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Product Liability and Safety 2022 in Turkey


Sources of Law

  1. What are the main areas of law and regulation relating to product liability?

The Product Safety and Technical Regulations Law 7223 (Law 7223) is the main law regarding product safety. Replacing Law 4703 on the Preparation and the Application of the Technical Regulations Related to Products, Law 7223 places some new obligations on actors who supply products to the market. It also ensures that the national legislation is in line with the European Union's 2019 legislation on product safety.

Secondary regulation provides details regarding inspection of products, their safety and compliance with technical legislations, and measures to be adopted. Other regulations on market surveillance and inspection of products, promulgated by the Ministry of Industry and Technology and the Ministry of Trade, also regulate the matter on a more detailed level:

  • General Product Safety Regulation.
  • The General Regulation on Market Surveillance and Inspection of Goods.
  • Regulation on the Market Surveillance and Inspection by the Ministry of Industry and Technology.
  • Regulation on the Market Surveillance and Inspection by Ministry of Trade.

Law 7223 covers all products that are:

  • Targeted to be placed on the market.
  • Made available on the market.
  • Put into service.

Furthermore, products exported or intended to be exported to European Union member countries are deemed to have been placed on the market within the scope of the Law 7223. Products exported or intended to be exported to countries other than European Union member countries are outside the scope of Law 7223. However, these products must also be:

  • Not subject to adulteration.

The marking, labeling, and certification of the product must also be done in a way that does not mislead the buyer.

Product liability claims of a commercial nature are based mainly on tort law and contract law provisions under the Turkish Code of Obligations 6098 (TCO). Consumers bringing product liability claims can rely on the Consumer Protection Law 6502 (Consumer Protection Law), enacted in light of EU directives, including:

  • Directive 2002/65/EC on distance marketing of consumer financial services.
  • Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market.
  • Directive 2008/48/EC on credit agreements for consumers.
  • Directive 2008/122/EC on the protection of consumers in respect of certain aspects of timeshare, long-term holiday product, resale and exchange contracts.

The term consumer is defined in the Consumer Protection Law broadly as "any natural and legal person who is acting for purposes that are not related to their trade, business or profession".

The Regulation of Liability for Damages arising from Defective Goods, published in the Official Gazette on 13 June 2003, contains similar provisions to that of the Product Liability Directive (85/374/EEC). However, the Regulation's validity became controversial, following the 2013 Consumer Protection Law's introduction of certain contradictory provisions.

Law 7223 introduces new measures against unsafe products (such as banning access to websites where such products are sold). Law 7223 also provides that:

  • No product can be put on the market before it is certified by the Ministry of Trade or the private certification institutions authorised by the Ministry of Trade (and accredited by the Turkish Accreditation Agency affiliated to the Ministry of Foreign Affairs).
  • Mandatory product recall must be carried out for unsafe products whose risks cannot be addressed by any other measures.

The new law not only introduces detailed rules on administrative aspects of product safety, but also establishes a specific regime of product liability. Article 6 of Law 7223, which was modelled on the Product Liability Directive, recognises the non-contractual liability of producers and importers for damages caused by a defective product.

Law 7223 seeks to codify rules that were previously set out in regulations, but which could not be enforced due to the hierarchy of norms. Law 7223 also introduces a new three-year limitation period to bring product liability claims, instead of two years under the TCO and Consumer Protection Law.

The Turkish Criminal Code 5237 (Turkish Criminal Code) sets out several criminal offences relating to product liability under the sections Offences against Public Health and Offences Relating to Economy, Industry and Commerce, such as:

  • Selling, supplying or keeping food materials or drugs endangering human health and life (Articles 186 and 187).
  • Producing, providing and selling poisonous products without obtaining necessary permissions (Article 193).
  • Influencing the prices of various products in the market (Article 237).
  1. What are the most common causes of action and what is required to establish liability under them? When is a product defective?

The most common causes of action relating to product liability are described below.

Defect Liability under the Code of Obligations (TCO)

Under the provisions of the TCO relating to sales contracts, the seller is liable to the buyer for any breach of warranty of quality and for any defects that would materially or legally negate or substantially reduce the value of the object or its fitness for its designated purpose. The seller is liable even if they were not aware of the defects.

To establish the seller's liability, the buyer must examine the purchased goods as soon as reasonably possible and inform the seller of any defects that would cause the seller to be liable under the TCO. Otherwise, the buyer will be deemed to have accepted the defect. However, the seller cannot be discharged from liability relying on the buyer's failure to timely inspect the purchased good if either:

  • The good contains a hidden defect that cannot be detected on a regular inspection (Article 223/2, TCO).
  • The seller was at gross fault when selling the defective product (Article 225, TCO).

