I INTRODUCTION TO THE DISPUTE RESOLUTION FRAMEWORK

i General structure of the law

Following Israel’s establishment, the pre-existing law based on the Turkish Ottoman law was replaced by English principles of common law and equity by the Mandatory Government. This was gradually replaced by new legislation enacted by the Israeli parliament, the Knesset, as well as by decisions of the Supreme Court. The judicial system incorporates elements from both common and civil law.

Israel has no formal constitution, although the Israeli Declaration of Independence, dated 14 May 1948, envisioned its future existence.2 Since 1950, the uncodified Israeli Constitution has been composed of separate chapters called Basic Laws. Eleven Basic Laws have been enacted to date: The Knesset; Israel Lands; The President of the State; The Government; The State Economy; The Israel Defence Forces; Jerusalem Capital of Israel; The Judiciary; The State Comptroller; Human Dignity and Freedom; and Freedom of Occupation.

The Supreme Court of Israel, sitting as the High Court of Justice, has developed fundamental constitutional principles over the years. In Bank Hamizrahi Hameuchad Ltd et al v. Migdal Kfar Shitufi,3 the Supreme Court recognised the last two Basic Laws, Human Dignity and Freedom, and Freedom of Occupation, as comprising a higher normative status. These Basic Laws cannot be changed by a ‘regular’ law enacted by the Knesset. Only enactment within the special requirements of those Basic Laws can change them, and the Court was empowered to strike down any enactment not fulfilling the conditions stated in them.

In addition, the Foundation of Law Act, 5740-1980,4 provides that if the court finds no answer to a legal question in statutory law or case law, or by analogy, it shall decide it in the light of the principles of the freedom, justice, equity and peace of Israel’s heritage.

Since its establishment in 1948, Israel has left the pre-existing law of family relations virtually untouched. Thus, religious law (e.g., Jewish, Muslim and Christian) applies as a source of law in matters relating to marriage and divorce litigated before religious courts. Such application is subject to the law of the land and to the supervision of the Supreme Court.

In 2006, a new proposal for the recodification of all laws pertaining to civil matters was introduced – work that was begun in the 1990s by the Israeli Ministry of Justice with the participation of leading jurists. Its adoption through legislation might take a long time, and when adopted would slant the Israeli legal system more towards the civil law model, although the existing influences of common law – such as the adversarial system, the principle of stare decisis (i.e., the Supreme Court’s rulings in Israel and its interpretations have guiding authority, add substance to the law and bind the lower courts) and the Supreme Court not being bound by its own decisions – will remain.

ii Structure of the courts5

Basic Law: The Judiciary6 establishes three levels of courts: the Supreme Court, district courts and magistrates’ courts. The latter two are trial courts, while the Supreme Court is essentially an appellate court that also operates as the High Court of Justice. There are no juries in Israel. In addition to the civil or regular courts there are special courts and tribunals, including labour courts, military justice courts, religious courts with limited subject matter and personal jurisdiction, and administrative tribunals. Decisions of the appellate tribunals of these courts are subject to a limited review by the Supreme Court sitting as a High Court of Justice.

Magistrates’ courts

Magistrates’ courts have jurisdiction in criminal matters over most offences that carry a punishment of up to seven years’ imprisonment. In civil matters, these courts hear cases involving claims of up to 2.5 million shekels and other remedies such as prohibitory injunctions or mandatory injunctions.7 They also have jurisdiction over the use and possession or partition of real property. Magistrates’ courts also act as juvenile courts, traffic courts, municipal courts, family courts and small-claims courts.

District courts

District courts hear disputes involving companies and partnerships, arbitration, prisoners’ petitions, appeals on tax matters and intellectual property matters. These courts hear appeals from the magistrates’ courts including senior registrars.8 Except for original jurisdiction in an exhaustive list of administrative matters, district courts have residual jurisdiction over all criminal and civil matters that are not within the jurisdiction of another court or tribunal and claims relating to real estate proprietorship and real estate tenancy of 25 years and over. When a matter is within parallel authority with any other court the district court has jurisdiction over the matter as long as the other court did not commence the proceedings.9

The Supreme Court

The Supreme Court hears criminal and civil appeals from the district courts. Cases that begin in the district courts are appealable as of right to the Supreme Court. Other matters may be appealed only with the Supreme Court’s permission.10

The President of the Court is the head of the judicial system. The Supreme Court, sitting as the High Court of Justice, has residual jurisdiction for any matter not within other court or tribunal jurisdiction that authorises that court or tribunal for summary or immediate procedures. The High Court of Justice exercises judicial review over the other branches of government and gives orders to courts, tribunals, bodies and individuals with judicial or quasi-judicial powers (excluding courts to which Basic Law: The Judiciary refers), as well as to religious courts.

iii The framework for alternative dispute resolution (ADR) procedures

The Israeli court system is not efficient enough, despite efforts at improvements and reforms. One of the main problems is an extraordinarily heavy workload compared with other judicial systems. Research conducted by the Center for Public Management and Policy regarding court management (published in 2007) placed Israel second out of 17 countries that had been checked regarding the matter of judicial workload. The average workload in the countries under research was 1,185 cases per judge; in Israel, the workload was 2,335 cases per judge.11 During recent years, more than 700,000 cases have been added each year to the court system, which has to deal with over 1 million cases, and at the end of December 2014 there were approximately 443,439 cases stayed within the court system.12

In various cases, the Supreme Court and district courts have indicated the need for a convenient, speedy and economical method of out-of-court dispute resolution to ease the courts’ workload, as the proposal for the Arbitration Act has indicated;13 the courts indicated the virtues of consensual arbitration and ruled on the importance of arbitration for preventing unnecessary litigation and its contribution to dispute settlement in a ‘manner which carries an agreed-upon characteristic without confrontation’.14

Over the years, however, difficulties in rectifying errors in arbitrators’ awards – even in inadvertently erroneous decisions in accordance with Supreme Court case law (which does not see itself as an appeal instance and will allow annulment of arbitration awards only in extreme circumstances) – produced the perception that the process allows material errors that cannot be amended. Parties and their lawyers were deterred from applying for arbitration, and data gathered since the enactment of the Arbitration Law show concerns relating to the use of arbitration.15 It was only in 2009 that the Israeli Attorney General instructed that the ‘state will treat arbitration, along with other dispute settlement mechanisms, as a legitimate and proper tool, in the right cases, to settle disputes in which the government is involved as a party’.16 The Attorney General’s instruction was a result of the second amendment to the Arbitration Law, enabling wider appeal processes.

In 2011 a new bill for mandatory arbitration was introduced by the Ministry of Justice; it created controversy among practitioners, scholars and even judges, but it gave rise to the possibility of increased use of arbitration in Israel.17

Mediation is the other main form of ADR. Its use is becoming more common, although not enough to have a major impact on the courts’ heavy workload. A pilot for a mandatory pre-mediation process has been conducted during recent years by the court management department with the intention of creating a nationwide form of dispute resolution.

II THE YEAR IN REVIEW

i Discussions on mandatory arbitration bills
Government mandatory arbitration bill

The government mandatory arbitration bill introduced by the Ministry of Justice in 2011 provoked much controversy among scholars, practitioners, former judges and the Israel Bar Association between 2011 and 2013.18 After the January 2013 elections, the nominated Minister of Justice together with the then new President of the Supreme Court decided not to proceed with the enactment stages and shifted the focus onto efforts to improve the efficiency of the judicial system.19 The former President of the Supreme Court, the Hon. J A Grunis President (ret.), submitted a letter to the Knesset Constitution, Law and Justice Committee opposing the bill, since it raised significant constitutional and practical difficulties by negatively affecting the courts’ independence, the right to due process and the right of access to court. According to the President’s stance, the bill as drafted will create a heavy burden on the judiciary system because of the procedural effect of the necessary arrangements and the transfer of jurisdiction to a parallel system without the necessary norms. The President of the Supreme court, at the annual conference of the Society of Public Law held on 9 January 2014 (the Public Law Conference), announced a plan to shift car damage claims against insurers to mandatory arbitration, along with other moves geared towards case-management efficiency within the judicial system. According to updated data gathered at the research department within the judiciary, 35 per cent of all civil cases before the magistrates’ courts involve at least one insurance company, and about 30,000 of these cases deal only with car damage due to car accidents. With so many car accident-related property damage cases taking up the time of about 10 to 12 judges, the judiciary is looking at the possibility of shifting all such cases over to a voluntary ADR procedure or to mandatory arbitration. The original initiator of a private mandatory arbitration bill has suggested the same, as well as proposing that lawsuits regarding construction damage-related claims up to a specific amount be subject to a mandatory arbitration procedure; and is seeking to engage and cooperate with the judiciary system’s new policy, reach an agreement on the bill and enact the necessary procedures.

Private mandatory arbitration bill

The private bill initiated and supported by the Institute for Consent Arbitration intends to implement a new model suggesting mandatory arbitration in specific claims, namely construction damage-related claims and property damage in car accidents, as mentioned above. These claims make up a large percentage of court claims, and in major cases the main issue was the damages assessment. The Second Amendment to the Israeli Arbitration Law of 196820 made the procedure safer for parties because of the appeal arrangements it added to the law.

The court will nominate the arbitrator after the deadline for submitting any defence pleadings has passed. The arbitrator will be a nominee accepted by the parties (nominated as an individual or by an arbitration institution agreed upon by the parties), or from a list of approved arbitrators. If the parties agree on arbitration by an institution, they may agree on an appeal procedures according to Article 21A, or 24 or 29B of the Arbitration Law. The qualification requirements for an arbitrator or an arbitration institution, as well as the conditions for appeal of ministerial decisions regarding the arbitrators list and the arbitrators fees will be decided by reference to the relevant regulations.

