Disclaimer: The Following is an unofficial translation, and not necessarily an updated one. The binding version is the official Hebrew text. Readers are consequently advised to consult qualified professional counsel before making any decision in connection with the enactment, which is here presented in translation for their general information only. CLASS ACTION LAW 5766-2006 The purpose of the Law 1. The purpose of this Law is to prescribe uniform rules on the submission and conduct of class actions, in order to improve the protection of rights and to advance thereby especially the following: (1) to give substance to the right to go to Court, also for categories of the population that find it difficult to go to Court as individuals; (2) to enforce the Law and deter its violation; (3) to provide appropriate relief to persons injured by Law violations; (4) to handle actions efficiently, fairly and comprehensively. Definitions 2. In this Law – "organization" – a body corporate, other than a body corporate set up by a Law or a religious trust that exists and operates regularly and actually during at least one year for the advancement of one or more public purposes, its assets and income being used only for the achievement of public purposes, on condition that its activity is not on behalf of a political party or of some other political body, or in connection with a party or aforesaid body or for the advancement of their purposes; "representative attorney" – an attorney-at-law, who represents a petitioner or a representative plaintiff in a petition for approval or in a class action, as the case may be; "Exchange" – a Stock Exchange in Israel, as defined in the Companies Law; "Court" – including a Labor Tribunal; "petition for approval" – within its meaning in section 8; "the Register" – within its meaning in section 28; "Administrative Affairs Courts Law" – the Administrative Affairs Courts Law 5760-2000; "Consumer Protection Law" – the Consumer Protection Law 57411981; "Restrictive Business Practices Law" – the Restrictive Business Practices Law 5748-1988; "Companies Law" – the Companies Law 5759-1999; "Control of Insurance Law" – the Control of Financial Services (Insurance) Law 5741-1981; "Benefit Funds Law" – the Control of Financial Services (Benefit Funds) Law 5765-2005; "Joint Investments Trust Law" – the Joint Investments Trust Law 5754-1994; "Prevention of Environmental Nuisances Law" – the Prevention of Environmental Nuisances (Civil Suits) Law 5752-1992; "Equal Rights for Persons with Disabilities Law" – the Equal Rights for Persons with Disabilities Law 5758-1998; "management company", "member" – as defined in the Benefit Funds Law; "insurer", "insurance agent" – as defined in the Control of Insurance Law; "petitioner" – whoever petitioned the Court for the approval of a class action under section 5; "clearing house" – as defined in section 50A of the Securities Law 5728-1968; "defendant" includes the respondent to a petition for approval; "public authority" – a body enumerated in Schedule One; "banking corporation" – as defined in the Banking (Licensing) Law 5741-1981, and also an auxiliary body corporate, as defined in that Law; "representative plaintiff" – the person approved by the Court under the provisions of this Law to be the representative plaintiff in a class action; "class action" – an action carried on in the name of a group of persons who did not authorize the representative plaintiff to do so, and which raises substantive questions of fact and of Law that are common to all members of the group; "the Minister" – the Minister of Justice. Bringing a class action 3. (a) A class action shall be brought only as an action specified in Schedule Two, or about a matter for which the provision of a Law explicitly provides that it may be brought as a class action; notwithstanding the aforesaid, a class action for compensation for damage caused by a third party shall not be brought against an authority on the grounds that the authority used or abstained from using the authority's powers of supervision, regulation or enforcement in respect of that third party; in this subsection and in sections 5(b)(2), 9 and 21, "authority" – as defined in section 2 of the Administrative Affairs Courts Law. (b) Bringing a class action requires approval by the Court and the provisions under this Law shall apply to its submission and conduct. By whom and in whose name may a petition for approval of a class be brought 4. (a) The following may petition the Court for approval of a class action, as specified below: (1) a person who has grounds for an action or matter said in section 3(a), which raises substantive questions of fact or Law common to all members of a group of persons – in the name of that group; 2 (2) (b) a public authority in an action or matter said in section 3(a) that is within the sphere of one of the public purposes in which the public authority engages – in the name of a group of persons, if that action or matter raises substantive questions of fact or Law common to all its members; (3) an organization in an action or matter said in section 3(a) that is within the sphere of one of the public purposes in which the organization engages – in the name of a group of persons, if that action or matter raises substantive questions of fact or Law common to all its members, on condition that the Court is satisfied that – under the circumstances of the case – it would be difficult to bring the petition in the name of a person said in paragraph (1); however, the Israel Consumer Council, as defined in the Israel Consumer Council Law 5768-2008, may petition for approval of an action as a class action, even if it is not difficult for a person' to submit the petition, as said in paragraph (1). For the purposes of this section, when one of the foundations of the grounds is damage, then – (1) in a petition for approval submitted by a person said in subsection (a)(1) – it shall suffice that the petitioner show a priori that damage was caused to him; (2) in a petition for approval submitted by a public authority said in subsection (a)(2) or by an organization said in subsection (a)(3) – it shall suffice that the petitioner show a priori that damage was caused to a member of the group, or that it is reasonably possible that damage was caused to the group, in whose name the petition was submitted. Bringing the petition for approval of a class action 5. (a) (1) Whoever wishes to bring a class action shall petition the Court in writing for approval of the class action, and he shall attach thereto a copy of the action (in this Law: petition for approval); the Minister may prescribe provisions on the manner of submitting a petition for approval, the particulars that must be included in it and the documents that must be attached to it. (2) Before the petition for approval is submitted, the petitioner shall check in the Register whether a pending petition for approval or class action is recorded in it, in which all or some of the substantive questions of fact or of Law shared by members of the group are identical with or essentially similar to the said questions that arise in the petition for approval; if the petitioner found that a said petition for approval or class action is registered in the Register, then he shall state its particulars in his petition for approval. 