In the Supreme Court Sitting as the High Court of Justice

                                                                                                                        HCJ 7245/10

                                                                                                                        HCJ 8357/10

                                                                                                                        HCJ 908/11

 

Before:                                                Her Honor Justice E. Arbel

                                                Her Honor Justice E. Hayut

                                                Her Honor Justice D. Barak-Erez

 

The Petitioner in                     

HCJ 7245/10:                          Adalah – The Legal Center for Arab Minority Rights in Israel

                                   

                                                v.

 

The Respondents:                   1. The Ministry of Social Affairs

                                                2. The National Insurance Institute

                                                3. The Knesset

 

The Petitioner in                      The Israel National Council for the Child

HCJ 8357/10: 

                                                v.

 

The Respondents:                   1. The Israeli Government

                                                2. The Minister of Finance

                                                3. The Attorney General

4. The Minister of Health

5. The Israeli Knesset

6. The National Insurance Institute

 

The Petitioners in                    1. The Association for Information on Vaccines

HCJ 908/11:                            2. Binyamin Brotski

                                                3. Matan Koren

                                                4. Netta Dror

                                                5. Itay Hadar

                                                6. Lilach Rochel                                             

 

                                                v.

 

The Respondents:                   1. The National Insurance Institute

                                                2. Director General, Ministry of Health

                                                3. The Speaker of the Knesset

 

Petitions for an order nisi and an interim order

 

Date of session:                       Tammuz 12, 5772 (July 2, 2012)

 

On behalf of the Petitioner    

in HCJ 7245/10:                      Adv. Z. Zausan, Adv. H. Jabarin

 

On behalf of the Petitioners   

in HCJ 8357/10:                      Adv. V. Windman, Adv. C. Pollack-Cohen

 

On behalf of the Petitioners   

in HCJ 908/11:                        Adv. A. Naveh

 

On behalf of Respondents     

1-2 in HCJ 7245/10 and

Respondents 1-4 and 6

in HCJ 8357/10 and the

Respondents in HCJ 908/11:  Adv. A. Keidar, Adv. M. Freeman

 

On behalf of Respondent 3

in HCJ 7245/10 and

Respondent 5 in HCJ

8357/10:                                  Adv. Dr. G. Bligh

 

 

Judgment

 

Justice E. Arbel:

 

The petitions before us concern the reduction of child allowance for a parent whose children have not received the required vaccines announced by the Director General of the Ministry of Health. In the petitions, the petitioners demand the revocation of Section 61(2)(d) of the Arrangements Law (Legislative Amendments for Implementation of the Economic Plan for 2009 and 2010), 5769-2009 (hereinafter, the “Arrangements Law” or the “Law”), on the grounds that it is unconstitutional.

 

The Arrangements Law

1.The Arrangements Law, which was enacted in 2009, included Amendment no. 113 (hereinafter, the “Amendment”) to the National Insurance Law [Consolidated Version], 5755-1995 (hereinafter, the “National Insurance Law”). The Amendment mainly concerns the gradual increase of the child allowances paid for the second, third and fourth child in a family unit. Concurrently, the Amendment orders the reduction of the child allowances paid for children who have not received the required vaccines based on their age and health condition and according to the Vaccination Program ordered by the Director General of the Ministry of Health. The main part of this arrangement is currently set out in Section 68(d) of the National Insurance Law:

(d)(1) If the child meets the provisions of Paragraph (2), the monthly child allowance paid for him will be reduced by the sum of NIS 100 (in this section – the “Sum of the Reduction”), provided that notice was given as stated in Subsection (e) and the 14-day period has passed as stated in the said subsection from the date of service of the notice according to the provisions of Subsection (h)(2); the reduction will begin on the 1st of the month following delivery of the notice to the Institute as stated in Paragraph (2);

(2) The Ministry of Health shall notify the Institute that six months have passed from the date on which the child was required to receive the vaccines based on his age and health condition and according to the Vaccination Program ordered by the Director General of the Ministry of Health; such notice shall be sent to the Institute no later than seven days after the date on which six months have passed as aforesaid;

(3) A program as stated in Paragraph (2) will be published in the Israel Official Gazette and shall include provisions regarding the type of vaccine, the vaccination schedule, additional dates on which a vaccine that was not administered on the required date may be supplemented, and the maximum age at which each vaccine may be administered (in this section, the “Vaccination Program”).

It should be noted that additional sections in this arrangement include: instructions regarding the notice that must be sent to parents whose children have not received vaccines as aforesaid, options to challenge and appeal decisions on the matter, sums of allowance reductions according to the number of children in the family, recalculation of the allowance after the child has been vaccinated as required or after the passage of the last date on which the vaccine, because of which the allowance was reduced, could be administered, etc.

2.Publication of the Vaccination Program by the Director General of the Ministry of Health was initially postponed because claims were raised regarding lack of access to Family Health Centers (“Tipat Chalav”) by the Bedouin population in the Negev, such that in practice the Amendment could not be implemented. After actions were taken to increase access and awareness among the Bedouin population in the Negev, the Director General of the Ministry of Health published a vaccination program by virtue of the Law, which included one vaccine named MMRV, a “quadrivalent” vaccine against four diseases: measles, mumps, rubella and varicella. The vaccine is given to infants at the age of one year and the program applies to infants born starting January 1, 2012, such that the first reduction of allowance will be made no earlier than July 1, 2013.

The petitions at bar were filed against this arrangement.

HCJ 7245/10 –Petitioners’ Claims

3.The petitioners are organizations and associations that act to promote Arab and Bedouin minority rights, as well as residents and chairpersons of local committees of three Bedouin villages in the Negev, in which, on the date this petition was filed, no Family Health Center operated.

4.First, the petitioners claim that the Amendment was passed following a coalition agreement, and that prior to its approval no discussion was held in respect thereof. They also argue the respondents did not base the approval of the Amendment on any analysis or research. Second, the petitioners claim that the Amendment violates the children’s constitutional rights. According to them, the child allowance belongs to the children themselves, even though it is remitted to their parents. The court has emphasized on various occasions the importance and objective of the child allowances is for the children’s welfare. The conclusion, therefore, according to the petitioners, is that reduction of the allowances harms the children and violates their rights, mainly children belonging to poor families that will be forced to waive monetary expenses necessary for the upbringing and development of the children. It is argued that the Amendment violates the supreme principle of the best interest of the child, which has been established in the case law of the Supreme Court and in international treaties. The petitioners further claim that the Amendment violates the principle of equality between children, as it creates an irrelevant distinction between children who have received vaccines and those who have not received vaccines, and between children whose parents have access to preventive medical services and children for whom the State has not ensured access to such services. They further claim that the Amendment violates the children’s constitutional right to the property, since the allowances belong to them. They claim that the very payment of the insurance contributions to the National Insurance Institute create a contractual agreement between the parent and the National Insurance Institute, which includes the expectation of payment of child allowances against payment of the insurance contributions by the parent. Violating this expectation, it is claimed, is also contrary to

5.According to the petitioners, the violation of the aforementioned constitutional rights does not satisfy the conditions of the limitation clause. The violation, it is argued, is not for a proper purpose. The violation was made without examination and without an appropriate foundation; it aggravates poverty and socioeconomic gaps; and it also harms the public interest that mandates protecting and avoiding harm to those children who are not being vaccinated.

6.It is further asserted that the violation does not satisfy the threefold proportionality test. The violation does not satisfy the rational connection test, since the means chosen do not achieve the objective of protecting the child’s health and public health. According to the petitioners, the Amendment in fact harms the child’s wellbeing, health, development, property and right to social security, and causes a deepening of poverty. It is asserted that punitive use of the allowances is prohibited, and that the allowances should not be used to combat various negative or wrongful phenomena. The Amendment punishes the children for non-receipt of vaccination services.

The petitioners further claim that the violation does not meet the second proportionality test, the less harmful means test. According to them, other appropriate means could have been adopted to achieve the goal, such as making preventive health services accessible in the unrecognized villages in the Negev. The petitioners assert that the main population that will be harmed by the Amendment is the children residing in the Bedouin villages, including the children of the unrecognized villages. According to them, the high rate of unvaccinated Bedouin children is the product of the State’s failure to provide preventive health services at Family Health Centers. The Bedouin children’s access to these services is limited. In approximately forty-five unrecognized villages there are, it is argued, only twelve Family Health Centers, and even those were only put in place after a petition to the HCJ, and some are under threat of closure. The petitioners add that the residents of these villages also have limited mobility due to the absence of driving licenses and suitable public transportation in the area, and that they have low socioeconomic status and a very high rate of poverty. The Amendment therefore punishes the Bedouin children through no fault of their own, and due to the Ministry of Health’s failure to fulfill its obligation to realize these children’s rights from the outset. This punishment will further aggravate the socioeconomic status of the Bedouin children, and deepen the social gaps between this population and the general population. The petitioners assert that despite the neutral language of the Amendment, the said data reveal that, de facto, it discriminates against the Bedouin children on the basis of nationality.

Finally, the petitioners claim that the violation also fails to fulfill the narrow proportionality test. According to them, democracy cannot justify punishing children because they have not been vaccinated by their parents. The Amendment leads to a result opposite to that sought by the legislature and, instead of protecting the children’s health, causes them additional harm.

7.In supplementary pleadings filed by the petitioners on August 16, 2012, the petitioners seek to emphasize the claim that the violation of rights should be examined in light of the fact that the matter concerns children, a group with special characteristics which mandate special constitutional protection. According to them, this fact distinguishes between a regular violation of the right of equality, which may be a permitted distinction, and a violation which falls under the definition of prohibited discrimination, i.e. violation of the constitutional right.

HCJ 8357/10 – The Petitioner’s Claims

8.The petitioner in HCJ 8357/10 is the Israel National Council for the Child. It too asserts that the Amendment constitutes a violation of the equality between children whose parents vaccinated them and children who have not been vaccinated for whatever reason. According to the petitioner, this is not a distinction that is relevant to the purpose of the legislation. The purpose of the child allowance arrangement, it is argued, is to allow a redistribution of income among the population, transferring income from citizens who have no children to those who have children and whose income needs to be divided between a greater number of persons. According to the petitioner, the allowance is not a prize for desired behavior, and conditioning the allowance on a condition unrelated to the size of the family is wrongful ab initio. The petitioner claims that the case does not concern denial of a benefit given to parents for vaccinating their children, as the State claims, since the allowance increment granted in the Amendment does not apply to the first child or the fifth and any subsequent children. The Amendment may also harm populations that are already weakened, who do not vaccinate their children due to lack of access to Family Health Centers or due to the absence of time and financial resources. The petitioner emphasizes that the rate of unvaccinated children is particularly high in the unrecognized settlements in the Negev as a result of a lack of physical, cultural and linguistic access to vaccination services. The petitioner further claims an additional violation of the right to social security which will bring more children into the cycle of poverty and deepen penury among families already below the poverty line, contrary to the objective of the child allowances, particularly with respect to the first child and the fifth child onwards in the family.

9.The petitioner argues that the violation of the constitutional rights of the children does not satisfy the conditions of the limitation clause. The objective of increasing the vaccination rate is foreign to the purpose of the allowances, and therefore is not a proper purpose. Introducing this consideration will create a dangerous precedent whereby allowances may be reduced for any health, educational or social reason. The proportionality test is also not satisfied according to the petitioner. When the reasons for non-vaccination are ideological or depend on access to health services, it is clear that the reduction of the allowances will not affect vaccination. Therefore, the means are inconsistent with the purpose. The lack of consistency, it is claimed, stands out against the background of the data regarding the high rate of vaccination in the State of Israel, mainly with respect to the vaccinations currently required by the Vaccination Program published in accordance with the Amendment. The petitioner makes a distinction between a benefit, the conditioning of which on vaccination may be proportionate, and the imposition of a sanction for failure to vaccinate which is not proportionate. The petitioner rejects the State’s claims regarding the measures taken in order to moderate the harm. It further claims that there are many and varied measures for achieving the goals reflected in the Amendment that do not violate the children’s rights and have a greater benefit potential. Thus, it is possible to act to increase awareness and improve access to child vaccination services.

HCJ 908/11 – The Petitioners’ Claims

10.The petitioners in HCJ 908/11 are the Association for Information on Vaccines and parents whose children they argue suffered various negative reactions following a vaccination. The petitioners claim that there are differences of opinion in the medical community and among the public regarding the effectiveness of vaccines and the severity of their side effects. Hence, they believe that parents should be allowed the right to choose whether or not to vaccinate their children. According to them, the fact that there is a law aimed at compensating those injured by vaccines proves that vaccines are not risk-free. The petitioners further assert that the Amendment violates the right to equality, the individual’s right to autonomy and the right to autonomy of parents in the upbringing of their children. The petitioners challenge the Amendment legislation procedure and its inclusion in the Arrangements Law, which does not allow the issue to be thoroughly discussed and examined. Similar to the other petitions, these petitioners claim that the violation does not satisfy the conditions of the Limitation Clause.

The Respondents’ Claims

11.Respondents 1-5 the legislative proceedings, which began at the initiative of the Director General of the Ministry of Health, and included preparation and examination of the data in Israel and worldwide. A separate legislative memorandum was subsequently circulated, unlike the regular procedure for enactment of the Arrangements Law, in order to allow specific examination of the matter. The memorandum was discussed both at the various government ministries and at the Finance Committee of the Knesset, and conflicting positions were heard. The respondents note that it was decided to stop collecting the Family Health Centers’ fees in order not to create an economic barrier to vaccination. The respondents further specified the actions that were performed by the ministries for the implementation of the Law, including increasing access to Family Health Centers and increasing awareness of the Amendment to the National Insurance Law.

12.The respondents emphasize the importance of the MMRV vaccine and the severity of the diseases against which it immunizes. According to them, the vaccine is intended to combat diseases that can cause severe harm to public health, and particularly to the health of children. In addition, these diseases are highly contagious. The respondents stress that according to professional opinion, in order to reach “herd immunity”, which protects even those who cannot be immunized or who have not developed resistance despite having received the vaccine, the immunization coverage required in the population is approximately 95%. The respondents further state the importance of immunization coverage to each individual child, relative to both the child population and the general population. They also note the expected economic and social repercussions for the State due to the absence of effective prevention of disease outbreak.

13.The respondents maintain that the default is that the Court will not be inclined to intervene in socioeconomic policy established in primary legislation of the Knesset. The respondents further claim that the legislative procedure was duly carried out and does not create cause for the Court’s intervention. The respondents also assert that the Amendment does not violate constitutional rights. With respect to violation of the children’s rights, the respondents contend that the allowance is not a direct right of the child, but rather the right of the parents, intended to help them support the family unit. It is argued that the fact that the amount of the child allowance depends on the birth order of the child in the family supports this conclusion. In addition, on the practical level, it is the parents who decide on the use of the allowance, and they are not obligated to use it for purposes pertaining directly to the children. According to the respondents, even if the allowance did belong to the children, there is no case law establishing a property right for recipients of the allowances. 