As noted in the explanatory part of the bill, the expectation is to change the culture of litigation since the procedure is supposed to be expeditious and relatively inexpensive with no possibility of procedural delay. Parties (respondents mostly) avoid resolving their disputes knowing that court procedures will be long, and respondents often delay proceedings, which increases the courts’ workload and delays justice. The possibility of such continual delay would be seriously limited in mandatory arbitration, and it is anticipated that as public awareness of arbitration increases, there will be broader acceptance of the process as a quicker way to resolve disputes. Owing to the elections held in Israel in March 2015 several months were needed after forming the new Knesset committees to start new legislation procedures. The private bill is under continuity rule, held by the Knesset, in front of the Constitution, Law and Justice Committee, and is expected to be discussed during 2016.

The Arbitration Law (Third Amendment)

As part of the discussions regarding the previous governmental mandatory arbitration bill, the ADR Forum of the Israel Bar Association21 has initiated a bill suggesting several alternatives regarding the right to appeal an arbitral award to the court. The bill’s aim is to enable parties to decide upon an arbitration procedure as an alternative to court proceedings in the first instance, along with a judicial review in the appellate court to rectify substantive errors regarding the application of substantive law, if necessary. During 2014, the draft was subject to discussion in the Bar institutions before being proposed to the Ministry of Justice and to the Knesset Constitution, Law and Justice Committee. Owing to the elections within the Israeli Bar Association, held in June 2015, the new ADR committees of the IBA, expected to start their activities towards the end of 2015, and the new elected IBA institutions, will integrate their attitude towards those initiatives, as well as others.

Litigation Arrangement in Family Disputes Law (Temporary Provision), 5775-2014

On 8 December 2014, right before the Knesset passed the bill for its dispersal due to the forthcoming elections in March 2015, the Knesset approved the Litigation Arrangement in Family Disputes Law, 5775-2014, the aim of which is to encourage family members to settle family disputes amicably by mandatory referral to the MAHUT22 programme. Mediation of such disputes involved marriage and divorce cases, matrimonial-asset disputes, alimony or residence of a spouse or a child, child support or other related matters under the Legal Capacity and Administratorship Act, 5722-1962.23 The special MAHUT mediation will focus on ‘information’ on various means of amicable dispute resolution, and ‘guidance’ and ‘coordination’ directing parties towards applicable dispute resolution mechanisms while examining their needs and choices, including the various implications of proceedings for the parties and their children regarding legal, emotional, social and economic consequences. Any party that wishes to submit to such procedures, without derogating from the relevant jurisdictions of family or religious courts, must apply for a mandatory dispute settlement request24 and participate in such MAHUT meetings for 45 days, at up to five meetings; and only after those 45 days, if the parties do not reach any kind of agreement or agree to start any kind of ADR procedure, will they be able to continue and submit a claim to the family or religious courts. The special meetings will be conducted by trained social workers from the social aid unit without preponderant ability, using mechanisms appropriate to the particular characteristics of the family disputes. The Litigation Arrangement in Family Disputes Law will come into force within nine months, subject to certain conditions prescribed by law.25

Court Regulations (Mediators List), 5774-2014

In Bagatz 2630/09, 3200/12 Schwartzman Yaniv et al v. Ministry of Justice et al, the petitioner appealed against the referral of the case to mediation because of the lack of appropriate legal arrangements, lack of necessary transparency and lack of the proper norms for the arrangement of the status of the mediators, their training and authorisation, following the nullification of the Court Regulations (Mediators List), 5756-1996. Under the supervision of the Supreme Court, the Ministry of Justice updated the Court regarding the enactment procedures of the Court Regulations (Mediators List), 5774-2014, which include regulation of the status, training and authorisation of mediators, and the procedure for transferring cases from the authorised courts to mediation. Thus, the Supreme Court held that the main aim of the petition was achieved and the petition was obliterated with the right to resubmit it if the new regulation procedures were not in place by the end of 2014. The Court Regulations memorandum also included other issues such as mediators fees for court-annexed mediation services; mandatory fees due for participation in the list; various conditions for eligibility for inclusion in, and conditions for exclusion from, the mediators list; and raised other important issues regarding the regulation of the mediation practice. The hearing of the Knesset Constitution, Law and Justice Committee was set for 30 December 2014, but the dispersal of the Knesset, on account of the forthcoming elections in March 2015, caused postponement of most enactments (including those mentioned above) until the new Knesset and its committees were established after the elections. The hearing is expected to take place during 2016.

The Jerusalem Arbitration Centre (JAC) 26

In November 2013 the Israeli and Palestinian national committees of the International Chamber of Commerce (ICC) launched a centre for arbitration between Palestinian and Israeli businesses that will be headed by a prominent Turkish business leader along with the ICC Israel president and the ICC Palestine president. The JAC has been structured to have equal participation of Israelis and Palestinians parties and a majority from the international community. The centre will adjudicate disputes between parties that apply for a ruling that will be recognised by courts in Israel and by the Palestinian Authority. The JAC is established under the auspices of the Paris-based ICC and its International Court of Arbitration. Its mission is to provide a neutral, independent, reliable and efficient bilateral dispute resolution forum for business people who act as ‘merchants of peace’ in the Middle East. The JAC will provide arbitration services to disputes related to Israel, the West Bank and Gaza, including East Jerusalem. It will also serve as an arbitration centre to resolve commercial disputes between Palestinian-Palestinian and Israeli-Israeli businesses, while promoting arbitration as an alternative means for resolving commercial disputes.

ii Steps that focus on efficiency
Continuity of deliberations

Order No. 2-13 of the procedural orders of the President of the Supreme Court was published on 31 December 2013. The Order deals with continuity of hearings in criminal cases, and seeks to prevent delay of justice and to promote efficiency and better effectiveness of the judicial system with economical use of judicial resources, without affecting the basic rights of defendants. The Order was announced with a limited 60-day transition period in which to organise for, and adjust to, the new procedure, as of 1 January 2014. In magistrates’ courts, preliminary stages will be concluded within 60 days and within 90–120 days in the district courts. The evidence stage will be concluded within 45–60 days from the end of the preliminary stage (longer for complex cases) to maintain continuity of hearings. The President of the Supreme Court said on 9 January 2014, at the annual conference of the Society of Public Law (the Public Law Conference), that success of this reform will lead to its expansion and application to other court departments, since this method has been successful in many other judicial systems around the world. On 16 January 2014, the Attorney General issued an order to all the legal advisers and attorneys in the public service to maintain continuity of court hearings on a daily basis by changing current practices. Practitioners from the Israel Bar indicated the need to take into consideration the different characteristics of civil procedures, which are, for example, more complex in the preliminary stages.

Proceedings postponements

A study into the scope of proceedings postponements in the Israeli judicial system, its characteristics, causes and implications was published in September 2013.27 The research is a basis for decision-making analysis and policy regarding the adjournment phenomenon and suggests practical steps to reduce the scope of postponed proceedings in light of the research findings. Administrative efforts within the judicial system are being dedicated to shortening case times within the system and effectuating case management.

The former President of the Supreme Court, the Honourable Dorit Beinisch, President (ret.) published a postponement procedure indicating specific guidelines for such requests and a very strict policy for response.

According to the research, in civil cases most of the postponements were due to pre-hearing requests, of which 71 per cent were accepted by the court.

On average, postponements added three to four months to the case’s ‘life’ within the system.

Generally, the judicial time needed to deal with such requests was equal to more than nine judges’ posts. The research recommendation suggests a better application of the procedure despite the enormous burden on the judges, and a strict policy aimed at reducing the phenomenon.

The former President of the Supreme Court, the Hon. J A Grunis President (ret.), published a new postponement procedure, based on the above-mentioned research findings, to further reduce the rate of postponement requests and reduce the rate of request acceptances. The procedure, started on 18 May 2014, focuses on maintaining the original court dates and only after exploring various possibilities – such as finding a replacement lawyer, the status of the case, and of any parallel court session, in terms of complexity, number of parties, judicial time already invested, lawyers’ personal circumstances and other issues – will the court consider the requested change of date, including to an earlier date. The Israel Bar has objected to the new procedure claiming that it affects the proper balance between the necessary efficiency of the legal process and the needs of the parties and their lawyers.

Second shift in courts

A pilot scheme trialling a second shift in the courts was started in the second half of 2012 and early in 2013, in the magistrates’ courts of Jerusalem, Rishon Le’Tzion and Petach Tikva, based on Regulation 2 of the Court Regulations (Second Shift), 5764-2004 by several senior registrars in cases under 75,000 shekels. The trial of the second shift in court proceedings was conducted, in predetermined matters, between 3pm and 9pm on regular weekdays (Sunday–Thursday) in Israel. The Israeli Courts Research Division initiated preparation of databases and statistical formulae to explore the impact of the second-shift pilot with a view to submitting its findings during 2014 on the feasibility of expanding the scheme.28 However, the Justice Minister has already announced, at the aforementioned Public Law Conference, the expansion of the scheme to include a second shift between 3pm and 8pm in the small-claims courts, in fast-track claims, in requests for protective orders, in cases of menacing harassment, traffic cases, custodial matters, changes of name and age, and in any kind of civil case. In 2015, the final report regarding the pilot was published indicating its effectiveness in shortening legal procedures and reducing the caseload, with a need for further adjustment between the first and second shift for the registrars and to ease the amount of cases per day to enable more judicial time for each case.29

Focusing on case weights for the assessment of judicial workload in Israel and its implications

A recent study by the Israeli Courts Research Division30 claimed that despite the burden on the judiciary being the focus of public debate and being an influential factor in socio-legal trends, the concept of judicial burden has remained obscure. The aim of the study was to provide an objective tool that enables quantification of the judiciary burden, to assess and to compare the judicial workload resulting from different case types. These measurements assign every case type in the judicial system a weight according to the average amount of judicial work put into it. Thus, the judiciary will be able to better allocate judicial resources (cases, judicial manpower, legal staff) and appoint judges with expertise in the various legal fields, in accordance with the weighted caseloads. The focus was on measuring the judicial time needed to process different case types. The study developed and refined a methodology of event-based case weights based on event frequency and event complexity.31

Case weights became a tool for court management but raised questions regarding the balance between efficiency and justice. The new reform in the judicial arena is based on new management principles such as measurement of outputs, enhancing efficiency and providing value for the client – the citizen. By putting the main focus on the client – rather than on the lawyer, who is a substantial consumer of system resources – the reform raises dilemmas, such as having to choose between consumers, the need to maintain universal equivalence and quality of service, and the need to refrain from selectivity while providing this service to the public.

