An Introduction to Dispute Resolution

In many countries, Turkey included, the overburdened justice system has become a chronic problem. The negative effect of a gridlocked system on litigants seeking to right a wrong can be all too real. After all, justice delayed really is justice denied.

This brings to mind two obvious questions: First, why might this be happening? Perhaps Turks are culturally more litigious than other peoples, or perhaps it’s some inefficiency in the Turkish justice system. The correct answer is probably a combination of these, and many other factors as well. Second, what can we do about it? To an economist the answer might be simple: where the supply is limited and the demand is too high, then the price should rise. However, in this context that solution runs into the fundamental principle of access to justice; a well-developed legal system cannot conceivably consider pricing some litigants out of the system.

Faced with this conundrum, what Turkey has done in recent years is that it started using ADR as a gatekeeping device. Now, before plaintiffs can file certain kinds of suits in Turkey, they first have to sit down with the defendant in front of a mediator, and try to come up with a mutually agreeable settlement. If they can come up with a solution, they can pay a relatively modest mediators’ fee and sign an agreement that can be enforced as though it were a finalized court order. While plaintiffs are coaxed to a seat at the table with the threat of being shut out of the courthouse altogether, defendants are encouraged to participate in the process with the rule that any party that willfully eschews mediation must bear the entire costs of adjudication, regardless of whether they eventually prevail on the merits in the lawsuit to follow (which could conceivably also apply to plaintiffs).

What the mediation process accomplishes is that it effectively culls the demand for court-dealt justice, such that its supply can meet the demand at a socially conscionable price. The culling is done in two ways: first, mandatory mediation subtly raises the transaction costs of filing suit by introducing additional hoops to jump through, thereby presumably deterring some would-be litigants sitting on the margin, but without blatantly offending fundamental values. Second, and more directly, mediation can sometimes actually bring the dispute to a resolution: anecdotal evidence suggests that a not insignificant proportion of disputes are in fact resolved at the mediation stage. It bears mentioning that statistics gathered on the national scale suggest that fully more than half of all disputes brought to mediation are resolved without the matter ever being brought before a judge. If that really is the case, then perhaps the mystery of the clogged Turkish legal system is not that complicated after all: it must be that Turks go to court for even the most trivial of disagreements, including those which can be resolved with no outside help other than the gentle nudging of a mediator.

Perhaps encouraged by these promising numbers, Turkey keeps gradually expanding the scope of the types of actions where litigants must first go to mediation. The experiment began with certain labor disputes at the beginning of 2018. In a major advance, at the start of the following year it expanded into commercial disputes concerning the payment of a sum certain, and in 2020, consumer disputes were brought into the fold. Most recently, major classes of real estate-related disputes, including rent challenges, have been added to the list, effective as of September 2023.

Turkey’s drive towards promoting mediation is not limited to easing the burden posed by domestic disputes alone. Turkey has also signed and ratified the Singapore Convention, which is intended to give immediate enforceable effect to settlement agreements signed through mediation in international commercial disputes. However, in a move that goes against the trend of continuously taking mediation-friendly action, the Grand National Assembly has recently passed a law that says that starting from April 2023, international settlement agreements will need to go through a limited, formalistic review by a local court before they are given enforceable effect in Turkey. What is more, the outcome of this review will be appealable, which in practice could neutralize the streamlining effect that the Singapore Convention was intended to have in the first place.

That Turkey has been pursuing mediation-friendly policies does not mean that the mediation process runs completely without issues. First, where parties have already tried to sort out their differences amicably but found that they have reached an impasse, having to go through mediation again before litigation can commence is oftentimes a hassle with no discernible benefit. Second, while the idea of making a last-ditch effort to bridge the differences may be well-suited for simple claims, multiparty suits with complex claims now have to clear an added layer of logistical hurdles before they can get underway, especially where the counterclaims and cross-claims that are involved are themselves subject to mandatory mediation. Nevertheless, tricky as they are, issues such as these are perhaps unavoidable when as fundamental a shift as mandatory mediation is being implemented, and perhaps this amount of collateral damage is acceptable if the larger project to ease the burden on the justice system is to succeed in the end.

Turkey’s experiment with mandatory mediation began more than five years ago. Mediation has by now firmly entrenched itself as a natural part of the litigation process, at least in practice areas where resorting to it has been held mandatory. According to some statistics, it has already kept a significant number of disputes out of the courts. With that said, there has been no detectable change in the pace at which cases that do get to court proceed through the system, at least in the commercial courts. Maybe the introduction of mandatory mediation was necessary just to keep the growing tide of lawsuits at bay; perhaps it will be necessary to keep expanding the scope of mandatory mediation just to remain where we are in terms of the glut in our courthouses. But eventually we will run out of new causes of action to sweep into the mandatory mediation universe. If Turkey wants to decisively ease the burden on its courts, then it will have to identify and resolve whatever systemic problems are causing the congestion in the first place. The experience thus far makes it seem like mandatory mediation is at best going to be a stopgap measure that will win us some time until we get there.

First published by Chambers and Partners, May 2023.

Tagged with: Hergüner Bilgen Üçer Attorney Partnership, Baran Alptürk, Tolga Danışman, Dispute Resolution