Conference on Alternative Dispute Resolution 19-20 October 2023

A prominent recurring event, the increasingly popular Alternative Dispute Resolution Conference was held for the sixth time on 19–20 October 2023.

For the second time, the conference was held at the Lámfalussy Sándor Conference Centre, located in the new headquarters of Magyar Nemzeti Bank at 55 Krisztina krt. in Budapest’s 12th District, with the attendance of 200 participants in person over two days. Also for the second time, the conference was available online as well, allowing between 100 and 200 additional participants to join in and listen to Hungarian and foreign speakers. The central themes of the Conference were consumer protection and the challenges of the digital world.

After an opening speech by Dr. Erika Kovács, Chair, Dr. Csaba Kandrács, Deputy Governor of Magyar Nemzeti Bank, responsible for consumer protection, welcomed the audience, reflecting as follows:

 “For eight years now, the Magyar Nemzeti Bank and the Financial Arbitration Board have been supporting the development of the Hungarian dispute resolution culture and using their tools to promote the widest possible dissemination of alternative dispute resolution techniques. We have organised this conference for the sixth time this year in that spirit, as this forum provides an excellent opportunity for professional dialogue, which may increase awareness of alternative forms of dispute resolution in Hungary and abroad, and may encourage and help citizens, organisations, institutions and businesses to recognise the possibilities and benefits of out-of-court settlement in as many cases as possible. The benefits of out-of-court settlement have been recognised by organisations in the financial sector for over more than 12 years since financial conciliation was first put in place. This is evidenced by the number of out-of-court agreements reached both in and outside the proceedings, which is considered by the management of Magyar Nemzeti Bank as a reassuring and positive outcome.

We are constantly making IT improvements to speed up our procedures and to improve the accuracy of our records and statistics. We have introduced digital-only communication with financial service providers and, since January 2022, financial consumers have been able to conduct business online. The majority of consumers tend to reach out to us each year with claims related to financial market services, most of them against credit institutions, primarily in the context of financial services related to the provision of credit and various types of loans.

It is no accident that the central theme of this year’s conference is ‘Consumer protection and the challenges of the digital world’. Unfortunately, since last year, there has been a surge in payment-related disputes due to cybersecurity offences. While every year there are new cases deserving special attention, the steady and dynamic increase in the number of such cases since 2022 calls for particular attention, not only in terms of individual disputes, but also from a regulatory and law-enforcement perspective. The Board has also been confronted with phishing incidents that have resulted in significant damage to customers. The Magyar Nemzeti Bank and the Board consider that it is important to train, educate and assist customers to prevent the misuse of financial services in general and digital banking in particular. Financial awareness, education and information are not the responsibility of Magyar Nemzeti Bank alone; they are the responsibility of the financial services sector as a whole, of advocacy, government and law enforcement bodies. That is the reason why we have set up the CyberShield website and are working with other organisations to get the message out to more people that digital banking requires increased caution and attention. Taking advantage of the opportunities offered by the digital world is great, yet it also carries risks if one does not act with due care.

It is therefore important to make ongoing efforts to raise awareness and educate the public. The Financial Arbitration Board has an important role to play in that respect. Team members working in different areas of Magyar Nemzeti Bank, including members of the Board, regularly publish professional articles on financial topics, with the double aim of informing readers and providing lessons for all of us by presenting real cases. My colleagues regularly publish informative and insightful articles on current financial news on the napi.hu, pénzcentrum.hu, origo.hu, vg.hu and index.hu websites. These articles provide useful information on different types of savings, the benefits of credit protection insurance, important insurance issues for car owners, the online consumer dispute resolution procedures for online financial services as well as on what to look out for when using digital tools to manage one’s finances.

Honoured Guests and Dear Colleagues,

I am confident that the presentations at today’s conference will also help raise awareness and provide an excellent forum for an exchange of experiences. I would like to thank our speakers for accepting our invitation and supporting our efforts with high-quality presentations. I wish everyone successful participation and a pleasant time.”

In her welcome address, Katalin Kézdi, Managing Director of conference partner Wolters Kluwer Hungary Kft. said:

“Listening to the presentation of Dr. Nóra Kupecki, Deputy State Secretary for Constitutional Legislation and Consumer Protection, at the 5th Alternative Dispute Resolution Conference last year, there was no question for me that we must be among the key sponsors of the 6th Alternative Dispute Resolution Conference. In her presentation, she spoke about new directions for consumer policy. She stressed Hungarian consumer protection was being transformed based on a new approach, increasing its efficacy, with the aim of guaranteeing the inviolability of Hungarian consumer rights both at home and in Europe. In addition to initiating legislative amendments, we are trying to ensure the protection of Hungarian people and families with all the tools currently available to us in the field of consumer protection, she stressed in her presentation.

As a provider of legal content, with our 30-year-old Legal Data Library product line and the expert solutions based on this data asset, with the rise of Artificial Intelligence, and with modern Legal Tech solutions, I saw a huge opportunity for renewal, in a broader ambit beyond monitoring legislative amendments and changes and preparing explanations and commentaries related to those amendments.

Over lunch, we talked excitedly with other conference participants and speakers, envisioning a knowledge base for consumer protection and mediation. I returned to my normal work full of enthusiasm and energy, and we started working on a ‘Mediation Module’.

Dear Participants and Honoured Guests,

I am thrilled to be here today as a sponsor and to welcome you to this high-quality event combining law and innovation with the challenges of the future. Looking ahead, what we can see is a rapidly changing world, which requires us to think out of the box and to find new solutions. During the coming days, we will focus on consumer protection, alternative dispute resolution, digital identity and other interesting topics.

The professional programme owes a lot to the expertise, care and excellence of the organisers. We are going to meet well-known and respected personalities and have interesting discussions that will help us gain a deeper insight into the relationship between law and innovation. The preparation and commitment of the speakers and panellists will contribute to a rich and valuable experience for all participants.

As a sponsor, we are particularly proud to be part of this event and to support the gaining ground of inspiring ideas and innovations. During the event, we will be happy to answer your questions and share the values we are so proud of. In the light of this program, so rich in valuable information, and looking back to last year’s event, I encourage you to take advantage of the breaks between the presentations to share your thoughts.

I wish you all an inspiring and productive time at the conference. I urge you to remain open to new ideas and enjoy the intellectual challenges and opportunities that await you at this extraordinary event. Thank you for the opportunity and I wish a good conference to all of you.”

The first presentation was held by Dr. Nóra Kupecki, Deputy State Secretary for Public Law and Consumer Protection, representing the Ministry of Justice, on the Transformation of the conciliation board system from 1 January 2024.

First of all, she stressed that the promotion of amicable dispute resolution is an important goal for society as a whole, as alternative dispute resolution procedures simplify the resolution of problems and encourage voluntary compliance with the law. That is why professional workshops on the subject are of outstanding importance, as they provide an opportunity to learn about and discuss various options and tools, both legal and non-legal. In her presentation, she described the activities of the conciliation bodies run by the Chambers of Commerce and Industry, highlighting the achievements attained in 2022. She said that, from 1 January 2024, the professional management of conciliation bodies will be taken over by the Ministry of Justice, and that they intend to carry out their task in an active and constructive manner, maintaining an active dialogue with the relevant bodies.

