Decision details
| Date | September 17, 2018 |
|---|---|
| Court | Central District Court (Lod), Judge Esther Stemmer |
| Case | Class Action 8929-08-11 (Yosef Hagma v. Mizrahi Tefahot Bank) |
| Type of decision | Settlement approvalClass action |
| Amount | Not set / not published |
| Topic | Class action: charging legal expenses that were not approved |
| Source | Source |
Background and facts: legal expenses charged in collection proceedings
The details here are based on the case law review of the Tel Aviv University Faculty of Law for September 2018. The full text of the judgment was not found openly online. According to the review, the Central District Court (Lod), per Judge Esther Stemmer, approved on September 17, 2018 a settlement in a motion to certify a class action. The applicant was Yosef Hagma, and the respondent was Mizrahi Tefahot Bank.
According to the motion for certification, the bank charged the accounts of customers against whom collection proceedings were opened with legal expenses that were not approved by a judicial body. It was alleged that this is contrary to the directives of the Supervisor of Banks (Proper Conduct of Banking Business 409). It was also alleged that on expenses that were approved, the bank charged bank interest, and sometimes default interest, although under the law they bear only linkage differentials and interest.
What the court decided: compensation by sampling
The parties did not set an amount of compensation in advance. They agreed on a mechanism by which the compensation will be set. Because of the high cost of an individual examination of each account, a statistical examination will be carried out through checks and samples. The sample will determine the average amount charged to the accounts of the debtor customers, and this amount will be refunded in full to each account holder.
According to the review, separate samples were set by periods. Regarding the early period, between May 14, 1996 and August 3, 2004, the bank argued limitation. The applicant argued that because of an earlier class motion that was rejected (the Luk case), claims from that period had not become time-barred. The court rejected the applicant's position and held that section 26(b) of the Class Actions Law extends the limitation period only for an individual claim of a class member.
The Attorney General objected to the settlement, among other reasons because the amount of compensation is not known. The court held that there is nothing wrong with the mechanism, since the bank will pay the class members the average amount found. It was also held that if the examination finds no damage, it is appropriate that no relief be given. The judge stressed, according to the review, that the bank agreed to a full refund of the amounts in dispute, although it disputes the existence of the causes of action. Agreeing to a settlement is not an admission of the claims.
Who is eligible and what to do
According to the review, those eligible are the bank's customers against whom collection proceedings were opened and whose account was charged with such expenses, in the periods for which the sample will be taken. The average amount is to be refunded to each account holder. The review does not detail the payment dates or the method of transfer.
What it means for Mizrahi Tefahot customers
The settlement concerns customers against whom the bank took collection action. A customer in such a situation can ask for a breakdown of the legal expenses charged to his account, and check whether a judicial body approved them. More information appears on the page Mizrahi Tefahot collection proceedings and in the class actions overview.
Sources
Status and caution
Details according to a Tel Aviv University case law review; the full text was not found openly online
More court rulings against Mizrahi Tefahot on execution and debt collection
- Class Action 56373-06-21 Beck and Tevel: Mizrahi Tefahot will refund fees for duplicate lawyers' warning letters
- Class Action 35618-05-11 Dimri: Mizrahi Tefahot will align inflated debt balances in execution files
- 28 years later: Execution Office registrar rejects Mizrahi Tefahot motion to add NIS 2.6 million in interest
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Questions and answers
What was the Hagma class action against Mizrahi Tefahot about?
According to the Tel Aviv University review, it was alleged that the bank charged customers against whom collection proceedings were taken with legal expenses not approved by a judicial body, and charged bank interest on expenses that were approved.
How much money will be refunded to customers?
No amount was set in advance in the settlement. The compensation will be set by a sample examination that will determine an average amount, and this amount will be refunded to each account holder.
Are customers from the years 1996 to 2004 included?
According to the review, the court accepted the bank's limitation argument regarding the period between May 14, 1996 and August 3, 2004.
Who approved the settlement?
Judge Esther Stemmer of the Central District Court (Lod), on September 17, 2018.
Did Mizrahi Tefahot Bank admit a violation?
No. The decision approves a settlement, and in such a settlement the bank usually does not admit a violation. The court examines whether the settlement is fair and reasonable for the class members.
Where can I read the full text?
The full text was not found openly online. You can search for it by case number in the Net HaMishpat database of the Israeli Judiciary.
Read also
- Received an execution warning from Mizrahi Tefahot Bank? What to do in the first 30 days
- Mizrahi Tefahot debt collection: how did a request to close a debt become a bench warrant?
- False reports by Mizrahi Tefahot Bank
- Sewer Service ISRAEL: the American method that reached the Execution Office
- Class actions against Mizrahi Tefahot Bank: all settlements, judgments and certifications