It’s for the Judges to Decide: Allocation of Trial Costs in Israel Report on Israel

The Israeli law governing cost and fee allocation diverges greatly from almost all other legal systems in the Western world (with the exception of South Africa) in that cost allocation is left entirely in the discretion of the court. Although in practice judges usually follow the “loser pays rule”, (Uri Goren, Civil Procedure Issues (Tenth Edition, 2009) 744.) this is not mandated by law and judges can, and sometime do, diverge from it, ordering the winning party to pay the losing party’s litigation costs. In terms of the amounts awarded, some rhetorical transformation has taken place. Historically, courts tended to disregard the actual amounts expended by winning parties on the litigation when awarding costs, leading to their substantial under-compensation. In recent years, following the “constitutional revolution” which also constitutionalized civil procedure, those both within and outside of the judicial system have increasingly argued that litigation costs should be more in line with actual costs. But the extent to which the rhetorical transformation will infiltrate actual reality remains to be seen. In what follows we provide some information and insights concerning the rules and decisions regulating the allocation of trial costs and reflect on their impact on access to justice as well as on the behavior of the parties to the litigation.