Negotiating between the parties as part of a legal proceeding is common because the parties understand that if they can achieve a good result through negotiation, it may save them a lot of time (at least the time spent conducting a legal proceeding), and probably also quite a bit of money (at least, saving on attorney fees).
מבחינת התובע, ניהול משא ומתן מחוץ לכותלי בית המשפט עשוי להוביל גם לקבלת התוצאה שהוא רוצה (או תוצאה שקרובה לה), ומבחינת הנתבע, ניהול מו"מ עשוי להקטין בצורה משמעותית את הסיכונים שלו, משום שבעת ניהול משא ומתן הצדדים הם אלה אשר מעצבים את הסכם הפשרה, ומחליטים מה לכתוב בו, ולעומת זאת, במסגרת The verdictThe judge will determine the merits of the lawsuit, and this may lead to an unpleasant outcome for one of the parties (for example: receiving Financial claim in full, or its rejection in full).
Disclosure of information and documents during negotiations outside the courtroom
The question arises whether it is possible to use information or documents that one party received from the other during negotiations outside the courtroom, and present them to the judge hearing the case?
סוגיה זו נדונה לאחרונה בבית המשפט המחוזי בתל אביב (ת"א 6338-05-20 נופי יהודה הימית 55 בע"מ נ' פסו גוב (בית העמודים של ת אביב) בע"מ, החלטה מיום 26.6.2022). במקרה זה בית המשפט המחוזי קבע, בין היתר, כך:
The rule is that documents exchanged between the parties during settlement negotiations are not admissible in the legal process. משמעות הדבר היא כי לא ניתן להגיש את המסמך או להציגו במשפט ולא ניתן לקבוע על יסודו ממצאים כלשהם (ראה רע"א 2235/04 בנק דיסקונט לישראל בע"מ v. Eli Shiri (published in Nevo, 27.06.2006) (hereinafter – Poems matter); ע"א 172/89 Sela Insurance Company v. Solel Boneh (Published in Nevo, February 1, 1993) (hereinafter – Rock matter)). The underlying goal of this rule is to encourage compromises and prevent lengthy litigation within the walls of the court and is derived from the general purpose of encouraging alternative frameworks for resolving disputes between litigants. (See Poems matter(see above).
The assumption underlying the rule is that when negotiations are underway to reach a compromise, the parties may refrain from making representations, statements or proposals that imply any concession in favor of the other party, for fear that such concession will be used as evidence against them in the legal proceedings between the parties, and thus the chances of reaching a compromise between the parties may be harmed. This undesirable result is the rule that limits the admissibility of these documents to prevent (See President Shamgar's remarks.) Regarding Sela, לעיל; וכן, ע"א 7547/99 מכבי שירותי בריאות נ' דובק בע"מ (Published in Nevo, 13.7.2011).
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Therefore, I determine that for the purposes of this proceeding and as long as the plaintiffs do not petition to enforce the agreement, the document constitutes a document exchanged between the parties as part of settlement negotiations, it is not admissible in the context of the investigation of the original claim, the plaintiffs will not be able to present it during the evidentiary hearings scheduled in the case, and the court will not be required to use it for the purpose of determining findings in the proceeding.
The rationale for not disclosing information or documents that emerged during negotiations outside the courtroom should be clear to everyone – it is in the interest of the legal system and the parties to be able to negotiate without fear that the information or documents that emerged during the negotiations will come to the attention of the judge. If negotiations cannot take place openly, the parties will in most cases decide not to hold them. This will lead to a very undesirable outcome for the parties and for the legal system.
This rationale is relevant to any legal proceeding, whether it is Class action lawsuit or Civil lawsuit "רגילה".
Frequently Asked Questions Regarding Out-of-Court Negotiations
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Must negotiations outside the courtroom be conducted in every case?
No. There is no obligation to negotiate as part of a legal proceeding, but as I mentioned in this article, negotiating may lead to very positive results for the plaintiff or the defendant (and usually both), so it is not worth ruling it out in advance.
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Does conducting negotiations outside the courthouse involve a fee?
If the parties negotiate directly with each other, there is no fee involved.
Sometimes the parties choose to negotiate through a mediator. In these cases, there is a fee for the mediator. -
What can be reported to the court at the end of negotiations?
If, at the end of negotiations, the parties have reached agreements, the agreements can be reported in order to obtain the validity of a judgment for the settlement agreement.
If the parties have not reached an agreement, they usually do not report anything or simply announce that the parties have not reached an agreement (usually only if the judge determines this positively). -
Can a party who refuses to negotiate outside the courtroom be punished by the judge?
There is no obligation to negotiate outside the courtroom, and in any case, agreements can only be reached if both parties agree to them, and therefore the judge cannot oblige or punish a party who is not interested in negotiating.
