Decision versus settlement in a civil lawsuit in Israel

Decision versus settlement – what is the difference between a judicial decision and a settlement in civil procedures in Israel? A settlement process can save time and money for both of the parties to the suit as well as to the court, and for this reason, Israeli law encourages the court to suggest settlement options during the procedure. Parties that come to a settlement quickly, and without a total loss for one party and total victory for the other, are usually not left disappointed, and the relationship between the parties to the suit can remain amicable.

Everyone seeks justice and truth, and often people are forced to turn to the court in order to bring justice to light and receive the rights they deserve. It is often assumed that seeking relief from the court would solve our problems, since the judicial system relies on the laws of the State of Israel, based on the assumption that no one is above the law, from the state’s institutions and leaders, to the people themselves, at all ages.

This article compares two situations: decision versus settlement. These terms are used in civil law, as opposed to criminal law (where the correct term is “plea bargain” rather than “settlement” and “verdict” rather than “decision”). We provide explanations regarding each of them, review each method/situation’s advantages and disadvantages, and explain which of them can be most beneficial.

What is a “decision”?

This refers to a judicial “decision,” meaning the court providing a reasoned ruling, based on the evidence presented to it, as well as the witnesses heard. Proving a plaintiff’s civil suit depends on compliance with two main elements: the burden of proof, also called the light burden, and the burden of persuasion, also called the heavy burden, as it must be carried by the plaintiff throughout the trial, until a ruling is issued.

Naturally, a judicial process, from the filing of the suit to the issuance of a ruling, is usually long, complicated, exhausting, and involves many expenses, both for the parties and for the judicial system. In addition, the result of a “decision” process via a ruling favors one party against the other, so that one of the parties leaves the trial feeling frustrated and deprived of justice, while the other party gains a sense of victory, including all that this entails in terms of the damage caused to the relationship between the parties to the dispute.

In other words, if the judicial process ends with a “decision” via ruling, this usually results in a situation where the suit is either fully accepted and the defendant is obliged to pay the full amount of the suit, or the charges under the suit, or the suit is dismissed, in which case the plaintiff finds themselves in “total loss,” and is left disappointed with nothing to show for it, or is even forced to pay the defendant’s- and the trial- expenses.

What is a “settlement”?

A “settlement,” on the other hand, is the amicable resolution of a legal proceeding, and the “price” of this procedure is the mutual compromises between the parties to the dispute, who are the ones also “dictating” the result of the trial. Naturally, a legal proceeding resolved through settlement is shorter, greatly saves time and resources, and may reduce the overload in the Israeli judicial system by quickly concluding the process.

As opposed to a decision, in a settlement process, both parties in fact “win,” subject to mutual compromises, and can even dictate the ruling to be made, of course after the court has certified their agreements.

It’s important to know that in almost every legal proceeding, the court suggests to the parties, as soon as the very first decision or meeting, to negotiate and settle, in attempt to prevent the long process resulting in a judicial decision, whose stages and implications we’ve already seen. This encouragement was also enshrined through legislation, such as in Section 79a of the Courts Law (Consolidated Version) 5744-1984 with regards to general civil law, as well as in Section 4(c) of the Road Accident Victims Compensation Law 5735-1975 specifically with regards to road accidents.

Sometimes, the court is also used as a sort of mediator or arbitrator between the parties, suggesting that they resolve the case in one way or another, and even explaining to them why it made any specific suggestions. This, of course, happens after the court has reviewed the judicial documents, the parties’ arguments and evidence, and before hearing the witnesses and evidence. It always emphasizes that this suggestion is not binding, and that things may change after hearing the evidence and witnesses, and managing the evidence. The court also emphasizes that the parties may commence negotiations at any time, prior to the provision of a decision by way of ruling, and to reach agreements and/or settlements, which usually receives the court’s blessing, after reviewing and certifying the agreements.

Hence, in most cases, the court encourages the parties to reach a settlement, which, as aforesaid, is preferable to a judicial ruling, sometimes even following the completion of the evidence hearing, and one step before the issuance of the ruling. Some of this encouragement is expressed through an exemption from paying court fees, which can reach dozens of thousands of ILS (in general, an exemption from court fees is given prior to the commencement of the evidence hearing).

Decision versus settlement – Which one is better?

In light of the above, it is clear that a settlement process is much preferable than a process of decision and the provision of the ruling by the court. As mentioned above, a settlement process, which is encouraged and viewed favorably by the judicial system, saves much time and resources, both for the court and for the parties, and results in a “win-win,” after mutual compromises on part of the parties on the one hand, but with a “gain” on the other hand by the parties’ ability to guarantee the result and even dictate it, following approval and certification by the court. In addition, a settlement process might create a compromise between the parties, allowing them to reconcile, in lieu of the conclusiveness, and perhaps even cruelty, of a decision.

If you have any other questions about decision versus settlement in Israeli law, or if you need legal assistance from an Israeli tort lawyer, you are welcome to contact us. Our offices are located in Jerusalem and Tel Aviv.