14.According to the respondents, the Amendment does not violate the constitutional right to minimal dignified existence. According to the respondents, there is no room for the assumption that any change in the allowance’s entitlement rate constitutes a violation of a constitutional right. They refer to case law that determines that the array of social rights does not necessarily reflect the bounds of the right to social security at the constitutional level. Moreover, the case at bar concerns the reduction of an allowance that for the most part corresponds to the allowance increment that was granted in the Amendment, and therefore there is no ground for the assertion that the Amendment will violate the right to minimal dignified existence. With respect to the violation of equality, the respondents claim that the Amendment establishes an egalitarian norm which seeks to incentivize individuals to take action that is highly desirable from a social and health perspective, and it cannot be said that it constitutes a discriminatory norm. Every parent is able to ensure that his child is vaccinated, and in such a case, the child allowance will not be reduced. In any event, it is argued that there is no violation of equality at the constitutional level—that is, a violation that is closely and pertinently related to aspects of human dignity as a constitutional right. As for the assertion of consequential discrimination on the basis of nationality, the respondents claim that the data indicate a similar rate of vaccination in the Jewish sector and in the Arab sector, while in the Arab sector there is a slightly lower rate of vaccination than in the Bedouin sector. The respondents admit that the percentage of vaccination in the unrecognized villages in the Negev is lower, but believe that the current level of access to Family Health Centers in these settlements, after various actions have and are being taken, is reasonable and appropriate. Finally, the respondents assert that the Amendment does not violate the constitutional rights to autonomy and to parenthood. They state that the professional position of the Ministry of Health, which is based on the prevailing approach in the medical world, is that vaccines are a desirable, efficient and safe method of preventing morbidity. They claim that the fact that there is a professional dispute on the matter does not provide grounds for the Court’s intervention in primary legislation. They further argue that the law does not force parents to vaccinate their children, but merely creates an economic incentive to vaccinate. In any event, it is argued that there is no violation whose severity rises to the level of a violation of a constitutional right. The respondents believe that the Amendment promotes other aspects of human dignity, leaving no basis to determine that the bottom line is injurious.

15.Alternatively, the respondents assert that even if it is determined that a constitutional right is being violated, the violation is lawful and satisfies the conditions of the Limitation Clause. They state that the purpose of the Amendment is protection of children while ensuring their health and welfare and caring for public health in general. This, they claim, is a proper purpose the values of the State of Israel. They further claim that the purpose is not foreign and extraneous to the National Insurance Law. They also assert that the Amendment satisfies the three proportionality tests. Experience in other countries establishes the effective connection between economic incentives and the conduct of parents with respect to their children, including increasing vaccination rates. Regarding the less harmful means test, the respondents admit that other alternatives exist to incentivize the vaccination of children. However, they claim that the means chosen by the legislator do not exceed the bounds of proportionate measures. They add that the State may intervene in arrangements and regulation of conduct where there is a public good that creates a “market failure” in the actions of citizens, each of whom is relying on the immunization of the other. Finally, they claim that the proportionality requirement in its narrow sense is fulfilled, in view of the clear public interest in vaccinating children and maintaining a high vaccination rate on the one hand, and considering that the harm is limited and proportionate, taking into account the conditions and limitations set forth in the legislation regarding reduction of the allowance, on the other hand.

16.The respondents refer in detail to the issue of the repercussions of the Amendment on children in the Bedouin diaspora. They argue that following actions taken on behalf of the respondents, there is currently reasonable and adequate access of the Bedouin population to Family Health Centers. In addition, they state that the MMRV vaccination rate in the Bedouin population registered at Family Health Centers is higher than the MMRV vaccination rate in the Jewish sector.

17.Respondent 6, the Knesset, rejects the petitioners’ claims and joins the position and reasoning of Respondents 1-5.

Deliberation and Decision

Claims Pertaining to the Legislative Process

18.The petitioners raise claims concerning the enactment of the Amendment in the framework of the Arrangements Law in expedited legislative proceedings, and argue that the Amendment was born out of a coalition agreement without comprehensive ground work. These claims should be dismissed. As detailed by the respondents in their response, the Amendment emerged following the request of the Director General of the Ministry of Health in 2008, Prof. Avi Israeli, to the Ministry of Finance, in which he requested to examine the possibility of conditioning child allowances on various acts, including vaccination of children. In 2009, the issue was also introduced into the coalition agreements, but there is nothing wrong with that in itself. Following the request of the Ministry of Health, the Ministry of Finance carried out a review of similar arrangements around the world, as well as examined the vaccination data in Israel. The resulting position paper stated that the use of allowance conditioning around the world to increase school attendance and the use of preventive medicine has been proven to be effective. It further indicated that there is a phenomenon in Israel of not vaccinating infants, contrary to the Ministry of Health’s recommendation. An outbreak of tuberculosis in Israel in 2008 was mentioned, and it was emphasized that the Ministry of Health has no effective means to handle the said problem. The position paper proposed a model whereby receipt of child allowance would be conditioned upon regular attendance at an educational institution and receipt of the vaccines required by the child’s age and health condition. As part of the discussions in preparation for the Arrangements Law, several discussions regarding this proposal were held at the relevant ministries as well as before the Attorney General. In the course of these discussions, several changes were made to the model proposed by the Ministry of Finance. Later, a Government Resolution was made generally adopting the proposed model with certain changes, primarily the reduction in child allowances, rather than their denial, and the establishment of caps for the reduction in each family.

19.Following the Government Resolution, and contrary to the regular procedure in the framework of the Arrangements Law, the Ministry of Finance circulated a separate legislative memorandum in order to allow continued examination and detailed discussion on the issue. The memorandum was examined by various entities at the ministries, and the Ministry of Justice also forwarded its comments regarding the memorandum. In addition, the Finance Committee of the Knesset held a discussion on the memorandum and examined the arrangement established therein. Prior to the discussion, the committee members received an analysis on the matter prepared by the Knesset Research and Information Center, which also included positions opposing the proposed arrangement. Many entities from the various ministries and from the National Insurance Institute were present at the Committee’s discussion on June 24, 2009, as well as representatives of the Israel National Council for the Child, one of the petitioners at bar. The vaccination data in the various sectors in the State of Israel were presented to the members. On July 7, 2009, another discussion was held at the Finance Committee, and its members were informed of the removal of the condition of regular attendance at an educational institution. Finally, the Finance Committee approved the bill for a second and third reading. The law in its final version was approved by the Knesset on July 14, 2009 after a discussion that included specific reference to the issue at bar (see the Knesset minutes of July 13, 2009, available at http://www.knesset.gov.il/plenum/data/02626209.doc#_Toc258334465).

20.In order to examine the petitioners’ claims regarding the legislative proceedings described above, it is necessary to mention the case law that held that intervention of this Court in parliamentary proceedings will be limited to cases in which “the legislative process causes deep harm to material values of the constitutional regime[.]” (HCJ 6784/06 Shlitner v. The Pensions Commissioner, Paragraph 36 of the opinion of Justice Procaccia (January 12, 2011)). The test that was set out is “whether the defect in the legislative proceeding goes to the root of the proceeding, and whether it harms basic values of the constitutional regime.” (Id). It was further held that an expedited legislative proceeding, such as the Arrangements Law, does not, in itself, lead to the striking down of the law. Even in such a case, the Court will examine whether there was a defect that goes to the root of the proceeding to an extent that justifies judicial intervention, and the consequence of such a defect in accordance with the severability model. (HCJ 4885/03 The Poultry Breeders in Israel Organization Agricultural Cooperative Society Ltd. v. The Israeli Government [2004] IsrSC 59(2) 14, 42 (hereinafter, “The Poultry Breeders Organization Case”); HCJ 3106/04 The Association for Civil Rights in Israel v. The Knesset [2005] IsrSC 59(5) 567). It was further held that “even if it were proven that the legislative procedure prevented the holding of an in-depth and exhaustive discussion and impaired the ability of Knesset members to formulate a well-established position with respect to each one of the issues included in the bill, this is not enough to justify judicial intervention.” (The Poultry Breeders Organization Case, on p. 50).

21.In the case at bar, there is no room for judicial intervention in the legislative proceedings of the Amendment. Contrary to the practice with the Arrangements Law, a separate legislative memorandum was circulated on the issue in question to the various ministries for their comments. In addition, as can be seen from the chain of events reviewed above, the issue was discussed and examined by various entities; various positions were heard, a report of the Knesset Research and Information Center was prepared and data were presented regarding the success of similar arrangements around the world. In the course of the discussions, the bill was modified, narrowed, and arrangements were added in order to reduce the harm to the entitled population. The issue was also raised in the discussion at the Knesset, and objections by various Knesset Members were heard regarding conditioning the child allowances on the vaccination of children. Indeed, there may have been room for a more in-depth discussion with a broader foundation. However, this is not a defect that goes to the root of the proceeding, and therefore there is no room for the Court’s intervention based on a defect in the legislative proceeding. (See and compare HCJ 494/03 Physicians for Human Rights – Israel v. The Minister of Finance [2004[ IsrSC 59(3) 322, 330 (hereinafter, “PHR Case”)).

Regarding the Content of the Legislation

22.Before examining the constitutionality of the Amendment, we must first state the essence and purpose of the child allowance arrangement. I will then review the standpoint of the Ministry of Health and medical science on vaccines in general, and specifically on the MMRV vaccine. These reviews will lay the foundation for examining the constitutionality of the Amendment to the National Insurance Law. As part of this examination, I will examine the question, as customary, of whether constitutional rights established in Basic Law:

 

Child Allowance – the Arrangement and its Purpose

23.

24.Johnny Gal Taub Center  Social Policy Dan BenDavidEditor, 2010) (hereinafter, “Gal”); HCJFH 4601/95 Serossi v. The National Labor Court [1998) IsrLC 52(4), 817, 831; HCJ 6304/09 Lahav, The Umbrella Organization for Independent Businesspeople v. The Attorney General, Paragraphs 43-44 (September 2, 2010) (hereinafter, “Lahav Case”)). The social insurance system is supposed to ensure minimal dignified existence for all of its residents and to protect their standard of living. The system is based on the principle of social solidarity and mutual assistance. (LCA 7678/98 The Payment Officer v. Doctori [2005] IsrSC 60(1) 489, 525; Lahav Case, Paragraphs 44, 58). The purpose of the child allowances is to help families with children to bear the increasing costs of raising children. In fact, the child allowances to equalize the state of different-sized families whose level of income are equal. In addition, they help families not to fall below the poverty line due to the added expenses of having children, and protect the family against exposure to the social risk of a decline in the standard of living created as a result of expansion of the family. (Abraham Doron “The Erosion of the Israeli Welfare State in 2000-2003: The Case of Children Allowances”, Labor, Society and Law, 11 95, 106 (5766); Gal, on p. 254; Ruth Ben-Israel “Family and Social Security: From A Traditional Division of Labor to a New Division”, Menashe Shava’s book, 207, 215-216 (Aharon Barak & Daniel Friedmann eds., 2006)). Understandably, these allowances affect the welfare of the child in the family, and therefore one of the purposes of the allowance is to further the best interests of the child and caring for the children’s welfare. (NIA /04 Azulay v. The National Insurance Institute, the opinion of Deputy President E. Barak-Ussoskin (November 2, 2006) (hereinafter, “Azulay Case”); HCJ 1384/04 Betzedek – The American-Israeli Center for the Promotion of Justice in Israel v. The Minister of the Interior [2005] IsrSC 59(6) 397, 408 (hereinafter, “Betzedek Center Case”)).

25.The Competent Authority under the Invalids (Nazi Persecution) Law 5717-1957 [1978] IsrSC 32(3) 408 (hereinafter, “Sin Case”), Justice C. Cohen holds that the child allowances are not income of the insured parents, but rather escrow funds the mother is entrusted with to spend for the welfare of her children. Certainly, it was held, it is not income of the father, who does not receive the money, neither into his possession nor for his enjoyment. The Court added that “the legislator’s intention in allocating an allowance to children would be entirely thwarted and frustrated if the children’s allowance was deemed as income of their parents, and all types of authorities would be able to get a hold thereof and take it from the mouths of the children in order to collect payment from their parents.” (Sin Case, on p. 411; see also LCA 3101/00 Betiashvili v. The Competent Authority [2002] IsrLC 57(1) 183). Indeed, a ruling of the National Labor Court held that the person who is entitled to the child allowance is the insured parent and not the child directly, and that the parent does not hold the money in trust for his child in the legal sense. (Azulay Case, Paragraphs 4-5 of the opinion of Justice V. Wirth Livne). However, this Court has not ruled on the issue, and the petition filed on the opinion in the Azulay Case was dismissed in limine because it was theoretical, and did not state a position on the merits of the issue. (HCJ 967/07 Jane Doe v. The National Insurance Institute (April 29, 2007)). In addition, it should be noted that in the Azulay Case, a minority opinion was voiced by Deputy President E. Barak-Ussoskin. This position, which was based, inter alia, on the said judgments of this Court, asserted that the right to child allowance is granted to the child and not to the parent, and that the parent receives the allowance in trust in order to care for the welfare of the child.

In any event, I do not believe that we are required to decide this issue, but we should rather assume that the legislator, when determining the child allowances, had in mind the welfare and best interests of the children.

The Vaccination Program

26.The issue at bar mainly concerns the conditioning of part of the child allowance on vaccinating the child for whom the allowance is paid. Therefore, the purpose of the Vaccination Program in Israel should be briefly stated. As the respondents clarified, the professional position of the Ministry of Health is that vaccines are a means of utmost importance for protection of the health of children and of the general public. The vaccine system currently in place protects the population in general and children in particular from serious morbidity. The importance of the vaccines is not expressed merely in vaccinating children, but also in ensuring the vaccine is timely given, in accordance with the recommendations of the Ministry of Health. This was addressed in the past by Deputy President E. Rivlin:

“There is no doubt that compliance with the vaccination dates is of great importance, and it is the duty of the persons charged with it to ensure and verify that there is no unjustified delay in vaccinating infants. The schedule set for vaccinating infants was set for good reason, and it obviously must be adhered to with the utmost attention and the strictness required in such a matter.” (CA 9628/07 Shalom v. Clalit Health Services, Paragraph 6 (September 2, 2009)).

27.The Ministry of Health deems the vaccination of children to be of great importance on two levels: the first level concerns the protection of the health of the individual child receiving the vaccine. The respondents state that a vaccine is the only way to ensure protection of the individual from the diseases against which the children are vaccinated. They explain that in a world that has become a type of “global village,” there is a risk that any immigrant or tourist will bring with him diseases that are not currently found in Israel, and which may infect those who are not immunized against such diseases. The second level concerns what is termed “herd immunity.” Herd immunity protects individuals in the public who have not been vaccinated for justified reasons, such as newborn babies who have yet to reach the age in which the vaccine is administered, the elderly person whose immune system is not functioning properly, or other persons at risk with respect to their immune systems, such as people suffering from serious illnesses or undergoing chemotherapy. In addition, herd immunity protects the small percentages of individuals who were vaccinated but are not reacting to the vaccine. Herd immunity is only achieved when there is a high coverage rate of vaccinated individuals in society and so long it is maintained.

Herd immunity creates a unique characteristic with respect to the issue of children’s vaccination, since the individual decision of each parent as to whether or not to vaccinate his children has an effect on the entire public. In addition, a “free rider” problem may develop in this regard, whereby a parent will choose not to vaccinate his children on the assumption that herd immunity will protect them from the diseases against which the vaccines protect. A wide-scale phenomenon of free riders could harm the herd immunity and thus harm the general public.

