In the great majority of disputes to be taken to the consumer courts there is a preliminary stage that must be completed before the pleading is submitted to the court: mediation. An action brought in disregard of that stage is dismissed on procedural grounds, without the merits being entered into, on the ground that the procedural requirement has not been satisfied. By contrast, no such obligation applies to claims directed to the consumer arbitration committees; nor is it necessary for mediation to have been sought where the consumer court is approached in order to object to a committee decision.
The route to be followed by a party wishing to commence the process is described in plain terms. It is enough to apply to the mediation office operating in the courthouse at the place of residence of the other side; if there is more than one addressee, the place of residence of only one of them may be taken as the basis. The mediator assigned invites the parties to the negotiating table and records the outcome of the meetings held in a minute. No action may subsequently be brought in respect of the matters on which agreement has been reached; where no settlement has been achieved, the minute drawn up must be annexed to the pleading in the action to be brought.
In processes that end in agreement, the signatures the minute bears also affect the outcome directly. If, in addition to the parties, the signatures of their lawyers also appear on the document, the minute may be put into enforcement without the need for any further step. Where the text bears only the signatures of the parties, an annotation of enforceability must be obtained from the civil court of peace. In this briefing note we examine in turn the scope of mediation in consumer disputes, its exceptions, the steps making up the process and the legal consequences it produces.
The Concept and Scope of a Consumer Action
A consumer action is the bringing before the courts of disputes arising from consumer transactions or from practices directed at consumers.
The concept of a consumer transaction is defined broadly in the Consumer Protection Act No. 6502. Accordingly, every kind of contract and legal transaction concluded with consumers by natural and legal persons acting for commercial or professional purposes in the markets for goods or services, and by persons acting in their name or on their account — public legal persons are also within this scope — is treated as a consumer transaction. Contracts for work, carriage, brokerage, insurance, agency and banking also fall within this definition.
The criterion the definition indicates is clear: for a transaction to acquire the character of a consumer transaction, one of the parties must bear the capacity of consumer. A consumer is an individual user acting without pursuing any commercial aim, solely in order to meet a consumption need.
So long as there is a consumer on one side of the relationship, disputes arising from that relationship fall as a rule within the subject-matter jurisdiction of the consumer court. What stands against this rule is the category of absolute commercial actions: in those actions, which are regulated in the Turkish Commercial Code No. 6102, subject-matter jurisdiction lies with the commercial court independently of the capacity of consumer.
Differences Between a Consumer Action and an Application to the Arbitration Committee
Both routes answer the same legal need; the point at which they diverge is their operation and scope. The arbitration committee mechanism is designed to bring disputes falling below a given monetary threshold to a swift conclusion without taking them to the courts, and to create a basis for resolution in the consumer’s favour.
Applications to the committee are concluded within a markedly shorter period than court proceedings and serve the aim of protecting the consumer in its entirety.
As to the monetary limit, taking 2023 as the basis, the provincial or district consumer arbitration committees have jurisdiction in disputes whose value remains below TRY 66,000 (sixty-six thousand Turkish lira). Where that amount is exceeded, there is no need to go to the committee; once the mediation stage has been completed, an action may be brought directly in the consumer court.
Another decisive difference between the two routes appears in the mediation requirement. While that requirement applies when the court is approached, no such precondition is provided for applications made to the arbitration committee. Accordingly, in respect of claims falling below the threshold above, the consumer is obliged neither to bring an action nor to go to a mediator; he may seek his rights by applying directly to the committee. The legislature’s preference is that consumer disputes should be resolved quickly, easily and at low cost through mediation. Since it is also desired that the judicial route should remain accessible to the consumer in files where no result is obtained at that stage, consumer actions are exempted from court fees.
For details on the financial dimension of the subject, reference may be made to our note entitled "Litigation Costs and Fees in Consumer Actions".
Mandatory Mediation as a Procedural Requirement
The rationale of mediation provided for as a procedural requirement in the consumer courts may be gathered under three headings: bringing disputes to a resolution within a shorter period, reducing the costs of proceedings and lightening the case load borne by the judicial organisation.
