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Overview: FAQs – Arbitration in Israel

Published on : 14 Mar 2021

FAQs – Arbitration in Israel

What is the state of law and Arbitration in Israel?

Israel has a reputation for being a litigious nation. According to study, Israel has the highest number of lawsuits lodged per capita in the country. In 2004, Israel was ranked third among seventeen developing countries in terms of judicial burden. The mixture of a large number of lawsuits filed and an insufficient number of judges resulted in an overburdened court system plagued with delays in verdict service. A Committee on the Structure and Jurisdiction of the Judiciary (hereinafter the "Landau Committee") reported in 1980 that the caseload of the courts is so heavy that there is fear that the justice system may be unable to carry out its duties and represent the public unless a swift remedy is found. Academic scholars and judges have expressed similar fears, which have persisted to this day. Along with other approaches, such as expanding the number of judges, simplifying civil processes, and implementing modern fast-track procedures for some categories of litigation, ADR is one effort to address this obstacle. In 1992, an amendment to the Courts Law allowed judges to use three ADR methods: adjudicate a case with the parties' consent by way of compromise, that is, issue a summary judgment without conducting a full trial and explaining the reasons for the decision; refer a case to; and refer a case to arbitration (at the time using the terms "conciliation" or "pishur" in the legal system).

In particular, under the Arbitration Act 1968, arbitration was still a constitutionally accepted way of settling conflicts at the time, causing one arbitration specialist to question the necessity for the change in that regard. Judges favor the judicial compromise procedure, but disputants and attorneys are wary of it because it is challenging to foresee if the judge would rule in a situation, there are no grounds for the ruling, and it is almost impossible to challenge the decision. Due to the difficulties of judicially reviewing arbitrators' rulings under Israeli arbitration rule, arbitration has not attracted many people. The state avoided utilizing arbitration in cases of which it was a defendant due to the restricted reviewability of arbitration awards, and a 2003 Attorney-General Directive stated that “as a practice, the state should not settle its conflicts in arbitration but through the courts.” The statute was changed in 2008 to allow parties to settle on an appellate mechanism for arbitrators' rulings, and the Attorney-General updated its prior stance on arbitration in 2009, issuing a new directive that stated that “the state sees in arbitration, alongside other conflict settlement procedures, a valid and worthy option, in appropriate situations, for the resolution of state disputes.” While new private Arbitration Institutions have sprung up, providing arbitration facilities by former judges and seasoned attorneys, the amount of disputes that have gone to arbitration has remained somewhat unchanged. A draft parliamentary bill in 2011 that would have made binding arbitration part of the judicial framework failed to pass. Mediation has gained greater assistance from the government and the courts than consensus and arbitration. “The Settlement of Labor Disputes Law of 1957 called for a form of obligatory resolution in all labor disputes by special labor relations officers at the Ministry of Labor,” according to a report from the late 1950s. However, in terms of settling labour conflicts, this procedure was ineffective. In 1992, an update to the Courts Law allowed judges to refer disputants to mediation. The Courts Mediation Regulations, provided by the Minister of Justice in 1993, laid out the protocol to be practiced by the court in staying pending cases assigned to mediation, spelled out the responsibilities of mediators in conducting mediation in civil and labour courts, and suggested a model mediation arrangement. Since Israel has yet to pass a general legislation on mediation, mediation that is not appealed to a judge is essentially uncontrolled. In Israel, there is no need for mediators to possess a degree in order to conduct mediation. However, in 1998, the Minister of Justice named a Consulting Committee on Mediation in the Courts (hereinafter the "Gadot Committee") to make suggestions on the skills and experience required by court-connected mediators. The Gadot Committee released recommendations on the basic credentials of court-connected mediators, which have since become the accepted practice in Israel for mediator preparation.

