Rights holders held the land by virtue of a judgment and a division map. A decade after the judgment, a mediation process took place regarding a family dispute between other partners in the plot, without involving the two original rights holders. The mediation agreement was granted the status of a judgment, but it contradicted the original division and as a result, among other reasons, the planning authorities refused to approve the original owners' land map. Following the cancellation of the mediation judgment, the rights holders demanded compensation from the mediator for the planning delay caused to them.
The Court dismissed the claim for damages because no flaw was found in the mediator’s conduct, no actual damage was shown, and the granting of judicial approval to the arrangement severed the causal link. The institution of mediation is utilized across all branches of the Israeli legal system to assist parties in reaching agreements outside of judicial adjudication. Under the Israeli Courts Law and the Mediation Regulations, the mediator's purpose is to help the parties reach an independent agreement and it must act fairly and even terminate the process if it adversely affects third parties. However, the primary duties are ethical, the responsibility for the content of the agreement rests with the contracting parties and the entire process is protected under statutory privilege, which limits the mediator's ability to defend itself. Here, the mediator acted in accordance with accepted norms and the arrangement was drafted with the sole purpose of resolving the internal dispute between the parties. At the time, the mediator, the parties, and the Court believed that the agreements does not affect the original rights holders and it later emerged that the planning authorities refused the separation due to prior, more profound, planning restrictions. Because the parties refused to waive the privilege, the mediator was limited in his defense. As it was found that his actions aligned with professional standards and because no causal link was proven to damages that arose anyway from previous failures, the lawsuit was dismissed and substantial costs were imposed on the initiators of the proceeding.