Court Orders Former Business Partners to Pay $27,000 in Failed Lawsuit

A Tel Aviv District Court judge has ordered former business partners to pay NIS 100,000 (approximately $27,000) in legal fees to a company they sued, reversing the outcome of a six-year legal battle. The case, initially filed in October 2019 against "Asinu Etz" (We Made a Deal) Agencies, an importer of power tools, alleged the company sold products without required safety certifications.

However, Judge Amir Weitzenblit ruled that the class-action lawsuit was not a genuine consumer protection effort but rather a weapon in a business dispute between former co-owners of "Asinu Etz." The court found "improper involvement of a competitor and adversary of the respondents in filing the representative proceeding," suggesting a potential abuse of legal process.

Evidence presented revealed that the main affidavit supporting the claim came from a manager at a rival company controlled by the other former partner. Furthermore, it emerged that some of the products in question did possess the necessary certifications from the Standards Institution of Israel, a fact the plaintiffs allegedly omitted.

After years of litigation, the plaintiffs sought to withdraw the case, requesting NIS 700,000 plus VAT for their legal counsel and NIS 100,000 for themselves. Judge Weitzenblit approved the withdrawal but ordered the plaintiffs to pay the company's legal costs instead, totaling NIS 100,000, in addition to NIS 100,000 in prior costs awarded against them.

The ruling underscores a stricter judicial approach to class-action lawsuits, aiming to prevent their use as tools in business conflicts rather than for genuine consumer benefit. The court noted that for the specific product subject to enforcement, the amounts involved were likely too small to justify a class-action suit, and that other products had indeed received certification.