She was talking about the huge strides that had been made toward the transformation of the relevant bodies, and that they have actively carried out legislative activities. Following extensive professional and public consultation, on 3 May, the Parliament adopted a bill on the functioning of the bodies, aimed at increasing their efficiency and accessibility. In the future, the current 20 conciliation bodies will be replaced by 8 conciliation bodies with regional competence. Personal hearings will be available in 8 regional centres, 12 county seats that are not regional centres and in 7 additional cities with county status that are not county seats. This represents a total of 27 options for consumers, a 35 per cent increase compared to the previous period. An important change is that online hearings will become the primary channel; for consumers, however, it will only be an option, i.e. they can still request a hearing in person. While allowing for a more efficient procedure for consumers, businesses and public bodies, this amendment may also reduce paperwork and costs for the parties involved. Businesses will be obliged to participate at least online, which will enable hybrid hearings.

Describing the types of decisions currently available to the relevant bodies, she pointed out another significant innovation of the amendment, i.e. the introduction of the institution of mandatory submission in proceedings with a value of less than HUF 200,000. This means that even in the absence of a declaration of submission by a company, the Board will issue a binding resolution in cases where the consumer’s application is well-founded and the claim sought to be enforced does not exceed the amount mentioned in the application or at the time of the decision. In her opinion, the measure is expected to increase the number of both cases and settlements.

She pointed out that the selection process for the chairperson and members is in progress and will be decided by the Minister responsible for consumer protection. One-third of the members of the conciliation body may be proposed by an association representing consumer interests, while two-thirds are selected by competitive tendering. In order to improve the quality of operation, the chairpersons and board members must take a basic conciliation board examination within one year of their appointment. Failure to pass the examination will result in termination of their status. The aim of the measure is to ensure that the relevant bodies are aware of the ministry’s positions and interpretation of the law, which will enable consumers to face the same procedure in all bodies.

She said that the European Commission had recently published a package of proposals to amend the Alternative Dispute Resolution Directive and the Regulation on Online Dispute Resolution. In a number of respects, Hungary has kept abreast with the regulation of alternative dispute resolution, she stressed in her presentation, adding that they will be able to support amendments that do not represent a step backwards compared to domestic legislation. She concluded by saying that she was hoping to report even greater achievements, momentum and progress at next year’s conference.

Will collective, or ‘representative’, actions be able to fulfil their desired function? This was the question Dr. Zsolt Hajnal sought to answer in the second presentation entitled New rules for representative action in Hungary. Dr. habil. Zsolt Hajnal, Associate Professor at the University of Debrecen, János Bolyai Research Fellow, President of the Hajdú-Bihar County Conciliation Board, gave a presentation at the AVR Conferences for the fifth time.

After welcoming the audience, he explained the forms of redress available to consumers in the event of infringements, which may differ from country to country. He said that in addition to individual forms of redress, which include traditional and alternative forms of redress, typically out of court, there are also forms of redress that empower organisations to act on behalf of consumers in the context of a mass infringement of consumer rights. As to the question of what kind of actions are considered representative actions (formerly known as public interest actions), he cited the example that with regard to a non-specified activity that affects a wide range of consumers and causes some kind of harm to their interests, the legislator considers that an organisation with the expertise and powers to act on behalf of consumers but without representing individual consumers, is able to act more effectively to bring an injurious activity to an end and, where appropriate, to obtain redress for the harm suffered by consumers. He noted that this legal institution is not alien to the Hungarian legal system, as the model of public interest actions has been included in the Consumer Protection Act from the outset, and both the Central Bank Act and the Civil Code provide for the legal institution of public interest actions in connection with the challenge of unfair contract terms, while the recently amended Competition Act and Code of Civil Procedure set out the framework rules that provide for the general rules of public interest litigation in the interest of the consumer.

He explained that the current amendment had been due to the obligation to transpose Directive 2020/1828 of the European Union, when the legislator amended Act CLV of 1997 on Consumer Protection by Act LXI of 2022 amending certain acts necessary for the protection of consumers and introduced the legal institution of representative actions with effect from 25 June 2023. The amendment also provided an opportunity for the legislator to correct the dysfunctions and deficiencies of the previous legal instrument, as the hidden wording in the previous legislation and the related case-law resulted in inefficiencies of this legal instrument in protecting consumer interests. As an example, he recalled that it had often been difficult to establish the group of consumers concerned and their entitlement, to assess and prove the existence of significant harm, and that the different requirements under the Civil Procedure Code and the Consumer Protection Act had also led to problems, which reduced the effectiveness of litigation.

He stressed that the new legislation added a number of new elements, thus widened the scope of remedies available, as remedies are no longer limited to injunctions, declarations and prohibitions, but also include reparation for the claims of consumer groups. Whereas the previous legislation allowed for the determination of damages after a specific sum had been explicitly established, the court is now able to order the company having violated consumer interests to pay some kind of refund, to extend a promotion, or to replace or repair the product. This has been a very important and significant change compared to the previous legislation. The scope of organisations entitled to bring an action and the conditions for such entitlement have also been extended. Third-party funding has been introduced as a new element in the legislation, subject to specific independence and guarantee rules. In addition to domestic disputes, there is a possibility for representative actions to be brought by qualified entities in cross-border disputes.

He said that the legislation also provides in detail on how to inform consumers. The information provided should specify the actions that are pending and how consumers can learn whether they have become eligible under a certain judgment. He stressed that, in addition to the companies concerned, which are ordered to disclose such information by a condemnatory judgment, the information should also be published on the website of the Ministry of Justice.

Finally, he added that four things are essential for this legal instrument to be effective in achieving the objectives intended by the legislator: financial resources, expertise, market and consumer information, and the professional and policy will of the organisation to make use of that possibility. The new legislation has removed the legal obstacles to the success of representative actions in Hungary, which should be exploited and turned into a success for the benefit of a wide range of consumers.

The presentation was followed by a panel discussion including Dr. Zsolt Hajnal, representing the Hajdú-Bihar County Conciliation Board in his capacity as chairperson, Dr. Virág Balogh, Head of Department of Magyar Telekom Plc. and Dr. József Zavodnyik, attorney-at-law, a member of the DHZ Law Office.

In the panel discussion, the three participants sought to answer the question whether it is reasonable to claim that the domestic consumer protection system is overprotective and underprotective at the same time, and whether, in such a situation, it is possible to create flexibility in consumer protection. They also discussed the role of public authorities in protecting consumer interests, the consumer image in their procedures, and the long-term impact of a powerful government intervention in civil law relations on the development of consumer power vis-á-vis businesses. At the beginning of the discussion, Dr. Zsolt Hajnal pointed out that while digitalization had become part of everyday life, it is still not clear how we are able to compete with the advertising and deceptive commercial practices emerging on the new digital platforms. Will the government be able to protect us, or will we be able to protect ourselves from ourselves. They have set out to provide participants with an insight into the problems currently facing legislators, law enforcers and even consumers.

Dr. Virág Balogh explained that, as a result of recent technological advances, the number of transaction options open to consumers has grown exponentially. Through apps, websites and all sorts of other platforms, people can now be the subject of consumer contracts or the target of commercial practices. What has perhaps been of most concern to European authorities and European consumer NGOs in recent years is the issue of the so-called dark patterns on online platforms. The term ‘dark patterns’ refers to website design techniques that, simply through the choice of design for a website or app, are able to create an illusion in consumers that may lead them to make decisions they would not have made otherwise. Such techniques include false countdowns or other techniques inducing consumers to rush to sign a contract or use a service so as not to miss out on a one-in-a-lifetime opportunity. Various types of such dark patterns have emerged, yet the most important question is how these dark patterns and the battle against them will fit into the existing model of consumer protection and claim enforcement. Is the current legislative framework adequate to tackle dark patterns or do we need new legislation?

