2. Litigation Funding
3. Initiating a Lawsuit
4. Pre-trial Proceedings
5. Discovery
6. Injunctive Relief
7. Trials and Hearings
8. Settlement
9. Damages and Judgment
10. Appeal
11. Costs
12. Alternative Dispute Resolution
13. Arbitration
14. Recent Developments


1.1 General Characteristics of the Legal System

Turkey is a civil law country whose legal system is mostly based on Roman law.

The main source of law is legislation rather than the court precedent. The Grand National Assembly of Turkey is the main legislative authority in Turkey.

Court precedents are not binding for the other Turkish courts, except for the decisions of the General Assembly on the Unification of Judgments of the Court of Cassation. However, the first instance courts and regional courts of appeal are likely to follow the jurisprudence of other chambers of the Court of Cassation. Doctrine is another important source for the interpretation of the law.

The Turkish civil law system follows a largely adversarial mod- el in civil matters unless the law provides that the court shall research the matter ex officio.

The Turkish legal system provides for both written submissions and oral argument; however, written submissions are essential in the Turkish legal system as most of the trials conclude on the basis of the written submissions. The law also allows oral arguments during the trial but the effects of oral argument are not as strong as those of written submissions.

The Turkish legal system provides for both written submissions and oral argument; however, written submissions are essential in the Turkish legal system as most of the trials conclude on the basis of the written submissions. The law also allows oral arguments during the trial but the effects of oral argument are not as strong as those of written submissions.

1.2 Court System

The national courts are responsible for adjudicating civil, criminal and administrative matters.

In principle, the Civil Courts of First Instance have general jurisdiction over civil law matters regardless of the value of the claim. In specific matters – such as commercial disputes, family disputes or employment disputes – specialised courts operate. There are also Civil Courts of Peace adjudicating simple matters such as rental disputes and elimination of joint partnerships.

Turkish law provides a two-tiered appeal system. The Regional Courts of Appeal, which are the first tier of the appeal system, have jurisdiction over the appeals in a specified region. The Court of Cassation, the second and last tier of the appeal system, on the other hand, is authorised nationwide. The Court of Cassation consists of various chambers specialised in different types of disputes.

1.3 Court Filings and Proceedings

In principle, the court proceedings are open to the public in civil, criminal and administrative cases. However, the proceedings are not accessible to the public as a whole.

The hearings are mostly open to the public unless otherwise decided by the court.

The case files, however, are confidential since they can contain confidential information regarding the parties. Within this con- text, only the parties and their representatives can examine the case file. Third parties can request access to the file from the judge provided that they have proven their interest in accessing the case file. In addition, lawyers with a valid Bar membership in Turkey can access all case files, unless a confidentiality order is granted.

1.4 Legal Representation in Court

Only lawyers admitted to a Bar in Turkey can be the legal representative before the Turkish courts. No further requirements are needed for lawyers admitted to a Turkish Bar in order to appear before the Regional Courts of Appeals or Court of Cassation. The parties can also represent themselves before the courts as Turkish law does not oblige a party to be represented by a lawyer in any stage of the trial.

Foreign lawyers cannot represent the parties or appear before the courts since being a Turkish citizen is a requisite for being admitted to a Bar in Turkey.

2. Litigation Funding

2.1 Third-Party Litigation Funding

Third-party funding is not common in Turkey and there is no legislation regulating it. Parties may draw up a contract regarding third-party funding within the scope of freedom of contract, subject to the Code of Obligations. However, in principle, lawyers are restricted from obtaining any right over the subject matter of the dispute to which they are a representative.

2.2 Third-Party Funding: Lawsuits

There are no restrictions regarding the types of lawsuits that can be funded. All types of lawsuits can be funded by a third- party funder. However, monetary claims and other claims of a monetary nature are more likely to be funded by a third-party.

2.3 Third-Party Funding for Plaintiff and Defendant

Third-party funding is available for both the plaintiff and the defendant. In civil law practice, the plaintiff bears most of the litigation costs during the trial. Defendants usually only bear the costs of litigation required to bringing the evidence declared by them if it is necessary. In this context, plaintiffs are more likely to require funding than defendants.

2.4 Minimum and Maximum Amounts of Third Party Funding

There is no minimum or maximum threshold determined for third-party funding.

2.5 Types of Costs Considered under Third-Party Funding

The third-party funder can fund any of the expenses arising from, or in connection with, a litigation proceeding, including legal fees, counsel fees and expert costs.

2.6 Contingency Fees

Contingency fees are not permitted in Turkey. The official mini- mum attorney's fee tariff sets the minimum amount for an attorney's fee, which lawyers are obliged to request from their clients.

However, the lawyers are allowed to receive premiums proportional to the success rate of the litigation or to draw up alter- native agreements, provided that the minimum attorney's fee stipulated on the tariff is paid and, furthermore, that the total attorney's fee cannot exceed 25% of the value of the dispute.

2.7 Time Limit for Obtaining Third-Party Funding

Under Turkish law there is no time limit regarding when a party to litigation should obtain third-party funding.

3. initiating a Lawsuit

3.1 Rules on Pre-action Conduct

In general, pre-action conduct is not obliged in Turkish law. The plaintiff can initiate a lawsuit before notifying the other party. However, for commercial disputes, sending notification before initiating a lawsuit is common practice.

