Developing Law and Litigation Funding in Israel

Courts have established a welcoming environment for third-party legal funding in Israel. Individual issues still remain vague, as no comprehensive rulings governing funding have been issued. Still, courts have responded positively to funding, which led to rapid growth in both liquidation and general litigation.

Woodsford Litigation Funding details the most important developments in the Israeli markets. It speaks to funding being an accepted part of the legal landscape. Over the last five years in particular, TPLF has grown rapidly.

Here are some key takeaways from the evolution of the funding landscape in Israel:

• There are no set limits on how much fees or interest funders may charge.
• Court approval is required for funding agreements in liquidation matters.
• There are no specific legal provisions governing third-party funding.
• TPLF ethics are guided by the Bar Association Rules, which do not include specific guidelines for lawyers advising clients on litigation funding.
• No public bodies are currently responsible for oversight of funders.
• Under Israeli law, there is no prohibition on funders having a say in the litigation process, strategy, or settlement decisions.
• Class actions have been legally permitted in Israel since 2006.
• Civil Procedure Regulations hold that only parties involved in litigation may be liable for adverse costs. This does not include third-party funders.
• ATE insurance, while not prohibited, is not commonly used.
• Except in liquidation matters, disclosure of TPLF is not automatically required. In some instances though, courts may compel disclosure.
• Funders do not enjoy privilege protections the way client and lawyer communications do.

For a more comprehensive overview of the litigation funding sector in Israel, check out Woodsford’s detailed report.