Dr. József Zavodnyik explained that while the Hungarian system of consumer protection institutions is characterised by a dominance of the state, the system of consumer protection institutions cannot be reduced to the role of the state, as interest representation bodies and consumer protection bodies also play an important role. In addition to shaping the legal environment, the state also plays a part in enforcing consumer claims. While this may be convenient for consumers, it is dangerous at the same time, as it leaves it as a matter of the capacity of the state whether or not it takes up the issue of enforcing certain consumer claims, which will then result in an official procedure. In the longer term, he advocates the idea that the state should take a back seat in certain areas. An excellent example of this is the operation of conciliation bodies or the Financial Arbitration Board, which provides an easy and quick way for consumers to assert their claims. However, it is also worth bearing in mind that effective consumer protection also presupposes that consumers can act as a market force against businesses. One possible solution is the emergence of a strong consumer NGO. He stressed that a special situation has developed. While in the past, it was easy to measure consumer needs, currently consumer needs remain hidden, and a significant part of them thus cannot be measured.

Dr. Zsolt Hajnal explained that the European Union is a safe market place. This is ensured by product safety rules and a long-established and well-functioning market surveillance system. The Hungarian market surveillance system ranks among the best in Europe in terms of the number of dangerous products identified. Yet is a public authority able to protect consumers when they order products from an online platform? The consumer becomes the importer of the product, and the product is delivered to one’s door by a courier. We are thus bypassing the system that has so far been a hallmark for product safety in the European marketplace. Moreover, whole new security risks are emerging, ones that were not previously thought of as security risks. So far, people have been thinking in terms of physical security. What was important were the health and safety of the consumer. However, can the emergence of intellectual dependencies, or the adequate cybersecurity protection of our personal data represent an extension of the product security category as it was used in the past? These issues are already being addressed at EU level. While legislative initiatives and changes have been made accordingly, it also requires new control practices if we are to feel as safe as before, which also requires consumers to assess and be aware of the relevant risks.

Dr. Zsolt Hajnal then asked the participants of the panel discussion for their opinion on the aspects of good practice to follow in order to solve problems efficiently. According to Dr. Virág Balogh, with the increasing popularity of online platforms, there has been an increasing need to better understand patterns of consumer behaviour. Not all consumer decisions can be rationally explained, and they cannot be linked to the emergence of online shopping, as it goes back to a longer history. She added that it would be worth looking at the various criteria consumers consider when making a choice. Is it true that consumers are impulse buyers? The more evidence is available on what people are like as consumers, the closer we can get to the regulation and enforcement that will help us to meet consumers’ needs. The coming period will show how we will be able to apply the legislative map that has already been drawn up. We are in for very exciting years.

Dr. József Zavodnyik stressed that it is important to set a benchmark of what is expected of the consumer. At present, the case-law is rather wide-ranging in that respect, and it should be harmonised. The benchmark is a principle of good morals, which must be followed in both offline and online practices. Rather than protecting ‘silly’ consumers, the legislation should take action against businesses that take advantage of consumers’ irrationality, lack of information or laziness.

At the end of the discussion, Zsolt Hajnal said that since traders have a lot of information about consumers, it is up to us not to let ourselves be influenced. Social platforms must be kept under control. There are Hungarian specificities. There is no such things as average European consumer behaviour, even if the legislator takes this as a basis for its decisions. He emphasised the principle that what is forbidden in the offline world should also be forbidden in online practices.

After lunch, Theodore S. Boone, the first foreign speaker of the conference gave a presentation entitled Artificial Intelligence and the practice of law – What does the future hold? An interesting and amusing highlight of the conference was the presentation by Dr. Theodore S. Boone, who works for the Budapest office of the Dentons Law Firm, one of the largest law firms in the world and is also a lecturer at the Faculty of Economics of Corvinus University.

He gave an informal presentation on the relationship between AI and jurisprudence, with a special focus on the challenges of the future. He addressed and sought answers to the following main questions:

Does the rise of AI mean the end of legal practice by humans, or will it only bring a reform of traditional legal practice? Will artificial intelligence have an evolutionary or revolutionary impact on the work of lawyers? What are the areas of law where AI will have a strong impact in the future? What are the skills of practicing lawyers that cannot be replaced by artificial intelligence? What are the characteristics of the European Union’s AI legislation (laws)? What challenges do practitioners face in regulating AI in the US?

In his introductory remarks, adding supporting statistical evidence, he noted that the spread of AI has been fundamental to technological development, the main steps of which include the spread and accessibility of the internet to legal practitioners in the 1990s; the widespread use of email messaging since 2002 (with the passing of time, paper-based messaging lost ground); while the last two or three decades have seen numerous technological innovations and developments that have had a strong and significant impact on the practice of law. As the spread of artificial intelligence has been rapid and its use is now commonplace in the work of practising lawyers, these examples show that AI-driven systems are tools that reduce the workload of practising lawyers.

He raised an important question: can AI be interpreted as the ‘Dick the Butcher’ of legal practice, i.e. will it lead to the disappearance of practical legal work? (Dick the Butcher is a prominent character in Act 2 of Shakespeare’s play Henry VI, the one to have used the phrase: “The first thing we do, let’s kill all the lawyers”). Before answering his own question, the speaker discussed the use of artificial intelligence in sports, gaming and gambling (card playing). A chess automaton in the late 1980s defeated the then world chess champion Garry Kasparov. Another software beat the Korean world champion in GO. A software developed in Texas, USA beat the most experienced poker players. A general question therefore arises: what are the current capabilities of AI-driven programs and applications in the field of practical legal work? As time has gone by, practising lawyers have picked up an increasing number of advanced software programs. In the US, for instance, the EDGAR database contains a number of templates for public contracts, agreements and actions. Using the documents in the database, users can draw up a summary of a given topic or give a legal opinion or position. Based on the contracts and agreements in the database, lawyers can draw up guarantees, warranties, liability and indemnity rules.

In general, AI-driven applications allow lawyers to compare and review provisions in hundreds of pages of contracts. They are able to prepare risk analyses, analyse and predict possible court decisions in litigation and arbitration. They can also carry out research in the field of written law and case law. They can develop proposals for multi-party agreements and settlements, and these systems can also recommend the conclusion of certain agreements. In that context, an important question arises: can these systems always, in all situations, replace a practitioner? What kind of work, what sort of tasks are they able to carry out? In general, can such AI-driven applications take over part of the work of beginner lawyers, junior lawyers and trainee lawyers? It is important that draft documents and contracts are always reviewed and checked by an experienced lawyer or senior legal adviser, as the software may arrive at incorrect conclusions. What are the additional risks of AI-driven systems in the field of jurisprudence? It is possible that artificial, invented or fictional cases are confused with actual cases by the software or database. That is why it is always imperative for an experienced lawyer to review and, if necessary, revise the results of the operation of a given system. Human control is therefore essential and must not be allowed to be spared.

In the light of the above, the question arises as to how novice lawyers can gain experience in the various branches of law. To that end, Dr. Boone suggests that trainees and law students should be up to date on the most important legislation and draft legislative amendments affecting their chosen branch(es) of law. They should find themselves an experienced mentor (this could be a lawyer, a senior lawyer, etc.) who is familiar with the practice of the law and is able to pass on his or her knowledge. They must be pro-active and do more legal research. They must get involved in legal project assignments where negotiation and the human factor play a major role. They should attend various legal conferences and take part in competitions, such as case-law and moot court competitions. They should be fully immersed in the operation of new AI-driven legal programs and databases so they can use them better and more effectively in their work.

