Restoring Checks and Balances and the Rule of Law, Welcoming Back International Clients

With Tisza having swept to power on a supermajority, do you expect the first parliamentary term to be packed with law changes, much as it was in 2010 when Fidesz returned to power?

Erika Papp: Yes, I think businesses should prepare for a very active legislative cycle. The new government is likely to implement significant regulatory and economic reforms at pace, and we are already closely monitoring developments. We have launched a dedicated platform, Hungary Forward, that provides practical, decision-ready intelligence and legal analysis to help clients monitor and interpret upcoming legal and regulatory developments.

András Posztl: We anticipate a surge of significant legislative activity. This period will likely be marked by a “firework display” of important new legislation aimed at reinforcing the rule of law and promoting a more stable, business-friendly environment.

Péter Lakatos: I expect a very active legislative period. The priority will be dismantling the prolonged “state of danger” regime and restoring ordinary constitutional governance. This affects many legal norms and, if mishandled, could create constitutional uncertainty. Implementing the new government’s agenda, including possible wealth tax legislation, will also require major legal changes.

Gábor Pázsitka: A busy legislative period should be expected, with movement on several fronts relatively early in the term.

András Szecskay: Yes, definitely. I expect the restoration of checks and balances, which is required for the proper operation of the rule of law in a democratic society. In my opinion, this is not an abuse of Tisza’s supermajority; this is a correction of the former abuse of a supermajority. The composition of the new Tisza MPs is very different from that of the outgoing parliamentary group. I expect their decisions to be based on expertise rather than on cult-like political loyalty.

János Tóth: Most definitely, we are already seeing several signs of that. For businesses, the key question is sequencing: which changes come first, and how efficiently the rule of law will be restored.

What are the areas that you think need the greatest attention in terms of new laws?

EP: One area that clearly requires significant attention is insolvency and restructuring law. Hungary’s current framework is outdated and no longer fully reflects the realities of modern business restructurings or the expectations of international investors and lenders. A new insolvency regime is therefore a very important development, particularly as it aims to unify procedures and introduce more flexible restructuring tools. It will also be important for Hungary to align with evolving EU trends, including preventive restructuring mechanisms and concepts such as prepack proceedings, which can help preserve enterprise value and jobs. A modern and efficient insolvency framework is essential for economic resilience, financing activity and investor confidence.

PL: Our clients need a predictable legal environment that supports the market economy and protects businesses from excessive or arbitrary state intervention, in line with rule-of-law standards.

GP: Joining the European Public Prosecutor’s Office, establishing a new asset recovery body, limiting the prime ministerial mandate to two terms, drafting a new constitution, ensuring judicial independence, and reforming public procurement are high on the agenda.

JT: The priority is restoring the rule of law in a structured, constitutionally sound way. This requires strengthening judicial independence, normalizing the legislative process away from decree-based governance, and improving compliance with EU law and court rulings.

When it comes to the legal ecosystem, what needs fixing? More courts or prisons? More judges? More sittings? More digitization? Something else?

PL: Restoring both the reality and perception of judicial independence should be a top priority. No judge should feel exposed to court administration or political pressure, and the public must have full confidence in this.

GP: Digitization is definitely an area that needs progress.

ASz: I don’t expect major changes. We seem to have enough courts and judges; however, a closer look at the workload of certain courts might lead to the appointment of more judges. I see a bigger problem in the overly formalistic procedural rules that judges are required to apply, which are counterproductive to broader access to justice.

JT: The most urgent priority is a more systematic and thoughtful use of technology across the legal ecosystem to strengthen institutional credibility and significantly improve how the system functions overall. This is not just about digitizing courts or increasing case-processing efficiency; it is about coherent and coordinated adoption of technology in law-making, adjudication, compliance, and legal practice alike.

What will be the benefits to Hungary of joining the European Prosecutors’ Office?

PL: Joining the European Public Prosecutor’s Office would help ensure that criminal law matters are assessed free from local political influence.

GP: Joining the EPPO means that fraud involving EU funds will be investigated and prosecuted by an independent European body. For businesses, this provides an additional layer of assurance that the playing field is level.