3 (b) (1) (2) A petition for approval shall be submitted to the Court that has substantive and local jurisdiction to hear the class action if it is approved, and in respect of substantive jurisdiction the aggregate amount or value of the claims of all members of the group, in whose name the petition for approval is submitted, shall be deemed the amount of the action or the value of its subject. A petition for approval against an authority, in an action in which the grounds are a decision by the authority, and in which the requested relief is compensation or restitution, including the restitution of amounts the authority collected as a tax, fee or other mandatory payment, shall be submitted to the Administrative Affairs Courts; in this subsection, "decision by the authority" – as defined in section 2 of the Administrative Affairs Courts Law. Notice that a petition for approval was submitted and registration in the Register 6. (a) When a petition for approval has been submitted, the petitioner shall send a notice of its submission to the Director of Courts, together with a copy of the petition and of the text of the action that is the subject of the petition, so that they be entered in the Register. (b) The Minister may prescribe provisions how the notice under this section is to be delivered and on the particulars that must be included in it, and he may also prescribe the obligation to serve notice that a petition for approval was submitted, together with a copy of the petition and of the text of the action that is the subject of the petition – in general or for categories of petition for approvals – to a body or an office holder, all as he shall prescribe; the Court may order that a notice on the petition for approval or a copy of the petition also be served on some other factor. Previous petition for approval or previous class action 7. (a) (1) If the Court to which a petition for approval was submitted concludes that a previous petition for approval or a previous class action is pending, in which common issues of fact or of Law arise that are similar to the issues raised in the petition for approval, then it may – if it deems it justified to do so under the circumstances – order that hearing the petition for approval be transferred to the Court, to which the previous petition for approval or the previous class action was submitted, and if the judge or the bench that will hear the previous petition or the previous action has been named, then to that judge or bench. (2) If the Court concludes that what is said in paragraph (1) 4 (b) (c) applies, and if the group in whose name the later petition was brought is identical with or essentially similar to the group in whose name the former class action was brought, then the Court shall order that the hearing of the later petition for approval be transferred to the Court to which the former petition for approval or the former class action was brought, and if the judge or the bench that will hear the previous petition or the previous action has been named, then to that judge or bench. The provisions specified below shall apply to the Court, to which the hearing said in subsection (a) was transferred: (1) in respect of a previous petition for approval, hearing of which has not yet begun – the Court may order that the later petition for approval be joined to the former petition for approval and hear them together, or that all or part of one of the petitions by squashed, and it may order that a petitioner or a representative attorney be added or replaced, all so that the group's interests be represented and conducted in the best and most effective manner; (2) in respect of a previous petition for approval, hearing of which has begun – the Court may order as said in paragraph (1), except that it shall not order replacement of the petitioner who brought the previous petition for approval or the representative attorney, unless it is satisfied that that is necessary so that the group's interests be represented and conducted in the best and most effective manner, all while taking into account the stage which the hearing of the petition for approval has reached; (3) in respect of a previous class action brought in the name of all or part of the same group – the Court shall order the later petition for approval to be quashed in whole or in part, but it may rule otherwise for special reasons that shall be recorded, on condition that it not order additional grounds for claims or additional members of the group to be added, unless it concluded that all the conditions and procedures required under this Law for the approval of a class action were complied with in respect of the said grounds for claims or members of the group; if the Court ordered an aforesaid addition, then its decision shall be treated like a decision on a petition for approval. The Court shall order as said in subsection (b)(1) to (3) only after it has given the parties an opportunity to present their arguments on this matter. Court approval of a class action 8. (a) The Court may approve a class action, if it found that the following 5 (b) (c) hold true: (1) the action raises substantive questions of fact or of Law in common to all members of the group, and it is reasonably possible that they will be resolved in the group's favor; (2) under the circumstances of the case, a class action is the efficient and fair method for a resolution of the controversy; (3) there are reasonable grounds to assume that the interest of all members of the group will be appropriately represented and conducted; the defendant must not appeal or petition to appeal a decision on this matter; (4) there are reasonable grounds to assume that the interest of all members of the group will be represented and conducted in good faith. Notwithstanding the provisions of subsection (a) – (1) if a petition for approval was brought against the State, any of its authorities, a local authority or a body corporate established by Law, and if the Court is satisfied that the very fact of conducting the procedure as a class action is expected to cause severe harm to a public that uses the defendant's services or to the public in general, as against the expected benefit members of the group and or the public will derive from its being conducted in this manner, and if the damage cannot be prevented by approval with changes, as said in section 13, then the Court may take that into consideration when it decides whether to approve the class action; (2) if a petition for approval was brought against a body that provides an essential service to the public, a banking corporation, stock exchange, clearing house or insurer, and if the Court is satisfied that the very fact of conducting the procedure as a class action is expected to cause severe harm to a public that uses the defendant's services or to the public in general, because of harm to the defendant's economic stability, as against the expected benefit members of the group and the public will derive from its being conducted in this manner, and if the damage cannot be prevented by approval with changes, as said in section 13, then the Court may take that into consideration when it decides whether to approve the class action. (1) The Court may approve a class action even if the conditions said in subsection (a)(3) or (4) have not been met, if it concludes that those conditions can be assured by the addition or replacement of a representative plaintiff or of a representative attorney, or in some other manner; if the Court approved a class action in accordance with the provisions of this paragraph, then in its decision it shall give 6 (d) directions to assure the appropriate and good faith representation and conduct of the interests of the members of the group, as said in that subsection. (2) If the Court concludes that all the conditions said in subsection (a) have been met, but that the conditions in section 4(a)(1) to (3), as the case may be, are not complied with in respect of the petitioner, then the Court shall approve the class action, but in its Order it shall order the representative plaintiff to be replaced. A decision to approve a class action under this section may be appealed, if permission to do so was given in the body of the decision or by the Court of Appeal. Petition for approval in an action for restitution against an authority – special provisions 9. (a) When a petition for approval was brought in an action specified in item 11 of Schedule Two (in this Law: action against an authority for restitution), then the Court shall hear it only after ninety days have passed since the petition for approval was submitted, and the Court may extend that period for reasons that shall be recorded (in this section: the determining date). (b) The Court shall not approve a class action in an action for restitution against an authority, if the authority announced that it will stop the collection in respect of which the petition for approval was brought, and it was proven to the Court that it stopped the said collection by the determining date at the latest. (c) If the Court