Israel: Competition Litigation

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This country-specific Q&A provides an overview to competition litigation laws and regulations that may occur in Israel.

This Q&A is part of the global guide to Competition Litigation. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/competition-litigation/

  1. What types of conduct and causes of action can be relied upon as the basis of a competition damages claim?

    The basis of competition damages claim is set out in the Economic Competition Law, 5748-1988 (“The Law” or “Competition Law”). Article 50 of the Law stipulates that any act or omission committed in violation of the Law constitutes a tort under the Torts Ordinance [New Version], and therefore, any person harmed by the tortuous cause can claim damages. This means that any conduct which violates the Competition Law can be the basis for a competition damages claim. Such claims can be brought by competitors or by clients/suppliers.

    Nevertheless, in order to be eligible for damages, the plaintiff must demonstrate some form of damage. For this reason, any violation of a technical provision of the Law, such as not filing merger notifications in cases that do not raise any competitive concerns, and would have been cleared were they filed, do not constitute a basis for a tort claim, since it did not cause any damage.

  2. What is required (e.g. in terms of procedural formalities and standard of pleading) in order to commence a competition damages claim?

    The Civil Procedure Regulations determine the procedural manner in which a claim will be filed, inter alia, in a tort action. There are no special requirements that relate specifically to a competition damages claim. The statement of claim must include the main facts that constitute the cause of action, the facts that grant the court the power to hear the claim, the requested remedies, the value of the claim, and the defendant's case and its connection to the claim.

    In cases in which the claim for damages relies on the breach of statutory duty, the plaintiff is required to prove that the statutory duty is intended to protect it; that the damage caused is the kind of damage that the statutory duty is intended to prevent; and causation (both factual and legal) between the damage and the breach of the statutory duty.

  3. What remedies are available to claimants in competition damages claims?

    The remedies that can be requested in the framework of a claim for competition damages are varied. First and foremost, most commonly the main remedy which is required in a competition case is damages. In addition, the court can render various remedies such as injunctions (for instance, imposing a duty on the defendant to continue to provide a service) or to issue a declarative order (for instance, a declarative order stating that an illegal restrictive arrangement exists). There are no treble damages under the Israeli law.

    It is however important to note that according to well-established case law, the court will tend not to make an in-depth analysis on major competitive questions such as the market definition, in the context of preliminary remedies such as requests for temporary injunctions. Thus, in such cases it is likely that the full discussion regarding the competitive questions will be discussed only at the full trial.

    For this reason, in cases in which the court has been presented with a clear-cut contractual question, it did not relate to the competitive claim, in the framework of preliminary or temporary remedies. For instance, in a case brought before the Supreme Court (the highest court in Israel), the court ruled in a preliminary hearing in favour of a party which claimed that the other party violated its exclusivity undertaking in the agreement, leaving the legality of such exclusivity vis-a-vis the Competition Law to be heard on the full trail.

  4. What is the measure of damages? To what extent is joint and several liability recognised in competition damages claims? Are there any exceptions (e.g. for leniency applicants)?

    The measure of damages in a tort claim based on violation of Competition Law is identical to other tort sectors customary in Israel and sets its aim on allowing the plaintiff which suffered the damage to be in the place it would have been if there were no infringement of the Law.

    In practice, In order to prove the amount of compensation to which it is entitled, the plaintiff must prove the damage caused to him, most commonly by an economic expert opinion.

    As in the general tort law, the courts recognize the defendants' liability, jointly and separately, when required. The law recognizes the contributory fault of the plaintiff, and recognizes the principle of reducing the damage, but different behavioural characteristics such as leniency applicants have no effect on the amount of the damage. In fact, a leniency applicant under the Competition Law will receive no benefit whatsoever in a civil claim for damages.

  5. What are the relevant limitation periods for competition damages claims? How can they be suspended or interrupted?

    The limitation period in tort claims is limited to seven years. The law determines that the count will begin from the day on which the act occurred or from the date on which the act ceased. Alternately, it begins from the day the damage occurred, and if the damage was not discovered on that day, then from the date on which the damage was discovered (when the limitation period is limited to ten years).

    The limitation period ceases when a claim is filed, and other factors that delay the limitation period are the defendant's improper behaviour (e.g. using force, threats, exploitation of distress); or if the plaintiff does not have the facts that constitute the cause of action (for reasons that are not dependent on him).

