Additional damages are the creditor's loss exceeding default interest under TCO Art. 122. Over the years the Court of Cassation has developed its case law on this provision and clarified the principles of application. On this page you will find an outline of Court of Cassation practice.
General principles
The Court of Cassation's basic principles on additional damages can be summarized as follows:
- Default interest is the minimum loss: Statutory default interest is accepted as the creditor's minimum loss. Additional damages are the actual loss above this minimum.
- Must be claimed separately: Unlike default interest, which accrues automatically, additional damages must be claimed separately and expressly.
- The burden of proof is on the creditor: The creditor must prove the loss exceeding default interest with concrete evidence.
- Presumption concerning absence of fault: The debtor is released from additional damages if it proves that it is not at fault (TCO Art. 122).
- Case-specific assessment: The Court of Cassation determines the most appropriate alternative return according to the characteristics of each case file.
Information
The Court of Cassation's decisions on additional damages have been issued by different chambers, primarily the 11th Civil Chamber (commercial), the 4th Civil Chamber (tort) and the 22nd Civil Chamber (labor law).
Banking practice
The Court of Cassation's most settled case law on additional damages is in the field of banking. Additional damages are awarded against banks in particular in the following situations:
Non-payment of deposit interest
When a bank fails to pay a customer's matured deposit or pays it short, the customer as creditor may claim additional damages. The Court of Cassation has held that in this case the creditor is entitled to additional damages at the deposit interest rate.
Credit card refund claims
When a bank delays a refund owed to a credit card customer, and the customer paid credit card interest during this period, the difference between the interest paid and statutory default interest may be claimed as additional damages.
Overdraft deposit account
When a bank causes a delay by not allowing the customer to use the money in the overdraft deposit account, the customer may claim additional damages.
Court of Cassation Principle
In banking disputes, the Court of Cassation has held that the bank must prove the absence of fault. In other words, a bank cannot escape liability merely by saying "I am not at fault".
Commercial relationships
Under TTK Art. 1530, in commercial transactions, if payment of an invoice is delayed the creditor may claim not only default interest but also additional damages. The Court of Cassation has accepted the following alternative returns in commercial relations:
- Advance interest: The advance interest rate applied in commercial matters
- Loan interest: Where the creditor had to take out a loan because of the delay in the claim
- Alternative investment return: Such as government bonds and deposit interest
- Inflation difference: Loss of purchasing power in periods of high inflation
Special situations in commercial relations
When assessing a claim for additional damages in commercial relations, the Court of Cassation takes the following factors into account:
- The nature of the creditor's commercial activity
- Market conditions during the period of delay
- The creditor's alternative investment opportunities
- The effects of the delay on the creditor's business
Labor law
In the event of delay in labor claims (severance pay, notice pay, overtime, national and public holidays, etc.), the employee may claim additional damages. The Court of Cassation's approach in this area:
- Inflation difference: The employee's loss of purchasing power in periods of high inflation
- Deposit interest: The return the employee would have earned by placing the claim amount on deposit
- Special case of severance pay: The highest bank deposit interest rate is applied to severance pay; additional damages above this interest may also be claimed
Severance Pay Interest
Under Art. 14 of Law No. 1475, the highest bank deposit interest rate is applied to severance pay. Since this interest is already high, claims for additional damages are generally more limited.
Expropriation
If the expropriation price is paid late, the owner may claim additional damages. In expropriation disputes, the Court of Cassation takes into account:
- The inflation rate during the period in which the expropriation price was paid late
- Deposit interest and government bond yield in the same period
- The alternative investment return according to the nature of the immovable property
and calculates the additional damages on that basis.
Proof and procedure
According to the Court of Cassation, the burden of proof in an additional damages case is distributed as follows:
| Subject | Burden of Proof |
|---|---|
| Debtor's default | Creditor |
| Existence of a loss exceeding default interest | Creditor |
| Amount of the loss | Creditor |
| Absence of fault | Debtor (by virtue of the presumption) |
Types of evidence
- Banking records: Account statements, deposit interest rates
- TCMB data: Exchange rates, interest rates
- TÜİK data: TÜFE, ÜFE, inflation rates
- Expert report: Specialist report for the calculation of additional damages
- Contract and invoice: The source of the claim
- Notice letter: Determining the date of default
Expert report
Since the calculation of additional damages requires technical knowledge, the Court of Cassation considers it mandatory to obtain an expert report. The expert is chosen from the fields of banking, finance, actuarial science or accounting.
Get a report for your additional damages
Additional damages report from an expert specialized in banking, commercial or labor law.
Request a reportFrequently asked questions about Court of Cassation decisions
How does the Court of Cassation assess additional damages in banking?
The Court of Cassation has held that where banks do not pay deposit interest or pay it late, the creditor may claim additional damages at the deposit interest rate. The bank must prove the absence of fault.
Which court has jurisdiction in an additional damages case?
The commercial court of first instance has jurisdiction in additional damages cases arising from commercial transactions; in banking disputes, the consumer court or the commercial court of first instance has jurisdiction (depending on the nature of the case file).
Does the Court of Cassation accept the inflation difference as additional damages?
In periods of high inflation, the Court of Cassation accepts the inflation difference as an alternative return in the calculation of additional damages. However, the assessment is made according to the characteristics of each case file.
How is the burden of proof for additional damages distributed according to the Court of Cassation?
According to the Court of Cassation, the existence and amount of additional damages must be proved by the creditor. The debtor, in turn, may be released from additional damages by proving the absence of fault under TCO Art. 122.
Does the Court of Cassation consider it mandatory to obtain an expert report?
Yes. Since the calculation of additional damages requires technical knowledge, the Court of Cassation considers it mandatory to obtain an expert report. The expert is chosen from the fields of banking, finance, actuarial science or accounting.