Himmelfarb and Goldberg had been friends and sole shareholders in a large, successful real estate development company for ten years. As the regional economy where the company was based changed, the company began experiencing a downturn in business. With the decrease in profits came a deterioration in the relationship between the friends. Each accused the other of taking self-serving actions which allegedly were detrimental to the business as a whole. Before long, Himmelfarb claimed that Goldberg had misappropriated company funds. In turn, Goldberg accused Himmelfarb of breaching certain of his fiduciary duties. One thing led to another until the parties became embroiled in a lawsuit — Himmelfarb having sued Goldberg for $500,000 and Goldberg having counterclaimed for $750,000.

Both Himmelfarb and Goldberg entered into the litigation convinced of the justice of their respective positions and certain of complete vindication in court. However, after countless depositions, subpoenas, document requests and interrogatories – all legitimate discovery tools – hundreds of thousands of dollars in legal fees, and seemingly interminable time dedicated to the case, the antagonists learned the painful and expensive lesson that there are two sides to a dispute. Like (an estimated) 95% of other parties in litigation, the erstwhile friends decided to settle without going to trial. They agreed to dissolve the business, split the remaining assets and drop the claims against each other without admitting culpability. They still remain angry with one another.

Himmelfarb and Goldberg were vaguely aware that according to Jewish law, Halacha, Jewish disputants were not supposed to resolve their differences in secular court, but rather in a Jewish court, a Beit Din. However, they mistakenly believed that the prohibition of Arkaot – litigation in secular court – did not apply to today’s judicial system. In any event, they had rejected suggestions that a Beit Din adjudicate the dispute.

Had Himmelfarb and Goldberg heeded the advice of their lawyers who had forewarned them of the expensive and time-consuming nature of courtroom litigation, they might have decided not to sue each other. They might have opted for private, less costly and more expedient alternative dispute resolution proceedings such as mediation or arbitration — forms of p’sharah discussed in Jewish law — either of which could have been conducted in an halachically-acceptable manner. By choosing to litigate in a public forum, these disputants ended in a “no-win” situation which cost them dearly; both financially and emotionally.

The mistakes of our fictitious antagonists need not be repeated….

Halacha generally prohibits a Jew from initiating legal action against a fellow Jew in a court other than a Beit Din.¹ Despite this Torah-based prohibition,²religious Jews, like others in today’s litigious society, unfortunately turn to the courts of this land to resolve disputes in which they become embroiled.

The conceivable reasons behind the derogation of this halacha are manifold.

First, it appears that the restriction against proceeding in Arkaot Shel Nochrim, the reference to non-Jewish courts, ³ is not well-known. Relatively few responsa over the past few decades ⁴ have delved exhaustively into issues surrounding secular litigation. Only recently have articles on this topic begun to appear in popular halachic journals. ⁵

Second, many Orthodox Jews who even have a general knowledge of the problem, miscomprehend the parameters of the issue of Arkaot. Two misconceptions abound: (1) that our judicial system cannot be considered Arkaot and, therefore, is not covered by the prohibition, and (2) that the law of the land, “dina d’malchuta dina,” automatically sanctions secular court lawsuits.

The initial misconception stems from the mistaken notion that Arkaot Shel Nochrim encompasses only idolatrous or corrupt courts. In fact, the Halacha prohibits a Jew from litigating in any non-Jewish court. ⁶ By not proceeding in Beit Din, the individual raises the potential Chilul Hashem inference that Jewish law is incapable of resolving the case at hand. ⁷ Additionally, should a civil court order monetary relief in a case where the Halacha would not, a plaintiff could come to transgress the prohibition of g’zelah. ⁸

Moreover, dina d’malchuta dina in no way condones the bypassing of Beit Din. The law of the land is more narrowly applied in Halacha than, perhaps, is commonly recognized. ⁹ In any event, it is a substantive rule of law and does not specifically speak to the question of choice of a Jewish or non-Jewish forum to resolve a dispute.