  6. Which local courts and/or tribunals deal with competition damages claims?

    A civil suit in tort is filed, in accordance with its value, to a Magistrate Court or to a District Court. With regard to local jurisdiction the claim can be filed in court according to a number of factors set forth in the Civil Procedure Regulations, relating to the place where the defendant conducts his business; The place where the undertaking was made; Where the act or omission constituting the cause of action has taken place. Although there is an Antitrust Tribunal, civil actions for damages are not heard before the Tribunal.

  7. How does the court determine whether it has jurisdiction over a competition damages claim?

    The law provides that civil courts have the power to adjudicate injustices under the Competition Law. The court which will have jurisdiction - a Magistrate Court or a District Court - depends on the sum of the damages which is being sued; if it exceeds ILS2.5 million (approx. 700,000 USD), it will be held in a District Court and, if not, in a Magistrate Court.

    With regard to extraterritorial jurisdiction, extraterritorial reach can be made in certain circumstances, if both essential and procedural requirements apply. The question of extraterritorial jurisdiction in competition claims was mainly discussed in connection with cartel cases, and therefore most of the case law on this subject was developed in this context.

    The Israeli Competition Authority (“ICA”) applies the 'Effect Doctrine' to acquire extraterritorial jurisdiction. The ICA ruled the level of 'effects' on the local market must show a clear link between the conduct outside Israel and the effect in the local market, rather than indirect or negligible effect. It was also ruled that when an arrangement is made outside Israel and is not entirely directed at the Israeli market, and when the foreign collaborators were not actively engaged in implementing the arrangement in Israel, the link to Israel is rendered insufficient.

    In addition, in civil litigation, there is also a procedural requirement, besides the essential requirement for extraterritorial application of the Israeli law. In order to extend the jurisdiction of the local courts over foreign defendants located outside Israel, it is necessary to obtain permission for service of process outside the border, in accordance with the provisions of Regulation 500 of the Civil Procedure Regulations.

    So far, it was argued for application of Regulation 500(7), which establishes a link to Israel when an act or omission subject of the claim was committed within the borders of the state.

    In recent years there have been a growing number of class actions brought against multinational cartel conduct. According to recent judgments, in order to establish a link (according to Regulation 500), it must be shown that the act occurred in Israel and it is not enough to show that damage was caused in Israel. However, the Supreme Court expressed its discontent with having Israeli consumers suffer indirect damage from cartels occurring outside Israel and criticized the inaptness of the regulation.

    In September 2019, a significant amendment to the Civil Procedure Regulations will take effect and the wording set forth in Regulation 500(7) will be changed and extended to actions that have caused damage that occurred within Israel. Only after the application of the amendment will it be possible to study the manner in which it is applied by the courts.

  8. How does the court determine what law will apply to the competition damages claim? What is the applicable standard of proof?

    In Israel, the courts are subject to a single set of laws, and there is no separation between districts.

    In general, in civil cases, the burden of proof rests with the plaintiff, and the degree of proof required is a balance of probability. The burden of proof imposed on the plaintiff relates to the definition of the market; the existence of a restrictive arrangement or harm to competition or any act on which the claim is based; and the alleged damage.

    In cases in which the action is brought as a class action, in order to certify a request for a class action, the burden of evidence is reduced, and a prima facie threshold is required in order to obtain the court's approval for the management of the claim through a class action.

  9. To what extent are local courts bound by the infringement decisions of (domestic or foreign) competition authorities?

    In accordance with Section 43(e) of the Law, The General Director’s determination shall constitute prima facie proof of its subject matter. Such evidence (as will be detailed below) constitutes prima facie evidence of the need to approve a request for a class action.

    Regarding the infringement decisions of a foreign authority, the prevailing position in international law regarding extraterritorial application of the competition law, is that these laws can be applied to conduct that occurs outside the borders of the country only when there is a clear link between that conduct and the domestic market in that country.

    Israeli courts are not bound by decisions of foreign competition authorities finding there was an infringement of the local law, and the plaintiff must prove there has been a violation of the Israeli law.

  10. To what extent can a private damages action proceed while related public enforcement action is pending? Is there a procedure permitting enforcers to stay a private action while the public enforcement action is pending?

