With litigation involving global corporations gaining unprecedented prominence in Israel, becoming acquainted with Israeli litigation practices could offer significant advantages for companies and individuals already operating in, or considering entering the Israeli market.
PART I
I. Israel's Litigation Framework
A. Comparative Law – Israel's Legal System
The State of Israel operates an independent, adversarial legal system, modeled after the Common Law tradition in form and procedure (though with continental influences in codified substantive law). Litigants are free to define the scope of their dispute, and the court will adjudicate only on the basis of their pleadings and the evidence they present.
In determining the outcome, the court applies the law, encompassing primary legislation enacted by parliament, subsidiary legislation such as regulations, and legal precedent. All judicial proceedings in Israel are bench trials, as there is no right to trial by jury.
Traditionally, Israeli civil procedure favored written submissions and affidavits (subject to cross examination), over oral arguments and testimonies. The Civil Law Procedure Regulations, which have gone through an extensive revision that came into force on January 1st, 2021 (the "Regulations") now theoretically prioritize direct examination and oral summation in certain proceedings. Many judges have yet to adopt this new approach, preferring to rely on their discretion as established by the Regulations, to order that witnesses will submit written affidavits.
For many years, the Israeli legal system has shown identifiable influences of Continental Law principles. These influences can be seen, for instance, in the revision of the Regulations, which envisages a more active role for judges, as well as in the long-time and continuous effort by the Knesset (the Israeli Parliament) to codify substantive civil laws. However, the "look and feel" of the legal system is more like that of a Common Law system, as exemplified by the strong emphasis on precedents as legal authority, and the importance of the right to cross-examine witnesses.
B. Israel's Litigation Landscape
Israel is a highly litigious state. It has the highest number of lawyers per capita in the world, and an overwhelming number of claims filed each year, crowding its courts. According to the Courts Administrator, approx. 897,000 new claims and appeals were filed in 2023 – roughly 1 claim for every 11 citizens.
II. The Structure of the Israeli Legal System
The Israeli judiciary is comprised of a general court system, alongside specialized tribunals. The general court system includes the Supreme Court, six District Courts (one in each judicial district), and dozens of magistrate courts located throughout the different districts.
Permanent specialized tribunals, each with limited subject matter or personal jurisdiction, function alongside (and sometimes as part of) the general court system. These tribunals include, inter alia, labor courts, administrative courts, military courts, religious courts, family courts, the Competition Tribunal, and the Standard Form Contracts Tribunal.
The magistrate courts serve as the trial court of first instance for most civil disputes, with subject matter jurisdiction over claims for relief valued under ILS 2.5 million, and in certain real estate disputes. Magistrate court claims are usually presided over by one judge.
District courts have appellate jurisdiction over the magistrate courts, and they also serve as a residual trial court of first instance when the magistrate courts and specialized tribunals lack jurisdiction. The district courts are usually presided over by one judge in their capacity as trial courts, and three judges in their capacity as appellate courts.
The Tel Aviv and Haifa District Courts each have a specialized economic division. These economic courts are granted exclusive subject matter jurisdiction within the court over economic claims (such as shareholder disputes or derivative actions). Judges with the relevant knowledge and experience preside over each of these divisions.
The Supreme Court is Israel's highest judicial authority, functioning both as an appellate court for district court decisions (with an automatic right of appeal for first-instance cases and by certiorari for appellate cases) and as a High Court of Justice endowed with judicial review powers. Standardly, it comprises 15 justices, headed by the President of the Supreme Court (there are currently 3 vacancies). Most cases are presided over by three justices, and five or more justices can preside over matters deemed especially significant. The decisions of the Supreme Court are final and are not subject to appeal, yet under extremely rare and unique circumstances a Supreme Court verdict can be subject to a re-hearing before an enlarged panel.
As the High Court of Justice, the Supreme Court has material jurisdiction over petitions for judicial review of legislative and administrative actions, including limited review of decisions of the specialized tribunals. While the High Court of Justice is in fact the court of first instance for such petitions, it is not a trial court and it applies administrative rules of evidence, rather than the civil law rules of evidence. Appropriately, the High Court of Justice also has unique procedural regulations.
Because many cases are granted rights to the Supreme Court, either by appeal or as first-instance petitions, the Supreme Court is extremely active – with approximately 9,170 proceedings opened in 2023.
According to the Courts Administrator, the average length of regular civil proceedings (including claims that are dismissed or settled before final judgment), is 10.9 months for proceedings in the magistrate courts; 21.4 months in the district courts, and 14.4 months for civil appeals in the Supreme Court.
III. Jurisdiction and Extraterritorial Service of Process in Israel
The purpose of service of process is both to notify the defendant of the legal proceedings and to establish the Israeli court's jurisdiction over a defendant – including a foreign defendant.
The Regulations establish that a prospective plaintiff can serve a foreign prospective defendant in its domicile outside of Israel – if there are grounds for such extraterritorial service – without needing to obtain prior permission from the court. The plaintiff is still required to file a motion to the court requesting orders for executing the service. This motion must be accompanied by an affidavit supporting the cause of action of the prospective suit, as well as the existence of grounds for extraterritorial service, and must include the defendant's address abroad to which process is intended to be served.
The Regulations include a comprehensive list of grounds for extraterritorial service, such as that the claim concerns a property located in Israel, or that the claim concerns a contract that is subject to the laws of Israel. All the grounds require some connection between the claim and the State of Israel which justifies the court assuming jurisdiction over the claim.
The court has the discretion to deny the prospective plaintiff's motion for orders for extraterritorial execution of service, and rule that under the given circumstances process will not be served extraterritorially. If the court does not deny the motion, and process has been served accordingly, the defendant may move to quash the extraterritorial service, arguing that the Israeli court lacks jurisdiction, or that it is not the appropriate forum for adjudicating the dispute (forum non conveniens). The performance of extraterritorial service is regulated by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (1965), to which Israel is a party.
A claim may also be served on a foreign defendant who is not currently present in Israel through a local representative on its behalf that represents it on a regular basis with respect to its matters in Israel, if the action pertains to the same matter. This method is commonly used to serve a claim on an international enterprise that does business in Israel through a subsidiary or a permanent local distributor.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
