Alternative Dispute Resolution Mechanisms In Wake Of The New Civil Procedure Regulations

Introduction

The Civil Procedure Regulations, 5778-2018 (hereinafter: the “New Civil Procedure Regulations” or the “New Regulations”) significantly changed the rules of procedure in civil proceedings. In this article, we will review the effects of the New Regulations on the preliminary proceedings, with an emphasis on the alternate dispute resolution mechanisms, such as mediation and arbitration.

The New Civil Procedure Regulations offer the parties alternative dispute resolution mechanisms already in the preliminary stages of the legal proceedings, in most cases even before a hearing in court. Moreover, the New Regulations encourage the parties to end the dispute between them outside the walls of the court already in the preliminary stage of the proceedings, and – only if the parties are not interested in an alternative mechanism or if they are unable to end the dispute themselves – to conduct the proceedings in court.

As part of the reform, the legal procedure – in its concept and principles – is getting closer to the alternative mechanisms, while adopting many of the values ​​and fundamentals of the alternative mechanisms in general and the arbitration process in particular, such as a just, quick and efficient resolution of the dispute.

The New Regulations seek to ensure that the change is reflected, inter alia, in such a way that the courts will adopt these principles as an integral part of the civil procedure, so that they will move on the spectrum from a situation of a hearing and decision, between conflicting legal rights, to a situation of reaching a right and just solution, quickly, efficiently, taking into account the time of all the parties to the litigation.

With the coming into force of the New Civil Procedure Regulations, it seems as if the legal system has begun moving along two main axes: the first, streamlining the legal system, including adapting the rules of procedure to that end; and the second, adoption and implementation of various dispute resolution mechanisms, which are offered to the litigants who come to court, while using judicial tools in a way that is graded from light to heavy: starting from striving to reach agreement, using dialogue and sharing interests, and ending with a full judicial decision.

The New Civil Procedure Regulations emphasize purposes and values ​​that are similar in nature to those that exist in the alternative dispute resolution mechanisms in general and in the arbitration process in particular, and they seek civil proceedings that are  “just, quick and efficient”.

For example, the principle of justice, which was absent in the previous regulations, is emphasized in the New Regulations: Regulation 1, The Purpose Regulation, states that, inter alia, the purpose of the regulations is to achieve a correct result and a just resolution to the dispute”.

In doing so, the drafter of the regulations made sure to establish the principle of justice as a beacon that is intended to direct the parties and the court towards the appropriate objective of the legal process – to do justice. Regulation 2, which defines a right and fair judicial process, refers to this principle and, inter alia, defines a process that is conducted “according to the rules of natural justice”.

And Regulation 5 seeks to ensure that the court guarantees “the existence of a just legal process”. Emphasizing the principle of justice in the New Regulations constitutes a dramatic change in the perception of the legal process and involves a tectonic movement of the civil procedure on the spectrum from a situation of hearing and decision, between legal rights, to a situation of reaching a just solution, similar to the result sought in the framework of arbitration proceedings.

The pursuit of the truth is also reflected in Regulation 1, The Purpose Regulation, which states that, inter alia, the purpose of the regulations is “to arrive at the truth”. The way in which the evidence is presented, orally or by way of written affidavits, is determined according to the question of whether this is “in order to assist in discovering the truth…” and the remedy of seizing evidence is examined according to the question of whether not granting the remedy will hinder the discovery of the truth.

The heavy burden on the judicial system has led to the incorporation of another principle in the New Regulations, the principle of efficiency. A right and fair procedure is defined in the New Regulations, inter alia, as an efficient procedure, because it is well known that judicial delay may lead to a distortion of the law and therefore the value of preventing judicial delay is enshrined in the value of human dignity by virtue of the Basic Law: Human Dignity and Freedom.

Moreover, within the context of the balancing of interests that the court is required to consider according to the New Regulations, it must take into account the public interest in the existence of an effective legal process.

The principle of efficiency is important when conducting a pre-trial hearing, where the court exercises its discretion with regard to holding evidentiary proceedings, joining parties to the litigation and where providing temporary remedies. By contrast, in the previous regulations, the consideration of efficiency is not mentioned, except with regard to the appointment of a temporary receiver.

Furthermore, the New Civil Procedure Regulations also emphasize considerations of saving resources of time and costs, as part of the public interest in having a just, quick and efficient legal process.

In other words, cost considerations have become part of the considerations that the court is required to take into account when conducting the legal proceedings, both for the purpose of defining abuse of the judicial process, which is defined, inter alia, as an act that is disproportionate to the cost of the proceedings, and for the purpose of saving costs as part of the public interest.

Hence, the New Civil Procedure Regulations have adopted the principles of justice, efficiency and economy, which characterize the alternate dispute resolution mechanisms, such as mediation and arbitration.

