In a pointed and exceptional ruling handed down recently, the court rejected a request from class action plaintiffs to receive compensation and legal fees following their motion to withdraw a claim against the company 'Asinu Esek Siyonim'. Instead of the requested funds, the claimants were ordered to pay 100,000 NIS in legal costs to the defendant company, in addition to previous rulings, bringing the total sum to approximately 200,000 NIS. The affair originated as a business dispute between two former partners, Yossi Bibas and Danny Ohev-Zion, who co-managed the company engaged in the import and marketing of electric tools.
Following their business separation in 2016, the two began a series of legal battles. Since 2017, five motions for class action certification have been filed against the company for an aggregate sum of approximately 315 million NIS. The court identified direct connections between some of the claimants and Ohev-Zion and his associates, determining that the proceedings were coordinated and provided no real benefit to the public. In the current claim, filed in 2019 for approximately 103.
6 million NIS, Judge Amir Weiznblit sharply criticized the abuse of the class action mechanism. The ruling clarified that when a legal proceeding is backed by the interest of a party involved in a business dispute, the goal is not consumer protection but exerting improper pressure on a competitor. The judge compared the use of such class actions to a hand grenade with the pin pulled, capable of causing heavy financial and reputational damage to the defendant before the facts are even investigated.
In his decision, the court emphasized that using class actions as a tool in business struggles is a phenomenon that cannot be tolerated. This decision aligns with a broader trend in Israeli courts, particularly following signals from the Supreme Court last April that more significant costs should be imposed on those filing improper proceedings to deter the abuse of legal processes. For practitioners, this case serves as a clear warning against attempts to turn class actions into a tool for settling scores between business rivals.
The emerging legal reality shows courts becoming stricter regarding conduct inconsistent with the purpose of consumer protection laws, with a readiness to impose heavy costs on claimants who misuse the process.