Combining Opt-in and Opt-out Systems? – Expert Proposal for the Hungarian Regulation of Collective Redress

Abstract

At present, collective redress in Hungary is limited to a certain narrow area, with sporadic and typically sectoral regulation being applied. In the existing forms of public interest, litigation is merely an actio popularis. During the recent codification of Hungarian procedural law, a working committee of experts, set up pursuant to a government decision, drew up its detailed recommendations concerning collective redress. The present article presents the essence of that expert proposal. Comparing the opt-in and opt-out systems and their combination, it is difficult to decide which model is more suitable for a certain legal system. The expert proposal, on the introduction new collective redress mechanisms into the future regulation of the Hungarian Code of Civil Procedure, suggested a compromise that provides an adequate response to the problems of both types of case (mass torts and scattered loss) by combining the opt-in and opt-out systems and applying a more refined approach. The expert proposal is essentially based on the opt-in model, but in actions where the expected value of the claim is so small (in respect of the individual actions) that it would be disproportionate due to the higher administrative costs of the opt-in system, it should be supplemented with a model based on opt-out.