28.It appears that the majority of the petitioners also recognize the importance of vaccines and their significant contribution to public health; the main dispute is about what measures should be taken in order to encourage the vaccination of children. However, the petitioners in HCJ 908/11 challenge this starting point, arguing that the effectiveness of vaccines and the severity of their side effects are in dispute. It appears to me that this position cannot change the said starting point. It seems that the position of the Ministry of Health regarding the importance of vaccines is a prevalent and very common position in Israel and around the world. (See e.g. Avraham Sahar “Opportunity Makes the Thief...” Beliefs, Science and the Vaccine Victims’ Insurance Law, 5750-1989” Medicine and Law 36 on p. 105 (2007) (hereinafter, “Sahar”); Bilhah Kahana “The Vaccine Victims’ Insurance Law – A Law that is Not Enforced” Medicine and Law 38 on p. 14 (2008)). Insofar as we are aware, to date no causal link has been scientifically proven between vaccines and neurological or other damages. However, medical science recognizes that vaccines, or to be precise, the fever caused in some children as a result of vaccination, can create a risk and cause damage to a very small percentage of children with a certain genetic predisposition who receive a vaccine. Nonetheless, it is unclear whether, even if the vaccine had not been given, damage could have been caused as a result of another fever-inducing disease. (See Tali Sagi “Comments on the Article “Opportunity Makes the Thief - Beliefs, Science and the Vaccine Victims’ Insurance Law”” Medicine and Law 36 on p. 116 (2007)). In addition, there is broad consensus that even if there is a certain risk, it is very small, and that the benefit resulting from the vaccine is much greater:

“The risk entailed in receiving the vaccine, even though it does in principle exist, is very distant and rare, while the benefit and necessity of the vaccine to the health of the child are not doubted” (CA 470/87 Eltori v. The State of Israel – The Ministry of Health [1993] IsrSC 47(4) 146, 153).

Examples from Israel and around the world can illustrate this risk. When the public immunization level declines, usually due to fears raised by vaccine opponents, there are reports of outbreaks of epidemics which were ostensibly extinct, causing severe injuries. This was the case in Britain after the rate of persons immunized against pertussis dropped to approximately 30% in early 1980; a pertussis epidemic broke out leading to the hospitalization of approximately 5,000 children and the death of twenty-eight children (Sahar, on p. 106). In Israel, an outbreak of measles occurred in 2003 among a population that did not habitually vaccinate. Within two weeks, sixty children fell ill, out of whom one child passed away from the disease. Another outbreak occurred in 2007-2008 after a sick tourist arrived from England. The disease spread among a non-immunized population and within several months 1,452 cases of measles were reported.

29.It should further be noted that the case law holds that the administrative authority, and certainly the legislative authority, may rely on expert opinion, even if there is a contradicting opinion, and the court will honor the authority’s decision between the contradicting opinions. “When a law is based on a matter within professional expertise, the fact that there are contradicting opinions on such issue does not justify striking it down.” (HCJ 6976/04 The “Let the Animals Live” Association v. The Minister of Agriculture and Rural Development, Paragraph 11 (September 1, 2005) (hereinafter, “LAL Case”); see also HCJ 1554/95 Gilat Supporters v. The Minister of Education and Culture [1996] IsrSC 50(3) 2, 19; HCJ 4769/95 Menachem v. The Minister of Transport [2002] 57(1) 235, 271 (hereinafter, “Menachem Case”)). Understandably, had there been a well-established and prevalent position among medical experts believing that the risks from the vaccines exceed the benefit, it would have affected the constitutional analysis of the Amendment being examined before us. However, this is not the factual situation. As I stated, the prevalent and recognized position worldwide is that the benefit derived from the vaccines immeasurably exceeds the risk inherent therein. (See e.g. . This position has opponents, but it appears that they are the relatively marginal minority. Therefore, this will be the starting point for the continuation of our discussion.

The MMRV Vaccine

30.As mentioned above, according to the Amendment to the National Insurance Law, the Director General of the Ministry of Health is required to publish a program of the vaccinations required. The child allowance will be reduced only for parents who have not vaccinated their children with the vaccines included in the program published. This program currently includes only one vaccine, the MMRV, also known as the quadrivalent vaccine, which is given to infants at the age of one year in a single dosage. Another dose is given to children in first grade, but this dose is not included in the Vaccination Program published. It is therefore appropriate to provide some details on this vaccine.

31.The quadrivalent vaccine, as its name suggests, protects against four diseases: measles, mumps, rubella and chicken pox. The vaccine is common in many countries worldwide. All European countries recommend a vaccine against measles, mumps and rubella. The vaccine against chicken pox is recommended in the United States, Australia, Canada, Germany, Greece, Latvia, and Japan.

32.Measles is a serious childhood disease. The disease may cause serious complications in the respiratory airways and in the nervous system. Approximately one third of patients will develop complications such as otitis media, diarrhea and keratitis. Rarer complications are pneumonia and encephalitis (one in 1000 cases). A very rare complication of the disease, which may appear approximately ten years after its manifestation, is a complication that manifests as a degenerative disease of the brain called subacute sclerosing panencephalitis and which causes serious and irreversible damage to the central nervous system, including mental deterioration and seizures. The risk of complications is higher among children under the age of five, among adults over the age of twenty, and among patients with a suppressed immune system. 1-3 children of every 1,000 patients die from the disease. Worldwide, measles is responsible for approximately twenty-one percent of mortality resulting from diseases preventable by vaccines. Measles is highly contagious, and a person who is not immunized and is exposed to a patient has a general risk of 90% of being infected. The vaccine against measles is very effective. 95% of children who receive the vaccine at the age of one develop antibodies against the disease, which give them long-term immunity. A few lose the protection against the disease after several years, and to address that, a repeat vaccine was introduced in Israel to be administered at school age. It should further be noted that in outbreaks of measles in Israel, the highest morbidity rates were of infants below the age of one, as they were not vaccinated against the disease.

33.Measles manifests in swelling in the salivary glands and in the glands beneath the ear lobe, sore throat, high fever, headaches and weakness. In approximately ten percent of patients, meningitis may develop, which manifests in vomiting and headaches. A common complication among adults is orchitis; more rare complications are an infection in the joints, thyroid, kidney, cardiac muscle, pancreas and ovary, deafness and other complications in the nervous system. Manifestation of the disease in a pregnant woman in the first trimester causes an increased rate of spontaneous miscarriage. The disease is more severe among adults and the rare mortality from the disease is mainly among this group. The vaccine against the disease is very effective. 80% of persons vaccinated with a single dosage are protected, and 90% are protected after receiving 2 doses.

34.Rubella may, in certain cases, cause complications such as encephalitis, which is more common in adults, and hemorrhaging due to a decline in the number of platelets, a phenomenon common mainly in children. Among women in the first months of pregnancy, rubella may harm the developing fetus and cause the death of the fetus or severe birth defects, which include eye defects that cause blindness, heart defects, deafness, defects in the nervous system which cause behavior disorders, and mental disability.

35.Chicken pox manifests in a high fever accompanied by a rash with blisters. Complications of the disease are pneumonia and encephalitis, a severe bacterial infection of the skin, a decline in the number of platelets and in rare cases hemorrhaging, kidney dysfunction, and even death. The disease is more severe among adolescents and adults, and is especially serious among persons with suppressed immunity who cannot receive the vaccine. Cases of death from chicken pox have been described among children treated with corticosteroids, which are frequently given as a treatment for other diseases (such as asthma). Contracting chicken pox in the first twenty weeks of pregnancy may cause birth defects in the eyes, limbs, skin and nervous system. Contracting the disease shortly after birth is especially dangerous for a newborn. Patients who have recovered carry the “varicella-zoster” virus in a dormant state in their body. This virus may, years later, or when the immune system is weakened, cause an outbreak of a disease called “herpes zoster.” This disease causes severe local pain which may last for a long time. The vaccine results in the development of protection in 85% of the persons vaccinated at the age of one year. The vaccine protects against a serious disease with complications, and giving two doses leads to a very high protection of 97%, to a point where it is impossible to identify chicken pox.

36.With respect to the MMRV vaccine, the vaccination coverage in Israel among the general population was on average 90% between the years 2006 and 2009. It should be noted that according to what we have been told, the position of professionals is that to achieve “herd immunity” with the MMRV vaccine, the vaccination coverage required in the population is approximately 95%.

Now that the factual foundation has been laid, the legal aspect shall be built upon it.

Examination of the Constitutionality of the Amendment to the National Insurance Law

37.We should first reiterate what is known: that the Court will not be quick to intervene and repeal statutory provisions enacted by parliament. In this regard, the court must exercise judicial restraint, caution and reserve:

“Indeed, striking down a law or part of it is a serious matter, not to be taken lightly by a judge. Striking down secondary legislation for conflicting with a statute is not the same as striking down primary legislation for conflicting with a basic law. By striking down secondary legislation, the judge gives expression to the desire of the legislator. By striking down primary legislation, the judge frustrates the desire of the legislator. The justification is that the legislator is subject to supra-statutory constitutional provisions, which he himself set. (See A. Barak “Judicial Review of the Constitutionality of a Statute”, Law and Governance C 403 (5756)). Nevertheless, considerable judicial caution is required.” (LAL Case, Paragraph 9).

However, I do not accept the respondents’ position that the judicial restraint required in this case is similar to that required for constitutional review in areas of economy and finance. As is known, case law mandates that this Court exercise particular restraint in areas of economy and finance, which involve far-reaching social and economic aspects. It has been held that the authorities entrusted with the economic policy should be allowed broad leeway “as the entities in charge of determining the comprehensive policy, and bearing the public and national responsibility for the State’s economy and finance.” (Menachem Case, on p. 263; see also HCJ 8803/06 Ganei Chuga Ltd. v. The Minister of Finance, comments of Justice Procaccia (April 1, 2007); Lahav Case, Paragraph 63). In the case at bar, although the Amendment to the National Insurance Law is part of the Arrangements Law, it is not a law whose essence is budgetary or economic. Although this is a socio-public matter, this is not what was meant by the special judicial restraint mentioned. As the respondents emphasized, the purpose of the Amendment is not economic and is not monetary savings. On the contrary, the purpose of the Amendment is to ensure that no child loses his allowance, since the purpose is that all children be vaccinated. Hence, I do not believe that the said case law applies to this matter. It is, however, clear the judicial restraint and reserve required by the mere constitutional review of an act of the Knesset also apply to the case before us.

38.As is known, constitutional review is divided into three stages. At the first stage, it is necessary to examine whether the law in question violates constitutional rights enshrined in the basic laws, and in the case before us, Basic Law: Human Dignity and Liberty (hereinafter, “Basic Law”). If the answer is negative, the constitutional review ends and it should be held that the law in question is constitutional. If the answer is affirmative, it is necessary to proceed to the second stage at which we examine whether the violation satisfied the conditions set in the Limitation Clause in Section 8 of the Basic Law. In order for the law to be declared constitutional, the violation must satisfy all of the conditions set forth in the Limitation Clause. If one of the conditions is not met, it is necessary to proceed to the third stage, which is the stage of the remedy for the unlawful violation. (HCJ 2605/05 Human Rights Unit v. The Minister of Finance, Paragraph 16 of the opinion of President Beinisch (November 19, 2009); HCJ 10662/04 Hassan v. The National Insurance Institute, Paragraph 24 of the opinion of President Beinisch (February 28, 2012) (hereinafter, “Hassan Case”); Lahav Case, Paragraph 75). As held in the Hassan Case, this method of constitutional analysis will be identical both when we are concerned with civil and political rights and when we are concerned with social and economic rights. (Hassan Case, Paragraph 31 of the opinion of President Beinisch).

We shall begin, therefore, at the first stage of constitutional review and examine whether, as the petitioners claim, the Amendment to the National Insurance Law indeed violates rights enshrined in Basic Law. In this framework, we will specify three principal rights that the petitioners mentioned in their pleadings: the right to a dignified life or the right to social security, the right to autonomy, and the right to equality.

The Violated Rights: The Right to a Dignified Life

39.Nowadays, no one disputes that the human dignity enshrined in Basic Law also includes the right to a minimal dignified existence, including both the positive and negative aspects of the right. This right means that “a person will be guaranteed the minimum of material resources that will allow him to sustain himself in the society in which he lives[.]” (HCJ 366/03 Commitment to Peace and Social Justice v. The Minister of Finance [2005] IsrSC 60(3) 464, 482 (hereinafter, “CPSJ Case”)). It was held that this right is at the core and nucleus of human dignity:

“Living in starvation and without shelter, while constantly searching for handouts, is not a dignified life. A minimal dignified existence is a condition not only to preserving and protecting human dignity, but also to exercising other human rights. There is no poetry in a life of poverty and deprivation. Without minimum material conditions, a person lacks the ability to create, aspire, make his choices and realize his freedoms.” (Hassan Case, Paragraph 35 of the opinion of President Beinisch).

It was further held that the right to a dignified life is not a right derived from the right to human dignity, but a right that constitutes a tangible manifestation of human dignity. (Hassan Case, Paragraph 36 of the opinion of President Beinisch; CPSJ Case, on p. 479).

40.The right to a dignified life is protected by the State using a variety of measures, systems and arrangements, and there is no doubt that the welfare legislation and allowances of the National Insurance Institute constitute a considerable and significant part of the realization of this right. The child allowances also constitute an additional tool to realize the right, since families living in poverty due to, inter alia, the expenses of raising children, can gain much assistance from these allowances and rise above the threshold that enables a dignified life. It should indeed be kept in mind that child allowances are universal allowances given according to the make-up of the family, and are not dependent on the family income. Therefore, the object of realizing a dignified life will not always be relevant to these allowances, compared to income assurance, for example, which is an allowance whose main purpose is to create a lasting safety net for families that need it. (Hassan Case, Paragraph 44 of the opinion of President Beinisch). However, there might be cases in which families on the edge of the last safety net will fall below it if they are denied the child allowance. The assumption is that “the gamut of the welfare arrangements granted in Israel provide the ‘basket’ required for a minimal dignified life.” (Hassan Case, Paragraph 46 of the opinion of President Beinisch).

41.Despite the aforesaid, I believe that in the case at bar, the petitioners have not presented a sufficient factual foundation to prove the existence of a violation of the right to a dignified life resulting from the Amendment to the National Insurance Law. As is known, a person who claims a violation of a constitutional right bears the burden of proving such violation. (Aharon Barak, Interpretation in Law – Constitutional Interpretation 374 (Vol. 3, 1994)). The petitioners bear the burden of demonstrating that after examination of the range of services provided to the family, reduction of the child allowances will cause harm to the dignity of families whose material living conditions will fall short. At the very least, and under the lenient approach, they should have presented individual cases that indicated the alleged harm; then, the burden of proof would have shifted to the State. (See the comments of President Beinisch in the CPSJ Case, on p. 492-493; HCJ 4124/00 Yekutieli v. The Minister of Religious Affairs, Paragraph 48 of the opinion of President Beinisch (June 14, 2010) (hereinafter, “Yekutieli Case”)). In the CPSJ Case, it was held that the mere reduction, even if it is a significant reduction, in income assurance allowances, does not in itself  prove a violation of the right to a dignified life, and it is necessary to examine the gamut of services and arrangements granted as a safety net in the State of Israel. “The examination is always concrete and consequential.” (CPSJ Case, Paragraph 19 of the opinion of President Barak; see also PHR Case, on p. 334; HCJ 10541/09 Yuvalim S.D.I. Ltd. v. The Israeli Government (January 5, 2012)).

42.The above is all the more relevant to the case before us. First, the petitioners did not point to any data proving their claim regarding the violation of the right to a dignified life of families to whom the Amendment will apply. The reduction in the child allowance cannot, in and of itself, establish a foundation for proving the violation. “The right to dignity, as well as the right to a dignified life, is not the right to a monthly allowance in a certain amount.” (CPSJ Case, on p. 485).

Second, this case concerns child allowances, distinguishable from income assurance allowances. As I stated, while the central purpose of the latter is to create a safety net for the realization of the right to a dignified life, this is merely one of the purposes of the child allowance. Therefore, while there are grounds to assume that denying income assurance allowance for reasons other than the existence of different sources of income violates, under the appropriate circumstances, the right to a dignified human existence of the person whose allowance was denied (see Hassan Case, Paragraph 46 of the opinion of President Beinisch), it is difficult to make a similar assumption with respect to the denial of the child allowances, and certainly with respect to their reduction. The case of child allowances therefore requires even more data-based proof of the violation of the right to a dignified life.

