Class-Action Lawsuits in Israel Are Being Used as Pressure Tactics, Says Avihai Kara

In a ynet daily news podcast, the discussion focused on class-action lawsuits in Israel and the claim that they have become a tool that mainly harms small and medium-sized businesses. Avihai Kara, Israel’s former deputy minister in the Prime Minister’s Office and the leader of the “Enough extortion” campaign, argued that the legal mechanism has drifted far from its original consumer-protection purpose.

Kara said the system, which was meant to help consumers who suffered small losses that would not justify individual lawsuits, is now being exploited by lawyers and serial plaintiffs. “The shield became a sword,” he said, adding that attorneys use the law “cynically” mostly against smaller businesses. He said most class actions in Israel are filed against small businesses, even though that was never the law’s intent.

He also said Israel was the world leader in class-action filings per capita in 2023, by hundreds of percent compared with Canada and the United States. According to Kara, the law has been “hijacked” by a group of lawyers and repeat plaintiffs who abuse it for profit.

Kara described the financial pressure such cases create, saying a lawsuit demanding 2.5 million shekels can force a business owner to hire a lawyer and leave a stain with the bank, making a quick settlement for tens of thousands of shekels more likely before any court hearing. “The only winners here are the lawyers,” he said, while consumers ultimately receive only small sums.