The rule operates as follows: the route of mediation is taken before the pleading is filed, and the dispute is first sought to be resolved in that negotiating environment, at which both parties are present.
Since that preliminary stage bears the character of a procedural requirement, where the court is approached before it is completed the consumer court does not enter into the merits of the matter and dismisses the action for want of a procedural requirement.
A dismissal on procedural grounds given in this way does not mean that the right is lost altogether. If the limitation periods have not expired, it is possible to complete the mediation stage that was left out and to bring the action afresh.
Although that is the general rule, there are also certain situations in which the consumer court may be approached directly. The disputes left outside the mediation requirement under the Consumer Protection Act No. 6502 are as follows:
- Actions brought in respect of a right in rem over immovable property
- Actions seeking the recall of goods from the market and the halting of production or sale
- Cases in which consumer organisations take the route of an action
- Disputes falling within the field of competence of the consumer arbitration committee
- Objections directed against decisions given by the arbitration committee
In short, the rule in consumer disputes is that mediation is to be sought before an action; in the exceptional situations listed above, however, an action may be brought directly without that stage being required.
How the Mediation Process Operates
Application to the Mediation Office
The party who is to commence the process applies to the mediation office at the courthouse at the place of residence of the other side; if there is more than one person on the opposing side, the place of residence of any one of them may be taken as the basis. In places where no mediation office has been established, the application is made to the registry office assigned for this task.
The period allowed for the application is not an independent period; it coincides with the limitation and preclusive periods relating to the action concerned. The effect of the application on limitation is dealt with separately below.
Determination of the Mediator
Following the application, the mediator is assigned by the office. The assignment is made from the list drawn up by the Department of Mediation and notified to the relevant commission presidencies. That said, the parties may also themselves decide who is to deal with their file, by agreeing on a particular name, provided that the person appears on the same list.
Where the assignment is made through the office, the mediator does not examine of his own motion whether the office has territorial jurisdiction. A party who objects on the question of jurisdiction must raise that assertion at the first session at the latest and must also submit the documents relating to the place of residence or the place where the work was carried out. A mediator faced with such an objection has no power to make an assessment of his own motion; he delivers the file to the office without delay so that it may be forwarded to the civil court of peace. The court examines the question of jurisdiction without any fee being taken and determines it by a decision that is final.
The Principles Applied in the Process
The mediator assigned makes contact of his own motion in order to inform the parties of the place and time of the meeting. Since their contact details are passed to him by the office, that information is already in his hands. If he is unable to reach the parties with the information available, the mediator may carry out his own enquiries and reach those concerned by any means of communication. Once contact is established, information about the assignment is given and the parties are invited to the first meeting.
It is possible for the parties to attend the negotiations in person, and equally possible for them to be represented by their lawyers holding special authority or by their legal representatives.
During the meetings the parties set out their respective claims and seek to meet at a common point. The mediator’s obligation at that stage is to approach both sides equally and to ensure that the negotiation proceeds on balanced terms. Where the parties are unable to reach a solution of their own accord, the mediator may also put forward a proposal.
One of the fundamental features of the process is confidentiality. The mediator is obliged to keep confidential the information and documents he learns by reason of his activity; the parties, too, may not use that material in a subsequent action or in arbitration proceedings. The Mediation Act lists the statements and documents that may not be put forward as evidence as follows:
- Documents drawn up solely by reason of the mediation activity.
- Proposals put forward by a party in the process and statements to the effect that he accepts a fact or an allegation.
- Views and offers expressed by the parties with a view to resolving the dispute through mediation.
- An invitation to mediation coming from the parties, or the willingness of a party to take part in the process.
The mediator must act equally and impartially towards the parties who apply to him and must perform his duty in person. If an action is subsequently brought concerning the dispute with which he dealt in that capacity, he may not act as the representative of either party.
The First Session
Following the invitation, the first session is held when the parties come together for the first time within the scope of the process. The fact that the session took place is recorded in a minute by the mediator. The consequences of attending that meeting and of failing to attend without a valid excuse are addressed separately below.