A third reason why many may disregard the primacy of Beit Din jurisdiction in favor of secular courts, concerns the inability of Beit Din to enforce its own decrees. Of course, this problem may be solved by the advance agreement of parties to be bound by the Beit Din’s holding and permit state or federal court enforcement of the judgment. Nonetheless, instances arise where a Beit Din’s decision is not upheld due to procedural and/or substantive challenges to the Beit Din proceeding. ¹⁰

Another possible explanation for the lack of enthusiasm for Beit Din is the concern putative litigants have regarding what substantive law applies. Jewish law certainly does not always coincide with the statutory or common law that, in people’s minds, formed the basis for the transaction or circumstance now in dispute. Parties refuse to subject themselves to the jurisdiction of a Beit Din which might, it is perceived, unfairly elevate halachic dictates and responsibilities over commonly accepted, albeit secular, laws and customs.

Regardless of whether the various rationales to avoid Beit Din are valid or are misplaced, the fact remains that the halachic restriction against Arkaot proceedings cannot be supplanted. Without obtaining the permission of a Beit Din, the plaintiffs attorney halachically is required to abstain from aiding in the instigation or continuance of a lawsuit outside the confines of Beit Din.¹¹

For the client who, for whatever reasons, refuses to turn to a Beit Din and for the lawyer who does not wish to lose litigation business, two alternatives exist which are halachically viable and practicable: mediation and arbitration. These two methods of alternative dispute resolution are well-founded in Halacha in the form of “p’sharah” or “bitzua” and can be tailor-made to serve the needs of Jewish litigants.

Arbitration

Arbitration is the voluntary reference by disputants of their disagreement to one or more (typically, three) impartial individuals who, after a hearing at which evidence and argument are presented, render a binding decision called an award. Although the arbitration proceeding is private and less formal than litigation in a court of law — e.g., discovery is circumscribed and strict evidentiary rules are not applied — it is governed by rules and procedures to which the parties have agreed in advance. At times, these rules and procedures are standardized, such as when the parties agree to arbitrate in accordance with the rules of an arbitral organization like the American Arbitration Association. In other instances, the procedures governing the arbitration are formulated, negotiated and agreed upon separately by the parties and their attorneys.

In addition, state and federal statutes provide guidance on the conduct of arbitrations to ensure fairness in the process. ¹² Arbitration awards may be appealable under various statutes, but the grounds for court review are narrow. Generally, a court will not vacate an arbitrator’s decision unless presented with evidence that the arbitration proceeding was tainted by fraud or bias, or that the arbitrators exceeded their powers ¹³ in a manner which results in a manifest disregard of the law.

Mediation

Mediation is a dispute resolution method by which an outsider helps persuade parties to settle their differences voluntarily. Unlike arbitration, no decision is rendered in mediation. Any suggestions the mediator makes for resolving the dispute are not binding upon the parties.

The modus operandi of the mediator is not prescribed. He may preside over face-to-face meetings between parties, caucus with each side separately, or (and most likely) use both of these approaches freely and interchangeably. The mediator listens to the parties’ real or imagined grievances and seeks to gain understanding of their respective positions. He attempts to define the issues and areas of dispute, and determine what common ground, if any, the parties may share.

The mediator is available to the parties as an objective, “sounding board” to offer an impartial evaluation of the merits of their case. In this regard, the parties can choose to share confidences with the mediator, who, without prior consent, will not divulge such information to others. Conversely, the mediator can serve as a conduit through which the two sides can exchange information or settlement proposals. In the end, the mediator resorts to his skills to find creative compromise solutions which are palatable to the antagonists. If acceptable, the mediator’s proposals are finalized in a written, enforceable agreement which the parties execute.

P’sharah and Bitzua

The terms p’sharah and bitzua are used interchangeably by the Talmud in the first chapter of Massechet Sanhedrin and, as explained below, apparently refer both to arbitration and mediation processes.

