Mediation is a voluntary conflict resolution system that brings parties together, makes them understand each other and ensures to provide a communication process in order to make the parties reach their own solution by using systematic techniques on the part of an independent and objective third person who is qualified. A mediator is a natural person who realises the mediation activities and is registered to the mediation register formed by the Ministry.
The Meaning of Mediation and Mediator
In Turkish law, mediation means a dispute resolution method carried out voluntarily, by employing systematic techniques, with the participation of an impartial and independent third person who brings the parties together to discuss and negotiate, who establishes a communication process between the parties in order to ensure that they understand each other and find their own solutions by this means, and who is specially trained.
Mediator means a real person who carries out the mediation activity, and is enrolled in the register of mediators regulated by the Ministry of Justice. Unless agreed on another procedure, the mediators may be selected by the parties. The mediator is liable to duly enlighten the parties, at the beginning of the mediation activity, with respect to the principles, process and outcomes of mediation. The mediator performs his/her duty carefully, impartially and personally.
In Turkey, around 65% of the Labor disputes and commercial disputes could be resolved much faster and less costly without going to the court, and this has made favorable impacts both on the parties and on the courts whose workload has considerably decreased.
Selection of a Mediator
The parties may agree to resort to a mediator, before the law suit is filed or during the course of the law suit. The court may also enlighten and encourage the parties to resort to a mediator.
Participation of Sides
In Turkey the mediator may meet or communicate separately with each one of the parties or collectively. The parties may participate in these meetings through their attorneys.
The mediator concludes the application within six weeks as from his/her date of appointment. Where necessary, such period may be extended for two weeks as a maximum.
Voluntary & Mandatory Mediation
A commercial dispute’s being subject to mandatory mediation does not prevent the resolution of the dispute by means of voluntary mediation. To this extent, the parties may always apply to voluntary mediation before mandatory mediation as long as their intentions are in line. In Turkey, the prerequisite for mandatory mediation is that the relevant commercial dispute is related to a receivable or a damage claim regarding the payment of a certain amount of money. No monetary limit is stipulated for the resolution of commercial disputes.
Turkey introduced new legislation which came into effect on 1 January 2019 providing for mandatory mediation as a prerequisite for commercial disputes before pursuing the dispute via the Turkish court system. In Turkey, parties to a commercial dispute pertaining to monetary receivables cannot bring their case before a court unless the mandatory mediation process is completed and a final report is issued by the mediator putting forth the parties’ failure to settle the dispute. The Turkish Mediation Law dictates that if a lawsuit is brought before the court without applying to mandatory mediation, the case will be dismissed on procedural grounds without any further examination of the merits of the case.
Scope of Mediation
With the new law, the scope of mediation as an alternative dispute resolution tool is extended to capture commercial disputes and not only disputes related to employment matters. The law stipulates a list of which types of commercial disputes will fall within its scope, such as monetary claims related to any of the followings:
- All disputes arising from commercial relations between legal entities and/or natural persons,
- All IP related disputes,
- All disputes relation to the banking and financial services, recourse lending transactions, disputes arising from regulations concerning stock exchanges, markets, storehouses,
- Disputes relating to business or asset acquisitions, mergers,
- Disputes relating to publishing contracts, brokerage agreements, agency, distributorship and dealership contracts.
Having said that, the list is not a complete list of claims within the scope of the mandatory mediation. We advise the parties to legal advice from our experts.
Our mediation services may be defined as a confidential, facilitative and voluntary process in which parties to a dispute, with the assistance of our mediators, attempt to reach a mutually acceptable agreement to resolve the dispute. The terms of any resolution agreement reached between the parties only becomes binding on them when set down in writing and signed by them. Once a settlement agreement is concluded and signed by the parties in mediation, it can be enforced like any other binding court judgement.
Our mediation services offers several possible advantages for resolving a dispute.
- Engagement between the parties is facilitated by a neutral, independent third party called the mediator.
- The parties decide if, when and how their dispute is resolved,
- The parties may avoid some or all of the risk and cost associated with court action.
