Israel

The Class Actions Law, 2006 (“the Law”) sets out the procedural framework for the conduct of class actions in Israel.

Prior to its enactment, Israel did not have a comprehensive statute establishing a general and uniform framework for class actions. Instead, the legislature provided for collective redress in a series of specific areas of law that were considered particularly suitable for representative litigation — such as corporate law, consumer protection, banking, antitrust, environmental law, and labor law. However, the mechanisms established under these various statutes were not uniform, creating both legal and procedural difficulties.

The enactment of the Law marked a turning point as Israel adopted a comprehensive and uniform regime for class actions, consolidating the various sector‑specific mechanisms into a single statutory framework.

Israel’s short‑yet‑plentiful experience with class actions provides valuable insight into both the advantages and the drawbacks of collective litigation. On the one hand, the mechanism has succeeded in creating effective tools and incentives for private entities to enforce consumer rights. On the other hand, it has at times led to frivolous or opportunistic claims, highlighting the ongoing challenge of balancing access to justice with adequate safeguards against abusive litigation.

Since the enactment of the Law, the number of class actions filed in Israel has increased dramatically — from only a few cases per year in the first years following the Law’s enactment to more than 2,500 annually within a decade.

According to publicly available data, the number of motions to certify class actions rose from 28 in 2008 to over 1,400 by 2015, peaking at more than 2,200 filings in 2020 and approximately 2,800 filings in 2023.

A temporary decline was recorded in 2018–2019, following the entry into force of the Court Regulations (Fees) (Class Action), 2017, which introduced mandatory filing fees for the first time — approximately NIS 9,308 in the magistrate courts (approximately USD 2,900) and NIS 18,615 (approximately USD 5,900) in the district courts. These regulations were intended to encourage the filing of well‑grounded and socially beneficial class actions while reducing the number of frivolous or opportunistic claims.

Historically, the majority of Israeli class actions have been consumer‑related, reflecting the law’s primary policy goal of promoting private enforcement of consumer rights. However, following the introduction of the filing‑fee regime, the composition of class actions shifted: approximately 40% of new filings are now consumer‑related, while around 30% concern accessibility and disability rights, which are exempt from filing fees.

The Class Action Law, 2006 applies, offering two staged opt-out proceedings.

According to the Law, class actions may be filed in diverse fields, including consumer protection, banking, insurance, securities, environmental protection, labor law, accessibility, discrimination in services and access to public places, claims concerning spam communications and other financial services.

Alongside the foregoing, the Law also allows the filing of class actions against administrative authorities for restitution of amounts unlawfully collected, such as taxes, fees, or other compulsory payments.

According to section 2 of the Law, a “class action” is defined as follows: “A claim conducted on behalf of a group of persons who have not authorized the representative plaintiff to do so, and which raises material questions of fact or law that are common to all members of the class”.

Section 3(b) to the Law provides that the filing of a class action requires the court’s approval. Therefore, the procedure for bringing a class action in Israel is divided into two main stages: the certification stage (“first stage”) and examining the class action on its merits (“second stage”).

Every class action begins with a motion to certify the claim as a class action (“certification motion”), supported by affidavits, documents, and expert opinions.

At the first stage, the court examines whether the statutory conditions for certification are met. Under the Law, the applicant must show, first, that the claim has a reasonable chance of success, in terms of reasonable cause of action and merits of the case; second, that it raises common questions of fact or law; third, that a class action is the efficient and fair method for adjudicating the dispute; and fourth, that the applicant and counsel can adequately represent the class.

The party submitting the certification motion is referred to as the applicant, while the defendant at this stage is referred to as the respondent. The respondent to the certification motion may file a response, and the applicant may file a reply to the respondent’s response. After the submission of the pleadings, the pre‑trial phase takes place, which includes hearings and often judicial encouragement of settlement or withdrawal.

If the parties do not reach an agreement, a hearing on the certification motion will be held, during which the witnesses who submitted affidavits and expert opinions in support of the parties’ arguments will testify. After the hearing stage, the parties will be required to submit their summations, following which the court will issue its decision on the certification motion — namely, whether the claim may proceed as a class action or not.

If the court denies the certification motion, the proceeding ends, and the applicant may appeal the decision as of right to a higher court. If the court grants the certification motion, the case proceeds to a full trial on the merits of the class action.

Once the claim is certified as a class action, the proceedings continue as a regular civil trial under the Civil Procedure Regulations, 2018, with the applicant becoming the representative plaintiff and the respondent becoming the defendant.