Third, and perhaps most important, most of the reduction in the child allowances for families who do not vaccinate their children is made after an increase of a similar amount of the child allowance, as it was prior to the Amendment. The Amendment increased the child allowance for the second, third and fourth child by NIS 100 per month for each child. At the same time, the reduction due to non-vaccination is NIS 100 per month for each child. It should be emphasized that for a family with more than three children the reduction is capped by the Amendment at NIS 300 per month, such that the reduction will be paralleled by a NIS 300 per month increase of the child allowances for that family (for the second, third and fourth children). The increase was also taken into account for families with two or three children, because for these families the maximum reduction will be NIS 100 and NIS 200 per month, respectively, equal to the increase in the child allowances that these families will receive. The only difficulty pertains to a family with a single child. In such a family, a reduction may be made in the sum of NIS 100 per month if the child is not vaccinated with the MMRV vaccine without such family receiving an increase in the child allowance to which the family is entitled. However, even with respect to such a family, it cannot be said that a violation of the right to a dignified life has been proven. As said above, data showing such a violation for a family of this type was not presented. In the absence of data, it may also be assumed that families with one child are less at risk of deprivation compared to large families. (See data thereon in the article of Yoram Margalioth “Child Allowances”, the Berenson Book on 733, 747-748 (5760)). Finally, weight should be given to the fact that even for such a family, the child allowance to which the family is entitled is merely reduced and not fully denied. In any event, “a deduction from a person’s income . . . is not the same as not granting a benefit.” (Betzedek Case, on p. 409). Where the main reduction is made following an increase of a similar amount in the allowance, it should be deemed as not granting a benefit, not as a deduction from a person’s income.

The conclusion is therefore that the Amendment does not violate the right to a dignified life.

43.I should note that insofar as the petitioners claim a violation of the right to social security, as distinguished from the right to a minimal dignified existence, they did not provide any support for its existence as a constitutional right, and made no argument as to the content of such right as distinguished from the right to a minimal dignified existence. This Court has not yet discussed the status and scope of the right to social security in Israeli law. (See HCJ 5578/02 Manor v. The Minister of Finance [2004] IsrSC 59(1) 729, 737 (hereinafter, the “Manor Case”); PHR Case, on p. 333). The petitioners did not expand on this issue, and it appears that some of them did not specify the differences between the two rights at all. Hence, I saw no room to discuss the issue of violation of this right separately. This is also the case with respect to the claim of violation of the property right. The question of whether the constitutional right to property applies to child allowances has not yet been decided in the judgments of this Court. (See the comments of Justices (formerly) Grunis and Rivlin in the Manor Case). The petitioners in HCJ 7245/10 raise this claim in a laconic and unsubstantiated manner, and I therefore also did not expand on this claim. In addition, I should note that the contractual assertion raised by the petitioners should be dismissed. No link is required between the insurance contributions collected by the National Insurance Institute and the allowances paid to entitled persons in respect of the various grounds for entitlement. (Lahav Case, Paragraph 57). Therefore, no harm is caused to the expectation of parents who pay national insurance contributions and whose child allowance will be reduced as a result of not vaccinating their children and a fortiori when the reduction in the child allowances almost fully corresponds to the increase in the amount of the allowance by the Amendment.

The Violated Rights – The Right to Autonomy and Parental Autonomy

44.The petitioners in HCJ 908/11 raised, at the center of their arguments, the violation of the right to autonomy, the right to parental autonomy and the right to parenthood. “One of the most important basic values is the value of the individual’s freedom of will” (Aharon Barak, Interpretation in Law – General Theory of Interpretation, 301 (vol. 1, Ed. 3, 1998)). This value of autonomy constitutes part of human dignity and is constitutionally protected by the Basic Law (HCJ 4330/93 Ganam v. The Israel Bar Association [1996] IsrSC 50(4) 221, 231 (hereinafter, the “Ganam Case”)). The meaning of the right to autonomy is the right of every individual to decide on his actions and wishes, according to his choices, and to act according to such choices:

 A person’s right to shape his or her life and fate encompasses all the central aspects of his or her life: place of residence, occupation, the people with whom he or she lives, and the content of his or her beliefs. It is a central existential component of the life of every individual in society. It expresses recognition of the value of every individual as a world unto him or herself. It is essential for the self-determination of every individual, in the sense that the entirety of an individual’s choices constitutes his or her personality and life.

(CA 2781/93 Ali Daka v. Haifa “Carmel” Hospital [1999] IsrSC 53(4) 526, 570 (hereinafter, the “Ali Daka Case”). The right to autonomy is a framework right from which many other rights are derived. (See Ganam Case; HCJ 7357/95 Barki Feta Humphries (Israel) Ltd. v. State of Israel [1996] 50(2) 769; see also Ali Daka Case, on p. 572). The importance of the right to autonomy was recognized especially in the context of giving or avoiding medical treatment, and it gives rise to a separate cause of action which entitles the claimant to damages. (Ali Daka Case).

45.One of the aspects of the right to autonomy is the right to parental autonomy. Parents are the natural guardians of their children. (Section 14 of the Legal Capacity and Guardianship Law, 5722-1962 (hereinafter, the “Legal Capacity Law”)). As such, they have the “obligation and the right to care for the needs of the minor, including his education, studies, training for work, occupation, and employment, as well as preserving, managing and developing his assets; also attached to this right is the permission to have custody of the minor and authority to represent him and to determine his place of residence.” (Section 15 of the Legal Capacity Law). The parents are obligated to ensure the “best interests of the minor [in the way that] devoted parents would act under the circumstances.” (Section 17 of the Legal Capacity Law). This Court’s rulings have recognized a very broad autonomy of parents in raising their children. Several reasons are presented as underlying this recognition. First, this recognition derives from the natural connection between a child and his parents. Second, it is commonly assumed that the parents, who are in charge of the family unit and know it from every aspect, will make the best decisions for the children. The supplementary assumption is that outsiders will not always be able to make the best decisions for the minor because the decisions often entail emotional aspects. Third, often these are issues on which there is no social consensus. Finally, the fact that the parents are those who will need to cope with the practical repercussions of the decision is taken into account. (LCA 5587/97 The Attorney General v. John Doe – Minor, PDI [1997] IsrSC 51(4) 830, 860 (1997)). However, it should be emphasized that the autonomy of parents vis-à-vis their children is not absolute and is limited by the principles of the child’s best interests and his rights.

46.Nevertheless, I do not believe that any harm to autonomy or parental autonomy will be recognized as constitutional harm which requires compliance with the terms and conditions of the limitation clause. Obviously, the closer the harm is to the core of the right, the greater the inclination to recognize it as constitutional violation. (See the comments of Deputy President Rivlin in CA 8126/07 The Estate of the Late Bruria Tzvi v. Bikur Holim Hospital (January 3, 2010)). “Overexpansion of the extent of the constitutional right should be avoided. Sweeping expansion of the limits of the constitutional right at the first stage, and “automatically” proceeding to the tests of the limitation clause in any case in which it is argued that legislation violates that right, may lead, in the overall balance, to an erosion of the protection granted by the basic laws.” (Hassan Case, comments of Justice U. Vogelman). It appears to me that two parameters may be examined to determine whether or not the violation will be recognized as a constitutional violation of the right to autonomy. First, the essence of the choice denied the individual should be examined. The more the harm to autonomy pertains to aspects concerning personal expression and self-realization of the person, the greater the inclination to deem it as a violation of a constitutional right. Denying a citizen of the State the possibility to marry the love of his life is not the same as denying another the option to choose the type of facilities that will be installed in the public park next to his home. A second parameter that should be examined in my opinion is the extent of coercion and denial of will. A prohibition that entails a criminal sanction is different from the denial of a minor financial benefit.

47.In the case at bar, I am not convinced that a violation of the constitutional right to autonomy or to parental autonomy has occurred. Even if I assume that the first parameter regarding the essence of the choice denied is met, the second parameter regarding the extent of the coercion is not fulfilled. The Amendment does not create an obligation to vaccinate children, nor does it impose a criminal sanction on non-vaccination. The monetary reduction that accompanies non-vaccination of children is not high and can range between NIS 100 and NIS 300 per month at most. Even if I do not disregard the fact that for some families this amount is significant, as mentioned above, it is, for the most part, a reduction of the same amount that was added to the child allowances in the Amendment to the National Insurance Law. Hence, I do not believe that the reduction in the Amendment may be deemed to violate the right to autonomy in its constitutional sense.

The Violated Rights: The Right of Equality

48.Much has already been said in the rulings of this Court on the right of equality, its status and importance, and it has been widely extolled:

The principle of equality is one of the building blocks of the law and constitutes the backbone and ‘life-blood’ of our entire constitutional regime. (Justice Landau in HCJ 98/69 Bergman v. The Minister of Finance [1969] IsrSC 23(1) 693, 698; HCJ 4805/07 Israel Religious Action Center of the Israel Movement for Progressive Judaism v. The Ministry of Education, Section 70 of the opinion of Justice A. Procaccia (July 27, 2008) (hereinafter, “IRAC Case”); HCJ 11956/05 Bashara v. The Minister of Construction and Housing (December 13, 2006)). The right of equality was recognized in our legal system in the early days of the State, when it received a place of honor in the Proclamation of Independence, and it was further established in various laws that were enacted by the Knesset over the years, and in the case law of this Court, which deemed it a ‘regal right’ and a principle which is ‘high above the other principles’.” (HCJ 2671/98 The Israel Women’s Network v. The Minister of Labor and Social Welfare [1998] 52(3) 630, 650; HCJ 2911/05 Elchanati v. The Minister of Finance, Section 17 of the opinion of Justice E. Hayut (June 15, 2008)); APA 4515/08 State of Israel v. Neeman, Paragraph 17 of my opinion (October 6, 2009) (hereinafter, “Neeman Case”)).

And elsewhere I stated:

            “It appears that no one disputes that equality is the keystone of a democratic regime and a central aspect of the relations between the individual and the State. No society can be maintained in a democratic state without equality, which is one of the derivatives of justice and fairness. Equality is a synonym for justice and fairness, as it appears to members of society in a certain period. Equality leads to justice, equality whose path is fairness. (See HCJ 7111/95 Federation of Local Authorities in Israel v. The Knesset [1996] IsrSC 50(3) 485, 502)” (HCJ 6298/07 Rasler v. The Israeli Knesset, Paragraph 18 of my opinion (February 21, 2012)).

The importance of the right of equality has been recognized and emphasized numerous times with respect to the distribution of budgets or resources of the State. “The resources of the State, whether land or money, as well as other resources, belong to all citizens, and all citizens are entitled to benefit from them according to the principle of equality, without discrimination on the basis of religion, race, sex or any other prohibited consideration.” (HCJ 1113/99 Adalah – The Legal Center for Arab Minority Rights in Israel v. The Minister for Religious Affairs [2000] IsrSC 54(2) 164, 170).

49.The right of equality, which creates the duty not to discriminate, does not mean equal treatment for everyone. It is a complex right which results from the fact that the common concept of equality seeks to give equal treatment for equals and unequal treatment for unequals. Equality does not require things to be identical. (HCJ 6427/02 The Movement for Quality Government in Israel v. The Knesset [2006] IsrSC 61 (1) 619, 677 (hereinafter, the “MQG Case”). Not every difference between people justifies distinguishing between them, but only a difference that is relevant to the matter in question. (HCJ 200/83 Veted v. The Minister of Finance [1984] IsrSC 38(3) 113, 119 (hereinafter, the “Veted Case”)). “The difference between wrongful discrimination and a permitted distinction depends, as is known, on whether a relevant difference exists between the groups that received different treatment from the authority.” (HCJ 6758/01 Lifshitz v. The Minister of Defense [2005] IsrSC 59(5) 258, 269; Yekutiel Case, Paragraph 35, 37 of the opinion of President Beinisch). In order to determine that the right of equality has been violated, it is necessary to examine who is the group of equals for the purpose of the matter at hand. The group of equals will be decided according to the purpose of the examined norm and the nature of the matter and the circumstances, as well as in accordance with common social conceptions. (HCJ 8300/02 Nasser v. The Israeli Government, Paragraph 37 (May 22, 2012) (hereinafter, the “Nasser Case”; Neeman Case, Paragraph 18 of my judgment; MQG Case, on p. 677; HCJ 1213/10 Nir v. The Speaker of the Knesset, Paragraph 14 of the opinion of President Beinisch (February 23, 2012) (hereinafter, the “Nir Case”; HCJ 4906/98 “Free Nation” for Freedom of Religion, Conscience, Education & Culture v. The Ministry of Construction and Housing [2000] IsrSC 54(2) 503, 513); Veted Case, on p. 119, 122; Yekutieli Case, Paragraph 36 of the opinion of President Beinisch).

In the case before us, it appears to me that it is possible to say that the right of equality   has been violated. As described above, child allowances are universal allowances that are granted to every family according to its composition. Their purpose is to assist in financing the expenses of raising children, and to prevent the family in general and the children in particular from becoming impoverished. Therefore, adding a condition to the receipt of the allowance that is dependent on the vaccination of the family’s children is foreign both to the structure of the allowance and to its purposes. Indeed, the child allowance serves the best interests and welfare of the children, and the assumption is that vaccinating the children is also in their best interests and protects their health. It is still a stretch to say that the condition is naturally integrated with this allowance. The main and natural condition to receiving the allowance is the number of children. Additions and conditions beyond that (apart from conditions such as residency, and without going into the issue of conditioning the allowances on income) would be foreign to the allowance, and therefore violate the right of equality. The fact that the allowances are intended for the best interests of the children also has repercussions for the determination that the right to equality has been violated. In fact, children whose parents decide not to vaccinate them are harmed twice, both by their non-vaccination and by the decision to reduce the allowances intended for their benefit. The equality group, therefore, is all parents who are insured pursuant to the National Insurance Law.

50.The petitioners argue that in principle, the national insurance allowances, the main purpose of which is social-welfare, should not be made contingent upon conditions intended to regulate behavior and achieve other social objectives that do not have a direct and close connection to the allowance granted. They emphasized that the allowances are not a prize for proper behavior. They also raise an understandable concern about the expansion of the conditions to the point of absurdity. Will it be possible to condition the granting of child allowances on the parents not smoking? On maintaining proper nutrition? On installing bars on home windows? Where will the line be drawn between behavior that ought to be encouraged through the conditioning of child allowance and that for which conditioning will not be the correct and constitutional tool? (See the comments of Members of the Knesset at the Finance Committee’s discussion on June 24, 2009).

51.“The main purpose of social insurance is to realize the State’s obligation to ensure a minimum standard of living for all of its residents, so that no person falls below the threshold of a dignified life. Social insurance, and the statutory frameworks intended to realize it, are an important component in realizing the idea of a society based on foundations of justice, equality and social care for the needy.” (Lahav Case, Paragraph 44; Johnny Gal

52.However, our work does not end here. Since we are concerned with primary legislation of the Knesset, it is necessary to examine the issue and ask whether the violation of equality in this case is a violation in the constitutional sense, i.e. whether it amounts to a violation of the right to human dignity enshrined in the Basic Law. “The Knesset has broad discretion in the task of legislation, and there are situations in which broader protection may be afforded against a violation of equality caused by an administrative authority than to one inflicted by the legislator.” (Nasser Case, Paragraph 43). In the MQG Case, an interim model was adopted for interpretation of the term human dignity in the Basic Law:

The interim model does not limit human dignity merely to humiliation and contempt, but it also does not expand it to all human rights. According to this model, human dignity includes those aspects of human dignity which find, in various constitutions, manifestation in special human rights, and are characterized by having, according to our perception, a pertinent and close connection to human dignity (whether at its core or in its margins). According to this approach, human dignity may also include discrimination that is not humiliating, provided that it is closely related to human dignity as expressing the individual’s autonomy of will, freedom of choice and freedom of action, and other such aspects of human dignity as a constitutional right.

