You wish to judicially collect financial debts in Israel? Please consider the following:
Out of Court Proceedings
Prior to filing a civil suit, you should attempt to give the party in default a detailed warning to pay its debt. Experience shows, that many times defaulters receiving such warning notice from our offices can be brought to settling the debt.
For out of court proceedings our fees are calculated by the hour. For the correspondence with a client required for the draft of a warning notice containing the threat to initiate legal proceedings and with the appointment of a date, the drafting of the warning notice itself and, where applicable, the delivery of the first reply of the defaulter we usually require about 2 working hours.
Should the out of court proceedings not produce any satisfactory result, you should first decide, whether you wish to evaluate the defaulting party’s ability to meet its financial obligations, before initiating legal proceedings.
Where the party in default is an Israeli entity, we could provide you with an up-to-date economical report of Dunn & Bradstreed, at a cost of approximately 180, 00 € (in March 2004). For the further handling of the matter you should also take an additional working hour of our offices into account.
Regarding the receipt of financial information regarding individuals, please note that there are no controlled credit agencies from which you could obtain the required financial information for a relatively small fee. Therefore, in order to obtain financial information regarding an individual, one would have to hire the services of a private investigator.
The Legal Proceedings
The court fees for a claim for payment amount to 2.5% of the amount in dispute, however not less than about 45 €, together with a protocol fee of about 25 € (in March 2004). 50% of these court fees (i.e. 1.25% of the amount in dispute) are to be paid together with the protocol fee upon filing the suit. The remaining 1.25% are to be paid after determining the evidence hearings. Such could become excessive, where the defendant settles the debt or where the parties reach a settlement agreement prior to the commencing of the evidence hearings.
Legal Fees at First Instance
In Israel, legal fees are not regulated by law, but may rather be agreed on individually between the attorney and his client.
In addition to a basic fee, that will be determined upon taking over the mandate, our offices charge for the effort invested in court hearings, commencing from the second hearing that takes place. The amount of such fees for court hearings mainly depends on the geographical distance between our offices and the relevant court in Israel. After each such court hearing, the client receives a separate invoice, payable within 30 days after receipt.
Reimbursement for Court Fees and Legal Fees
Where the claim is successful in full, the defendant has to bear the total court fees. Further, the defendant has to bear the legal fees paid by the plaintiff in an amount, which is to be determined by court and at the court’s sole discretion. It can therefore occur that the court will not cast all legal fees paid by the succeeding plaintiff upon the defendant.
Where the defaulter does not pay following the verdict against him, the verdict is passed on to the execution offices. The respective fee amounts to 1% of the amount stated in the verdict. In such cases the representing attorney and the client usually agree upon a contingency fee, which is to be paid by the defaulter, in full.
Documents Required for the Warning Notice and/or Filing the Suit
In general, the drafting of a warning notice of the filing of the suit require the presentation of the following documents:
1. For the warning notice – a listing of the outstanding basic amounts, the dates of the respective days of payment, the
calculation of the interest on each basic amount till date and an explanation regarding the interest rates demanded, as well
as the orders or another document stating the exact and complete data of the defaulter.
All these can be delivered via facsimile.
2. For the suit – as above and all correspondence with the defaulter, including orders, delivery papers, invoices, reminders
and replies of the defaulter, where applicable (in chronological order), as well as a specific power of attorney, which we
would provide you with.