ADR-related cases
Annulment of arbitral award ex post facto
Request for Civil Appeal 4839/15 Moshkovitz D. et. al. v. Menorah Mivtachim Insurance Ltd. (Nevo, 1 December 2015)

The Supreme court held, for the first time, that an arbitration award can be annulled a posteriori based only on the breach of the duty of disclosure by one party. It is a rare remedy, in cases when the breach of the bona fide duty is prominent and very acute and it is unacceptable to leave the award as it is. It is necessary to prove the absence of bona fide regarding the essence of the agreement to use the arbitration procedure or nominate an arbitrator and that there is a reasonable possibility that if the negatively affected party, from the non-disclosure of information regarding a previous connection between the other party and the arbitrator, would have been aware of its existence, he or she would have refused to go to arbitration or to arbitrate in front of that specific arbitrator. The rule is ‘when there is a doubt – there is no doubt’, even regarding the small possibility that a fraction of information is necessary for the forming of another party agreement to the arbitration procedure.

Rejection of a request for an arbitrator nomination despite an arbitration clause
Request of Civil Appeal 8157/14 The Association of High Tech Mount Hotzvim Initiative Centre v. Shulman J., (Nevo, 14 April 2015)

The Supreme Court held that when the court is asked to nominate an arbitrator under Article 8 of the Arbitration Act in cases where there is an arbitration agreement but no arbitrator was nominated, the rule is to enforce the agreement unless the circumstances justify denial of a request by a party to an agreement including an arbitration clause to nominate an arbitrator.

Such deviation from that rule can be used in circumstances when previous conduct of the party who now requests use of the arbitration procedure indicates he or she has waived his or her rights under the arbitration agreement (e.g., the respondent previously submitted a lawsuit to the court despite the arbitration clause in the parties’ agreement and even insisted on conducting it in court and not through arbitration). This indicates a waiver on the arbitration stipulation and he or she cannot argue differently. A party to an agreement with an arbitration stipulation cannot artificially divide his or her claims under the agreement between court and arbitration, regardless of the size of each claim. Such cases justify denial of any request for an arbitrator nomination.

Privilege of mediation procedures and documents prepared for an ADR procedure
Request of Civil Appeal 1496/15 Levy B. v. Drori T. et. al. (Nevo, 21 May 2015)

The Supreme Court rejected a request for a civil appeal over the District Court in Heifa decisions held during the evidence hearing, when the court allowed a lawyer under investigation as a witness not to answer some questions due to mediation procedure immunity and lawyer–client privilege. The request was rejected in limine, because when a witness claims for privilege of a document he or she is reading while on the stand, the court decision over whether to acknowledge privilege or not cannot be a cause for permission to appeal. To the merits of the case, the witness served as a mediator between the parties, trying to solve their dispute and the parties did not waive their dispositive right for privilege of the mediation process, including privilege of documents prepared for an ADR procedure such as a settlement procedure, mediation or arbitration. Because of that and due to the lawyer–client privilege that applies in that matter on the content of a letter that was a subject of some questions and the reasons for sending it – the Court held that the witness could not answer any questions regarding his role as a mediator and regarding the professional service he gave to his client under Article 48(a) of the Evidence Ordinance [New Version], 5731-1971.

Ultra vires of an arbitral award
HP”B (Jer) 54712-07-13, 48376-09-13 Levy Ramot initiating and investment Ltd. v. Z.P. Association, HP”B (Jer) 8722-09-13 Z.P. Association v. Levy Ramot initiating and investment Ltd. (Nevo, 14 April 2015)

A request was made for partial annulment of an arbitral award due to ultra vires of the arbitrator in a highly exceptional manner while taking the power to annul a determined debt under a district court and the Supreme Court verdicts.

The District Court accepted the request. In this case the arbitrator initiated an interim award, regarding accounting issues between the parties. He decided over a sum of debt owed by the association to the constructor. This interim award was affirmed by the District Court and the time for requesting a permission for an appeal in front of the Supreme Court has ended, without a submission of such a request. In such circumstances, this interim award is considered as a peremptory award, with the same status as a peremptory award of the court. An interim award under the Arbitration Act has the same meaning as an interim award in the general civil procedure. Hence, the arbitrator has no authority to change his or her own interim award, even if he or she reveals during the arbitration procedure or at the end that his or her decision was wrong.

In those circumstances, and after the appeal was denied by the Supreme Court, the arbitrator had no possibility to continue to deal with that matter within the arbitration procedure. The possibility to open peremptory awards due to new evidence or facts indicating that an act of fraud affected that award can be utilised only in front of the court that gave the ‘infected’ award, since it is no longer the arbitrator interim award but the district court verdict that affirmed that award and ordered payments in accordance.

III COURT PROCEDURE

i Overview of court procedure

The two main pieces of legislation that govern civil litigation are the Courts Act (Consolidated Version), 5744-198432 (the Courts Act), which deals with the powers and jurisdiction of courts and judges and registrars; and the Civil Law Procedure Regulations 198433 (the Regulations).

There are also specific civil litigation enactments, such as the Administrative Matters Courts Law, 5760-200034 and the Family Court Law, 5755-1995.35 The High Court of Justice Procedure Regulations, 5744-198436 regulate special court procedures in the Supreme Court sitting as the High Court of Justice.

ii Procedures and time frames

The main stages in civil procedure are:

  • a filing a statement of claim (the commencing of civil proceedings);
  • b filing of a statement of defence (and a possibility of filing a reply by the plaintiff);
  • c preliminary proceedings, such as the facts admission process;37
  • d questionnaires process;38
  • e discovery process;39
  • f pretrial review;40
  • g filing of principal evidence affidavits;41
  • h hearing stage,42 combined with the cross-examination of witnesses;
  • i filing the parties’ oral summation or written summation, according to the courts’ orders;43 and
  • j judgment.44

The time required to complete a case depends on the circumstances (mainly the size and complexity of the claim). Because of the courts’ heavy workload, and despite the efforts of the judicial system, an average case can still take up to a couple of years.45

Expedited procedures for trial, such as fast-track claims,46 are available for claims involving amounts less than 75,000 shekels; and summary judgment claims, which involve liquidated monetary claims supported by documentary evidence or under specific statute, claims involving statutory causes of action related to liquidated monetary claims by local authorities for property taxes, tolls due, participation charges or eviction proceedings supported by documentary evidence.47

The main remedies awarded by the Israeli courts are damages, declarative decisions, injunctions (mandatory or prohibitory) and enforcement orders.

Urgent or interim applications

Pursuant to the Regulations, the courts have the power to grant interlocutory relief, in special circumstances even before a claim is brought. An interim order may be given ex parte in urgent cases48 where there is a substantial concern that were the defendant to become aware of the application, he or she might act in a manner that might frustrate its effect.

Interim measures can include an attachment order, stay of exit order, sequestration, levy, temporary receiving order, injunctive relief, Mareva injunction and Anton Piller order, among others.49

The basic conditions that must be met for a successful application for an interim order are:

  • a maintaining the status quo to prevent deprivation of rights;
  • b the interim applicant should appear before the court with ‘clean hands’;50
  • c the application must be supported with prima facie credible evidence to support the existence of a claim;51
  • d sufficient security must be deposited for compensation in the event any reason expires;52
  • e particular conditions relevant to the particular application must exist;53 and
  • f the court must be satisfied that the damage to the applicant if the order is refused will exceed the damage caused if it is granted, and be satisfied that grant of the relief is just and worthy within the relevant circumstances and not prejudiced beyond what is required.
iii Class actions

In 2006, the Class Actions Law, 5766-2006 was enacted by the Knesset.54 Prior to this, and until 1988, it was possible to file class actions in Israel under Regulation No. 29 of the Civil Law Procedure Regulations55 and under a series of legislative acts incorporating class action provisions.56 In Request for Appeal 3126/00 The State of Israel v. E. SH. T. Management and Manpower Ltd [2003],57 a narrow majority of the Supreme Court of Israel ruled conclusively that Regulation No. 29 may not, without proper amendment, be invoked to submit modern class actions. That decision was confirmed in a further hearing by the Supreme Court of Israel, where the Court also stated that it was its hope that the matter be addressed by the Knesset in primary legislation.58

New Class Action Law (the New Law)

The entry into force of the New Law has replaced the entire corpus of sector-specific provisions, but earlier judicial interpretations remain an important source of reference59 since scholars have indicated that the main problem, even after the New Law’s enactment, is the attitude of the courts to class actions, which is to dismiss most applications for certification. The question has been raised as to what impact the New Law will have on the courts’ attitude.60

The New Law contains a list of claims for which class actions may be filed,61 including:

  • a consumer suits against a ‘dealer’ as defined in the Consumer Protection Law;
  • b claims against insurers, insurance agents or fund management companies (guarantors or other third parties injured by a bank are prevented from filing class actions);
  • c claims with a cause of action pursuant to the Business Restriction Law;
  • d claims with regard to securities ownership, possession, purchase or sale of a security or unit trust;
  • e claims relating to environmental nuisance;
  • f claims for any cause of action under various laws;62
  • g claims against a government authority for the refund of unlawfully collected monies, such as taxes or charges; and
  • h any matter that an explicit law order permits as a cause of action for a class action.63

The ‘representative’ (the applicant for the certification of a class action) can be a person (including a corporation) who has a personal cause in the subject matter of the action, or the public authorities in a matter pertaining to their public purposes.