In this context, the TCO provides alternative remedies to the buyer relating to the defective goods, which apply regardless of the seller's fault. To obtain compensation for indirect losses (for example, loss of profit), the buyer must prove the seller's fault.

Defect Liability under the Consumer Protection Law

Under the Consumer Protection Law, defective goods are goods that do not conform to the sample or model agreed by the parties, or do not have the objectively necessary qualities. The Consumer Protection Law states that goods are also deemed defective if they:

  • Do not have one or more qualities appearing on their packaging, tag, user manual, website, adverts and announcements.
  • Do not have the qualities made known by the seller or stated in the relevant technical legislation.
  • Are unable to carry through their designated use.
  • Have defects that would materially or legally negate or substantially reduce the fitness of the goods for their designated purpose.

In a sale of a defective good, the buyer is entitled to certain alternative remedies against the seller regardless of fault. Some of these remedies, in particular requesting repair or delivery of a replacement good, can be asserted against the producer and the importer as well as the seller.

Tortious/Non-Contractual Liability

Tortious liability is regulated by the TCO, and does not distinguish between consumers and non-consumers. Tortious liability can be used to establish the liability of producers against end-users and other injured parties in the absence of a contractual relationship. In principle, to establish liability the injured party must prove:

  • The defendant's fault.
  • A causal link between the defendant's act and the injury.

To determine fault, the courts tend to examine whether the product in question complies with the applicable technical standards and safety measures. Although Law 7223 provides the presumption that products compliant with the applicable technical standards are safe, it is possible in theory for the injured party to prove the contrary.

In addition, pursuant to Law 7223, if a product causes damage to a person or a property, the producer or importer of this product is obliged to repair the damage. If more than one producer or importer is responsible for the damage caused by the product, they are jointly and severally liable.

  1. Who is potentially liable for a defective product? What obligations or duties do they owe and to whom?

Under the TCO, in the context of a sales contract, the seller is liable to the buyer for defective goods. If the product purchased has any defects as described under the TCO (see Question 2), the buyer can claim the following alternative remedies:

  • Rescind the agreement, by informing the seller that they are ready to return the goods.
  • Retain the defective goods, and request a discount on the purchase price in proportion to the defect.
  • Request repair of the defective goods free of charge at the seller's full expense, provided that the repair does not impose an excessive cost on the seller.
  • Request replacement of the defective goods.

(Article 227, TCO.)

The buyer can also claim compensation for any further (indirect) loss, unless the seller can prove that they are not at fault.

If the buyer opts to rescind the sale agreement, they must return the product to the seller and claim:

  • Reimbursement for the purchase price paid together with interest.
  • Expenses incurred due to the delivery and safeguarding of the defective product, and all other damages directly caused by the defective product.

The seller can prevent the buyer from using these remedies by immediately providing goods of the same kind which are free from defects and indemnifying the buyer for all their losses.

The Consumer Protection Law provides consumers with four alternative remedies, which are the same as those in Article 227 of the TCO. Consumers can request all of these remedies from the seller. They can also enforce their requests for free repair and a replacement for the defective goods against the producer and importer.

The Consumer Protection Law imposes specific obligations and duties on producers and importers, as follows:

  • Producers and importers must issue a guarantee certificate for certain goods which provides that the statute of limitation is at least two years.
  • With respect to goods sold with a guarantee certificate, producers, importers and sellers are jointly liable to the buyer, if the seller:
  • fails to repair the defective good in a timely way, or the good becomes broken after being repaired by the seller; or
  • rejects the buyer's request for any alternative remedies.
  • Producers and importers must provide after-sales service during the expected life of the goods.

Under the tort law provisions of the TCO, the producer, manufacturer and any other relevant parties who do not have a contractual relationship with the buyer can be liable for damages caused by a defective product. Sellers and other potential parties may be liable not only to the buyer but to injured third parties, such as the buyer's household.

As explained under Question 2, pursuant to Law 7223, the producer and the importer are jointly and severally liable for any damage caused by the product.

Defences

  1. What are the defences to a product liability claim?

Under the contract law provisions of the TCO, the seller is not liable for defects that the buyer was aware of at the time of contracting (Article 223/2, TCO).

Another defence is the buyer's failure to perform inspection and notification, in which case the buyer is deemed to have accepted the defect unless the defect is latent or hidden (Article 223, TCO).

Under the tort law provisions of the TCO, the seller or any other liable party can raise the defence that they are not at fault, or that the defect has no relation to the alleged damage.