    The rule of thumb is that damages actions can proceed while related public enforcement action is pending. The ICA does not have a legal option through which it can suspend a civil proceeding that is conducted concurrently with an enforcement proceeding. However, the ICA has the option to present its claim before the court hearing the civil procedure and request that it be suspended. In such a case, the court will hear the positions of the parties to the proceeding, and in practice will treat the authority's position as an important factor.

  11. What, if any, mechanisms are available to aggregate competition damages claims (e.g. class actions, assignment/claims vehicles, or consolidation)? What, if any, threshold criteria have to be met?

    The existing mechanism in Israel is a class action. The Class Action Law, 5766-2006 (“The Class Action Law”) allows the filing of a request to certify a class action on the grounds of violation of the Competition Law. In fact, Israel is considered to be liberal when it comes to certifying class actions and there are over 400 requests for class actions yearly; thus, class actions are very common in Israel both generally, and specifically in relation to the Competition Law.

    There are two main stages in a class action: first, the court must certify that the claim should be considered a class action, when a violation of the Competition Law constitutes a cause of action under the law. For this purpose, it is necessary to prove the following conditions: the existence of a cause of action for a specific plaintiff; the existence of a prima facie cause of action; a cause for a joint claim by the plaintiffs; the plaintiff is appropriate.

    If the request to certify the class action is granted, the main proceeding conducted in any civil suit begins with necessary changes. The process begins with the discovery procedure, and from there the evidence stage, affidavits and summation. It should be noted that in most cases, the parties reach a compromise immediately upon court approval of the class action. Such agreements must be approved by the court.

  12. Are there any defences (e.g. pass on) which are unique to competition damages cases? Which party bears the burden of proof?

    A defendant in a tort claim based on violation of the Competition Law can withstand several defence claims. Inter-alia, the defendant may claim to apply a type exemption under which he acted; the defendant may claim that the claim was filed in bad faith; or a pass on defence.

    Recent case law in Israel indicates that the courts are allowing indirect purchasers to claim damages for violation of the Competition Law and recent attempts of defendants to claim that the suit could not be brought by indirect purchasers were rejected.

    Regarding the pass-on claim, there is no binding precedent in Israel regarding the defendant's ability to raise a pass-on defence against claims brought by direct purchasers. In the only relevant case in which the Supreme Court referred to the passing-on defence, its position was sympathetic to the claim, but the suit was dismissed on other grounds, so the court did not have to decide on the matter.

    Another possible defence which is available to a defendant in Competition Law cases is the defence of an antitrust injury. According to this claim, an antitrust injury only occurs if the damage caused to the plaintiff is the damage that the antitrust laws were intended to prevent, while in other cases such a plaintiff cannot bring action for violation of the competition Law.

  13. Is expert evidence permitted in competition litigation, and, if so, how is it used? Is the expert appointed by the court or the parties and what duties do they owe?

    In a civil proceeding, and in particular in a claim based on violation of the Competition Law, a party wishing to prove a matter of expertise is required to rely on an expert opinion. The counterparty may submit a counter-opinion, and has the right to investigate the expert of the other party.

    In practice, the submission of an expert opinion in a claim relating to the laws of competition is a common practice. Both the plaintiffs and the defendants tend to support their claims with an economic opinion given by an expert, usually an economist in the area of competition, and they attach the opinion at the beginning of the proceeding, upon submission of the statements of claim and defence. In addition, the parties can file a supplement opinion following the counter-opinion submitted by the opposing party.

    The court is authorized to appoint an expert on its behalf, which is not one of the experts, relied on by one of the parties. In addition, the court may, with the consent of the parties, appoint an expert on its behalf, and then the opinions submitted by the parties will not be admissible as evidence, but the litigants may investigate the expert or refer clarification questions regarding his opinion. In this case, the obligations of the expert are equivalent to every witness obligations.

  14. Describe the trial process. Who is the decision-maker at trial? How is evidence dealt with? Is it written or oral, and what are the rules on cross-examination?

    The claim is first submitted to the court with relevant and local jurisdiction, by filing a statement of claim. The plaintiff must ensure that the claim is submitted to the defendant, and the regular period for filing the statement of defense begins from the day the pleading is received by the recipient.

