In monetary claims, default raises not only the issue of late payment of the debt, but also the risk that the claim may lose its economic value over time. Particularly during periods of high inflation, creditors claim additional loss by arguing that statutory interest or default interest does not compensate their loss. The reversal for the benefit of the law decision numbered 2025/1704 E., 2026/1019 K. of the 5th Civil Chamber of the Court of Cassation (Yargıtay 5. Hukuk Dairesi), published in the Official Gazette, has brought an important approach in this debate back into focus.
The Approach of the 5th Civil Chamber of the Court of Cassation: Inflation Alone Is Not Considered Sufficient
In the decision in question, the 5th Civil Chamber of the Court of Cassation maintained its line of reasoning that does not accept the erosion of a claim due to inflation alone as additional loss. The noteworthy aspect of the decision is that, without denying that deterioration in economic conditions may create a real loss for the creditor, it emphasizes that this does not automatically turn into compensation for excess loss.
The expression included in the decision is important in the following context:
... due to adverse economic conditions
This approach does not consider it sufficient for the creditor to claim additional loss based solely on general economic indicators, inflation, or the decline in the purchasing power of money. In other words, although inflation is an economic reality known and felt by everyone, the creditor is still expected to put forward a concrete loss claim separately.
What Is Additional Loss and How Is It Distinguished from Default Interest?
Additional loss, also known as excess loss, is the additional loss suffered by the creditor due to the debtor’s default that is not covered by default interest. Under the system of the Turkish Code of Obligations (Türk Borçlar Kanunu), default interest is the statutory and ordinary consequence of late payment of a monetary debt. However, in some cases, the loss suffered by the creditor may exceed the amount of such interest.
At this point, the distinction between the two concepts is important:
| Concept | Main Function | Position in Terms of Proof |
|---|---|---|
| Default interest | It is the statutory consequence of late payment of a monetary debt. | As a rule, separate proof of loss is not required. |
| Additional loss | It aims to compensate the actual loss exceeding default interest. | The creditor must establish the concrete loss and the causal link. |
Therefore, additional loss is not an automatic claim arising in every case where default interest is inherently insufficient. The creditor must legally explain and prove why and how the loss not covered by interest occurred.
Why Is Inflation Alone Not Accepted as Excess Loss?
The approach highlighted in the decision of the 5th Civil Chamber of the Court of Cassation is based on the distinction between inflation as a general economic phenomenon and proof of the creditor’s individual loss. The depreciation of money due to inflation is a macroeconomic consequence affecting society as a whole. By contrast, a claim for additional loss requires showing that a specific loss has arisen for a specific creditor.
For this reason, the critical questions for courts are as follows:
- How would the creditor have used the money if the debt had been paid on time?
- Was there a concrete investment, payment, or commercial opportunity missed due to the default?
- Did the creditor have to use credit at a higher cost because of the late payment of the debt?
- Is the loss not covered by default interest calculable and capable of being evidenced?
- Can an adequate causal link be established between the loss and the debtor’s default?
Where concrete answers cannot be given to these questions, the mere assertion that “there was inflation” or that “the claim lost value” may not be considered sufficient for compensation for excess loss.
The Practical Importance of the Reversal for the Benefit of the Law Decision
It is also noteworthy that the decision is in the nature of a reversal for the benefit of the law. This remedy is an exceptional mechanism that serves a legal review function in respect of finalized decisions. In practice, its main purpose is to contribute to clarifying the legal approach in similar disputes and ensuring uniformity of practice.
For this reason, the decision is important not only in terms of the outcome of a particular case file, but also in terms of how additional loss claims raised in lawsuits concerning monetary claims will be handled. Particularly in disputes involving expropriation, receivables, compensation, monetary debts arising from contracts, and similar matters, creditors will need to structure their evidentiary strategy more carefully.
What Should Creditors Pay Attention to When Claiming Additional Loss?
Creditors claiming additional loss should not rely solely on general economic data. The likelihood of success of the claim depends on personalizing and concretizing the loss.
In practice, the following evidence and explanations may become important:
- Financing cost: If credit was used due to late payment of the debt, documents relating to the loan and the interest burden.
- Impact on commercial activity: Commercial obligations that could not be fulfilled or opportunities missed due to the payment delay.
- Alternative return claim: Concrete bases for how the claim would have been invested or used if collected on time.
- Accounting records: For companies, records showing cash flow, borrowing, and payment plans.
- Expert examination: Where necessary, presentation of data suitable for expert assessment in order to calculate the loss.
By contrast, relying solely on general explanations regarding inflation rates, economic crisis conditions, or the depreciation of money appears risky under the approach adopted by the 5th Civil Chamber of the Court of Cassation.
Assessment from the Debtor’s Perspective
The decision also clarifies the scope of defense available to debtors against additional loss claims. The debtor may argue that the loss claimed by the creditor is not an actual loss exceeding default interest, that the loss has not been concretized, or that there is no causal link between the default and the loss.
In addition, the debtor’s fault is also important in additional loss claims. Under the relevant legislation, the debtor’s liability is assessed on the axis of default and fault. Therefore, in each concrete case, the nature of the debt, the ability to pay, the reason for the delay, and the parties’ conduct should be examined together.
What Does This Mean in Practice?
The decision numbered 2025/1704 E., 2026/1019 K. of the 5th Civil Chamber of the Court of Cassation shows that the relationship between inflation and additional loss must be approached cautiously. Although the depreciation of a claim due to economic conditions is an important fact, it is not accepted as sufficient on its own for compensation for excess loss.
In summary:
- Inflation may be a fact supporting an additional loss claim; however, it is not sufficient on its own.
- The creditor must put forward its concrete and provable loss exceeding default interest.
- An adequate causal link must be established between the loss and the debtor’s default.
- The reversal for the benefit of the law decision is capable of guiding practice in similar disputes.
- In additional loss claims, litigation strategy should be built on a document-based calculation of loss rather than a general economic narrative.