Since 1997, we were involved in approximately 100 class actions in various matters, including securities, banking, corporations, anti-trust, consumer protection and environmental. The area of class actions is relatively new and still evolving and therefore demanding expertise and a great deal of work. Because of our broad experience and success, we were hired to represent both plaintiff and defendants as well.
In the past, our office took part in several class actions in the U.S. against Israeli companies traded on NASDAQ, in conjunction with U.S. law firms. Some of these lawsuits have already ended in compromise arrangements of quite high figures.
We believe that the filing of class actions is also a public calling and a paramount tool in private enforcement where the public authorities reveal impotence or the criminal law provides no adequate answer. For this reason, we have also filed several “non-economic” class actions with the aim of redressing wrongs committed against the consumer public as well as wrongs committed in the environmental realm.
In one of these lawsuits, we represented, pro bono, the Israel Consumers’ Board in a class action against a company that had defrauded the consumers. In another case, we represented the Green Party Organization in a class action against the Yarkon River Authority as well as local authorities concerning the river’s pollution. Also in this case, work was done for no consideration and as a service for the public.
Recently, we achieved a settlement agreement in a class action against the biggest banks in Israel. The lawsuit has been filed due to allegations against the banks claiming they coordinated their service fees (this is forbidden according to anti-trust legislation). The settlement agreement determined that the banks will return 35 Million NIS to their clients.
Thanks to a claim we filed against the First International Bank of Israel concerning the unlawful change in the “Libor” interest rate of foreign currency loans, clients of the bank received NIS 15 million in refunds.
Another lawsuit against the HMO (health maintenance organization)”Maccabi” group had to refund the sum total of 6.4 million NIS, a claim against DMV (department of motor vehicle) led to refunds of 7.5 million NIS licensing fee and future savings of 22 million NIS. A number of other claims filed against the authorities brought to a successful end when the Authority has announced it will no longer charge a fee or tax collected overly and thus save substantial amounts of future payments.
Not always, the procedure is ended with a payment to the plaintiffs. Defendants investing time and efforts that cause prolongation of discussions over many years and the courts does not make it easy for plaintiffs as well. Sometimes the achievement is deterrent, declarative or any change in the defendant’s attitude. These can be considered as achievement for the consumers not less than refund or compensation.
For example, we filed a lawsuit against the manufacturers of tiles convicted of running cartel (in contradiction with anti-trust laws), we arrived after years of legal battle to a settlement. According to this agreement consumers compensated by way of discounts for a specific period.
We had also filed a lawsuit against one of the municipalities regarding collection of sewage tax. We succeeded to bring changes in the wording of the bills sent to consumers and to the publications in the municipality website.
It is not always possible to obtain financial compensation and in each case, there are legal and typical factual issues. However, we believe that such settlements has deterrent and first-class educational effects.
By law, the court should award the lead plaintiff and the lead counsel a special compensation and attorneys’ fees in respect of the efforts invested and the special risk undertaken for they represented. The courts in Israel do not rule high sums for plaintiffs and lawyers in class actions. The difference compared to the same legal field in the US is enormous, both in amounts to the plaintiffs and fees. However, when such claims are rejected – substantial amounts of expenses can be ruled against the plaintiffs.
This approach discourages potential claims and greatly reduces the attractiveness of such claims. Despite this, the class actions led to more awareness of consumer rights both among consumers themselves and among the largest corporations and authorities that maintain and develop greater caution in their actions with consumers and in this lies the great achievement of the class actions.
Mr. Ram Dekel is a senior member of the Committee for class actions in the Israeli Bar Association.
Another legal area that is a bit similar to the class actions, is the derivative action. This allows a minor shares holder to try and force a public company for example – to file a complaint against its directors. We have filed several derivatives actions applications in behalf of shares holders in public companies – against the directors in cases of personal responsibility towards the company.
Currently, we are managing a derivative action in behalf of “Discount Investments” shareholders against its directors for their negligence and recklessness failing in a deal of purchasing the newspaper “Ma’ariv”. Their decision caused the company a loss of nearly 400 million NIS within a year.