Defences for the seller under the Consumer Protection Law are similar to those under the TCO. Additionally, the Consumer Protection Law provides that:

  • The seller is not liable for the content of an advert if:
  • they prove that they do not know about the advert and cannot be reasonably expected to know the content of the advert;
  • the content of the advert was rectified at the time of the sale agreement; or
  • the advert had no impact on the buyer's intent to conclude the sale agreement.
  • If the buyer enforces its request for repair or a replacement good against the producer or importer, the defendants can avoid liability by proving that the defect occurred after they released the good into the market.

Also under Law 7223, for the producer and the importer to be held liable, the injured party must prove the damage suffered and the casual link between the non-compliance and the damage.

  1. Is there a time limit in which proceedings can be brought?

The time limitation period for sale contracts is two years from delivery, unless the seller undertakes liability for a longer term. The seller cannot benefit from this limitation period if they were at gross fault in providing the defective product. If so, the general limitation period of ten years applies (Articles 146 and 149, TCO). The same limitation periods apply under the Consumer Protection Law (Articles 12, Consumer Protection Law).

The limitation period under tort law is two years from the date when the injured party finds out about the injury and the party causing the injury. The limitation period ends at the latest ten years from the tortious act, which can be the manufacture or sale of the defective good, depending on who the defendant is (Article 72, TCO).

The limitation period under Law 7223 is three years from the date when the injured party finds out about the damage and the person liable for the compensation, and in any case ten years from the date of the damage.

If the act is an offence for which criminal law imposes a longer limitation period, the longer period will also apply to the civil law claim.

Excluding/Limiting Liability

  1. Can a supplier limit its liability for defective products and are there statutory restrictions on a supplier doing this? Do consumer protection laws apply? Are guarantees or warranties as to quality implied by law? Is there a mandatory or minimum warranty period for consumer products?

Under the contract law provisions of the TCO, the seller's liability can be limited under an agreement between the buyer and the seller. Any limitation of liability is void where the seller is at gross fault in providing the defective goods (Article 221, TCO).

However, if the activities of the seller require specialisation and an authorisation to be granted by the relevant legislation or the administrative authorities, it is not possible to limit the seller's liability, irrespective of any degree of fault (Article 115, TCO).

The Consumer Protection Law does not have any provisions on limitation of the seller's liability relating to defective goods. However, the above provisions of the TCO apply by analogy.

Law 7223 prohibits any contractual provision removing or limiting the liability of manufacturers and importers (Article 6/4, Law 7223).

Under the TCO and the Consumer Protection Law, the product has an implied warranty: the seller is responsible for defects that would materially or legally negate or substantially reduce the value of the good or its fitness for the designated purpose. The Consumer Protection Law also provides that certain goods to be specified under secondary legislation must be supplied with a guarantee certificate of at least two years.

However, the guarantee period may vary under the annex attached to the Warranty Certificate Regulation. For example, cars are subject to a two-year guarantee period but the guarantee ceases to apply as soon as they reach 60,000 kilometres of mileage.

Product Liability Litigation

  1. In which courts are product liability cases brought? Are product liability disputes generally decided by a judge or a panel of judges? Are juries used in certain circumstances?

Matters regulated by the Turkish Commercial Code 6102 (TCC) and all business-related transactions and activities are commercial transactions, and all related disputes are commercial cases. Unless otherwise provided, all commercial cases are brought before the Commercial Court of First Instance, regardless of their value or amount.

Under the Consumer Protection Law, a consumer is a real or legal person acting for non-professional and non-commercial purposes. Cases relating to consumer transactions are brought before the Consumer Court. Where a consumer concludes a contract that is a commercial transaction for the counterparty, the transaction is a consumer transaction.

In consumer transactions, if the consumer is unable to settle the dispute amicably, the consumer can consult with the competent Consumer Arbitration Committee (consumer boards) regarding defective goods or services instead of filing a lawsuit. Under the Regulation on Consumer Arbitration Committees published in the Official Gazette on 27 November 2014, these committees can settle disputes arising from all types of consumer problems, if they fall within the monetary thresholds. The thresholds for 2021 are as follows:

  • District consumer arbitration committee. The dispute must be under TRY7,550.
  • Provincial consumer arbitration committees located in metropolitan cities. The dispute must be between TRY7,550 and TRY11,330.
  • Provincial consumer arbitration committees located in the centre of non-metropolitan cities. The dispute must be under TRY11,330.
  • Provincial consumer arbitration committees located in the districts of non-metropolitan cities. The dispute must be between TRY7,550 and TRY11,330.

Disputes over these thresholds cannot be brought before the consumer arbitration committees and instead must be heard by the consumer courts. A law that came into force on 22 July 2020 introduced mandatory mediation before any consumer dispute can be brought before consumer courts (see Question 8).

