Law No. 7589 Amends the Interest Regime Applicable to Compensation for Loss of Earning Capacity and Loss of Support

Significant amendments have been introduced to Article 55 of the Turkish Code of Obligations No. 6098 through Law No. 7589 on Amendments to Certain Laws for the Effective and Efficient Functioning of the Judiciary, which was published in the Official Gazette dated July 31, 2026 and numbered 33326 and entered into force on the same date.

The amendment primarily revises the interest regime applicable to pecuniary compensation arising from the reduction or loss of earning capacity and compensation for loss of support. In addition, the method for offsetting payments made before the filing of a lawsuit or prior to the commencement of the investigation phase has, for the first time, been expressly regulated at the statutory level.

This new regulation will directly affect the calculation of interest in compensation claims arising from bodily injury, particularly those relating to occupational accidents, traffic accidents, occupational diseases, and pecuniary compensation claims arising from death.

Practice Prior to the Amendment

Before the enactment of Law No. 7589, the settled case law and established practice of the Court of Cassation provided that statutory interest was applied to the entire amount of compensation for loss of earning capacity and loss of support from the date of the wrongful act or the event giving rise to the damage. Furthermore, no distinction was made, for the purpose of determining the commencement of interest, between actual damages and damages expected to occur in the future.

For example, assuming that a lawsuit was filed following an occupational accident that occurred on January 1, 2024 and that the court rendered its judgment on January 1, 2028, statutory interest could be applied to the entire amount of compensation for loss of earning capacity calculated by the court-appointed expert, commencing from January 1, 2024. Accordingly, statutory interest also accrued from the date of the accident in respect of future loss of earnings relating to periods after the date of judgment.

New Interest Regime Introduced by the Amendment

Pursuant to the provisions added to Article 55 of the Turkish Code of Obligations No. 6098 by Article 18 of Law No. 7589, a distinction has now been introduced between the "known period" and the "unknown period" for the purpose of determining the commencement of interest in compensation claims for loss of earning capacity and loss of support.

The known period refers to the period between the occurrence of the event giving rise to the damage and the date of the court's judgment, during which the loss of income has actually occurred. Statutory interest will continue to be applied, as under the previous practice, from the date of the damaging event to the amount of compensation calculated by the expert in respect of the period during which the earnings of the injured person or the deceased's dependant are known.

Conversely, future loss of income arising after the date of the judgment is regarded as the unknown period. Accordingly, statutory interest on compensation calculated in respect of future losses, where earnings cannot yet be determined, will no longer accrue from the date of the damaging event but from the date of the court's judgment. The legislature considered that applying retrospective interest to damages that have not yet occurred and are calculated based on future assumptions is inconsistent with the principle of equity and therefore linked the commencement of interest to the date of judgment.

For example, assuming that an employee became permanently incapacitated as a result of an occupational accident that occurred on January 1, 2024 and that the court rendered its judgment on January 1, 2028, statutory interest will apply from January 1, 2024 to the compensation calculated in respect of the employee's actual loss of income sustained between the date of the accident and the date of judgment. However, statutory interest on compensation calculated for the employee's future loss of earnings relating to the period after January 1, 2028 will now accrue from January 1, 2028, being the date of the court's judgment, rather than from the date of the occupational accident. Accordingly, while the new regulation preserves the application of interest from the date of the damaging event for actual losses, it provides that interest on future losses will commence from the date of judgment.

Offsetting Early Payments Made Prior to Court Proceedings

The legislative amendment also provides that, in compensation claims for loss of earning capacity and loss of support, payments made by the person liable for the wrongful act or by other persons or institutions responsible for compensation before the filing of the lawsuit or before the commencement of the investigation phase shall be proportionally offset against the compensation amount based on their economic value as of the actual date of payment. Accordingly, while preserving the economic value of payments made by the liable party at an early stage, the amendment aims to encourage the early settlement of disputes before they proceed to litigation and to promote voluntary early compensation payments.

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