Online Dispute Resolution and The Israeli Legal System: Looking for Mechanical Justice.

Written with Adv. Effi Fuks, LL.B. for the International conference on Online Dispute Resolution taking place at Haifa University today.

Abstract: The Israeli Legal system suffers from great burden and lengthy processes. While initiatives try to narrow the Israeli supreme court’s authority and open new courts, the Israeli courts have tried to implement a”paperless court” solutions but have yet to succeed in implementing its solutions in the legal community. This Paper presents the problems facing today’s legal community and its digital divide, while inspecting the ability and incentives in moving to a paperless solution.

Our solution to the problem, using the current legislation and based partially on the current unpopular and costly arbitration process, shall include implementing an Internet based arbitration mechanism. this mechanism might bridge the digital divide and allow parties to inspect prior decisions and experience of arbitrators,  thus opening the process for public inspection and allowing precedent-based decisions while allowing all parties access to relevant decisions and documents, it may lower negotiation costs and shorten the legal process dramatically. Based on an open source platform, we enable institutions to install, adapt and modify the solution and to conduct hearings, processes and arbitration.

persons will be able to overview the legal proceeding and inquire witnesses via existing technologies and at minimal costs, while keeping a video archive of witness questioning and a written archive of affidavits to allow litigants future use of the archive in writing their closing arguments. The system itself shall be configured to allow quick dispute resolution when there is no or little dispute, while relying on documents only (similar to the procedural fast-track).

The Israeli Court System is one of the most encumbered systems in the world, a report by the Haifa Center for Public Management and Policy (Solciano-Kenan et al, 2007) ranks Israel as the second busiest court system.  the systems statistic’s are overwhelming: With 2235 average cases per judge (ibid, 14) and 653,940 new court cases in 2008 (Israeli Courts, 2009) it has a total inventory of 449,718 cases and an average civil small case is11.30 months old (including settled cases and open cases examined) (ibid, ibid) and a total of 593 judges. Each judge has to process numerous cases and has an incentive to pressure parties into settlements, in order to save judicial time. The 2008 special mid year report (Shtrassberg-Cohen, 2008, pp. 25), for example, in one case a judge pressured a plaintiff to settle by threatening that unless she settles, he will remove her claim and rule expenses in favour of the other party. The claim was published in the 2006 yearly report as well. The pressure on parties to settle is also widely covered by the press and media (Roeh, 2001, Magen, 2003).

Though the Israeli Court system attempts to computerise court cases, the Israeli Bar Association advises lawyers to refrain from using it (Sharvit, 2008). A survey conducted by the Israeli Bar Association (Israeli Bar, 2008) found that requirements such as using proprietary operating systems (Windows XP) had a constraint on users and that 49% of the lawyers found the system uncomfortable to open proceedings. Requiring users to use Microsoft Windows, as well as proprietary smart cards, creates additional transaction costs that witholds the project, which was launched on 2005 (Yoaz, 2005) and has yet to be implemented widely. Even if implemented, at the cost off 250,000,000 ILS (around 80,000,000 US$) (Fogel, 2008), the solution is still far from being perfect, and even after full implementation may not solve most of the problems or provide a paperless solution.

In a parallel road, the opening of new arbitration mechanism (Raz, 2008) including commercial arbitration proved to be quite costly, with an average cost of 40,000 US$ (Leibowitz-Dar, 2003) (plus attorney’s fees), the general public’s approach to arbitration and other means of Alternative Dispute Resolution are quite limited. Small Claims Courts, though, are not as widely used in small disputes, and are limited to claims under 4,400 US$. Therefore, some disputes are not brought to court as they are not cost-efficient. and so the total amount sought in lawsuits was inflated for unknown reasons and in order to justify the high litigation costs (for example, OCR 13593/01 Cartel Survivors ltd. v. Osem)

However, not arbitration nor the regular courts have the ability to cope with consumer-centric lawsuits. Guadamuz points out (Guadamuz, 2003) that eBay’s unique ADR (alternative dispute resolution) was the reason for eBay’s success and that it allows online dispute resolution efficient enough to generate trust between users and as a ruslt engage in commerce even though their identities are unknown. eBay’s ODR was just the beginning and other realms are experiencing the use of ODR  (online dispute resolution) (Katsh, 2002). However, ODR’s use in Israel is quite non-existent.

