ARTICLE
15 January 2020

Amendments In The Attorney Fees In Material Compensation Lawsuits

EA
Esin Attorney Partnership

Contributor

Esin Attorney Partnership, a member firm of Baker & McKenzie International, has long been a leading provider of legal services in the Turkish market. We have a total of nearly 140 staff, including over 90 lawyers, serving some of the largest Turkish and multinational corporations. Our clients benefit from on-the-ground assistance that reflects a deep understanding of the country's legal, regulatory and commercial practices, while also having access to the full-service, international and foreign law advice of the world's leading global law firm. We help our clients capture and optimize opportunities in Turkey's dynamic market, including the key growth areas of mergers and acquisitions, infrastructure development, private equity and real estate. In addition, we are one of the few firms that can offer services in areas such as compliance, tax, employment, and competition law — vital for companies doing business in Turkey.
In addition, the amendment provides that if a material damages claim is entirely dismissed, then the attorney fee will not be proportional, but fixed.
Turkey Litigation, Mediation & Arbitration

Recent Development

An amendment has been made to the Minimum Attorneyship Fee Tariff ("Tariff") and with this amendment, a new approach similar to the moral damages claims has been adopted for material damages claims.

This amendment provides that if a material damages claim is partially dismissed, then the counsel for the defendant's attorney fees as per the Tariff will not exceed the counsel for the plaintiff's attorney fees. In addition, the amendment provides that if a material damages claim is entirely dismissed, then the attorney fee will not be proportional, but fixed.

What's New?

As per Article 13 of the Tariff, in case of partial dismissal of the material damages claim, the counsel for the defendant's proportional attorney fee will not exceed the amount ruled for the plaintiff's counsel. For instance, TRY 70,000 is dismissed and TRY 30,000 is accepted in a material damages claim wherein TRY 100,000 is requested in total. In that case, before the amendment, the counsel for the defendant's attorney fee would be calculated based on the dismissed amount (i.e. TRY 70,000) and the counsel for the plaintiff's attorney fee would be calculated based on the accepted amount (i.e. TRY 30,000). However, under the amendment, even if the dismissed amount (i.e. TRY 70,000) is higher than the accepted amount (i.e. TRY 30,000), the counsel for the defendant's attorney fee will not exceed the counsel for the plaintiff's attorney.

Additionally, another significant amendment brought under Article 13 of the Tariff provides that in case of full dismissal of the material compensation lawsuits, the counsel for the defendant's attorney fee will be a fixed fee.

Conclusion

We believe that the amendments made to the Tariff eliminates an obstacle before the right to legal remedies that we see in practice. However, this amendment may prompt the abuse of right to file a lawsuit. This is because the risk of attorney fees in case of the dismissal of the lawsuit has become a fixed amount, which may be relatively low compared to a proportional attorney fee, and the foregoing situation may be an advantage for the parties that are considering filing a lawsuit for a high-amount in bad faith.

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.

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