Referral to alternate dispute resolution mechanisms in the New Regulations:

The New Civil Procedure Regulations prefer referral to an alternative dispute resolution mechanism already in the preliminary stages of the proceedings and they allow for such referral in each of the following cases:

 

Preliminary Hearing

This is a new procedure in which represented parties are required to meet with each other, without an intermediary, shortly after filing the pleadings. Regulation 34 of the New Regulations defines one of the purposes of the preliminary hearing as examining the possibility of resolving the dispute through an alternate dispute resolution mechanism.

In other words, as part of the preliminary hearing, the parties are required to discuss the question of whether and how they wish to resolve their dispute outside the doors of the court, and they must report this to the court in a detailed report, inter alia, which alternative mechanism has been proposed in the preliminary hearing for the purpose of resolving the dispute.

 

An Information, Acquaintance and Coordination Meeting [“Coordination Meeting”]

The second possibility in which the New Regulations allow for referral to an alternative mechanism is at the Coordination Meeting. In the previous Civil Procedure Regulations, Chapter 7(i) discusses the Coordination Meeting for examining the possibility of settling the claim through mediation (Regulation 99a-99k).

In the New Civil Procedure Regulations, a Coordination Meeting is defined as “an information, acquaintance and coordination meeting to examine the possibility of settling the dispute through a mechanism”. This is a reference to an alternative dispute resolution mechanism; i.e., not only mediation but also arbitration or any other way to settle the dispute outside the doors of the court.

Although the Coordination Meeting appeared in the previous regulations, the procedure was established as a temporary order and was only used in some of the magistrates’ courts for claims exceeding NIS 75,000. In the New Regulations, the Coordination Meeting is established as an integral part of the preliminary proceedings, and, in addition, the program has been extended to all magistrates’ courts.

Moreover, the amount of the claims pertaining to the Coordination Meeting was increased in such a way that any claim exceeding NIS 40,000 will be referred to a Coordination Meeting. Therefore, the possibility of a referral to alternative mechanisms for settling the dispute has increased significantly in the New Regulations.

 

Pre-Trial

The third possibility in which the new regulations allow a referral to an alternative mechanism for the settlement of the dispute is during the pre-trial hearing. Regulation 63 of the New Regulations allows the pre-trial judge, either on his own initiative or at the request of a party, to propose an alternative mechanism for resolving the dispute.

In other words, when the parties arrive physically at the court, after failing to implement the alternative mechanism they chose at the preliminary hearing, or even after preferring to waive the alternative mechanism proposed at the Coordination Meeting, the pre-trial judge still has the option of suggesting that the parties refer the case to an alternative mechanism to resolve the dispute.

In this respect, the position of the judge in the wake of the New Regulations is more comfortable than  before they came into effect, because today the parties are required to report to the judge what alternative mechanism they discussed at the preliminary hearing for resolving a dispute.

Thus, for example,  if the parties have discussed arbitration proceedings as a possible mechanism for resolving the dispute, then the pre-trial judge has the parties’ report in his hands and he can work to convince the parties to turn to the arbitration proceedings that the parties indicated as a relevant mechanism for resolving the dispute between them.

 

Legal Assistant

And if all this is not enough, the New Regulations also allow the judge’s legal assistant (with the judge’s approval) to bring proposals before the parties to the litigation to refer the action to an alternative mechanism for resolving the dispute.

In other words, we are witnessing a clear trend in the New Regulations to transfer as many cases as possible at the earliest possible stage to an alternative dispute resolution mechanism. This is in order to reduce the load on the court system and to prevent wasting valuable court time, while taking into account the limited judicial resources.

 

Summary

For the first time, the New Civil Procedure Regulations fully adopt the Multi-Door Courthouse model, which allows the parties to choose from a variety of alternative mechanisms that the system places at their disposal.

The parties have at their disposal the entire continuum of procedures: starting with negotiations, through holding a preliminary hearing; through the possibility of mediation, after holding a meeting with a mediator as part of the Coordination Meeting; through the examination of the possibility of arbitration, as part of the preliminary hearing, as part of the Coordination Meeting, in the referral by the legal assistant and as part of the pre-trial hearing; and ending – if all these fail – in judicial proceedings within the framework of the court.

It is fitting that the parties to the conflict adopt the models proposed in the New Civil Procedure Regulations, and turn to the alternative mechanisms for settling disputes, such as mediation and arbitration, even in the early stages of the conflict and preferably even before approaching the court.


[1]         Civil Procedure Regulations, 5778 -2018, Regulations File 5778 – 422 (hereinafter – the “New Civil Procedure Regulations”).

[2]         Regulation 5 of the New Civil Procedure Regulations.

