"A tool that enriches lawyers": The Knesset debate on limiting class action lawsuits

The Constitution Committee discussed a reform to the Class Action Law, which includes exempting small businesses and requiring a 60-day prior notice before filing a lawsuit in certain cases. The President of the Chamber of Commerce Association harshly criticized the mechanism, calling it an "extortion mechanism" and "protection under the guise of law."

The Knesset Constitution Committee discussed a comprehensive reform to the Class Action Law today, initiated by MKs Avraham Bezalel, Yonatan Misharki, Sasson Gueta, and Eliyahu Baruchi. The updated proposal stipulates that a class action cannot be filed against a "small business," which will be defined by an annual turnover threshold to be set by law. Additionally, it proposes a mandatory 60-day prior notice to the defendant before filing a lawsuit in cases involving non-deduction of packaging weight, sending advertisements (spam), product marking, displaying a price per unit of measure, and accessibility adjustments in services. The court will order the dismissal of a lawsuit filed without the required prior notice. The proposal also addresses compensation for the representative plaintiff and attorney fees, allowing parties to submit written arguments after the amounts are determined. In the case of non-monetary relief, the actual cost to the defendant will be considered. It also proposes changing the method of notifying group members about compensation, through publication on the defendant's website and, in certain cases, personal notification. The President of the Chamber of Commerce Association, Shahar Turjeman, harshly criticized the use of class actions against small businesses, calling them an "atomic weapon" and claiming they have become an "extortion mechanism" and "protection under the guise of law." According to him, class actions are "a tool that enriches lawyers and accelerates the cost of living."