ex-post facto review of legislation. Judges, therefore, remain the key actors in initiating important petitions, raising fundamental questions together with the individual complaints. As we explained, constitutional justice is puzzling in 2016 as to the evaluation of doctrinal development. As to its relevance as a balancing factor to governmental powers, it certainly loses further points in 2016.

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[1] European Commission for Democracy through Law (Venice Commission), Opinion on the Fourth Amendment to the Fundamental Law of Hungary [CDL-AD(2013)012] 83.

[2] The Constitutional Court of Hungary, ’Statistics’ <http://hunconcourt.hu/constitutional-court/statistics> accessed 14 February 2017.

[3] Eszter Bodnár, ‘All Voters are Equal but…Two Case Studies on the Voting Rights of Hungarians Living Abroad’ (2016) ICL 4.

[4] Decisions 3130/2016. (VI. 29.), 3150/2016. (VII. 22.), 3151/2016. (VII. 22.).

[5] Zoltán Pozsár-Szentmiklósy, ‘A Kúria végzése a betelepítési kvótáról szóló népszavazási kérdésről. Országgyűlési hatáskör az európai jog homályában’ (2016) Jogesetek Magyarázata 1-2.

[6] Éva Balogh, ‘A megkülönböztetés művészete: bírói mérlegelés a közszereplőkkel kapcsolatos közlések szabadsága kapcsán’ (2016) Fundamentum 1.

[7] Decisions 3103/2016. (V. 24.), 3098/2016. (V. 24.), 3167/2016. (VII. 1.), 3222/2016. (XI. 14.), 3272/2016. (XII. 20.).

[8] Act XXXVIII of 2014 on the Resolution of Questions Relating to the Uniformity Decision of the Curia Regarding Consumer Loan Agreements of Financial Institutions.

[9] See also Act XL on the Rules of Settlement Provided for in Act XXXVIII of 2014 on the Resolution of Questions Relating to the Uniformity Decision of the Curia Regarding Consumer Loan Agreements of Financial Institutions and on other related provisions.

[10] According to statistics of the Constitutional Court, in 2015 630 motions were submitted to the Constitutional Court in the same subject and 1,300 constitutional complaints with essentially identical texts were submitted in the same period. 700 foreign currency loan cases were active on 31 December 2015. Alkotmánybíróság, ‘Statisztika’ http://alkotmanybirosag.hu/dokumentumok/statisztika/2015 accessed 14 February 2017.

[11] Schweitzer Gábor, ‘Alaptörvény – sarkalatos törvény – történeti alkotmány’ in Boóc Ádám’ Fekete Balázs (eds), Il me semblait que j’étais moi-même ce dont parlait l’ouvrage – Liber Amicorum Endre Ferenczy (Patrocinium 2012) 261–262; Szente Zoltán, ‘A historizáló alkotmányozás problémái – a történeti alkotmány és a Szent Korona az új Alaptörvényben’ (2011) Közjogi Szemle 3.

[12] Zoltán Szente, ‘The political orientation of the members of the Hungarian constitutional court between 2010 and 2014’ (2016) 1 Constitutional Studies 1.