 The Gadot Committee noted that mediation was seldom used in Israel, and that the procedure was largely unfamiliar to the general population and legal profession. The Ministry of Justice established a National Center for Mediation and Dispute Resolution in that year in order to focus resources on spreading mediation. A year later, the Attorney General released a directive urging the resolution of government-related conflicts by mediation. After the late 1990s, courts have been directing civil litigation through mediation, either by in-judicial mediators, who are court employees, or by private-sector mediators who have completed court-approved training courses. Furthermore, court proceedings have been submitted to judicial mediation meetings, which are held by judges who are not assigned to consider the prosecution at trial. The courts developed Case Routing Units in 2001, which were responsible for directing cases to mediation, and the Director of the Courts Administration released a national program for the implementation of the Case Routing Units in 2003, which acted as the country's primary source of mediation cases. However, in fact, the amount of disputants who chose to engage in mediation was limited. The implementation of a soft version of obligatory mediation as a pilot scheme in a variety of civil courts was proposed by the Commission to Explore Ways to Increase the Use of Mediation in the Courts (hereinafter the "Rubinstein Committee") in 2006. Disputants in civil cases were expected to undergo a free, obligatory pre-mediation session with a mediator, through which they collected mediation material and assessed the suitability of their argument for mediation, according to the scheme. The parties could opt for mediation or arbitration at the conclusion of this session. The protocol was dubbed "Information Exchange, Acquaintance, and Coordination," or MAHUT (the Hebrew acronym), and it was included in the Civil Procedure Regulations. After 2016, an expanded edition of MAHUT has included four sessions with a social worker from the Family Court Assistance Units to introduce divorcing parties to consensual approaches to resolving their family conflicts. ADR campaigns outside of the courtroom started in the early 2000s.

The National Center for Mediation and Dispute Resolution aided and guided the creation of community mediation services. In 2001, two group mediation centres were operational, and ten more were in the planning stages. There are now over forty of them. Furthermore, under the auspices of the Ministry of Social Affairs and Social Welfare, Citizens' Advisory Services Units ("Shil" in Hebrew) are now providing free mediation services in thousands of communities around the world. Thousands of citizens have been drawn to the modern area and emerging career of ADR in the private sector. About the fact that negotiation has existed in the dark, more than a thousand persons have received basic mediation training in compliance with the Gadot Committee's mediator training guidelines, which were established in 2001. In addition, in 2001, approximately forty private mediation centers were also providing public mediator preparation and mediation facilities. However, the increase in the number of mediators, which now stands at over 30,000, has not resulted in a sustainable mediation practice. Since the amount of mediators who currently accept cases from the courts is limited, because the general population does not want to mediate before trial, the bulk of the current trainees have not matured into licensed mediators who perform mediations for a charge or even pro bono.

What was the primary motive of introducing ADR in the Israeli Legal System? Explain?

Justice as Efficiency:

