Lex Mundi Global Attorney-Client Privilege Guide |
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Israel |
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(Middle East)
Firm
S. Horowitz & Co.
Contributors
Eyal Doron |
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| Is the ACP recognized in your jurisdiction? | Attorney-client privilege is recognized in Israel and is codified in section 48 of the Israeli Evidence Ordinance [New Version], 5731-1971 (“the Evidence Ordinance”). |
| If the ACP is not recognized in your jurisdiction, are there rules of professional confidentiality or other rules that would enable a lawyer or a client to withhold attorney-client communications or work product prepared by counsel from disclosure... | See the response to above. |
| Is a distinction made in applying the ACP or professional confidentiality rules in civil and criminal proceedings? May government authorities require disclosure of attorney-client communications and legal work product? | No material distinction is made when applying ACP in criminal and civil cases. However, there are two exceptions to applying attorney-client privilege in the context of criminal proceedings, these being: (a) where the attorney-client communications are in furtherance of a crime which the client intends committing in the future; or (b) where the lawyer was implicated in the offense committed by his client. No, since according to section 52 of the Evidence Ordinance, the scope of attorney-client privilege, encompasses the provision of evidence before a court or tribunal and before any authority, body or person authorized by law to collect evidence, thus government authorities would not be privy to such privileged communications from the outset. |
| In the corporate context, what test is applied to determine who within a corporation is considered the client for the purposes of the ACP? (e.g., in the U.S.: the Upjohn approach, control group test, etc.) | No similar legal test applies in Israel for making such determination. However, the issue has been raised before the Israeli courts on numerous occasions in the context of derivative claims, in which shareholders ask to disclose privileged communications between the company and its attorneys (see, e.g., Cl. Act. (Tel Aviv) 40404-03-16 Atzmon v. Osem Investments Ltd. (published in Nevo, 26.1.2018)). It should be noted, that pursuant to section 47 of the Israeli Companies Law, 1999-5759 ("the Companies Law"): "the acts and intentions of an organ shall be the acts and intentions of the company". Hence, it can be argued that, for the purpose of establishing attorney-client privilege in the corporate context, communications with the company's organs would be considered the same as communications with the company itself. The company’s organs include: "the general meeting, the board of directors, the general manager and any person whose acts in any given matter are considered by law or by virtue of the articles of association to be the acts of the company with regard to the matter concerned" (section 46 of the Companies Law). |
| Is in-house counsel expected to meet a higher burden than outside counsel in order to establish that privilege applies to in-house counsel’s communications? | For the purpose of attorney-client privilege, no distinction is made between an in-house counsel, who is in the employ of the company (the client) and the company’s outside counsel (see C.C. (Tel-Aviv-Yafo District Court) 2486/02 Carmelton Group Ltd. v. Israel Discount Bank Ltd. (published in Nevo, 4.5.2003). The Israeli courts have even ruled that making such distinction undermines the trust between in-house counsel and the employer company, which relies heavily on the attorney-client privilege (see Liq. (Central) 54665-06-12 Yosef Segev, Adv. v. Official Receiver of Tel Aviv (published in Nevo, 31.7.2014(. |
| Civil Law Jurisdictions: May in-house counsel assert privilege or professional confidentiality? | N/A |
| Civil Law Jurisdictions: Is in-house counsel allowed to be active members of your jurisdiction’s bar? | Not relevant to Israel. |
| Is the common interest doctrine recognized in your jurisdiction? | There is no express rule (whether under Israeli law or case law) that would apply attorney-client privilege to encompass communications between a client or his attorney and a third party's attorney on a matter of common interest. However, where a number of clients are jointly represented by the same attorney, then communications among each of the clients and the said attorney, in connection with the joint representation, will not be deemed privileged vis-a-vis the other mutual clients, but would be deemed so vis-a-vis any third party (C.A. 442/81 Grumet v. Serousi PD 36(4) 214, 221 (1982)). In addition, disclosing privileged information to a third party who is considered the client's "confidant" or when the disclosure serves the purpose for which the legal advice was obtained, will not necessarily constitute a waiver of the attorney-client privilege (LCA 6171/17 John Doe v Meuhedet Health Fund (published in Nevo, 4.9.2017)). |
| How is the doctrine articulated in your jurisdiction? | See the response to the above. |
| Must a common interest agreement be in writing? | See the response to the above. |
