Israel Approves Bill Shielding Small Businesses From Class Action Lawsuits
Translated & summarized from Globes by baba
The Knesset's Constitution and Economy committees approved amendments to the Class Action Law, shielding businesses with annual revenues up to 9 million shekels from class action lawsuits. This change, championed by former MK Avir Kara and the Israel Export and International Cooperation Institute, will protect about 93% of Israeli businesses. The amendment allows for individual lawsuits, and the protection threshold was raised from an initial proposal of 2 million shekels.
The story in 6 lines · by baba
- Small businesses with annual revenues up to 9 million shekels are now exempt from class action lawsuits in Israel.
- Approximately 660,000 businesses, or 93% of all businesses in Israel, will benefit from the new law.
- The amendment was approved for a second and third reading by a joint Knesset committee.
- Former MK Avir Kara and the Israel Export and International Cooperation Institute were key proponents of the bill.
- The protection threshold was raised from an initial proposal of 2 million shekels to 9 million shekels.
- Individual lawsuits against these businesses remain permissible.
A joint committee of the Constitution and Economy committees in the Knesset has approved significant amendments to the Class Action Law, which will exempt small businesses from such lawsuits. The amendment, passed for a second and third reading, states that class action lawsuits can no longer be filed against small businesses with an annual revenue of up to 9 million shekels. This exemption will apply to approximately 660,000 businesses, representing at least 93% of all businesses in Israel, including licensed sole proprietorships.
Former Knesset Member Avir Kara and the Israel Export and International Cooperation Institute were among the key proponents of this legislative change. The amendment is being fast-tracked during the election recess due to an agreement between the ruling coalition and the opposition. The original proposal, which passed its first reading in 2024, would have protected businesses with revenues up to 2 million shekels. However, following a meeting involving the Ministry of Justice's legislative department and professional staff, the revenue threshold was raised.
While the current amendment protects businesses up to 9 million shekels in revenue, initiators like Chairman of the Constitution Committee Simcha Rothman and former MK Avir Kara had initially pushed to extend the protection to 20 million shekels. The Israel Export and International Cooperation Institute advocated for an even higher threshold, while the Equal Rights Commission for Persons with Disabilities suggested a lower one. The amendment allows for individual lawsuits against these businesses.
This amendment is part of a broader reform initiative by the Ministry of Justice that has been in progress for several years. The civil department within the Ministry of Justice's legal counsel, led by Deputy Legal Advisor Adv. Carmi Yulis, has been instrumental in advancing and drafting these legislative changes. Currently, only the section pertaining to small businesses is being advanced, not the entirety of the proposed reform.
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