The urgent need to deal with the problems of an overburdened justice system was clearly a driving force behind the implementation of ADR into the Israeli legal system. “It is suggested to include settlement, consultation, and arbitration formal status of law, both to allow disputants to select additional forms to resolve their conflict and thereby accelerate resolution of the dispute and relieve the overload of litigation in the courts,” according to the 1992 Proposal to Change the Courts Statute." “The key benefit of consensus on the conclusion of disagreement in this process is simplicity and speed,” according to the settlement protocol, “with decision being delivered in most situations on the basis of the disputants' arguments alone, without bringing additional evidence.” Justice Meir Shamgar, the former President of the Israeli Supreme Court, wrote about the object of arbitration: "is to help disputants to resolve conflicts more quickly, for example by simplifying processes, and to reduce the pressure of litigation in the courts. The legislature has introduced a realistic, solution-oriented concept of mediation that aligns with an efficiency view of justice. In reality, though, the revised law did not achieve the productivity objective by making a dramatic improvement in the usage of mediation in the courts until the late 1990s. The Committee on the Structure of Ordinary Courts in Israel (the Or Committee) reaffirmed the reliability logic of ADR in 1997, emphasizing the role of out-of-court ADR procedures, such as consultation, in reducing the courts' caseload and delays. The 1999 Attorney- General's Directive on the Resolution of Disputes of which the State is a Party by Way of Mediation (hereinafter the "Attorney-General's Directive on Mediation") stated that mediation is normally easier and more effective than court proceedings. Furthermore, the intent of the 2001 national initiative for the Case Routing Units in the court system was to provide "swift, reliable, and meaningful justice to the individual" by enhancing "support to all who come to court" and "quickly end dealing with filed cases." Furthermore, the Rubinstein Committee, which proposed the obligatory premeditation session (MAHUT) in civil procedures, acknowledged the effectiveness and expense benefits of using mediation more often, particularly for the legal system and for disputants. With these assumptions in mind, it's no surprise that legal dialogue dominates mediation processes in court-referred disputes in Israel, focusing on the disputants' legal rights and obligations, and normalizing the mediator's evaluative function. While ADR scholars have warned about the impact of such trends on parties' ability to exercise free choice, mediator impartiality, and the future of mediation as a true alternative to the adversary legal system, the expectation of fast settlements and the equating of success with mediated agreement maintain the dominance of the justice-as-efficiency perspective of ADR. D. Justice in Context of Efficiency Well before the Courts Law Amendment of 1992, which formally incorporated ADR into the legal system for efficiency purposes, some observers argued that ADR, especially mediation, could provide disputants with a better (rather than more efficient) way of resolving legal disputes. Mediation's versatility, mediation's commitment to effective coordination and productive bargaining, and mediation's capacity for reaching innovative compromises built by the parties are among the benefits of mediation on the adversarial legal environment, according to one of the earliest Israeli law review publications on mediation. The capacity of mediation to contribute to social progress, foster mutual respect and understanding among individuals, enhance consent-based, individual decision-making without resorting to the state's coercive forces, and boost individuals' well-being can be found in the writings of numerous Israeli academics who related, among other things, to the potential of mediation to contribute to social change, promote mutual respect and understanding among individuals, enhance consent-based, individual decision-making without resorting to the state's coercive powers, and improve individuals Inside the judicial framework, the justice-beyond-efficiency stance earned official endorsement. The Attorney- General's Directive on Mediation, for example, recognized that, in addition to cost and time savings, other potential benefits of using mediation in disputes in which the state is a party include high quality solutions tailored to the parties' needs, the maintenance of relationships and future cooperation between parties, and increased public confidence in the state and its institutions. More specifically, in 2001, Justice Aharon Barak, the Chief Justice of the Supreme Court, argued that the object of mediation is to reform the litigious atmosphere of Israeli society, make it a safer place to live in, and to have a way of resolving disputes by negotiation rather than through the use of the courts' force. He mentioned a "mediation revolution" in Israel, which he said might lead to a shift in public discourse. Several months later, the Minister of Justice referred to mediation as a positive social phenomenon that inspires hope, claiming that it signals a shift away from a culture of argument, harshness, and resistance to the possibility of compromise and change of opinions that pervades everywhere - on the roads, in shopping malls, and in government institutions - to one based on dialogue. Out-of-court ADR groups and advocates vigorously supported this thicker view of ADR justice, which was championed by top legal authorities (such as the Attorney General, the Chief Justice, and the Minister of Justice). The Israeli Mediators' Association was established with the aims of assimilating mediation's language into Israeli culture and schooling, as well as introducing mediation to the general public. The value of debate, requires conversation, and consensus-building regarding competitive negotiating practices, roles discourse, and intimidation has been emphasized in the curriculum of basic mediator training courses. Academic programmes have since been developed to investigate the complex field of alternative dispute resolution beyond its ability to relieve the pressure on the courts. More broadly, we see ADR philosophy, language, and goals being introduced to community issues (e.g., living together with neighbors, minorities, and immigrants), education (e.g., bringing ADR into nurseries and schools), and environmental issues outside of the legal system (e.g., dealing with environmental conflicts and giving individuals voice in public decision-making processes).

Some examples of justice that goes beyond productivity the following is an ADR discussion.