Product liability cases tried before commercial courts are decided by one president and two members. In consumer courts, a sole judge renders the judgment. A consumer arbitration committee has five members, including a:

  • Member to be appointed by the mayor, from among expert personnel of the municipality.
  • Lawyer to be appointed by the bar of the relevant province.
  • Member appointed by the Chamber of Commerce and Industry where the seller or the provider is a merchant, or a member appointed by the Union of the Chamber of Merchants and Craftsmen where the seller or provider is a tradesperson or craftsperson.
  • Member appointed by consumer organisations.
  1. How does a party initiate proceedings?

Commercial lawsuits that concern the payment of a certain sum and all other compensation claims are subject to mandatory mediation (Article 5/A, TCC). This means that the mediation process must be exhausted for any lawsuit to be brought. In principle, the mediator must finalise the process within six weeks, subject to a two-week extension.

Consumer disputes recently became subject to mandatory mediation. From 22 July 2020, claimants in a consumer dispute first need to apply for mediation. If no solution is reached by the parties during the mediation proceedings, the claimant will be able to bring a lawsuit before the consumer courts. The amendment excludes consumer arbitration committees applications.

The commercial court hears cases according to the written procedure rules, whereas the consumer court follows a simplified procedure. The main difference is the number of submissions that must be filed before the court progresses to trial on the merits. Under the written procedure rules, the parties can exchange two submissions. In simplified proceedings, only one submission can be exchanged.

In either case, proceedings start with a written plaint petition and deposit of an advance payment for the court fees and expenses. The claim petition must include some elements such as the:

  • Name of the competent court.
  • Names and addresses of the parties.
  • Turkish ID number of the claimant and passport numbers of non-Turkish claimants.
  • Names and addresses of the attorneys, if any.
  • Subject matter of the claim and claim amount.
  • Summary of the material facts.
  • Explanatory notes in relation to evidence, if any.
  • Legal grounds.
  • Precise explanation of the claim.
  • Signature of the claimant or their attorney.
  1. Who has the burden of proof and to what standard?

The burden of proof is on the party who brings the claim, unless otherwise provided by law.

The provisions related to tortious liability under the TCO state that the injured party must prove the damage, the fault of the counterparty and a causal nexus. However, the Supreme Court does not always strictly apply this principle in product liability cases, and shifts the burden of proof so that the producer must prove that the good is free of defects. The reasoning is the "unwritten principle that those who pose a danger have to take necessary preventive measures" and that buyers are often deprived of access to necessary evidence showing the complex production stage (Supreme Court Assembly of Civil Chambers; 27.11.1996, merits no. 1996/4-588, decision no. 1996/831).

In a breach of contract, the defendant (seller) must prove that they are not at fault. Sales contracts provisions further stipulate that the seller is responsible for alternative remedies (including indemnification of direct loss) provided under Article 227 of the TCO, even if they did not know that the good supplied had defects (see Question 3).

As Question 4 states, pursuant to Law 7223, for the producer and the importer to be held liable, the injured party must prove:

  • The damage suffered.
  • The casual link between the non-compliance and the damage.
  1. How is evidence given in proceedings and are witnesses cross-examined?

Unlike in criminal proceedings, parties to a civil law dispute are responsible for determination of the facts and collection of evidence. Parties should indicate all the evidence with their first petitions before the court continues with the trial on the merits.

On request of the parties, the court can order public bodies, third parties, and even the counterparty to submit the requested evidence. If a party does not submit the documents within the time granted by the court, the court can accept the allegation of the other party as an undisputed fact, so that the respondent who did not obey the court order is no longer allowed to bring any other evidence.

The court also has power to:

  • Conduct an investigation on site.
  • Obtain an expert opinion on technical aspects.
  • Hear witnesses presented by the parties.

Cross-examination of witnesses is not available in civil proceedings. Only the court is authorised to ask questions during witness testimony. Usually, the court allows the parties' counsel to ask questions to clarify and remedy deficiencies in witness evidence.

  1. Are parties able to rely on expert opinion evidence and are there special rules or procedures for it?

The parties can submit expert opinion evidence to the court. After submitting the expert evidence, on request or on their own initiative, the judge can invite the expert and examine the expert during the trial.

  1. Is pre-trial disclosure/discovery required and which rules apply? If not, are there other ways to obtain evidence from a party or a third party?

There is no comprehensive discovery and disclosure procedure. The Attorneys Act as amended in 2001 improved lawyers' role in collecting evidence. Lawyers can gather information and evidence from public and private bodies. However, this power is not widely used due to lack of procedural rules and the respondents' uncooperative attitude.

Therefore, the court primarily collects evidence on the claimant's request, particularly evidence that the counterparty holds. The claimant is merely expected to set out the importance and relevance of the evidence not in their possession.