The Final Session
The mediator’s obligation to draw up a minute is not limited to the first session; he must also prepare the final minute at the session at which the process closes. That document serves a critical function as regards mediation as a procedural requirement. If it is not annexed to the pleading in the action subsequently brought and is again not submitted despite the period allowed by the court, the action is dismissed for want of a procedural requirement. Moreover, with the drawing up of the final minute the limitation and preclusive periods begin to run again.
Rights Granted to and Obligations Imposed on the Parties
Throughout the process there are rules that both the mediator and the applying parties must observe, and rights that they may exercise.
- Confidentiality is an inseparable element of the process and gives rise to both a right and an obligation for the parties. Just as the parties may require that the meetings remain confidential, they must themselves preserve that confidentiality. For the mediator too there is a duty to keep confidential every kind of information and document reaching him during the activity. A person who, by breaching confidentiality, harms the legally protected interest of another may, pursuant to Article 33 of the Mediation Act, face imprisonment of up to 6 months upon complaint.
- Mediation is in essence a voluntary method resting on the will of the parties; no one may be compelled to take part in the process. Where it is provided for as a procedural requirement, however, the party contemplating an action is obliged to complete that stage. In the same way, a decision by the party who will later be in the position of respondent not to attend the meetings also gives rise to certain adverse consequences for him. This matter is explained separately below.
- The parties are in an equal position throughout the process. The mediator must not withhold from one party the approach he shows to the other. The time allotted for the right to speak must be kept equal, and every situation liable to give rise to inequality must be prevented by the mediator.
One matter must be underlined at this point: a party who fails to attend mandatory mediation meetings without showing an excuse may face sanctions such as being left to bear the costs of the proceedings himself. That consequence is, however, particular to employment and commercial disputes; since the consumer is exempt from the costs of proceedings, it does not arise as regards him.
Representation at the Meetings
Just as the parties may take part in the negotiations in person, they may also be represented through their lawyers or their legal representatives.
Time Limits and the Effect on Limitation
The mediator is obliged to conclude the application within 3 weeks beginning from the day on which he is assigned. In situations of necessity, he is given the power to extend that period by a further week.
In mediation as a procedural requirement, limitation periods are suspended in the period falling between the date of application to the office and the date on which the final minute is signed; preclusive periods do not run. By contrast, no such effect arises in voluntary mediation, to which the parties resort of their own will.
The Mediation Fee
The mediator is entitled to claim his fee and expenses in return for the activity he carries out. He may, moreover, request an advance for those items before he has even begun work. Unless the parties have agreed otherwise, the fee is calculated on the basis of the Minimum Mediation Fee Tariff in force on the date on which the activity comes to an end. It is not possible to agree on a sum below the amount provided for in the Tariff. The fee and the expenses incurred for the dispute are as a rule shared equally between the parties; the parties may, however, agree that the whole or the greater part of the sum is to be met by only one of them.
Where the parties cannot be reached, where they do not attend the meetings or where no settlement is achieved, the mediation fee is paid from the budget of the Ministry of Justice.
If the action brought after the process is concluded in the consumer’s favour, that fee is collected from the respondent within the framework of the provisions of Act No. 6183 and recorded as revenue to the budget.
The method of calculating the fee varies according to the subject matter of the dispute. Pursuant to the Minimum Mediation Fee Tariff, in matters whose subject is money or which can be measured in money the fee is found on a percentage basis, whereas in matters carrying no monetary value the hours spent and the number of parties are taken as the criteria.
Termination of the Process
How the activity has concluded, whether the parties have reached a settlement and the nature of the point arrived at are evidenced by a minute drawn up by the mediator. That minute is signed by the parties and, where they exist, by their lawyers or legal representatives. If signature is refused, the document is signed by the mediator alone, with the reason also being recorded.
If the process has closed with an agreement, no action may subsequently be brought by the parties on the matters upon which agreement has been reached.
Where no settlement is achieved, a final minute reflecting that position is prepared. That document may be annexed to the pleading and the dispute taken to the consumer court. If the court is approached without the minute being annexed, a summons is sent to the claimant containing a warning that he is to produce the document and that the action will otherwise be dismissed on procedural grounds. If, despite that warning, the minute is not submitted, the action is dismissed on procedural grounds.
