Background
The Magistrates’ Court entered judgment against the applicants for approximately NIS 370,000 in favor of respondent George Nahum. During their appeal to the Central District Court, the court proposed deciding the case by compromise under section 79A of the Courts Law, within a range of NIS 80,000 to NIS 180,000, while also determining costs. After a recess, counsel for both sides accepted the proposal, and the District Court gave their agreement the force of a judicial decision.
Later that day, one applicant, who had not attended the hearing, personally informed the court that she had neither known of nor accepted the proposal. The applicants sought to withdraw their consent, arguing that her husband had avoided contacting her during the hearing because of her medical condition and that counsel lacked authority to accept such a consequential arrangement without her approval. The District Court rejected the requests, finding that counsel’s power of attorney expressly authorized settlements, no limitation on his authority had been disclosed, and the medical documents did not substantiate treatment occurring during the hearing itself.
The applicants sought leave to appeal to the Supreme Court and requested interim relief and a stay. They emphasized that they attempted to withdraw only hours after the hearing, before supplemental submissions were filed, and argued that the respondents had not materially relied on the agreement.
The Court’s Holding
Justice Ruth Ronnen denied leave to appeal without requesting a response. Under section 2 of Israel’s Agency Law, an authorized representative’s act binds the principal. Because the absent applicant’s power of attorney authorized counsel to compromise at his discretion, counsel’s unqualified statement that “we agree to the court’s proposal” bound her as though she had personally consented. A court may sometimes seek direct confirmation from a litigant, but it is not generally required to obtain each represented party’s personal approval whenever counsel accepts a settlement proposal or procedural arrangement.
The Court also held that the applicants could not withdraw from the agreement merely because the absent applicant promptly expressed a different view. Agreements to submit a case for a section 79A compromise judgment have both substantive and procedural features: they establish the mechanism and boundaries for resolving the dispute and may entail procedural consequences such as an unreasoned judgment. Courts should permit withdrawal from a valid agreement of that kind only in exceptional circumstances, particularly after the agreement has received the force of a judicial decision.
No exceptional circumstance was shown here. The applicants could have requested additional time to consult the absent party or conditioned their consent on receiving her approval, but they did neither. The Court therefore left the District Court’s decision intact, denied the stay application, and made no costs order because no response had been requested.
Key Takeaways
- A lawyer’s acceptance of a compromise proposal binds a represented litigant when the power of attorney authorizes settlement and no relevant limitation has been disclosed.
- Courts are not ordinarily required to obtain personal confirmation from every represented party before accepting counsel’s consent to a settlement or procedural arrangement.
- Promptly changing one’s mind does not, by itself, justify withdrawal from a valid section 79A agreement that has received judicial approval; withdrawal is reserved for exceptional cases.
Why It Matters
The decision strengthens the reliability of courtroom agreements made through authorized counsel. It warns parties that an undisclosed instruction requiring personal approval will not ordinarily defeat an unconditional consent given by counsel within the scope of an express power of attorney.
It also clarifies the status of agreements to accept compromise judgments under section 79A. Although such an agreement is not itself a complete settlement because the court must still select the outcome, its combination of contractual, procedural, and substantive features makes it difficult to revoke once judicially approved.