The main form of pre-action conduct in Turkish law is an application for mandatory mediation. Most lawsuits regarding employment, commercial and consumer disputes cannot be filed before completing a mandatory mediation process. The plaintiff must submit the minutes of the last mediation meeting, which state that the parties could not reach a settlement, to the court together with the state of claim. Unless the mediation process is carried out, the court will reject the case due to lack of a cause of action, without examining the merits of the case.

3.2 Statutes of Limitations

There are two kinds of statutes of limitations under Turkish law: final term and lapse of time.

Final Term

A right lapses after the final term expires and cannot be used or enforced. Accordingly, a lawsuit cannot be initiated regarding the right in question after the final term. Final term is a cause of action to be considered by the court ex officio. Most family law matters and individual rights are subject to foreclosure.

Lapse of Time

Lapse of time is a plea allowing the debtor to refrain from performing an obligation after a certain period of time. Lapse of time is not considered by the court ex officio, and must be pleaded against the creditor by the debtor.

The general term for lapse of time is ten years, to which most contractual claims, unless otherwise prescribed by law, are subject. Lapse of time for unjust enrichment is two years from the date at which the plaintiff learned of the unjust enrichment, and in any event ten years from the unjust enrichment. In principle, lapse of time for tort claims is two years from the date at which the plaintiff learned about the damage and the identity of the defendant, and in any event ten years from the tortious act.

3.3 Jurisdictional Requirements for a Defendant

In international disputes, the jurisdiction of the Turkish courts is determined according to the Code on International Private and Procedural Law, which refers to the Code of Civil Procedure regulating the jurisdiction of the courts in domestic cases.

The jurisdiction of Turkish courts differs depending on the nature of the dispute. The main principle is that the competent court is the court of the residence of the defendant. Therefore, defendants residing in Turkey can be subject to a lawsuit in Turkey.

In addition to the general principle, contractual claims can be filed before a Turkish court, if the contract will be performed in Turkey. Tort claims, on the other hand, can also be filed in Turkey, when the plaintiff is residing in Turkey, or the dam- age has been suffered in Turkey. The exclusive forum for claims regarding property, or in rem rights related to a real property placed in Turkey, are the Turkish courts, regardless of the residence of the parties.

As a rule, Turkish law permits jurisdiction agreements to be conducted between merchants.

3.4 Initial Complaint

To initiate a lawsuit, the plaintiff must file a statement of claim to the court submitting the reason for the dispute, relevant facts and events and evidence. The statement of claim must include information regarding the counterparty, the subject of the dis- pute, the value of the claim and its legal basis. A statement of claim can be delivered to the court from the courthouse or can be submitted via the National Judiciary Informatics System.

Any mistakes made in the statement of claim can be corrected by an additional petition provided that the mistakes do not affect the value of the claim, its legal basis or the identity of the counterparty.

In addition, the plaintiff can amend the statement of claim as a whole or in part; however, this can be done only once until the conclusion of the trial. In practice, it is usually the amount of the subject matter in dispute that is amended. It is often increased in partial lawsuits following an expert report in favour of the plaintiff.

3.5 Rules of Service

Serving the statement of claim and other documents subject to service is the responsibility of the court. However, the plaintiff must make an advance payment covering the legal fees and ser- vice expenses while initiating the lawsuit.

Service is made through the post office unless the party is using an electronic service system. Using an electronic service system is an obligation for some legal entities and real persons such as lawyers. Also, persons who are not obliged to use the electronic service system can obtain an electronic service address. The service must be made through the electronic service system to those who have an electronic service address.

The procedures of service to the parties outside the country are regulated by the Hague Civil Procedure Convention, the Hague Convention on Service Abroad and other bilateral treaties to which Turkey is a party. In the absence of a treaty or convention, service abroad will be performed in accordance with the provisions of the Notification Law.

3.6 Failure to Respond

The defendant should respond to the lawsuit within two weeks, as a rule. The court may grant additional time for this response at the request of the defendant (made within two weeks), in cases where it is very difficult or impossible to prepare a respond petition within this period.

If the defendant does not respond to a lawsuit within the term above, the claim, events and evidence submitted by the plaintiff will be deemed denied by the defendant. The defendant cannot submit any plea or evidence exceeding the limits of denial.

3.7 Representative or Collective Actions

The class action is not recognised in Turkish law since, according to civil law principles, the results of civil proceedings are only binding for those who are a party to such proceedings.

However, there are actions that can be filed for protecting the rights of a group of people who are not a party to civil proceedings. Turkish law provides "mass actions", which can be filed by associations and other legal entities, to protect indirectly the rights of their members or the community they represent. Indemnification claims are excluded from the scope of the mass action.

In addition, labour unions can file lawsuits on behalf of their members or inheritors of their members. However, these law- suits cannot be considered as a mass action or class action since they only grant representation authority to the labour unions.

3.8 Requirements for Cost Estimate

Neither the Code on the Legal Profession nor the Code of Professional Conduct impose any explicit obligation to provide clients with a cost estimate of potential litigation at the out- set. However, lawyers are obliged to act with due diligence and secure their clients' benefits, and the aforementioned is considered as a part of such an obligation.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.