	Lex Mundi Global Attorney-Client Privilege Guide
	Hungary
	(Europe) Contributors Updated 25 Mar 2020
Is the ACP recognized in your jurisdiction?	N.A. (ACP is not recognized as a common-law doctrine but defined by statutes, see below)
If the ACP is not recognized in your jurisdiction, are there rules of professional confidentiality or other rules that would enable a lawyer or a client to withhold attorney-client communications or work product prepared by counsel from disclosure...	[1] The ACP (i.e. professional confidentiality rules defined by statutes) is recognized and regulated in Hungary both in constitutional, criminal and civil law. The regulation concerning this doctrine are contained in every main procedural act and also in the act on legal practice. Notes: [1] This question is directed primarily to civil law jurisdictions that do not recognize common law jurisdictions’ privilege doctrines.
Is a distinction made in applying the ACP or professional confidentiality rules in civil and criminal proceedings? May government authorities require disclosure of attorney-client communications and legal work product?	In criminal proceedings, the duty of confidentiality is absolute and in the civil proceedings it is relative: the defense counsel shall not give any information obtained in that capacity while in the civil cases the client – if he is willing to do – can exempt the attorney from the obligation of the secrecy. According to Ethical Rules of the Hungarian Bar Association the duty of confidentiality does not apply if the client misled the lawyer about his identity. Act LIII of 2017 on the Prevention and Combating of Money Laundering and Terrorist Financing obliges the attorneys and notaries to apply due diligence measures and reporting if necessary in some legal services [2]. This obligation does not apply if the attorney in question is the defense counsel of the client who is the object of the report. In disciplinary and authority cases of bar associations, within the scope necessary for conducting the proceedings, legal practitioners may disclose the attorney-client privileged information to the proceeding bar association bodies and court. Notes: [2] a) buying or selling any participation (share) in a business association or other economic operator; b) transfer of ownership of real estate property; c) founding, operating or dissolving a business association or other economic operator; d) conclusion of a fiduciary asset management contract or unilateral acts for the purpose of fiduciary asset management; e) transfer of any movable property, in particular funds, financial instruments, without consideration.
In the corporate context, what test is applied to determine who within a corporation is considered the client for the purposes of the ACP? (e.g., in the U.S.: the Upjohn approach, control group test, etc.)	There is no test in Hungarian law, the regulation does not analyze this question. The Bar Association of Budapest declared that in case of a company, the client is the entity itself. The entity is represented by its corporate representatives.
Is in-house counsel expected to meet a higher burden than outside counsel in order to establish that privilege applies to in-house counsel’s communications?	There is no distinction between in-house counsel and the outside counsel in this case. Any person bound by the attorney’s confidentiality obligation shall not disclose documents and data containing attorney-client privileged information, and shall not be obliged to testify and provide data concerning the attorney-client privileged information during authority’s revision, inspection but may not hinder the authority’s procedure.
Civil Law Jurisdictions: May in-house counsel assert privilege or professional confidentiality?	The in-house counsel is under the same rules as the outside counsel in case of privilege and confidentiality.
Civil Law Jurisdictions: Is in-house counsel allowed to be active members of your jurisdiction’s bar?	The in-house counsel is allowed to be active member of the bar and they obligated to notify the bar register about their employer.
Is the common interest doctrine recognized in your jurisdiction?	There is no regulation in connection with this doctrine only the ethical rules. The entity entitled to waive the attorney-client privileged information has the right to specify who is entitled to get to know the information subject of the privilege (except in case of criminal counsel).
How is the doctrine articulated in your jurisdiction?	The Ethical rules of the Hungarian Bar Association state if the attorney representing several entities in the same case then the attorney is not bound by the obligation of confidentiality with regard to the entities whom he represents, to the extent that the represented parties’ factual submissions are identical in substance.
Must a common interest agreement be in writing?	This question is not regulated.
Is litigation funding permitted in your jurisdiction? Are there any professional rules in this respect?	Litigation funding is not regulated or forbidden in Hungary but there is no practice of it. In case of engagement for the benefit of a third party, the principal shall have right to make decisions in connection with the information it shares and the third party shall have right to make decisions in connection with the other information in respect of attorney-client privilege according to the ethical rules.