(MQG Case, on p. 687). Not every violation of equality, therefore, amounts to a constitutional violation. In order to prove a violation of the constitutional equality, it is necessary to demonstrate that the violation of equality has a pertinent and close connection to human dignity (whether at its core or in its margins). (See also Nir Case, Paragraph 11 of the opinion of President Beinisch; HCJ 9722/04 Polgat Jeans Ltd. v. The Israeli Government (December 7, 2006); HCJ 8487/03 IDF Disabled Veterans Organization v. The Minister of Defense [2006] IsrSC 62(1) 296, Paragraph 23; Nasser Case, Paragraph 44; Lahav Case, Paragraph 76).

53.It appears that the discrimination in this case violates the constitutional right of equality as part of human dignity. The fact that a small group of residents is excluded from the group of all residents with children because of its choice not to vaccinate its children violates the human dignity of this group. The gap created between the two groups creates a sense of discrimination of the latter group, and has a close connection to human dignity. (See, similarly, Lahav Case, Paragraph 92). The violation is comprised of both the lack of respect for the belief or choice of this group not to vaccinate its children for various reasons, and the sense that other parents, whose actions may harm the best interests of their children or the best interests of the public in other ways, continue to receive full child allowances. The sense is that the legislator focused specifically on this group and on this social objective, which is the only one for which a condition is imposed on the child allowances, harming the dignity of the chosen group. (See Nasser Case). The consequence that this reduction has on the distinction between groups of children also contributes to the conclusion that the right of equality has been constitutionally violated.

However, it appears that there is no need to rule on this issue, in light of my conclusion that the above violation satisfies the requirements of the limitation clause. I will proceed, therefore, to examine the violation through the lens of the limitation clause in Basic Law.: Human Dignity and Liberty.

 

The Limitation Clause

54.It is well known that the right of equality, like other rights, is not an absolute right, and as such it requires a balancing with other rights and interests relevant to the issue in question. This balance is formed in the limitation clause set forth in Section 8 of Basic Law: Human Dignity and Liberty:

There shall be no violation of rights under this Basic Law except by a law befitting the values of the State of Israel, enacted for a proper purpose, and to an extent no greater than is required or by regulation enacted by virtue of express authorization in such law.

President Barak stated the importance of the limitation clause in the MQG Case:

This provision plays a central role in our constitutional structure. It is the foothold on which the constitutional balance between the individual and the general public, between the individual and society, rests. It reflects the concept d. (See D. Hodgson, Individual Duty Within a Human Rights Discourse (2003)). It reflects the concept that the human rights set forth in Basic Law: Human Dignity and Liberty are not absolute but rather relative. They are not protected to their full scope. The limitation clause emphasizes the concept that the individual lives within the confines of society, and that the existence of society, its needs and tradition, may justify a violation of human rights. (See re. United Mizrahi Bank Case, p. 433; re. Investment Managers Bureau Case, p. 384; APA 4436/02 Ninety Balls – Restaurant, Members Club v. The City of Haifa, PDI IsrSC 58(3) 782, 803 (hereinafter, “re. Ninety Balls Case”) (re. MQG Case, on p. 691-692).

55.The limitation clause contains four conditions, only upon the cumulative fulfillment of which will the non-constitutionality of the prejudicial law be prevented. The first condition is that the violation of the human right was made in or by a law or by virtue of explicit authorization therein. The second condition is that the prejudicial law befits the values of the State of Israel. The third condition is that the prejudicial law is intended for a proper purpose. The fourth condition is that the law violates the right to an extent no greater than is required.

56.There is no dispute that the first condition is satisfied. In addition, the petitioners did not raise claims with respect to the satisfaction of the second condition. Therefore, all that remains is to examine the existence of a proper purpose and the proportionality test.

57.“The purpose of a law that violates human rights is proper if it is intended to achieve social objectives that are consistent with the values of the State in general, and exhibit sensitivity to the place of human rights in the overall social fabric.” (MQG Case, on p. 697). It was further held that the more important the right violated, and the greater the harm, the stronger the public interest needed to justify the violation. (MQG Case, on p. 698-700; Yekutieli Case, Paragraph 44 of the opinion of President Beinisch; Nir Case, Paragraph 19 of the opinion of President Beinisch; Hassan Case, Paragraph 55 of the opinion of President Beinisch). Part of the petitioners’ claims regarding the satisfaction of the proper purpose condition focuses on the violation alone and not on its purpose. In addition, the petitioners argue that the purpose of increasing the vaccination rate is extraneous to the purpose of the allowances and may create a dangerous precedent of reducing allowances on various grounds. As I stated above, I do not believe that every conditioning of allowances is prohibited, and the fear of a slippery slope is a matter for the proportionality test. It appears to me that the purpose of increasing the rate of vaccination among children is a proper purpose which promotes an important social objective of caring for public health in general and children’s health in particular. The purpose underlying the Amendment does not focus only on children that have not yet been vaccinated, but also on additional populations that may be harmed as a result of non-vaccination of such children, including newborn infants whose time to be vaccinated has yet to arrive, populations who are unable to be vaccinated for various medical reasons, a certain percentage of the population whom the vaccination does not protect, despite being vaccinated, etc. As stated above, the diseases against which the vaccines protect might cause serious complications that compromise a person’s health and in rare cases might even cause his death. In this sense, the purpose of the Amendment has a close connection to the right to health and life. Therefore, even if we say that the Amendment seriously violates an important right, the purpose of the Amendment is sufficiently strong and important to justify the violation.

58.I further add that the purpose of the Amendment also expresses the principle of mutual guarantee. A separate question is whether encouraging vaccination could be deemed as a proper purpose if we were concerned only with the best interests of the children who have not yet been vaccinated. However, the purpose does not concern only the best interests of the children who have not been vaccinated or whose parents do not intend to vaccinate them, but the best interests of a broader population, as described above. The non-vaccination of such children may have an effect not only on their health and life, but on the health and life of a broader population. The principle of mutual guarantee, alongside the said purposes, justifies deeming the purpose of the Amendment as a proper purpose. It should be noted that this principle is not extraneous to the National Insurance Law, but rather, as I already mentioned, underlies it, albeit in a different context.

The conclusion is therefore that the proper purpose condition is satisfied. All that remains is to examine is whether the violation meets the proportionality test of the limitation clause.

59.The determination that the purpose of the violating law is proper does not mean that all of the measures taken to achieve it are legitimate. The end does not always justify the means. (Yekutieli Case, Paragraph 47 of the opinion of President Beinisch). The proportionality test was created for this situation. The test is divided into three subtests, all three of which must be satisfied in order to hold that the violation is proportionate. The first subtest is the “compatibility test” or the “rational connection test”. In accordance with this test, a connection of compatibility is required between the end and the means. The second subtest is the less harmful means test. According to this test, the legislator is required to choose a measure which achieves the legislative purpose and which least violates the human right. The third subtest is the proportionality test in the narrow sense. It examines the proper relation between the benefit derived from achievement of the proper purpose and the scope of the violation of the constitutional right.

60.It appears to me that the Amendment satisfies the rational connection test. It should be noted that several means might achieve the end. In addition, there is no need to prove that the means will definitely achieve the end, and a reasonable degree of probability of achieving the end is sufficient. (MQG Case, on p. 706; Hassan Case, Paragraph 59 of the opinion of President Beinisch). It should further be emphasized that there is no requirement that the means chosen achieve the end in full, and partial achievement, not minor or negligible, of the purpose following the use of the means chosen is sufficient. (Nir Case, Paragraph 23 of the opinion of President Beinisch; Hassan Case, Paragraph 59 of the opinion of President Beinisch). Indeed, it is impossible to know for certain whether the Amendment will achieve its objective and whether the percentage of vaccinated persons will rise significantly and create “herd immunity”, or at the very least create a broader protection for the public. However, it is possible to say that there is a sufficiently high probability that such objective will be achieved. The respondents presented data regarding the success of similar programs in countries worldwide and about the support of the World Bank for such programs. (See also Gal, on p. 256-257; report of the Knesset Research and Information Center of June 23, 2009 regarding increasing and conditioning the child allowances). In addition, data was presented regarding a similar program implemented in Israel that made the receipt of maternity allowance contingent upon delivery in a hospital in order to reduce the phenomenon of home births. The respondents report that following this legislation, the number of home births in Israel decreased significantly. Past experience therefore indicates a substantial probability of achieving the objective with this measure. It should also be added that the assumption is that some parents who do not vaccinate their children are not acting based on ideological reasons, and that there is a “free rider problem” whereby parents are in no hurry to vaccinate their children and rely on the vaccination of the entire public to protect their children against outbreaks of diseases. The respondents also indicated the difficulty of late vaccination of children, which the Amendment might solve by incentivizing parents to vaccinate their infants on time. Finally, I note that after the Amendment is implemented and real data collected regarding its repercussions, it will be possible to reexamine the reality created, and it might transpire that this reality does not meet the rational connection test or another proportionality test. (See HCJ 9333/03 Kaniel v. The Israeli Government [2005] IsrSC 60(1) 277, 293).

61.The Amendment, in my mind, the second subtest, the less harmful means test. It should be kept in mind for the implementation of this test that the court does not put itself in the shoes of the legislator, and that it will intervene only when it is convinced that the expected purpose may be achieved through the use of less harmful means –

When examining the severity of the violation and whether there is a less harmful means through which it is possible to achieve the purpose of the legislation, the court does not put itself in the shoes of the legislator. The assumption underlying the test of need is that there is maneuvering space in which there may be several methods for achieving the objective of the legislation, from which the legislator can choose one method. So long as the chosen method is within this maneuvering space, the court will not intervene in the legislator’s decision. The court will be prepared to intervene in the method chosen by the legislator only where it is possible to demonstrate that the harm is not minimal, and that the purpose of the legislation may be achieved through the use of less harmful means.”

(Yekutieli Case, Paragraph 45 of the opinion of President Beinisch). Indeed, there is a range of means for achieving the purpose of encouraging vaccination. Some of these means are more harmful than the means adopted by the legislature, and therefore are irrelevant for the purpose of the test in question. This is the case with respect to criminal sanctions on anyone who fails to vaccinate his children, as proposed by some of the petitioners, and for denying school attendance for those who cannot provide confirmation of vaccination, as is done in the United States. (James G. Hodge & Lawrence O. Gostin, “School Vaccination Requirements: Historical, Social and Legal Perspectives” 90 Ky. L.J. 831 (2001-2002)). It should further be emphasized that the economic sanction used in the Amendment is very similar to the denial of a benefit, since in the majority of cases, the reduction that will be made in the child allowance of parents who have not vaccinated their children is equal to the increase in the child allowances in the same Amendment. The petitioners refer to additional means that concern informational activities and increasing accessibility to Family Health Centers. With respect to informational activities, this is certainly an appropriate means, but it is included and precedes implementation of the Amendment itself. The respondents stated that a campaign is planned for informing the population about the law, in which the importance of vaccination will also be emphasized. Obviously, the sanction of reduction of child allowances will not be used against those who are convinced by the informational activity and vaccinate their children. Therefore, the informational means is also incorporated into the means chosen. The concern, of course, is that the informational means are insufficient in view of the vaccination “market failure,” whereby, as aforesaid, a child who is not vaccinated may be protected against the outbreak of diseases due to the vaccination of the population around him, but this failure may cause the non-vaccination of a certain population, which will cause the outbreak of an epidemic therein.

62.Regarding the accessibility of the Family Health Centers, this difficulty pertains to the Bedouin population in the Negev, and mainly to the population of the unrecognized villages in the Negev. Due to this difficulty, which the respondents recognize, the implementation of the Amendment was postponed in order to make arrangements and increase the accessibility of Family Health Centers to this population. However, the steps specified in the respondents’ response are satisfactory with respect to the level of accessibility achieved and the efforts being made to further increase it. The respondents report that there are currently forty-five Family Health Centers spread throughout the southern district, twenty-five of which service the Bedouin community: thirteen centers in permanent settlements, eight portable centers for the Bedouin villages, and centers in the Jewish settlements which also service the Bedouin population. There is also a special mobile family health unit to provide vaccinations for the Bedouin population. This mobile unit travels every day through a different location in the unrecognized villages and is intended to vaccinate children of families who have not visited Family Health Centers. The unit is operated five times a week between 8:00 and 16:00. Three centers in Bedouin settlements which were closed have been reopened and a petition filed on the matter was dismissed with consent. (HCJ 10054/09). The respondents are also working to encourage hiring of male and female nurses for Family Health Centers in the south and in the Bedouin settlements. To this end, it was decided to increase the financial incentive for such personnel, to add administrative personnel and security positions for the centers, and to add positions to make the services accessible to the population that finds it difficult to come to the centers. In June 2011, an incentive plan was formed for the personnel of the Family Health Centers in the Bedouin sector in the south of Israel, including payment of an encouragement bonus, payment of a persistence bonus, reimbursement for rent in certain cases, consideration for travel time to and from work, increased overtime pay, and provision of a mobile telephone to nurses. The respondents further state that mediators are brought in to make the services culturally accessible, and their role includes providing information about the importance of early registration with a Family Health Center. A special program financed by the Ministry of Health was established at Ben-Gurion University to train nurses from the Bedouin sector. The program’s students undertake to work in the Bedouin sector upon completion of their studies.

The current data regarding vaccination of the Bedouin population in the Negev with the MMRV vaccine should also be taken into account. According to the data, the vaccination rate for this vaccine in the Bedouin population is higher than in the Jewish sector, the rate in the unrecognized villages is 90%, and in the permanent settlements 93.5%.

It therefore appears that the less harmful means for achieving the purpose of encouraging vaccination have been exhausted, and the next step on the ladder for achieving the purpose may be at the economic level, as was done in the Amendment. The second subtest is therefore also satisfied.

63.The last question that we must ask is whether we ought to go one step further on the ladder, after previous steps have not yet achieved the desired objective. This is an ideological question, which is based on principles of balance and examines the relationship between the benefit in achieving the proper purpose and the damage that will be caused by the violation of human rights. (See MQG Case, on p. 707; Hassan Case, Paragraph 69 of the opinion of President Beinisch). In my opinion, the Amendment also satisfies this test. We should not disregard the harm that will be caused to parents who do not wish to vaccinate their children, who will be discriminated against compared to the group of child allowance recipients and will either need to be satisfied with a reduced allowance or act against their will and vaccinate their children. There is also difficulty in the distinction that may be created between strong groups in the population which can allow themselves to waive part of the child allowance in order to realize their desire not to vaccinate their children and weak groups which will be forced to choose between aggravated poverty and waiving their desire not to vaccinate their children. Conversely, consideration should be given to the fact that the violation of equality in this case is not arbitrary and is not based on any suspect distinction between different sectors. In addition, the harm was limited to reduction of the child allowance, and was also limited to a maximum amount that can be reduced. Further arrangements in the Amendment, including a right of appeal, prior notice, and increasing the allowances after vaccination also support the proportionality of the violation. On the other side is the benefit, as I have already stated, that may be significant and important to the health of those children who have not yet been vaccinated, and more importantly, to the public at large. The effect of each and every individual on the public justifies a balance which harms the individual to a limited and restricted extent for the benefit of the public. It is impossible to ignore that the individual lives within society and sometimes his acts or omissions impact the society around him:

A person is not solitary individual. The person is a part of society. (HCJ 6126/94 Sanesh v. The Broadcasting Authority, on p. 833). A person’s rights are therefore his rights in an organized society; they concern the individual and his relations with others. (HCJ 5016/96 Chorev v. The Minister of Transport, on p. 41). Hence, a person’s dignity is his dignity as a part of society and not as an individual living on a desert island. (Cr.M 537/95 (hereinafter, “Cr.M Ganimat”), on p. 413; LCA 7504/95 Yassin v. The Registrar of Political Parties, on p. 64; HCJ 7015/02 Ajuri v. The Commander of the IDF Forces in the West Bank, on p. 365)” (hereinafter, the “CPSJ Case, on p. 496-497).

