The work of lawyers is fundamentally affected by coronavirus. Due to the shutdown of the economy, no new companies are being founded, there are no company modifications, and even real estate transactions are being postponed. In the investigative phase, however, in some situations lawyers still do have to get involved personally. In criminal cases, involvement is necessary, otherwise suspects would have to be released. Some lawyers will also face livelihood problems. Our interview with János Bánáti, president of the Hungarian Bar Association.
To what extent are lawyers affected by the coronavirus pandemic?
Fundamentally. the government has just issued a decree that will completely reorganize court proceedings. In short, there will be basically no stoppage in civil lawsuits, but preferably only written communication will be used. There will be a postponement only when proving is inevitable and it cannot be resolved by remote hearing.
The question of criminal cases is more complex, because at first instance the presence of the participants is essentially inevitable, so in such cases a postponement will be commonly applied.
The bar must be ready to adapt to a completely new situation, use new working methods, and new ways of communication with clients.
What is the currently used procedure with investigations?
The investigation phase continues. In a meeting led by ORFK (National Police Force) a few days ago we discussed possible solutions. Under the mandatory provision of the law, there are situations in which a lawyer must also be involved. If someone is detained, their lawyer or an assigned defence counsel must be summoned to the suspect’s first interrogation. The presence of a defence counsel is also mandatory when a decision about arrest is being taken.
It would have far-reaching consequences if the defence counsel did not attend, because if an interrogation cannot be held within 72 hours of detention due to the absence of the defence, the suspect can be released.
How do you protect your colleagues in these mandatory appearances?
This was one of the issues we discussed with ORFK and the judicial leadership. Everyone is trying to be very careful.
I would add, however, that face masks are not provided to our colleagues, they have to take care of it themselves.
Has the number of crimes decreased?
So, investigations are going on, new suspects are being found, but also new crimes occur in connection with the state of emergency, which also need a response. And now I am not only thinking of scaremongering, but also of other crimes against property, or fraud.
What about other cases? How sharp is the decline there?
Although we do not have specific figures, all feedback clearly indicates the same: the turnover of law firms has fallen significantly.
It’s safe to say that lawyers have currently lost at least half of their work.
There are no lawsuits, real estate transactions are being postponed, and also establishment of new companies and company modifications ceased to occur. The main question is how long all this will last and whether assignments will return later.
70 percent of lawyers’ assignments are generated by the economy. If the economic meltdown lasts longer, it will also affect our profession sensitively.
What about real estate transactions?
Real estate is a sensitive barometer of the economy, and there has been a significant decline there as well. Transactions may start again later, but as for now, non-essential transactions are all postponed. In addition, it is not clear how deadlines will be modified at the Land Registry. The Land Registry does not work electronically. The company registration processes are already electronic, contact between the courts and lawyers is also electronic in many respects, but the Land Registry is still paper-based. It is still unpredictable what kind of problems will arise there in the near future and later.
Could this downturn cause livelihood problems?
Lawyers and law firms do not provide data on their income. There was a law three years ago that would have made the balance sheets of law firms public, but for some mysterious reason it had been revoked before it could be applied. Therefore, only NAV (Tax Office) has information about the turnover and income of the law firms, the Bar Association does not. But based on experience in times of ‘peace’, I can say that the 15,000 practicing lawyers in the Bar belong to three different groups.
The first one-third has an income that is higher than the Hungarian average. They are in a good financial situation, with a secure livelihood, having major permanent assignments, from large companies and foreign clients. The second third has no daily problems as they can make a decent living from working as a lawyer. There is a third group, however, who have already had livelihood problems earlier, too. One proof of this is the noticeable interest in defence assignments, which are very underpriced by the budget.
In other words, one-third of the Bar do not have sufficient income, so obviously, they are the most vulnerable. Presumably they don’t have any savings, either. There may be problems here, we are prepared for that. The association also needs to do something by its own means.
How can you help these people?
We have turned to the Minister of Justice and we are asking for an amendment to the Act on Attorneys in view of the emergency.
Currently, it would be difficult to convene an assembly of delegates, it is only the assembly of delegates, however, which has the right to modify the budget and membership fees. If the presidency is given the mandate to act on behalf of the assembly of delegates, and it is possible without personal meetings, we will probably find some solutions for the following few months to help our colleagues.
We are considering primarily reducing the membership fee or postponing payment deadlines.
At present, our monthly membership fee is HUF 10,000, so if we remit fifty percent, it will be HUF 5,000 per month. It might also help a little. The compulsory liability insurer, the Hungarian Lawyers' Mutual Insurance Association, will also give a discount. Fortunately, they can provide coverage for everything there.
You have recently written to Minister Gergely Gulyás. What facilitations did you ask for?
We are not asking for any allowances other than those received by other people suffering average losses. We accept that hospitality and tourism will receive extra help, as the market there is completely ruined. We are merely asking for what other people who accumulate losses will get: tax waiver for KATA or deferred payment of social security contributions.
The Ministry of Justice is now preparing a number of laws and regulations, and they are doing it extremely quickly. What is our opinion about their work?
They are currently doing heroic work. Personally, I also have good friends there, former lawyer colleagues. We have a good relationship with the ministry. In this special situation, we consult a lot, and we are invited to share our thoughts with them. They have great responsibility.
I hope that by continuing to work together, we will find the best solutions so that the justice system can carry on working and the judiciary can survive in the current emergency situation.