The New Law reflects a combination of the American approach, where an individual is entitled to file a class action, and the European approach, where the authority lies with organisations or public entities.64

The New Law determines a list of cumulative conditions for the certification of the class action by the court.

The New Law enables the court to supervise the lawyer who represents the class, and to order his or her replacement. Moreover, the court will determine the lawyer’s fees for representing plaintiffs taking into consideration a number of factors, including the public interest in the claim and the complexity of the proceedings. There is no reference in the New Law to awarding fees by percentages of the claim.

According to Article 27, a class action fund will be established under the auspices of the Ministry of Justice to assist the plaintiffs’ representatives to finance motions for approval of claims as class actions whenever there is a matter of social or public interest in filing the claim.

When monetary relief is not practical, the court may award other relief to the class or to the public.

In the event of a settlement, a motion requesting approval for such a settlement should be published to enable public entities and members of the class to file an objection to the offered settlement. The settlement may only be approved by the court after it receives an independent expert opinion stating that the settlement agreement is the fairest way to resolve the dispute.

The court may award costs in favour of the plaintiff even in cases where the claim is not approved as a class action in a procedure called ‘withdrawal’. According to the New Law, compensation will be awarded if damage was proven, but it is specifically stated that the court may award compensation for non-financial damage (such as mental anguish).

After the New Law’s enactment, many applications to approve class actions were submitted to the court; most were consumer-oriented. The question remains as to whether the courts will continue to treat class actions in a very conservative way.

In 2015, in the fifth conference regarding class actions, it was stated that in 2014, 1,233 applications had been filed.65 Two court verdicts were given.66 In 2014, withdrawn cases were still the dominant procedure, as was expected, with an average reduced compensation for the representative of 3,050 shekels and average reduced lawyers’ fees of 14,000 shekels. In about 95 settlements, the average compensation for the representative was 47,700 shekels and average reduced lawyers’ fees of 240,000 shekels.

iv Representation in proceedings

Litigants can perform any permitted or necessary action in court by themselves or by using a lawyer.67 Under the Legal Aid Law, 5732-1972 and its regulations, the state shall provide legal services for people in a state of incapacity and in certain matters such as family matters,68 residency rights, monetary matters and claims at labour courts.

The right to be represented by a lawyer is a basic constitutional right.69

A party must appear before the court if ordered to do so.70

Representation by a lawyer in the small-claims court will only be by court permission and under a special reasoning recorded in the protocol. Any litigant can be, with the court’s permission, represented in the small-claims court by an organisation authorised by the Minister of Justice for this matter.71 With the small-claims court’s permission, a litigant can be represented by any person duly warranted, unless the warrantee represents parties on a regular basis in the course of his or her regular business and for consideration.72

v Service out of the jurisdiction

The court acquires jurisdiction after the plaintiff commences the process, serves the defendant with the documents set out in the Regulations (normally the statement of claim together with all attachments, and a summons determining the return date upon which the defendant must serve its defence).

A court may only hear a claim that has been duly served on the defendant, whether in Israel or abroad.73

If the court acquires international jurisdiction under a specific legal order, its terms will determine whether that international jurisdiction is in effect.74 The parties can validate international jurisdiction for the court via a jurisdiction agreement.

Service of the above-mentioned documents can be carried out:

  • a by a court official or a person authorised by the court;
  • b by a lawyer or someone on his or her behalf;
  • c by registered mail; or
  • d by fax or by email under specific terms (but not the commencing documents and not service abroad).

To effect service on a foreign defendant outside Israel, the plaintiff must apply for leave and satisfy one of the 10 criteria set out in Regulation No. 500 of the Regulations, including that, inter alia, the defendant resides in Israel (and not for a temporary reason);75 the claim concerns real estate in Israel, a contract that was entered into in Israel, or an act or omission that occurred in Israel; or the claim involves the enforcement of a foreign judgment or a foreign arbitration award. Further, the plaintiff must show a good arguable case; and the decision whether to serve outside the jurisdiction is at the court’s discretion – the court may refuse an application for reasons of forum non conveniens. The court will consider if the local forum is the ‘natural forum’ or if there is a natural foreign forum with jurisdiction.76

The most privy forum (i.e., the forum that has the most links to the matter and the parties) will be considered as the natural forum in the light of reasonable expectations of the litigants and their ability to conduct efficient legal procedures in Israel.77

vi Enforcement of foreign judgments

Chapter 27 of the Civil Law Procedure Regulations makes reference to the Enforcement of Foreign Judgments Law, 1958.78

According to Article 1 of the Enforcement of Foreign Judgments Law, a ‘foreign judgment’ is ‘a judgment given by a court in a foreign state in a civil matter, including a judgment for the payment of compensation or damages to an injured party even though it may not have been given in a civil matter’, while according to Article 3:

A court in Israel may declare a foreign judgment enforceable if it finds that:

(1) the judgment was given in a state the courts of which were, according to its laws, competent to give it; and (2) the judgment is no longer appealable; and (3) the obligation of the judgment is enforceable under the statutes of Enforcement of Foreign Judgment in Israel, and the content of which is not repugnant to the laws of the state of Israel or to public policy in Israel; and (4) the judgment is executory in the state in which it was given.

The court interprets this by asking whether the legal system of the foreign jurisdiction that gave the judgment was authorised to issue such a verdict through any of its courts, and if the burden of proof in this matter lies upon the claimant who wishes to enforce the foreign judgment.79 The burden of proof is the same in relation to the finality of the judgment.80

Reciprocity of enforcement is the general rule, and a foreign judgment will not be declared enforceable if it was given in a state the laws of which do not provide for the enforcement of judgments of Israeli courts, unless otherwise ordered by the court.

Article 7 restricts enforcement of any foreign judgment if its enforcement is likely to prejudice the sovereignty of the state of Israel or its security. An Israeli court may enforce provisional judgments and interim orders given by foreign courts in maintenance-related cases, even though such a judgment or order may still be appealable, if it considers that the circumstances of the case justify it and as long as the other conditions imposed by the Enforcement of Foreign Judgments Law are fulfilled in respect thereof (Article 8).

After proving the existence of the above-mentioned conditions, the court that proposes to deal with the matter will then consider its jurisdiction while asking if it is the proper place for such a court sitting. The court will check the connection between the defendant and the state in which the court acts, while respecting any foreign judicial system that considers itself to have jurisdiction because one of the litigants is a citizen or a resident in that state or because central facts of the case have occurred within its boundaries.81

Until the court declares the foreign judgment enforceable in Israel, the petitioner can withdraw the application by submitting a written notice to the court.82

vii Assistance to foreign courts

The Legal Aid between Jurisdictions Law (the Legal Aid Law), 5758-199883 and the Legal Aid between Jurisdictions Regulations, 5758-199984 regulate how other jurisdictions may obtain legal assistance from Israel.

Israel is also a party to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, and to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters. Regarding specific states, among others, Israel and the United States are parties to the Vienna Convention on Consular Relations, which governs judicial assistance between them, while Israel and Austria have signed a special international agreement to simplify their legal connection according to the Hague Convention, and special regulations were enacted in relation to that agreement.85

According to the Legal Aid Law, legal assistance between Israel and another state includes, inter alia, service of documents, taking of evidence, search and seizure, transmission of evidence and other documents or of information, forfeiture of property, provision of legal relief, authentication and certification of documents and the performance of any legal act, all in connection to a civil or a criminal matter.86

The competent authority to accept requests for legal assistance is the Minister of Justice. The request must be submitted on behalf of the authority designated in that state as the competent authority for matters of legal assistance, and a proper notification of such a designation must be delivered to the competent Israeli authority.87

Among other reasons, a request may be refused because:

  • a the act is liable to prejudice Israel’s sovereignty, security, public order, public welfare or some other vital interest of state;88
  • b the request relates to an offence of a political nature;89
  • c the request for legal assistance is connected with a proceeding whose purpose is to cause harm to a person because of his or her political opinions or origin, or because he or she belongs to a certain race, nationality, religion, sex or social group;90 or
  • d the requesting state refrains from performing similar acts on request by Israel or by Israeli citizens, or it does not extend facilities similar to those extended under the Legal Aid Law.91
viii Access to court files

The Courts and Labour Courts (Files Inspection) Regulations 200392 have considerably enlarged rights of access to court files. Inspection of court documents and pleadings should be allowed unless there are special reasons, such as possible damage that may occur from exposing certain documents.

Regulation 1 determines that ‘inspection’ includes watching, listening, copying, photographing, printing, recording, receiving a computer printout or receiving a copy of the document in any other way, depending on the type of the information and its form of storage.

‘Court files’ include all documents and exhibits that are found in the court, or in its archives, whose inspection is requested.