| Is litigation funding permitted in your jurisdiction? Are there any professional rules in this respect? | Litigation funding is a relatively new area or means for bringing lawsuits that is currently gaining momentum in Israel. Established guidelines or rules regarding the implementation of litigation funding have yet to be prescribed or laid down. The Israeli courts have encouraged, in some cases, the setting up and utilization of litigation funds as a means for circumventing situations where, due to financial concerns, parties elect not to pursue, or decide to forfeit their inherent right to institute, claims that are deemed justified. (Liq. (Nazareth) 29526-10-16 Benny Bachar Zoabi Construction Company Ltd. v. The Official Receiver (published in Nevo, 23.4.2017); Liq. (Tel-Aviv) 7684-11-15 Lederman v. Tamir Fishman Venture Capital II Inc. (published in Nevo, 28.8.2017)). It should also be noted that the Israeli Ministry of Justice operates and maintains a governmental fund that provides assisted financing for the institution of class actions perceived, in the Ministry’s view, as being of public and social importance. |
| Have the courts in your jurisdiction addressed whether communications with litigation funders may be protected by the ACP or the work-product protection | As noted above, due to it being a relatively new area or means for bringing lawsuits in Israel, the Israeli courts have yet to fully address or consider the issue. However, in one case, the court was asked to order a litigation fund to disclose a financing agreement entered into with one of its clients; the fund objected and argued, inter alia, that the agreement was a document prepared specifically for legal proceedings and is therefore protected by the legal work product doctrine; the court ultimately agreed to keep the agreement confidential, but based its decision on the fact that its disclosure could result in jeopardizing commercial trade secrets of the fund (LAF 45595-01-16 El Al Israel Airlines Ltd v. First Libra Fund Manage Ltd. (published in Nevo, 14.4.2016)). |
| Is the crime-fraud exception recognized in your jurisdiction? | The crime-fraud exception is recognized and has been interpreted, in Israeli case law (although not expressly accounted for or stipulated in statutory law or regulations). |
| What statutes or key court decisions articulate the crime-fraud exception in your jurisdiction? | Section 48 of the Evidence Ordinance articulates the sole exception when it comes to ACP, namely, waiver by the client of their inherent privilege. Additional “indirect” exceptions have also been established in case law. A.IBA 17/86 John Doe v. The Bar Association PD 41 (4) 770, is the most cited judgment on this point. In its ruling in this case, the court held that: "Where the offender relays to an attorney his intention to commit an offense in the future and also conducts himself in such a way, then the client does not wish to obtain any professional services from the attorney, and it is also not something that is connected to professional services given by an attorney." |
| Is there a statute or rule that protects information obtained or prepared in anticipation of litigation from disclosure in legal proceedings? (In the U.S.: What state rule is your jurisdiction’s analog to FRCP 26(b)(3)?) | The Work Product Doctrine/Litigation in Israel was developed by the courts and, thus, is entrenched in case law. |
| What are the elements of the protection in your jurisdiction? | Work Product Doctrine/Litigation Privilege is broader than attorney-client privilege, and applies (also) to documents that are not expressly covered under the attorney-client privilege (such as documents prepared by an expert for the client for trial purposes without the involvement of a lawyer).
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| Does your jurisdiction recognize an accountant-client privilege? | No, see LCA 3184/16 Kost Forer Gabbay & Kasierer, Accounting Firm v. Heftziba Jerusalem Gold Ltd. (in Liquidation) (published in Nevo, 26.5.2016). |
| Does your jurisdiction recognize a mediation privilege? | Section 79C(d) of the Courts Law (Consolidated Version), 5744-1984, provides that "Things transferred under a mediation procedure will not serve as evidence in civil litigation" (inadmissibility). Further, section 3F of the Courts Regulations (Mediation), 5753-1993 (“the Mediation Regulations”), stipulates that the mediation procedure will be governed by the form of agreement, as more fully set out in the Addendum to the Mediation Regulations. Included amongst the provisions of such agreement (viz., the Addendum to the Mediation Regulations) is an undertaking by the parties, inter alia, not to submit to the court anything that was stated in the mediation process and not to present documents on any matter raised, directly or indirectly, in the mediation process. See LCA 4781/12 YM Ainy Confectionery Ltd. v. Bank Leumi le-Israel B.M. (published in Nevo, 3.6.2013). |
| Does your jurisdiction recognize a settlement negotiation privilege? | As entrenched in Israeli case law, documents and communications exchanged during the course of settlement negotiations will be deemed inadmissible subject to the following three cumulative conditions being met: (a) the settlement negotiations between the parties were genuine; (b) the relevant documents or communications formed part of the settlement negotiations; and (c) in the given circumstances, no exception as to the inadmissibility of the documents/communications arose (see CA 172/89 Sela Insurance Company Ltd. v. Solel Boneh Ltd. PD 47(1) 311). It should be noted that the relevant documents and/or communications will be examined by adopting a substantive (rather than formalistic) approach (i.e., the use of phrases such as "without prejudice to rights - for negotiation purposes only" or the like in such document/communication, will not be viewed as conclusive evidence to support a claim based on the inherent privilege/inadmissibility). |
Lex Mundi Global Attorney-Client Privilege Guide
Attorney-client privilege is recognized in Israel and is codified in section 48 of the Israeli Evidence Ordinance [New Version], 5731-1971 (“the Evidence Ordinance”).