decided as said in subsection (b), then it may – (1) notwithstanding the provisions of section 22, adjudge compensation for the petitioner, having taken the considerations said in section 22(b) into account; (2) determine legal fees for the representative attorney in accordance with the provisions of section 23. Defining the group 10. (a) When the Court has approved a class action, then in its decision it shall define the group in whose name the action shall be conducted; a person, the grounds for whose claim arose after the date on which the aforesaid class action was approved, shall not be included in the group. (b) Notwithstanding the provisions of subsection (a), the Court may permit a person to be added to the group it defined under that subsection, even if he was not included in it under the Court decision said in that subsection, and that up to a date it shall prescribe; if the Court permitted as aforesaid, then it shall order how notice thereof shall be given to persons joined to the group, and it may order that a notice thereof also be given to the 7 (c) members of the group or to some other factor, if it concluded that that is justified under the circumstances of the case; notice under this subsection shall also be given to the Director of Courts, to be entered in the Register. The Court may define a subgroup, if it finds that questions of fact or of Law not common to all members of the group arise in respect of part of its members; if the Court defined a said subgroup, then it may order that a representative plaintiff or a representative attorney be appointed for the subgroup, if it deems that necessary in order to assure that the subgroup's interests be represented and conducted appropriately. Leaving the group 11. (a) When the Court has approved a class action, then every member of the group defined by the Court, as said in section 10(a), in its decision is deemed to have agreed that the class action be brought in his name, unless he informed the Court of his desire not to be included in the group within 45 days of the day on which the Court's decision to approve the class action was published or within a longer period prescribed by the Court. (b) On the petition of a person included in the group said in subsection (a), who asks not to be included in it, the Court may extend in his respect the period said in that subsection, if it finds that there is a special reason for doing so. Class action by way of adherence 12. (a) Notwithstanding the provisions of sections 10 and 11, the Court that approved a class action may – under special circumstances that justify doing so, including the circumstances said in paragraphs (1) and (2) below – direct in the aforesaid Order of approval that the group, in whose name the class action is to be carried on, include only persons who inform the Court in writing – in a manner and by the time prescribed by the Minister – that they desire to adhere to the action and who are entitled to bring action in their own name on grounds for a claim that are the subject of the action (in this section: adherent), on condition that it is reasonably possible to identify and locate the members of the group in whose name the petition for approval was brought, and to inform them of the class action's approval, all at a reasonable cost: (1) it is reasonably possible that a significant part of the members of the group, in whose name the petition for approval was brought, will bring action on the grounds for the claim that is the subject of the class action; (2) the amount of the action or the value of its subject is considerable in respect of each member of the group in 8 (b) (c) (d) whose name the petition for approval was brought, also in the case of an action for bodily harm; The Court shall order as said in subsection (a) only after it gave the representative plaintiff and the defendant an opportunity to present their arguments on this matter. If the Court ordered as said in subsection (a), then it may – in the decision of approval said in that subsection – prescribe that every adherent participate in the expense of conducting the class action, in an amount and on conditions that it shall prescribe; when the Court has ordered as aforesaid, then it shall order how notice of the decision shall be communicated to the adherents. The provisions of this section shall not apply to a class action on grounds specified in Schedule Three. Approval with changes 13. The Court may approve a class action with any change in respect of the petition for approval, on which it may decide, all as it shall deem proper in order to assure the fair and efficient conduct of the class action. Decision on the approval of a class action 14. (a) When the Court has approved the class action, then in its decision it shall specify, inter alia, all the following: (1) the definition of the group, in whose name the action shall be conducted, and the definition subgroups, if any; (2) the identity of the representative plaintiff and of the representative attorney; (3) the grounds for the action and the questions of fact or of Law that are common to the group; (4) the claimed relief. (b) Notice of the Court's decision to approve the class action or to reject a petition for approval shall be delivered to the Director of Courts, together with a copy of the decision, to be entered in the Register. Participating in hearings 15. (a) The Court may permit a member of the group, in whose name a class action is being conducted – and also a public authority that works to advance a public purpose connected to the matter with which the class action deals, or an organization approved by the Minister for this purpose that works to advance a said purpose – and who are not the representative plaintiff, to participate in hearings of the class action, if it concluded that that is necessary for the efficient and fair conduct of the class action, and also – in respect of a member of the group – for the defense of that group member's interest, and in respect of the public agency or organization – for the defense of the interest of the members of 9 (b) (c) the group. When the Court has acceded to a request to participate in hearings, as said in subsection (a), then it may prescribe provision on the manner of the said participation. The provisions of this section shall also apply, mutatis mutandis, to requests to participate in hearings on a petition for approval. Withdrawal from a petition for approval or from a class action 16. (a) A petitioner, representative plaintiff or representative attorney shall withdraw from a petition for approval or from a class action only with the Court's permission, and he shall also accept any direct or indirect benefit from the defendant or from any other person in connection with his said withdrawal only with the Court's approval. (b) If a petitioner, representative plaintiff or representative attorney wishes to withdraw from a petition for approval or from a class action, then to his petition to withdraw that he submits to the Court he shall attach an affidavit, in which he properly reveals all substantive particulars connected to the withdrawal. (c) If the petitioner, representative plaintiff or representative attorney withdrew from a petition for approval or from a class action, or if the Court found that one of these cannot continue in his position in relation to the petition or the action, then that shall not affect the continued conduct of the petition for approval or of the class action by another petitioner, representative plaintiff or representative attorney, as the case may be. (d) (1) If the Court approved the withdrawal of all petitioners or all representative attorneys from a petition for approval, or if the Court concluded that they are unable to continue in their position in relation to the petition for approval, then the Court may decide that a petition may be brought to appoint in their places a representative plaintiff or a representative attorney, as the case may be, within a period it shall prescribe, and the Court may also order that a notice thereof be published, all if it found that doing so is justified under the circumstances of the case and taking into account the stage that hearings