In accordance with the Regulations, any person may request a judge or registrar to review the files of the court unless prohibited by law (Regulation 2(b)). The Regulations distinguish between three types of privileged entities for inspection of the files: the parties of the court case, third parties and those with a general inspection permit.

A third party may review court files by filing a reasoned request to the presiding judge or registrar of the case (Regulation 4(b)). The court will take into consideration all those who may be damaged by the granting of the inspection, and the reasonableness of the required resources.

According to Regulation 5, the court manager can grant a person a general inspection permit of court files if it ‘considers that there is public interest in granting the permit’; as such, the permit is not subject to the restrictions and conditions specified in Regulation 4, and allows persons such as journalists generally covering the work of the court, researchers and public officers to review the court files.

Hence, the principle of open court has constitutional status in the Israeli legal system. It is also subject to the principle of preventing any harm to court procedures under Article 71 of the Courts Act.

IV LEGAL PRACTICE

i Conflicts of interest and Chinese walls

Lawyers in Israel are forbidden to represent a client when there is a suspected conflict of interest. The lawyer must represent the client free of any ulterior interest or consideration. The principle of forbidding conflicts of interest is an essential principle of Israeli law,93 and according to special law orders under the Law of Agency and the Trust Law, 5739-1979. Under the rules of ethical conduct, a lawyer must not represent a client when he or she suspects that, because of a conflict of interest, he or she will not be able to fulfil the required professional obligation towards the client.94 The general rule requires the existence of an actual possibility for a conflict of interest, but lawyers in Israel are under the more onerous requirement95 not to represent a client when there is even a suspicion that the lawyer will be incapable of giving proper service to the client because of the lawyer’s personal matters, another liability or any fiduciary obligation by the lawyer towards another party, or a heavy workload.96

A lawyer must not represent parties with conflicting interests in the same subject matter unless they have agreed in writing to mutual representation, or when the lawyer drafts a contract for opposing parties (such as contract of lease). Even so, the lawyer faces civil responsibility and disciplinary action if he or she breaches the duty not to favour one client over any other.97

If a lawyer represents a contractor in relation to the contractor’s client, he or she should not represent the same client, and can handle for that client only the matter of land registration relating to the purchase (and be paid only for this specific service).

Prohibition on handling cases against clients

In any matter where a regular client of a lawyer is a party, the lawyer must not represent the other party, even if the same lawyer does not represent that client in this specific matter, and even when another lawyer from the firm represents that client.98

A lawyer cannot act against a former or occasional client in the same matter, or in relation to a matter that he or she used to handle for that client, or in a matter with an actual link to information once obtained by the lawyer from that client. The ‘same matter’ concept should be given a broad interpretation.99

A lawyer cannot engage in other business if this may cause a conflict of interests with his or her legal practice, nor can he or she deal, in such other business, with matters under his or her attention as a lawyer, or vice versa.

A lawyer should ensure that his or her client is not involved in any other business of the lawyer’s beyond their legal relationship. A special committee of the Bar (chaired by the chair of the ethical committee) can allow the lawyer an exception from the latter prohibition if it is found that a conflict of interest will not occur in this matter.

ii Money laundering, proceeds of crime and funds related to terrorism100

Israel has implemented robust legislation to combat financing of terrorism, including the Prevention of Terrorism Ordinance, 1948, and the Defence (Emergency) Regulations, 1945.

The Prohibition on Money Laundering Law, 2000,101 set up the Israel Money Laundering Prohibition Authority, which manages a database of reports received under the provisions of the law, and upon suspicion of money laundering activity it disseminates the reports to the competent authorities. The law was modified during 2012 to include transactions with precious stones and imposed more supervision responsibilities on financial institutions’ dealings with financial and currency services.

The Prohibition on Terror Financing Law, 2005102 expanded Israel’s legal options to prevent terror attacks and tackle the funding sources of terrorism. The New Law included provisions regarding the criminalisation of terror financing and the reporting duties of financial institutions. In accordance with international standards, various financial institutions must identify their clients before performing a financial transaction, report certain financial transactions and maintain records of such transactions.103

The current law does not impose a reporting duty on persons in the non-financial sector, such as attorneys, when they perform actions for their clients, to guard attorney–client privilege and to prevent a potential conflict of interest.

On 27 July 2011 a bill was published in the Official Gazette on the struggle against terrorism, 5751-2011.104 The purpose of the bill is to provide a variety of tools to law enforcement authorities in criminal justice and the public sector aimed at preventing the existence and activities of terrorist organisations, as well as damaging the corporate and financial infrastructure that feeds them. The bill also includes a controversial aspect imposing reporting duties for lawyers. Lawyers, practitioners and even, unusually, active judges were involved in the discussions on the bill and the Israel Bar Association promoted public and professional discussion of the bill and its implications for the legal profession. The proposed law will effectively replace the Prevention of Terrorism Ordinance (1948) and the Prohibition on Terrorist Financing Act (2005), and will consolidate all legislation under this act.

In 2012,105 and in 2014,106 amendments of the Prohibition on Money Laundering Law, 2000, were completed, including the necessary orders regarding obligations for customer identification, report and records management of currency services providers,107 and for customer identification and records management of business services providers108 to prevent money laundering and terrorism financing. The Israeli Bar Ethical Rules of Conduct were amended in parallel as well.109 Amendment No. 13 and the Order regarding business services providers applies to lawyers and accountants that perform or are asked to perform a business service as defined in the statute or in the Order110 as part of their professional services, for a client. As a precondition for such business services, providers will be required to conduct an identification procedure as specified in the relevant Order, and conduct a risk assessment in respect of money laundering and terrorism financing, based on, among other factors, client character, type of requested business service, the source of the money to be used in the business, reasonableness of details supplied by the client to the lawyer or accountant pursuant to the first supplement of the Order and the data that will be published on the website of the Designated Non-Financial Business and Profession Supervisor in accordance with the Israel Money Laundering Prohibition Act. If the client is a foreign resident, there is a special questionnaire to determine whether that person is a politically exposed person as described in the Order articles. The business service provider will retain the record of the necessary information and the assessment for at least five years. Identification of the client shall be conducted from a reliable source such as an ID card or passport or a trusted, authorised copy of such a document verified by the appropriate authority pursuant to the Order provisions. Types of client that might be considered as a high risk for money laundering or terror financing include, among others, politically exposed foreign persons, clients related to the countries or territories mentioned in the second supplement of the Order, a client that conducts cash transactions without proper explanation or business logic, a client that asks to perform business services with no explanation or business reasoning, and a client that refuses to provide the details required under the Order provisions.

V DOCUMENTS AND THE PROTECTION OF PRIVILEGE

i Privilege

A claim for privilege can be raised when responding to a question in a submitted questionnaire, and against a demand for a specific document’s inspection (one must include the specific document in the discovery of documents list as a part of the required affidavit, with a claim for privilege attached to it). In the event of a dispute, the court will rule in the matter according to the following criteria:111

  • a the right to refrain from self-incrimination,112 but even if the court rejects that claim, any answer to such a question in a questionnaire will be inadmissible evidence in a criminal case;
  • b attorney–client privilege: covering all communication between the attorney (including an in-house attorney) and the client concerning legal advice, provided that the attorney is acting as an attorney and not as an employee or executive performing a business role. Similar privilege applies to patent attorneys, doctors, psychologists, social workers and priests;
  • c litigation privilege: this applies to documents drafted and communications made between the attorney and client as part of the preparation for pending or anticipated legal proceedings;
  • d ‘without prejudice’ privilege: this covers all verbal documentary communications concerning negotiations for settlement;
  • e privilege to refrain from revealing commercial secrets in legal proceedings;113 and
  • f journalist’s privilege.114

The court or registrar reviews the document to rule on the question of privilege.

ii Production of documents

The parties must attach to their pleadings all substantive documents under their control. Further, at the stage of disclosure, each party must set out in an affidavit a list of substantive documents in its control and relevant to the claim. As part of the disclosure process, the parties must set out which of the documents listed are privileged; such documents do not have to be disclosed.

Disclosure does not include the obligation to allow the other side to inspect the documents on the list, unless it wishes to do so.115

Only parties to the claim can take part in the disclosure procedure; however, if a party has a controlling interest in certain companies, the other party can demand disclosure of documents under each of those companies’ control.116

Courts usually initiate discovery at the pretrial review without the necessity of the above-mentioned demands between the parties.117

The duty to disclose relates to any document relevant to the matters discussed in the trial that are or used to be within the party’s possession or control; the relevancy question is interpreted broadly. The party under the disclosure obligation does not have to produce documents if those documents are not within its control, and if the cost of producing those documents will prove to be disproportionately high.118

Failure to disclose documents gives the court the power to strike out the breaching party’s pleadings (as a last measure when the refusing party severely disregards court orders).119 Documents that were not listed in the disclosure list may not be entered as evidence.

VI ALTERNATIVES TO LITIGATION

i Overview of alternatives to litigation

The most common ADR alternatives are arbitration and mediation. According to the Courts Law, with the parties’ consent the court can rule on the matter before it, in part or in full,120 or can transfer the case to arbitration121 or mediation.122

Various institutions offer mediation and arbitration services, as well as other forms of dispute resolution (e.g., early neutral evaluators).

ii Arbitration123

The Arbitration Law, 5728-1968,124 enacted prior to the UNCITRAL Model Law, and the Regulations thereunder regulate the arbitration procedure.