Have the courts in your jurisdiction addressed whether communications with litigation funders may be protected by the ACP or the work-product protection	No
Is the crime-fraud exception recognized in your jurisdiction?	In general, the attorney is obliged to refuse to carry out the client’s (or employer’s in case of in-house counsel) instructions if they conflict with law or are aimed at evading legal regulation, but failure to refuse do not automatically create an exception from ACP. Legal practitioners may disclose attorney-client privileged information in criminal procedures instituted against them to the extent necessary for asserting their right to defense. In the case of the suspicion of money laundering, of terrorist financing, or that specific property is derived from criminal activity, there is a reporting duty of the attorney towards the bar association (except if the attorney is the defense counsel of the aforementioned crime) according to the Act on the Prevention and Combating of Money Laundering and Terrorist Financing. According to Ethical Rules exception from the privilege is if the client misled the lawyer about his identity when the obligation of confidentiality does not apply.
What statutes or key court decisions articulate the crime-fraud exception in your jurisdiction?	There is no statutes or court decision in connection the crime-fraud exception as this doctrine as such is not recognized in Hungary.
Is there a statute or rule that protects information obtained or prepared in anticipation of litigation from disclosure in legal proceedings? (In the U.S.: What state rule is your jurisdiction’s analog to FRCP 26(b)(3)?)	This doctrine is not recognized in Hungarian law, basically because no discovery process is applicable in Hungarian court procedures.
What are the elements of the protection in your jurisdiction?	There are rules however defining similar protection: Documents made for the purposes of defense may not be used as evidence in authority, court or other public authority proceedings and may not be examined, may not be seized and may not be copied by public authority bodies; their presentation, handing them over, giving access to them may be refused. The person concerned may waive these rights, except when the document is connected with his/her defense in a criminal case. Documents made for the purposes of defense shall be documents or part of documents that were created for the sake or within the frameworks of exercising the client’s right to defense in public authority proceedings, during the communication between the legal practitioner and his/her client or a record of what was said during such communication and this character is evident from the document itself. Documents that are not in the possession of the client or the legal practitioner shall not be deemed as documents made for the purposes of defense, except when it is proved that the document has been removed from their possession unlawfully or under a criminal procedure. In case of other documents, the person bound by the attorney’s confidentiality obligation (the legal practitioner) may not disclose these documents and data containing the attorney-client privileged information, may not be obliged to testify and provide data concerning the attorney-client privileged information during authority’s revision, inspection, on-site search conducted at him/her, but may not hinder the authority’s procedure.
Does your jurisdiction recognize an accountant-client privilege?	According to the regulation, registered statutory auditors and audit firms shall treat all data and information, professional and business secrets obtained in the course of carrying out statutory audits under strict confidentiality and professional secrecy, as they may not use or publish the secrets without appropriate and express authorization, unless making such secrets available to the public is their right or obligation by virtue of law. The regulation is protecting the business secrets in a general sense which means that the person who is bound by the obligation of secrecy may refuse to testify if he would violate his obligation except if he has been released from it by the person entitled, or the transmission of the information obligatory for the requested authority.
Does your jurisdiction recognize a mediation privilege?	Unless otherwise prescribed by law [3], mediators must handle any and all data and information obtained in a mediation process in strict confidentiality. During the procedure, the mediator may convey any information received from one of the parties to the other party for reply, unless the party supplying the information expressly forbids the mediator to convey it to the other party. Unless otherwise prescribed by law and unless otherwise agreed by the parties, any statement or recommendation made during the mediation by the parties shall be inadmissible in court or arbitration proceedings initiated after the mediation process. Notes: [3] for example, it is a misdemeanour of felony if the person with who has positive knowledge of preparations being made for some specified crime (e.g. kidnapping, conspiracy against constitutional order, riot, destruction, high treason, treachery, giving aid and comfort to the enemy, espionage)
Does your jurisdiction recognize a settlement negotiation privilege?	There is no recognized settlement negotiation privilege in Hungary.

