Aviv Kara Proposes Law to Protect Small Businesses from Abusive Class Action Lawsuits

Aviv Kara, former Deputy Minister in the Prime Minister's Office, criticized the misuse of class action lawsuits by lawyers and serial plaintiffs targeting small businesses in Israel. He claimed that thousands of lawsuits have been filed exploiting legal loopholes, often over minor technical violations such as missing accessibility declarations on websites. Kara highlighted cases where businesses faced demands of up to 2.5 million shekels for such infractions, with defense costs so high that settling for tens of thousands of shekels seemed preferable.

Kara explained that some lawsuits were filed even when accessibility services were in place but not properly declared online, and cited an example of a lawyer and a woman from Sderot who filed over 80 class actions against real estate agents exempt from such requirements, sometimes without the agents' knowledge. He described these lawyers as extortionists taking advantage of minor legal gaps.

To address this, Kara introduced legislation aimed at protecting small businesses with annual revenues up to 2 million shekels from class action suits. The proposed law would require a preliminary notice to the business to correct any violation before a lawsuit can proceed. If the business remedies the issue, it would pay a fine of 2,000 shekels, ending the matter without court involvement. Kara emphasized that this approach is unusual internationally but necessary to shield small businesses from predatory legal practices.