In general, Israeli courts will respect arbitration clauses in agreements and will stay litigation proceedings in favour of arbitration if there is a valid arbitration agreement between the parties.125 Arbitration can only be conducted between parties who have agreed to it, and the award is binding on them (or their substitute) and not on third parties.126 The arbitration agreement can be made in advance by the parties agreeing in writing to submit any future dispute to arbitration, whether institutional or ad hoc.127

Generally, there are no limits on the terms of an arbitration agreement, and it is deemed to include all the instructions in the first addendum, as long as they are relevant to the issues and do not contradict the intentions of the agreement itself, such as provisions that relate to the number of arbitrators; venue, scheduling and organisational matters; issues related to the award; additional, tie-breaking arbitrator nomination; the management of the arbitration; arbitrators’ powers if a party does not comply with instructions for no justifiable reason; and arbitrators’ powers when parties avoid participating in the arbitration procedures.

Commonly, the parties agree that the hearing will not be bound by the rules of evidence and procedure but will be subject to substantive law.

Arbitrators may refer legal questions that arise during the arbitration process, or part of or the entire arbitration award, to a court. They may give an award as a declaratory sentence, a positive or negative injunction, or an immediate executive order, and any other relief that the court is authorised to offer, and are also entitled to give interim awards that determine various parts of the arbitration.

A party may challenge an arbitrator, if there are justifiable grounds, as to his or her impartiality.128

Amendment of the award is possible; for example, if the award:

  • a has clerical errors;
  • b is flawed in matters not relevant to the disputed issues;
  • c does not include instructions regarding the payment of interest; or
  • d does not include instructions regarding the expenses of the parties, including lawyers’ fees.

According to Article 23 of the Arbitration Law the court may, following a party’s request, ratify the award and, subject to appeals, it has the same legal standing as a judgment of the court.

Regarding nullification, Article 24 states that, upon request of a party, the court may nullify an arbitration award, entirely or in part; complete such an award; amend it; or return it to the arbitral tribunal for one of 10 specific grounds.129

Arbitration awards may be appealable for limited causes that are set out in the Arbitration Law under one of two procedures outlined in Articles 21A and 29B (as a result of the second amendment to the Arbitration Law in 2008). Article 21A sets forth a private appeal procedure against the award in front of another arbitral tribunal. The second route of appeal is a judicial appeal process by leave of the court subject to the following cumulative conditions:

  • a the arbitrator must, by the arbitration agreement, render an award in accordance with the law agreed upon by the parties; and
  • b the parties have agreed in the arbitration agreement that the award is subject to an appeal process with leave from the court if a fundamental error in the interpretation of the above-mentioned law has occurred in cases where this is likely to result in a miscarriage of justice.130
iii Mediation

The Courts Act and the Courts (Mediation) Regulations, 5753-1993131 form the statutory basis for mediation and regulate the mediator’s powers and the rules of the procedure.

Mandatory pre-mediation meeting

Chapter G1, relating to the process of mediation, was added to the Civil Law Procedure Regulations in 2008. According to the new amendment, in certain civil claims the parties must attend a pre-mediation procedure with a court-nominated mediator, called a MAHUT meeting, to attempt to reach a settlement outside court.

The meeting will take place after the parties have filed the statement of claim and the statement of defence.132 The mediator explains the principles of the MAHUT meeting, the mediation process and its advantages to the parties, and examines with the parties the main issues in their dispute and the possibility of settling these amicably before undertaking the long, expensive process of litigation.133

Chapter G1 applies only to civil monetary disputes over 75,000 shekels134 and, from 2012, in the magistrates’ courts in Tel Aviv, Jerusalem and Rishon Le’Tzion (the first courts chosen for the MAHUT pilot by the Ministry of Justice) and all magistrates’ courts within the centre district.135 As was planned by the court management department the pilot has been expanded to other magistrates’ courts all over the nation. After the pre-mediation meeting the parties must inform the court within 10 days if they are willing to enter into a full mediation process or would prefer to continue to litigate. The main purpose of this new amendment is to increase the use of mediation in civil claims and reduce the significant load on the courts. It is not clear yet how those proceedings will continue if the mandatory arbitration bill is enacted by the Knesset. According to the statistics, the process has produced results but is still in need of greater public recognition.

iv Other forms of alternative dispute resolution

Expert engineers or appraisers may be nominated by the parties (mainly in advance as part of a written agreement) in relation to, for example, real estate and zoning agreements. They are sometimes considered ‘quasi-arbitrators’. To determine if the Arbitration Law will apply to the procedures utilising such quasi-arbitrators, four elements must exist in the agreement:

  • a a dispute that must be settled;
  • b the arbitrator must have the authority to decide on monetary obligations;
  • c the arbitrator must have the authority to conduct a judicial character hearing; and
  • d the parties must be represented by counsel.136

In the event of the nomination of a peremptory appraiser,137 his or her opinion shall prevail over both parties’ positions and the opinions submitted by their respective appraisers. The procedure shall be conducted according to the Arbitration Law with the necessary changes.138

VII OUTLOOK AND CONCLUSIONS

The ongoing burden on the courts produced a controversial bill for mandatory arbitration; complicated by various proposals for enactment that the Ministry of Justice was unable to decide between, its enactment procedure was abandoned. Since then, there has been a much simpler bill, trying to force arbitration procedures on the community of litigants. Another effort seeks to add a court appeal option on arbitration awards. If the bill or the appeal suggestion were enacted, it might change the extent to which arbitration procedures are used in Israel, in both local and international commercial disputes, but not necessarily in very large monetary disputes, which will not be submitted to magistrates’ court from the beginning.

Since 2013 and mainly since 2014, the focus of the judiciary has shifted to efforts to improve the efficiency of the judicial system, through measures such as orders on continuity of deliberations, restraining orders on proceedings postponements, the pilot scheme of second shifts in courts and the use of case weights for the assessment of the judicial workload in Israel. Because of the dispersal of the Knesset in December 2014 and the elections held in March 2015, all relevant enactment procedures have been stopped for several months; in the meantime, therefore, the system has been able to focus on procedure.

However, the last-minute enactment of the Litigation Arrangement in Family Disputes Law, 5775-2014 and the expansion of the MAHUT mediation pilot within the magistrates’ courts give presence to mandatory mediation procedures, even if they are unique to the Israeli system.

With discussions on the proposal for the recodification of all laws pertaining to civil matters – including the new draft of the Civil Law Procedure Regulations, 5775-2014, which was published for public review towards the end of 2014 for discussion during 2015 – Israel’s legal system may be about to undergo major changes. Some of these will occur faster than others; however, the constant work being done to improve the system reflects the efforts of the legal community to renew itself and find ways to continue to improve legal services. In a similar situation to that at the end of 2012, towards the end of 2014 all major enactments were stopped because of the elections held in March 2015. None of the bills discussed above have been enacted as of December 2015, and if one of them is enacted during 2016, it will have a significant effect on the use of ADR methods in Israel.

Footnotes

1 Shraga Schreck is the founder of Schreck Law Offices. The information contained in this chapter is accurate as of February 2016.

2 If legislation may be interpreted in several ways, the court holds that laws should be interpreted in a way consistent with the principles expressed in the Declaration of Independence.

3 Civil Appeal 6821/93, P’D 49 (4) 221.

4 Legal Codex 978, 1980, p. 163.

5 This subsection includes some information from the website of the Israeli Ministry of Foreign Affairs: www.mfa.gov.il/MFA/Government/Branches+of+Government/Judicial/The+Judiciary-+The+Court+System.htm.

6 Legal Codex 1110, 1984, p. 78.

7 In 2012, senior registrars were for the first time nominated to the magistrates’ courts with judicial powers in financial claims of up to 50,000 shekels (except in relation to personal injury class actions and family matters). The new law of execution was modified as well, to create full separation between the judicial authority and the bailiff office that will include regular registrars.

8 See footnote 7, supra.

9 Courts Act (consolidated version), 5744-1984, Article 40. (See Section III.i, infra.) See discussion at Keshet M, Procedural Rights and Civil Litigation: Theory and Practice, 14th ed. 2004, IBA (pub.), pp. 215–249.

10 The Supreme Court also has special authority for matters such as those arising under the Antitrust Law or trademark-related issues.

11 Solitziano-Keinan, Reichman, Vigoda-Gadot, The workload of the judicial system: an analytic comparison between 17 countries – final report, The Center for Public Management and Policy, May 2007, as indicated in the explanatory preamble for the Private Bill for Arbitration Law (Amendment – Mandatory Arbitration in Financial Claim) 2011, submitted on 17 January 2011.

12 Information introduced at various conferences held by the Bar Association on arbitration procedures and according to the December 2014 annual report of the judicial system
(http://elyon1.court.gov.Il). During 2014, 744,630 cases were opened, 764,089 cases were closed and there were around 443,439 cases stayed within the judicial system (including some special courts). The clearance rate (number of closed cases divided by number of new cases that year) in 2014 was 102.6 per cent. The focus is on higher efficiency of the judicial system as will be further discussed in this chapter. Israel was ranked 13th out of 15 European countries in terms of the number of professional judges per 100,000 people (only 8.02) according to research by the Israeli Courts Research Division from 14 July 2011 by K Weinshall-Margel, I Galon and S Hirshenson. For more information see the European Commission for the Efficiency of Justice (CEPEJ), Scheme for Evaluating Judicial systems 2013 – Israel , at www.coe.int/t/dghl/cooperation/cepej/evaluation/2014/Israel_2014/pdf.

13 Proposal for the Arbitration Act – 1967, Proposed Rules 717, pp. 64, 70.

14 Civil Appeal 241/81 Shemen Industries Ltd v. Tavlin Society Ltd, P’D 29 (1) 561, 575 as brought by Ottolenghi S; Arbitration Law and Procedure, 4th ed., Tel Aviv 2005, Vol. 1, p. 4 (Ottolenghi ).