What are the characteristics of the regulation of AI-driven legal programmes in the European Union and the US, he asked. The European Commission has prepared a draft legislation on the various AI legal programs and databases, he replied. On the basis of such draft legislation, they are classified into several risk categories, i.e. low, medium and high risk (they mainly set out prohibitions). There are EU laws that only set out minimum rules, and it is up to the Member States to work out the details of the rules for the operation of the AI concerned and the programs and databases it controls. There is a different situation in the US, where the main rules for AI-powered programs are developed by companies and the business community. The government refrains from interfering in regulating the operation of artificial intelligence. IBM, for example, has developed a code of conduct emphasizing the importance of ethical, human-centred and transparent rules for AI-driven systems and programs.

Finally, Dr. Boone concluded his presentation by emphasizing the importance of human control over legal programs driven by artificial intelligence, concluding his presentation with a quote from Nobel Prize-winning Hungarian scientist János Neumann: “The human brain is, after all, the best example we have of an intelligent system.”

This was followed by a presentation by Dr. Éva Inzelt, entitled The challenges and innovative dimensions of online conciliation in the 21st century. Dr. Éva Inzelt, President of the Budapest Conciliation Board (BBT), adjunct professor at the Faculty of Law and Political Science of ELTE, has been involved in alternative dispute resolution since 2010.

She has been preparing undergraduates for the ICC World Mediation Competition since 2013. Their greatest success came in 2020, when ELTE students finished in 3rd place in a field of 65 prestigious universities. To what extent is it worthwhile, necessary or possible to transpose alternative dispute resolution into the online space? The question asked by the speaker deserves further reflection. There is no doubt that we are using an increasing number of services in the digital space, she said. Conference participants had a chance to use the Smart Event mobile application to answer questions related to the presentation. Her conclusion that it was possible was confirmed by an instant ad hoc survey. For example, nearly 60 per cent of the audience had used internet banking services in the past seven days.

The speaker used statistics to illustrate that growth based on a representative survey, showing that the proportion of internet users who also make online purchases increased from 49 per cent to 76 per cent between 2017 and 2022. In terms of the rate of growth, Hungary ranked 2nd in the EU during the period, she added.

The Budapest Conciliation Board dealt with more than 4,200 cases last year, about 50 per cent of which were related to the purchase of products and 50 per cent to the use of services, she commented. The share of online sales was 47 per cent for products and 23 per cent for services. These figures also demonstrate the growing importance of digital consumer protection. The presenter cited two examples of how the opportunities offered by digitalisation can be used in the field of consumer protection. She described the main features of the EU’s online dispute resolution (ODR) platform. She explained that the system is available to EU citizens in all official EU languages, with a built-in translation service. The limitation is that the system can only be used to settle disputes concerning products bought online from traders based within the EU. The parties can also conciliate directly or use registered mediators, such as the Budapest Conciliation Board (BBT) in Hungary. In the case of BBT, 85 per cent of all ODR cases were decided in favour of consumers, she said. The problem is that businesses are not obliged to cooperate on this platform. The pandemic gave a major boost to the uptake of online procedures from 2020. Based on the experience of less efficient and cumbersome written procedures, the BBT introduced the use of the Zoom platform in the spring of 2021. Experiences have been positive, with settlement rates reaching pre-pandemic levels of 55–65 per cent.

A very significant change in the functioning of BBT is that, due to a change in legislation, hearings will be held online as the main rule from 1 January 2024. Consumers will obviously have the possibility to request a personal hearing, while companies will be required to at least cooperate online, which means that hybrid procedures will be offered. According to preliminary BBT surveys, more than 70 per cent of consumers prefer a face-to-face interview. (The impromptu survey showed that conference participants were more open, only 25 per cent of them insisting on a face-to-face hearing.)

The big question for BBT in the near future, she added, is how consumers will react to the change. Building trust and managing change present a major challenge, as the releasing of frustration, emotions and personal interactions play an important part in resolving disputes. There are also a number of issues that arise in relation to online dispute resolution that were routinely handled in the traditional framework, such as data protection, the right to representation and the publicity of hearings (the procedure is not public), she concluded.

The penultimate presentation of the first day of the conference, entitled The work of FIN-NET network and its future challenges, was given by Mr. Gintaras Grikšas, Policy Officer in the Retail Financial Services Unit of the European Commission, who is also responsible for administering the FIN-NET network.

In his presentation, he described the functioning of the FIN-NET network, the steps taken so far to promote consumer rights and the possible directions for the development of the network. He said that FIN-NET, established in 2001, is a cooperation network within the European Economic Area (which includes the Member States of the European Union plus Iceland, Liechtenstein and Norway), bringing together alternative dispute resolution forums for cross-border financial disputes between consumers and financial service providers. Currently operating with 62 members in 30 countries, the network can be joined by any organisation responsible for the out-of-court settlement of financial disputes that complies with the rules of the relevant Alternative Dispute Resolution Directive. The principles and rules for cooperation between member organisations are set out in a Memorandum of Understanding. Member organisations hold at least one (usually one or two) general meetings a year, which may be hosted by individual member organisations. The role of the network and the effectiveness of cooperation are constantly growing. As opposed to 2001, when only 337 organisations were involved in cross-border consumer financial disputes, in 2019, 3,759 organisations were involved in such disputes, 60 per cent related to banking, 25 per cent to insurance and 15 per cent to investment products.

He stressed that the administrative background for the FIN-NET network is provided by the European Commission. In this capacity, the Commission promotes cooperation between member organisations, provides support for joining the network, keeps them up to date with the latest developments in EU financial services and consumer protection legislation, and ensures that member organisations are able to exchange experiences and dispute resolution practices. The Commission supports the uniform treatment of cross-border disputes to ensure a better enforcement of consumer rights. On its website, the network also provides information on the alternative dispute resolution forums available in each member country, the main rules of their procedures (in particular the language of the procedure), potential costs and the legal binding force of member organisations’ decisions. He presented the website developed by the Commission, which provides basic information on each FIN-NET member organisation by geographic location, including visual information. He stressed that the Commission plans to provide consumers with face-to-face advice on cross-border consumer redress in the so-called European Consumer Centres. The network provides the Commission with information on current issues in financial services to improve the enforcement of consumer rights. Current topics include the experiences of member organisations on new trends in fraud in the provision of financial services and the impact of anti-money laundering rules on the effectiveness of alternative dispute resolution.

In his presentation, he pointed out that, in the future, the main challenge for the Commission and FIN-NET will be to ensure that consumers are aware that they can settle their disputes with financial service providers out of court, through competent alternative dispute resolution forums. To that end, the Commission has proposed legislation requiring financial service providers to inform consumers of the out-of-court dispute resolution body they can refer a dispute to. The Commission has carried out extensive information activities, both online and through the European Consumer Centres in each Member State, to help consumers find the required information to resolve cross-border consumer disputes.

The speaker reported on the European Commission’s current proposal for an amendment to the ADR/ODR Directive, which is now awaiting adoption by the Parliament and the Council. According to the proposal, the Directive should cover all aspects of EU consumer protection law and extend its scope to non-EU traders, tackling unfair practices such as manipulative interfaces, manipulative advertising or geo-blocking rules. Under the proposal, businesses will remain free to choose whether or not they wish to participate in ADR, unless specific EU or national law requires traders to participate in out-of-court dispute resolution. However, if the consumer requests alternative dispute resolution, the business is required to respond within 20 working days. This approach will speed up the overall process and encourages service providers and traders to get involved. Under the proposal, Member States will designate contact points to facilitate communication between consumers and traders, to help them through the process and to provide general information on EU consumer rights and redress.

