Israel's Supreme Court Allows Health Ministry Probe into Clalit to Proceed

Israel's Supreme Court on Thursday rejected an appeal by Clalit Health Services, allowing a Ministry of Health investigative committee to continue its work examining Clalit's corporate governance. The court lifted an interim order that had halted the committee's proceedings since late June, ruling that Clalit has 30 days to submit its response to the draft report.

Clalit had argued it could not effectively respond to the draft report without access to all the evidence the committee relied upon, including protocols, recordings, and transcripts of testimonies. The health provider filed its second appeal against the Ministry of Health and the investigative committee after the court initially issued an order freezing the process. The Supreme Court, however, deemed the appeal premature, stating the regulatory process was not yet complete and no final decision that could harm Clalit had been made.

The court did not rule on whether Clalit had received all the materials it was entitled to, but rather that the dispute did not justify halting the committee's work at this stage. Following the court's directive, negotiations between the parties led to Clalit receiving a list of all materials before the committee, a list of witnesses, additional protocols, and five testimonies with identifying details redacted. However, four testimonies remained confidential, with the Ministry of Health citing concerns about the witnesses' future careers and potential repercussions for current and former Clalit employees.

The committee was established, in part, due to significant executive turnover at Clalit, including three CEOs within a few years while Yochai Locker served as chairman. It was tasked with examining the relationships between the board and management, the board's influence on CEO changes, and Clalit's overall corporate governance.

Clalit retains the right to approach the court again after the committee completes its work and the final report is drafted. The state has also committed to providing Clalit with seven days' notice before any potential publication of the final report by the Health Minister, allowing Clalit to exercise its rights, including further legal action.