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.
Israel’s Litigation Framework
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. At the same time, for many years, the Israeli legal system has shown identifiable influences of Continental Law principles, including 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.
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 2021 (the “Regulations”) now theoretically prioritize direct examination and oral summation in certain proceedings. Despite the time that has elapsed since the Regulations entered into force, many judges have yet to adopt this new approach, preferring to rely on their discretion as established by the Regulations, to order that summation and witness testimony will nevertheless be submitted in writing.
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. 911,312 new claims and appeals were filed in 2024 — roughly 1 claim for every 11 citizens.
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 up to 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 4 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 11,274 proceedings opened in 2024.
According to the Courts Administrator, the average length of regular civil proceedings (including claims that are dismissed or settled before final judgment), is 11.2 months for proceedings in the magistrate courts; 20.1 months in the district courts, and 23.2 months for civil appeals in the Supreme Court.
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/agent.
Class Actions in Israel
Class action lawsuits have become a prevalent phenomenon in Israel, including against foreign international corporations.
The legal framework for filing and adjudicating class actions in Israel is outlined in the Class Actions Law, 2006 and the Class Action Regulations, 2010.
The Class Actions Law limits the causes of action and matters that can be certified as a class action, listing several class actions that may be certified. Some prominent examples are listed below:
- Most commonly used is any civil cause of action against a business in a matter between that business and a customer, whether derived from contract law (e.g. breach of contract) or torts law (e.g. breach of a statutory duty). These may include, for example, claims based on the Consumer Protection Law, 1981, such as misleading consumers regarding material aspects of a transaction (e.g. the nature of the asset or service); transaction cancellation terms, etc.
- Another prominent cause of action in recent years is unlawful invasion of privacy, especially in cases where personal information regarding customers is collected and stored.
Under Israeli law, a class action is adjudicated in two stages:
- The certification stage — where the court decides whether to allow the class plaintiff to lead a class action on behalf of the class they claim to represent.
- The adjudication of the action itself — which is similar to the adjudication of any other civil claim in Israel.
The certification stage begins with the plaintiff filing a motion to certify the class action. The motion to certify must demonstrate that the claim meets the following cumulative conditions:
- The plaintiff has a personal cause of action concerning the subject of the motion.
- The class action raises material questions of law or fact that are common to all the members of the putative class.
- There is a reasonable chance that said mutual questions will be decided in favor of the putative class in the adjudication of the claim.
- A class action is the fair and effective mechanism for resolving the dispute.
- There is a reasonable basis to assume that the class plaintiff will duly and properly represent the interests of the represented class.
- There is a reasonable basis to assume that the interests of all class members will be represented and managed in good faith.
The respondents are entitled to respond to the motion to certify, and the class plaintiff is then entitled to reply to the respondents’ response.
Following the parties’ submissions, the court will usually set a preliminary hearing, for the purpose of simplifying and expediting the adjudication of the motion to certify, or to explore the option of resolving dispute through a settlement. At times, the court might propose that the parties turn to mediation.
Should mediation or the preliminary hearing not be fruitful, the court will usually schedule evidentiary hearings, wherein the affiants (and experts who submitted expert opinion) on behalf of both parties are subjected to cross-examination (unless the parties agree to forgo cross-examinations). The evidentiary hearings are typically followed by written summations, following which the court decides whether to certify the class action.
If the motion to certify is granted, the court will include in its decision the legal and factual questions that will be adjudicated, and the definition of the class to be represented by the plaintiff. In general, the decision to certify a class action can be challenged by leave of appeal filed to the relevant court of appeal. A decision to deny the motion to certify, on the other hand, is considered a judgment, and can therefore be appealed by right. However, the court’s decision in the claim itself (following the granting of the motion to certify) can be appealed by right to the relevant court of appeal.
The Class Actions Law sets out a unique procedure for the approval of settlements, which are subject to the court’s approval. The parties must publicize a notice to the public with the terms of the proposed settlement. Furthermore, a copy of the proposed settlement must be sent to the Attorney General, the Courts Administrator, and the relevant regulator (such as the Custodian of Consumer Protection).
These officials, as well as any member of the represented class, and any entity or government body that operates to further public goals in fields relevant to the motion, may file objections to the proposed settlement. Members of the represented class may also “opt-out” of the settlement agreement. The settlement will only be authorized if the court finds it fair, reasonable, and proper, considering the interests of the represented class. If the settlement is reached during the certification stage, the court must also find that the prerequisites for certifying the motion are fulfilled.