    In a standard civil claim, the defendant may file a statement of defence within 30 days from service of the statement of claim. The plaintiff may file a rebuttal within 15 days of service of the statement of defence. Normally, after the parties have submitted their statements of objection, the court orders a document disclosure procedure. The parties must serve the other side's requests of general documents and a replay to interrogatories no later than 30 days after the last statement of defence or rebuttal has been filed. Specific document disclosure may be sought at any time on the trial.

    After that, the file will be scheduled for pre-trial hearing, in which the judge will examine how it is best to proceed with the trial, simplify and streamline it.

    At the end of the pre-trial stage, and when the judge considers that the case should continue to the next stage, the case will be scheduled for submission of evidence and trial hearing.

    The Israeli legal system is adversarial, and therefore the judge manages the procedure and the manner in which the proceeding is conducted, but the parties are obligated to act to advance the case. Thus, the judge decides how the evidence will be presented, which evidence will be admissible, and how the witnesses will be examined.

    The parties submit their evidence to the Court via their witnesses and experts, and they are cross-examined on their affidavits and opinions during the trial. Each document must be admitted into evidence via witness, who will submit a main affidavit to which he will attach the document. If the litigant has no control over the document, he shall invite the person holding the document and require him to present the document and it shall be submitted as evidence. In addition, in the absence of control over a witness, the litigant who wishes to summon the witness will request that the witness be examined first by him. After that, the other party will be able to cross-examine. While in direct examination only open questions should be asked, in cross-examination leading questions are allowed.

    First, the prosecution's evidence will be presented, and then the defence's evidence will be presented. The court may permit the plaintiff to present refuting evidence. The limits that the court places in the course of an investigation are usually that the questions will be relevant to the conflict.

  15. How long does it typically take from commencing proceedings to get to trial? Is there an appeal process? How many levels of appeal are possible?

    The Civil Procedure Regulations stipulates that the trial will be scheduled 30 days from the filing of the last statement of claim, only if the court is not intending to set a pre-trial. In practice, however, this is almost always not the case as most of the cases are scheduled for a pre-trial several months after the last statement of claim is filed, and by then the parties must complete the discovery process. The beginning of the trial may be scheduled long after commencing proceedings, due to the burden on the courts.

    The litigant has the right to appeal, but it should be noted whether the decision is an interim decision or whether it is a judgment or partial judgment. This distinction is necessary when the appeal is filed, with some of the interim decisions bringing with them the right to appeal immediately upon the date of the decision, and in other decisions the date of the appeal will only be with the issuance of a final judgment in the case. In addition, some interim decisions require the court's permission to appeal.

    In any event, an appeal is submitted to the above instance, so that if the main case is handled by the Magistrate Court, the appeal will be submitted to the District Court. In certain circumstances, when the appeal raises important and major legal question, where the decision may have public importance, a second appeal will be heard, upon the court's approval. In any case, a Supreme Court decision is indisputable.

    In addition, the appellate instance does not intervene in the factual findings of the lower court, but only on legal matters.

  16. Do leniency recipients receive any benefit in the damages litigation context?

    Leniency recipients do not receive any benefit in damages litigation. Nevertheless, it should be noted that the leniency program has been rarely used in Israel, and therefore, currently the law on this subject is not developed enough and may be developed in the future.

  17. How does the court approach the assessment of loss in competition damages cases? Are “umbrella effects” recognised? Is any particular economic methodology favoured by the court? How is interest calculated?

    There are only few competition damages cases that have reached the assessment of loss stage, as most of the cases have been settled.

    In general, there are two recognized types of competition damages claims: overcharge claim, according to which, the price charged was higher than the price that had to be charged; Loss of future profits, according to which, if it were not for the violation of the Competition Law, the defendant's profit would have been greater.

    Both of the claims focus on the question of “alternative reality”, what the real price would be if the competition wrong did not occur. Therefore, the question in connection with the assessment of loss is how the court asses the “alternative reality”.

    As mentioned, there are only few competition damages cases that have reached the assessment of loss stage. In most of these few cases, in which the damage was calculated by the court, due to lack of evidence or partial or accurate data, the damage was determined by means of an estimate in a way that reflects the gap between the market price and the actual price charged.

    So far, the “umbrella effects” have not been recognised by the Israeli courts; however, no claims have been made against it. There are a few cases of competition damages in which the “umbrella effects” raised by the parties, but they have not it been decided by the local courts.