A balance is therefore required between the rights of the individual and the best interests of society, a balance, which in my opinion, is proportionate in the case at bar, and within the bounds of proportionality afforded to the legislator.

Conclusion

64. The constitutional examination of the Amendment to the National Insurance Law revealed that the Amendment indeed violates the right of equality enshrined in the Basic Law: Human Dignity and Liberty. However, this violation satisfies all of the terms of the limitation clause, such that a proper balance is struck with other rights and interests. Hence, the Amendment is proportionate and this Court will not intervene. I will mention that this Court does not examine what it would have done in the legislator’s shoes and what its preferences would have been in such a matter, but merely examines whether the legislator’s choice is within the boundaries of the range of proportionality available to the legislator. (See HCJ 1715/97 The Bureau of Investment Managers in Israel v. The Minister of Finance, [1997] IsrSC 51(4) 367, 386). I mentioned that most of the reduction in the child allowances will be executed simultaneously with the increase in the allowances set in the Amendment. I further noted the importance attributed to the vaccination of the children, not only for the health of the children themselves, but also for the health of the environment, society and the public. Thus, the conclusion I have reached is that the violation resulting from the Amendment satisfies the conditions of the limitation clause and therefore, the petition should be denied. I did not see fit to an order for costs.

If my opinion is heard, the petition will be denied and as aforesaid, there will be no order for costs.

 

•  

Justice D. Barak Erez

1. The petitions before us raised fundamental issues pertaining to the manner in which the State fulfills its responsibility for the health of the public in general and the welfare of children in particular. They also raised the basic issue of conditioning rights and eligibilities. In general, I concur with the comprehensive opinion of my colleague, Justice E. Arbel, and I too believe that the petition should be denied. Nevertheless, I wish to clarify my position with respect to some of the reasons that support this conclusion.

The Legal Issues

2. In fact, the discussion of the issue that has been placed before us—conditioning a part of the child allowances on the children’s vaccination within an amendment to a law—raised several secondary issues. The first question concerns the examination of the essence and legal status of the child allowances, the conditioning of which is at the center of our discussion. Specifically, the question in this context is whether the eligibility for child allowances is an “ordinary” legal right, conferred merely by a law, or whether it constitutes a manifestation of constitutional rights. Insofar as the argument is that the child allowances embody constitutional rights, it is necessary to examine what is the constitutional right they represent. This question is important because the violation of a constitutional right is not tantamount to the violation of a legal right that does not enjoy a super-statutory status. The second question revolves around the essence and purpose of the condition for granting the allowance: the requirement to vaccinate the children as infants. As part of this question, it is necessary to examine what is the purpose of the vaccination requirement is and whether there is a link between this purpose and the objective of the child allowances. The third question focuses on the legal regime that applies to the conditioning of rights. This question is related to the first question, since the conditioning of legal rights and the conditioning of constitutional rights should not be addressed in the same manner. The fourth question is whether the distinction that was made in legislation between parents who vaccinate their children and parents who do not amounts to a violation of the constitutional right of equality. The fifth question, derived from the former questions, is how the above normative scheme affects the constitutional judicial review of the amendment to the law, in accordance with the constitutional tests of the limitation clause in the Basic Law: Human Dignity and Liberty.

Child Allowances: History and Purpose

3. As we mentioned, the first question with which the discussion should begin revolves around the essence and objective of the child allowances, as were set in the National Insurance Law. (5755-1995 (hereinafter, the “National Insurance Law”). Because the basis for a discussion on constitutional review of the validity of a law is the status of the right violated, we should begin and by examining if, and to what extent, the eligibility to receive a child allowance is a right that enjoys constitutional protection.
4. My colleague, Justice Arbel, articulated the purpose of the child allowances as part of the fabric of Israel’s social legislation. To this I would like to add a review of the historic development of the arrangements in the field, a development that sheds light on the ongoing use of the child allowances as a tool for promoting of social policies.
5. In general, the child allowances were subject to many changes from the time they were first introduced in the format of legislation until the regulation thereof in our time. Generally speaking, a clear process of strengthening the universal element in granting the allowances can be pointed out. The intention is to grant child allowances to each and every family for each of its children, without taking into consideration economic data or other distinguishing criteria (distinct from past practice when they were only granted to some families or some children based on distinguishing criteria).
6. Before the establishment of the State, payment to parents for their children was made in the form of an increase to the employees’ salary. (See Johnnie Gal, Social Security in Israel, 97 and 102 (2004) (hereinafter, “Gal”)); Abraham Doron “Policy on Child Allowances in Israel” Spotlight on Social Policy Series 1, 2 (2004) (hereinafter, “Doron, the “Allowances Policy” ”)).
7. After the establishment of the State in 1950, the Kanev Committee submitted the Inter-Ministerial Report on Social Security Planning (1950), which included reference to a “children’s grants” plan (See Abraham Doron, In Defense of Universalism –The Challenges Facing Social Policy in Israel, 128-129 (1995) (on the report and its importance)). The report determined that this plan would only be implemented in the last stage of the introduction of social insurance in Israel because its performance was not economically feasible in the immediate future. Nevertheless, striving to increase the birth rate in Israel, the then prime minister, David Ben-Gurion, introduced a monetary prize to families with ten children and more. (Gal, on p. 103). Starting from the early 1950’s, proposals were made to grant allowances, and in the second half of that decade, the government began to demonstrate preparedness to consider the idea. (Meir Avizohar, Money to All – The Development of Social Security in Israel 67 (1978) (hereinafter, “Avizohar”)).

1. The first piece of legislation that dealt with child allowances was adopted in 1959 as an amendment to the National Insurance Law. (National Insurance Law (Amendment) (No. 4), 5719-1959 (hereinafter, “Amendment 4”)). The initiator of the legislation was the Minister of Labor, Mordechai Namir (hereinafter, “Namir”). In the background was a mass immigration from Middle Eastern countries that included large families whose breadwinners did not, at the time, adequately integrate into the labor market. The legislative initiative was thus derived from the social-economic gap created between the immigrant families and long established families in Israel, which were characterized by a smaller number of children on average. (Knesset Minutes 27, 2693-2642 (1959); Giora Lotan, Ten Years of National Insurance – An Idea and its Fulfillment 38 (1964)). Some argue that the Wadi Salib events in 1959 were a material catalyst to the enactment of the law (Gal, on p. 103, Avizohar, on p. 68-70) and this appears to have partial support in a discussion that was held in the Knesset (Knesset Minutes 27, 2642 (1959)). More generally, it can be said that the payment of the allowances was the first stage of a process that increased the involvement of the National Insurance Institute in reducing poverty and economic and social gaps in the population. (Ester Sharon, The Child Allowances System in Israel: 1959-1987 Where did it come from and where is it going? 3 (1987) (hereinafter, “Sharon”)).
2. The allowance payments were consistent, in principle, with the basic principles of national insurance in Israel, in the sense that they were granted on a universal basis, independent of income level. However, the allowance was initially granted only to families with at least four children, and only for children under the age of fourteen. (Michal Ophir and Tami Eliav, Child Allowances in Israel: A Historical View and International Perspective (2005) (hereinafter, “Ophir and Eliav”)). Minister Namir explained that these conditions were imposed for budgetary reasons, and that the aspiration was to lay down an infrastructure that would be expanded gradually. The deliberations on the scope of Amendment 4 were not particularly heated despite reservations on its small scope. Knesset Members supported Amendment 4 and expressed their hope that the terms of eligibility would be expanded in the future, and that it would presently succeed in encouraging births, eradicating poverty and enforcing equality among the various groups in Israeli society. (Knesset Minutes 27, 2667-2680 (1959)).
3. In 1965 the child allowances were expanded in several respects. First, the allowances were paid for all minor children, with no age distinction (that is, until the age of 18). Second, the allowance paid by the National Insurance Institute was accompanied by an employees’ children allowance that was only paid to salaried employees by their employers for their first three children, and was financed by the National Insurance Institute. Therefore, this allowance, unlike the regular child allowance, was deemed as taxable income. (See: The National Insurance Law (Amendment Number 12), 5725-1965, Statutes 461, 208; The National Insurance Regulations (Employees’ Children Allowance) (Part-Time Employees and Employment Seekers), 5725-1965 which were promulgated by virtue of Sections 31K and 115 of the National Insurance Law, 5714-1953; Gal on p. 103). In addition, in the early 1970s, an additional allowance was introduced for families with four or more children, if a family member served in the security forces (hereinafter, the “Military Veterans Allowance”). This payment was made directly from the National Insurance Institute and was exempt from tax. (Regulations on Grants to Soldiers and their Families, 5730-1970, Regulations 2605, 2180, promulgated by virtue of Section 40(B1)(2) of the Discharged Soldiers Law (Reinstatement in Employment), 5709-1949). In 1975, this payment was expanded to also apply to families with three children. (Regulations on Grants to Soldiers and their Families (Amendment), 5735-1975, Regulations 3298, 1001). Over the years, payments were also made to additional families, who did not fulfill the statutory condition of a military service; ultra-orthodox families received additional payments from the Ministry of Religion and families of new immigrants received such payments from the Jewish Agency. (Gal, on p. 104; Eliav and Ophir, on p. 5-6; Yoram Margaliot “Child Allowances” Berenson Book, Second Volume – Beni Sabra 733, 745 footnote 40 (Editors, Aharon Barak and Haim Berenson, 2000) (hereinafter, “Margaliot”)).
4. We can therefore summarize that in general, in the first half of the 1970’s, financial support was provided to relatively large families in several formats: first, universal child allowances were given by the National Insurance Institute; second, additional allowances were given in the Jewish sector to families for their children (whether Military Veterans Allowances or other allowances); third, employees’ children allowances were paid to salaried employees by their employers, and were taxed. These mechanisms were added, of course, to other welfare payments to which the families were eligible based on their individual economic condition. Additionally, families with a relatively high income enjoyed tax benefits which took the family size into consideration. However, this benefit was only enjoyed by families with a relatively high income, whose income was taxed. The incompatibility at the time between the various benefits and the understanding that families with many children constitute a more impoverished group together were a catalyst to a reform in the system. (The National Insurance Bill (Amendment Number 12), 5733-1972, Government Bill 1022, 30; The Amendment to the Income Tax Ordinance Bill (Number 18), 5733-1972; The Government Bill 1022, 31; The National Insurance Law (Amendment Number 12), 5733-1973, Statutes 695, 142; Raphael Rotter, The Reform in Child Allowances in Israel (1972); Arieh Nitzan, Twenty Years of National Insurance in Israel (1975) (hereinafter, “Nitzan”)).
5. The policy with respect to allowances underwent further turmoil following the recommendations of the Ben-Shahar Committee on the subject of the income tax reform in 1975. (Report of the Committee for Tax Reform – Recommendations for Changes to the Direct Tax, 25A-26A (1975)). Pursuant to the committee’s recommendations, the double treatment of the child allowances—within tax law and national insurance law—was discontinued, and it was decided to grant tax-free allowances on a universal basis to all families of salaried and non-salaried employees for all children in the family, starting with the first child, until they reach the age of 18. (National Insurance Law (Amendment Number 17), 5735-1975, Statutes 773, 152; Sharon, on p. 9-11).
6. The trend of expanding eligibility changed in the 1980’s to the desire to reduce public expenditure. The scope of allowances was reduced. In addition, the child allowances for the first two children, in families of up to three children with a marginal tax rate on the main breadwinner’s salary of at least 50%, were taxed. (Amendment to the Income Tax Ordinance (Number 59) Law, 5744-1984, Statutes 1107, 64; Sharon, on p. 11-12). In 1985 a tax was also imposed on the child allowance for the third child in families with up to three children and the marginal tax rate was reduced. In addition, the universal payment of the child allowance for the first child was revoked, except for low-income families. (The Arrangements Law for an Emergency in the State Economy, 5746-1985, Statutes 1159, 20; Sharon, on p. 12-13). The 1985 arrangement was supposed to remain in effect for only one year, but it “survived” (with various changes pertaining to the income test’s threshold amount) until 1993. (Ophir and Eliav, on p. 8; Sharon, on p. 12-13).
7. The pendulum swing child allowances policy continued in full force in the 1990’s. At first, the trend of reducing the universality which characterized the granting of the allowances at the end of the last decade continued, and the eligibility of small families not defined as “in need” was significantly reduced. Later, the trend was one of expansion, while strengthening universality in granting the allowances. In this decade, the following changes occurred: the conditioning of eligibility for the allowance on the family size was revoked; the Military Veterans Allowances were gradually cancelled; the allowances for large families were gradually increased. (The Arrangements Law for an Emergency in the State Economy (Amendment Number 15), 5750-1990, Statutes 1328, 188; The Arrangements in the State Economy Law (Legislative Amendments), 5751-1991, Statutes 1351, 125 (Indirect Amendment to the Arrangements Law for an Emergency in the State Economy, 5746-1985); The Income Tax Law (Temporary Order), 5753-192, Statutes 1407, 22 (Indirect Amendment to the Arrangements Law for an Emergency in the State Economy, 5746-1985); The Arrangements in the State Economy Law (Legislative Amendments for Attaining the Budget Goals), 5754-1994, Statutes 1445, 45 (Indirect Amendment to the Discharged Soldiers Law (Reinstatement in Employment), 5709-1949); Dalia Gordon and Tami Eliav “Universality v. Selectivity in the Granting of Child Allowances and Results of Performance Limitations” 50 75, 78 Social Security (1997) (hereinafter, “Gordon and Eliav”)).
8. The turmoil continued, even more forcefully, in the following decade. In 2001, the child allowance rate for large families was significantly increased—starting with the fifth child. However, shortly thereafter, a gradual cutback began in all allowances, including the child allowances, in order to reduce public expenditure. Another fundamental change that occurred in this period was equalizing the allowance given for each child in the family, irrespective of his birth order. At the same time, the attempt to reinstate the Military Veterans Allowances failed. (See Doron “The Allowances Policy”, on p. 4; Abraham Doron “Multiculturalism and the Erosion of Support for the ‘Welfare State’: The Israeli Experience” Studies on the Revival of Israel 14 55, 63-64 (2004)); Knesset Research and Information Center, Child Allowances in Israel: A Historic Review – an Update 8 (2008)).
9. The issue before us is related to an additional stage in the development of the policy on child allowances within Amendment No. 113 of the National Insurance Law, which was enacted as part of the Economic Streamlining Law. (Legislative Amendments for Implementation of the Economic Plan for 2009 and 2010), 5769-2009 (hereinafter, the “Amendment”)). As part of the Amendment, the allowances for the second, third and fourth child in the family were gradually increased by 100 shekel per month for each child, and eligibility to receive the full amount of the allowance was made contingent on the vaccination of the children.
10. This short historical review of the eligibility for child allowances reveals several important things. First and foremost, it demonstrates how eligibility for child allowances has always served as a platform for the promotion of national public objectives (for example, the encouragement of births and reduction of social gaps), which go beyond the narrower purpose of supporting the family’s finances. For example, in a discussion held in the Knesset on Amendment 4, which gave rise to the child allowances for the first time, Minister Namir stated the following:

The law was intended to achieve three goals that are social demographic and economic in nature: a) to ease the difficulties in the social condition of weak parts of society; b) to stop signs of negative trends in our demographic development c) to remove several errors and anomalies in the field of employment and distribution of wages in the factories, in relation to the employees’ family status.” (Knesset Minutes 27, 2639 (1959)).

