A. Introduction
A Class Action is a legal procedure which enables an individual to submit a claim on behalf of a large number of potential plaintiffs against the same defendant, all of whom have a common cause of action which is based on common issues of laws and facts to be determined in one action. The class members are not named as individual parties but are described as a group. Although the members do not usually take an active part in the litigation, a Court ruling will bind all members of the class.
A Class Action is heard in two stages: firstly, the Court decides whether to approve the claim as a class action. If the claim is approved, the Court characterizes the class following which the claim is heard as to its merits. A Court judgement in the Class Action binds the defendants in respect of all members of the class.
Until 1988 it was only possible to file class actions in Israel under Regulation 29 of the Civil Procedure Regulations - 1984 - the civil regulations referring to all civil disciplines without any exceptions.
Over the years the Knesset (the Israeli Parliament), has legislated specific laws which provide for the filing of class actions in various matters, for example: the Law for the Prevention of Environmental Hazards (Civil Claims) (1992), The Law for Consumer Protection (1994), The Law of Equal Salary for Male and Female Employees (1996), The Companies Law (1999), etc.
On 1st March 2006 the Class Action Law - 2006 was legislated by the Knesset. The new law collates all matters in which Class Actions may be filed in Israel and sets the principles and requirements in respect thereof.
Before the new law came into force, class actions were approved only in respect of particular causes of 
actions which were specifically defined in certain laws. The new law expands the list of subject matters for which class actions may be filed, both with regard to the defendants and the causes of action.
For example, prior to the new law, a class action against an insurance company was based only on the Financial Services (Insurance) Control Law and was limited to only a few causes of action whereas, under the new law, a class action may be filed against insurers without any restriction as to the cause of action.
Another example relates to environmental claims:
While in the past, a class action based on the Environmental Hazards Law – 1992 was limited to injunction order, the new law now enables filing of a monetary claim based on breach of environmental provisions.
According to a specific clause in the new law, the State authorities may be sued. However, no claim may be filed against the State for damage caused by a third party over whom the State did not provide proper supervision.
In the event of several class actions being filed in respect of the same subject matter, by the same class, the law provides that the first claim which was filed is the claim which will be heard in Court and the other claims will be dismissed, unless the Court shall decide otherwise based on special grounds, which should be detailed in the Court’s decision.
The new law enables the Court to supervise the lawyer who represents the class: the Court may decide that the lawyer who filed the claim is not suitable to represent the class and can order his replacement. Moreover, the Court will determine the lawyer's fees for representing plaintiffs, taking into consideration a number of factors, such as the public interest in the claim and the complexity of the proceedings. There is no reference in the law to awarding fees by percentages of the claim.
According to clause 27 – a class action fund will be established in order to assist plaintiffs' representatives to finance motions for approval of claims as class actions, whenever there is a matter of social or public interest in filing the claim.
When monetary relief is not practical, the Court may award other relief to the class or to the public. 
In case of a settlement - a motion requesting approval for such settlement should be published and a copy thereof sent to several public entities. These entities and members of the class may file an objection to the offered settlement. The settlement may only be approved by the Court after it receives an independent expert opinion stating that the settlement agreement is the fairest way to solve the dispute.
The Court may award expenses in favour of plaintiff for efforts invested, even in cases where the claim was not approved as a class action.
According to the new law, compensation will be awarded if damage was proven, but it is specifically stated that the Court may award compensation for non-financial damage (such as mental anguish).
The new law also applies to class actions which were filed before the laws coming into force, provided that the claims were filed according to the specific laws, and not according to Regulation 29 of the Civil Procedure Regulations.
C. The New Law – Encouragement to More Plaintiffs
The influence of the new law on the number of class action claims filed was immediately noticed. After the new law came into effect, and considering that it created a greater variety of causes for which a class action may be filed, an application to approve a class action is now submitted to Court almost daily. Most of the motions are consumer orientated, alleging fraud or misleading representations by manufacturers, marketers, insurance companies, municipalities, etc.
D. What About the Defendants?
It is clear that the new law is beneficial to plaintiffs, but it should be noted that several obstacles set by the law may assist the defendants:
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The Court may decide to reduce the indemnity if it considers that the full compensation may result in a major damage to the defendant and/or the public.
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The Court may order plaintiffs to actively join the class action (opt-in). This possibility is an innovation since the usual procedure is that plaintiffs are considered as members of the class unless they request Court to release them (opt out).
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