The Talmud reports a dispute between Rabbi Meir and Chachamim as to the number ofindividuals needed to preside over p’sharah and bitzua.¹⁴

“Bitzua is with three [individuals] according to R. Meir; And Chachamim say that p’sharah is with one [individual].”

The Soncino translation defines the terms p’sharah and bitzua to mean “arbitration”: “Arbitration is by three, so says R. Meir. The Sages say that one is sufficient.”

The continuation of the Gemara focuses upon the respective rationales of R. Meir and the Chachamim and concludes that their argument is based on whetherp’sharah/bitzua can be compared to “din,” formal court proceedings:¹⁵

“All [both R. Meir and the Sages] agree that legal decision is by three, and the point in which they differ is this: One [R. Meir] holds that the force of arbitration should be regarded as equal to that of legal decision, while the other disputes it.”

The view of Chachamim is codified by R. Yosef Karo in the Shulchan Aruch which holds that p’sharah may be conducted by a single individual, ¹⁶ unlike strict legal proceedings which require three judges. ¹⁷

Because p’sharah is not comparable to din, the Shulchan Aruch,¹⁸ in accordance with the continuation of the Gemara in Sanhedrin, ¹⁹ requires parties submitting to p’sharah to pledge themselves, through kinyan, to adhere to the award rendered. Rashi in Sanhedrin opines, ²⁰ and the Shulchan Aruch concurs, ²¹ that a kinyan is necessary for enforcement of the award even where the p’sharah is conducted by three individuals, i.e., the number necessary for din.

Although, as noted above, the Soncino translation of both p’sharah and bitzua is “arbitration,” whether those Talmudic terms refer to the present-day concepts of arbitration or mediation turns, in part, on the timing of the kinyan necessary for enforcement of the p’sharah/bitzua. If a kinyan is made in advance, thereby binding the parties to a decision, then p’sharah/bitzua is in this sense akin to arbitration. If a kinyan is required as an afterevent, then the p’sharah/bitzua is like non-binding mediation in which settlement of the dispute is made enforceable only by the subsequent agreement of the parties.

Tosafot in Sanhedrin ²² actually contemplates both circumstances: (i) A kinyan may be made by the parties at the outset to become bound by the judgment to be rendered at the conclusion of the p’sharah proceeding or (ii) a kinyan may be made by the parties after pronouncement of the p’sharah decision to fulfill otherwise non-binding terms.

That p’sharah and bitzua encompass not only an arbitration but also a mediation format is also clear fiom the explanation of the Shiltei Giborim ²³ to another statement in Sanhedrin:²⁴

“After a case has been decided by legal judgment, one must not attempt a settlement.”

The Shiltei Giborim qualifies this proscription: While judges may not, after rendition of the strict law. impose a settlement, they may encourage voluntary conciliation. i.e., mediation, in the form of p’sharah. Indeed, according to the Shiltei Giborim, not only is it “worthy” for the judges to do so through assuagement and persuasion, it is a “great mitzvah.” because voluntary conciliation brings “shalom” — harmony – between opposing litigants. ²⁵

P’sharah/Bitzua Today

According to all opinions, p’sharah/bitzua is certainly acceptable. if not preferable, at least before disputants approach a Beit Din for a strict din proceeding²⁶Indeed, the Shulchan Aruch rules that even a Beit Din must ask litigants whether they wish to proceed in p’sharah or in din before commencement of the latter process. ²⁷ The Aruch HaShulchan further rules that it is a mitzvah for the judges to encourage the parties to proceed on the basis of p’sharah rather than din. ²⁸

