Public authorities are "classic" candidates for the role of defendants in class actions. The ability to sue the state (and other public authorities) in class actions accompanied the legislative and judiciary development of class actions in Israel. The state found itself in a dilemma: on the one hand class actions are a good tool for private regulation of the markets; and on the other, the state is a potential defendant. As a result, the state, a very strong player in the legislative process, tried to minimize its risk.
The legislative subcommittee was not too happy about the State’s attitude, but a political standoff forced a compromise. The State (and other public authorities) has received special treatment in the Israeli Class Actions Act:
1) A closed list of causes which does not include general Tort.
2) A specific exemption relating to exercising of regulatory powers (sec 3)
3) A special Defense against restitution where the authority ceased and desisted within 90 days of lawsuit (sec 9).
4) A special defense where the authority proves that conducting the lawsuit (sec 8(b)(1)) or full damages (sec 20(d)) is harmful to the public.
5) A special limitation period of 24 months (sec 21).
6) The authorized court in suits for damages or restitution is the Administrative Court (sec 5(b)(2)).