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Israel Company Law 1999


Miss Sahara Kaplan, will attend to you (in English) at Phone No. +972 3 546 88 88

In case of emergency, call Gabriel Hanner at his
cellular: +972 50 552 33 33

Companies Law 1999

Article B: Representative Action


207. (a) In this Article, “connection” – ownership, possession, purchase or sale.

(b) A person having a cause of action under any law as a result of a connection to a security may, with the consent of the court as provided in section 210, sue on behalf of a group all of whose members have a cause of action deriving from the same connection to a security.

Representative action

208. A plaintiff filing a representative action shall give notice thereof in writing to the Attorney-General; where the cause of action arises out of a connection to a security of a public company, the plaintiff shall also give notice thereof to the Securities Authority.


209. (a) A plaintiff seeking to sue in a representative action deriving from a connection to a security of a public company may request the Securities Authority to bear his costs.

(b) Where the Securities Authority is convinced that the action is in the interests of the public and that there is a reasonable chance that the court will approve it as a representative action, the Authority may bear the plaintiff’s costs, in such sum and on such conditions as it shall prescribe.

(c) Where the court rules in favor of the plaintiff, it may order in its judgment indemnification of the Securities Authority for its costs.

Funding by Authority

210. (a) The court may approve a representative action if it is of the opinion that, prima facie, all of the following conditions are fulfilled:

(1) the bases of the cause of action are substantiated and where one such basis is damage, it is sufficient if the plaintiff shows prima facie injury to himself;

(2) substantive questions of fact and law common to all of the members of the group are to be settled in the action;

(3) a representative action is the most appropriate method for settling the dispute in the circumstances of the case, taking into account, inter alia, the size of the group;

(4) the interests of all of the members of the group will be represented and managed in an appropriate manner by the plaintiff; the defendant may not appeal or seek leave to appeal against a decision in this regard.

(b) The court shall not approve a representative action if it finds that it was submitted with lack of good faith.

Court approval

211. (a) Where the court approves the filing of an action as a representative action, it shall define the group on behalf of which the claim is filed and shall give instructions to the plaintiff as to the manner in which its decision is to be made public.

(b) Any person included in the group as defined by the court shall be considered to have agreed to have been included in the group unless any such person notifies the court of his desire not to be included in the group, within sixty days of the date of publication of the decision of the court; the court may, on the application of any person, extend the said period in respect of such person, if it is of the opinion that there is a special reason for doing so.

Definition of group

212. A judgment in a class action shall be res judicata in respect of all members of the group, subject to the provisions of section 211.

Res judicata

213. (a) A plaintiff shall not withdraw from a representative action and shall not make an arrangement or compromise with a defendant without the approval of the court.

(b) Where the court is requested to approve an arrangement or compromise, it shall order the publication of a notice setting out the details of the arrangement or compromise; members of the group may file an objection to the approval of the arrangement or compromise within the time set down for such by the court.

Arrangement or compromise

214. The court shall determine the fees of the advocate representing the group; the advocate shall not receive fees greater than the sum determined by the court.

Advocate’s fees

215. Where the court rules in favor of the plaintiff, it may order the payment of remuneration to him for his efforts in filing and proving the claim.

Remuneration to plaintiff

216. (a) Where the court adjudicates on monetary compensation in a class action, it may order that in addition to such compensation, costs will be paid in a fixed sum to each of the members of the group for their efforts in proving their right to relief.

(b) Where the court adjudicates an inclusive sum as monetary compensation in the action, it may give instructions regarding the use of the balance that would remain if any of the members of the group had not made any effort to prove their right to relief.

Compensation and costs

217. Subject to the provisions of section 212, the provisions of this Article shall not preclude any other legal relief to the defendant.

Other relief

218. (a) The Minister shall prescribe rules of procedure regarding filing and conducting a representative action, and regarding court fees.

(b) The Minister may make provisions regarding methods of proving injury to each of the members of the group.


Miss Sahara Kaplan, will attend to you (in English) at Phone No. +972 3 546 88 88

In case of emergency, call Gabriel Hanner at his
cellular: +972 50 552 33 33

Part VI: Office Holders in a Company
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