Today, those litigants who choose to go to Beit Din generally agree to accept a decision of the judges termed “p’sharah karov l’ din” ²⁹ or “din k’ein p’sharah,”i.e., a compromise judgment for which the judges need not adhere absolutely or strictly to the law. ³⁰ To the extent, however, that disputants do not bring their cases to Beit Din, they obviously are not afforded — and probably are not even aware of — the options of p’sharah or p’sharah karov l’ din under Beit Dinauspices. Unfortunately, even when apprised of these alternative proceedings before a Beit Din, some otherwise Torah-abiding Jews simply refuse, for whatever reasons, to become involved with a Rabbinic, judicial or quasi-judicial panel. For these individuals who otherwise will turn to secular courts, the question arises whether arbitration or mediation proceedings outside the jurisdiction of a formal Beit Din, e.g., before Jewish or non-Jewish attorneys and other professionals acting as arbitrators/mediators, is permissible.

While non-Jewish arbitration or mediation panels may be halachically acceptable, ³¹ it would be preferable, where possible, to have parties voluntarily appear before fellow, from Jews. First, keeping squabbles “within the family” would help reduce the potential for Chilul Hashem. Second, a mediation or arbitration over which an halachically-knowledgeable lawyer or other professional presides can consider not only common law and statutory customs and principles, but also principles of Choshen Mishpat and the spirit of “yashrut.” ³² So long as the litigants voluntarily agree to have their case mediated or arbitrated on these bases, there should be no halachic objection to these forms of p’sharah or bitzua. ³³ In this regard, Rav Eliezer Yehudah Waldenberg has ruled it permissible for neighbors in a shared housing or condominium-type facility to have disputes decided without any reference to Torah law. ³⁴ Rav Waldenberg relied, in part, on sources cited by R. Akivah Eiger ³⁵ that permit businessmen to have their arguments resolved on the basis of their industry-accepted practices and customs — again without reliance upon the laws of the Torah.³⁶

There is strong precedent for the conduct of p’sharah outside the jurisdiction of Beit Din. The first and foremost arbitrator/mediator was Aharon HaCohen. TheGemara in Sanhedrin extols Aharon as one who “loved peace and pursued peace and made peace between man and man…. ” ³⁷ Tosafot in Sanhedrin ³⁸ notes specifically that Aharon fulfilled p’sharah in his individual capacity, in contrast to his brother. Moshe Rabbeinu, who applied strict din in his capacity as a dayan(judge). Similarly, R. Yoel Sirkus, the Bach. ³⁹ speaks of p’sharah conducted by “baalei batim” — lay individuals who are not part of a formal Beit Din.According to the Bach, the decisions or sugestions of the baalei batim become binding through a kinyan, as discussed above. Finally, R. Shlomo Ganzfried in hisKitzur Shulchan Aruch ⁴⁰ upholds the validity of a p’sharah proceeding separate from Beit Din:

“Occasionally, litigants choose arbitrators to sit either jointly [in conjunction] with the Beit Din or without [apart from] the Beit Din. This is a proper procedure, because each arbitrator advances the cause of the one who has chosen him, and thus a just settlement will be reached.”

A Proposal For P’sharah

A Jewish mediation/arbitration service staffed by Torah-abiding attorneys, with access to competent Rabbinic authorities for consultation where necessary, can act as a modern-day Aharon in the pursuit of shalom. Such a service could afford Jewish disputants who, for whatever reasons, are unwilling to appear before a Beit Din, the opportunity to have their cases settled or decided in a more private, speedy and cost-effective manner than courtroom litigation. More importantly, such a service would enable both lawyers and their clients to avoid the potential of transgressing the prohibition against litigation in Arkaot, and attendant problems of Chilul Hashem and, possibly, g’zelah.

Cases brought to the service, by advance agreement, would be settled in mediation or decided in arbitration by reference to Torah law, secular customs and practices based upon common and statutory law, and by taking into account general notions of fairness and equity and yashrut Also by advance agreement, the fees and costs could be allocated by the mediator(s)/arbitrator(s), or shared equally by the parties. ⁴¹ The parties could represent themselves or, if they preferred, be accompanied and represented by their own attorneys. Finally, the parties would also agree not to appeal the results of the mediation or arbitration to court, and to have the arbitrator(s)/mediator(s) retain jurisdiction to ensure compliance.