ASz: The role of the EPPO should not be misinterpreted. It will serve in addition to, not in place of, the Hungarian prosecutor’s responsibilities. I hope the two institutions will work hand in hand and complement each other. In any event, the EPPO can be expected to be independent, neutral and objective. As a lawyer, I expect the new government to sign the European Convention on the Protection of the Legal Profession (the Luxembourg Treaty), which has been pending for more than a year, even though 31 states have already signed it.

JT: Joining EPPO would be a very strong signal of commitment to transparency, accountability, and the protection of EU financial interests.

The business mood in Budapest seems brighter, at least during this honeymoon period until the new government starts having to make difficult and potentially unpopular decisions. Do you get a sense of this from your international clients? Are they ready to invest, or are they planning to “wait and see?”

EP: There is definitely a close interest among many international investors and financial institutions at the moment. As a banking lawyer, this is naturally the area where I see developments most directly, and from that perspective, I can already see certain foreign banks visibly increasing their presence and activity in Hungary. In my experience, this is usually a strong indicator of improving market confidence and growing appetite for investment opportunities.

AP: There has been an impressive wave of enthusiasm from international clients and financial institutions, with many expressing a strong desire to reengage with the Hungarian market. While the initial wave of positive sentiment is palpable, many of these clients are keenly waiting to see how the government’s promises will translate into concrete legislative actions and a genuinely more business-friendly environment.

Ákos Fehérváry: We see a clear improvement in sentiment among international clients, for whom Hungary was not on their radar for certain reasons in the last couple of years. Private equity and other investors have already invited us to discuss and learn more about market trends and opportunities. A major financial group reversed its earlier plans and has now decided to keep its regional HQ in Hungary and increase its activities. This reflects expectations of a more business-friendly, predictable, EU aligned environment, though most remain cautious and wait to see the new government’s actions.

PL: Our international clients reacted very positively to the election result, seeing an opportunity to restore trust. We have already seen previously suspended cross-border transactions resume.

GP: There is definitely a shift in sentiment. We are seeing a general willingness to reengage with Hungary. The government’s stated goal of creating a predictable economic and business environment with a level playing field is exactly what international investors have been waiting to hear.

ASz: Whoever I talk to, I sense great enthusiasm. Investors look for safe and predictable investment opportunities, and I am very optimistic that, once the legislation becomes stable and reliable, without improvised tailor-made amendments, investors’ confidence in Hungary will return.

JT: Clients are encouraged by the prospect of improved EU relations but remain largely in a wait-and-see mode. They want to see whether reforms, particularly related to the rule of law, judicial independence, and EU compliance, are implemented consistently and durably, not just announced.

Which areas of law are bringing in the most work nowadays, and why is that?

ÁF: Regulatory complexity is driving high-quality work, while M&A remains active in key sectors, such as tech, automotive and energy. Banking and finance is supported by construction and refinancing needs and tighter conditions, and real estate is picking up with renewed investor interest and activity increasingly focused on high-quality assets. A rapidly developing new area is defense, with various tier-related activities.

PL: Activity has increased across almost all our practice groups this year, with particularly strong growth in M&A.

GP: Renewable energy and battery storage projects are key on both the financing and regulatory sides. M&A and real estate attract renewed interest from foreign investors. Regulatory and compliance work is consistently busy, and we also see a growing demand in employment law.

ASz: Dispute resolution is still leading, although M&A and corporate work should normally be at the top. We also see a lot of competition and antitrust-related matters.

JT: Currently, much of the activity is driven by regulatory complexity and uncertainty. There is strong demand in areas such as compliance and investigations, particularly in relation to state-linked entities and EU-facing businesses; regulatory and administrative law, given the number of rapidly changing rules; and FDI screening and foreign investment structuring, which has become complex due to overlapping regimes.

How cut-throat is the market right now? Is client price sensitivity producing a “race to the bottom?”

AP: There is a noticeable segmentation within the market. Competition in the commodity segment has become even fiercer, with rates for routine legal work dropping to levels even below what one might pay a car repair mechanic. However, the picture is different when it comes to more complex work, especially for international clients. In these cases, clients still recognize the value of expertise and are willing to pay appropriate fees for high-quality service. That said, the compensation gap between the U.S. market and the rest of the world is widening rapidly, underscoring how quickly global dynamics can shift.