    If the courts will be required to assess loss in future competition damages cases, we expect that the court will use accepted calculation methods, such as "Before-During-After" method, or on the “Yardstick” method, and in fact any practiced and complete method. The first method presents a competition between the plaintiff’s experiences in the same market before the act of injustice began or after it ended, during the period which the injustice occurred. The Yardstick method presents an isolation of the damage caused by the civil wrong, by comparing the relevant market to another firm in a comparable market, which was not affected by the injustice.

    A decision to pay compensation also includes instructions from the court regarding interest and linkage. As a rule, the interest and linkage differences will be determined from the date of occurrence of the event that established the cause of action, and according to the interest index and the Awarding of Interest and Linkage Law, 5721-1961.

  18. Can a defendant seek contribution or indemnity from other defendants? On what basis is liability allocated between defendants?

    The Competition Law allows “converting” infringements into a civil wrong under the Tort Ordinance [New Version]. The Israeli courts' approach is that the doctrines stipulated by the Tort Ordinance also apply in cases where the civil wrong is not originally from the Torts Ordinance, rather in other legislation (such as the Competition Law). Therefore, the doctrines stipulated by the Tort Ordinance are applied in cases of competition damages litigation.

    According to the Tort Ordinance, any civil wrong doer is liable in respect of the damage, may recover contribution from any other civil wrong doer which is also liable in respect of the same damage, or would be liable if sued.

    The amount of the contribution recoverable will be as may be found by the court to be just and equitable having regard to that person’s responsibility for the damage. The Court will have the authority to exempt from liability to make contribution, or to order that the contribution to be recovered from any person will amount to a complete indemnity.

    In addition, in any civil litigation, the defendant has the right to deliver third party notice, without the court’s permission, to any other person including other litigants (e.g., other defendants), in a claim that he is entitled to contribution or participation in contribution from the third party in respect of the damage which will be ruled by the court, or in a claim that he is entitled from the third party to the same remedy which is requested by the plaintiff.

    If the court ruled against the defendant, the defendant will be entitled to contribution or indemnity from the third party. However, if the lawsuit was denied, the third-party notice will be denied as well. The court has the authority to decide whether to judge in the third-party notice during or after the main proceedings.

  19. In what circumstances, if any, can a competition damages claim be disposed of (in whole or in part) without a full trial?

    The grounds according to which a claim can be disposed are identical in relation to any civil claim, including a claim based on violation of the competition laws. Circumstances such as existing verdict, period limitation, unreasonable delay in filing the claim, lack of good faith of the plaintiff or misuse of legal proceedings, lack of rivalry between the parties and lack of jurisdiction. In addition, the court may also dispose the claim for any reason, according to which it believes that the claim should be dismissed in the first place.

    In cases of class actions, there are additional arguments for disposal, as detailed above (see question 11), which are filed in the preliminary stage, in the motion to certify the claim as a class action.

  20. What, if any, mechanism is available for the collective settlement of competition damages claims? Can such settlements include parties outside of the jurisdiction?

    A class action suit is managed on behalf of the class and the Class Action Law stipulates that a group of persons may collectively file a class action on the legal ground of Competition Law. In practice, many class actions are filed on the grounds of the Competition Law, and in particular, recently many class actions are filed on the grounds of excessive pricing and international cartels.

    Very often class actions terminate with a collective settlement which must be approved by the court, in lieu of a full legal proceeding. The settlement relates to all the members of the group, that is, anyone who has a cause of action before the date of approval of the class action, the mechanism being opt-out and not opt-in.

    The settlements may include parties outside of jurisdictions as long as extraterritorial jurisdiction has been acquired by the Israeli court (see question 7).

  21. What procedures, if any, are available to protect confidential or proprietary information disclosed during the court process? What are the rules for disclosure of documents (including documents from the competition authority file or from other third parties)? Are there any exceptions (e.g. on grounds of privilege or confidentiality, or in respect of leniency or settlement materials)?

    As part of the discovery process, the parties are required to submit to the other parties any relevant document, from requests for general disclosure to a request to disclose a specific document. At the same time, a request for confidentiality may be filed to the court for the discovery process or parts thereof (e.g., a statement of claim, an economic opinion, a specific document, etc.), in order to prevent third parties from receiving confidential information. In addition, the parties can reach procedural arrangement, according to which the documents will be forwarded to a limited number of parties, such as lawyers, experts on behalf of the parties, etc.