- All communications between the parties and the mediator are protected by confidentiality,
- Mediation is a flexible, informal process that can be organized at short notice. This may allow the parties to conclude a resolution agreement in a short time and much faster than is usually possible by court action,
- Resolution using mediation can allow parties to continue or resume their previously successful contractual or other relationship,
- We recommend that parties should have met with or spoken to our mediators in advance. We inform parties about how much time and money the dispute has cost them. We recommend that parties should take professional advice related to Turkish Law, including legal advice as required, in advance. This can help them to fully understand their legal rights and obligations in relation to the matters in dispute. These are just some ways that our legal experts can help you before and during mediation:
- Helping you to understand the process and answer questions, and decide to use mediation,
- Advising you how to make or accept an offer to mediate,
- Helping you to identify, select and appoint a suitable mediator,
- Advising you about the terms of the agreement to mediate / rules of engagement,
- Assisting you in briefing the mediator,
- Attending you at pre-mediation meetings with the mediator,
- Advising you about selection, appointment and briefing experts,
- Giving you legal advice or opinion on your legal rights and obligations,
- Helping you to assess your legal and commercial strengths and weaknesses, and those of the other parties,
- Helping with scheduling costs (including legal costs) you have incurred to date in the dispute,
- Estimating costs (including legal costs) that would be incurred if the issue is not resolved in mediation,
- Assisting you to prepare a negotiation strategy or settlement range in monetary cases
- Assisting you to identify needs and interests in having the dispute resolved in the mediation,
- Engaging in alternative scenario-checking and the best or worst alternatives,
- Assisting you in drafting a position statement for joint meeting,
- Assisting you in deciding who will attend mediation meetings with you,
- Assisting you to identify possible alternative options for resolution and settlement,
- Assisting you to prepare generally for the mediation,
- Advising you when the mediation settlement is being drafted,
- Assisting the mediator as appropriate as you request.
Our mediators do not decide the case; their role is to facilitate the settlement discussion. The parties decide whether to settle and on what terms.
Process of Mediation
Prior to the mediation day, our mediator will usually contact each party or their legal representatives by way of a telephone call. On the day itself, a typical one-day mediation will run roughly as follows:
- The parties arrive at the venue and go to their separate rooms, where they consult in private with their lawyers and any other advisers,
- The mediator comes to each room to introduce themselves to each group,
- The parties gather together in one large room for a joint opening session (the plenary session),
- The mediator explains the terms of the mediation and emphasizes its confidential nature.
- Each party then has an opportunity to speak, explaining the issues that concern them in the dispute and their hopes for the mediation (this is known as the opening statement).
- The parties return to their separate rooms and the mediator ‘shuttles’ between the rooms, exploring each side’s concerns and challenging and testing their positions.
- Eventually, the mediation will reach the negotiation phase, whereby one party makes an opening settlement offer, and then further counter-offers are made.
- The mediator will communicate each offer and encourage the parties towards settlement, until an offer is accepted in principle.
- Once an offer has been accepted, the parties’ lawyers work together to draft a settlement agreement.
- The parties reconvene to sign the written agreement.
There may be variations to the above, such as lawyers having a joint session without clients present to debate a point of law, or the parties having a joint session without lawyers present to discuss commercial considerations.
Mediation Fee & Cost
Mediators’ fees are negotiated in each individual case and reflect the complexity and value of the dispute and the expertise and reputation of our mediator. Often, we offer a fixed fee which covers a certain amount of preparation and a mediation up to a certain number of hours, with additional hours charged over and above the fixed fee at an hourly rate. Mediators’ fees vary considerably, but the average fee of a less experienced mediator for a two-hours mediation is currently 640 TL, whereas the average fee for an experienced mediator is 1320 TL. (Ref; https://www.resmigazete.gov.tr/eskiler/2018/12/20181231M4-13-1.pdf )
Usually, the parties will agree to split the costs of the mediation (which, as well as the mediator’s fees, may also include the cost of venue hire and refreshments), but each pays for their own legal representation. It is also possible (although much rarer) that one party might offer to pay all of the costs of the mediation in order to encourage their opponent to mediate.