Court Takes Measures to Prevent Frivolous Class Actions

The Tel Aviv District Court ruled recently on complaints about website accessibility declarations. It stated that consumers must first address concerns with website owners before pursuing class action motions.

Ram Ben Or v. Aviv Investment House Ltd.

The court issued the ruling with respect to six separate motions to certify class actions. The motions alleged failure to publish an accessibility declaration, a failure to publish accessibility arrangements, and a failure to publish the details of the accessibility coordinator on the companies’ websites. Shortly after filing the motions, the parties submitted withdrawal applications for the court’s approval. These included payments of thousands of shekels to the petitioners and their lawyers.

The court approved motion withdrawals but reduced settlements to petitioners and lawyers to only ILS 1,000. In the court’s opinion, this sum is enough to cover the hassle that would have been involved in sending a letter of complaint first to the company instead of filing a motion to certify a class action.

The court’s position with regard to lawsuits of this type, which do not involve actual inaccessibility but merely a failure to publish an accessibility declaration, is that a class action is not the appropriate, efficient, or proportional way to handle such immaterial violations. Rather, it should only be used as a last resort.

Accordingly, the court ruled that consumers must first complain to the website owners before filing a motion to certify a class action. Several factors formed the basis of the court’s position. These include its interpretation of the law and obligations under accessibility laws, along with the duty of good faith imposed on the petitioner. The court suggests consumers who don’t complain to website owners first might face accusations of process abuse.

Duty of Good Faith

Within this context, the court emphasized the damage caused to defendants in lawsuits of this type, which are predominantly small and family businesses, who recoil when served a claim for millions of shekels. It also noted the unnecessary burden that such lawsuits impose on the courts. Consumers addressing complaints directly to businesses in good faith can prevent the need for court motions. This will prevent superfluous anguish to the website owner and to the general public, as well as enable the court to use its limited time resources on other cases.

Court Raises a Barrier against Frivolous Lawsuits

It is important to note that, at this stage, this is a district court ruling that, as stated, relates only to cases in which the alleged violation is merely a failure to publish an accessibility declaration. Thus, it is not binding on all judges. Nevertheless, other judges have also had to contend with this trend. The considerable burden on the courts in recent years, due to the exponential rise in motions to certify accessibility class actions, particularly highlights this issue. In the wake of this ruling, we are already seeing an increase in the number of complaints sent directly to companies before the filing of motions to certify class actions, especially complaints about accessibility and consumer issues. One can assume this trend will continue.

A clear example of this can be found in the outcomes of legal proceedings where requests for approval of class actions were filed against numerous public companies and reporting corporations in Israel. Our firm represented all of these entities. These actions alleged the lack of access to their financial reports. As part of the judgment rendered in the same proceedings, the court summarily dismissed all 66 class actions. This occurred after the court recommended that the plaintiffs in the class actions withdraw from the proceedings. The court cited, among other reasons, their failure to comply with the obligation of early application.

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Barnea Jaffa Lande’s Litigation Department is at your service to answer any questions about class actions, accessibility lawsuits, or other issues.

Adv. Zohar Haim Levinger is an associate in the firm’s Litigation Department.