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Is the ACP recognized in your jurisdiction?

N.A. (ACP is not recognized as a common-law doctrine but defined by statutes, see below)

If the ACP is not recognized in your jurisdiction, are there rules of professional confidentiality or other rules that would enable a lawyer or a client to withhold attorney-client communications or work product prepared by counsel from disclosure...

[1] The ACP (i.e. professional confidentiality rules defined by statutes) is recognized and regulated in Hungary both in constitutional, criminal and civil law. The regulation concerning this doctrine are contained in every main procedural act and also in the act on legal practice.

Notes:

[1] This question is directed primarily to civil law jurisdictions that do not recognize common law jurisdictions’ privilege doctrines.

Is a distinction made in applying the ACP or professional confidentiality rules in civil and criminal proceedings? May government authorities require disclosure of attorney-client communications and legal work product?

In criminal proceedings, the duty of confidentiality is absolute and in the civil proceedings it is relative: the defense counsel shall not give any information obtained in that capacity while in the civil cases the client – if he is willing to do – can exempt the attorney from the obligation of the secrecy.
According to Ethical Rules of the Hungarian Bar Association the duty of confidentiality does not apply if the client misled the lawyer about his identity.
Act LIII of 2017 on the Prevention and Combating of Money Laundering and Terrorist Financing obliges the attorneys and notaries to apply due diligence measures and reporting if necessary in some legal services [2]. This obligation does not apply if the attorney in question is the defense counsel of the client who is the object of the report.
In disciplinary and authority cases of bar associations, within the scope necessary for conducting the proceedings, legal practitioners may disclose the attorney-client privileged information to the proceeding bar association bodies and court.

Notes:

[2] a) buying or selling any participation (share) in a business association or other economic operator;
b) transfer of ownership of real estate property;
c) founding, operating or dissolving a business association or other economic operator;
d) conclusion of a fiduciary asset management contract or unilateral acts for the purpose of fiduciary asset management;
e) transfer of any movable property, in particular funds, financial instruments, without consideration.

In the corporate context, what test is applied to determine who within a corporation is considered the client for the purposes of the ACP? (e.g., in the U.S.: the Upjohn approach, control group test, etc.)

There is no test in Hungarian law, the regulation does not analyze this question. The Bar Association of Budapest declared that in case of a company, the client is the entity itself. The entity is represented by its corporate representatives.

Is in-house counsel expected to meet a higher burden than outside counsel in order to establish that privilege applies to in-house counsel’s communications?

There is no distinction between in-house counsel and the outside counsel in this case. Any person bound by the attorney’s confidentiality obligation shall not disclose documents and data containing attorney-client privileged information, and shall not be obliged to testify and provide data concerning the attorney-client privileged information during authority’s revision, inspection but may not hinder the authority’s procedure.

Civil Law Jurisdictions: May in-house counsel assert privilege or professional confidentiality?

The in-house counsel is under the same rules as the outside counsel in case of privilege and confidentiality.

Civil Law Jurisdictions: Is in-house counsel allowed to be active members of your jurisdiction’s bar?

The in-house counsel is allowed to be active member of the bar and they obligated to notify the bar register about their employer.

Is the common interest doctrine recognized in your jurisdiction?

There is no regulation in connection with this doctrine only the ethical rules. The entity entitled to waive the attorney-client privileged information has the right to specify who is entitled to get to know the information subject of the privilege (except in case of criminal counsel).

How is the doctrine articulated in your jurisdiction?

The Ethical rules of the Hungarian Bar Association state if the attorney representing several entities in the same case then the attorney is not bound by the obligation of confidentiality with regard to the entities whom he represents, to the extent that the represented parties’ factual submissions are identical in substance.

Must a common interest agreement be in writing?

This question is not regulated.

Is litigation funding permitted in your jurisdiction? Are there any professional rules in this respect?

Litigation funding is not regulated or forbidden in Hungary but there is no practice of it.

In case of engagement for the benefit of a third party, the principal shall have right to make decisions in connection with the information it shares and the third party shall have right to make decisions in connection with the other information in respect of attorney-client privilege according to the ethical rules.

