Has Arbitration Become Cheaper Than Litigation In Hungary?

As of 28 January 2025, a legislative change has drastically increased procedural fees for litigation in Hungary. In contrast, the procedural costs of arbitration have remained the same. This raises the question: which option is now cheaper?

Before 28 January 2025

Arbitration procedures are globally and generally regarded as quicker and more cost-effective than regular court litigation. This is primarily due to their lower level of formalities, the single-instance nature of arbitration, and the arbitrators' vested interest in concluding the process and securing their fees.

This was not the case in Hungary. For many years, court litigation, even across multiple instances, proved to be cheaper than arbitration. This is because the procedural fees for court proceedings were capped at each stage, including the first instance, the second instance and extraordinary remedies. In arbitration cases, the arbitrator fees themselves (which are just one element of the