Finally, he informed the audience that a review of the current online dispute resolution platform is underway. The Commission is expected to develop user-friendly digital tools to replace the current solution, in order to ensure that consumers can find an alternative dispute resolution body with the competence and jurisdiction to resolve their disputes. The European Consumer Centres and, for financial services, the FIN-NET network will continue to be the focal points for consumer advice.

The final presentation of the day was given by conciliator Joachim Leitner, representing Verbraucherschlichtung Austria - Schlichtung für Verbrauchergeschäfte, whose presentation was entitled The work of TRAVEL-NET and the effect of the digitalisation of passenger rights.

In the first part of the presentation, the speaker explained the functioning and structure of TRAVEL-NET, a network of alternative dispute resolution bodies in the field of tourism and travel. Founded in 2017 and having 29 members from 18 countries, the organisation holds plenary meetings at least twice a year, the three groups (aviation, railway and package travel) within the organisation also holding regular consultations. The network is open to all EU-recognised ADR bodies in the transport, travel and tourism sectors that accept the network’s memorandum. TRAVEL-NET’s main objective is to share information and best practices, facilitate the management of cross-border cases and promote cooperation between members. The speaker also described the projects currently in progress, including the development of the network’s website. He stressed that the proportion of cross-border cases in travel-related matters is very high. Since networking among ADR organisations is essential for high quality case management, TRAVEL-NET intends to continue to develop and expand cooperation in that area.

The second part of the presentation focused on the relationship between digitalisation and passenger rights. It is an area where digitalisation has gained ground recently, he said, referring to the way people communicate, the digital tools (chatbots, artificial intelligence, etc.) available or the fact that certain products are now only available digitally. As an example, he mentioned, that printed airline tickets are no longer used and complaints are not sent by post. He pointed out that in the area of passenger rights, it is very important to ensure non-discriminatory access to transport, to provide adequate support and compensation in case of problems in the service (cancellations, delays, denied boarding, etc.) and to have appropriate enforcement bodies in place. The National Enforcement Bodies (NEBs) operate under the EU rules on passenger rights. There is one body per Member State dealing with general cases. ADR bodies, on the other hand, operate under the EU ADR Directive, with several bodies per Member State dealing with specific cases. There are also private actors, mainly in the field of air transport as well as various claims enforcement agencies. Experience shows that digitalisation will continue. While human activities will not completely disappear, they are going to decrease, and the operation of alternative dispute resolution bodies and consumer organisations will still be necessary in the area of passenger rights.

A Q&A session followed where the speaker gave a comprehensive answer to each question.

Why should one choose TRAVEL-NET over Flightright or SkyRefund? TRAVEL-NET helps the complainant to find the appropriate alternative dispute resolution body. Alternative dispute resolution bodies are free of charge, and consumers do not have to pay a fee even if their claim is successful.

Is there procedural cooperation between TRAVEL-NET members on cross-border consumer disputes? They do cooperate. If, for example, a Hungarian consumer has an issue with an Austrian service provider and the Hungarian alternative dispute resolution body they have approached is unable to act, they can find the appropriate dispute resolution forum through the TRAVEL-NET network.

Does the digitalisation of passenger rights carry a risk and, if so, what kind of risk? In addition to the general data protection risk, there is also a risk of fraud and a risk of hindering the ability to enforce claims.

What impact have recent events (COVID-19, the war) had on passenger claims? Is there an increase in the number of procedures? To his knowledge, most ADR entities have seen a 100 per cent increase in their caseload due to COVID-19. In his reply, he pointed out that almost all flights in Europe were cancelled, customers were not entitled to any compensation, which led them with two choices: either they claimed a refund or a ticket for a later date. While it was a problem that the airlines did not have sufficient financial resources to repay the fares, the fact that the airlines gave short-term vouchers also led to disputes.

In what ways does TRAVEL-NET offer consumers more than ECC-Net? In his view, ECC-Net is a very useful and valuable partner. However, while ECC-Net is a consumer protection organisation, TRAVEL-NET is a grouping of alternative dispute resolution bodies. The service offered by TRAVEL-NET is therefore not more, but different than ECC-Net’s offer.

 

For the presentations of the first day of the conference see the Magyar Nemzeti Bank’s YouTube channel

For the most part, the second day of the conference concerned the challenges of the digital world. The first presentation, entitled Digital Phishing, Cyber Security – Facts, Decisions, Opportunities in Financial Conciliation, was given by Dr. Judit Cserépi and Dr. Lajos Tamás Tarpai, members of the Hungarian Financial Arbitration Board.

At the beginning of the presentation, Dr. Erika Kovács offered a brief overview of the Financial Arbitration Board and the cases dealt with by the Board. She pointed out that, since its creation, the Board has been dominated by credit and loan-related disputes; that trend, however, has changed in recent years. Today, digital phishing cases have surpassed credit and loan cases in terms of both their number and complexity. The Board was first confronted with such cyber fraud cases in 2018, which were considered unique at that time. The number of cases has steadily increased from year to year. The most significant change occurred from 2022 to 2023, when the number of cyber fraud cases tripled. In addition to the significant increase in the number of cases, the data available to the Board also show that such abuses affect a wide range of consumers, regardless of age, education or access to information. Everyone can be affected, so the best way to guard against abuse is prevention.

At the beginning of his presentation Dr. Tamás Lajos Tarpai emphasized that it is always the customers that fraudsters target and, rather than through complex technical operations, they tend to obtain sensitive data by using the characteristics of human nature, through social engineering. Of the many types of fraud, fraud cases where fraudsters used fake banking sites, such as online product sales and Google search, were the most prominent in 2023. He explained that the law on the provision of payment services has imposed a special liability regime on unauthorised payment transactions. In the case of fraud, consumers may request their payment service provider to credit the amount of unauthorised payment transactions. If a claim is rejected by the payment service provider, the consumer may initiate a dispute to have the rejection reviewed, seeking to enforce the claim before the Board. A specific feature of the dispute is that the burden is on the payment service provider to prove that the refusal is justified, i.e. that the consumer has authorised the payment transaction or that the damage was caused by fraudulent conduct, intentional or grossly negligent breach of duty on the part of the consumer. The law also sets out obligations for consumers, both in terms of safe banking and reporting unauthorised activities. He stressed that, for the most part, payment service providers often refer to the grossly negligent misconduct on behalf of the customer.

He described the different types of cases, stressing the importance of careful handling and use of personal authentication elements provided to consumers (e.g. the numerical code sent by text). He believes that the number of abuses can be reduced if customers make sure they are not banking out of habit. As an example, he cited the abuse of text messages sent in the name of the Hungarian Post. He reminded consumers to always check and carefully read the messages they receive from their bank and only provide the authorisation codes once they have made sure that they belong to a transaction they intend to carry out. Based on the experience of recurring fraudulent phone calls, he suggested that one should always calmly consider whether the call is from one’s account-holding bank, and recall previous experiences. He noted that it was important that banks had never asked customers to provide authorisation codes or online banking login details, to download any software or to transfer money to a secure account. When banks have managed to detect fraudulent activity, they can act quickly to restrict or ban access to the account. One can also encounter a high number of fraudsters when advertising a product online. In such cases, the fraudsters will attempt to mislead consumers about the purchase of the product. Scammers will send an email posing as a buyer with instructions to finalise the sale and receive the money. The guidance will eventually take the victim to a page that imitates the online banking interface of their bank. However, that interface will request various data and SMS codes. With due diligence, the fake banking site can be recognised and, on the basis of the SMS messages received, the consumer may realise that the fraudsters are trying to register a mobile app. Regarding that abuse, the speaker told that banks in the market currently have different policies in place regarding whether it is possible to register the bank’s mobile application on several mobile devices linked to the same customer. At the end of his presentation, he pointed out that, unfortunately, they have also encountered cases of fraudsters applying for an online personal loan in the name of a consumer and misappropriating the amount of the loan. Several banks now offer personal loans online only. Such abuses are made possible by customers installing a remote access program on their device, thus enabling the fraudsters to access the customer’s netbank or mobile bank through the software and with the customer’s help. By using these tools and distracting the customer, fraudsters can carry out the application process.

