Background
S. Cohen Engineering Ltd. performed construction and development work for the Municipality of Ashdod under a contract to complete work at a city school. After disputes arose, the company terminated the contract and sued the municipality, alleging breach and nonpayment. The Magistrates’ Court rejected most of the claim in 2020, and the Supreme Court dismissed the parties’ cross-appeals in 2021.
The company subsequently brought further proceedings arising from the same dispute, including an unsuccessful action seeking to set aside the 2020 judgment on the theory that findings in litigation involving a subcontractor showed that the municipality had concealed favorable evidence. In May 2026, the company filed another action against the municipality. The municipality sought security for costs, citing the repeated litigation and unpaid costs from earlier proceedings. The Ashkelon Magistrates’ Court ordered the company to deposit NIS 80,000, finding that it had not disclosed sufficient financial information, that the new action appeared vexatious, and that its prospects were very weak.
The company then sought the trial judge’s disqualification, arguing that these statements showed that the judge had prejudged the case. The Magistrates’ Court denied the motion, explaining that assessing the action’s prospects was required when deciding whether to order security for costs. The company appealed that refusal to Supreme Court President Yitzhak Amit.
The Court’s Holding
The Supreme Court dismissed the disqualification appeal without requesting a response from the municipality. President Amit held that judicial disqualification requires circumstances creating a real apprehension of bias. The trial court’s assessment of the claim’s weak prospects did not meet that standard because the assessment formed part of the analysis legally required when determining whether a limited-liability company should provide security for costs.
The Court explained that a company ordinarily may be required, upon request, to provide security. In deciding whether circumstances justify departing from that rule, a court may consider the company’s ability to pay a successful defendant’s costs, whether the claim was brought in good faith, and the claim’s prospects. The Magistrates’ Court’s discussion of those considerations did not demonstrate a closed mind or actual prejudgment.
To the extent the company challenged the correctness of the security order itself or claimed that it impaired access to the courts, those were appellate objections to a procedural ruling, not grounds for disqualification. Such objections must be pursued through the ordinary appellate process. Given the company’s repeated unsuccessful disqualification appeals and the resulting consumption of public resources, the Court ordered it to pay NIS 4,000 to the State Treasury.
Key Takeaways
- A judge’s unfavorable preliminary assessment of a claim does not establish disqualifying bias when that assessment is required to decide a pending procedural motion.
- Challenges to the merits of a security-for-costs order belong in the ordinary appellate process, not in judicial-disqualification proceedings.
- Repeated meritless disqualification applications may result in costs payable to the State Treasury, particularly when the litigant has previously been warned about misuse of the procedure.
Why It Matters
The decision reinforces the strict distinction in Israeli procedure between allegations of judicial bias and disagreements with judicial rulings. A court may evaluate litigation prospects when the governing procedural issue requires it to do so without thereby becoming disqualified from continuing to hear the case.
For corporate litigants, the ruling also underscores that failure to disclose financial capacity, a history of unpaid costs, weak prospects, and repetitive litigation may support an order requiring substantial security for costs. Disqualification proceedings cannot be used as a substitute route for contesting that order.