    In general, during the discovery process, a party may request the court to instruct the other party to disclose a document or answer a questionnaire, and to instruct a third party to disclose a document in its possession or in its control.

    A party may raise privilege claims for specific documents on certain grounds, such as attorney-client privilege, medical confidentiality, trade secret, etc. If necessary, the court itself will examine the document, and will decide after weighing the various interests of both sides.

    Regarding documents placed in the ICA file, only parties to an administrative proceeding with the ICA, in case of an appeal, have the right to review them. Litigants in competition civil litigation which are not parties to an administrative proceeding with the ICA may file a request to disclose the documents by virtue of the Freedom of Information Law, 5758-1998.

    The Civil Procedure Regulations stipulates that the court has the authority to order a litigant to disclose documents under his possession or under his control – not to a third party. The main way for disclosing third party documents is to summon him to testify and to disclose the documents.

    However, in rare circumstances the court will directly order a third party to disclose documents under his possession, by virtue the Civil Procedure Regulations, when the third party is identified with the litigant in such a way that the litigant has the real control or ownership of the documents. Therefore, the third party should not be considered as an actual third party (for example, if the third party is a company owned and controlled by the litigant).

    In addition, in very rare cases, the court has recognized the possibility of issuing an order directly to a third party to disclose documents, even if the documents are not wholly owned or controlled by the litigants.

  22. Can litigation costs (e.g. legal, expert and court fees) be recovered from the other party? If so, how are costs calculated, and are there any circumstances in which costs recovery can be limited?

    The Israeli courts have discretion to oblige a litigant to pay the costs and attorneys' fees.

    The amount of costs is determined by the court, after considering the value of the disputed remedy and the final remedy that was ruled by the court. The court may consider the manner in which the parties conducted the legal proceedings. The starting point is the ruling of real expenses actually incurred in favor of the winning litigant. The expenses must also be reasonable, proportionate and necessary.

    Regarding class actions, the Class Action Law stipulates that the court shall order the legal fees of the representative attorney. Moreover, if the Court decided in favor of all or part of the group (also by way of approving a settlement) then it shall order compensation to be paid to the representative of the plaintiff, unless it concluded, for special reasons, that is not justified under the circumstances of the case. In special cases and for special reasons the Court may adjudge compensation to the representative of the plaintiff, even if the class action was not approved or if the class action was not decided in favor of the group.

    In its decision regarding the legal fees of the representative attorney, the court will consider the attorney’s expenses. In addition, the court will consider additional considerations that may affect the amount of fees, such as the benefit of the class action, the complexity of the proceeding and the degree of risk, the degree of importance of the class action, the manner in which the representative attorney managed the proceedings, and the gap between the remedy claimed and the remedy actually rendered.

    It should be mentioned that in practice, for both class actions and damage litigation, the fees decided by the court only rarely reflect the real costs of the proceedings, and the winning litigant does not cover all of its expenses.

  23. Are third parties permitted to fund competition litigation? If so, are there any restrictions on this, and can third party funders be made liable for the other party’s costs? Are lawyers permitted to act on a contingency or conditional fee basis?

    In Israel, external financing of civil litigation by third parties is not very common, therefore it is not regulated or discussed by the courts (including the liability of the funders).

    However, there are a few funds which offer to finance civil litigation. These funds arrange with the party interested in the litigation the issues of payment and expenses’ payment in case of loss and ruling expenses to a third party.

    Regarding class actions, a potential plaintiff may be assisted by third parties. There is a designated fund for funding class actions, in cases with public and social significance. In competition class actions, assistance can be obtained from the ICA. In addition, there are also various associations that lead class actions with public importance in various areas, in particular, in the area of competition. For example, in June 2019, the court approved a competition class action regarding excessive price of hard cheese, which was filled by the Israel Consumer Council.

    According to the The Rules of Chamber of Advocates (Professional Ethics), 5726- 1966, payment for attorneys’ fees may only be rendered in the form of money. When there is no legal restriction, the fee can be obtained as a percentage of the interest. In criminal litigation, a conditional fee which depends on the litigation results is not permitted. Similar restrictions do not exist in connection with civil litigation (or competition litigation), therefore, lawyers are permitted to act on a conditional fee basis, including torts and competition litigation. The Chamber of Advocates has set minimum recommended fees for attorneys' fees, but as noted, this is only a recommendation, and this is not the common practice in claims in the field of competition.

