Insurance Firm's Class Action Ends With Minimal Payout
Translated & summarized from Bizportal by baba
A NIS 20 million class action lawsuit against IDI (Direct Insurance) in Israel concluded with a NIS 1,600 reward for the applicant after the judge approved a compensated withdrawal. The suit concerned marketing messages sent to users who had opted out. The court found the company had corrected the issue before the suit began and that the group received no tangible benefit from the proceedings, though the applicant received a partial reimbursement of court fees.
The story in 6 lines · by baba
- A NIS 20 million class action against IDI insurance ended with a NIS 1,600 reward for the applicant.
- Judge Motty Firer approved a compensated withdrawal, citing company corrections before the suit.
- The suit concerned marketing messages sent to users who had opted out of communications.
- The applicant, Ben Gabra, alleged violations of spam and privacy laws.
- The company argued the messages were service reminders with an accidental marketing wording.
- The court reduced the applicant's reward and legal fees, noting limited group benefit.
A class action lawsuit against Israeli insurance company IDI (Direct Insurance), initially seeking NIS 20 million in damages, concluded with a NIS 1,600 reward for the applicant. Central District Court Judge Motty Firer approved a compensated withdrawal from the suit, which concerned SMS and email messages sent by the company to users who had opted out of marketing communications. Firer ruled that the company had amended the message wording before the suit was filed and that "the proceedings had exhausted themselves before they began."
The applicant, Ben Gabra, claimed that after requesting a travel insurance quote online on December 10, 2024, and opting out of marketing, he received an SMS and an email encouraging him to complete the purchase. He alleged violations of the Communications Law (Spam Law) and the Privacy Protection Law, estimating damages at NIS 20 million for the group. IDI, represented by attorneys Ronit Siton Zalkind and Ravit Koren Pery, stated the messages were service reminders for incomplete purchases, with the marketing wording being an error due to a technical glitch. The company had already stopped sending these messages and offered Gabra NIS 2,000 in personal compensation.
Following preliminary proceedings, the parties reached an agreement where IDI committed to using an agreed-upon text for future reminders to customers who opted out of marketing. The court approved a NIS 2,000 reward and NIS 13,000 in legal fees for the applicant's side, though this was later reduced. Judge Firer noted that compensated withdrawals are exceptional and require demonstrable benefit to the group. He found that the primary relief, an injunction against such messages, was achieved before the suit was filed, and compensation for past damages was outside the settlement, thus providing no benefit to the group members.
Ultimately, Firer reduced the applicant's reward to NIS 1,600 and legal fees to NIS 10,400 plus VAT. The company will reimburse the applicant NIS 6,399 for the first part of the court fees, while the applicant is exempt from the second part due to the early termination of the proceedings. The judge emphasized that the withdrawal does not preclude group members from suing in the future if they can prove damages. The court also noted that the applicant's personal claim was dismissed.
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