Knesset Committee Approves Class Action Exemption for Small Businesses

A joint committee of the Constitution Committee and the Economy Committee has approved for its second and third readings significant amendments to the Class Actions Law, offering relief to small and medium-sized businesses.

Under the new amendment, class action lawsuits can no longer be filed against small businesses with an annual revenue of up to 9 million shekels. This protects approximately 660,000 businesses, representing at least 93% of all businesses in Israel, including authorized dealers.

The initiative was spearheaded by former Member of Knesset Abir Kara and the Federation of Israeli Chambers of Commerce. The legislative amendment is being advanced unusually during the election recess following an agreement between the coalition and the opposition.

Originally passing its first reading in 2024, the bill proposed exempting businesses with a turnover of up to 2 million shekels. However, the Ministry of Justice held discussions, resulting in raising the threshold to expand business protection, though individual lawsuits remain permissible.