11. The legislative history also demonstrates the fact that over the years, the child allowances expressed a different and changing welfare policy. In other words, the tool remained one, but into it were cast various objectives, or at least secondary objectives. The goal of reducing poverty among children hovered, throughout the year, over legislation concerning the child allowances indirectly and directly. However, in each of the periods reviewed, alongside the purpose of eradicating poverty stood additional purposes. In fact, even Amendment 4, which gave birth to the child allowances, was intended to provide a response, according to its legislators, to demographic data regarding births in Israel. An additional purpose at the time was bridging the social gaps created between various groups of immigrants in order to promote their integration in Israel.
12. The recurring oscillation between the expansion of eligibility for allowances for small families, and its reduction for large families, marks the tension between the perception that, in general, the State’s role is to contribute towards the cost of raising children ,together with their parents (Doron “The Allowances Policy”, on p. 2), and the perception that child allowances provide a way to fulfill other roles the State has taken upon itself, such as reducing unemployment and gaps in society and encouraging births. (Margaliot, on p. 734-754). In practice, we have learned that child allowances constituted, throughout the years, a means of realizing various social and economic goals that were placed at the top of the political agenda in each period. For our purposes, it is important to note the following information: child allowances are supposed to promote the welfare of families raising minor children. However, the child allowances are not paid in correlation with the family’s economic situation (and in this they differ from income assurance payments). (Compare: HCJ 5578/02 Manor v. The Minister of Finance [2004] IsrSC 59(1) 729 (hereinafter, “Manor Case”), in which former President A. Barak referred to the old-age pension and held that unlike the income assurance allowance, this one is not intended to guarantee a dignified minimal existence). At most, it might be said that they are provided according to the estimated needs of families raising children. (Compare: Abraham Doron, The Welfare State in an Age of Change 72 (1987)). Additionally, the purpose of promoting the economic welfare of families who are raising children is not the sole purpose of the allowances.
13. Thus, it can be determined that in view of the many aspects of eligibility for child allowances, as well as the changes it has undergone through the years, the objective of the allowances is a broad objective of striving to promote the welfare of the children in the Israeli society, as well as to promote the social policy of the government at a given time. This insight is important in continuing the discussion on the legal status of the allowance.

Child Allowances: Legal Rights or Constitutional Rights

14. Child allowances are currently given by virtue of a law—the National Insurance Law. Does the right to receive child allowances as it they are granted today constitute an exercise of a constitutional right? Like my colleague, Justice Arbel, I too believe that it was not proven before us that this is correct at this time.
15. The ruling on this issue is relevant to the continuation of the constitutional examination process, since the conditioning of the legal means for exercising the constitutional right is not tantamount to the conditioning of the constitutional right itself. Indeed, without legal means for exercising the constitutional right, the right may remain as an empty normative shell, void of content. There may certainly be situations where either the conditioning or denial of the means to fulfill the constitutional right will amount to a violation of the right itself. However, this should be examined in each and every case. This can be compared to a two-story building: on the upper floor is the constitutional right itself; on the lower floor are the means for its fulfillment. Too severe of an injury to the foundations of the lower floor, by conditioning or otherwise, will result in harm to the upper floor, the floor of the constitutional right, and undermine protection. Thus, the question is whether the petitioners have successfully shown that conditioning eligibility for child allowances amounts to a violation of a constitutional right. Additional examples that illustrate the importance and relevance of this distinction can be found in case law regarding the violation of the right of access to the courts. For example, it has been held that a person does not have a vested right to exercise the right of access to the courts through a specific procedural proceeding. Therefore, limiting the ability to file a class action does not necessarily amount to a violation of the right of access to the court. (See and compare: HCJ 2171/06 Cohen v. The Chairman of the Knesset, paragraphs 21 and 24 (August 29, 2011)).
16. Child Allowances and the Right of Dignity – Indeed, this Court’s rulings have repeatedly emphasized that the protection of the right to a dignified human existence falls within the scope of the protection of the right of human dignity enshrined in the Basic Law: Human Dignity and Liberty, and that its protection is identical to the protection given to the other basic rights. (HCJ 366/03 The Association for Commitment to Peace and Social Justice v. The Minister of Finance, [2005] IsrSC 60(3) 464, 482-484; HCJ 10662/04 Hassan v. The National Insurance Institute (February 28, 2012), paragraphs 34-36 (hereinafter, “Hassan Case”)). However, a distinction should be drawn between the constitutional right and the legislative and administrative means that are used for its fulfillment. The right to dignified human existence does not have to be fulfilled through the payment of child allowances, and in the present legal situation it is not even clear that this is the purpose for which they are paid. As a matter of policy, and in order to promote various national public objectives, the Israeli legislature has chosen to provide for the welfare of families with children, irrespective of their economic situation.
17. In legislative conditions in which the State does not provide a means of existence for weakened populations, payment of child allowances may, de facto, guarantee their dignified existence. Nevertheless, at this time, it has not been proven to us that eligibility to receive child allowances was intended to maintain a dignified human existence or that it is essential to its protection, and therefore, under these circumstances, conditioning the eligibility is not in itself conditioning of a constitutional right. Nothing in the aforesaid negates the possibility to prove that, in a specific case, or following other changes in the welfare system in Israel, cutbacks in child allowances will violate the rights of individuals to basic conditions of a dignified existence. As mentioned, this has not been argued before us and was consequently not proven. It should be added that Section 68(c) of the National Insurance Law orders an increase in the regular child allowance payment for the third and fourth child when the parent is eligible for an income assurance allowance or support payments through National Insurance, but the amendment to the law before us has no ramifications on this special increment and does not derogate therefrom.
18. Child Allowances and the Right to Property – The petitioners also argued that the eligibility for child allowances is a property right protected by the constitutional protection of property under the Basic Law: Human Dignity and Liberty, through application of such protection to “new property.” Indeed, through the years, the term “property” has been attributed a broader and more realistic understanding. Currently, rights vis-à-vis the State (the right to a license, the right to an allowance) are no less important to a person’s financial situation than classic rights of property, and their importance may even exceed that of classic property rights, as demonstrated by the scholar Reich in his classic article on the issue. (Charles Reich, New Property, 73 Yale L. J. 733 (1964)). The legal protection of new property was also recognized in the judgments of this Court. (See HCJ 4806/94 D.S.A. v. The Minister of Finance, [1998] IsrSC 52(2) 193, 200-202; HCJ 4769/95 Menachem v. The Minister of Transport [2002] IsrSC 57(1) 235, 275), which also recognized certain welfare allowances as new property (Manor Case, on p. 739). However, recognizing rights vis-à-vis the State as property cannot be identical in all characteristics to the protection of traditional rights of property. When the State wishes to expropriate a plot of land owned by a person it is a violation of property that requires constitutional justification and is required to satisfy the tests of the limitation clause. It would be improper to apply precisely the same legal regime to a situation in which the State is seeking to reduce eligibility given to a person by the State treasury. The eligibility for child allowance payments for example, expresses, inter alia, the economic and social policy in place at the time the eligibility was granted. Adopting the approach that the scope of eligibility for an allowance as it was set in the past has become a property right in its classical sense, would lead to the conclusion that the State is very limited, more than it should be, in the possibilities available to it to change its social and economic policy. (Compare: Daphne Barak Erez, Administrative Law, Volume A, 50-52 (2010) (Barak Erez, Administrative Law); Daphne Barak Erez, Citizen-Subject-Consumer – Law and Government in a Changing State 32-33 (2012) (hereinafter, “Barak Erez, Citizen-Subject-Consumer”). This perception is contrary to the democratic perception to practical needs, and to the justified recoiling from “sanctifying” the status quo (which occasionally may also reflect unjustified bias toward strong groups that acted in the past to enact laws that benefitted them). Obviously, if the eligibility for child allowances was required for the protection of dignified human existence, this would have been a good reason to impose restrictions on its reduction. In addition, rights to receive allowances from the State must be protected in that they must be granted equally and changes to them must take into consideration legitimate reliance upon them. Furthermore, there may be room for additional distinctions such as a distinction between an allowance based on an insurance mechanism or a feature of savings via mandatory payments that were made over the years (such as an old-age pension; see Manor Case, on p. 739), and an allowance that was granted in the form of a one-time grant (compare Daphne Barak Erez “The Defense of Reliance in the Administrative Law” Mishpatim 27, 17 (1996); HCJ 3734/11 Haim Dudian v. The Knesset of Israel, paragraphs 24-25, (August 15, 2012)). In any event, the argument that “what was will be”, in itself, cannot be sufficient.
19. To emphasize further, holding that there is no constitutional right to receive support from the State in the form of child allowances, does not mean that this eligibility is not significant. Moreover, once the State has chosen to pay child allowances under law, it is required to do so in a manner that complies with constitutional standards and in this context to ensure, among other things, that payment of the allowances will be made equally and indiscriminately (as distinct of course, from the setting of legitimate conditions to the receipt of the allowances), as will be explained below.
20. As Justice Arbel mentioned, the argument regarding violation of rights was also raised before us with a special emphasis on an alleged violation of the rights of the children for which the allowances are to be paid, separately from their parents’ rights. This argument is supported by the current perception that recognizes children’s rights and does not merely support a paternalistic protection of their interests. (Compare: CA 2266/93 John Doe, Minor v. John Doe [1995] IsrSC 49(1) 221, 251-255; Yehiel S. Kaplan “The Child’s Rights in Israeli Case Law – The Beginning of the Transition from Paternalism to Autonomy” Hamishpat 7 303 (2002)). This development is indeed very significant. Nonetheless, under the circumstances of this case, it cannot change the framework of the discussion. First, it is important to note that the distinction between the rights of children and protecting their best interests without asking their opinion is important in situations where it is possible to consider the child’s autonomy of will. However, our case focuses on young infants who, undisputedly, cannot take an autonomous and rational stance on the question of whether to be vaccinated. It should be emphasized in this context that the statutory scheme explicitly orders the continued payment of the allowance even if the children were not vaccinated, once the early infancy period proper for vaccination passes. Second, the petitioners’ argument regarding the amendment’s violation of the child’s rights was made generally without stating which of the rights has been violated. The discussion we conducted clarifies that the contingent reduction of the child allowances does not violate, in itself, a constitutional right, including constitutional rights of children (unless it will be invalid for another reason, such as discrimination, an issue that will be examined separately below). To a certain extent, the argument of a violation of the children’s rights in this case wishes to repeat the argument regarding the violation of the parents’ autonomy to make decisions with respect to their children’s best interests. This tension frequently underlies decisions on the best interests of children and repeatedly arises, for example, in relation to decisions regarding the children’s education. (Compare: Yoram Rabin, The Right of Education 121-124 (2002)).

The Objective of the Vaccination Requirement: Between Rights and the Public Interest

