Israeli Knesset Panel Approves New Class Action Law Provisions

A joint committee of the Israeli Knesset's Constitution and Economy committees has approved splitting key provisions from a proposed class action lawsuit reform bill. These provisions, designed to protect small businesses and mandate prior notification to defendants, will now be voted on separately in the Knesset plenum for second and third readings.

The split sections include a clause that would have prevented class action lawsuits against "small businesses," defined as those with an annual turnover not exceeding NIS 9 million in the preceding year. Another separated provision mandates that plaintiffs must first contact the defendant and allow 60 days for them to rectify alleged violations before filing a class action request. This prior notification requirement would apply to various alleged infractions, including incorrect packaging weight calculations, sending unsolicited "spam" advertisements, improper goods labeling, misleading unit pricing, and certain accessibility compliance issues.

If a class action request is filed without this required prior contact, the court will be obligated to dismiss the application. Committee Chairman MK Simcha Rothman stated that the bill and the discussions demonstrate the possibility of broad consensus and cooperation for the benefit of small businesses.