Sponsored briefing: Israel: Litigation and dispute resolution 2021

Tadmor Levy & Co’s Yechiel Kasher and Sivan Wulkan-Avisar answer questions on how the litigation and disputes market functions in Israel

What type of legal system does your jurisdiction have? Are there any rules that govern civil procedure in your jurisdiction?

Israel has an independent, adversarial legal system, modelled on the Common Law tradition.

How is the civil court system in your jurisdiction structured? What are the various levels of appeal and are there any specialist courts?

Israel’s court system is divided into three tiers: Magistrates’ Courts, District Courts and the Supreme Court. The former are trial courts and appeals over Magistrate Court decisions are submitted to District Courts. The Supreme Court is an appellate court (also functioning as the High Court of Justice). There are no juries in Israel. Israel also has unique tribunals established by law, inter alia, the Antitrust Tribunal, military tribunals, religious courts, family courts, labour courts and administrative courts.

What are the main stages in civil proceedings in your jurisdiction? What is their underlying timeframe?

A civil proceeding is initiated by the filing of a statement of claim, following which the defendant has the right to file a statement of defense within 60 days, and to which the plaintiff has the right to file a rejoinder within 30 days.

Are there any particular rules about funding litigation in your jurisdiction? Are contingency fee/conditional fee arrangements permissible?

According to the Bar Association Rules (Professional Ethics), 5746-1986, lawyers are forbidden from providing loans or other benefits to their clients (ie, to fund the litigation). Contingency fees are allowed under said rules.

Are there any constraints to assigning a claim or cause of action in your jurisdiction? Is it permissible for a non-party to litigation proceedings to finance those proceedings?

Per the Tort Ordinance: assigning a claim is forbidden unless it has been explicitly allowed (said rule refers only to tort claims). The Supreme Court has established various exceptions to this rule, the most significant being assigning a tort claim on the grounds of contractual context. There is no legal limitation over a non-lawyer litigation funding, although this practice is uncommon.

Is there any particular formality with which you must comply before you initiate proceedings?

Generally, there is no formality with which parties must comply prior to initiating proceedings. However, there are exceptional procedures with unique requirements, such as remedies exhaustion when required or a warning letter prior to the submission of a class action.

How are civil proceedings commenced (issued and served) in your jurisdiction? What various means of service are there? What is the deemed date of service? How is service effected outside your jurisdiction? Is there a preferred method of service of foreign proceedings in your jurisdiction?

Proceedings begin with the serving of the statement of claim and a summons to the defendant. Regulation 162 states that the first pleading can be served either by post or in person. Service outside jurisdiction requires the plaintiff to apply to the Court to obtain a permit for service of process outside the jurisdiction. Regulation 166 elaborates on the circumstances under which this type of permit is granted.

Is there any particular case allocation system before the civil courts in your jurisdiction? How are cases allocated?

There are two types of Court jurisdiction: material and local. Both bind the litigants. There are six judicial regions, each with a single District Court and several Magistrate Courts. Magistrate Courts within each District have parallel authority. If no District has jurisdiction, the case would be allocated to the Jerusalem District Courts. The geographical factor (eg, a land-dispute involving a real-state in Tel Aviv would be brought to the Tel Aviv Court) would play a role when allocating the case between districts, based on specific rules. Materially, claims exceeding ILS 2.5m are brought directly to a District Court, while claims below ILS 2.5m are brought to the first tier, Magistrate Courts). For other matters, cases are heard in accordance with the matter in question, (eg family matters are brought to family court, an antitrust issue with the Antitrust Tribunal and so on.

Do the courts in your jurisdiction have any particular case management powers? What interim applications can the parties make? What are the cost consequences?

Courts have broad discretion regarding how proceedings will be managed. The president of each Court appoints the presiding judge who will hear the case. In cases where requests have been discussed as part of the main proceeding, the Court would impose costs regarding these requests at the final verdict.

Do the courts in your jurisdiction have the power to strike out part of a statement of case or dismiss a case entirely? If so, at what stage and in what circumstances?

Courts have the power to strike out a statement of claim (either with or without res judicata) or part of it, at any stage of the proceeding due to lack of cause of action, inaction, vexatious statement of claim, consistent incompliance with the Regulations or court order, res judicata, limitation or for any other reason at the court’s discretion. The Court also has general discretion to strike out pleadings, either as a whole or specific parts, due to abuse of process.

