Information on the procedure of TSZSZ (Experts’ committee concerning construction work disputes)

A designer, contractor or subcontractor may request the procedure of the TSZSZ (Experts’ committee concerning construction work disputes) if he has carried out the work under the contract but has not received the certificate of completion, or if he has received the certificate of completion but his invoice has not been paid.

The client may also request the procedure if he does not consider payment of the fee due under the contract to be justified based on the contractor’s performance. The most important condition for the application to be admissible is the existence of a written contract between the contracting parties, signed by both parties.

The procedure of TSZSZ is much faster and cheaper than going straight to court. Once the application has been received, the report of the TSZSZ will be delivered within 30 days, or maximum up to 60 days if the deadline is extended. The expert’s report provides a basis for conciliation between the parties, so that court action can be avoided. If no agreement can be reached, a case based on a TSZSZ report will also be brought before the courts within shorter time limits and with special procedural rules to facilitate the recovery of the money claimed.

Applications will be assessed by the TSZSZ within 5 days of the day after submission. If the application is incomplete, the TSZSZ will inform the applicant of the deficiencies and the possibility of rectifying them, otherwise it will accept the application. At the same time as the application is accepted, the three-member board of experts is appointed.

The main task of the board of experts is to establish whether the performance in question has been carried out in accordance with the contract and the amount of compensation due to the contractor. The board has 30 days to prepare its expert’s report. During this period, it carries out a site visit in the case of construction works and an expert hearing in the case of a design dispute.

Where the complexity of the case justifies it, the board may request an extension of up to 30 days. At the end of the procedure, the TSZSZ shall send the expert’s report to the contracting parties.  In the case of a technical question raised in the proceedings, the report of the TSZSZ shall be considered as evidence in the same way as if it had been given by the expert appointed in the proceedings.

The completed expert’s report will be sent by post to both the applicant and the defendant. The applicant will attempt to reach an agreement with the defendant based on the report. If the defendant is not willing to settle and pay the claim based on the expert opinion, the applicant will go to court and start a lawsuit based on the expert report of the TSZSZ. The proceedings, which are treated as a priority case, may be brought within 60 days of receipt of the expert opinion.

Interim measure

An essential element of the special rules is that the court will order an interim measure in the application (counterclaim) on request. In addition, the court may order the performance of the claim in the application for interim measures for an amount not exceeding HUF 400 million, which, according to the expert’s report of the TSZSZ, is the contractual value of the design, construction and execution works that can be established with absolute certainty.

The purpose of this measure is to ensure that the party will in any event receive the amount of the provisional measure for which it is certain that it has completed the corresponding work.

An application for interim measures may be granted only if the applicant proves that he or she has taken out insurance or a guarantee from a credit institution or a financial undertaking for the reimbursement of the amount of the claim in the event of the expiry of the interim measure or the revocation of the order for interim measures or has deposited an amount equal to the amount of the claim with the President of the Court.

Questions regarding construction law or disputes in Hungary? Contact us!

dr. Dobos István attorney at law

Phone / Whatsapp: +36303088151