Israel’s New International Commercial Arbitration Law
On February 12, 2024, the Knesset enacted the International Commercial Arbitration Law, 2024 (the “ICAL”). This law closely conforms to the United Nations Commission on International Trade Law’s (“UNCITRAL”) Model Law on International Commercial Arbitration, initially adopted in 1985 and subsequently amended by UNCITRAL in 2006 (the “Model Law”).
The ICAL’s primary purpose, as outlined in its introductory provision, is to establish a comprehensive legal framework for conducting international commercial arbitration proceedings in Israel, guided by the principles contained in the Model Law.
Before the ICAL came into effect, all arbitrations conducted in Israel, whether domestic or international, were governed by the Israeli Arbitration Law, 1968 (the “Arbitration Law”), which also referred to certain terms of international conventions on arbitration, where applicable. However, the explanatory notes accompanying the ICAL bill contended that the Arbitration Law inadequately addressed the distinct features of international commercial arbitration. As a result, the ICAL was introduced to bridge this gap by adopting a framework based on the provisions of the Model Law, which reflect a globally-recognized standard for international arbitration practice.
It should further be noted that Israel is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Noteworthy Procedures and Principles in Israeli Law
Good Faith
Great emphasis is placed on the principle of Good Faith under Israeli law, which is applicable across all domains of private law.
The duty of a party to act in good faith is often sufficient to establish liability (or rights), and sometimes even to create duties towards a party harmed by conduct in bad faith — even if said obligations are not expressly included in the original agreement between the parties.
The duty to act in good faith was set in the Israeli Contracts (General Part) Law, 1973 and applies to all the contractual stages — negotiations, the execution of the agreement, and termination thereof — but has also been interpreted to apply to all types of legal actions, whether contractual or not, including actions taken in the context of litigation, such as misuse of judicial procedure.
Unjust Enrichment
Unjust Enrichment is a codified and well-established cause of action under Israeli law. It may be used as an independent cause of action where there is no contract or specific tort, but where a party is deemed to have benefitted unfairly at the expense of another.
It may also be useful as a cause of action accompanying a more traditional one, such as copyright infringement, where there is difficulty proving damages (or where it is impossible to do so), but where the injured party can show that there is enrichment resulting from such unlawful conduct. Under such circumstances, a party may be required to reimburse the other party for its enrichment.
Under Israeli law, a plaintiff must prove three cumulative elements in an unjust enrichment claim: (1) the existence of enrichment; (2) that the enrichment is at the expense of the plaintiff; and (3) that the enrichment is unlawful.
Standard Form Contracts
A standard form contract (or a contract of adhesion) is a contract with a uniform formulation intended for many engagements. Generally, the contract is drafted by one party, or at its request, in order to be used in agreements with its customers and is usually presented to the customer as a finished product that cannot be negotiated (“take it or leave it”).
The Standard Form Contracts Law, 1982 was enacted to protect customers that are party to a standard contract. The law stipulates that in circumstances where — considering the entirety of the contract’s provisions and the context of the engagement — a specific clause of a standard form contract is found to be exploitative or provides an unfair advantage to a service provider, the court is empowered to invalidate it. The law also includes a list of instances which are presumed to be exploitative.
Numerous claims, including class actions, are submitted alleging that the provisions delineated in the agreements which are the subject of the claim (in the case of a class action, for example, user agreements, or terms of service), prescribed by the service providers, are exploitative and hence non-binding.
The authors of this article, Nir Kehat (Partner), Sivan Wulkan-Avisar (Partner) and Iyar Yariv (Associate) are members of Arnon, Tadmor-Levy’s Litigation Department, and have extensive experience in civil and commercial litigation encompassing class actions and legal proceedings entailing prominent global corporations. For further information or consultation regarding litigation in Israel, please feel free to reach out to Nir@Arnontl.com, Sivan@ArnonTL.com and Iyar.Y@Arnontl.com.
This article was first published on The US-ISRAEL Legal Review 2025-2026 >>
The above content is a summary provided for informational purposes only and does not constitute legal advice. It should not be relied upon without obtaining further professional legal counsel.