on the petition for approval had reached; the provisions said in paragraph (4) shall be stated in the notice; (2) If the Court approved the withdrawal of all representative plaintiffs or of all representative attorneys from a class action, or if the Court concluded that they are unable to continue in their position in relation to the class action, and if within a period the Court prescribed no petition was submitted to it to appoint in their place a representative plaintiff or a representative attorney, as the case may be, then the Court shall order that a notice thereof be published 10 (e) in accordance with the provisions of section 25; the provisions said in paragraph (4) shall be stated in the notice; (3) a notice said in paragraphs (1) or (2) shall be delivered to the Director of Courts, to be entered in the Register; (4) when the Court has ordered publication of a notice said in paragraphs (1) or (2), as the case may be, then any person who under the provisions of section 4(a) was entitled to petition for approval of the class action may petition the Court – within 45 days after the said publication – that it appoint him representative plaintiff in the class action, and within the same period an attorney may petition the Court to appoint him representative attorney in the action; if a said petition for appointment was submitted after the Court approved the class action, then the Court shall approve the petition for appointment only if it concluded that the conditions specified in section 8(a)(3) and (4) have been met; (5) if the Court approved the withdrawal of all petitioners, of all representative plaintiffs or of all representative attorneys, or if it concluded that they are unable to continue in their position, as said in paragraphs (1) or (2), as the case may be, and if no petition was submitted to appoint a representative plaintiff or a representative attorney under the provisions of this subsection, or if a said petition was brought and was not approved, then the Court shall order the petition for approval or the class action, as the case may be, to be quashed. The provisions of this section, except for the provisions of subsection (d)(5) shall also apply, mutatis mutandis, to a petitioner, representative plaintiff or representative attorney on behalf of a subgroup. Obligations of a representative attorney 17. In the performance of his duties, a representative attorney shall act loyally and devotedly for the benefit of the group, in whose name the petition for approval was brought, or of the group, in whose name the class action is being conducted, as the case may be, as if it were his principal, with the changes required by the fact that the proceeding is a class action. Petition to approve a compromise 18. (a) An agreement to settle the controversy, in respect of which a petition for approval was brought or a class action was approved (in this Law: compromise), shall only be made with the Court's approval. (b) A petition to approve a compromise shall be submitted to the 11 (c) (d) (e) (f) (g) Court together with affidavits on behalf of the parties' attorneys, in which they shall make fair disclosure of all the substantive particulars that relate to the compromise. If a petition to approve a compromise was submitted to the Court, and if the Court did not see any reason for rejecting it in limine, then it shall order that a notice about submission of the petition be published under the provisions of section 25, and also that the said notice, together with a copy of the petition, the compromise and the action be sent to the Attorney General, to the Director of Courts and to every other body or office holder that the Minister will designate, and the Court may order that the same also be sent to any other person it designates; a notice under this subsection shall include the particulars of the compromise, in respect of which the petition was brought, and the provisions of subsections (d) and (f) shall be stated in it. A person who belongs to the group, in whose name a petition for approval of a compromise was submitted, a public authority that works to advance a public purpose connected to the matter with which the petition for approval or the class action deals, an organization approved by the Minister for this purpose that works to advance a said purpose, and also the Attorney General may submit to the Court – within 45 days after the notice said in subsection (c) was published or within a longer period set by the Court – a reasoned written opposition to the compromise and to the agreed recommendation on the matter of remuneration and legal fees submitted under subsection (g)(2). If objection was submitted as said in subsection (d), then the petitioner or the representative plaintiff, as the case may be, and the defendant may submit responses to the objection within a period which the Court shall set. If a member of the group does not wish the compromise to apply to him, then he may petition the Court – within the time set for the submission of objections under subsection (d) – that he be allowed to leave the group to which the compromise will apply. A compromise shall not include – (1) grounds for claims, parties or group members that were not included in the petition for approval or in the decision to approve the class action; however, that shall not derogate from a party's right to petition the Court for permission to correct the petition for approval or the class action, as the case may be, under any statute; (2) a provision for the payment of compensation to the petitioner or to the representative plaintiff, or legal fees to the representative attorney, but the parties may submit an agreed recommendation to the Court about payment of the said compensation and legal fees, including their amount 12 and conditions; when a said agreed recommendation was submitted, its particulars shall be included in the notice said in subsection (c). Court approval of a compromise 19. (a) The Court shall approve a compromise only if it concluded that the compromise is proper, fair and reasonable, taking the interest of the members of the group into consideration, and if the petition for approval of the compromise was submitted before the class action was approved – also that there are, a priori, substantive issues of fact or Law common to all members of the group, and that concluding the procedure by a compromise is, under the circumstances, the most efficient and fairest way of resolving the controversy. (b) (1) The Court shall approve a compromise only after it received the opinion of a person it appointed for that purpose and who has expertise in the sphere with which the petition for approval or the class action deals (in this section: examiner), unless the Court concluded that – because of special reasons that shall be recorded – the opinion is not necessary; the remuneration and expenses of the examiner and how they are to be paid shall be prescribed by the Minister. (2) A person recommended by one of the parties, or a person who submitted an objection to the compromise under section 18(d), who advised one of the parties or gave it his opinion in connection with the controversy, in respect of which the petition for approval was brought or the class action approved, shall not be appointed examiner. (3) When an examiner has been appointed, the Court shall transmit to him a copy of the petition for approval of the compromise with all its attachments, and also of the objections submitted under section 18(d); for the provision of an opinion under this subsection, each party may submit any material connected to the compromise to the examiner, and the examiner may summon the parties in order to hear their stand on this matter, and also in order to propose changes in the compromise, all as he finds appropriate. (4) In his opinion the examiner shall take note of the advantages and disadvantages of the compromise, from the point of view of all members of the group, taking all the circumstances and any other matter into account, as the Court shall prescribe. (5) The examiner shall deliver his opinion to the Court within sixty days after he was given a copy of the petition for approval of the compromise, and the Court