The end of prison lawsuit profiteering in Hungary

Instead of rewarding prisoners, the Hungarian government is taking steps to rein in lawyers and compensate victims

editor: REMIX NEWS
author: Daniel Deme

The Hungarian Parliament has passed a new piece of legislation designed to prevent profiteering from lawsuits by convicted criminals, unscrupulous lawyers and human rights NGOs which have taken the Hungarian state to court numerous times on behalf of prisoners.
In the past three years, courts have ruled against the Hungarian state in the range of 10 billion forints (€2.8 million) in cases where prisoners, with strong incentivizes from specialized law-firms, have lodged complaints about their living conditions. These complaints have ranged from overcrowding, insufficient sunlight in the cells, and inadequate facilities on premises. The prison lawsuit business has grown into an industry that had caused not only enormous financial losses to the country, but had also shaken society’s confidence in the justice system.
The law, introduced by Justice Secretary Judit Varga, would first of all put an end to the enormous profits gained by law firms involved in these legal actions, but would also prioritize the financial compensation of victims of crimes instead of that of perpetrators. Victims of crimes, who have been awarded financial compensation, more often than not fail to receive money owed to them by criminals, either because the perpetrators have no means to pay or refuse to do so. Recouping such money in most cases has proven difficult or impossible in the past.
At the same time, prisoners have been awarded sums surpassing the Hungarian annual salary multiple times, and were promptly compensated for what most observers would have described as relatively minor inconveniences.
Prisoners have complained about a lack of sunlight. The Prison of Vac, pictured here, was originally built for the convict of the noble youth and been in operation since 1855. In one such case, the murderers of Hungarian teacher Lajos Szögi have received a multi-million forint compensation for a lack of sunlight in their cell. The murder was committed in the village of Olaszliszka in 2006, when an angry mob, reacting to a traffic accident, beat a teacher to death in front of his two daughters. The Hungarian public reacted with outrage upon learning that the perpetrators of such a violent act were being compensated.
When the new proposal is passed into law, any financial compensation awarded by the courts will be withheld until authorities have determined that the debts and compensation claims towards the convicts are duly settled. Any compensation claims from the part of the victims will have to be settled first, and the remainder of the sum, if any, is then transferred to the prisoners themselves.
Another major change to the present practice is that the money awarded will not be deposited on the bank-account of law firms, but will exclusively be transferred to the accounts of the prisons where the convicts are held. Only after the prisoners have left the institution will the money be transferred to a bank account whose exclusive beneficiary is the awardee. As legal expenses are paid by the claimants, this will clearly disincentivize most legal firms from taking up lengthy and expensive claims if they can potentially only be able to recoup their legal fees years after the proceedings have ended. It might also clearly be a factor that recouping money from convicted criminals might not be as trouble-free as simply deducting their own fees from a sum from their own bank account.
The prison lawsuit industry also took on a political dimension, when human rights organizations, chief among them the Hungarian Helsinki Committee (HHC), known for its strongly critical stance against the Viktor Orbán government, have started to shield the legal enterprise from any criticism under the guises of human rights.
Reportedly , however, some of those legal firms or lawyers, who had actively taken part in these lawsuits have had previous ties to the HHC, such as Gergely Fahidi, or members of the Cech lawfirm, who have preciously worked at the human rights organization as interns. According to media reports , prominent lawyer and liberal political activist György Magyar had also profited from representing prisoners.
Magyar, a high profile critic of Orbán’s government, has been instrumental in winning over €1 million of compensation from the Hungarian state by representing criminals incarcerated in prison institutions.
According to Justice Minister Judit Varga, irregularities around payments have become so widespread that the government had in the spring decided to suspend the transfer of compensations to law firms’ and awardees’ bank accounts. According to her, the entire phenomenon was seriously affecting people’s sense of justice, as perpetrators of the most serious crimes were awarded millions, while their victims had often no means of recouping the compensation owed to them. The decision to suspend compensation payments to prisoners has been attacked by the HCC, which has filed a complaint at the European Council.
Pál Völner, secretary of state for the Ministry of Justice, had emphasized that parliament put an end to the immoral “prison business” that had in the past few years developed into a multi-million euro industry. The new system will put victims first, said Völner, and will make sure that prisoners’ obligations towards society are enforced before they could benefit from any financial compensations.
At the same time, he also noted that the government has made efforts to reduce prison overcrowding. In 2020 alone, the number of prison accommodations have grown by almost 3,000 units.


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