Turkey
The Turkish court system has undergone rapid change in recent years which has led to pressures upon the judicial and legal system.
The appeals process to the Appeal Court has also seen significant rise in cases in recent years and this has placed challenges on parties as well as the judiciary in case resolution.
To assist, the Government has implemented a requirement for mediation, firstly in employment law cases but now with respect to all commercial disputes to ensure that disputes are dealt with as swiftly as possible and to alleviate challenges on the court system.
1. Is third party funding permissible for disputes?
Third-party litigation funding is not specifically addressed, one way or the other, in substantive Turkish law. While it is not therefore explicitly prohibited under Turkish law, due to the lack of certainty surrounding the subject, among other reasons, third-party funding is not common in Turkey.
2. Are lawyers able to work on a contingent basis in the jurisdiction and are there any restrictions?
Turkish law has limited application of contingency fees with the bar associations of most cities setting minimum fee recommendations for most types of legal work., Whilst some lawyers do undertake cases on such a basis the practice is limited to small claims and employment law cases and rarely applied where there is significant value in a claim.
Indeed, it tends to be that local lawyers will claim the bar minimum or more if there is a significant valued claim.
3. Can the court or tribunal order one party to pay the other’s legal costs?
In Turkey, the rules regarding the award of legal costs can vary depending on the type of court or tribunal. Whilst the general rule is the successful party is awarded their legal costs, these legal fees are restricted to the legal fees which are determined by the courts or tribunals, rather than what might be the actual fees paid by a party to their lawyer to run the case. Plus, if parties have multiple claims and the court decides for or against a party on the claims individually, the cost may be awarded on the basis of the success and failure of each separate claim as opposed to a global cost award.
4. Is insurance available to protect against adverse outcomes for funded litigation?
Yes, insurance is available to protect against adverse outcomes for funded litigation in Turkey.
Insurance for litigation costs has been possible in Turkey since 1996 under the “General Terms on Legal Protection Insurance”, though it has not been much applied in practice.
As third-party funding is still a developing area in Turkish law the local insurance market is not as sophisticated as some jurisdictions. The insurance is not placed in Turkey but it would be placed via a reinsurance process into a more established market such as the UK, and the premiums would therefore be correspondingly higher.
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