As a part of the Turkish Judicial Reform, the Law Amending the Civil Procedure Law and Certain Laws No. 7251 is published in the Turkish Official Gazette on July 28, 2020. In addition to the amendments on several regulations, such as Turkish Civil Procedure Law and Administrative Procedure Law, a major development in consumer law also took place.
Turkish Judicial System has been adopting an approach to include the mediation process before the litigation proceedings and the first reflection of this approach was seen in commercial disputes having a financial claim. As of July 28, 2020, the lawsuits relating to disputes that fall into the jurisdiction of consumer courts are made subject to mediation process as well; thus applying to mediation process is deemed as a pre-requisite for filing such lawsuits, which means that "not applying" would result in rejection to the lawsuit.
- The requirement to be subject to the mandatory mediation process
The amended Article 73/A/1 (a) of Consumer Protection Law regulates that (i) disputes that fall within the scope of the consumer arbitration committee's duty, (ii) objections to the consumer arbitration committee's decisions, (iii) lawsuits mentioned in Article 73/6 of Consumer Protection Law, mostly injunction orders, (iv) lawsuits regarding suspension of production or sales and recall of goods from market, and (v) disputes having the nature of consumer actions and arising from real rights regarding real estate are not subject to mandatory mediation.
1. Disputes that fall within the scope of the consumer arbitration committee's duty
In Turkish Consumer Law, there is a system having two phases, separated based on the financial value of the claim. As per Article 68 of Consumer Protection Law, claims having a value higher than TRY 10,390 can be brought only before court through lawsuits. In line with this exception, Article 73/A/1 (a) of Consumer Protection Law, regulating the mandatory mediation process, provides that the disputes that fall within the scope of the consumer arbitration committee's duty, which pertain to the claims having a value lower than TRY 10,390, are not subject to mandatory mediation.
2. Objections to the consumer arbitration committee's decisions
The first phase, which falls within the scope of the consumer arbitration committee's duty, can still evolve into a lawsuit if the party against whom the committee decides objects against the decision. In such a case, the opposition is examined by the consumer court. The mandatory mediation process is not applicable for consumer lawsuits that are born from a proceeding pursued by the consumer arbitration committee.
3. Lawsuits mentioned in article 73/6 of Consumer Protection Law
As per Article 73/6 of Consumer Protection Law; consumer organizations, relevant public bodies or the Ministry of Customs and Trade are entitled to initiate lawsuits before consumer courts to impose an injunction order, or to detect, prevent or suspend an unlawful situation in cases that generally concern the consumers and in cases where there is a risk that a situation contrary to relevant laws may arise (This authority to file lawsuits does not include the lawsuits stemming from provisions of unfair commercial practices and commercial advertisement) The mandatory mediation is not applicable for the type of lawsuits mentioned here; these lawsuits can be filed without the need for applying for mandatory mediation.
4. Lawsuits regarding suspension of production or sales and recall of goods from market
The Ministry, consumers, or consumer organizations are authorized to file a lawsuit to inspect whether a series of goods offered for sale are defective, to suspend production or sale of such, to remedy defect, and to recall such from those who are holding such goods for sale. Based on the clear provision of the amended regulation of mandatory mediation in Consumer Protection Law, these lawsuits are left out of the purview of mandatory mediation.
5. Disputes having the nature of consumer actions and arising from real rights regarding real estate
The exception requires (i) the nature of the dispute to be related to consumer actions and (ii) the dispute to have arisen from rights regarding real estate. With reference to the wording and basic interpretation rules in Turkish Law, both these requirements should be present at the same time for this exception to be applicable.
- Consequences of not attending the mediation meetings
The mediation proceeding regarding consumer lawsuits is subject to the Law on Mediation in Civil Disputes. Article 18/A/11 of the Law on Mediation in Civil Disputes dictates that if the mediation process is concluded with a party not attending the first mediation meeting without a valid excuse, this party will be kept liable for all litigation costs and cannot be entitled to attorney fee even if the court results in favor of that non-attending party. That said, Article 73/A/2 of Consumer Protection Law protects the consumer from such outcome connected to non-attendance and stipulates that the consumer who did not attend the first mediation meeting is not liable for the litigations costs and attorney fee if the consumer loses the case. The counterparty of the consumer does not benefit from this exception though.
- Lawsuits subjected to the mandatory mediation process
The provisional clause of Consumer Protection Law rules that mandatory mediation is not applicable for the consumer lawsuits pending before first instance courts, Regional Court of Appeals or High Court of Appeals. In other words, the first consumer lawsuit that shall be subject to the mandatory mediation will be the lawsuit that is initiated as of July 28, 2020, i.e. the date of the mandatory mediation provision being published in the Official Gazette.
Turkish legal system welcomed another mandatory mediation process that targets the disputes falling into the jurisdiction of consumer courts, with certain exceptions to that scope. Consumer lawsuits can be of low claim amount by nature but brings a significant workload on the consumer courts nonetheless, and adding the pre-step of mandatory mediation process before going into court for such disputes might be effective in reducing this workload, especially when it comes to claims of low amounts. Because it is reasonably possible for parties to settle if they have a proper venue to discuss the disputed matter, as they would also be considering that the legal proceedings consumes time, energy and money.
This article was first published in Legal Insights Quarterly by ELIG Gürkaynak Attorneys-at-Law in September 2020. A link to the full Legal Insight Quarterly may be found here
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