6 October 2026TheMarker – חדשות משפט וכלכלה

Supreme Court Rules: Travel Agencies Cannot Deduct Fees from Canceled Flight Refunds

The Supreme Court accepted a travel guide's appeal against a handling fee charged after a flight cancellation. The ruling states that travel agencies are prohibited from deducting sums from refunds received from airlines for their clients, overturning previous precedent that allowed such fees.

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This is an original newsroom summary and analysis. The source was not reproduced, and readers can inspect the original publication.

Original publication at TheMarker – חדשות משפט וכלכלה

Why it matters

The ruling shifts the balance of power between consumers and travel agencies, preventing agencies from charging fees from customer refunds and ensuring full reimbursement for canceled flights.

Key points

  • ▪The Supreme Court ruled that travel agencies are not permitted to charge handling fees from flight refunds.
  • ▪The precedent was set following an appeal by a passenger charged $30 for a canceled flight refund.
  • ▪The passenger's claim was rejected by the first two courts but accepted by the Supreme Court.
  • ▪The ruling is relevant to numerous passengers previously charged similar fees.
  • ▪The decision prohibits travel agencies from using refund money as an additional income source.

A significant Supreme Court ruling in October 2026 sets a clear boundary for the conduct of travel agencies in Israel concerning customer refunds. The case began when Doron Reder Ben Shimon, a tour guide from Tel Aviv, booked a flight to Warsaw through the travel agency Issta. Following the flight's cancellation, the airline issued a refund, but the travel agency deducted $30, labeling it a "handling fee. " Reder Ben Shimon decided not to accept the deduction and initiated legal proceedings against the agency.

His claim was initially dismissed by the Small Claims Court, and his subsequent appeal to the District Court was also rejected. Despite losing in two lower courts, the plaintiff filed a request for leave to appeal to the Supreme Court. In its ruling, the Supreme Court accepted Reder Ben Shimon's position, determining that a travel agency is not authorized to charge a handling fee from the refund amount due to the passenger from the airline. This decision means that the refund for a canceled flight must be paid to the consumer in full, without any financial intervention by the intermediary agent, even if it's a cost they define as administrative processing.

According to a report in TheMarker, this is a far-reaching decision with broad implications, relevant to a large number of passengers who were previously charged similar fees for refunds on canceled flights. The ruling changes the legal situation that prevailed after the lower courts' decisions and clarifies the prohibition against travel agencies using refund money as an additional source of income for cancellation processing services. For consumers, this is significant news that upholds their right to receive a full refund without "deductions" by intermediaries.

The issue highlights the need for full transparency with travel agencies and the ability of individuals to fight for their rights even when the amount seems small, as these legal principles protect the public from unauthorized charges.

General information only. This item is not legal advice and does not replace review of the original source.

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