One of the goals of the ISA is to remove barriers in the field of Private Enforcement, to promote proper private proceedings, and to ensure that these proceedings are handled and ended for the benefit of the investors.
The ISA desires to implement these goals especially by providing tools and creating a comfortable "working environment" for investors wishing to file appropriate class actions and derivative actions, and by an extended and active involvement during the settlement approval stage.
One of the ISA's significant and unique tools in the field of private enforcement is participation in the financing of proper class actions.
Pursuant to Section 209 of the Companies Law-1999, the ISA may incur the expenses of class action proceedings, if it is convinced that the class action is of public interest, and that there is a reasonable likelihood that the court will approve it as a class action. In addition, pursuant to Section 205a of the Companies Law, the ISA is entitled to incur the expenses of derivative action proceedings if it is convinced that the claim is of public interest, and that there is a reasonable likelihood that the court will approve it as a derivative action.
The ISA uses its power to finance class actions and derivative actions regularly. Its main purpose is to reduce the integral asymmetry between the plaintiff and the respondent in these actions. By financing, the ISA also expresses its view with regards to the importance of the action.
The involvement of the ISA during the settlement approval stage is mainly reflected in filing objections and opinions to courts and participating in hearings in courts, once applications to approve settlements are filed.
It is noteworthy that since the Economic Department in the Tel-Aviv District Court commenced its work as the leading court for securities and corporate issues, a positive change in trends is distinguishable, in private enforcement of Securities Law and Corporate Law. There have been several significant decisions in class actions and derivative actions, some of which were financed by the ISA.