When a dispute is resolved with the assistance of a mediator instead of before a court, one of the first items to arise at the end of the process is the mediation fee. This fee represents the amount the mediator is entitled to in return for the activity carried out, and it is shaped largely by whether or not the parties reach a settlement. The amount is not arbitrary; it is framed by the Mediation Minimum Fee Tariff published each year. In this article we explain, for information purposes, the legal basis of the mediation fee, how the fee is determined where a settlement is or is not reached, the points to be observed in practice, and the mistakes most frequently encountered.
The Legal Basis of the Mediation Fee
The legal framework for mediation is set out in Law No. 6325 on Mediation in Civil Disputes. Under this Law, the mediator is entitled to claim a fee and expenses in return for the activity carried out. The lower limit of the fee, in turn, is determined by the Mediation Minimum Fee Tariff published each year by the Ministry of Justice. The Tariff sets out separate rules for disputes whose subject matter is money and for those that cannot be measured in money, and it is updated every year.
It is important that the Tariff is of a "minimum" nature: the amounts specified constitute a floor, and the parties and the mediator cannot agree on a fee below this limit. The parties may, however, freely agree on a fee above the Tariff. Accordingly, the current amount of the fee payable in a mediation process is determined by the tariff for the year in which the process is conducted; tables from previous years may give misleading results.
The Distinction Between Mandatory (Condition Precedent) and Voluntary Mediation
The key to understanding the mediation fee is to distinguish whether the process is mandatory (a condition precedent to litigation) or voluntary. This distinction directly affects who pays the fee, and under what conditions.
- Mandatory mediation: In certain areas, such as employment, commercial and consumer disputes, it is compulsory to apply to a mediator before a lawsuit can be filed. Here, if the parties fail to settle, the fee for the first two hours of activity is, as a rule, covered by the Treasury; if the process exceeds two hours, the excess is paid by the parties.
- Voluntary mediation: This is a process to which the parties apply of their own free will. The fee is borne by the parties from the outset; unless otherwise agreed, it is shared in equal proportions.
In both cases, the decisive factor is whether the process ends with a settlement or without one. Where a settlement is reached, the fee usually increases according to a proportional rate calculated on the value of the dispute.
How Is the Fee Calculated Where a Settlement Is Reached?
If the parties reach a settlement, the mediation fee is, as a rule, calculated on the amount of the subject matter of the dispute. The proportional part of the Tariff provides for graduated percentage rates for specific money brackets: a higher percentage is applied to the first brackets, while lower rates apply to the upper brackets as the amount grows. Thanks to this graduated structure, as the amount increases the rate falls, yet the total fee still rises.
- Disputes whose subject matter is money: The agreed amount is divided into brackets, the percentage for each bracket is applied, and the resulting figures are added together. If the calculated fee falls below the minimum fixed amount in the Tariff, that fixed amount is taken as the basis.
- Disputes whose subject matter is not money: In matters that are settled but cannot be measured in money, no proportional calculation is made; the fixed (flat) fee in the Tariff is applied.
An important detail is that the fee arising where a settlement is reached is, as a rule, shared equally between the two parties; however, the parties may agree on a different allocation. The result given by this tool is an estimate based on the logic of the Tariff; the exact amount varies according to the current tariff for the year in which the process is conducted and the specific circumstances.
What Happens If No Settlement Is Reached?
If the process ends without the parties settling, the fee is no longer determined proportionally on the value of the dispute but on the basis of the time (hours) spent. In mandatory mediation, for meetings that end without a settlement, the fee for the first two hours of activity is, as a rule, covered by the Treasury; if the activity has exceeded two hours, the excess is calculated on the hourly fee in the Tariff, and this part is paid equally by the parties unless otherwise agreed.
In voluntary mediation, on the other hand, even if the process ends without a settlement, the hourly minimum fee in the Tariff is applied for the hours negotiated, and this amount is borne by the parties from the outset. As can be seen, the difference between reaching a settlement and failing to settle is decisive not only in terms of the legal outcome but also in terms of the method by which the fee is calculated.
Are the Mediation Fee and Litigation Costs the Same Thing?
The mediation fee is not a court charge or a litigation cost. It is the consideration for the mediator's labour, arising in a process resolved without going to court. By contrast, if the parties are represented by a lawyer in the mediation, an attorney's fee may also come into play. Where a settlement is reached and there is no need to file a lawsuit, the parties are spared many litigation costs such as court charges, expert-witness fees and on-site inspection. In this respect, mediation often offers a lower-cost and faster solution compared with litigation.
Points to Watch Out For
- The current tariff: Both the percentage brackets and the fixed amounts are updated every year. The calculation must be based on the tariff for the year in which the process is conducted.
- The settlement/no-settlement distinction: In the same dispute the fee is calculated proportionally where a settlement is reached and hourly where it is not; the two must not be confused.
- The minimum fixed threshold: If the figure found by the proportional calculation falls below the minimum fixed fee in the Tariff, the minimum fixed amount is applied.
- The allocation ratio: The rule is equal sharing; however, the parties may agree on a different allocation in the settlement document.
- The Treasury exception: The Treasury's coverage of the first two hours where no settlement is reached in mandatory mediation is specific to compulsory mediation only; it does not apply in voluntary processes.
Common Mistakes
- Calculating with an old tariff: A calculation made with the percentage brackets and fixed amounts of a previous year does not reflect the true fee.
- Assuming a single rate: Calculating the proportional fee by applying a single percentage to the whole amount is wrong; the rates are graduated by bracket.
- Confusing settlement with no settlement: Expecting a proportional fee on the value of the dispute in a process that ends without a settlement is mistaken; there, the hourly basis applies.
- Overlooking the allocation: Assuming that the total fee will be paid by a single party; the rule, unless otherwise agreed, is equal sharing.
- Extending the Treasury's coverage to every process: Trying to apply the Treasury's coverage of the first two hours to voluntary mediation as well is incorrect.
A Short Example Scenario
Suppose an employee and an employer try to resolve a dispute arising from severance and notice pay through mandatory mediation. Assume that, at the end of the meetings, the two sides settle on 120,000 TL. In this case the mediation fee is calculated by applying the graduated percentage brackets of the Tariff to the agreed 120,000 TL: a higher rate is applied to the first brackets and a lower rate to the upper brackets, and the resulting figures are added together. If the fee that emerges is above the minimum fixed amount in the Tariff, that amount applies; if it is below it, the minimum fixed amount is taken as the basis. Unless otherwise agreed, this fee is shared equally between the parties.
Had the parties failed to settle, the fee would this time be calculated not on the value but on the hours negotiated; for meetings not exceeding two hours, the fee would be covered by the Treasury, as is specific to mandatory mediation. This example is intended only to illustrate the logic; the actual amount varies according to the current tariff and the specific situation.
Conclusion
The mediation fee is an amount framed by the Mediation Minimum Fee Tariff, shaped according to the type of dispute, whether the process is mandatory or voluntary and, most importantly, whether or not a settlement is reached. Where a settlement is reached, a proportional and graduated calculation comes to the fore; where none is reached, the hourly basis applies. Correctly grasping this distinction makes it easier to see that mediation is a faster and often more economical solution than litigation. The information on this page is general in nature; for the fee payable in a specific dispute, it is advisable to rely on the current tariff and to consult a lawyer.