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December 21, 2023

The Problem Of Awarding Attorney Fees In Favor Of The Administration In Expropriation Cases

I. INTRODUCTION AND THE CONCEPT OF EXPROPRIATION AND ATTORNEY FEE

As is well-known, the concept of expropriation is regulated under Article 46 of the Constitution and directly affects the property right of individuals, and refers to the administration’s acquisition of immovable properties belonging to real/legal persons, in order to provide services such as electricity, water, roads, which are urgent and essential to be provided in terms of public interest, by fully and completely compensating and satisfying the party whose property right is damaged, and dedicating the expropriated property to that service in order to provide the necessary services.

1. In this context, in order to discuss the concept of expropriation, certain elements which must be present together are as follows;

  • It must be carried out by the state and other public legal entities
  • It must be carried out only in cases where the public interest requires it
  • It must be carried out in accordance with the principles and procedures set forth by law
  • The area subject to expropriation to be subject to private property
  • The payment of the real value of the expropriated immovable to the owner be made in advance
  •  

Therefore, full, partial, or urgent expropriation transactions may be initiated upon the issuance of the public benefit decision within the scope of Expropriation Law No. 2942 (“Law”).

2. The important issue at this point is that the parties whose property right is damaged as a result of the expropriation process should be given the opportunity to file lawsuits for annulment of the expropriation process in the administrative jurisdiction and for material rectification in the judicial jurisdiction. As a matter of fact, since interventions to the right of property, which is one of the most fundamental rights in essence, can only be terminated as a result of the control to be carried out by the administrative/judicial judiciary, the issue carries significant importance for the protection of the right of property.

3. In practice, although this right is granted to the right holders who are the subject of the expropriation process who have suffered damage to their property rights as a result of the expropriation process, in addition to the cancellation of the expropriation process and/or the price to be appreciated as a result of the expropriation, the problem arises whether the administration should be represented by an attorney and whether an attorney fee should be awarded if the case is concluded in favor of the administration, and it is important to evaluate this problem separately.

4. Therefore, first, it is necessary to determine the legal basis of the attorney’s fee and to determine whether an attorney’s fee can be decided in favor of the administration that carried out the expropriation in the light of these determinations and judicial decisions.

II. WHAT IS THE BASIC PRINCIPLE ON WHICH ATTORNEY’S FEES ARE BASED?

1. Under Turkish law, it is regulated that there should be a minimum amount that the attorney should receive in return for the service provided. As a matter of fact, Article 323 of the Code of Civil Procedure No. 6100 (“CCP”) lists the elements that are included in the scope of the costs of the proceedings, and the attorney’s fee assessed in the cases pursued by proxy is included in the costs of the proceedings and it is stipulated that these costs must be covered by the party against whom the case is concluded.

2. Again, Article 164 of the Attorneyship Law No. 1136 (“Attorneyship Law”) stipulates that attorney’s fee is a remuneration for the legal support service provided by the attorney and this fee is divided into two categories as “contractual attorney fee” and “counterparty attorney fee”. As it is known, upon the conclusion of the lawsuit, the party against whom the judgment is rendered is obliged to pay the counterparty attorney’s fee in addition to the judgment rendered, and therefore, as a result of the loss of the lawsuit, an obligation in addition to those that may arise in terms of the loss of the lawsuit is imposed on the losing party.

3. In the context of expropriation proceedings and price determination cases, it becomes crucial to examine whether attorney’s fees will be awarded in favor of the administration, taking into account the existing legislation, judicial decisions, and ongoing case law..This examination is essential to avoid burdening the expropriation subject, whose property rights have already been damaged, with additional obligations… Given the objections raised by the administration that conducts the expropriation process in various lawsuits related to expropriation transactions, requesting that the attorney’s fee should be awarded in their favor and that the opposing party should be responsible for it, it becomes necessary to clarify the legal basis of this situation..

III. CAN AN ATTORNEY FEE BE AWARDED IN FAVOR OF THE ADMINISTRATION IN LIGHT OF THE CURRENT LEGISLATION AND THE DECISIONS OF THE COURT OF CASSATION AND EUROPEAN COURT OF HUMAN RIGHTS?

1. As mentioned above, the attorney’s fee, which is regulated in the CCP and the Attorneyship Law, is basically a fee awarded for all the efforts exerted by the attorney to handle and conclude a case., and the primary intent of this fee is to ensure that the provided legal services are duly recognized and to offer the necessary incentive for the effective execution of an attorney’s role, which holds significance within the realm of public order. 

2. Therefore, in other lawsuits in which the administration is a party other than the lawsuits filed in relation to expropriation transactions, a ruling in favor of the administration along with an attorney’s fee may be ruled against the other party if the administration has represented itself with an attorney. However, specific considerations arise in lawsuits concerning expropriation transactions, necessitating distinct attention.

To elucidate, it’s worth noting that certain types of lawsuits, particularly those involving the determination and registration of expropriation prices, may not always have a clear winner or loser in terms of case outcomes. In essence, these lawsuits are primarily aimed at determination since the unilateral actions of the administration lead to conclusions about the valuation of the expropriated property and the rightful recipient of the registration on the title deed..