It should be noted that an attorney is ethically prohibited from waiving his client's privilege without obtaining his client’s consent to do so (section 90 of the Israeli Bar Association Law, 5721-1961).
See the response to above.
No material distinction is made when applying ACP in criminal and civil cases. However, there are two exceptions to applying attorney-client privilege in the context of criminal proceedings, these being: (a) where the attorney-client communications are in furtherance of a crime which the client intends committing in the future; or (b) where the lawyer was implicated in the offense committed by his client.
No, since according to section 52 of the Evidence Ordinance, the scope of attorney-client privilege, encompasses the provision of evidence before a court or tribunal and before any authority, body or person authorized by law to collect evidence, thus government authorities would not be privy to such privileged communications from the outset.
See Cl. Act. (Economics Department) 21851-03-15 Avigdor Moshe Weinberger v. Mizrahi Tefahot Bank Ltd. (published in Nevo, 22.06.2016).
No similar legal test applies in Israel for making such determination. However, the issue has been raised before the Israeli courts on numerous occasions in the context of derivative claims, in which shareholders ask to disclose privileged communications between the company and its attorneys (see, e.g., Cl. Act. (Tel Aviv) 40404-03-16 Atzmon v. Osem Investments Ltd. (published in Nevo, 26.1.2018)). It should be noted, that pursuant to section 47 of the Israeli Companies Law, 1999-5759 ("the Companies Law"): "the acts and intentions of an organ shall be the acts and intentions of the company". Hence, it can be argued that, for the purpose of establishing attorney-client privilege in the corporate context, communications with the company's organs would be considered the same as communications with the company itself. The company’s organs include: "the general meeting, the board of directors, the general manager and any person whose acts in any given matter are considered by law or by virtue of the articles of association to be the acts of the company with regard to the matter concerned" (section 46 of the Companies Law).
For the purpose of attorney-client privilege, no distinction is made between an in-house counsel, who is in the employ of the company (the client) and the company’s outside counsel (see C.C. (Tel-Aviv-Yafo District Court) 2486/02 Carmelton Group Ltd. v. Israel Discount Bank Ltd. (published in Nevo, 4.5.2003). The Israeli courts have even ruled that making such distinction undermines the trust between in-house counsel and the employer company, which relies heavily on the attorney-client privilege (see Liq. (Central) 54665-06-12 Yosef Segev, Adv. v. Official Receiver of Tel Aviv (published in Nevo, 31.7.2014(.
N/A
Not relevant to Israel.
There is no express rule (whether under Israeli law or case law) that would apply attorney-client privilege to encompass communications between a client or his attorney and a third party's attorney on a matter of common interest. However, where a number of clients are jointly represented by the same attorney, then communications among each of the clients and the said attorney, in connection with the joint representation, will not be deemed privileged vis-a-vis the other mutual clients, but would be deemed so vis-a-vis any third party (C.A. 442/81 Grumet v. Serousi PD 36(4) 214, 221 (1982)). In addition, disclosing privileged information to a third party who is considered the client's "confidant" or when the disclosure serves the purpose for which the legal advice was obtained, will not necessarily constitute a waiver of the attorney-client privilege (LCA 6171/17 John Doe v Meuhedet Health Fund (published in Nevo, 4.9.2017)).
See the response to the above.
See the response to the above.
Litigation funding is a relatively new area or means for bringing lawsuits that is currently gaining momentum in Israel. Established guidelines or rules regarding the implementation of litigation funding have yet to be prescribed or laid down. The Israeli courts have encouraged, in some cases, the setting up and utilization of litigation funds as a means for circumventing situations where, due to financial concerns, parties elect not to pursue, or decide to forfeit their inherent right to institute, claims that are deemed justified. (Liq. (Nazareth) 29526-10-16 Benny Bachar Zoabi Construction Company Ltd. v. The Official Receiver (published in Nevo, 23.4.2017); Liq. (Tel-Aviv) 7684-11-15 Lederman v. Tamir Fishman Venture Capital II Inc. (published in Nevo, 28.8.2017)). It should also be noted that the Israeli Ministry of Justice operates and maintains a governmental fund that provides assisted financing for the institution of class actions perceived, in the Ministry’s view, as being of public and social importance.
As noted above, due to it being a relatively new area or means for bringing lawsuits in Israel, the Israeli courts have yet to fully address or consider the issue. However, in one case, the court was asked to order a litigation fund to disclose a financing agreement entered into with one of its clients; the fund objected and argued, inter alia, that the agreement was a document prepared specifically for legal proceedings and is therefore protected by the legal work product doctrine; the court ultimately agreed to keep the agreement confidential, but based its decision on the fact that its disclosure could result in jeopardizing commercial trade secrets of the fund (LAF 45595-01-16 El Al Israel Airlines Ltd v. First Libra Fund Manage Ltd. (published in Nevo, 14.4.2016)).