  24. What, in your opinion, are the main obstacles to litigating competition damages claims?

    The main obstacle to litigating competition damages claims are the burdens of proof (e.g., proof of cartel, market shares, market power, excessive pricing – economically and theoretically); duration of the proceedings - the procedure is very lengthy due to the complexity of the factual and legal questions and the burden on the courts in Israel; and lack of temporary injunction in competition litigation (see question 3).

    The plaintiff (in the ordinary case where the burden of proof is imposed on him) must be supported by an expert opinion. In a considerable number of cases, the proof is complicated and sometimes has broad implications for the rest of the economy. Therefore, economic experts find it difficult to write a certain position knowing that they will have to write opposing positions in the future.

    Moreover, the difficulty in obtaining temporary injunctions is a major obstacle to litigating competition damages claims.

    For example, if a claim is made on a contractual level, according to which the agreement is a restrictive arrangement and therefore cannot be enforced, the court will order the enforcement of the contract, while the question of the restrictive arrangement will be clarified in the main proceeding, which may last years.

  25. What, in your opinion, are likely to be the most significant developments affecting competition litigation in the next five years?

    2019 was a significant year for the Israeli competition law. On January 2019 the Israeli Parliament passed a comprehensive amendment to the Competition Law, which led to significant changes in a number of fields such as monopolies, the obligation of company officials and more. At the same time, there has been significant developments in the case laws. We anticipate that the new laws and case laws may lead to a significant increase in competition litigation, in particular class actions, alongside significant development of the existing case laws in the field.

    • Excessive pricing class actions – in recent years, many class actions were filed on the grounds of excessive price: The price collected by the Israel Electric Corporation from its consumers for natural gas; prices of Tnuva Cottage Cheese and hard cheese; potash prices collected by the Dead Sea Works; prices of dairy milk manufactured by Tnuva and Strauss-group; prices of Nespresso capsules; and more.

      In January 2019, two decisions regarding excessive pricing were published simultaneously by the District Court: the first, regarding excessive pricing of Coca Cola bottles sold in Israel by CBC group; the second is regarding excessive pricing of cocoa powder for domestic consumption, sold by Strauss-group. While the first class action regarding Coca Cola was approved, the class action regarding cocoa powder was denied.

      Although it is not the first time excessive pricing class actions were discussed by the Israeli courts, it is the first time that reasoned decisions were published that outline guidelines and criteria for the analysis of excessive pricing. As stated, the decisions were published during a period in which there is already a significant increase in class actions related to excessive pricing. Therefore, we anticipate a significant increase in such class actions and significant developments in competition litigation in that field.

    • Competition litigation in the field of monopoly violations – One of the significant amendments was to the term “Monopoly”, to include entities which possess significant market power. In the previous version of the Law, the definition of the term “Monopoly” was determined solely by the market share test – any entity which supplies or acquires more than half of a relevant market is a monopoly. The amendment expands this definition, which now includes firms that possess significant market power. Namely, a firm can be deemed a monopoly even if its market share does not exceed 50%.
    • Competition litigation against company officials – as part of the comprehensive amendment to the competition law, company officials are now obligated to supervise and act within their power to prevent violation of the Law. Officials who violate the Law are now subject to criminal and monetary sanctions.

      Under the Law, company officials (defined by the amendment to the Law as any active manager in the company, partner - excluding limited partners, or company nominated official responsible for the field in which the violation occurred) must supervise and act to the full extent of his power in order to prevent a violation of the Law by the company or one of its employees. The Law states that if an offense was committed under the Law by the company or one of its employees, the company official will be held in violation of this obligation, unless he can prove he acted to the full extent of his or hers power in order to uphold its legal duty. A company official who fails to uphold this obligation will be subject to a year in prison alongside the monetary fine detailed by the Law.

      This amendment completely transforms the scope of the company officials' obligations: while previously company officials' liability was derived of the company's violation of the Law, under the new Law there is now an independent offense of lack of supervision and failure to employ the full extent of the official's power to prevent the violation of the Law.

    • Increase in International cartel class actions – following the courts latest decisions regarding Regulation 500 in connection with international cartel class actions, as mentioned in question 20 above, we anticipate an increase in this kind of class actions, as well as development of the existing law and the analysis of international cartel cases and extraterritorial jurisdiction.