1.General

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.General

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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