The Annotation of Enforceability
Where mediation in a consumer dispute ends in agreement, an annotation must be given in order for the document drawn up to become capable of compulsory enforcement. That annotation may be sought from the civil court of peace at the place where the mediator carried out his duty. An agreement bearing the annotation is accepted as a document in the nature of a court judgment; in other words, it acquires a force equivalent to a judgment of a court.
An agreement document signed jointly by the parties, their representatives and the mediator is likewise in the nature of a court judgment. That is to say, there is no need to make a separate application to the court for a document that contains, alongside the signatures of the parties, the signatures of the lawyers and of the mediator, to acquire enforceability; minutes of that kind may be put into enforcement directly.
Bringing an Action After the Process
As regards the matters on which agreement has been reached, the route of an action is closed to the parties; those matters cannot be brought before the courts again.
On the points on which no agreement has been reached, there is no obstacle to bringing an action. The minute showing the failure to agree and bearing the signature of the parties, their representatives or their legal representatives together with the signature of the mediator must be annexed to the pleading in the action to be brought in the consumer court. Where this is not done, the court allows a period for the document to be submitted; if it is not placed on the file within the period allowed, the action is dismissed on procedural grounds.
Frequently Asked Questions
Does applying to a mediator affect limitation?
In voluntary mediation, conducted at the parties’ own choice, the application has no interrupting or suspending effect on limitation and preclusive periods. By contrast, where mediation is provided for as a procedural requirement, the application interrupts and suspends limitation.
Is it necessary to go to a mediator before commencing enforcement proceedings?
No. Mediation as a procedural requirement is provided for certain actions to be brought in the labour, consumer and commercial courts; the commencement of enforcement proceedings is not made subject to any such precondition.
What fee is the lawyer entitled to if no agreement is reached?
Where the activity closes without a settlement, the lawyer is entitled to a fixed fee in the amount of TRY 2,400.00 for 2023. That sum may not exceed the principal claim. If the route of an action is taken with the same representative, the amount paid at the mediation stage is deducted from the minimum fee payable during the proceedings.
How is the lawyer’s fee calculated in monetary matters where agreement is reached?
In matters whose subject is money or which can be measured in money, where an agreement document has been signed, the lawyer’s fee is determined as one quarter more than the amount found under the third part of the Minimum Lawyers’ Fee Tariff. The calculation is therefore made on a percentage basis.
What is the position in matters with no monetary value?
In matters that cannot be assessed in money, where agreement is reached and a document is signed, the lawyer’s fee is determined as one quarter more than the fixed fee provided for the court before which the action would be heard in the second section of the second part of the Minimum Lawyers’ Fee Tariff.
The Independent Legal Assessment
Mediation as a procedural requirement is in practice often seen as a formality to be got past; yet the decisions taken at that stage determine the course of the action in a lasting way. An application made to the wrong mediation office, a claim prepared incompletely or an agreement document signed without its content having been sufficiently discussed may give rise to consequences that are difficult to make good afterwards. That the route of an action is closed altogether on matters settled by agreement clearly shows the cost of sitting down at the negotiating table unprepared.
Determining at the outset whether, according to the nature of the dispute, the arbitration committee or instead the route of mediation and an action is to be preferred is also decisive for the efficiency of the process. In setting the road map in a particular file, the following headings should be given priority:
- Establishing whether the value of the dispute falls below or above the arbitration committee threshold
- Checking whether the claim falls within one of the exceptions exempted from the mediation requirement
- Making the application to the mediation office with territorial jurisdiction and assessing in advance the possibility of an objection to jurisdiction
- Ensuring that the representative who is to attend the meetings holds special authority
- Drawing up the agreement document so that it bears the signatures that give rise to enforceability directly
- Annexing the final minute in full to the pleading where no settlement is achieved
Independent Legal provides advisory and representation services throughout the whole process in consumer disputes, from the conduct of mediation meetings through to the enforcement of the agreement document and the conduct of the court stage.