Jerusalem Court Rules Municipalities Must Exercise Caution in Bank Account Seizures After October 7 Conflict

The Jerusalem Small Claims Court has ordered the Jerusalem Municipality to pay 4,000 shekels in damages to a Tel Aviv couple after it was found that the city improperly seized funds from their joint bank account without proving they received traffic violation notices. The couple's home in Tel Aviv was rendered uninhabitable by a missile strike during the October 2023 Iron Swords war, leading to their evacuation. Despite this, the municipality sent two fines for unauthorized use of public transport lanes to their registered address, which they never received. One letter was returned to the municipality due to a sorting error by Israel Post, undermining the claim that the couple had been properly notified.

The municipality argued that the fines were sent to the official address on record and that the couple failed to update their address, thus absolving the city of responsibility for the collection process. However, the court rejected this, emphasizing the exceptional circumstances following October 7, when many residents were displaced. It ruled that the municipality should have exercised greater caution to ensure proper delivery of notices before enforcing such a severe measure as a bank account seizure. The court also criticized the municipality for lacking a clear policy on handling undelivered mail.

The court further determined that the seizure constituted defamation, as it implied the couple was delinquent on payments without legal proof of notice. Consequently, the municipality was liable under the Defamation Law and ordered to pay compensation with interest from the lawsuit filing date. Attorney Yosef Gabay, specializing in administrative and defamation law, highlighted that public authorities do not have a license to automatically enforce collections without verifying receipt, especially under extraordinary conditions like missile damage and evacuation. He stressed that such enforcement harms individuals’ reputations, banking trust, and sense of security, and urged citizens to keep documentation of addresses and correspondence to protect their rights.

This ruling sends a significant message to municipalities to adopt more responsible and humane practices in debt collection, particularly during times of crisis and displacement.