Israeli Supreme Court Overturns Order for Retailer to Pay Class Action Fund

The Supreme Court of Israel has overturned a lower court's order compelling the retail chain Freshmarket to pay 120,000 shekels to the Class Action Claims Fund at the Ministry of Justice. The original lawsuit, filed by Hava Mazor, alleged that Freshmarket failed to display tobacco product prices in its stores, violating consumer protection law. Freshmarket countered that the law prohibits openly displaying such prices. The parties had initially agreed that Freshmarket would prominently display a price list and offer discounts totaling 600,000 shekels, with 120,000 shekels allocated for attorney fees and compensation.

However, the Haifa District Court rejected a request to keep the settlement confidential and forward it to the Attorney General. The Attorney General opposed the agreement, arguing it violated the law by allowing only a price list available upon request. She also contended that the discounts would encourage smoking and proposed the entire sum be transferred to the Claims Fund. The District Court accepted this, ordering the 120,000 shekel payment to the fund, though it rejected the Attorney General's other points.

Freshmarket appealed this specific payment order. Supreme Court Justice Ofer Groskopf, joined by Justices Yechiel Kasher and Ruth Ronen, ruled in favor of Freshmarket. They found that the original lawsuit had not yielded any benefit to the public, making the payment order unwarranted. Freshmarket was represented by attorney Dror Severansky, and Mazor by attorney David Mizrahi.

In separate class action rulings, the Central District Court approved a lawsuit against Arkia Airlines, alleging it fails to offer passengers alternative flights after a five-hour delay, instead providing only refunds or seats on its own flights. The court ordered Arkia to pay 30,000 shekels in expenses. The Jerusalem District Court dismissed a class action against Mercantile Discount Bank regarding undisclosed correspondent bank fees for foreign currency transfers, stating disclosure is only required when fees are known in advance. The Central District Court also approved a class action against Menora Mivtachim concerning how it includes its own investigation costs in car insurance claim notifications, potentially raising premiums. The court ordered the replacement of the original plaintiff due to inconsistencies in his personal claim.