Charging the winning party for costs is a common practice in arbitration proceedings conducted under civil law - similar to the method used by courts. In arbitrations conducted under Torah law, this is more rare.
In this column, we will suggest that it is appropriate to positively consider the use of expenses in this framework as well, in arbitrations according to Torah law in which the business-legislative aspect is necessary and therefore professional representation is required.
As a matter of routine, courts order the losing party in an interlocutory application or in a final judgment to pay “costs” in favor of the winning party. These “costs” are intended to compensate the winning party for the costs it actually incurred.
Sometimes, the court uses the "threat" of costs. That is, as a sword and not as a shield. That is, in order to prevent futile proceedings or to pressure a party to compromise, the court "intimidates" one of the parties because whether or not he agrees to the court's proposal, there is a chance that he will be "charged with costs." Sometimes the judges add the word "significant." Then the "threatened" party thinks twice, and quite often, it happens that the "sword of costs" forces him to agree to one thing or another.
There is room for criticism that the threat of costs is sometimes a threat and not always just compensation for the other party's costs, but at the same time, when it comes to clarifying to a party that insistence - usually unnecessary - will lead to the charging of costs, in the sense of there being no penalty unless they are warned, this streamlines the proceedings and shortens them, since a party who knows that they will not be charged costs can "busy" the case endlessly, if only to harass the other party.
As a routine practice, "civil" arbitration proceedings have adopted the above and use the charging of costs as used by the court.
Between courts and tribunals
Charging a party for expenses is almost non-existent in arbitration proceedings conducted according to Torah law.
In general and in a nutshell, as volumes have been written about this, the idea behind not charging costs is that every person can represent themselves and there is no reason to charge a party with costs on the strength of the other party who lost the case, since he could have represented himself.
In today's reality, courts are also business arbitrators for all intents and purposes. Quite a few disputes that are heard before them are disputes between companies, or disputes that are decided according to the law of the state and even the laws of countries overseas. Often these are complicated disputes, and there is room for knowledge of various civil laws, investigation of experts, witnesses who are business people, and so on. In these disputes, most often, the individual or company does not have the ability to represent themselves and they are assisted and represented by professional lawyers.
The possibility, although not routine and most poskim do not accept it, of using expenses/fines exists in Hebrew law, see: Tosafot Bavli Sanhedrin 3, 2 D. V. and Ex.; Maharam of Rothenburg in Mordechai there; Responsa HaRosh 176; Responsa Rashba, Part 1, Section 580; Tosha HaMosh 314, Section 5.[1]
It seems that in disputes such as this, it is appropriate for the courts to positively consider the use of expenses where a halakhic option can be found, by virtue of the laws of fines at this time, similar to the manner in which it is used in the courts and in arbitrations under civil law, for the two reasons mentioned above. This will, on the one hand, result in compensation for a party who has been wronged for no reason, or a party who has earned the right to receive back the expenses he incurred for necessary and necessary professional representation, as well as streamline the hearings in the courts that deliberate according to Torah law.
*Attorney Zvi (Tsiki) Wolfson From the office of Wolfson Weinstein & Co.', intern In commercial law He also serves as an arbitrator in various commercial disputes.
*The halakhic aspect of the article was written with the assistance of an attorney and rabbi. Eliyahu Schwartz, fromWolfson Weinstein & Co.'.
[1] For more information, Tel Aviv (Ha'i') 2839/06 Yariv v. State of Israel - Ministry of Economy et al.'
As well as a wide-ranging analysis by the Honorable Justice Drori - in Sha'a 1692/05 Oved Mizrahi et al. v. Eliyahu Hasid et al.'
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