The crime-fraud exception is recognized and has been interpreted, in Israeli case law (although not expressly accounted for or stipulated in statutory law or regulations).
Section 48 of the Evidence Ordinance articulates the sole exception when it comes to ACP, namely, waiver by the client of their inherent privilege. Additional “indirect” exceptions have also been established in case law. A.IBA 17/86 John Doe v. The Bar Association PD 41 (4) 770, is the most cited judgment on this point. In its ruling in this case, the court held that: "Where the offender relays to an attorney his intention to commit an offense in the future and also conducts himself in such a way, then the client does not wish to obtain any professional services from the attorney, and it is also not something that is connected to professional services given by an attorney."
See, also, HCJ 1437/02 Association for Civil Rights in Israel v. Minister of Internal Security PD 57(2) 746 (2004); Cr.A. 670/80 Baruch Ben Israel Abuchatzira v. State of Israel PD 35(3) 681 (1981); Misc. Cr. Petitions 7064/08 State of Israel v. Leora Berko PD 63(2) 453 (2009).
Furthermore, section 262 of the Israeli Penal Law, 5737-1977 imposes criminal liability on "a person who, knowing that a person intends to commit a crime, fails to exercise all reasonable measures to prevent the commission or completion thereof". In light of such provision of law, both the Israeli courts, as well as the Ethics Committee of the Israel Bar Association, have ruled that a lawyer is obliged to disclose communications with his client regarding the contemplated commission of an offense in the future, in the event of two cumulative conditions being met: (1) the offense is criminal-related (i.e., one that is punishable by imprisonment for a period exceeding three years); and (2) the lawyer possesses actual and concrete information of his client’s intention to commit the offense (see 55206-09-12 Rothenstrich v. Tel Aviv District Bar Association (published in Nevo, 14.3.2013).
The Work Product Doctrine/Litigation in Israel was developed by the courts and, thus, is entrenched in case law.
See C.A. 327/68 Simcha Bonim Zinger v. John Edred Biyanun, et al. 22 (2) 602 (1968).
Work Product Doctrine/Litigation Privilege is broader than attorney-client privilege, and applies (also) to documents that are not expressly covered under the attorney-client privilege (such as documents prepared by an expert for the client for trial purposes without the involvement of a lawyer).
Two cumulative conditions need to be satisfied in order to apply the Work Product Doctrine/Litigation privilege (see LCA 1412/94 Hadassah Medical Association Hadassah Ein Kerem v. Ofra Gilad, PD 59(2) 516 (1995)
- The existence of pending legal proceedings or, at the very least, a genuine probability that legal proceedings will be instituted in the future.
- The main purpose for preparing the document or the exchange of communications was to prepare for such legal proceedings.
No, see LCA 3184/16 Kost Forer Gabbay & Kasierer, Accounting Firm v. Heftziba Jerusalem Gold Ltd. (in Liquidation) (published in Nevo, 26.5.2016).
Section 79C(d) of the Courts Law (Consolidated Version), 5744-1984, provides that "Things transferred under a mediation procedure will not serve as evidence in civil litigation" (inadmissibility). Further, section 3F of the Courts Regulations (Mediation), 5753-1993 (“the Mediation Regulations”), stipulates that the mediation procedure will be governed by the form of agreement, as more fully set out in the Addendum to the Mediation Regulations. Included amongst the provisions of such agreement (viz., the Addendum to the Mediation Regulations) is an undertaking by the parties, inter alia, not to submit to the court anything that was stated in the mediation process and not to present documents on any matter raised, directly or indirectly, in the mediation process. See LCA 4781/12 YM Ainy Confectionery Ltd. v. Bank Leumi le-Israel B.M. (published in Nevo, 3.6.2013).
As entrenched in Israeli case law, documents and communications exchanged during the course of settlement negotiations will be deemed inadmissible subject to the following three cumulative conditions being met: (a) the settlement negotiations between the parties were genuine; (b) the relevant documents or communications formed part of the settlement negotiations; and (c) in the given circumstances, no exception as to the inadmissibility of the documents/communications arose (see CA 172/89 Sela Insurance Company Ltd. v. Solel Boneh Ltd. PD 47(1) 311). It should be noted that the relevant documents and/or communications will be examined by adopting a substantive (rather than formalistic) approach (i.e., the use of phrases such as "without prejudice to rights - for negotiation purposes only" or the like in such document/communication, will not be viewed as conclusive evidence to support a claim based on the inherent privilege/inadmissibility).