15 Shimony I, The Law of Arbitration: New Horizon Arbitration, Expanded second edition, Yavne, 2014, pp. 931–32 (Shimony) and the explanatory notes to the Arbitration Law (Amendment No. 2), Knesset Law Bills, 191, 25 December 2007, p. 78.

16 Attorney General Instruction No. 6.1205 from 12 October 2009. However, as introduced in the Annual Conference of the Bar Association Arbitration Institute in December 2012, there was no judicial case that was approved by the state (as a party) for arbitration proceedings instead of judicial proceedings.

17 For further discussion regarding the bill, see Schreck S, The International Arbitration Review (Israel chapter), 3rd ed., Carter J H (ed.), Law Business Research Ltd, London, 2012, pp. 257, 275–9. See updated discussion in Section II.i, infra.

18 See discussion in Schreck S, The International Arbitration Review (Israel chapter), 4th ed., Carter J H (ed.), Law Business Research Ltd, London, 2013, pp. 274, 292–298; and Schreck S and Schonker-Schreck D, The International Dispute Resolution Review (Israel chapter), 5th ed., Clark R (ed.), Law Business Research Ltd, London, 2013, pp. 410–412.

19 Such as orders on the continuity of deliberations, restraining orders on proceeding postponements, pilot schemes of second shifts in courts, and focusing on case weights for the assessment of the judicial workload in Israel; see further discussion below.

20 See discussion in Schreck S, The International Arbitration Review (Israel chapter), 5th ed., Carter J H (ed.), Law Business Research Ltd., London, 2014, pp. 307, 318–319.

21 The author was a member of the subcommittee on the draft versions during 2013.

22 A MAHUT meeting is a pre-mediation procedure with a court-nominated mediator (the abbreviation derives from the Hebrew words for ‘information’, ‘guidance’ and ‘coordination); see Section VI.iii, infra, for a discussion of MAHUT mediation in civil courts.

23 Legal Codex 5722, p. 120, but excluding action by the Hague Convention (Child Abduction Reversion), 5751-1991.

24 Such a request shall include only basic details to avoid as much as possible escalation of the dispute.

25 The author, as a member of the ADR forum of the Israel Bar Association, has participated in the discussions before the Knesset Constitution, Law and Justice Committee, which urgently needs to conclude the enactment procedures before the dispersal of the Knesset. It is expected that the first claims to be referred to the new procedure will be alimony and custody claims. According to the Israeli Courts Research Division, during 2013 about 17,000 such cases were opened in the family courts and about 6,000 in the rabinical courts. In January 2015, a postponement of the validation of the law was requested on account of a budget shortfall. A postponement until July 2016 was granted by the newly elected Knesset. The law will be in force for three years from its commencement.

26 The author is a member of the judicial team that formed the joint venture agreement as part of the legal effort to establish the JAC. See Rogers C A, Peace, One Dispute at a Time: The Jerusalem Arbitration Center, NY Dispute Resolution Lawyer (Spring 2012) Vol. 5, No. 1 (https://pennstatelaw.psu.edu/_file/news/ABA_Article_Rogers.pdf).

27 Weinshall-Margel K and Taraboulos I, Continuances of Hearings in the Israeli Court System, The Israeli Courts Research Division. See: http://elyon1.court.gov.il/heb/Research%20Division/Research%20Division%20-%20Eng.htm.

28 The state of Israel Judicial Authority Annual 2012 Annual Report under Free Information Act, 1998, p. 33. See: http://elyon1.court.gov.il/heb/haba/dochot/doc/hofesh_meida2012.pdf.

29 Aviv G, Galon I and Weinshall-Margel K, Pilot Assessment of Second Shift for Senior Registrars: Final Report, The Israeli Courts Research Division. See http://elyon1.court.gov.il/heb/Research%20Division/Dcc/05072015.pdf.

30 Weinshall-Margel K, Galon I and Taraboulos I, Case Weights for the Assessment of Judicial Workloads in Israel, The Israeli Courts Research Division. See: http://elyon1.court.gov.il/heb/Research%20Division/Research%20-%20Eng.htm, presented during a conference on empirical and experimental researches in law, held in the Hebrew University of Jerusalem in June 2013.

31 An event is defined as any stage of the proceeding that requires judicial time.

32 Legal Codex 1123, 1984, p. 198.

33 K.T. 4685, 1984, p. 2220.

34 Legal Codex 1739, 2000, p. 190.

35 Legal Codex 1537, 1995, p. 393.

36 K.T. 4685, 1984, p. 2321.

37 Reg. Nos. 102–104.

38 Reg. Nos. 105–111.

39 Reg. Nos. 112–122.

40 Reg. Nos. 140–150. Another phase, of a mandatory pre-mediation meeting, is being piloted in some courts (see Section VI.iii, infra).

41 The court has wide powers for the purposes of managing and determining a claim. Such powers include, inter alia, control over the issues on which evidence is permitted and the way in which evidence is to be put before the court. Nevertheless, there is limited scope for the parties to vary, by agreement, the directions made by the court, especially on the timetable element.

42 Reg. Nos. 151–153, 157–177.

43 Reg. No. 160.

44 Reg. Nos. 190–200.

45 According to the 2014 annual report of the judiciary, most cases in the Supreme Court take between 9.4 and 19.9 months (13.1 per cent of cases take three years or more), civil cases in the district courts take up to 20.1 months (about 4.7 per cent of cases take more than four years), and civil cases in magistrates’ courts take 14.2 months (about 6.3 per cent of cases take more then three years).

46 Reg. within Chapter 16-1.

47 Reg. within Chapter 16.

48 Reg. Nos. 365, 367.

49 Reg. No. 1 enables the court to grant any other remedy, suitable for the relevant circumstances, under Chapter 28 of the Reg.

50 Appearing with clean hands includes the duty for disclosure of all relevant facts; that the aim of the interlocutory relief is not to apply improper pressure on the other party; to act in good faith; to apply proper case management; and to act without delay. See discussion at Sammareli A, Interim Remedies, Vol. 1, Otzar Hamishpat (pub.), 15th Cumm. Supp., pp. 19–32 (Sammareli).

51 Reg. No. 362.

52 Reg. No. 364.

53 For example, in the case of a stay of exit order against a foreign citizen, which requires uncommon circumstances and special reasoning for approval (Reg. 384(a)). See discussion at Sammareli, Vol. 3, Otzar Hamishpat (pub.), 15th Cumm. Supp., pp. 507–529.

54 Legal Codex 2054, 2006, p. 264 (the New Law).

55 Regulation No. 29 provides as follows:

One represents all interested parties:

29 (a) Where the number of those interested in one cause of action is large, a portion of them – at the request of a plaintiff if they are plaintiffs, or at the request of a defendant if they are defendants, and with the permission of the Court or the Registrar – may represent in the cause of action all the interested persons. If the other interested persons were not aware of the filing of the cause of action, the Court or Registrar shall notify them of the filing by personal service or by public notice if personal service is deemed impractical by the Court or Registrar for any reason, as the Court or Registrar will order in each individual case.

(b) Anyone represented by the cause of action as provided by subregulation (a) may request the Court or Registrar to make him a party to the cause of action.

Reg. No. 21 of the Labour Court (Procedural Regulations)(1991) has an identical version.

56 Such as the amendment to the 1968 Securities Law (1988), which was superseded by the later comprehensive reform of the Israeli Corporate Law in 1999; the Law for the Prevention of Environmental Hazards (Civil Suits) (1992) (a unique law in that it adopted an opt-in mechanism for inclusion in a class); the amendment to the 1981 Consumer Protection Law (1994); and the Equal Pay for Equal Work Law (1996). See the discussion in Magen A and Segal P, The Globalization of Class Actions: National Report: Israel, http://globalclassactions.stanford.edu/sites/default/files/documents/Israel_National_Report.pdf, pp. 1, 5 and 6 (Magen & Segal ); and the discussion on the Supreme Court ruling in Civil Appeals 86/69, 79/69 Frankische Pelzindustrie Markle & Co v. O Rabinowitz, P’D 23 (1) 645, adopting a restrictive approach towards the use of Reg. No. 29 to pursue representative actions and the conflicting judicial interpretations that resulted for years afterwards.

57 P’D 57 (3) 220.

58 DN’E 5163/03 from 1.9.05.

59 Magen & Segal, p. 6.

60 Plato-Shinar R, Israel: The New Law on Class Actions, J.B.L. [2007] August issue, Sweet & Maxwell and contributors, pp. 527–8 (Plato-Shinar). Only if the claim is approved does the court characterise the class, following which the claim is heard as to its merits. The court judgment in the class action binds the defendants in respect of all members of the class.

61 Article 3(a), and the list in the second addition to the Law. Article 30 provides the procedure for the Minister of Justice to add additional causes.

62 Including the Law Prohibiting Discrimination in Products, Services, Access to Places of Entertainment and Public Buildings (2000); the Equal Employment Opportunities Law (1988) and the Equal Pay for Equal Work Law (1996); claims with a cause of action due to non-protection of equal rights for people with disabilities, including any cause of action related to accessibility demands under the Planning and Construction Law (1965); claims for causes of action in violation of labour laws, discrimination at work and harm to an employee (except where the employee and employer in question operate under a collective labour agreement (in unionised places of work)) – see the National Labour Court decision in 1210/10 Bibring v. El-Al Airways Ltd, PD’A 38, 115. See discussion on various causes in Magen & Segal, pp. 11–13 and in Plato-Shinar, pp. 529–30.

