Class Actions on Accessibility of Public Companies’ Reports Dismissed

About two years ago, motions to certify class actions were filed against dozens of public companies and reporting corporations in Israel, alleging violations of provisions of the Equal Rights for Persons with Disabilities Law.

The actions concerned the obligation of public companies and corporations to publish immediate and periodic reports (such as financial statements, prospectuses, reports about material events in corporations, etc.) through the Israel Securities Authority’s online reporting system (the Magna System).

Class Action

Concurrent with the filing of motions to certify class actions, many public companies in Israel received warning letters in advance of the filing of a class action. In letters and proceedings, the would-be plaintiffs alleged that the defendant corporations (or potential defendants) were violating provisions outlined in the Equal Rights for Persons with Disabilities Law and the Equal Rights for Persons with Disabilities Regulations (Service Accessibility Adjustments). Specifically, they accused the companies of failing to make accessibility adjustments to their reports and accompanying documents when filing them through the Magna system. These adjustments were necessary to ensure accessibility for persons with disabilities.

The warning letters and actions alleged the defendant corporations were discriminating against visually impaired individuals. Specifically, the plaintiffs claimed they were either completely or partially prevented from reading the reports of these corporations, which hindered their ability to make informed investment decisions. Therefore, the plaintiffs petitioned the court to order the defendant corporations to make accessibility adjustments to their reports and documents and to adjudge financial relief totaling millions of shekels from each of the defendant corporations.

Our firm advised and represented a significant portion of the defendant corporations, and also provided opinions to public companies examining the extent of their exposure in this regard.

The Legal Proceeding

The cases began with the consolidation of all the motions before one judge. This allowed for the clarification of the motions in two stages, with the first stage focusing solely on broad shared legal questions, without the consideration of any individual factual aspects.

We were successful in this step and, in March 2022, the court allowed the motions and ordered to conduct all of the cases together before the Tel Aviv District Court. It also ruled that, initially, it would deliberate only on legal questions shared by all defendants.

The second step was to present the pleadings on their merits, which were also supported by an expert opinion. The expert opinion stated, inter alia, that these cases should not be clarified within the framework of class actions, that compensation should not be awarded to “members of the class,” and that accessibility obligations should not be imposed on the companies themselves during such a procedural framework (but rather solely during discussions with the regulatory authorities) for a variety of factual and legal reasons.

As the law firm representing the largest number of defendants, our firm led the joint representation and was at the forefront of the defense against the actions.

The Ruling

At the beginning of March 2023, after a year and a half of managing the cases, the court handed down its ruling and dismissed all 66 class actions in limine.

The presiding judge recommended that the class plaintiffs withdraw their actions. After doing so, he issued a consensual ruling.

Additionally, the judge indicated that he was inclined to allow the defense’s pleadings, which had been drafted a year and a half prior in a legal opinion provided by our firm to our clients.

Our firm continues to assist public companies with clarifying the accessibility obligations that apply to them vis-à-vis the relevant regulatory authorities and the provisions of law applicable in this regard.

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Barnea Jaffa Lande is at your service if you have any questions about public companies’ reporting obligations and other relevant issues.

Advs. Eyal Nachshon, Hagit Ross, and Anat Even-Chen represented the corporations.