In her presentation, Dr. Judit Cserépi explained the procedural rules and experiences of cross-border cases in the context of cyber fraud. She explained that a particular feature of such procedures is that one of the parties is domiciled or established in an EEA member state other than Hungary. She stressed that where the financial service provider concerned by the procedure is established in another EEA Member State, the opening of the procedure is also subject to the service provider’s submission to the Board’s procedure and decision. In a case cited in her presentation, she pointed out that, despite frequent requests by customers, the Board is unable to investigate the adequacy of financial service providers’ fraud monitoring systems. Moreover, she specifically addressed a special cross-border case type, i.e. cases related to online trading platforms. In these types of cases, customers register on online trading platforms, usually hoping for and relying on investments with high returns. They are then informed of apparently high profits by the scammers, and thus keep investing increasing sums, only to be confronted with the fraud when they want to withdraw their money. In this type of abuse, customers often claim unauthorised unlicensed investment activities and money laundering violations. However, the Board can only act within the scope of its competence, as it is not an investigative authority. It can only report the offence to the relevant supervisory area of Magyar Nemzeti Bank when it has detected unauthorised activity, and it will do so in any case.

After the two speakers, with regard to the success rate of the Board, Dr. Erika Kovács pointed out, that unfortunately, this is the area where conciliation is least effective, either in the form of a settlement or other decisions favourable to the customer. The increasing number of out-of-court settlements in 2023 was, however, a positive development. In addition to adjudicating individual cases, the Board also assists consumers by publishing professional articles, regularly informing consumers about its experience in the course of its proceedings and cooperating closely with the supervisory authorities of Magyar Nemzeti Bank. The Board is also involved in the Cyber Shield programme, an extensive multi-agency cooperation to educate consumers and promote prevention. She concluded by stressing that since there is a lot consumers can do to protect their money, one should always act with care.

As a change in the programme due to the illness of Mr. Kurt Callewaert, the next presentation was held by Dr. Edina Kastory, Commissioner for Media and Communications, entitled Possible means of preventing claims affecting consumers of electronic communications services and media content.

The speaker began her presentation by saying that electronic communications and media content fall under the competence of the National Media and Infocommunications Authority (NMHH), which is responsible for two distinct areas (the Internet and media). The Commissioner presented the legal background and the most important general and sector-specific legislation. The NMHH shapes sector-specific practice, which is in turn shaped by market practices, she said. In the market for electronic communications (telephone, internet and television services), there is an asymmetric relationship between the service provider and the subscriber. It is important that the consumer should be assertive rather than aggressive. The subscriber may lodge a complaint/report with the service provider, the market surveillance authority and the Commissioner’s Office. The Office deals with infringements, breaches of interests, actions or conduct of concern by service providers (e.g. service provider failures). The Commissioner’s Office can be contacted regarding complaints affecting numerous subscribers, yet it does not deal with individual cases. She highlighted the types of complaints. The most common complaints concern inadequate and contradictory information, poor customer services (service is difficult to reach, inadequate information), provisions of the general terms and conditions (GTC) and the lack of fair consideration by the service provider. The question arises as to whether consumers should be expected to be familiar with the GTC. The Commissioner has the possibility to conclude an agreement with the service provider, if the service provider is willing to do so in order to establish good practice. If that has been achieved, it will be integrated into the contracts for other customers. For example, the service provider may agree to a fairer procedure. New focal points have been identified to ensure a sustainable, modern and high quality consumer protection regime. These are: consumer rights and consumer protection, balance between the consumer and the business, an absence of undue influence on consumer decisions and of active or passive misrepresentation, user-friendly customer service processes, clear information before consumer contracts are signed, fair administration and complaint handling, etc.

In the area of consumer protection, customers have become more demanding vis-á-vis customer services, including the possibility to choose the communication platform, support for online transactions, the need for personalised information, non-stop availability, transparency measures and the expectation to value customer loyalty.

Turning to the media, the Commissioner presented the sanctioned facts and the legal consequences the Media Council can apply. Assessment criteria include the harm caused by the infringement. Rather than an authority, the Media and Infocommunications Commissioner (‘MHB’) is an independent institution investigating conduct that violates or jeopardises the fair interests of consumers. While the MHB does not ‘look for’ violations, in many cases it will be remedied by the service provider if it is recognised during the procedure. The authority imposes fines, yet it does not remedy individual harm. With regard to traditional media, print media, radio and television content, she explained that consumers are troubled by pseudo-news, pseudo-scientific, vulgar, offensive content, obscene language, too much and too loud advertising, too many repeats, too few nature films or too little sports coverage, violation of the language correctness rule, negative discrimination, sexual content and content that offends the dignity of women. Consumers should specify the kind of action they expect. However, they are, for example, unable to ban certain types of programmes or charge service providers.

Digital media is a new area, she remarked. While edited content can be taken to the authorities, unedited content that can be published freely is problematic. The Digital Services Act (DSA) is an international regulation, she said. It will become applicable to intermediary service providers from 17 February 2024, providing a strong framework, enhanced protection of fundamental consumer rights in the online space, risk reduction, management of illegal content, transparency of online platforms, accountability, responsibility, supervision, complaints and redress mechanism and alternative dispute resolution.

She also provided information on the challenges in the application of artificial intelligence (AI), supporting transparent decision making in the field of communications, customer management, the role of AI in customer service, such as response templates, stereotyping, etc. She stressed the need for cooperation between public authorities, content providers and consumer representatives. She also noted that the rules for the use of AI are currently being shaped. Market players are expected to regulate and develop good practices. While the aim is to prevent harm, among good practices, it is desirable that consumers should be informed, assertive, able to make decisions, have an influence on the processes, yet at the same time be loyal and faithful to and cooperate with the service provider. On the part of the service provider, it is very important to provide a mental customer experience, of which she presented an example.

Finally, she described the non-authority-type tools used in the field of prevention, highlighting the Internet Hotline platform, which operates under the auspices of the NMHH. Rather than an authority, it is a more confidential platform, which mainly serves for reporting content harmful to minors. However, any harm or harmful content can be reported. She stressed the importance of prevention. To that end, for example, the authority concludes contracts with service providers with updated content, she said.

The next speakers of the morning were representatives of the Bank of Italy, Dr. Costanza Alessi and Dr. Francesco Privitera, representatives of the Italian Banking and Financial Ombudsman Division. While Costanza gave an online presentation, Francesco attended the Conference in person. They took turns speaking during their joint presentation entitled AVR Digitalisation and the use of artificial intelligence – Introducing the Italian Banking and Financial Ombudsman.

Dr. Costanza Alessi has been working at the Financial Ombudsman’s Office of the Banca d’Italia, the Bank of Italy, since 2017, while Dr. Francesco Privitera joined the Office in 2019. Graduating as a lawyer in 2008, Costanza obtained a Ph.D. in economics in 2011 at the Luiss Guido Carli University of Rome. Francesco graduated in Economics in 2014 and also received his Ph.D. from Rome’s Luiss Guido Carli University in 2018. He is responsible for analytics and statistics at the Financial Ombudsman’s Office. The presentation included the description of the Italian Banking and Financial Ombudsman (Arbitro Bancario Finanziario – ABF), drawing on the experience of recent years, and providing insights on how the use of information technology (IT) in ADR systems has contributed to increasing the efficiency of ADR. Over more than a decade of successful efforts, the use of IT has evolved and changed as the ABF has developed. The Bank of Italy set the objective of ensuring adequate consumer protection as early as 2010 and has set up a separate department for consumer protection and financial education since 2020.

