Shaked sets fees to stem class actions flood

Ayelet Shaked photo Eyal Izhar
Ayelet Shaked photo Eyal Izhar

 Minister of Justice Ayelet Shaked has decided that a NIS 24,000 fee will be charged for a class action in a district court.

Following months of discussions, consultations, and hesitation, Minister of Justice Ayelet Shaked has decided that fees of NIS 24,000 and NIS 12,000 will be charged for filing a class action in a district court and magistrates court, respectively. The fees are substantially lower than Shaked originally intended to charge as a condition for filing a class action. At present, in contrast to ordinary lawsuits, no fee is required for filing a request for a class action.

The revised proposal was formulated in cooperation with the Israel Bar Association, Ministry of Justice legal advisor Erez Kaminitz, and the Manufacturers Association of Israel. Only half of these fees will be charged when the class action is filed; the other half will be paid if and when the evidence in the case is presented to the court. This stage is reached in very few cases, because most of the cases are either settled out of court or approval for the class action is denied.

It was also decided to exempt class actions filed by NGOs and non-profit organizations and class actions filed against the state from the fee. The new regulations require approval from both the Knesset Constitution, Law, and Justice Committee and Minister of Finance Moshe Kahlon.

Under Shaked's original proposal, the fee would have been NIS 62,500 for a class action in a district court and NIS 50,000 for a class action in a magistrates court. As is the case with ordinary lawsuits, the proposed fee varies according to the type of court in which the action is filed, and according to its authority.

Shaked's proposal is designed to stem the tide of class action requests in Israel, following studies by Tel Aviv University Professor of Law Alon Klement, among others, who showed that half of the class action requests end in dismissal of the action, due to the fact that its chances of success are low.

Shaked believes that these class action requests are imposing unnecessary costs on the legal system and increasing its workload, and should never have been filed.

Shaked wants to combat the common practice in which lawyers initiate the filing of a class action request and talk their clients into filing it, with no fee at all being charged, meaning that they have nothing to lose. The lawyers hope that filing a multitude of actions will produce at least one ending in either a settlement or judgment, with a handsome fee for them.

Published by Globes [online], Israel Business News - www.globes-online.com - on March 23, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

Ayelet Shaked photo Eyal Izhar
Ayelet Shaked photo Eyal Izhar
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