The counterparty holding the evidence is mainly obliged to disclose all evidence requested by the court. The court can accept the statement of the party who requested disclosure about the evidence or document:

  • If the counterparty does not provide the court with the evidence or documents.
  • If the counterparty does not reasonably show that it does not possess the evidence or documents.

An official authority or third party that does not provide the court with the evidence must give reasons for this. If the court does not find the reasoning sufficient, the court can hear the relevant authority or third party as a witness.

  1. Is there liability for spoliation of evidence/a remedy for destruction of or failure to preserve evidence (in particular, the product)?

In criminal product liability cases, a person who destroys, hides, modifies or disrupts evidence of the crime is punished with imprisonment for six months to five years. However, the person who committed the criminal offence cannot be punished for spoliation of evidence (Article 281, Turkish Criminal Code).

There is no express provision in the Code of Civil Procedure in this respect. However, the court has discretion to accept the allegation of the other party as an undisputed fact against the party who spoiled the evidence.

If a counterparty, authority or third party attempts to prevent an on-site examination, the court can execute the proceeding by force and impose an administrative fine and compensation to cover the court's expenses (Article 291, Code of Civil Procedure).

  1. What types of interim relief are available before a full trial and in what circumstances?

The main temporary legal protections that can be requested from the court before a full trial are as follows.

Preliminary Injunction

This can be ordered from the court, if there is a concern that a change in the current situation (status quo) would result in difficulty or impossibility to enforce a right at the end of the full trial. If it is necessary to protect the rights of the claimant immediately, the judge can order the preliminary injunction without hearing the other party.

To obtain a preliminary injunction, the applicant must make a security deposit payment to compensate possible damage to the other party and third parties as a result of the injunction. There is no specific provision on the amount of the deposit. In practice, the deposit is about 15% of the dispute value.

After the preliminary injunction is issued, a lawsuit must be filed within one week, otherwise the preliminary injunction will terminate automatically.

Preliminary Attachment

Preliminary attachment is subject to conditions similar to a preliminary injunction. Preliminary attachment can be used to seize the debtor's assets as protection if the applicant succeeds at the end of the trial.

Recovery of Evidence

Requests for recovery of evidence are commonly applied for before trial, especially in product liability cases. Each party can request discovery, expert examination, and witness statements to determine the facts to be set out in the case.

A legal interest is required to bring this action. The applicant will be deemed to have a legal interest if setting out the evidence is considerably difficult, or the evidence is likely to be spoiled unless an order is made immediately.

  1. Can the successful party recover its costs associated with the litigation, such as legal fees and experts costs and to what extent?

The main costs of civil proceedings are application fees, litigation expenses (such as notification fees, expert fees, and witness fees) and official attorney fees. The successful party can generally recover these costs from the losing party. If both parties partially succeed, costs are allocated proportionally.

Under a recent amendment of the Attorney Fee Tariff applicable from 2020, any statutory attorney fees in compensation actions that are awarded to the defendant in proportion to their success in a lawsuit cannot exceed the statutory attorney fees that are awarded to the claimant (Article 13/3, Attorney Fee Tariff General Provisions). This means that, if the claimant loses the case entirely, the statutory attorney fee awarded to the defendant will be the minimum fee under the Attorney Fee Tariff. Before this change, the defendant was awarded attorney fees in proportion to the portion of the claims rejected by the court.

The contractual professional fee agreed between a party and their attorney is generally not recoverable under Turkish law.

  1. What types of appeal are available?

Under the Code of Civil Procedure, decisions of the courts can be appealed to the regional courts of appeal. However, actions concerning material rights of less than TRY5,880 cannot be appealed.

Decisions on a preliminary injunction and preliminary attachment can also be appealed to the regional courts of appeal.

Decisions of the consumer courts on objections to awards of a consumer arbitration committee are final and cannot be appealed.

The grounds for an appeal to a regional court of appeal are not limited. Any wrong application of procedural or substantive law or factual error can be appealed. Regional appellate courts will also consider a breach of public order, even if not challenged by the parties.

In principle, decisions of regional appellate courts can be appealed to the Court of Cassation. However, decisions on material rights of less than TRY78,630 cannot be appealed to the Court of Cassation.

The grounds for appeal to the Court of Cassation are:

  • Wrongful application of the law or agreement between the parties.
  • Absence of preliminary requirements to file an action.
  • Unlawful dismissal of evidence.
  • Procedural mistakes or deficiencies affecting the judgment.
  1. How long does it typically take to litigate a product liability action from start to finish?

Generally, consumer arbitration committees issue their final decisions within six months. If not appealed before a consumer court, the decision of the committee becomes final. If appealed, or if a lawsuit is lodged with the consumer court directly, it generally takes the court an average of 450 days to issue its final decision, according to judicial statistics of the Ministry of Justice.