shall serve 13 (c) (1) (2) copies of the opinion on the parties; the parties may submit written responses to the opinion to the Court within thirty days after a copy thereof was served on them. The Court's decision whether to approve the compromise or reject it shall be reasoned, and it shall include – inter alia – all the following: (a) the definition of the group to which the compromise applies; (b) the grounds for the action, the substantive questions of fact or Law that are common to all members of the group and the relief claimed, as specified in the petition for approval or as defined in the Court's decision under section 14, as the case may be; (c) the main points of the compromise. In its decision under paragraph (1), the Court shall refer – inter alia – to these considerations: (a) the gap between the relief proposed in the compromise and the relief the members of the group might have received, if the Court had decided the class action in favor of the group; (b) objections submitted under section 18(d), and how they were decided; (c) the stage which proceedings have reached; (d) the examiner's opinion, given under subsection (b)(5); (e) (d) (1) (2) the possible risks and gains in continuing to conduct the class action, compared to the advantages and disadvantages of the compromise; (f) the grounds and relief, in respect of which a decision to approve the compromise constitutes a verdict in respect of the group members to whom the compromise applies. If the Court concludes that certain conditions must be included in the compromise, such as it deems necessary in order to protect the interests of the group members to whom the compromise applies, to assure enforcement of the Law or to supervise implementation of the compromise, including conditions and provisions under section 20(a) to (c) or conditions for leaving the compromise, then it shall inform the parties to the compromise that its approval of the compromise is conditional on their consent to those conditions. If the Court's decision to approve the compromise includes a condition on leaving the compromise, then that decision shall not constitute a verdict in respect of a group member who informed the Court that he does not wish the 14 (e) (f) (g) compromise to apply to him. (3) In this subsection, "condition on leaving the compromise" – a condition, according to which a member of the group who does not wish the approved compromise to apply to him, may inform the Court of that desire at a time and in a manner that the Court shall prescribe. A copy of the Court's decision under this section shall be sent to the Director of Courts, and in respect of a decision to approve a compromise a copy of the approved compromise with all its attachments shall be attached to the copy of the decision, all in order to be entered in the Register. When the Court has approved a compromise, it shall prescribe the remuneration of the petitioner or of the representative plaintiff, as the case may be, in accordance with the provisions of section 22, and the legal fees for the representative attorney in accordance with the provisions of section 23, and the Court may take into account an agreed recommendation on this subject, submitted to it by the parties. If proceedings for the approval of a compromise took place and the compromise was not approved by the Court, or if the Court's approval for a compromise was canceled, then anything said or determined in the course of those proceedings shall not be evidence in any civil legal proceeding. Proof of entitlement to relief and payment of monetary compensation 20. (a) If the Court decided all or part of a class action in favor of all or part of the group in whose name the class action was conducted, than as part of its decision to award monetary compensation or other relief to members of the group it may make, inter alia, an Order specified below, as the case may be, on condition that doing so will not place an unnecessarily heavy burden on members of the group or on the parties: (1) to pay monetary compensation or to provide some other relief, at a rate and in a manner that it will prescribe, to each member of the group whose entitlement to the said compensation or relief has been proven; (2) that each member of the group prove his entitlement to the compensation or other relief; (3) to pay monetary compensation in an overall amount and how to calculate the share of each group member, on condition that the total compensation can be calculated exactly on the basis of evidence before the Court: if the Court ordered compensation to be paid in a said overall amount, then it may order how the remaining amount is to be divided among the members of the group in proportion to their damage, if one or several members did not claim their 15 (b) (c) (d) share, did not prove their entitlement to compensation or relief, were not located or could not be paid their share for some other reason; however, no member of the group shall receive monetary compensation or other relief in excess of the full compensation or relief due to him; if, after the said distribution to the members of the group an amount is left, then the Court shall order it to be transferred to the State Treasury. If the Court ordered that every group member prove his entitlement to monetary compensation or other relief, then it may make Orders about – (1) how and when entitlement shall be proven by members of the group and how it is to be divided, and for that purpose it may appoint a person with suitable qualifications (in this section: the appointee); if the Court decided to appoint an appointee, then any person who deems himself injured by an act or omission of the appointee may apply to the Court that ordered the appointment and the Court may approve, cancel or change the act or omission and make any Order on this matter, all as it finds proper; the appointee's pay and expenses, as well as how they shall be paid, shall be prescribed by the Court; (2) the payment of expenses to a group member, in an amount to be set by the Court or by the appointee, for the trouble involved in proving entitlement to the said compensation or relief. If the Court concluded that, under the circumstances, monetary compensation for all or some members of the group is not practical, either because they cannot be identified and the payment cannot be made at a reasonable cost, or because of some other reason, then it may order other relief to be given for the benefit of all or part of the group or for the benefit of the public, as it deems appropriate under the circumstances of the case. (1) If the Court decided all or part of a class action, which was brought against the State, one of its authorities, a local authority or a body corporate established by Law, in favor of all or part of the group, then – when it is about to decide the amount of compensation and how it is to be paid – it may also take into account the damage that is liable to be caused by the payment of compensation, its amount or the manner of its payment, to the defendant, to the public that uses the defendant's services or to the general public, as opposed to the expected benefit for members of the group or for the public. (2) If the Court decided all or part of a class action, which was 16 (e) (f) brought against a defendant not enumerated in paragraph (1) in favor of all or part of the group, then – when it is about to decide the amount of compensation and how it is to be paid – it may also take into account the damage that is liable to be caused – by the payment of compensation, its amount or the manner of its payment – to the defendant, to the public that uses the defendant's services or to the general public by damaging the defendant's economic stability, as opposed to the expected benefit for members of the group or for the public. In a class action the Court shall not adjudge exemplary compensation and it shall also not adjudge compensation without proof of damage, except in an action specified in item 9 of Schedule Two, but the aforesaid shall not prevent the award of compensation for other than monetary damage. The Court may make Orders about supervision over the implementation of its judgment under this section. Relief