  1. Mediation in the Community

On the basis of expertise gained in group mediation services in the United States and England, the Israeli National Center for Mediation and Conflict Resolution created a community mediation and conflict resolution program for Israel in 2000. 80 The program imagined mediation as a cooperative forum led by group neutrals who aided representatives of the community in resolving conflicts and maintaining relationships. It was felt that such a mechanism would improve group communication, encourage community representatives by allowing them to settle their conflicts on their own, increase knowledge of the possibilities of settling disputes by dialogue, and avoid disputes. Hundreds of informal mediation and dialogue centres sprung up across Israel with the help of the National Center for Mediation and Conflict Resolution, mostly by collaboration between local officials and voluntary mediators from the neighborhood. Acting in collaboration with neighborhood police, municipal councils, schools, and youth groups, the centers will then seek to offer mediation resources to their neighborhoods in a variety of conflicts. Mediation is defined as an ability to accomplish justice beyond-efficiency objectives for Israeli society in ADR dialogue in the form of community problems, which can be found in legal work/discourse, social work, management, and mediation literature. It implies that group mediation has the potential to effect genuine societal progress and facilitate intercultural discourse. Scholars argue that mediation can help immigrants integrate into Israeli society and overcome integration barriers; that it can help handicapped employees in a special-needs factory have a voice and negotiate with non-handicapped management; and that mediation can help improve the relationship between the police and the public through including mediation in citizen complaints against cops.

  1.  Formal education

Another example of a justice-beyond-efficiency debate of ADR priorities is ADR dialogue in the field of schooling. In light of the deep rafts and fundamental disagreements within Israeli society on political issues (e.g., between the left and right on settlement issues or between Israeli Jews and Israeli Arabs on issues of fidelity to the state and equality), on the place of religion in public and private life, and on the plight of Palestinians, mediation and collaborative dialogue in the educational system are seen as critical. Mediation and related services focused on the ideals of negotiation, collaboration, and consent are portrayed by Israeli academics as instruments for teaching a new generation of young people to be more accepting of different viewpoints and beliefs, more respectful of others, less litigious and violent, and more collaborative in resolving conflicts. In order to spread the vocabulary and values of partnership and mediation, as well as to adopt consensual communication and conflict resolution to replace verbal and physical abuse and bullying, a significant range of mediation services have been implemented in nurseries, primary schools, and higher education institutions. Many schools adopted mediation programs in order to facilitate conversations in the aftermath of the political murder of Prime Minister Itzhak Rabin by a right-wing extremist. Hundreds of schools used mediation in any way to accomplish justice-beyond-efficiency aims like reducing crime, strengthening leadership skills, and teaching young learners how to resolve disputes peacefully. Furthermore, researchers emphasize the importance of integrating collaborative communication and collaboration concepts into interactions between educators and parents.

  1. The natural world ADR in general, and mediation in particular, is used in Israeli environmental discourse as a tool that can lead to a less cumbersome and informal settlement of environmental problems, as well as the pursuit of environmental justice. In this context, justice entails collective participation in policies that impact their lives, resource sharing across various sectors of the community, and environmental conservation for the greater good and future generations, all while addressing the current needs of the populace for accommodation, jobs, shopping, and leisure. For example, a quarry near a neighborhood was the focus of a multi-party environmental mediation that discussed both the business's and employees' economic concerns as well as the community's desires in clean air and quiet. Furthermore, environmental conflicts, especially in Israel, often have a political component, making them highly inflammatory and complicated. Several efforts are attempting to bring mediation and collaborative discourse into these highly sensitive regional, environmental, cultural, and political disputes for reasons other than effectiveness.
  2. Complaints against Government Entities

The State Comptroller of Israel, who frequently serves as the Ombudsman, oversees lawsuits against government ministries, city governments, government corporations, and other public entities. Anyone may file a lawsuit with the Office of the Ombudsman whether she has been personally harmed by a government agency and the action was unconstitutional, contradictory to administrative laws, or grossly unfair or inflexible. The Office has the authority to prosecute the case in whatever manner it deems appropriate, and it may request documentation and records from any individual or entity that may be relevant to the investigation. The versatility of the review protocol allows the Ombudsman's office to incorporate consultation techniques and sessions into the process. Since 2008, the Ombudsman's office has carried out mediations in some complaints against public authorities. Mediation takes place at the Ombudsman's offices, where the mediators are Ombudsman's office staff who have been certified as mediators. In a diverse variety of grievances, the mediators use constructive (problem-solving), transformative, and storytelling mediation styles. Improvement of partnerships between the stakeholders (thereby minimizing the amount of potential complaints), representation of people, and improved coordination are several of the intended advantages of introducing mediation to the Ombudsman's toolbox, which go beyond productivity targets.

