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 Mediation Law Client Update 

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May 18 2017

Confidentiality in Mediation Proceedings

Much has been said about the general advantages of taking a dispute to mediation proceedings.  These include the advantages afforded to the legal system and society as a whole as well as the advantages to the actual parties to the dispute.   Nevertheless, the State has not yet done enough in order to advance mediation as an alternative to court proceedings as a dispute resolution mechanism.  Even the parties themselves and the lawyers representing them do not tend to exhaust this possibility, notwithstanding its many advantages.

In this context, one of the issues which the legislator has yet to develop is the protection of confidentiality of mediation proceedings. Confidentiality in the meditation process is fundamental – if the confidentiality of the proceeding is not guaranteed it will not be possible to conduct an efficient mediation process.  It is clear that the parties to disputes will refrain from turning to mediation where the confidentiality of that process is at risk.

The current regulation of confidentiality in mediation proceedings under Israeli law is insufficient.  A central aspect of this confidentiality is that a privilege will apply to everything that is prepared for the meditation as well as to all that is said or written.  In the judgment of His Honor Justice Amit, sitting in the Supreme Court in the Drori Matter (where he cited a previous judgment he wrote in the Eini Bakery case), he noted:

"Here it is, there is a strong interest to recognize relative privilege of the mediation proceedings in the claim which was transferred by the Court according to Section 79C(b) of the Courts Law.  Even though it seems that the case law takes the view, as something that is obvious, that the privilege over mediation proceedings should be recognized (see the Gabbay Matter, where it was decided that the privilege is dispositive and can be waived by the parties and also Section 2A of the 'Form Agreement between the Parties and the Mediator' provided in the Schedule to the Mediation Regulations, which includes the obligation of the parties 'not to present to the Court matters which were said during the mediation and not to present documents on any matter which was raised, whether directly or indirectly, in the mediation proceedings')".

Even though the Supreme Court recognized the existence of the privilege, it found that it is relative and is likely to be rejected in light of other considerations.   In the current legal situation, these considerations are neither defined nor clear, and can lead to ambiguity harming the certainty of the parties choosing to go to mediation.  Zer-Gutman referred to this deficiency in her article 'the Protection of Confidentiality in the Framework of Mediation Proceedings', and even though 15 years have elapsed this deficiency has still not been attended to, along with others.

Alongside the relative privilege created by the ruling, the legislature includes a non-admissibility provisions which prohibits the acceptance of anything as evidence in court. Section 79C(d) of the Courts Law provides in this context that 'matters which were presented during a mediation proceeding will not be brought as evidence in a civil court proceeding'.  Nevertheless it is doubtful whether this Section applies to mediation proceedings which were not initiated by the court in accordance with Section 79D of this law so that the scope of this Section is not sufficiently broad.
While the Supreme Court has taken an important step in the direction of protecting the confidentiality of mediation proceedings, it is important to secure this entirely and in an embracing manner via the legislature.  Such regulation with its publication is likely to act as a catalyst to the transfer of disputes to mediation proceedings, which to date have been underused.   The entire system and especially the parties themselves will be the main beneficiaries.

We wish to take this opportunity to update that Mr. Yaron Horovitz, who served as a partner in our office over the 20 years, and who practiced primarily in the fields of commercial litigation and employment law, has decided to move and act as a mediator in the areas in which he practiced as a lawyer.  His business as a mediator will be conducted in the firm's offices in Tel-Aviv.

References: RCA 1496/15 Levy v Drori (published in Nevo 21.5.2015); RCA 4781/12 Y.M. Eini Bakery Ltd v Bank Leumi L'Israel Ltd (published in Nevo 6.3.2013); Limor Zer-Gutman 'the Protection of Confidentiality in the Framework of Mediation Proceedings', Sha'ari Mishpat C 165 (2002)
Disclaimer: This Newsletter is intended only to provide general updates to clients and for no other purpose. Nothing in this Newsletter constitutes any opinion or advice on the subject matter dealt with therein. For any advice or opinion, clients are advised to approach the relevant lawyer at Naschitz, Brandes Amir & Co.

Contact Us:

Yaron
Adv. Yaron Horovitz
tel: 972-3-6236000
email: 
yhorovitz@nblaw.com
Written by Adv. Yaron Horovitz
Edited  by Dr. Sharon Yadin, Adv.
English version by Adv. Helen Raziel