ÁF: Clients remain sensitive to pricing, with greater focus on industry knowledge, reliability, predictability, efficiency and overall value. That leads to a more clearly segmented market. Our approach is not to get into an unreasonable price battle but to focus on matters where clients select based on the above criteria and think it is worth reflecting those in pricing as well.

PL: The market remains highly competitive, although pricing tolerance varies by client. Hungarian legal fee levels have not followed the substantial increases seen in Anglo-Saxon markets.

GP: Clients are certainly price-conscious and demand greater transparency on fees, but sophisticated clients understand that complex cross-border work requires quality advice. Being a regional law firm gives us the advantage of drawing on experience from other jurisdictions, enabling us to be efficient with pricing.

JT: Clients are price-sensitive, particularly in a slower economic environment, but they are also increasingly focused on quality, reliability, and strategic advice, especially in complex or uncertain regulatory settings.

Are we likely to see any consolidation on the market, or is there enough business to support all the current players?

AP: The immediate future looks bright for most of us. The anticipated legislative surge, coupled with the changes brought by a new elite in formation, is likely to generate a significant volume of work, ensuring that the majority of firms remain busy for some time. However, as we move beyond this initial phase, perhaps after a year or two, I expect consolidation to gain momentum. This shift will be driven not only by market forces but also by the growing impact of AI and the continuous push for higher efficiency. These “galactic” trends are reshaping the industry landscape and will inevitably encourage firms to join forces to stay competitive and innovative.

ÁF: Some consolidation is likely, especially among smaller and midtier firms facing increasing technology investment and high-profile industry expertise needs. However, the Hungarian market remains diverse, with room for international firms, strong local players, and specialized boutiques. Firms that were previously heavily involved in state-related or connected “inner circle” matters might have some difficulties reshuffling their focus and operations.

PL: I expect changes in the legal market. Firms visibly aligned with the previous NER system will likely need to adapt. However, quality legal work will always remain in demand.

GP: Some consolidation is likely, especially among mid-sized firms that lack a clear specialization or international network. There is enough business to support quality players, but firms that cannot differentiate themselves will face pressure.

ASz: I’m not aware of any move in the pipeline. The Hungarian market is relatively small but very competitive. The risk of running into a conflict situation should not be ignored.

What will be the next great legal trend that clients may not be aware of today, but should be preparing for?

EP: One interesting topic the new government is expected to address is large-scale infrastructure transactions and the likely revival of PPP structures. In a global environment where governments need significant infrastructure investments while also seeking to maintain strategic ownership and control, PPPs can be a highly effective tool for attracting foreign capital and expertise.

ÁF: A key trend is the convergence of technology and regulation. AI, data governance, digitalization, technology and compliance are reshaping client needs, favoring firms that combine legal and technological capabilities.

PL: The broader adoption of AI will raise new legal and regulatory challenges that both clients and law firms must prepare for.

GP: Two things. First, AI regulation: Companies should start mapping their AI use cases now to identify where they fall under the EU AI Act. Second, ESG and sustainability reporting. New EU directives are dramatically expanding the scope of companies’ compliance obligations.

JT: If the expected trajectory of shifting from a discretionary to a rules-based legal environment holds, clients will need to adapt to a more structured, compliance-driven framework aligned with EU standards. This will involve stronger internal compliance systems, greater transparency requirements and more rigorous enforcement of existing regulatory rules.

BBJ Legal Services Market Talk Panel 2026

(Listed in alphabetical order, by company name)

• Erika Papp, managing partner, head of finance for CEE, CMS Hungary

• András Posztl, country managing partner, DLA Piper Hungary

• Ákos Fehérváry, managing partner, Fehérváry Horányi Kovács Baker & McKenzie

• Péter Lakatos, managing partner, Lakatos, Köves and Partners

• Gábor Pázsitka, office managing partner, Schönherr Hetényi

• András Szecskay, managing partner, Szecskay Attorneys at Law

• János Tóth, partner, head of corporate/M&A, Wolf Theiss Faludi

This article was first published in the Budapest Business Journal print issue of June 5, 2026.