What are the concerns about ADR and the development of mediation in Israel?

Concerns about Justice and ADR the development of mediation in Israel has been accompanied by lively discourse over the dangers and risks associated with the use of ADR mechanisms and the implications of ADR use on justice issues. This section explores some of these concerns and their relation to justice.

  1. The Qualifications of Mediators

Mediation was hardly known of in Israel before 1992 when the Israeli legislature officially introduced mediation into the law.  In 1993, the Minister of Justice authorized the courts through Regulations to refer pending cases to mediation, but left open the question of the qualifications required of persons serving as mediators. In 1996, new Regulations on Mediator Appointment authorized the Director of the Courts Administration to compile a list of mediators to which the courts may refer cases for mediation, and provided that the Director should appoint an Advisory Committee to the Minister of Justice to advise the Minister on the qualifications and skills to be required of court-connected mediators. The Committee, headed by Justice Gadot, published its report in 1998.The Gadot Committee treated the qualifications of mediators as a matter of justice beyond efficiency, though it did not use that term explicitly. The Committee felt that setting minimum qualifications for mediators was necessary in order to protect both consumers (i.e., mediation parties) and the process of mediation, which had been making its first steps in Israel. The Committee rejected the view, strongly advocated by the Israeli Bar, that lawyer-mediators need not undergo special mediation training. Instead, they determined that all mediators in court-connected mediation programs had to undertake training courses, approved by the Committee, whose content included both theoretical and practical aspects of mediation. Following the Gadot Committee report, the Mediator Appointment Regulations were amended to provide that a mediator on the courts' list must have an academic degree, working experience of at least five years in his professional field, and must take a forty-hour basic mediation training course or sixty-hour family mediation training course. In another report, the Gadot Committee delved into the content of these courses, and the Reports’ recommendations became the field's standard for mediators’ training in Israel, both for court-connected and out-of-court mediators. The list of mediators attracted much justice-beyond-efficiency-related criticism. On the one hand, a competence issue became apparent: the list included thousands of names of persons who were eligible to be included on the list simply because they completed forty to sixty-hour training courses but in fact had no actual mediation experience and did not see mediation as a vocation. On the other hand, the criticism raised a just distribution issue: many persons on the list who wished to pursue a career in mediation found that the courts largely disregarded the list because judges had no meaningful way of choosing between the names on the list and therefore referred cases to a small group of mediators known to them. The Rubinstein Committee (2006), which reviewed the ways to increase the use of mediation in the courts, noted that one of the reasons for the slow development of mediation in Israel was the dissatisfaction of disputants and lawyers over the professional competence of the mediators and negative experience of participants in mediation. The Rubinstein Committee sought to change that by the creation of a relatively small roster of professional and experienced mediators eligible to mediate court-referred cases. These mediators were to be selected through a public bid, were to participate in continuing education activities, and were to be subject to an evaluation program. The plan succeeded to some extent but raised new justice-related issues. The new legal regime irritated many mediators who felt that the state unduly restricted their freedom of occupation and their prospects to practice mediation for a living. Legal actions before the Israeli High Court of Justice put pressure on the government, and in 2008, the Regulations on the courts' list of mediators were cancelled. Since then, there have been no official criteria for minimum qualifications required of mediators; though in practice, the Gadot Committee standards for mediators’ qualifications and training remained the standard of the field. This year, the new Courts Regulations (Mediators’ List) 2017 entered into force, creating stringent criteria for court-connected mediators, including participation in a supervised practicum, demonstration of evidence of actual experience in mediation, and successful completion of a professional evaluation process. The debate in Israel over the qualifications of mediators and access to the emerging new profession is likely to continue.

