Cellcom customers sue for compensation

MK Nachman Shai: A mobile carrier should know to how to refund, not just how to bill.

Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) customers want to sue the mobile carrier for anguish caused by yesterday's nationwide crash of the company's network, which intermittently silenced its 3.3 million subscribers. Three lawsuits have already been filed with the Central District Court with requests to be recognized as class action suits in the amount of NIS 2.4 billion.

One lawsuit is seeking NIS 1.1 billion in compensation from Cellcom, based on NIS 350 in damages for anguish caused to the company's 3.3 million subscribers who could not manage their usual affairs.

Adv. Josef Fuchs, representing the petitioner, said, "The power of the class-action lawsuit is exactly intended for a case like this. Although so many people were affected yesterday because of their inability to manage their work, family and other affairs, only a few stood up and sued for compensation for the damage caused them."

Politicians also jumped on the bandwagon. At the request of MK Nachman Shai (Labor), Minister of Communications Moshe Kahlon will report to the Knesset Economics Affairs Committee how his ministry is dealing with the breakdown. Kahlon will update the committee next week on how he intends to ensure that Cellcom's customers will be compensated for the damages caused them.

In his letter to Kahlon, Shai said, "The breakdown at Cellcom must be investigated. The Ministry of Communications should order the company to compensate its customers for the losses caused for loss of their business day. The financial damage to consumers is immense. A mobile carrier should know how to pay refunds to customers when necessary, and not only know how to bill them when possible."

The second lawsuit was filed by Orna Dahan of Tel Aviv, through Adv. Shlomo Hardi, in the amount of NIS 1.3 billion for alleged negligence by Cellcom. Dahan has three Cellcom cellphones. Her statement of claim says, "For most of the day the cellphones were stones."

Hardi told "Globes" that there was a good chance that the court would approve the request for a class-action lawsuit against Cellcom. He said that the company should have anticipated a breakdown of this magnitude.

"Globes: Do you really believe that Cellcom neglected its infrastructure in order to enrich itself at its customers' expense, as you allege in your statement of claim?

Hardi: "We assert that it's necessary to invest in infrastructures so that such a breakdown cannot occur. Since there was a breakdown, then Cellcom apparently did not invest enough. Customers pay Cellcom, so such a breakdown should never have happened."

The third lawsuit by two claimants is seeking NIS 18 for each Cellcom customer, amounting to NIS 60 million.

Published by Globes [online], Israel business news - www.globes-online.com - on December 2, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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