Legislation8/23/2026

Amendment Could Shield at Least 93% of Businesses From Class Actions

Israel's Ministry of Justice is advancing an amendment to the Class Actions Law that could exclude businesses with annual turnover of no more than NIS 9 million from its scope. According to Globes, this concerns approximately 660,000 businesses, although the final threshold has not yet been approved.

Key facts

•Law: Class Actions Law
•Proposed threshold: annual turnover of up to NIS 9 million
•Scope: approximately 660,000 businesses
•Proportion: at least 93% of businesses in Israel
•First reading of the original version: 2024
•Globes publication: August 23, 2026

What Is the Proposed Change?

Under the arrangement reached at the Ministry of Justice, class actions could not be filed against small businesses with annual turnover of no more than NIS 9 million. The original version, which passed its first reading in 2024, set a maximum turnover of NIS 2 million or up to five employees. The version published ahead of the committee meeting still leaves the definition of a small business open.

To Whom Would the Exemption Apply?

Approximately 700,000 businesses operate in Israel. The proposed exemption could apply to approximately 660,000 businesses—at least 93% of all businesses, including licensed businesses. Knesset committee chair Simcha Rothman and former Knesset member Avir Kara proposed setting a threshold of NIS 20 million, while other participants in the discussion supported a lower or higher threshold.

Why Is the Amendment Being Advanced?

The explanatory notes to the bill state that the costs and other consequences of a class proceeding against a small business may outweigh its benefits. The drafters assume that small businesses may violate requirements in good faith and generally do not have ongoing legal counsel. Opponents of the broad exemption warn that it could weaken the incentive to comply with the law and deprive the class action mechanism of its practical substance.

Prior Notice Before Filing a Claim

An additional proposed provision would require first contacting the business and asking it to correct certain violations. If a business with turnover of no more than NIS 50 million does not correct the violation, a class action could be filed 60 days after it is contacted. The mechanism concerns, among other things, price display, advertising materials sent without the customer's consent, certain labeling rules, accessibility, and the installation of audio systems at service counters.

What Happens Next?

The Knesset Constitution, Law and Justice Committee is expected to discuss the amendment in preparation for its second and third readings. For now, it has been decided not to advance the full reform and instead to proceed with only several issues included in the original proposal. The source does not state that the amendment has received final approval, and it therefore does not yet constitute an exemption in force for businesses.

What this means for you

If the amendment is enacted in the form described, consumers and other potential claimants will not be able to use class actions against most businesses whose turnover does not exceed the threshold to be determined. For certain less serious violations, it will first be necessary to request that they be corrected and wait 60 days. The precise implications will depend on the final wording and the law's passage in the Knesset.

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