This writer was recently involved in mediations involving religious Jews. In each case, with the aid of the mediator, the parties came to appreciate some of the strengths and, more importantly, the weaknesses in their respective positions. They thus were able to gauge their probability of success (or lack thereof) in subsequent court action or arbitration. They also came to recognize the potential, enormous outlay in time and expense that further proceedings of any kind would engender. As a result, in each case, the parties negotiated an amicable settlement through the mediator who conducted “shuttle diplomacy” between them. Although mediation will not resolve every conceivable dispute, in these cases the disputants left the process wiser (and wealthier) for having made the good faith efforts they did to avoid litigation.

In this time of overuse and misuse – halachically and otherwise – of the courts, it is time for a Jewish mediation/arbitration service.

Ira Yitzchak Kasdan – The author is a partner in the law firm of Ginsburg, Feldman and Bress, Chartered, located in Washington, D.C. He is also a cofounder of P’SHARA Jewish Dispute Resolution, Inc., which offers disputants the opportunity to resolve differences through mediation or arbitration conducted in an halachically-acceptable manner.

Notes 

• Shulchan Aruch, Choshen Mishpat 26.
• Sh’mot 21:1 based upon Gitin 88b. See also Responsa Minchat Yitzchak Vol.4 No.51 and the sources cited therein.
• See Rashi Sh’mot 21:1 “Litnaihem.”
• These include the following:
  Mishneh Halachot Vol.7 No.255: Noam Vol.9 “B’inyan Arkaot”; Tzitz Eliezer Vol.11 No.93: Tzitz Eliezer Vol.12 No.82; Y’chaveh Daat Vol.4 No.65; Sh’alot Ut’shuvot T’shuvot V’hanhagot Nos. 793-796.
• See, e.g. Journal of Halacha and Contemporary Society. Vol. H, Rabbi Simcha Krauss. “Litigation in Secular Courts” (hereinafter “Litigation”); id., Vol. IX, Rabbi Dr. Dov Bressler. “Arbitration and the Courts in Jewish Law” hereinafter “Arbitration”), CROSSROADS. Halacha and the Modern World. Vol.11, Rav Yaacov Arid, “Secular Courts in the State of Israel.” id., Prof. Yaacov Bazak. “The Statua of the Israeli Court System.”
• See, e.g., Litigation at 37 note 6.
• Shulchan Aruch, Choshen Mishpat 26:1. One, unfortunately, of many examples of Chilul Hashem resulting from civil litigation in secular court is found in a recent Washington Post editorial which publicized how two factions within a synagogue sued each other under the Racketeer Influenced and Conupt Organizations Act (RICO). Cases of this nature are regularly published in State and federal law reporters. See, e.g., Grunwald v. Bornfreund, 696 F. Supp. 838 (E.D.N.Y. 1988).
• Chidushei R. Akivah Eiger, Shulchan Aruch, Choshen Mishpat 26:1 “Uv’arkaot shelahem.”
• See generally Journal of Halacha and Contemporary Society, Vol.1, Rabbi Hershel Schachier, “‘Dina De’Malchusa Dina:’ Secular Law As a Religious Oblitation.”
• See. e.g.. Kozlowski V. Seville, Inc., 64 Misc.2d 109 (Sup. Ct. 1970); Katz V. Uvegi, 187 N.Y.S.2d 511 (Sup. Ct. 1959). See also New York Law Journal. July 19.1989 p.1 “Court Vacates Rabbis’ Award In Arbitration,” discussing Meisels V. Uhr (Supreme Court. Kings County July 13, 1989).