Having set up the Ombudsman in 2009 and continuing to ensure full cooperation in the activities of the OCR, the Bank of Italy has, thanks in particular to its technical secretariat supporting its seven regional bodies, always been convinced of the importance of information technology in supporting the activities of the Ombudsman. In that spirit, it has set up an IT procedure to share information and manage procedures efficiently and securely. The ABF is an independent alternative dispute resolution forum established by law. Financial service providers are required to participate in the ABF’s procedure. The procedure can be initiated by the consumer or any company by submitting a request, following an adequate complaint procedure, and by paying a procedural fee of 20 euros, which will be refunded if the ABF’s acting board decides in favour of the consumer. Its decisions are recommendations that are published on its website. In 2022, 15,500 such applications were received, and the Board decided on a total of 17,372 cases, 52 per cent of which were decided in favour of the applicants. 95 per cent of applicants were private individuals.

With the significant growth of the ABF’s activities and in line with the specific provisions of the ADR Directive, an online portal was launched in 2018, which now allows customers to submit and manage their complaints entirely online. The ABF Portal is a simple interactive tool providing users with a step-by-step guided process, which will also be available to financial service providers in the future. In their experience, this method facilitates the application process, making it more cost-effective for consumers and improving the efficiency and transparency of the ABF’s efforts. In addition, based on their experience, the new case management system has reduced the possibility of errors, clarified the interconnection and traceability of individual workflows, and accelerated the administrative processes for the staff. On the online portal, applicants can follow the status and progress of their procedure and access, upload and download documents. A messaging function is also available on the portal for proper communication. The success of the new online portal is demonstrated by the fact that 99 per cent of applications have been submitted online, the number of incomplete applications has fallen below 5 per cent and the time taken to process them has been considerably reduced.

Recently, the Bank of Italy has launched a new project, the presenters said, which aims to introduce the use of artificial intelligence techniques, such as text mining and machine learning, to support the analysis process of complaints received and decisions issued by the ABF. The aim of the project is to facilitate the decision-making process by identifying similar cases and facts. This is not necessarily an easy task these days, given the volume of documents received and the complexity of the operational processes, they concluded.

The following presentation, entitled The State as a mediation service provider – challenges and strategies for the government in Georgia, was given by Dr. Giorgi Tsertsvadze, a lawyer and university professor from Georgia and a Managing Partner of the law office J&T Consulting LLC.

He started by elaborating the reasons why the state is considered a mediation service provider, and the reasons that have led to a situation that it had to take on that kind of activity in the first place. The reasons he cited included the poverty of mediation infrastructure, the legacy of the Soviet era, which has survived to this day, and the nature of public-private partnerships. He said that an organisation, the Association of Mediators of Georgia has been set up, an authorised organisation with legal personality, governed by public law. The organisation, which brings together mediators, is functioning, while a paternalistic approach also persists in the country, which means that mediation cannot develop on its own and the state has to intervene and support development.

As regards the historical background, he noted that information concerning mediation and its development can be divided into three major periods if one is to understand the developments in this field. The Middle Ages, Soviet times and the period since independence can be identified according to their relevant characteristics. He added that in Georgia, the term ‘mediation’ first appeared in tax legislation. It is true, however, that the definition of that term in the said law was not fully explained and does not exactly correspond to what people normally mean by ‘mediation’ these days. According to a concept published in the 2012 volume of Tbilisi-based journal “Brochures from the Revenue Service”, mediation is an alternative concept of tax dispute resolution, which is a way of settling disputed issues before an audit report or a tax ruling is issued.

Mediation exists also in the field of insurance in Georgia, and it has been introduced in the legislation. It covers the possibility of settling disputes between health institutions and insurance companies out of court, he noted. To settle such disputes, a special body has been set up by the Ministry of Labour and the Ministry of Health and Social Affairs. The procedure developed by that body on the initiative of the ministries is a hybrid solution, a mix of mediation and arbitration, he added. While the implementation of their decisions was originally enforceable in the courts, this was abolished by a subsequent piece of legislation on the grounds that the reasons for the decisions were unclear, he said.

Similarly, it is possible to mediate collective disputes in Georgia, he explained in the rest of his presentation. That form of mediation is used to resolve disputes between the employer and a group of at least 20 employees. For such disputes, a mediator is appointed jointly by the Ministry of Labour and the Ministry of Health and Social Affairs. Such mediation option has only been available in Georgia in the past few years. It is characterised by the fact that the employer is often a state-owned institution or company. While this form of mediation has certain advantages, it has numerous downsides as well, he concluded.

A well-known solution in Georgia, as is also the case in Hungary to the speaker’s knowledge, is reliance on notaries to mediate in certain disputes. That possibility was granted to notaries by the Act on Notaries, in a manner similar to other countries, he noted. Notaries may mediate in family matters, except for adoption and disputes concerning the existence and enforcement of parental rights. They can also act as mediators in matters of succession, neighbouring rights and other areas for which no special, exceptional or specific mediation procedures are provided by law, he explained.

Finally, he added that a new initiative is in the pipeline between the Ministry of Economy and the Ministry of Sustainable Development of Georgia and, while that initiative is still in its infancy, it has already shown signs of promise. The two ministries have joined forces to set up a joint labour law or labour mediation system in order to resolve disputes involving companies owned by the ministries. This initiative will be aimed at resolving individual, rather than collective disputes with employees, he added.

Summing up the topics and content of his presentation, he noted that by answering the following three questions, one can decide whether or not the state mediation solutions and forms developed and implemented in Georgia have a justification for their existence and to what extent they serve or can serve the settlement of disputes. These questions are the following: 1. How effective is the State as a provider of mediation services? 2. Can the State play a role in mediation at all? 3. Apart from the State providing the appropriate and necessary infrastructure for mediation, what other possibilities does it have to develop and advance the issue of mediation? The questions are theoretical and need to be answered in the future, he concluded, thanking the audience for their attention.

The next speech was delivered by Dr. Szilveszter Ádám, Deputy Director of Communications Supervision, representing the Office of the National Media and Infocommunications Authority, on the Consumer protection in the NMHH’s electronic communications and postal supervision activities.

He began his presentation with a concise description of the NMHH. He explained that the independent regulatory body named in the Fundamental Law is accountable to the Parliament. It has four offices in Budapest and five in other cities. It is chaired by its president. The Media Council and the NMHH Office belong to it as bodies with independent responsibilities. Its tasks cover the full range of media management, electronic communications and spectrum management, as well as overseeing postal services and trust services. The NMHH is involved in protecting subscribers and users through the Media and Communications Commissioner. It supports public and municipal actors through its measurement capabilities and contributes to legal compliance. The NMHH offers a reporting facility in the event of online harm identified. It actively contributes to raising user awareness and improving media literacy among the younger generations.

With regard to reviewing the sectoral regulations protecting subscribers and users, he noted that electronic communications and postal services are indispensable in all areas of society, the economy and the operation of state administration. In many areas of contractual relations with subscribers and users, binding sectoral regulation exists, where the parties’ freedom of contract and the rules of the Civil Code do not apply. Further sectoral rules ensure the publicity and comparability of service conditions and the possibility to make an informed choice and to change service providers.