3. Therefore, the notion of winning or losing the does not apply to such cases. This is due to the transformative nature of these proceedings, as they shift into determination lawsuits.since the party whose property right is damaged does not have any influence on the filing of the lawsuit. As a result, the traditional plaintiff/defendant roles don’t precisely align, serving merely as legal designations., In this context,  it wouldn’t be equitable to award an attorney’s fee against the defendant who “lost” the lawsuit, particularly when their property has been subject to expropriation..

4. At this point, while the Law does not explicitly specify which party of the lawsuit will bear the burden of attorney’s fee, Article 29 of the Law delineates who will be responsible for the expenses that will arise due to the trial of the lawsuit;

“The per diems of the court committee pursuant to Article 10, the fees of the experts appointed by the court pursuant to Article 15 and the fees of the headman heard in the reconnaissance to be appreciated by the court, title deed fees and other expenses required by this Law shall be paid by the expropriating administration.”

The expropriation process is determined as the administration carrying out the expropriation process. As it can be seen, the expenses of the proceedings that may arise by the Law are imposed on the administration carrying out the expropriation, and these expenses are regulated not as numerus clausus, but in a way to cover the attorney’s fee by including other cases required by the Law.

5. In this sense, as explained above, the attorney’s fee, which is clearly stated in both the CCP and the Attorneyship Law, should be kept within the scope of Article 29 of the Law in terms of expropriation cases. Therefore, pursuant to this clear provision of the Law, it is not possible to award an attorney’s fee in favor of the administration that carried out the expropriation process even if the lawsuit to be filed concludes against the property owner, who is the subject of the expropriation process, due to the fact that such judicial expenses are imposed on the administration in the Law.

6. Another issue that needs to be determined is the current jurisprudence and the decisions of the Courts in the face of this clear provision of the Law. In this context, the Court of Cassation has established a legal precedent asserting the illegality of awarding an additional attorney’s fee in cases related to expropriation transactions in the event that the Court of First Instance decides in favor of the administration that carried out the expropriation transaction. This stance was further reinforced throughthe decision dated 14.05.2019 and numbered 2019/241 E. and 2019/560 K. (“Decision”) given by the Court of Cassation General Assembly of Civil Chambers. Accordingly, the Decision summarizes;

“As it is seen, the basis of the case at hand is the expropriation process, and as stated before, the immovable owner’s acquisition of the title of defendant arises directly from the Law. Therefore, the defendant, who is the owner of the immovable, has no fault in the filing of the lawsuit, and the defendant is not able to force the plaintiff administration to file a lawsuit.

On the other hand, if the defendant is obliged to pay an attorney’s fee in favor of the plaintiff administration, the owner of the immovable, who has the right to ownership, will not only be deprived of his immovable, but will also receive a deficient expropriation fee equal to the amount of the attorney’s fee. This will result in a violation of the principle of “payment of real compensation” regulated in Article 46 of the Constitution of the Republic of Turkey.

As such, the decision of the 14th Civil Chamber of the Ankara Regional Court of Appeals to resist that no attorney’s fee can be awarded in favor of the plaintiff administration is appropriate.”

It is clearly stated that the imposition of the obligation to pay an attorney fee to the proprietor, whose immovable property has already been expropriated unequivocally , will lead to the payment of an incomplete expropriation fee, which is a part of the trial expenses in cases related to the expropriation process.

7. The situation in question was also examined by the Constitutional Court (“CC”) by referring to the European Court of Human Rights’ (“ECHR”) decision Musa Tarhan v. Türkiye dated 18.03.2019 and in its decision dated 28.07.2022 with Application No. 2018/32734, as follows; 

“The ECHR emphasized that in cases where the expropriation price to be paid to the applicant is determined, it appears to be a paradox that the state gives with one hand and takes away with the other through the collection of judicial expenses.”

and 

“The ECHR concluded that since it could not be shown that there had been a significant reduction in the expropriation value and that the applicant’s conduct had led to this result, it was an excessive burden on the applicant to pay the expropriating administration’s attorney’s fees and that the fair balance between the public interest and the rights of the individual was disturbed. Therefore, it decided that the right to property was violated.”

Hence, it is explicitly ruled that the awarding of attorney’s fees in favor of the administration that carried out the expropriation within the purview of the aforementioned lawsuits regarding expropriation transactions would exacerbate the detriment already inflicted upon the owner’s property rights., which is already regulated under Article 35 of the Constitution, as a one of the utmost fundamental rights.

IV. CONCLUSION

 In conclusion, in accordance with the comprehensive analysis of the decisions from the ECHR, the Constitutional Court (CC), the Court of Cassation, and the relevant legislation, as elaborated extensively above, it is unequivocally established that the awarding of an attorney’s fee in favor of the administering authority conducting the expropriation process is impermissible. Such a provision would impose an additional burden upon the proprietor of the property right subject to expropriation. Furthermore, the sum to be disbursed as a consequence of the expropriation process is intrinsically tied to the genuine value, as articulated in Article 46 of the Constitution. The bestowal of an attorney’s fee to the administration, however, obstructs the rightful payment of the expropriation price corresponding to the real value.

Therefore, all of these aspects should be evaluated together and addressed when rendering a judgment, and as a result of the evaluation made, it is necessary to ensure uniformity in the provisions to be established regarding the attorney fee in expropriation transactions by making a judgment in parallel with the case law and legislation provisions.

With Regards,

Kılınç Law & Consulting

Authors

Kılınç Hukuk ve Danışmanlık

Kılınç Hukuk ve Danışmanlık