Our presented solution is based on free software and allows quick and relevantly easy ODR; it may allow conduction of arbitration processes or any other dispute resolution, even court cases. Based on the popular and modular WordPress software, with only a few variants, an organisation may set up its own mechanism. We set up a wordpress installation based at . The system allows users to register and add complaints (or “posts”). Each “post” could be a complaint initiated against a specific person or company, allowing users to attach all his relevant documents to the post, including images, video files, documents and links to on-line sites. Once a complaint was “filed” (or published) one of the moderators may act as an arbitrator, the arbitrator will send an email to the defendant, requesting him to post, in a reply, his defence. Using a wordpress plugin called “Easy Comment Uploads” he can add attachments and using the Seesmic video comments plugin he can record his video reply. After the defence and the Plaintiff’s answers, testimonies by 3rd parties could be given by video or file, and the parties may conclude their arguments.

This process allows the parties to select the arbitrator from a list of experts and provide them a documented process with regulated procedure. This while allowing submission of documents via an electronic system, full disclosure of documents and video archives to conduct the process even with a distance.

Allowing a tag-based index allows users to search previous cases, including disputes between similar parties or similar subjects (for example, all disputes relating to body injury or to eBay); and also to allow direct linking to previous rulings in order to create precedent-based ODR, which is currently not available in other ODR mechanisms, as they remain confidential.

In order to create compulsory arbitration, compelling arbitration clauses should be embedded in the user agreements of major e-commerce sites and cooperation, with Israeli consumer organisations and so trade-unions may generate sufficient traffic to justify such a process. The ODR’s costs may be externalised on the e-commerce websites in order to promote user trust and faith. another solution could be that the ODR may charge a small fee, in a similar manner to small claims court (1.5% of the claimed sum). We believe that such a process may allow an arbitrator to rule in cases efficiently and quickly, and maybe even creating precedent based ruling, It may deter repeat infringers by generating new norms (Engert, 2002); as Engert points out: “[A] theory of reputation based on model-exogenous information does not need the complicated theories of norm stability laid out in the previous section. In particular, reputation based on model-exogenous information does not rely on network effects: If a player can fully observe the history of the game she need not bother if others apply the same reputation norm”.

Based on our system the end-user, prior to engaging in any business, can fully observe the game, and has knowledge of transaction costs, litigation costs and previous rulings. He can make inquiries and see, prior to purchasing on any e-Commerce site, the credibility of his vendor and know that no claims were settled without being public. Therefore, with full information, he could lower transaction costs, where our model allows online dispute resolution efficient enough to generate trust between users and let the engage in commerce even though their identities are unknown.

Conclusion: The Israel Legal system is still far from going mechanical and automated; The inherent antagonism to electronic solutions and the fear from losing income by lawyers may deter users and inflict limitation on ODR; moreover, the yet-to-be-perfect solution presented still required further research as to the costs of arbitrators and whether it could be cost-efficient. However, the advantages of such a system are clear, and may be implemented easily and without any major costs by any organisation or commercial entity.


Engert, A., Norms, Rationality, and Communication: A Reputation Theory of Social Norms, 2002,

Guadamuz, A., eBay Law: The Legal Implications of the C2C Electronic Commerce Model, 2003,

Katsh, E., Online Dispute Resolution: The Next Phase, 2002,

Israeli Bar Association, Satisfaction survey on Net-Courts, 2008,

Israeli Court System: Half-Yearly Report for 01.07.2008 – 31.12.2008,

Solciano-Kenan, R., Reichman, A. & Vigoda-Gadot, E.
, The Burden on Legal Systems : Comparative Analysis of 17 Countries, available on the Israeli Court webite,

Shtrassberg-Cohen, T., Special Report: Mid 2008,

Shtrassberg-Cohen, T., 2006 Report,

Fogel, R., Ness,  IBM and Taldor will pay for the hassle in courts,

Leibowitz-Dar, S., Quick, Expensive and Elegant Ruling, Haaretz, 10.09.2003,

Magen, H., They will eat flies, Globes, 29.09.2003,

Raz, H., Courts are privatized: a new company will provide court services for people interested in legal fast tracks, TheMarker, 23.01.2008,

Roeh, A., Sharon’s Trial against Ha’aretz: No Settlement, the appeal will be heard, Ynet, 02.05.2001,,7340,L-711988,00.html

Sharvit, N., The Israeli Bar Association: We’ll recommend not to use Net-Courts, Globes, 30.06.2008,

Yoaz, Y., The Computerisation of Courts will begin in November, It will allow filing of claims and appeals over the web, Haaretz, 12.07.2005,

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