Phoenix Wins Appeal, Cancels 182 Million Shekel Class Action Over Investment Fund Changes
The National Labor Court accepted Phoenix's appeal against the approval of a 182 million shekel class action lawsuit filed against its pension and provident fund management. The original class action, approved in October by the Tel Aviv Regional Labor Court under Judge Ariela Glitzer, alleged that Phoenix changed the investment track of Excellence provident funds without obtaining consent or providing sufficient notice to the members. The change occurred in 2018 when Phoenix merged the general investment track of Excellence, which it had acquired earlier, into its own general investment track, renaming the Excellence track to "Excellence Short-Term Provident" with a different investment policy.
The plaintiff, supported by economic expert Gilad Mano, estimated the losses to members from this involuntary switch at 182 million shekels. The Regional Court viewed the case as a "transfer of members without consent," considering it a common issue suitable for class action. However, the National Labor Court rejected this characterization, ruling that the change was a regulatory investment policy adjustment conducted in accordance with law, the fund's regulations, and with explicit, timely approval from the Capital Market Supervisor.
The court emphasized that since the change might be considered an internal policy shift within the same investment track, the documentation each member received, what was published, and what each member actually knew must be individually examined. Therefore, the case does not present a common question suitable for class action. The court noted Phoenix had published the changes, sent notifications, updated regulations, and complied with supervisory requirements, making it impossible to assume all members were equally affected. Phoenix was represented by attorneys Nadav Wiseman and Gilad Shiff from Meitar Law Offices and Harel Shaham from Gornitzky & Co. The plaintiff was ordered to pay Phoenix 50,000 shekels in legal fees.
