Class Actions and the Regulatory State: Lessons from Israel

Israel presents an illuminating case for the study of class actions. On its face, the Israeli class action is a story of success. The uptake of the class action mechanism to Israel is unprecedented: Israel has become the world leader in the number of per capita class actions just a few years after the introduction of the class action law. On the other hand, the wave of class litigation has also raised serious concerns. Unique to Israel is the complaint that cases have little quality – most class actions seem to generate little impact, and filings often target the nonenforcement of obsolete provisions, rather than tackling important legal and social problems. The procedural aspects of class actions are also insightful. A robust regulatory framework underlies many Israeli class actions, and accordingly the Israeli law developed distinct tools that facilitate the interaction between agencies and class litigation. The lessons from the Israeli case study can therefore be useful for policymakers who consider the implementation of the class action mechanism, particularly in heavily regulated jurisdictions.