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the absence of a jury system in Israel, decides on questions of law and fact. Following
summation stage, the court gives its judgment. A final judgment handed down by a
Magistrates Court or District Court is appealable to a higher court (the District Court
and the Supreme Court, respectively).
Restrictions of the Right to Approach the Courts
Israeli lawconsiders the right of access to the courts to be a basic or constitutional right,
with restrictions considered rare. Notwithstanding proposals to amend the existing law,
the plaintiff is not required to approach the defendant before filing the claim, and there
is no obligation to hold preliminary discussions or for mediation between the parties.
The normal prescription period stands at seven years (subject to a number of
exceptions). Nonetheless, in many cases, the courts do not decide on the matter of
prescription at the commencement of the proceedings but only at the end.
The Economic Affairs Division
In2011,anEconomicDivisionwas established in theTel AvivDistrictCourt,the country's
largest District Court. The purpose was to consolidate hearings regarding economic
affairs before judgeswith expertise in this field.Moreover,the legislator sought to reduce
the time needed for conducting such claims, reflecting the need for quick decisions in
the business world. The Economic Affairs Division has eased the Judiciary's workload
and sped up the litigation process in “Economic Affairs,” which includes claims based on
the Securities Law, derivative claims and claims pertaining to the rights and obligations
of shareholders of a company.
Derivative Claims and Corporate Class Actions
The Class Actions Law of 2006 and the Companies Law of 1999 enable the filing of a
class action or a derivative claim on behalf of a class that has suffered damage or on
behalf of a company.
In both cases, the party initiating the proceedings may not file the suit directly, but is
required to obtain court approval to file it. In such cases, there is a preliminary process of
a motion for certification of a class action or a derivative claim. No court fee is required
for these proceedings, and their popularity is continuously growing. For the most part,
these proceedings are conducted in the District Courts (particularly in the Tel Aviv
District – in the Economic Affairs Division).
A derivative claim is filed in order to protect the interests of the company. The one who
may request to file it is a shareholder of the company and sometime a creditor of the
company as well.
Class actions in the corporate field are filed by holders of securities (shares or bonds) on
behalf of a class of securities holders.
Unlike the normal rule, which allows a leave to appeal only through a higher court, in the
event of a derivative claim or a class action being approved/certified, the respondent
can request a further hearing before an expanded bench of the District Court.
One notable trait of the Israeli courts is a strikingpreference for substance over
procedure. This stance is reflected, for example, in the preference for clarifying
claims on their merits and not dismissing them on procedural arguments.