A regional court of appeal may take about two years to render its final decision. An appeal before the Court of Cassation may take another two years from start to finish.

However, most product liability cases are finalised within two years, as the monetary appeal thresholds are generally not met (see Question 16).

  1. Is it common for product liability actions to settle? Are there any rules or procedures that govern settlements (for example, for minors or class actions)?

According to judicial statistics for 2020 (data for 2021 is yet to be published), only 61 lawsuits out of over 50,000 were settled during proceedings. Therefore, it is not common for consumer disputes, including product liability actions, to settle.

If a case is settled during ongoing proceedings, the parties can request the court to approve the settlement, in which case the settlement becomes a final court decision binding on both parties. Alternatively, the parties can request the court to end the proceedings without any decision on the merits (Article 315, Civil Procedural Code). The parties' counsel can only settle if they are specifically authorised to do so by their clients (Article 74, Civil Procedural Code).

Class actions are not recognised in Turkey. However, there are "community actions" that can be brought by associations and other legal entities on their own behalf (see Question 19). As the legal consequences of these actions do not have any binding effect on the affected consumers, the applicant entity cannot enter into settlement agreements on their behalf.

Class Actions/Representative Proceedings

  1. Are class actions, representative proceedings or co-ordinated proceedings available? If so, what are the basic requirements? Are they commonly used?

Except in cases of unfair commercial practices and commercial adverts, consumer organisations, relevant public institutions and organisations, and the Ministry of Trade, except in cases of unfair commercial practices and commercial adverts, can apply to the consumer courts for:

  • An interim measure to prevent or stop activities in violation of the relevant law.
  • An action to determine an activity as unlawful and prevent or stop the relevant action.

(Article 73/6, Consumer Protection Law.)

The Consumer Protection Law designates the consumer groups and public bodies that can file these community actions for consumer-related infringements.

The Ministry of Trade, consumers or consumer organisations can file a lawsuit for discovery of a series of defective goods on sale, suspension of production or sale, removal of a defect, and recall of goods retained for sale (Article 74, Consumer Protection Law).

Consumer protection institutions and associations are active in enforcing consumer rights. There are many lawsuits reported in the media that are brought for the benefit of consumers. Generally, these lawsuits focus on matters that affect the general public. Examples include actions brought against banks for unlawful fees charged to consumers, and against electricity distribution and telecoms companies for overbilling.

Litigation Funding

  1. Is litigation funding by third parties allowed? Is it common? Are contingency fee or no win no fee arrangements allowed?

Turkish legislation does not regulate this matter. There is no statutory obstacle for parties to resort to third party funding in litigation proceedings, and it is possible to obtain such funding under the freedom of contract principle and general provisions of the TCO. However, third party funding is not common, especially because court fees are relatively low.

Providing funding in litigation does not automatically entitle the funding third party to any rights in the lawsuit.

Litigation funding by the state for people with difficulties paying the fees is set out in the Code of Civil Procedure.

Contingency fees or no win no fee arrangements are not allowed under Turkish law.

Remedies

  1. What remedies are available to a successful party in a product liability claim?

A buyer who succeeds on the merits can exercise one of four alternative remedies stipulated under the TCO and the Consumer Protection Law (see Question 3). If the seller is proven to be at fault when providing the defective good, the buyer can also claim compensation for indirect (positive) damages, which in most cases are loss of profit.

A party can also claim compensation for immaterial (moral) damages. In this case, the court has discretion to determine the amount of compensation according to the matter of the dispute.

The successful party in a product liability claim can recover the costs associated with the litigation (see Question 15).

  1. How are damages calculated and are there limitations on them? Are punitive or exemplary damages available and in what circumstances?

Punitive or exemplary damages are not available under Turkish law.

Pecuniary damages are losses that can be quantified in monetary terms. In principle, a person claiming damages must prove that loss or damage occurred. However, in practice, such claims are mostly calculated by an expert appointed by the court during the proceedings.

If the exact value of the loss or damage cannot be quantified, the court will estimate the value at its discretion in light of the normal course of events and steps taken by the injured party.

The court can also consider the following when calculating compensation:

  • The degree of fault.
  • Whether the injured party consented to the action that caused the loss, or circumstances attributable to them contributed to the loss or damage, or otherwise exacerbated the position of the liable party.
  • Whether the liable party will gain from the transaction.
  1. Is liability joint and several/how is liability apportioned, including where a partially responsible entity is not a party to the proceedings?

Law 7223 sets forth a joint and several liability for the producer and the importer for the damage caused by the product.          