What are the basic rules of disclosure in civil proceedings in your jurisdiction? Is it possible to obtain disclosure pre-action? Are there any classes of documents that do not require disclosure? Are there any special rules concerning the disclosure of electronic documents or acceptable practices for conducting e-disclosure, such as predictive coding?

Civil proceedings’ disclosure consists of document discovery and production (with their production) and questionnaire. Following the filing of the final pleading, the litigants are required to replace affidavits regarding the list of documents relating to the disputed matters, which are or were in the possession or control of the litigant and which the litigant located after inquiry and demand. If the document is no longer in the litigant’s possession or control, it should also specifically detail the circumstances. The document review procedures will be completed no later than 30 days before the first preliminary hearing. There are no special rules regarding disclosure of electronic documents.

What are the rules on privilege in civil proceedings in your jurisdiction?

Absolute privilege: concerns situations in which the Court has no discretion as to whether to maintain privilege and refers mainly to two situations: client-attorney and clergy–penitent privileges. Partial privilege: concerns situations in which the Court was granted the discretion to remove the privilege (eg, physician–patient privilege, journalists). The removal of privilege will be done while balancing the interests at stake – exposing the truth and the reasons that justified privilege in the first place.

What is the court’s role in disclosure in civil proceedings in your jurisdiction?

By default, the parties exchange documents without the Court’s intervention. However, a party that seeks the disclosure of a specific document should submit an adequate request to the Court. The legislature specifically recognises the importance of adequate disclosure and review procedures, and that it constitutes a basic condition for an adequate and fair judicial procedure. If the court determines that a party has not properly fulfilled its obligation under the New Regulations, the Court can issue orders requiring disclosure or response to questionnaires, as well as impose expenses and in special cases, even have the pleading dismissed.

What are the basic rules of evidence in your jurisdiction?

As Israel has an adversarial legal system, main testimonies are heard verbally or by an Affidavit of evidence in chief, and the opposing party has the right to cross-examination.

What types of evidence are admissible, and which ones are not? What about expert evidence in particular?

As a rule, any relevant evidence is admissible. Nevertheless, there are several exceptions to this rule, such as hearsay evidence and privileged documents. Expert medical opinions shall be annexed to the statement of claims. A non-medical expert opinion shall be submitted to the Court no later than 90 days prior to the date of the evidential hearing (or at a date determined by the Court).

Are there any particular rules regarding instructing expert witnesses, preparing expert reports and giving expert evidence in court? Are there any particular rules regarding concurrent expert evidence? Does the expert owe his/her duties to the client or to the court?

Expert opinions may only be submitted in writing. Each party is entitled to submit an expert opinion on his behalf. There is no limitation to the overall involvement of the commissioning lawyer in the preparation of the opinion. Still, the absence of such a prohibition does not allow the submission of an opinion that is, in fact, of the commissioning attorney who commissioned the lawyer – and the underlying issue of the expertise which is the subject of the opinion remains with the expert. The court has the authority to appoint an expert on its behalf to assist in questions of expertise. It seems likely that this practice will become more commonplace under the New Regulations. There are some legal fields in which appointing an expert on behalf of the Court is a somewhat perfunctory step with substantial influence on the proceeding. Expert witnesses are warned of the legal implications of misleading the Court, it can reasonably be assumed that they owe their duties to the Court itself, rather than the summoning party.

What powers do your local courts have to make rulings on damages/interests/costs of the litigation?

The default is to impose costs on the winning party. In practice, costs are estimated by the Court and the sum ruled is generally less than the real actual expenses. The Court has the authority to add a monetary interest with linkage differences to the judgment. Non-adjudication of interest and linkage differences is an exception. Generally, it is impossible to claim damages for the mere filing of a claim or the conduct of a defence (except for damage caused by a temporary interim order, if the claim was eventually rejected).

How can a domestic/foreign judgment be recognised and enforced?

A foreign, civil, and operative judgment can be enforced in Israel. The enforcement is via the legal procedure, and the conditions set in the Enforcement Law. Recognition of foreign judgments – ie, the adoption of a legal determination not by way of enforcement (for instance for the purposes of estoppel by record). It is secondary to the other proceedings and subject to certain conditions.