by restitution in a class action against an authority – special provisions 21. If the Court approved a class action in a claim of restitution against an authority, then it shall not obligate the authority to make restitution in respect of a period of more than 24 months before the date on which the petition for approval was brought; the provisions of this section shall not derogate from the right of a member of the group, in whose name the action is being conducted, to sue on the same grounds also for relief in respect of additional periods. Compensation for the representative plaintiff 22. (a) If the Court decided all or part of a class action in favor of all or part of the group, also by way of approving a compromise, then it shall order compensation to be paid to the representative plaintiff, taking into account considerations said in subsection (b), unless it concluded – for special reasons that shall be recorded – that that is not justified under the circumstances of the case. (b) When it sets the amount of compensation the Court shall, inter alia, take these considerations into account: (1) the effort exerted and the risks assumed by the representative plaintiff by bringing and conducting the class action, especially if the relief requested in the action is declaratory relief; (2) the benefit which the class action yielded for members of the group; (3) the degree of public importance of the class action. (c) In special cases and for special reasons that shall be recorded, the Court may – 17 (1) (2) adjudge compensation to the petitioner or representative plaintiff, even if the class action was not approved or if the class action was not decided in favor of the group, as the case may be, taking the considerations said in subsection (b) into account; adjudge compensation to an organization that participated in hearings of the class action under the provisions of section 15, if it found that to be justified by the trouble taken and the contribution made by its said participation in the hearings. Legal fees of a representative attorney 23. (a) The Court shall set the representative attorney's legal fees for conducting the class action, including the petition for approval; the representative attorney shall not accept legal fees in excess of the sum determined by the Court as aforesaid. (b) When it sets the representative attorney's legal fees under subsection (a), the Court shall, inter alia, take the following considerations into account: (1) the benefit which the class action yielded for members of the group; (2) the complexity of the proceeding, the trouble taken by the representative attorney and the risk he assumed by bringing and conducting the class action, as well as the expenses he incurred for that purpose; (3) the degree of public importance of the class action; (4) the manner in which the representative attorney conducted the proceeding; (5) the gap between the relief sought in the petition for approval and the relief adjudged by the Court in the class action. (c) The Court may adjudge partial legal fees for the representative attorney, on account of the overall legal fees, even before the class action proceeding was concluded, if it concluded that this is justified under the circumstances of the case, and as far as possible taking the considerations said in subsection (b) into account. Res judicata 24. The judgment in a class action shall constitute an adjudged matter in respect of all members of the group, in whose name the class action was conducted, except where this Law explicitly provides otherwise. Giving notice to members of the group 25. (a) Notice about all of the following shall be given to members of the group in accordance with the provisions of this section : (1) the Court's decision to approve a class action, under the provisions of section 8; the particulars enumerated in section 18 (b) (c) (d) (e) 14(a) shall be specified in the notice under this paragraph; (2) the Court's decision to permit all representative plaintiffs or all representative attorneys to withdraw from the class action, or the Court's determination that all the said plaintiffs and attorneys are unable to continue in their positions, as said in section 16(d)(2), the appointment of a representative plaintiff or of a representative attorney, as said in section 16(d)(4), or a decision to quash a class action, as said in section 16(d)(5); (3) submission of a petition for approval of a compromise; (4) the Court's decision to approve a compromise under the provisions of section 19; the particulars enumerated in section 19(c)(1) and (2) shall be specified in the notice under this paragraph; (5) the Court's judgment of the class action, including the Orders and decisions handed down under sections 20, 22 and 23. The Court may order that notices be published in addition to the notices specified in subsection (a), if it finds that necessary in order to assure the fair and efficient conduct of the proceeding and of the group's representation. The Minister may prescribe that a notice published under this section, either in general or for categories of petitions for approval or of class actions, be served on members of the group, on bodies or on office holders, all as he shall prescribe; the Court may order that notices published under this section be served on members of the group. The formulation of notices said in subsections (a) and (b), their format and how they are presented shall be brought to the Court for approval before they are published; a notice, the subject of which is a Court decision or direction, or a compromise shall include the main points of the decision, direction or compromise, as the case may be, as well as a referral to the Register and to other places where the full texts, including their attachments, may be viewed. Publication of a notice under this section shall be in the manner and at the time prescribed by the Court, and it may prescribe different manners of publication for different categories of group members, all while taking into account – inter alia – the following considerations: (1) the expenses involved in a form of publication and the degree of its effectiveness; (2) the extent of monetary compensation or other relief that each member of the group is likely to get, if the class action is decided in the group's favor, and the extent of the damage liable to be caused to each member of the group, if the class 19 (f) (g) action is rejected; (3) the estimated number of group members and the ability to identify and locate them with reasonable effort and at reasonable cost; (4) the ability to give notice personally to group members with a reasonable effort and at reasonable cost, also through continuous communication in existence between a party and some or all members of the group; (5) special characteristics of group members, including language. The Court may make some or all the parties responsible for publication of a notice and for all or part of the costs of publication, as it deems efficient and fair under the circumstances. If the Court ordered a person to publish a notice under this section, then that person shall send a copy of the notice to the Director of Courts for entry into the Register. Prescription 26. (a) When the Court has approved a class action under the provisions of section 8, then for purposes of prescription every person who belongs to the group defined by the Court under the provisions of section 10 shall be deemed to have brought action on the date on which the petition for approval was submitted. (b) If the Court rejected a petition for approval or canceled it, then the period of prescription for an action by a person, who belongs to the group in whose name the petition for approval was brought and which arises out of the same grounds for action, shall not end sooner than one year after the day on which the decision on the petition for approval became final, on condition that the prescription of that person's action had not occurred by the date on which the petition for approval was brought. (c) If, under the provisions of section 10, the Court defined the group in whose name the class action is to be conducted so that it does not include all persons in the group in