The Ombudsman on the management of deposits in the care of lawyers and its regulation

Press release:

The Ombudsman on the management of deposits in the care of lawyers and its regulation

An additional burden and increased responsibility, yet poorly paid and open to abuse. The Ombudsman has examined regulations relating to the management of deposits in the care of lawyers.

Deposits in the care of lawyers are essentially amounts deposited by contracting parties as guarantees for a particular purpose. They are regulated in separate contracts, and the lawyer may only use the amount for the purposes set out in the contract, and pay it out under the conditions laid down therein.

Due to the large number of individual complaints concerning the issue, Máté Szabó, Commissioner for Fundamental Rights, has examined the problems relating to deposits in the care of lawyers in the context of his Report on the situation of lawyers and on the protection of the rights of lawyers and persons seeking their assistance. According to the Ombudsman the procedure for deposits generates an increased responsibility and an extra burden for lawyers, for which they are not duly compensated since it is only a secondary transaction linked to the civil law transaction.

In a difficult economic situation chances for unlawful use may increase. Irregularities relating to the management of these deposits have very serious consequences in practice for both the contracting party and the lawyer. With respect to clients, the present regulation allows possible abuse by lawyers.

The report of the Ombudsman refers to the summary drawn up in 2011 by the liability insurance association of Hungarian lawyers (Magyar Ügyvédek Biztosító és Segélyező Egyesülete), according to which ‘there are still too many instances of damage related to deposits in the care of lawyers'. The Commissioner for Fundamental Rights has established that present rules on the management of deposits in the care of lawyers may hinder the enforcement of the requirement of legal certainty. For this reason the Ombudsman asked the competent Minister and the President of the Hungarian Bar Association to pay special attention to the right to legal certainty of citizens when drawing up rules and regulations relating to lawyers.