63 No claim may be filed against the state for damage caused by a third party the state did not properly supervise.

64 See Plato-Shinar, p. 530.

65 Published summary of the presentation by advocate Asaf Pink at the 2015 Fifth Annual Conference for Class Actions, available at www.knowit.org.il.

66 T”Z 3344-09-07 Amosi v. The Fenix (in favour of the plaintiff); T”Z (Hi)38449-04-11 Tal Stein v. Uniliver Israel Food Ltd (in favour of the defendant).

67 Civil Law Procedure Regulations, Regulation No. 472.

68 Permitted Civil Appeal 6810/97 Ben Shushan v. Ben Shushan, P’D 51 (5) 375 – family matters are like ‘capital offences law’ for a party without representation, and as such the party has the legal right to be represented.

69 Bagatz 1437/02 The Association for Civil Rights on Israel v. The Israel Bar, P’D 58 (2) 746.

70 Civil Law Procedure Regulations, Regulation No. 474.

71 Courts Law [consolidated version], 5744-1984, Legal Codex 1123, 1984, p. 198 – Article 63(a).

72 Courts Law [consolidated version], 5744-1984, Legal Codex 1123, 1984, p. 198 – Article 63(b).

73 C.A. 23/83 Yohimek v. Kedem, P’D 38 (4) 309.

74 Article 76(2) of the Legal Capacity and Guardianship Law, 5722-1962, Legal Codex 380, 1962, p. 120, in cases relating to minors or incapacitated persons; Articles 136 and 137 of the Inheritance Law, 5725-1965, Legal Codex 446, 1965, p. 63 in cases relating to the inheritance of a person who dies while domiciled in Israeli or when some of his or her assets are in Israel.

75 HM (Nazareth) 116/82 Folop v. Tzulin, P’M 1984 (1) 111. The question is where that person mainly lives.

76 C.A. 300/84 Abu Atiya v. Arabtisy, P’D 39 (1) 365, 384.

77 Goren U, Civil Procedure Issues, 10th edn., SYAGA Publishing Ltd, 2009, p. 48 (Goren) and Request for Civil Appeal 3144/03 Elbit Imaging v. Harefuah Serviços de Saude, P’D 58 (5) 414. In Civil Case (Tel Aviv) 2502-07 Alzar Ltd v. S Linak/A the court nullified service out of the jurisdiction because of a parallel arbitration proceeding in Denmark. The plaintiff wishing to oppose the arbitrator’s authority can approach the local court in the arbitration venue (Denmark in this case), especially when the arbitration process was completed after the arbitral tribunal (in Denmark in this case) decided that it had jurisdiction over the dispute and the disputants. Another possibility is to oppose the arbitration award enforcement action in the court where the action will be submitted. Since, in this case, the parties had a dispute resolution clause referring them to an arbitration institution in Denmark, an early decision permitting service out of the jurisdiction (before the decision of the Copenhagen arbitration institution regarding its authority) was nullified in accordance with Israeli case law and international courtesy rules towards the Danish legal system.

78 Legal Codex 244, 1958, p. 68.

79 C.A. (Jerusalem) 1095/96 E Taylor v. M Simchon, Pador 96 (1) 793.

80 Civil case (Tel Aviv) 1312/97 D Nadvitzky-Berkhein v. S Nadvitzky, P’D 54(1) 3.

81 Licht A, Civil Law Procedure, De Jure and De Facto, Part 3, Otzar Hamishpat (pub.), 2007, pp. 2477–8.

82 Reg. No. 358.

83 Legal Codex, 1686, 1998, p. 356 (Legal Aid Law).

84 K.T. 5973, 1999, p. 802 (Legal Aid Law Regulations).

85 Legal Aid between Jurisdictions Regulations (an Agreement with Austria related to Civil Procedure), 5743-1982, K.T. 4426, 1982, p. 212.

86 Article 2(a).

87 Article 4(a).

88 Article 5(a)(1).

89 Article 5(a)(2).

90 Article 5(a)(3).

91 Article 5(a)(6).

92 K.T. 6227, 2003, p. 518.

93 Bagatz 531/79 The Likud Party v. The Municipal Council of Petach Tikva, P’D 34 (2) 566.

94 Rule No. 14.

95 Bombach I, Conflict of Interests as an Ethical Offence, Pen & Ethics, Pamphlet No. 62.

96 Rule No. 14(a).

97 Civil Appeal 37/86 Levi v. Sherman, P’D 44 (4) 446.

98 Rule 14(c), with the same exceptions as mentioned above.

99 AL’A 6/88 Kobler v. The District Bar, P’D 45 (4) 329.

100 Based on information presented during the professional conference on the money laundering prohibition, organised by the Israel Bar. In addition, see the Israeli Ministry of Justice website: http://old.justice.gov.il/MOJEng/Halbanat+Hon/General+Information.htm.

101 Legal Codex 1753, 2000, p. 293.

102 Legal Codex 1973, 2005, p. 76.

103 Article 7 of the Prohibition on Money Laundering Law.

104 Government Bills, 611, 2011, p. 1408.

105 Legal Codex 5772, No. 2355, 14.5.2012, p. 366.

106 Prohibition on Money Laundering Law (Amendment No. 13), 5774-2014, Legal Codex 5774, No. 2468, 7.8.2014, p. 742. Amendment No. 13 came into force in September 2015.

107 Prohibition on Money Laundering (Obligations of Identification, Reporting and Keeping of Records of Currency Services Providers to prevent money laundering and terrorism financing) Order, 5774-2014, Regulations Codex 5774, No. 7388, 30.6.2014, p. 1364.

108 Prohibition on Money Laundering (Obligations of Identification and Keeping of Records of Business Services Providers to prevent money laundering and terrorism financing) Order, 5774-2014, Regulations Codex 5775, No. 7447, 2.12.2014, p. 310 (the Order).

109 Bar rules (professional ethics) (amendment), 5775-2015, Regulations Codex 5775, No. 7486, p. 814.

110 Such as buying or selling of real estate, establishment of corporations, financial management and other similar issues.

111 Reg. No. 19 of the Civil Law Procedure Regulations.

112 Request for Civil Appeal 5381/91 Hugla Marketing (1982) Ltd v. M Ariel, P’D 46 (3) 378.

113 Request for Civil Appeal 3585/01 Paz Oil Company Ltd v. Bitton et al (not published), Request for Civil Appeal 3638/03 Bitom Petrochemical Industries v. Kemiphran – Israel Ltd, P’D 58 (1) 97.

114 B’S 298/86 Tzitrin v. The Discipline Court, P’D 41 (2) 337.

115 Civil Appeal 95/68 Amamit v. British Insurance, P’D 22 (2) 689.

116 Permitted Civil Appeal 4256/98 Rosh Kash v. Rochvitz, P’D 49 (5) 793.

117 Permitted Appeal 241/84 Atalla v. Universal Pictures, P’D 38 (2) 643.

118 Request for Civil Appeal 6715/05 Mahsanei Aruva Ltd v. Eizenberg, P’D 60 (3) 264.

119 Civil Appeal 2271/90 Jumbo building and commercial company (Karnei Shomron) Ltd v. Mordechai et al, P’D 46 (3) 793.

120 Article 79A(a). The court can always suggests a compromise to the parties, or validate a settlement agreed upon by the parties, upon their request (Article 79A(b)).

121 Article 79B of the Courts Law.

122 Article 79C of the Courts Law.

123 Schreck S, op. cit. 20, p. 307.

124 Legal Codex 535, 1968, p. 184 (the Arbitration Law).

125 Article 5 of the Arbitration Law.

126 Request for Civil Appeal 340/94 Parcel 41 Company v. Basan, P’D 50 (1) 636.

127 When the parties will agree to submit a current and specific dispute to arbitration, for example, during claim hearings, and will stay litigation proceedings by mutual consent. Request for Civil Appeal 6435/05 Jano and 23 others v. Uro Israel (I.S.) Ltd (Nevo).

128 Article 3 of the Arbitration Law.

129 Request for Civil Appeal 1937/03 Shukrun v. Malin (Nevo, 2 April 2003).

130 The court activates its ‘supervision’ jurisdiction over its ‘appellate’ jurisdiction; Shimony, pp. 642–661.

131 K.T. 5539, 1993, p. 1042.

132 Reg. No. 99A and 99B of the Civil Law Procedure Regulations.

133 Reg. No. 99H of the Civil Law Procedure Regulations.

134 Reg. No. 99J of the Civil Law Procedure Regulations.

135 This procedure started as a pilot constructed by the Israeli court management department within the Ministry of Justice as a result of the work of the J Rubinstein Committee, which was appointed to suggest ways to further implement the use of mediation within the judicial system as a compromise between mandatory mediation and non-mandatory mediation approaches. According to the statistics reported in the March 2013 Israel Bar Conference on ADR, approximately 40.5 per cent of cases starting the procedure continued the mediation process, and approximately 51.5 per cent of those resulted in a mediated agreement. 86.4 per cent of the parties reported that the MAHUT programme is considered as a service improvement by the legal system.

136 Civil Appeal 241/81 Shemen Industries Ltd v. Tavlin Society Ltd, P’D 39 (1) 561, 565–569; see the discussion in Ottolenghi, pp. 533–44, footnote 13.

137 In another procedure according to the Planning and Building Law, 5725-1965, third addendum, Legal Codex 467, 1965, p. 302, and see Ottolenghi, pp. 544–6, footnote 13.

138 For further discussion, see Shimony I, Quasi-Judicial Bodies Appeals Committee Regarding Compensations and Improvement Levy, Itro Institution for Arbitration, 2016.