whose name the petition for approval was submitted, or if the Court decided to change the definition of the group, then the period of prescription for an action by a person not included in the said definition of the group, which arises out of the same grounds for action, shall not end sooner than one year after the day on which the Court's decision on the definition of the group became final, on condition that the prescription of that person's action had not occurred by the date on which the petition for approval was brought. (d) If a person announced, under the provisions of section 11, his desire not to be included in the group in whose name the class action will be conducted or of his desire that a compromise not apply to him under the provisions of section 18(f) or 19(d), then 20 (e) the period of prescription of his action that arises out of the same grounds for action shall not end sooner than one year after the day on which he so announced, on condition that the prescription of that person's action had not occurred by the date on which the petition for approval was brought. If the Court ordered that the group in whose name the class action is to be conducted shall include only persons who informed the Court of their desire to join it, in accordance with the provisions of section 12, then the period of prescription of the action of a person who belonged to the group in whose name the petition for approval was brought and who did not give notice of his desire to join the class action, that arises out of the same grounds for action, shall not end sooner than one year after the last day on which he was to have announced his said desire, on condition that the prescription of that group member's action had not occurred by the date on which the petition for approval was brought. Fund for financing class actions 27. (a) A fund to finance class actions is hereby established (in this section: the Fund), in order to assist representative plaintiffs to finance the submission and hearing of petitions for the approval of class actions of public and social importance. (b) The Fund shall be managed by a Board of nine members appointed by the Minister (in this section: the Board), and these shall be its members: (1) a person qualified to be a district judge, who is not a State employee, and he shall be the chairman; (2) a representative of the Consumer Protection Commissioner, within the meaning of the term in the Consumer Protection Law; (3) a representative of the Controller of Restrictive Business Practices, within the meaning of the term in the Restrictive Business Practices Law; (4) a representative of the Supervisor of Banks, within the meaning of the term in the Banking Ordinance 1941; (5) a representative of the Commissioner, within the meaning of the term in the Benefit Funds Law; (6) a representative of the Ministry of the Environment; (7) a representative of the Commission for Equal Rights for Persons with Disabilities; (8) a representative of the Attorney General; (9) a representative of the public with knowledge and experience in the Fund's sphere of activity. (c) At the end of each budget year the Minister shall publish a report on the Fund's activity, income and expenditures in Reshumot and 21 (d) (e) (f) (g) on the Internet site of the Ministry of Justice. The Fund's budget shall be prescribed each year in the annual budget law in a separate program in the budget of the Ministry of Justice; for this purpose, "annual budget law" and "program" – within their meaning in the Foundations of Budgets Law 57451985. The Minister shall prescribe provisions for the implementation of this section, also in respect of egalitarian criteria for the extension of aid to finance petitions for approval and class actions, how the said criteria are to be published, and also on the way applications for the said assistance are to be submitted, the order of the Board's work and the reports to be submitted by recipients of the assistance on the use made of the money. (1) The Fund shall operate during a seven year period after the day on which this Law was published; however, the Minister may extend the said period by Order for an additional period (in this section: extension period); if the period was extended as aforesaid, then the provisions of this section shall apply during the extension period, but the applicability of subsection (d) during that period requires the consent of the Minister of finance, and if the Minister of Finance did not give his consent, then the matter shall be brought to the Government for its decision. (2) When the period of the Fund's activity came to an end according to the provisions of paragraph (1) and a balance of money is left in the fund, which was not used until the end of the said period, then – notwithstanding the provisions of that paragraph – the Fund shall continue to act with that money according to its responsibilities, as specified in subsection (a), until the said balance is used up, and that subject to every statute. Assistance under this section shall not be extended in order to finance class actions said in section 209(a) of the Companies Law, and in section 41 of the Joint Investments Trust Fund Law, and also not for petitions for the approval of aforesaid class actions. Register of Class Actions 28. (a) The Director of Courts shall keep a Register of Class Actions (in this Law: the Register), in which the notices given him under sections 6(a), 10(b), 14(b), 16(d)(3), 18(c), 19(e) and 25(g), as well as every other particular prescribed by the Minister, shall be entered; the Register, as well as the documents delivered to the Director of Courts with the said notices, shall be open for viewing by the public on the Internet site of the Directorate of Courts. (b) The Minister shall prescribe provisions for the implementation of 22 (c) this section, also about the particulars of entry in the Register and about arrangements for viewing it. The Director of Courts shall begin to keep the Register within one year after publication of this Law; the Minister shall publish – in Reshumot and also in a widely circulated daily newspaper published in Israel in the Hebrew language – a notice of the date on which the Register began to be kept. The State 29. This Law shall apply to the State. Changing the Schedules 30. The Minister may, by Order with approval by the Knesset Constitution, Law and Justice Committee – (1) change Schedule One; (2) add to Schedule Two after consultation with the Minister of Finance; (3) add to Schedule Three. Implementation and regulations 31. (a) The Minister is charged with the implementation of this Law and he may, with approval by the Knesset Constitution, Law and Justice Committee, make regulations for its implementation. (b) Notwithstanding the provisions of subsection (a), regulations that prescribe law procedures on anything related to petitions for approval or to class actions shall not require approval by the Knesset Constitution, Law and Justice Committee. The following sections amend the different Laws that are specified below. We shall incorporate provisions of those amendments into our translations of the Laws referred to. Their effect is as specified below - Tr. Section 32: Section 33: Section 34: Section 35: Section 36: Section 37: repeals Chapter Five "A of the Control of Financial Services (Insurance) Law 5741-1981; repeals Chapter Six "A" of the Consumer Protection Law 5741-1981; repeals Chapter Three "A" of the Banking (Service to Customers) Law 5741-1981; repeals Chapter Six "A" of the Restrictive Business Practices Law 5748-1988; changes sections 10, 11, 12(a) and 13; replaces section 14, and replaces item 2 and repeals item 3 in the Schedule of the Prevention of Environmental Nuisances (Civil Suits) Law 5752-1992; replaces section 41 of the Joint Investments Trust Law 5754-1994 23 Section 38: Section 39: Section 40: Section 41: Section 42: Section 43: repeals section 11 and changes section 15(b) of the Equal Pay for Male and Female Employees Law 5756-1996; repeals sections 19BBB to 19LLL of the Equal Rights for Persons with Disabilities Law 5758-1998; repeals Article Two in Chapter Three of Part Five and changes section 209(a) of the Companies Law 