[3]         In Chapter 28 of the Civil Procedure Regulations, 5744-1984, Regulations File 5744 – 2220 (hereafter – the “Previous Civil Procedure Regulations”) one can find reference to the concept of justice with regard to the court’s considerations for granting temporary relief and providing guarantees. It should be emphasized that this a relatively new chapter that was added in 2001, most of which was adopted in the New Civil Procedure Regulations.

[4]         Regulation 1 of the New Civil Procedure Regulations.

[5]         Regulation 2 of the New Civil Procedure Regulations.

[6]         Regulation 5 of the New Civil Procedure Regulations.

[7]         Explanatory Notes to the First Addendum to the Arbitration Law, 5728-1968, states that “the arbitrator shall act in a way that he deems most beneficial for a just and quick resolution of the dispute and his judgment will be according to the best of his ability based on the material before him”.

[8]         Regulation 1 of the New Civil Procedure Regulations.

[9]         Regulation 67(a) and Regulation 67(b) of the New Civil Procedure Regulations.

[10]         Regulation 123(a) of the New Civil Procedure Regulations.

[11]         Regulation 2 of the New Civil Procedure Regulations.

[12]         See the well-known English saying: “justice delayed is justice denied”, as well as “justice delayed does not exist”, according to Steven Goldstein, Quick Justice: A Comparative View, Alei Mishpat 9 (19) (2011). And also the remarks of Judge Cheshin in CA 45/90 Shimon Abada v Tikva Abada, PD 48(2) 77, paragraph 5 (1994), according to which a delay in giving judgment will result in its cancellation, especially when the judgment is based on the reliability of witnesses. And in Mishpat Haivri we found: “The sword comes to the world for the procrastination of justice, the corruption of justice, and because of those who misinterpret the Torah” (Mishnah Avot 5, 8).

[13]         HCJ 6972/96 The Movement for Quality Government in Israel v The Attorney General, Pd 51(2) 757, 782 (1997).

[14]         Regulation 5 of the New Civil Procedure Regulations. It should be noted that already in 2007, Judge Grunis (as he was then known) established the rule according to which “the court should not examine the matter exclusively from the perspective of the litigants in specific proceedings. The court is responsible for all the litigants”. And where there is a conflict between the private interests of the litigants and the public interest – “in this conflict, the court is obliged to prioritize the collective interests of all the litigants”, CA 10227/06 Moshe Bublil v Haim Indig (Nevo 5.2.2007).

[15]         The purpose of the pre-trial is to streamline the legal process, to simplify it and to expedite it – Regulation 63(b) of the New Civil Procedure Regulations.  

[16]         Regulation 67(a) and 67(b) of the New Civil Procedure Regulations.

[17]         Regulation 26(a) of the New Civil Procedure Regulations.

[18]         Regulation 94 of the New Civil Procedure Regulations as well as the appointment of a receiver, as stated in Regulation 111(b) of the New Civil Procedure Regulations.  

[19]         Regulation 387C of the Previous Civil Procedure Regulations.

[20]         Regulation 5 of the New Civil Procedure Regulations.

[21]         Regulation 4 of the New Civil Procedure Regulations.

[22]         Regulation 5 of the New Civil Procedure Regulations.

[23]         Regulation 35 and Form 4 in the Addendum to the New Civil Procedure Regulations.

[24]         Coordination Meeting – Information, Acquaintance and Coordination Meeting.

[25]         Regulation 37(a) of the New Civil Procedure Regulations.

[26]         Except in a claim for compensation for bodily injury or a claim arising from the Road Accident Victims Compensation Law 5735-1975 (Regulation 37(b) of the New Civil Procedure Regulations).

[27]         Regulation 63(b)(17) of the New Civil Procedure Regulations. There was no similar clause in the Previous Civil Procedure Regulations.

[28]         The aforementioned regulation allows the pre-trial judge to use the entire spectrum of alternative mechanisms, starting with a compromise proposal, through obtaining authority to rule on the compromise method by virtue of Section 79a of the Courts Law, 5744-1984, and ending with a proposal for an alternative mechanism to settle the dispute.

[29]         Regulation 177 of the New Civil Procedure Regulations.

[30]         Regarding the desire of the legal system to refer the parties to alternative mechanisms for settling disputes, it has already been stated in the past: “The strong recommendation of the heads of the legal system, who diligently promote privatization through mediation, is interesting. In my opinion, this is a call to litigators and their lawyers: ‘Leave us, there are more efficient ways. We are also overloaded, as you know. Many of our best judges have recently left us and become arbitrators (perhaps you should contact them?) We are here for important laws. In day-to-day life, whoever can – should manage without us”.’ Yehiel Bhatt, Mediation and Conciliation: Privatization and Moderate Pressure (letters to the editor)”, joint editor’s note, Sha’arei Mishpat 3(1) 7 (5762).