Section 79A in Israeli Courts: Judgment by Way of Compromise Explained for Foreign Litigants

Foreign litigants in Israel tend to meet Section 79A the same way. You are three hearings into a contract dispute in the Tel Aviv District Court, your witnesses are in London or New Jersey, and at the pre-trial hearing the judge looks up and suggests that the parties consider "seventy-nine A." Your Israeli lawyer nods. Nobody explains what just happened, because to an Israeli practitioner nothing unusual did.

What was offered is a real decision with real consequences, and the choice usually has to be made in the room or within a week or two. This guide sets out what Section 79A does, what it costs you, how the bracket works, and how it differs from court-referred arbitration under Section 79B and mediation under Section 79C. The mechanism has no close equivalent in English or American procedure, which is exactly why it catches foreign parties off guard.

1. What Section 79A Actually Is

Section 79A was added to the Courts Law in the early 1990s and is short. A court hearing a civil matter may, with the consent of the parties, decide the matter by way of compromise. The section also preserves the court's separate power to give a judgment recording a settlement the parties reached themselves.

Two things follow from that wording, and they matter more than the wording suggests.

First, consent is the whole foundation. No Israeli judge can impose a 79A decision. Both sides have to say yes on the record, and the consent is recorded in the hearing minute (protocol, פרוטוקול), which then functions as the agreement governing everything that follows.

Second, the court decides. This is not a settlement. Nobody negotiates a number. The judge, who has already read the pleadings and the affidavits, produces a figure. Israeli case law has consistently held that in doing so the court is not bound by the rules of substantive law, and is likewise freed from the ordinary rules of evidence and procedure. The court is not, however, free to be arbitrary. It works from the material in the file and must stay within whatever limits the parties set.

That combination is the point of the section. A judge who has read a 400-page file has a good sense of who is likely to win and roughly by how much. Section 79A lets them tell you, with binding force, without spending eighteen months proving it through witnesses.

2. Why the Judge Is Proposing It

Israeli judges carry heavy dockets. A District Court judge may hold hundreds of open civil files, and the Courts Administration tracks disposal rates. Judges are actively encouraged to resolve cases before the evidentiary stage, and Section 79A is the most efficient tool available for that. When a judge raises it, the suggestion is genuine, and it is also institutional.

The proposal usually comes at the pre-trial hearing (kdam mishpat, קדם משפט), after the pleadings and the affidavits of evidence have been filed. That timing is deliberate. The judge has now seen the shape of both cases and can see where the money should land. It is also the last moment before the expensive part of the litigation begins.

For a foreign party the arithmetic is often more favorable than it is for the Israeli side. Running an evidentiary trial in Israel with witnesses abroad means flights, hotels, sworn translation of every English document into Hebrew, an interpreter at each session, and cross-examination in a language your witness does not speak conducted through that interpreter. Two or three trial days spread over a year, each requiring a transatlantic trip, will comfortably exceed the amount in dispute in a mid-size commercial claim.

None of that means you should accept. It means the judge is offering something that is worth more to you than to your opponent, which is a decent position from which to negotiate the terms.

3. What You Give Up

Three things, and it is worth being blunt about each.

The law. If you have a technically excellent legal argument, 79A dilutes it. A limitation defense under the Limitation Law 5718-1958, a contractual exclusion clause, a failure to give notice within a contractual window: under strict law these can win outright. Under 79A the judge weighs them alongside a general sense of fairness, and a defendant who is legally right but commercially unattractive frequently pays something anyway. The reverse is true too. A claimant with a sympathetic story and a weak legal case usually does better under 79A than at trial.

The evidence. Without cross-examination, a disputed factual account never gets tested. If your case depends on demonstrating that the other side's key witness is lying, and you have the documents to do it, 79A takes away the stage on which that happens. The judge reads both affidavits and forms an impression rather than a finding.

The appeal. This is the one foreign parties underestimate. A 79A ruling is a judgment, so an appeal is technically available on the ordinary timetable set by the Civil Procedure Regulations 5779-2018. But an appeal normally argues that the trial court applied the law incorrectly, and here the court was released from the law by your own consent. Israeli appellate courts intervene in 79A judgments only in narrow situations: the award fell outside the agreed bracket, the court disregarded the procedure recorded in the minute, reasons were promised and never given, or the outcome is so extreme that no reasonable court could have reached it. Assume the number you receive is final.

4. The Bracket, and How to Set It

Israeli practice almost never uses a bare 79A. Instead the parties agree a mitcham (מתחם), a bracket with a floor and a ceiling, and the court must rule inside it. On a NIS 900,000 claim the parties might agree the judgment will fall between NIS 150,000 and NIS 450,000.

The bracket converts an open-ended risk into a defined one. The claimant accepts they will not recover in full; the defendant accepts they will not walk away clean. Both sides delete the outcome that would have been catastrophic, which is usually why the deal gets done at all.

Setting the numbers is the real negotiation, and it happens in minutes, in the corridor, under pressure. Points that come up repeatedly:

• Judges tend to land somewhere in the middle third of a bracket. A narrow bracket buys certainty at the cost of upside. A wide one preserves upside and reintroduces the risk you were trying to remove.
• State clearly whether the bracket is inclusive of interest and index linkage under the Adjudication of Interest and Linkage Law 5721-1961. On a claim that has been running four years, linkage and interest can add a substantial sum, and arguments about whether the ceiling was gross or net are common and avoidable.
• Deal with costs and legal fees separately and say so. Otherwise the court may treat them as inside the bracket and your NIS 450,000 ceiling quietly becomes NIS 400,000 of principal.
• Where currency matters, fix the exchange rate or the conversion date. A judgment in shekels on a dollar-denominated contract can shift by several percent between the summations and the ruling.
• A floor of zero is not a bracket. If the defendant will only agree to a ceiling, you have capped your recovery without capping your risk, and you should probably decline.