5759-1999; adds item 2 to Schedule Three of the Administrative Affairs Courts Law 5760-2000; repeals section 53 of the Control of Financial Services (Benefit Funds) Law 5765-2005; changes section 12(b) of the Television Broadcasts (Foot Titles and Sign Language) Law 5765-2005. Must make regulations on fees 44. Within six months after the publication of this Law, the Minister shall bring regulations under sections 83(a)(3) and 108(a)(4) of the Courts Law [Consolidated Version] 5744-1984 about fees for procedures under this Law to the Knesset Constitution, Law and Justice Committee for approval. Effect, applicability and transitional provisions 45. (a) Sections 5(a)(2), 6(a), 10(b) in respect of sending a notice to the Director of Courts about joining a person to a group, 14(b), 16(d)(3),18(c) in respect of sending notice to the Director of Courts that a petition for approval of a compromise was submitted, 19(e), 25(d) about referral to the Register, and 25(g) shall go into effect within thirty days after the Register began to be kept, as said in section 28(c). (b) The provisions under this Law, other than the provisions of regulations about fees, as said in section 44, shall also apply to petitions for the approval of a class action and to class actions that were pending before a Court on the day this Law was published. (c) (1) If a petition for approval was pending on the day this Law was published and if one of the conditions specified below holds true for it, then – for purposes of counting the prescription period – it shall be treated as if it had been submitted on the day on which this Law was published; (a) the petition was brought otherwise than under one of the arrangements specified in sections 32 to 43, as they stood immediately before their repeal by this Law; (b) its grounds are not among the grounds, for which a class action could have been approved under one of the arrangements said in subparagraph (a). (2) Notwithstanding the provisions of any statute, if a petition for approval of a class action said in paragraph (1) was rejected 24 (3) (d) (1) (2) (3) before this Law was published, then – for purposes of the prescription period of the action that is the subject of the petition – the time between submission of the petition and its rejection shall be taken into consideration; for this purpose, "rejection" within its meaning in section 15 of the Prescription Law 5718-1958. The provisions of this subsection shall not apply to the period of prescription of a personal action brought by the person who brought the petition for approval of a class action as said in paragraph (1), on the grounds that are the subject of the petition for approval. Petitions for approval, which were submitted from the day on which this Law was published until the day on which regulations about fees, as said in section 44, and also class actions approved under said petitions for approval shall be exempt of the payment of Court fees. If – on the day this Law was published – a petition for approval of a class action, as said in section 5(b)(2), was pending, then the Court that hears the petition shall order its transfer to the Administrative Affairs Court; if a class action said in section 5(b)(2) was pending on the day this Law was published, then the Court that hears the petition may transfer it to the Administrative Affairs Court, taking into account the stage which hearing the action had reached; the Administrative Affairs Court to which a petition or an action under this paragraph was transferred may continue to hear it from the stage at which its predecessor had stopped. In respect of a petition for approval of a class action against an authority for restitution, which was brought before the day on which this Law was published, the day on which this Law was published shall be deemed the day on which the count of the period said in section 9(a) begins, instead of the date on which the petition for approval was submitted. 25 SCHEDULE ONE (Section 1 – Definition of "Public Authority") 1. 2. 3. The Commission for Equal Rights for Persons with Disabilities; the Nature Protection and National Parks Authority; the Commission for Equal Opportunities at Work. SCHEDULE TWO (Section 3(a) – Claims for which Petitions for the Approval of Class Actions May Be Submitted) 1. 2. 3. 4. 5. 6. 7. 8. 9. A claim against a dealer, as defined in the Consumer Protection Law, in connection with a matter between him and customers, whether or not a transaction was contracted between them; a claim against an insurer, insurance agent or management company, in connection with a matter – insurance contracts or benefit fund bylaws – between them and a client, whether or not a transaction was contracted between them; a claim against a banking corporation, in connection with a matter between it and a client, whether or not a transaction was contracted between them; a claim on grounds under the restrictive Business Practices Law; a claim on grounds that arise out of a connection to a security or unit; for this purpose – "connection" – ownership, possession, purchase or sale; "unit" – within its meaning in the Joint Investments Trust Law; "security" – within its definition in the Companies Law, and also securities, as defined in section 52 of the Securities Law 5728-1968; a claim in connection with an environmental nuisance against the person that causes it; for this purpose, "person that causes it", "environmental nuisance" – within their meaning in the Prevention of Environmental Nuisances Law; a claim on grounds under the Prohibition of Discrimination in Respect of Products, Services and Entry to Places of Entertainment and Public Places Law 5761-2000; (1) a claim on grounds of discrimination at work, under the Equal Opportunities at Work Law 5748-1988; (2) a claim on aforesaid grounds under the Equal Pay for Male and Female Employees Law 5756-1996; (1) claims on grounds under Chapters Four, Five or Five "A" of the Equal Rights for Persons with Disabilities Law; (2) a claim on grounds under the accessibility regulations under the 26 Planning and Building Law 5725-1965, as defined in section 19A of the Equal Rights for Persons with Disabilities Law; (3) a claim under the provisions of the Television Broadcasts (Foot Titles and Sign Language) Law 5765-2005; 10. (1) a claim on grounds over which a Regional Labor Tribunal has exclusive jurisdiction under section 24(a)(1), (1a) or (3) of the Labor Tribunals Law 5729-1969, on condition that as part thereof no relief is claimed of delay in the payment of a pension compensation, wage delay compensation or severance pay delay compensation under the provisions of sections 16, 17 and 20 of the Wage Protection Law 5718-1958; (2) an employee's claim under section 6A of the Minimum Wage Law 5747-1987, an employee's claim on grounds under sections 2 and 3 of the Right to Work while Seated Law 5767-2007, or under the Employment of Employees by Manpower Contractors Law 5756-1996; (3) in this item – "claim" – other than the claim by an employee, to whom a collective agreement applies that arranges the terms of his employment, and that employee's employer or the employer organization to which he belongs is a party to the collective agreement; "collective agreement" – a collective agreement under the Collective Agreements Law 5717-1957, or a written collective arrangement; 11. a claim against an authority for the restitution of amounts it collected unlawfully as tax, rates of other compulsory payments; 12. an action against an advertiser, as defined in section 30A of the Communications (Telecommunications and Broadcasts) Law 57421982, on grounds according to the said section. SCHEDULE THREE (Section 12(d) – Restrictions on Class Action by Way of Adherence) 1. 2. A claim on grounds under the Restrictive Business Practices Law; a claim on grounds that arise out of the connection to a security or unit; for this purpose – "connection" – ownership, possession, purchase or sale; "unit" – within its meaning in the Joint Investments Trust Law; "security" – within its definition in the Companies Law, and also securities, as defined in section 52 of the Securities Law 5728-1968. 27 28
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