At the second stage, the burden of proof shifts significantly: the plaintiff must prove the causes of action on the merits on behalf of the class according to the standard of a regular civil proceeding — the balance of probabilities. This stage includes the filing of amended pleadings, extensive discovery, submission of evidence and expert opinions, cross‑examinations, and written summations, culminating in a final judgment that may be appealed.

Class actions are generally self‑funded by plaintiffs’ counsel rather than by external litigation funders. Typically, law firms finance the proceedings themselves, including the preparation of the certification motion, expert opinions, and court fees, on a contingency‑fee basis.

Plaintiffs’ attorneys are compensated only if the case succeeds or is settled, usually receiving a certain percentage of the total settlement value, depending on the stage at which the settlement is reached and the benefit derived from it by the class members.

Importantly, the Class Actions Law does not include any provision allowing for third‑party funding by private, profit‑oriented entities, and recent case law has produced conflicting interpretations on how to address this legislative gap. In Class Action (Central District) 28974‑10‑20 Firt v. Monsanto Company et al. (Nevo, August 7, 2025), Judge Rotenberg held that the existing provisions of the Class Actions Law indicate that the statute, as currently drafted, does not permit the conduct of a class action funded by a private, profit‑driven company, and that such funding may justify dismissal in limine of a certification motion financed in this manner.

Conversely, in Class Action (Jerusalem District) 42026‑05‑20 The Israel Consumer Council v. Lotonet Members Club Ltd. (Nevo, December 3, 2025), Judge Bezek‑Rappaport held that the fact that a class action is funded by a private investment fund does not, in itself, justify dismissal in limine, since “this does not constitute bad faith at a level that warrants denying certification”.

This issue is expected to be reviewed by the Israeli Supreme Court, which is anticipated to provide authoritative guidance in the near future. In any case, the question of whether profit‑oriented third‑party funding of class actions should be permitted under Israeli law continues to attract significant attention.

Overall, the certification stage may last between two to five years, depending on the complexity of the case and the scope of preliminary issues raised. In extreme cases, the certification stage has required about a decade.

If the action is certified as a class action, it will then be tried to its full extent, ending in a final judgment (which is also subject to appeal as of right). As noted, this includes additional pleadings, pre-trial, evidentiary and summations phases, which may take approximately two to five additional years, not including appeal.

The applicant must show that the cause of action alleged in the certification motion applies to his or her own case, and that there is a reasonable basis to assume that he or she will represent the class in good faith. However, courts handle this question rather liberally, allowing for substitution of applicants to enable the case to proceed.

At the first stage, the applicant must demonstrate the very existence of a class — that is, that the case raises questions of fact and law common to all members of the class.

At the second stage, the representative plaintiff will be required to prove the size of the class.

The default mechanism for inclusion in a certified class is an opt‑out mechanism. In other words, if a court certifies a class action, all members of the group defined by the court that did not request to leave the class will be deemed to have agreed to the filing of the class action on their behalf. A class member wishing to be excluded from the class may give notice to the court of their desire not to be included in the class within 45 days of the publication of the notice of certification of the class action, or by a later date prescribed by the court.

Israeli courts exercise broad case‑management powers in class actions.

During the pre‑trial hearing, judges actively manage the proceedings, hold multiple hearings, and often encourage settlement or withdrawal, with or without formal mediation.

Courts also address numerous preliminary issues — such as jurisdiction, motions to dismiss in limine, discovery, and consolidation of competing claims — all of which significantly affect the duration and complexity of the case.

When multiple identical class actions are filed, courts may consolidate them by merging or dismissing overlapping claims to ensure procedural efficiency.

In addition, courts have wide discretion in reviewing and approving settlements: they may appoint independent appraisers, modify proposed terms, or reject a settlement altogether if it is deemed unfair.

Through these tools, Israeli courts play an active managerial role, balancing procedural efficiency with the protection of class members’ interests.

Disclosure in Israeli class actions is limited, particularly at the first stage. Courts generally restrict document production to small, specific sets of documents directly relevant to the threshold conditions for certification. This limitation is intended to prevent “fishing expeditions”, where plaintiffs might file unsubstantiated claims and seek supporting evidence after the fact.

A plaintiff seeking disclosure must demonstrate that the requested documents are relevant to the certification requirements and provide an initial evidentiary basis for the claim. Alongside standard document discovery, Israeli civil procedure allows the use of interrogatories, but depositions are not available, and e‑discovery is rarely used — though it has become somewhat more common in recent years, particularly in large, complex cross‑border cases.

