Thou shalt not be a fryer

Who in Israel hasn’t felt the frustration of dealing with unauthorized cellular phone charges, unexplained bank commissions, incompetent building contractors or repairmen, and other every-day instances of being unduly charged and/or under-serviced. A euphemistic term has even been coined for this in Hebrew – the “matzliah” (success) method. They try and get away with something, and if they’re lucky and they get away with it, they have succeeded.

Contrary to common perception, there are relatively quick, effective and inexpensive tools to deal with these situations when agreed-upon solutions are not reached. In a country where not being a fryer (Israeli slang for “sucker”) has for better or worse become a national ethos, it is surprising how little use is made of these.

Small claims – successful tool

One of the simplest, quickest and most effective ways to deal with simple disputes is utilizing the small claims courts, which have authority to award financial compensation of up to NIS 31,900 in a suit filed by an individual. Although I am a firm believer in “choosing your battles” carefully, I have found that, every once in a while, pursuing a small claims suit is financially worthwhile, not to mention the satisfaction of realizing that all-too-elusive principle on which the legal process is founded – justice.

Two years ago, the keyboard of my Orange-operated cell phone got stuck and I brought it in for repair. As I was handed back my fixed phone a few days later, I was nonchalantly told by the Orange saleswoman that my list of contacts had been erased, and that Orange had no responsibility for this because I had supposedly accepted these terms when I dropped off the phone for repair. I was certainly not happy.

After two brief letters I sent to Orange were politely answered but offered no financial compensation, I decided to sue in small claims court. My intern took the unusually long time of a whole day to prepare the suit, giving a broad overview of the notorious reputation of the cellular companies and supporting this with findings and proven statistics culled from the internet. With less meticulous detail, drafting this suit would have taken two hours. Six months later, I was awarded NIS 5,000 by the judge, after a 20 minute hearing. Not bad.

A client had a similar situation with HOT, Israel’s leading cable company, where repeated complaints to the company about home phone and internet disruptions were ignored. We drafted a suit and he filed in small claims court.

Walking out of the court building after the hearing, he related, the cocky 25-year-old HOT representative was still trying to convince him that he had made a mistake by refusing HOT’s NIS 2,000 settlement offer in the courtroom. This arrogant and mistaken “legal assessment” was an excellent example of the crass attitude these huge corporations have towards their customers. A week later he received the judge’s decision, ordering HOT to pay him NIS 6,000.

In another case, just the threat of a suit, even in small claims, was enough. The bank mistakenly froze a client’s internet trading account for several hours, potentially causing him financial loss. The bank manager promptly and prudently responded to our letter of complaint, and suggested a generous five figure settlement offer, so that the matter be “closed silently,” without any precedent-setting judgment that might adversely affect the bank country-wide.

Other recent examples of clients’ success in small claims courts include awards made for cases of faulty work done by a car mechanic, poor workmanship by a repairs contractor, breach of contract terms by non-payment, problems with rent, and the long list goes on. Most awards we’ve seen are in the NIS 4,000-15,000 range, some for substantially more. Legal sites reveal several hundreds of other examples.

The More the Merrier

Israelis do not utilize the venue of small claims courts enough. Perhaps this is primarily due to the fact that for many Israelis, venting is the most important thing. One of the studies we dug up as part of the small-claims suit against HOT showed a staggering number of complaints filed with the customer service department of the company but a surprisingly low number of ensuing suits when the problems were not resolved. It seems that the Israeli mind-set dictates that the main thing is to complain and voice your resentment, following up with concrete steps is of only secondary importance.

Volume is crucial in improving customer service. If more people sued through small claims this would become a real issue for more service-based institutions. The courts would also recognize the epidemic problems and would begin to award larger sums of money in successful cases. The courts influence and shape desired public policy through legal decisions. In criminal law it comes by way of harsher sentences, in civil law through larger monetary awards.

Perhaps olim from western countries, coming from a more cool-headed culture, where litigating is not part of an emotional catharsis, can benefit most from this relatively simple and cost-effective tool. The advantage of the small claims court over regular courts are numerous: time, money and aggravation.

Sue it Yourself

So here’s a few central considerations to have in mind with small claims in Israel.

Full legal representation is not necessary in these cases and in any case is not allowed in the actual hearing. Nonetheless, it is strongly advised to get legal help in order to succinctly and professionally draft your suit.

The clearer your written claim, the greater your advantage. After all, the judge who will hear your case is a judge in regular court as well, and is accustomed to legal style. A judge’s clear understanding of the main points of your written claim, even before the oral hearing begins, is crucial. Every judge in any case has an initial leaning, primarily based on the written contentions he reads.

Once the defendant files his defense, some professional tips and pointers on how to refute and pick apart the defense at the hearing are also very helpful.

At the actual hearing itself – almost always limited to one sole short hearing in small claims – you will be allowed to briefly make your point, on your own. After hearing both parties, the judge will either suggest a compromise or render a decision, usually within days of the hearing. If you have difficulty with Hebrew, you may bring a translator, or even a friend to translate, although prior notice of this should be given to the court.

Time-wise, from the day of filing suit, it usually takes between 6 to 9 months for the court’s decision, no small consideration where an average case in regular court takes about 3 years to be heard.
Financially, small claims make perfect sense. Court fees are only 1% of the suit, compared to 2.5% in regular courts. For drafting a brief suit and advising the plaintiff on how to appear in court and deal with the defendant’s defense, a decent lawyer’s fees should range from $200 to no more than $500.

We almost always advise our clients on self-representation and filing in small claims courts, even when the disputes involves up to NIS 50,000. True, you will have to limit your suit to the court’s maximum jurisdiction sum of NIS 31,900, but you will also be saving costly legal fees, that even for the most junior of lawyers will add up in regular court.

Like many revolutions, significant consumer changes in Israel can only rise from the bottom up. Last year’s summer “middle-class” protests, set to return with spring weather, have proven that. Choosing the best service-provider is certainly the most important initial step. Yet when things go awry, and accountability and fairness are scarce, small claims are a big step in the right direction.

The contents of this article are designed to provide the reader with general information or present the writer’s personal opinion and not to serve as legal or other professional advice for a particular situation. Readers are advised to obtain advice from qualified professionals prior to taking any legal or other action.

About the Author
Gabi Danon is an Israeli lawyer who heads the law firm of Gabriel Danon & Co., representing Israeli and foreign individuals and corporations on a variety of real estate, corporate, civil, estate and high-tech issues and transactions. He studied law in both Israel and the U.S.