Hungarian Constitutional Court rules that the way Academy of Sciences' research network was taken away violates property rights

According to a fresh decision of the Constitutional Court, the way in which the research network of the Hungarian Academy of Sciences (MTA) was separated from the Academy in 2019 by then Minister of Innovation and Technology László Palkovics was partly unconstitutional. The body called on Parliament to fulfill its duty to fill the regulatory gap on the issue of property rights by 30 June 2023. However, the court did not annul the entire law in the framework of the ex-post constitutionality review.

In other words, the decoupled research network can essentially continue to operate under the system set up three years ago.

The government's 2019 reorganization of the Academy was officially justified by the need to improve the international competitiveness of Hungarian science, but the new institution, Eötvös Loránd Kutatási Hálózat, ( ELKH, Eötvös Lóránd Research Network) and the way the restructuring was done received much criticism. At the time, László Palkovics tried at length to negotiate the restructuring with the stakeholders, but no compromise could be reached, as the Academy wanted guarantees that research would remain independent under the new system. After the measure was pushed through, MTA President László Lovász and opposition MPs both appealed to the Constitutional Court. The current ruling is on the latter's petition.

The essence of the 2019 measure was to ensure that the MTA's public body and secretariat would no longer have direct influence on the functioning of the research system.

The law also obliged the MTA to allow the free use of its property. Six members of the 13-member governing body of the ELKH are delegated by the Hungarian Academy of Sciences and six by the government (whereas the Academy would have preferred a maximum of three). The chairman of the body is appointed by the prime minister following a joint proposal by the president of the Academy and the minister in charge. Given that a qualified majority is not required within the governing body for decisions on important matters, the government's will can be easily imposed.

The opposition sent the law to the Constitutional Court for an ex-post constitutional review, arguing that the challenged provisions are unconstitutional because they violate the MTA's right to property, the guarantees of the MTA under the Fundamental Law and the autonomy of science. The argument concerning the right to property was based primarily on the fact that, although state funding did play a central role in the operation of the Academy, a significant part of the MTA's assets came from donations and gifts from private individuals. The petitioners argue that autonomy is infringed upon because half of the governing body is appointed by the government.

The Constitutional Court reached its decision based on the parallel arguments submitted by Dr Balázs Schanda, Dr László Salamon and Dr Marcell Szabó. In its judgement the Constitutional Court ruled that at the time of separating the Research Network from the Academy of Sciences, the Parliament had breached the constitution by failing to regulate the ownership relations with the former operator of the ELKH in a manner that ensured legal certainty and property rights. The panel therefore calls on the Parliament to fulfill its obligation until 30 June 2023.

According to the Constitutional Court, it is a requirement stemming from the 2014 Law on Innovation, Research and Development and the Fundamental Law that measures affecting the MTA must be in keeping with scientific freedom. The Constitutional Court did not find that the taking away of MTA's research network and the establishment of the ELKH violated this requirement. The Court also concluded that it had no jurisdiction to review how the efficiency of the performance of public tasks had been affected by the nationalization of the network of academic research institutes. However, the mere fact that the state intends to continue to perform a public task through another body is not in itself an infringement of the constitution," they write.

However, it was found that for the public task to be fulfilled, the two actors (MTA and ELKH) must be able to work together. Within the framework of this cooperation, MTA is obliged to tolerate any restriction on its property that is necessary for the performance of its public tasks and meets other important conditions, such as a clearly defined and necessary scope of property and the possibility of judicial review. As these conditions currently aren’t met, the judicial body has ordered that the National Assembly supplement the law with clauses that will fill the current regulatory gap.

Regarding the autonomy of science, the Constitutional Court concluded that it is not compromised because two thirds of the governing body is made up of scientists (in other words, the Constitutional Court has no problem with half of the members being delegated by the government).