Final Approval: Fees Capped for Handling Claims by IDF Veterans and Terror Victims
The Knesset plenum today (Tuesday) approved in second and third readings the bill limiting legal fees for IDF-disabled veterans and victims of hostilities. The bill proposes setting a cap on the maximum amount that lawyers and rights-enforcement companies may charge for handling claims. Fourteen Knesset members supported the proposal, with none opposed and one abstention. Chair of the Labor and Welfare Committee MK Michal Woldiger said, "This is a law that does historical justice with IDF-disabled veterans and the security forces, and with Israeli civilians who were victims of hostilities." MK Michael Biton, the sponsor of the private bill that was merged into the government proposal, said, "This is a correction of an injustice that lasted for decades. For social correction, you need the people, the government, the Knesset and exemplary people who leave home to bring good news, and that is what we did here."
Globe reviewed fee agreements that were brought to its attention, from which it emerges that some injured veterans are forced to forgo disability benefits for a long period in order to pay their lawyers. In the most draconian contract, the injured person was asked to pay 2,500 shekels for each percent of disability. Throughout the deliberations, the Israel Bar Association argued that freedom of occupation should not be harmed or restricted. The association feared that if very low rates were set that did not match lawyers' investment, or if amounts were decided that did not reflect the complexity of the case, lawyers would take only simple cases that would be profitable for them, and those who would be harmed would be the disabled themselves.
The proposal distinguishes between types of applications and caps filing fees. It differentiates between representation that includes an application for recognition and medical committees, and treatment that includes only one of them, as well as between treatment that includes representation by a lawyer and treatment that does not. For example, in claims by IDF-disabled veterans that include a request for recognition and proceedings before a medical committee, a filing fee of up to 4,000 shekels may be charged. In claims that do not include legal representation, the amount will be 2,667 shekels. Filing fees for those seeking recognition as victims of hostilities will be capped at 2,000 shekels in claims that include representation and 1,333 shekels in claims that do not include representation.
Fee caps by disability percentage are also set. When a permanent disability rating qualifying for a grant is determined, up to 19 percent, in a claim that included representation by a lawyer, up to 7,360 shekels may be charged for the first 10 percent of disability, plus 600 shekels for each additional percent. In claims without representation, the corresponding amounts will be 4,907 shekels for the first 10 percent and an additional 400 shekels for each additional percent. When a permanent disability rating of 20 percent or more is determined, qualifying for a monthly benefit, in a claim that included representation, up to 16,000 shekels may be charged for the first 20 percent and an additional 800 shekels for each additional percent. In claims without representation, the corresponding amounts will be up to 10,660 shekels for the first 20 percent and an additional 533 shekels for each additional percent.
The proposal also sets maximum charges for procedures in which temporary disability percentages were determined, appeals, recognition of aggravation and more. VAT will be added to all amounts specified in the bill, and they will be updated every January according to the Consumer Price Index.
The proposal also establishes a mechanism for refunding money to anyone from whom amounts defined in the law as "excessive" were collected, in relation to agreements signed after October 7, 2023. The money will be returned to the represented client within six months of their request to the representative. The amendment also requires representatives to offer convenient installment payments for those assigned a disability rating of at least 20 percent, for a period of at least 60 months without interest or index linkage, and prohibits charging payment from an eligible claimant before the date on which they began receiving payments from the Defense Ministry or the National Insurance Institute. Excessive payment is defined as payment exceeding 140 percent of the maximum amount permitted under the bill, for treatment that led to recognition of eligibility for a monthly benefit due to a permanent disability rating of at least 20 percent. Anyone who collected more than that amount will have to return it and may appeal to court to argue that the refund is unjust in the circumstances.
To prevent a situation in which represented clients sign a retention agreement under pressure or distress, it was decided that the representative must provide the represented client with a draft agreement at least seven days before signing, together with an information sheet including, among other things, the updated fee caps. After signing, the represented client will be entitled to withdraw from the agreement within 14 business days from the date the signed agreement was delivered to them in writing, unless by that date a claim for benefits had been filed, which, had it not been filed by that date, could no longer have been submitted.
The proposal was promoted and pushed by the "Battle Diamonds" forum and Nadav Wirsch. After the bill was approved, Chair of the Labor and Welfare Committee MK Michal Woldiger said, "After months of complex and lengthy discussions, we are bringing today a great message to IDF-disabled veterans and the security forces and to victims of hostilities. We dealt with the issue with great seriousness, while hearing all voices and understanding the complexities, and we reached a balanced and proper wording, and we all hope the amendment will fulfill its goals in the best possible way and for the benefit of all sides. I want to thank everyone who took part in the discussions, expressed their views and contributed. Together we made history."
In an earlier debate on the bill, MK Michael Biton, the sponsor of the private bill that was merged into the government proposal, said: "This law has broad support in the coalition and the opposition, and it has been waiting for a long time for leadership in the committee to advance it decisively."
The Israel Bar Association: Our proposals were broadly ignored
After the bill was approved last week in second and third readings, the Israel Bar Association said: "The Israel Bar Association regrets the bill that passed its second and third readings, as this bill will severely harm IDF-disabled veterans and victims of hostilities who need representation before institutions.
"The bill was advanced aggressively by the Justice Ministry, the Defense Ministry and the committee's legal adviser, while the association's proposals for alternative solutions were broadly ignored, including setting a maximum fee in such cases and the economic opinions submitted during the process, which present the real situation in law offices, based on extensive research into the number of cases handled by those offices.
"An examination of the average number of work hours per case shows that an average case consumes between 78 and 93 hours of work, while the Justice Ministry arbitrarily determined, without data and without presenting objective field data, that handling a case requires only 31 hours of work. This argument led to the setting of unjust amounts, which will result in disabled people receiving low-level representation and being exposed before the institutions.
"The proposal does not distinguish between disabled people injured in combat activity and other circumstances, nor between long-standing disabled people and new disabled people, and this will lead to these disabled people not receiving representation.
"Most seriously of all, the bill establishes a retroactive compensation mechanism for past agreements without data-based justification, while presenting only isolated cases in which allegedly excessive fees were set, which is illegal, disproportionate and entirely improper.
"The bill allows the Justice Minister, after the law is enacted, to make drastic changes to it at his own discretion, without needing Knesset approval or approval by the Labor and Welfare Committee, which is disproportionate. The Israel Bar Association will consider its next steps if the law passes its second and third readings without significant reservations that change its character."
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