• See Ramah Choshen Mishpat 26:1:”Likewise we ban one who strengthens the hand of the one who goes before a heathen court.” See also Y’chaveh Daat Vol.4 No.65 note **; Sh’alot Ut’shuvot T’shuvot V’hanhagot No.795. An exception from the need to obtain advance permission of Beit Din may apply in a case involving non-religious Jews who undoubtedly will not obey a subpoena (“harmana”) issued by a Beit Din. See Sh’alot Ut’shuvot T’shuvot V’hanhagot No.795.
• See. e.g.. the Federal Arbitration Act, 9 U.S.C. §§ 1-15, and the Uniform Arbitration Act (“UAA”), which has been adopted in whole or in part by 32 states and the District of Columbia.
• See. e.g.. 9. U.S.C. § 10; UAA § 12.
• Sanhedrin 6a.
• Id.
• Shulchan Aruch, Choshen Mishpat 12:7.
• Id. 3:1.
• Id. 12:7.
• Sanhedrin 6a.
• Rashi Sanhedrin 6a “V’hilch’tah p’sharah tz’richah kinyan.”
• Shulchan Aruch, Choshen Mishpat 12:7.
• Tosafot Sanhedrin 6a “V’hilch’tah p’sharan tz’richah kinyan.”
• Shiltei Giborim, Rif on Sanhedrin 1b note 1.
• Sanhedrin 6b.
• Shiltei Giborim. note 23 supra.
• Even the opinion of R. Eliezer, who prohibits bitzuah. see Sanhedrin 6b. is limited to the time after the litigants arrive at the doors of Beit Din. See Rashi Sanhedrin 6b “Asur livtzoah.” See also Peirush HaRif on Ein Yaacov. Sanhedrin 6b “R. Eliezer omer asur livtzoah.”
• Shulchan Aruch. Choshen Mishpat 12:2
• Aruch Hashulchan 12:2, See also N’tivot Hamishpat, Choshen Mishpat 12 note 3: Igrot Moshe, Choshen Mishpat Vol.1 No.17.
• See, e.g., Igrot Moshe Choshen Mishpat Vol.2 No.8: Sh’alot Ut’shuvot T’shuvot V ‘hanbagot No. 793.
• The concept of p’sharah karov l’ din is intended not only to encourage a spirit of compromise, but also is designed to help protect the judges themselves from the consequences of (even inadvertently) not rendering an indisputably correct and foolproof decision. See Arbitration at 107.
• See generally Arbitration, supra. See Aruch HaShuichan 22:8 citing Shach, Choshen Mishpat 26 nOte 15.
• See Rashi, D’varim 6:18 Hayashar v hatov: “Zu p’sharan, lifnim mishurat hadin.”
• Whereas the agreement of disputants to litigate in secular courts (including the State of Israel’s court system) is prohibited even in instances where the secular court would apply Torah law (see Shulchan Atuch, Choshen Mishpat 26:2; Litigation at 49-53), agreement to arbitrate before a Jewish arbitration panel which would not necessarily apply strict Torah law should nonetheless be permissible. See notes 34,35 and 36, infra. The distinction may lie in the permanence of the secular court system, its usually compulsory nature and its rigid adherence to precedent, versus the temporal status of the arbitral panel, its non-compulsory nature and its ability to exert flexibility and discretion in the decision-making process. These latter characteristics would not render atbitration an affront to, or rejection of, Belt Din or halachic authority, or create the spectre of Chilul Hashem on those occasions when it (arbitration) is used. Cf Litigation at 51-52.
• Tzitz Eliezer Vol.11 No.93.
• Chidushei R. Akivah Elger, Shulchan Aruch. Choshen Mishpat 3:1 “V’ham danim.”
• Tzitz Eliezer Vol.11 No.93.
• Sanhedrin 6b.
• Tosafot. Sanhedrin 6b “Aval Aharon.”
• Bach, Tur, Choshen Mishpat 12 note 7 “Af al pi.”
• Kitzur Shulchan Aruch 181:8.
• Aruch HaShulchan, Choshen Mishpat. 9:6.