Regarding the NMHH’s tasks in the supervision of electronic communications and postal services, the speaker explained that the purpose of supervision is to protect electronic communications subscribers and users of postal services and to ensure that service providers operate in compliance with the law. Its tools include comprehensive investigations under and outside the supervision plan; procedures based on requests from subscribers and users; and the handling of notifications and signals from other bodies. In the case of a breach of the law, the Authority’s task is to apply a legal sanction aimed at remedying the infringement and creating the conditions for lawful operation. It is, however, not responsible for settling individual grievances. Legal consequences may include: an obligation to comply; an obligation to draw up an action plan and to report; an obligation to publish a notice on the service provider’s website; the publication of a press release at the service provider’s expense; the imposition of a fine on the service provider and the manager as a sanction; and interim measures in the event of widespread threat of serious harm.

In the case of ex officio procedures, the Authority’s toolkit includes comprehensive investigations under and outside the supervision plan; procedures based on requests from subscribers and users; and the handling of notifications and signals from other bodies. Proceedings may be initiated upon request if it becomes necessary to investigate the conduct, procedure or omission of the service provider specified by the subscriber or user needs to be investigated. The Authority will only investigate procedures that comply with sectoral rules and the GTC. There is a time-limit for starting the procedure. The procedures, which, in addition to consumers, can also be initiated by businesses and other legal entities, provide valuable indications of the areas where systemic problems may exist in the way service providers operate.

The ex officio procedures are carried out on the basis of the Authority’s annual monitoring plan, which is adopted by its President in December each year. The plan is public and available to anyone. While it primarily addresses the focus areas for the coming year, investigations may be launched at any time during the year.

Finally, he spoke about public contracts. He said that this is a complex tool to deal with the consequences of more widespread infringements and to ensure lawful operation. The service provider can initiate the conclusion of a contract. Essentially, the service provider makes commitments that are suitable for resolving and settling the situation faced by the customer. The commitments may go beyond what the Authority may impose as a legal sanction. The resulting public contract is enforceable, he added in conclusion.

The conference concluded with a panel discussion among three academics, entitled New postgraduate training options in the field of alternative dispute resolution – panel discussion with the professional leaders of the programmes. Dr. Éva Inzelt, Associate Professor at the ELTE Faculty of Law and Political Sciences from Budapest, Dr. Judit Glavanits, Associate Professor at the Széchenyi István University of Law and Political Sciences of Győr and, as moderator of the discussion, Prof. Dr. Veronika Szikora, Head of Department, Faculty of Law and Political Science, University of Debrecen, discussed the increased importance of alternative dispute resolution training both in the education of lawyers and in postgraduate education.

All three speakers said that their postgraduate training courses have a maximum of 15–20 participants, which is the only way to work effectively, as the nature of the training is such that it includes a lot of practical training besides theoretical education. Prof. Dr. Veronika Szikora said that it was a few years ago, soon after the Alternative Dispute Resolution Conference, that she decided to arrange for an alternative dispute resolution specialist training in Debrecen, which finally started two years ago. In Debrecen, there are two types of training related to alternative dispute resolution, i.e. the training of alternative dispute resolution lawyers, which is currently only available for lawyers, and the training for consumer protection lawyers, the first such training in the country to be launched at the University of Debrecen. The question of the ratio between theory and practice in training has been repeatedly raised. She argued that theory and practice must go hand in hand, and that new expectations and practical elements must be strengthened in training. Basic training should provide a solid foundation on which to build the new direction of vocational training based on practice. One of the results of the change in the university model is the launch of their consumer protection law programme. Here, in addition to face-to-face attendance, there is a possibility of online participation, which means that interested professionals can subscribe to this training from outside the city or the country. The training course for alternative dispute resolution lawyers has been the most popular. She also noted that they have been trying to incorporate an established approach in the field of ADR in their latest training courses, such as compliance training, which is currently being organised. Since feedback is important in education, suggestions on how to improve special training courses are welcome from anyone.

Dr. Judit Glavanits noted that, in Győr, those who participate in the specialist lawyer training are open to new ideas, including an expanding range of postgraduate courses. The trainees are a pleasure to work with and are an invaluable community, she added. The training of alternative dispute resolution lawyers was thought up five years ago. Their speciality is that they are not satisfied with mediation only. Conciliation, financial conciliation and arbitration have also been integrated into the training and the final exam, so the training covers all forms of alternative dispute resolution. The training has a very high number of face-to-face sessions, with a practical component of 80 per cent. The students also prefer the fact that lawyers and non-lawyers meet for several hours, as project managers, social workers and teachers also participate in the mediator training, thus enriching each other’s activities and providing each other with new insights. This offers participants a much broader knowledge. Practice is a crucial part of training. Post-graduate training can be conducive in overcoming burn-outs, by discovering new environments and new colleagues. Foreign language training is also important for model-changing universities, she noted, adding that internationalisation has become a priority. One of the advantages of post-graduate training is that the rigidity and slow implementation of changes that used to be typical of the legal profession has changed in a positive direction as a result of post-graduate training, and short courses can now keep up with new needs and a new training direction can be set up quickly, within months where necessary. As for the future, it has been suggested that shorter training modules of a few months could be launched, even online, which could become necessary and popular with students because of the need to adapt quickly. An instructor who is brilliant at undergraduate education may not prove so good in postgraduate education. Professionals with several years of experience can impart much more useful knowledge to students. In postgraduate education, there is much less difference between the teacher and students. Among the future training courses in Győr, the training of cybersecurity lawyers is already in the early stages. This field was also one of the most interesting topics at this conference, she added.

Dr. Éva Inzelt said that this has been the second year of the economic alternative dispute resolution (mediator) specialist and lawyer training at the ELTE Faculty of Law and Political Sciences. One of their specialties is that trying to provide students with useful expertise on specific issues that arise in the business world, both within and between companies. Apart from lawyers, the training is also available to economists and certain management graduates in fields such as health, art and engineering. Undergraduate law education is essentially theoretical, while postgraduate education is a lot more oriented toward practice. In the long term, measures should be taken to transform the system of basic training. Market demand should be constantly monitored and training must follow such demand. Even with the rise of artificial intelligence, the mediator will never be replaced by a machine, i.e. the emotion the mediator works with will never be taken over by a machine, which is why mediator training has a long-term potential and outcome. In practical training, cases are dealt with in pairs or small groups. The postgraduate course also provides students with literature in foreign languages and invites well-known foreign experts. The combination of law and other business professionals in postgraduate education brings many positive outcomes for students, and has also become very popular among the lecturers. The outstanding theses by students have shown the way they can make use of theoretical and practical teaching. Finally, she added that they are already looking forward to next year’s conference theme. For years, ADR conference organisers have managed to come up with the most current issues, which should be taken into account in postgraduate training.

Various articles have been published on the conference and the digital world in the online journal JOGÁSZVILÁG (A LAWYER’S WORLD), published by Wolters Kluwer Hungary Kft.

The article summarising the conference is available here: Consumer protection and challenges of the digital world - Jogászvilág (jogaszvilag.hu)

Information on one of the panel discussions can be found here: How far can consumer protection extend? State intervention versus private autonomy – Jogászvilág (jogaszvilag.hu)

More articles on digital consumer protection can be found here: digital consumer protection - Jogászvilág (jogaszvilag.hu); NMHH - Jogászvilág (jogaszvilag.hu)

You can find out more about the CyberShield Programme and cyber risks here:

The Cyber Shield programme - Jogászvilág (jogaszvilag.hu)

The lectures of the second day of the conference are available on the Magyar Nemzeti Bank’s YouTube channel.