Liability arising out of a sale contract under the Consumer Protection Law and TCO mainly attaches to the seller as the party to the sale contract. Except for a few cases, this liability is not joint and several with the producer or importer.

However, the buyer can hold the seller and the producer or importer jointly and severally liable on different grounds. It is possible to hold the seller liable relying on the contractual relationship, and the producer or importer liable in tort. If the seller, the producer, or the importer are among the defendants, the compensation ordered by the court can be enforced against any of them due to their joint and several liability. Therefore, the court will not apportion liability among the defendants.

If only one of the potentially liable parties is the defendant, the defendant can choose to notify the other liable parties of the claims. The notified parties can choose to submit their defences to the court, but cannot be party to the dispute. The defendant benefits from notifying other potentially liable parties when then file a recourse action against the other liable parties within two years after they compensate the buyer. If the respondents of the recourse action have been notified of the lawsuit initiated by the buyer, they cannot argue that the award of compensation is unlawful. Instead, the respondents can argue that:

  • The notification of the buyer's claims was too late for them to properly exercise their defence.
  • The defendant failed to defend its case properly against the buyer.

During the recourse action, the court will apportion the liability of each jointly and severally liable party.

Product Safety

  1. What are the main laws and regulations for product safety?

Law 7223 is the main law regarding product safety. It is the basis for more specific technical regulations issued by various public institutions and ministries. It covers all types of products, without considering whether they are consumer products.

The secondary regulation provides details regarding inspection of products, their safety and compliance with technical legislations, and measures to be adopted. The Ministry of Industry and Technology and the Ministry of Trade also promulgate other regulations on market surveillance and inspection of products, which regulate the matter on a more detailed level:

  • General Product Safety Regulation.
  • The General Regulation on Market Surveillance and Inspection of Goods.
  • Regulation on the Market Surveillance and Inspection by the Ministry of Industry and Technology.
  • Regulation on the Market Surveillance and Inspection by Ministry of Trade.

Consumer Protection Law evaluates the issue with the strict concern of protecting consumers. It mostly refers to Law 7223 regarding reporting product hazards and recall measures.

  1. Are there general regulators of product safety issues? Are there specific regulators for particular goods or services? Briefly outline their role and powers.

The Ministry of Trade is the co-ordinating body for product safety issues. Under the General Directorate of Product Safety and Surveillance of the Ministry of Trade, ten different public entities conduct product safety and market surveillance activities for different product groups. These are the:

These entities can prepare detailed technical legislation under the supervision of the Ministry of Trade. They regularly conduct market inspections. If certain goods or services do not comply with the technical standards and legislation, these entities can impose required measures, for example:

  • They can withdraw goods from circulation.
  • They can limit or ban marketing of goods.
  • They can order producers to withdraw and dispose of goods.

Product Recall

  1. Do rules or regulations specify when a product recall is required or how companies should make decisions regarding product recalls and other corrective actions? Are any criteria specified?

Law 7223 requires that the products must:

  • Be safe.
  • Comply with the technical regulation.

This rule also applies to:

  • Products that have been used, but are:
  • re-supplied to the market; or
  • are intended to be re-supplied to the market.
  • Old and used products imported from countries other than European Union member countries.

Products that do not comply with the technical regulation cannot be placed on the market, kept on the market, or put into service without the nonconformities being corrected (Article 4 and 5, Law 7223).

If a product placed on the market is not suitable, the producer, the importer, and the distributor are immediately obliged:

  • To take the necessary corrective measures to bring the product into conformity.
  • If necessary:
  • to stop the supply of the product to the market;
  • to withdraw or recall the product from the market; and
  • where the product on the market poses a health and safety risk, to immediately inform the authorized institution in detail and immediately about the issues, the corrective measures taken, and their results. They must also fulfill the authorized institution's instructions to carry out activities that eliminate the product's risks.

The producer or the importer may take voluntary measures against the non-conforming products that it puts on the market, keeps on the market, or puts into service, without the request of the authorized institution before the inspection date. This voluntary action covers all necessary measures to eliminate the nonconformity and eliminate the risk, including:

  • Stopping the supply of the product to the market.
  • Preventing the product from being placed on the market.
  • Withdrawing the product from the market.
  • Recalling the product.
  • Making the distributors aware of this measure.
  • Warning the end users about the risks borne by the product.

If the producer or importer engages in a voluntary precautionary activity, it applies to the provincial directorate by specifying the time needed to complete the activity, along with all the information and documents regarding this activity. Administrative sanctions prescribed in the relevant legislation will not be applied to a producer or importer that fulfils its obligations within the scope of voluntary precautionary activities, and eliminates the non-compliance.

