Top Lawyer's Abusive Language Costs Client Tens of Thousands

The Israeli Supreme Court has ordered businessman Eli Kahana and two companies he owns to pay 75,000 shekels in legal costs due to abusive language used by his senior lawyer, Gilad Waksman, against a lower court judge. Waksman, head of litigation at Herzog Fox & Neeman, attacked Judge Yardena Sarusi of the Tel Aviv District Court during an appeal hearing in February 2025.

The case involved Kahana's appeal against a tax ruling that classified a $2.2 million payment for a non-compete agreement as ordinary income, subject to a 50% tax rate, rather than capital gains taxed at 25%. Judge Sarusi had previously rejected Kahana's appeal, finding it questionable whether the sale was legitimately split into two agreements and ruling the non-compete payment as ordinary income.

During the Supreme Court hearing, Waksman initially defended his language, claiming he was presenting a statistical fact about the judge's past rulings. However, Justices Yael Willner and Yehiel Chashin criticized his statements, with Chashin stating that such statistical arguments were intended to "blacken the judge's face." Willner added that the language was "extreme" and "sharp."

Waksman eventually apologized, but the Supreme Court justices indicated that such apologies should be made to the lower court. The State had requested the appeal be dismissed outright due to the abusive language. Justice Chashin, in his ruling, noted that while the appeal was not dismissed this time due to the apology, such "shameful" and "abusive" arguments, violating civil procedure rules, are unacceptable from legal representatives.

Despite the criticism of the language, the Supreme Court overturned Judge Sarusi's ruling on the tax classification. Justice Chashin determined that the non-compete payment was indeed ordinary income, explaining that it compensated for limiting the "fruits" of Kahana's business, not the "tree" (his fundamental ability to earn a living). Justices Willner and Noam Sohlberg concurred.