These limitations reflect the courts’ effort to balance the need for relevant information with the prevention of abusive or burdensome discovery practices.

At the certification motion, the applicant must specify the remedies sought in the class action.

Remedies available in Israeli class actions are primarily monetary, though their scope is generally modest compared to other jurisdictions. Most class actions in Israel are resolved through settlements, which typically provide compensation to class members or, in some cases, donations to public causes instead of direct payments.

In addition to monetary relief, Israeli courts may also approve non‑monetary remedies, such as declaratory judgments or undertakings to change business practices, particularly in consumer and accessibility‑related claims.

Settlements and Alternative Dispute Resolution (ADR) mechanisms play a central role in Israeli class actions.

Israeli law distinguishes between two types of consented resolutions: settlements and withdrawals. Approximately 70% of class actions are resolved through settlement or withdrawal, most of them during or immediately after the first stage.

Settlements create res judicata, involve higher monetary compensation, and require extensive judicial review, including publication of the proposed settlement, an opportunity for objections by the public and regulatory authorities, and, in some cases, the appointment of an independent appraiser to assess fairness. Withdrawals, by contrast, are typically used in weaker or unsubstantiated claims and are approved more quickly, usually without public notice or external review.

An important and increasingly common ADR mechanism in Israeli class actions is mediation. Entering into a mediation process is voluntary and non‑binding, and may be initiated by the parties themselves (even before a lawsuit is filed) or recommended by the court at any stage of the proceedings.

Mediation requires the consent of all parties and is conducted in complete confidentiality. Information exchanged during mediation is privileged and inadmissible in court. This confidentiality is designed to encourage open communication and cooperation between the parties.

When a class action has already been filed, mediation typically begins at the pre‑trial stage, after the parties have submitted their pleadings and the scope of the dispute is clear. However, mediation may also commence later, depending on the parties’ wishes. Once the parties agree to enter mediation, they must inform the court, which will usually suspend the judicial proceedings for a specified period to allow the mediation to proceed effectively.

Overall, the vast majority of settlements are ultimately approved by the courts. Judges frequently encourage settlement discussions and mediation as part of their case‑management powers, reflecting the Israeli judiciary’s policy of promoting consensual resolution of class actions while safeguarding the interests of class members and the public.

Payout mechanisms in Israeli class actions depend largely on the nature of the settlement approved by the court. In settlements per se, compensation is typically monetary, and the court may appoint an independent appraiser to evaluate the fairness of the proposed settlement. In other cases, particularly where direct compensation is impractical or disproportionate, settlements may provide for donations to public causes rather than direct compensation to class members. Such arrangements are common in consumer and accessibility‑related claims. The court has considerable discretion in approving or modifying the terms of a settlement as it sees fit.

Final judgments in Israeli class actions are relatively rare, as the vast majority of cases are resolved through a consented resolution.

When a class action proceeds to a full trial, the court issues a final judgment, which is binding on all class members (except those who opted out) and subject to appeal as of right to the higher court.

Judgments approving settlements or withdrawals carry the same binding effect on all class members, unless the court orders otherwise. The court’s approval decision may include directions regarding the implementation and supervision of the settlement, including the appointment of an independent appraiser or the establishment of a distribution mechanism. The court may also require the parties to submit notices and affidavits during the implementation phase, in order to monitor and ensure that the settlement is executed in accordance with the court’s instructions.

Future reform and policy development in Israel focus primarily on refining the balance between access to justice and the prevention of abusive or frivolous class actions.

A bill currently pending before the Israeli legislature proposes, in certain cases, to require the applicant to send a pre‑motion notice to the defendant before filing the certification motion, with the aim of encouraging early resolution of disputes and avoiding unnecessary litigation.

The proposed bill further introduces several additional reforms aimed at improving the efficiency and fairness of the class action mechanism. It provides that in certain types of class actions, compensation will be monetary only, unless the class members expressly agree to receive compensation in the form of coupons, future discounts, or similar benefits. Courts will be empowered to dismiss class actions in limine if they lack a cause of action or are deemed vexatious, frivolous, or involve minimal damage. The bill also seeks to regulate and cap attorneys’ fees in class actions and to authorize courts, where justified, to impose costs directly on counsel in addition to the parties.

Additional reform ideas under consideration include imposing real, material costs on unsuccessful plaintiffs, applying the good‑faith requirement more rigorously to filter out unmeritorious claims, and using procedural tools, such as adjustments to discovery and burden of proof, to improve early case screening.