Court Orders Competitor's Proxies to Pay $27,000 in Frivolous Lawsuit Case

A Tel Aviv District Court judge has ordered two individuals who filed class action lawsuits on behalf of a competitor to pay NIS 100,000 (approximately $27,000) in legal expenses after they withdrew their claims. Judge Amir Weitzenblit ruled that Dani Ohev-Zion was behind a series of class action requests against the company "Asinu Et" (We Did It), controlled by Yossi Bivas, with whom Ohev-Zion was a partner until a dispute arose between them. These lawsuits, which were ultimately not heard on their merits, accumulated to a total of NIS 315 million (approximately $85 million).

"Asinu Et" imports electric tools, and Bivas and Ohev-Zion separated in 2016, with their legal battles continuing until 2019. The lawsuits involved Yossi Eldar, a former employee who moved to Ohev-Zion, and attorney Moni Azura, who represented Ohev-Zion. Bivas claimed that the filings, despite not being heard, cost him tens of millions of shekels in defense costs and caused tangible damages.

In 2017 alone, four class action requests were filed alleging the import of non-compliant tools. These ranged from NIS 5.5 million to NIS 251 million, with some filed by Eldar's relatives or associates, and others through attorney Azura. The largest claim, initially NIS 251 million, was later reduced to NIS 104 million and filed by another lawyer, but Eldar provided the supporting affidavit. Judge Weitzenblit noted the significant similarities between the claims, indicating a coordinated effort by Ohev-Zion.

Several previous lawsuits had been dismissed for lack of basis or withdrawn due to inaction. Following the latest filing, Bivas and "Asinu Et" filed a NIS 10 million lawsuit against Eldar and the two plaintiffs, Binyamin Hillman and Talik Cohen. During a hearing, both sides agreed to withdraw their claims, leaving the question of costs to the court.

Judge Weitzenblit emphasized that class action lawsuits should not be initiated by competitors or those in dispute with the defendant, citing potential harm to the group's interests, judicial oversight difficulties, lack of good faith, severe damage to the defendant, harm to competition, and misuse of the discovery process. He concluded that the case demonstrated a "rather serious picture of misuse of the class action tool for an extraneous purpose," casting doubt on the plaintiffs' claims and their reasons for withdrawing previous suits without compensation.