Have the courts in your jurisdiction addressed whether communications with litigation funders may be protected by the ACP or the work-product protection

Is the crime-fraud exception recognized in your jurisdiction?

In general, the attorney is obliged to refuse to carry out the client’s (or employer’s in case of in-house counsel) instructions if they conflict with law or are aimed at evading legal regulation, but failure to refuse do not automatically create an exception from ACP.

Legal practitioners may disclose attorney-client privileged information in criminal procedures instituted against them to the extent necessary for asserting their right to defense.

In the case of the suspicion of money laundering, of terrorist financing, or that specific property is derived from criminal activity, there is a reporting duty of the attorney towards the bar association (except if the attorney is the defense counsel of the aforementioned crime) according to the Act on the Prevention and Combating of Money Laundering and Terrorist Financing.

According to Ethical Rules exception from the privilege is if the client misled the lawyer about his identity when the obligation of confidentiality does not apply.

What statutes or key court decisions articulate the crime-fraud exception in your jurisdiction?

There is no statutes or court decision in connection the crime-fraud exception as this doctrine as such is not recognized in Hungary.

Is there a statute or rule that protects information obtained or prepared in anticipation of litigation from disclosure in legal proceedings? (In the U.S.: What state rule is your jurisdiction’s analog to FRCP 26(b)(3)?)

This doctrine is not recognized in Hungarian law, basically because no discovery process is applicable in Hungarian court procedures.

What are the elements of the protection in your jurisdiction?

There are rules however defining similar protection:

Documents made for the purposes of defense may not be used as evidence in authority, court or other public authority proceedings and may not be examined, may not be seized and may not be copied by public authority bodies; their presentation, handing them over, giving access to them may be refused. The person concerned may waive these rights, except when the document is connected with his/her defense in a criminal case.
Documents made for the purposes of defense shall be documents or part of documents that were created for the sake or within the frameworks of exercising the client’s right to defense in public authority proceedings, during the communication between the legal practitioner and his/her client or a record of what was said during such communication and this character is evident from the document itself. Documents that are not in the possession of the client or the legal practitioner shall not be deemed as documents made for the purposes of defense, except when it is proved that the document has been removed from their possession unlawfully or under a criminal procedure.

In case of other documents, the person bound by the attorney’s confidentiality obligation (the legal practitioner) may not disclose these documents and data containing the attorney-client privileged information, may not be obliged to testify and provide data concerning the attorney-client privileged information during authority’s revision, inspection, on-site search conducted at him/her, but may not hinder the authority’s procedure.

Does your jurisdiction recognize an accountant-client privilege?

According to the regulation, registered statutory auditors and audit firms shall treat all data and information, professional and business secrets obtained in the course of carrying out statutory audits under strict confidentiality and professional secrecy, as they may not use or publish the secrets without appropriate and express authorization, unless making such secrets available to the public is their right or obligation by virtue of law.

The regulation is protecting the business secrets in a general sense which means that the person who is bound by the obligation of secrecy may refuse to testify if he would violate his obligation except if he has been released from it by the person entitled, or the transmission of the information obligatory for the requested authority.

Does your jurisdiction recognize a mediation privilege?

Unless otherwise prescribed by law [3], mediators must handle any and all data and information obtained in a mediation process in strict confidentiality. During the procedure, the mediator may convey any information received from one of the parties to the other party for reply, unless the party supplying the information expressly forbids the mediator to convey it to the other party.

Unless otherwise prescribed by law and unless otherwise agreed by the parties, any statement or recommendation made during the mediation by the parties shall be inadmissible in court or arbitration proceedings initiated after the mediation process.

Notes:

[3] for example, it is a misdemeanour of felony if the person with who has positive knowledge of preparations being made for some specified crime (e.g. kidnapping, conspiracy against constitutional order, riot, destruction, high treason, treachery, giving aid and comfort to the enemy, espionage)

Does your jurisdiction recognize a settlement negotiation privilege?

There is no recognized settlement negotiation privilege in Hungary.

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