Under Article 18 of Law 7223, if the producer, importer, distributor, or other similar company takes the measures (on its own, or upon the request of the authorized institution) that Law 7223 or the secondary legislation requires, it should effectively announce the information about these measures and the risks contained in the product.

If other measures are insufficient to eliminate the risk, the producer, importer, distributor, or other similar company must recall the product on its own, or upon the request of the authorized institution (Article 19/1, Law 7223).

  1. Are there mandatory advertising requirements for product recalls? Are there other rules governing how a product recall should be conducted?

The producer, importer, distributor, or other similar company, which takes (on its own, or upon the request of the authorized institution) the measures that Law 7223 requires for risk-bearing products, should effectively announce the information about these measures and the risks contained in the product (Article 18, Law 7223). Announcement is made by one or more of the following methods:

  • By informing all at-risk persons directly, when they can be reached.
  • If the producer, importer, distributor etc. has a website, by announcing it in a way that can be easily seen on the homepage of the website for at least six months.
  • If the producer, importer, distributor, or other similar company does not have a website:
  • by a broadcast on a national television channel between 07:00 and 22:00, in written and audio form for at least 30 seconds; or
  • in a nationally distributed newspaper, on a quarter of the page, to be announced during a day through the Press Advertisement Agency.

The Announcement shall contain at least the following information:

  • Brand, model or type name, serial number, other distinguishing features that clearly introduce the product.
  • Photograph or pictorial representation of the product, if possible.
  • The action taken.
  • A clear and understandable description of the problem requiring action.
  • Name, address, and other contact information of the responsible producer, importer, distributor, or similar company.
  • Suggested methods to avoid the risk or fix the problem.
  • Information about the places where the product will be returned, or the addresses to which it can be sent, to eliminate the problem in the product.

If the provincial directorate does not find the announcement (or the form of the announcement) appropriate or sufficient, it may request that the announcement be repeated in a more appropriate way and with more appropriate methods.

  1. Is there a mandatory obligation to report dangerous products or safety issues to the regulatory authorities?

Under Law 7223, in cases where it learns (or ought to know) that a product that it has placed on the market is not suitable, the producer, importer, or distributor is under obligation to immediately inform the authorized institution. It must provide detail about the issues that pose a health and safety risk, the corrective measures taken, and their results. The distributor is also obliged to inform the producer and the importer about the same.

Although there is no time limit stipulated by law, producers, importers, and distributors are advised to notify the authorities immediately upon discovering the noncompliance and nonconformity with their products.

Reporting obligations and penalties for non-compliance may vary depending on the product type. Relevant ministries that are responsible for market monitoring and product compliance matters regularly announce the list of recalled products (including electronical devices that pose significant risks of injury, such as certain lamps, cables, and scooters) on their websites.

  1. Is there a specific requirement to provide progress reports and/or keep the authorities updated about the progress of corrective actions? In practice, do authorities expect periodic update reports?

Each public authority prepares detailed legislation on market surveillance and product inspection for specific products in its jurisdiction. While Law 7223 does not impose any obligation to report, or to update reports, some of the more detailed and product-oriented legislation may require such reports. For example, the Regulation on Market Surveillance and Audit promulgated by the Ministry of Industry and Technology specifically requires the producer to share reports of corrective actions with the provincial directorate of the said ministry.

Recent Trends and Reform

  1. Are there any recent trends in product liability and safety law? Have there been any recent significant changes or important cases? Are there any legal or procedural issues that are attracting particular interest in your jurisdiction?

Law 7223 introduced a new term called a “commercial operator.” A commercial operator is defined as the producer, authorized representative, importer, distributor or other natural or legal person who is responsible for manufacturing products, placing products on the market, or putting the products into service, within the scope of the relevant technical regulation. Thus, any natural or legal person supplying the product to the market or reforming the same will be liable for the product's safety.

The new regulation also brought a several and joint liability for the damages arising out of a product in the market in terms of the producer and the importer. It is not possible for the producer or importer to avoid this liability under any agreements.

  1. Are there any proposals for reform and when are they likely to come into force?

Turkish product liability and safety legislation was very scattered. There was a growing need to harmonise legislation with current EU product safety and liability legislation. To this end, Law 7223 was enacted, and it entered into force on 12 March 2021 (see Question 1).

As secondary legislation, the General Product Safety Regulation, and General Regulation on Market Surveillance and Inspection of Goods, also entered into force on 11 March 2021 and 10 July 2021, respectively. 

In addition, the Regulation on the Market Surveillance and Inspection, by the Ministry of Industry and Technology, and the Regulation on the Market Surveillance and Inspection, by the Ministry of Trade, both entered into force in 2021.

First published by Practical Law in 12.08.2022.

Link: https://uk.practicallaw.thomsonreuters.com/w-012-7205

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