5. Reasoned or Unreasoned

The parties decide whether the 79A judgment will contain reasons. Israeli practice leans toward short reasons or none, and many judges will ask the parties which they prefer.

An unreasoned judgment has real advantages. It arrives faster, sometimes within two or three weeks of summations. It creates no findings that a counterparty can use against you in a related dispute, which matters where the same contract or the same construction project has generated several files. And it avoids a written record of a judge's impression of your witness's credibility.

Reasons are worth insisting on in three situations. Where the judgment will need to be enforced abroad, a foreign court asked to recognize it may want to see that it was reached on the merits. Where an insurer or an indemnifying party is standing behind the outcome, they will often refuse to pay against an unexplained number. And where the dispute is one of several between the same parties, reasons can settle a point that would otherwise be relitigated.

6. Section 79A, 79B Arbitration and 79C Mediation

Sections 79A, 79B and 79C sit next to each other in the Courts Law and are constantly confused. They do different things.

Section 79A keeps the case with the judge. The same judge who has been managing your file decides it, by compromise, and the result is a court judgment enforceable through the Execution Office (Lishkat HaHotza'a LaPo'al, לשכת ההוצאה לפועל) like any other.

Section 79B sends the case out. With the parties' consent, the court refers the dispute to an arbitrator, and the Arbitration Law 5728-1968 then governs. The arbitrator is a private appointee, often a retired judge or a specialist, and the parties pay their fees. The award has to be confirmed by the court under Section 23 of the Arbitration Law before it becomes enforceable, and it can be attacked on the closed list of grounds in Section 24, with an application to set aside filed within 45 days of receiving the award. Section 79B suits technical disputes, where an arbitrator who understands construction pricing or software licensing adds something a generalist judge cannot. It costs more and takes longer than 79A, and institutions such as the Israeli Institute of Commercial Arbitration (ICCA) will administer the reference if the parties want a framework rather than an ad hoc appointment.

Section 79C refers the parties to mediation. A mediator has no power to decide anything. If the mediation produces a settlement, the parties bring it back to court for approval, and Section 79C(h) lets the court give it the force of a judgment even where no claim was filed. Mediation under 79C is confidential, and nothing said in it may be used later in the civil proceedings.

One overlap deserves a note. Under the Arbitration Law an arbitrator is by default released from the substantive law unless the parties provide otherwise, which makes an arbitration under 79B look structurally similar to a 79A. The practical differences are cost, speed and control: the judge you already have is free, and a private arbitrator is not.

7. Fees, Refunds and Realistic Timing

Israeli civil claims for money carry an ad valorem court fee of 2.5% of the claim value, payable in two installments, the first on filing and the second before the hearings begin. Jurisdiction depends on value: money claims up to NIS 2,500,000 go to the Magistrates Court and larger ones to the District Court, and the threshold has been revised more than once, so confirm the current figure before filing.

Ending a case under 79A can recover part of that fee. The Court Fees Regulations provide for a refund where proceedings conclude before the evidentiary stage is completed, on a scale that shrinks as the case advances. Agreeing at the pre-trial hearing typically preserves a worthwhile refund. Agreeing after the last witness has left the stand typically does not. On a NIS 1,500,000 claim carrying a total fee near NIS 37,500, that difference is not trivial, and it is a reason to take the 79A question seriously the first time the judge raises it rather than the third.

Timing, in the usual sequence:

• Consent recorded at the hearing, with the bracket and terms entered in the minute.
• Written summations (sikumim, סיכומים), commonly 15 to 20 pages each, filed on a schedule of roughly 21 to 30 days per side. Some judges dispense with summations entirely and rule on the file as it stands.
• Judgment, usually 30 to 90 days after the last submission. Unreasoned judgments arrive at the faster end.
• Payment, typically within 30 days of the judgment unless the court sets a different date.
• Enforcement if payment does not come. Opening an Execution Office file costs roughly 1.25% of the sum claimed, added to the debt rather than absorbed by you. The debtor is served with a warning (azhara, אזהרה) and has 20 days to pay or object before garnishment orders against bank accounts and liens on property become available.

From the pre-trial hearing to money in the account, four to six months is a realistic expectation. The litigated alternative is measured in years.

8. When a Foreign Party Should Agree

Section 79A tends to be the right answer when the case is genuinely uncertain, when the amount in dispute is not large enough to justify a full trial run from abroad, when your evidence lives in documents rather than in witnesses, and when the counterparty is solvent enough that a moderate judgment will actually be paid. It also helps if you would rather have this finished than be proved right.

It tends to be the wrong answer when you hold a clean legal defense that would end the claim outright, when the case is a test run for a series of related disputes and you need a precedent, when the other side's factual account will not survive cross-examination, or when the sum at stake justifies the cost of doing this properly. Consider it carefully too if the judgment will have to be enforced in a jurisdiction that scrutinizes whether a foreign judgment was decided on the merits.

A last piece of advice for anyone litigating in Israel from abroad. Decide your position on Section 79A before the first pre-trial hearing, not during it. Judges raise it without warning, the courtroom conversation moves in Hebrew, and the pressure to answer in the moment is considerable. A client who has already agreed a bracket with their lawyer, in writing, is in a strong position. A client hearing the words "seventy-nine A" for the first time while a judge waits is not.

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