  1. Abuse of Process, Power Issues, and Ethics

The reception of mediation in the Israeli legal system was met with concerns that the process might harm some of its users. For example, Israeli commentators, writing on divorce mediation, recognized the current disparities of power between men and women and noted the dangers (referred to in ADR literature) that mediation could enhance men's power and produce inferior settlement terms for women. These concerns are particularly relevant and disturbing in Israel because divorce law in Israel is based on religious norms that treat women and men unequally and enhance men’s power. Looking at discrimination cases at the workplace, other commentators pointed to the hegemony of evaluative mediation in Israel and argued that Israeli policy makers should be aware that evaluative mediation is not suitable to some cases, such as discrimination disputes, and that allowing these cases to be mediated exposes disempowered parties to an increased risk of abuse. Making a more general claim, another commentator pointed to the gap between the mediation myths; that mediation is a voluntary, consent based process, and the reality of documented mediator practices that undermine party self-determination, manipulate information, and fail to prevent process abuse. Yet another commentator, writing on the importance of informed consent in mediation (which is closely connected to fairness considerations) felt that Israeli mediation law was not clear enough with regard to mediators’ obligations to obtain the parties’ informed consent regarding the risks of mediation, the use of separate meetings, the identity of the mediator, the style of mediation, and the mediation outcome. Commentators have noted that Israeli mediators have little guidance on the ethics of mediation practice. Some guidance can be found in the Court (Mediation) Regulations that refer to fundamental duties of court connected mediators, but the language of the regulations is abstract and laconic, leaving much to the interpretation and discretion of the mediator. Moreover, the Regulations formally apply to court-connected mediations, leaving private mediations largely unregulated. Raising justice-beyond-efficiency concerns relating to the fairness of mediation procedures, commentators warned that the Regulations do not provide for a robust obligation of mediators to respect the parties’ right to self-determination; leave too much discretion to the mediator in deciding whether she is in a conflict of interests; fail to explain the meaning of impartiality in the context of conducting a mediation, thereby weakening the duty of impartiality; and fail to adequately protect the confidentiality of mediation communications. The absence of clear ethical guidelines and the high level of mediator discretion led commentators to question the appreciation of mediators of their professional role and its limits, to criticize the lack of appropriate guidance to mediators on the ways to address inequalities of power between disputing parties, and to wonder about the accountability of mediators to mediation outcomes.

  1. Mandatory Mediation and Access to the Court

The small number of mediations of legal cases in Israel led the court system to consider introducing mandatory mediation as a precondition to adjudicating civil cases. This initiative was criticized on various grounds. One justice-beyond-efficiency based objection was that mandating pre-trial mediation sessions undermines disputants' right to access the court.  It was argued that disputants have a right to have their case adjudicated by a judge rather than mediated by a mediator, and that mandatory mediation could increase the expenses of the disputants in cases in which the mediation failed to resolve the dispute and the disputants had to pay for the costs of litigation on top of the costs of mediation. The response of the Rubinstein Committee to these concerns was to recommend the adoption of a soft form of mandatory pre-mediation session (MAHUT) that provides parties with information about mediation rather than imposing on them a duty to mediate. Another justice-beyond-efficiency-based objection was that mandatory pre-mediation sessions in civil cases could adversely affect disempowered disputants in particular. First, it was argued that the requirement to go through an additional process before having the right to be heard by a court would intensify inequalities of power and drive weaker parties to make unjustified concessions and settle. Second, it was suggested that since mediation in Israel follows a rights-oriented evaluative model, disempowered disputants that are unrepresented and less familiar with their legal rights will not be able to fully participate in the process, voice their non-legal concerns and needs, nor take an active role in the design of a creative outcome. Moreover, as disempowered disputants may rely more on the mediator and are often not in a position to second guess the mediator’s evaluations, which are not necessarily accurate, they will therefore be more inclined to accept inferior offers to settle.

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