21. Based on all that has been said thus far with relation to the legal status of the child allowances and the objective underlying them, it is necessary to address the second question regarding the objective of the Amendment that conditions part of the eligibility for the allowance on vaccinating the children.
22. The policy on the vaccination of young children is currently considered a very important tool in the protection of children’s health – both from the aspect of each child’s right to good health and the aspect of the public interest in eradicating epidemics which claimed many victims in the past. (See for example: David E. Bloom, David Canning & Mark Weston, The Value of Vaccination, 6 World Economics 15 (2005); Saad B. Omer and others, Vaccine Refusal, Mandatory Immunization, and the Risks of Vaccine-Preventable Diseases, 360(19) New England J. Medicine 1981 (2009)). The State of Israel has excelled since its establishment in operating Family Health Centers, which were an important element in ensuring the population’s health. This public health operation ensured the vaccination of children, for their benefit and for the benefit of the population as a whole.
23. Through the years, criticism was voiced against the sweeping policy of child vaccination. Some parents refrain from vaccinating their children for various reasons—both because of a belief that vaccinations are dangerous to children’s health and because of a position that prefers “natural” immunization, acquired over the years via “natural” contraction of diseases. So long as those refraining from vaccinations are a minority, choosing this alternative is ostensibly a rational alternative for the relevant persons because of the effect known as “herd immunization;” that is, the phenomenon wherein those who are not vaccinated are in fact protected from contracting diseases when most of the people around them are properly vaccinated. Thus, there is a risk of free riders here, and if it increases it may eventually compromise “herd immunity,” which weakens as the rate of non-vaccinated persons rises. In fact, the decision to vaccinate has characteristics of the “prisoner’s dilemma:” it is a decision that must be made in conditions of uncertainty with regard to the acts of others, and whose benefit from the perspective of the individual also depends on the behavior of such others. Individuals facing the decision whether to be vaccinated will always tend not be vaccinated (provided that others are being vaccinated), purely out of promotion of self-interest. This is a classic case of a “market failure” that justifies intervention. (See also Christine Parkins, Protecting the Herd: A Public Health, Economics, and Legal Argument for Taxing Parents Who Opt-Out of Mandatory Childhood Vaccinations, 21 S. Cal. Interdisc. L. J. 437 (2011)). De facto, there is a decline in child vaccination. The professional opinion of the Ministry of Health, supported by clear professional opinions on the matter, is that the decline in child vaccination constitutes a health risk, both to the children themselves and to the population as a whole (due to the risk of contracting diseases from children who were not vaccinated and later contract serious diseases).
24. The new Amendment to the law was intended to provide a response to the problem presented above. This problem is also present in other countries, and a spectrum of responses to situations of non-vaccination of children can be pointed to. (See in general: Daniel Salmon and others, Compulsory Vaccination and Conscientious or Philosophical Exemptions: Past, Present and Future, 367 Lancet 436 (2006)). Among the well-known examples, the United States and France represent a rigid approach to the enforcement of the vaccination obligation. In France, the Code of Public Health (Code de la Sante Publique) states that parents and guardians of children are personally responsible for their vaccination, and proof of proper vaccination must be presented upon the child’s acceptance to an educational institution. (Section L3111-2 of the code). Alongside the aforesaid obligation, criminal sanctions of up to six months imprisonment and a fine were set forth. (Section L3116-4 of the code). A mandatory vaccination policy is also common in the United States. The means employed, as well as the scope of the limited exemptions granted on religious freedom or freedom of conscience grounds, vary between the different states, as these issues are regulated on a state, and not a federal, basis. However, it appears that a central means used is the imposition of a limitation on the enrolment of children in schools when they are not vaccinated in accordance with the basic vaccination plan, because of the concern that others will be infected. Constitutional petitions that challenged laws that imposed vaccination obligations were rejected, based on the recognition of the importance of vaccinations to public health. (See Jacobson v. Massachusetts, 197 U.S. 11 (1905) (a general discussion of the vaccination obligation); Zucht v. King, 260 US 174, 176-77 (1922) (a specific discussion on the conditioning of school enrollment on vaccination). Alongside the aforesaid, additional sanctions were used over the years, including setting a statutory vaccination obligation whose violation entails a fine and cutbacks in municipal education budgets. In the city of New York, for example, it was decided to impose fines on schools that accept unvaccinated children, even when they fall within one of the exceptions that allow parents not to vaccinate their children. The fine is imposed for each day in which an unvaccinated child was present on school grounds. In this manner, the city of New York wished to create an incentive for parents to vaccinate their children, since failing to do so compromises the school’s budget and the level of education it is able to provide. (See further: Alan R Hinman, Walter A Orenstein, Don E Williamson & Denton Darrington, Childhood Immunization: Laws That Work, 30 J. L. Med. & Ethics 122, 123 (2002); Gary L Freed, Victoria A Freeman & Alice Mauskopf, Enforcement of Age-Appropriate Immunization Laws, 14(2) Am. J. Prev. Med. 118 (1998); D. Isaacs, H. A. Kilham & H. Marshall, Should Routine Childhood Vaccinations be Compulsory?, J Pediatr. Child Health 40(7) 392, 395 (2004); Anthony Ciolli, Religious & Philosophical Exemptions to Mandatory School Vaccinations: Who Should Bear the Costs to Society?, 74 Mo. L. Rev. 287 (2009); Ross Silverman, Litigation, Regulation, and Education – Protecting the Public's Health through Childhood Immunization, 360(24) New England J. Medicine 2500 (2009)).
25. Unlike in the United States, there is no norm of mandatory vaccination as a condition to the acceptance of children to school in Canada. In fact, only two provinces of Canada, Ontario and New Brunswick, have a statutory vaccination requirement. Nevertheless, an inspection of the education legislation of Ontario shows that alongside the requirement to vaccinate children as a precondition to their enrollment in the education system, a fine of up to $1,000 is also imposed on parents who fail to vaccinate their children. (Education Act, SNB 1997, c E-1.12, s 10; Immunization of School Pupils Act, RSO 1990, c I.1, s 3-4).
26. A different approach prevails in Australia, where monetary incentives are given to parents who respond to the vaccination plan. This is, to a certain extent, in the spirit of the solution chosen by the Israeli legislator. This approach is recognized in academic literature as more respectful of the parents’ autonomy, and ethically appropriate, insofar as it does not endanger the lion’s share of welfare payments for children. (See David Isaacs, An Ethical Framework for Public Health Immunisation Programs, 23(5-6) NSW Public Health Bulletin 111,114 (2012).
27. The comparative law was reviewed merely to illustrate the variety of means employed by other legal systems in a similar context. Obviously, these examples themselves cannot dictate the outcome. However, they emphasize several points that ought to be discussed. First, they show that the issue of child vaccination and imposing sanctions in this context (even when they may indirectly harm the children themselves) are also present in other systems to promote the welfare of the children themselves and the welfare of the public. Second, other systems went as far as imposing sanctions, which may be deemed harsher than those methods adopted by the Israeli legislature. These sanctions may indeed serve more closely the purpose of achieving the result of vaccinating children (due to their weight), but they simultaneously entail more severe harms to the children and their parents (including the imposition of fines or prevention of the children’s studies in educational institutions). I will mention these alternatives again when addressing the limitation clause.
28. And now: the Amendment discussed before us was intended to achieve a double purpose of protecting the health of infants, for whom contracting the diseases against which the vaccine protects may be dangerous and at times even lethal, and protecting public health as a matter of national medical policy through the creation of  “herd immunity”. This double purpose will also be important for our later discussion regarding the limitation clause. At this point it can also be said that the double purpose of the law does not mandate a direct confrontation with the discussion on the limits of paternalism. As is known, the classification of a legal rule as paternalistic is made through the prism of the grounds underlying it. Therefore, the more the legal rule intervenes in the individual’s autonomy of will for the sole purpose of protecting him and his welfare from his own actions, the more likely we are faced with a paternalistic rule. More specifically, in our case we have a paternalistic rule which intervenes in the parents’ autonomy of will in order to stop them from making a mistake, as the issue is perceived by the Ministry of Health. The question of the appropriate limits of paternalism has been extensively discussed and this framework is too narrow to discuss it. (See, for example: John Stuart Mill, On Liberty (Arieh Simon, Translator, 1946); Peter De Marneffe, Avoiding Paternalism, 34(1) Philosophy and Public Affairs 68 (2006); Gerald Dworkin, Moral Paternalism, 24(3) Law and Philosophy 305 (2005)). For purposes of the current discussion it is important to state on this issue the following two points. First, it is evident that those engaged in the legislative work were aware of the difficulties caused by over-intervention in the decisions of individuals. Thus, for example, the drafters of the law refrained from setting a statutory vaccination requirement, the breach of which entails a punitive sanction; instead, they were satisfied with the creation of an economic incentives scheme, which leaves parents a wider array of choices. The fact that it is only the increase in the allowances that is made contingent on the vaccination of the children, while leaving the base allowance intact suggests the same. Second, it is certainly doubtful whether we have before us a paternalistic rule in the full sense of the word, considering that the Amendment was intended not only to protect the children and their parents from themselves, but also to protect the general public against the outbreak of diseases. It seems that the duty of the Ministry of Health to institute preventive measures to eradicate diseases that threaten public health cannot be disputed.
29. Moreover, since the Amendment was intended to promote the protection of the health of children in the State of Israel, it should not only be deemed as a means that violates rights (in the name of an important public interest), as the petitioners argued, but also as a means intended to promote rights in a positive manner—in this case, the children’s right to health. The above fits in with the general perception of Basic Law: Human Dignity and Liberty, pursuant to which the protection of basic rights is not merely reduced to a negative protection against the damaging power of government, but also extends to a positive protection which reflects the government’s duty to operate in an active manner for the protection of basic rights. While according to Section 2 of the Basic Law: Human Dignity and Liberty “[t]here shall be no violation of the life, body or dignity of any person as such” (and here the negative protection of these rights is expressed), according to Section 4 of Basic Law: Human Dignity and Liberty “[a]ll persons are entitled to protection of their life, body and dignity (in other words, the government is also required to positively promote these rights).” Although the question regarding the scope of the constitutional right to health has yet to be decided, there is no doubt that striving to guarantee basic conditions of good health falls within the boundaries of the right to human dignity. In addition, it can be deemed as a derivative of the right to life and of the protection of the person’s body. (Compare: Eyal Gross “Health in Israel: Right or Product”, Economic, Social and Cultural Rights in Israel (Yoram Rabin and Yuval Shani, Editors, 2004); LCA 4905/98 Gamzo v. Yesha’ayahu [2001] IsrSC 55(3) 360, 375-376; HCJ 3071/05 Luzon v. The State of Israel (July 28, 2008), in paragraphs 9-17; HCJ 11044/04 Solometkin v. The Minister of Health (June 27, 2011), in paragraphs 11-16). Legislation seeking to create incentives for child vaccination is legislation that falls not only into the category of laws that limit rights, but also that of promoting rights in general and children’s rights in particular. Section 4 of the Basic Law expresses a clear position that rejects the perception that the State is at its best when it does not intervene. Article 25 of the Convention on the Rights of the Child, 1989 also states the obligation of the member states to act for the promotion of children’s health, including “to develop preventive health care.” (Article 25(6)).

Conditioning of Rights: The Normative Framework

30. The third question of those I mentioned in the beginning is the legal question at the heart of the petition: to what extent can conditions be imposed on rights vis-à-vis the State and more specifically, is it possible to condition rights on requirements which the recipient of the right is required to fulfill?  What is the supposed novelty of setting conditions? The law frequently defines rights and eligibilities as such that include restrictions and conditions to their fulfillment, either paternalistic conditions seeking to protect the holder of the right from himself or conditions seeking to protect the public interest. However, the other side of the coin is that imposing conditions on rights raises a concern of weakening those specific rights and eroding the concept of a right until it is turned into a benefit given by the grace of government.
31. An important distinction that should be drawn at the outset is the distinction between constitutional rights and legal rights. The main concern regarding the conditioning of rights pertains to the conditioning of constitutional basic rights. The liberal doctrine of rights is based on the perception that constitutional basic rights are the individual’s shield against government’s power, and thus they are supposed to be, in the usual case, autonomous of any and all limitations. The history of the democratic fight for rights is tied to the perception that rights are also conferred on those who are not perceived as “normative persons,” violators of law, and those who are not deemed, ever or at the time, to be “model citizens”. On the contrary, many battles for rights were shouldered by those whose opinions outraged others and were a thorn in the side of people in authority.
32. Does this mean that conditions may never be imposed on constitutional rights? In fact, since I have reached the conclusion that payment of child allowances does not reflect, at least for the time being, a protection of a constitutional right, I am no longer required to answer this question directly, and therefore I will address it relatively briefly. In general, the position regarding the setting of conditions on the exercise of constitutional rights should be suspicious and minimizing. However, attachment of conditions to the exercise of a constitutional right cannot be rejected at the outset and in advance (as distinct from conditions aimed at denying the constitutional right itself), if only because of the perception that rights are relative for the most part, and not absolute, as indicated by the limitation clauses included in the basic laws. For example, exercising the right of access to courts can be made contingent upon payment of a fee (subject to exceptions guaranteeing that the payment of the fee does not bar persons without means from conducting legal proceedings). (See for example, LCA 3899/04 The State of Israel v. Even Zohar [2006] IsrSC 61(1) 301, 319-321; LCA 2146/04 The State of Israel v. The Estate of The Late Basel Naim Ibrahim [2004] IsrSC 58(5) 865, 868; M.C.M. 457/01 Karlitz v. The Officer of the Elections for the City of Beer Sheva 1998 [2001] IsrSC 55(3) 869, 872)). Similarly, the income assurance allowance, which is generally the legal manifestation of the constitutional right to a dignified human existence, can be contingent upon the requirement to “exhaust earning capacity.” In both cases, the conditions are not “foreign” to the purpose of the relevant rights considering that the payment of a fee assists in making sure that the use of the right of access to the courts will not lead to inefficient use of the important public resource of the judicial system, and that the requirement to exhaust earning capacity contributes to the proper use of the limited resource of support for those who cannot ensure their basic sustenance.
33. In any event, the case before us falls within a different category: the conditioning of legal rights vis-à-vis the State (by virtue of legislation, as distinct from super-statutory constitutional basic rights). Because the conferral of rights pursuant to the law is supposed to also serve public interests and public policy, the conferral of this type of right is often accompanied by conditions. Below I will refer to standards which should guide the legislature, and later the court, in outlining the proper framework for the conditioning of legal rights.
34. Presumably, the conditioning of rights available to individuals vis-à-vis the State does not necessarily raise a constitutional difficulty. We should remember that the law often defines rights and eligibilities as such that include restrictions on and conditions to their fulfillment. The aforesaid notwithstanding, in practice the imposition of conditions on legal rights may also be problematic on the constitutional level, when the essence of the condition is a waiver of a constitutional right. For example, conditioning of a legal right, such as eligibility for an allowance, on the recipient’s waiver of his right to freedom of speech or his right to freedom of religion and conscience is problematic even though, theoretically, the government may choose not to grant such an allowance at all. The reason for this is concern about an indirect limitation of constitutional rights. In American constitutional law, the accepted term for discussing the problem of eligibilities given by the government based on a (supposedly voluntary) waiver of constitutional rights is the unconstitutional conditions doctrine. (See for example: Note, Another Look at Unconstitutional Conditions, 117 U. Pa. L. Rev. 144 (1968); Allen Redlich, Unconstitutional Conditions on Welfare Eligibility, Wis. L. Rev. 450 (1970); Richard A Epstein, Unconstitutional Conditions, State Power and the Limits of Consent, 102 Harv. L. Rev. 5 (1988); Kathleen M. Sullivan, Unconstitutional Conditions, 102 Harv. L. Rev. 1413 (1989); Cass Sunstein, Is There An Unconstitutional Conditions Doctrine?, 26 San Diego L. Rev. 337 (1989); Brooks R. Fundenberg, Unconstitutional Conditions and Greater Powers: A Separability Approach, 43 UCLA L. Rev. 371 (1995); Daniel A. Farber, Another View of the Quamire: Unconstitutional Conditions and Contract Theory, 33 Fla. ST U. L. Rev. 913 (2006); Renee Lettow Lerner, Unconstitutional Conditions, Germaneness, and Institutional Review Board, 101 Nw. U. L. Rev. 775 (2007); Philip Hamburger, Unconstitutional Conditions: The Irrelevance of Consent, 98 Va. L. Rev. 479 (2012)). We are not bound, of course, by the details of this doctrine, and some aspects of its scope and application are still in dispute in American law itself. Nevertheless, it does indicate the caution necessary in conditioning legal eligibilities, which may indirectly violate constitutional rights. In this spirit, and without exhausting discussion in the matter, I wish to present primary relevant considerations in examining such conditioning. As I will clarify below, these considerations will ultimately be included in the formal constitutional examination performed within the context of the limitation clause.
35. Relevance of the Condition and its Affinity to Eligibility – Essentially, conditions to eligibility are supposed to have a relevant connection to the policy the eligibility is intended to promote. In order to clarify the nature of the discussion, let us consider two hypothetical examples that may be discussed in relation to framing the eligibility for income assurance allowances: first, conditioning eligibility for receipt of the allowance on the applicant not having a bad traffic record; second, conditioning eligibility on the applicant’s active desire to re-join the employment circle by visiting the employment bureau each week. Our intuition suggests that the second condition is legitimate, as it is consistent with the purpose of the income assurance allowance and it comports with the public interest underlying it—the re-integration of a person who has been excluded from the employment circle, while providing a last residual protective net on the way there. (Hassan Case, in paragraphs 6-7 and 57). The translation of this intuition into a legal principle tells us that the condition should derive from the same legal circle within which the conditioned right is operated. In other words, the purpose of the condition and the public interest promoted through it must be derived from the same normative field in which the conditioned right is rooted. The weaker the connection between the two becomes, the more the conditioning becomes constitutionally illegitimate. For example, although there is no dispute that eradicating driving violations and creating a system of incentives to promote this are desirable from perspective, these have absolutely nothing to do with eligibility for income assurance allowance. The purposes underlying each of these arrangements are foreign to one another. This foreignness indicates the arbitrariness of the conditioning and the flaw in combining them with each other. Sometimes, the question of the relevance of the conditioning may also be examined with respect to the question of whether the condition is paternalistic and seeking to promote the best interests of the holder of the right himself, or a condition seeking only to protect a wide public interest. Sometimes, of course, the conditioning of the right may encapsulate more than one reason within it.
36. An auxiliary test that may assist in examining the nature of the affinity and the connection between the purpose of the condition and the conditioned right focuses on the date the condition was imposed and the legislative history behind it. Generally, insofar as the condition was imposed on or about the time the right was granted, the conditioning will be classified as part of the definition of the right and delineation of its scope. Insofar as the condition is added, or should we say “pasted,” at a later date, adding it should be deemed as external conditioning of the normative content of the right. This is of course merely an auxiliary test and no more. Situations can also be conceived where a new statutory eligibility is “born” with an attached foreign and inappropriate condition.
37. Without making a final determination, an example seemingly close to our case is the birth grant given by the State, which is contingent on the mother having chosen to give birth in a hospital and not in her home. (Sections 42-43 of the National Insurance Law). In this context too, the State wishes to help the mother but at the same time promotes a public policy that the delivery will take place in the hospital, which is, as the State and professionals perceive it, in the best interests of the mother and the newborn as well as in the best interests of the public as a whole. In addition, the condition attached to the eligibility is in affinity the general purpose of the eligibility, promoting the welfare of the mother and her family.
38. Voluntary Choice – A distinction must be made between voluntary conditions, which give the individual freedom of choice, and conditions that refer to inherent identity characteristics that a person is unable to change or that it would be inappropriate to require him to change (such as religious or national origin). The importance of this consideration cannot be exaggerated. Conditioning rights on a requirement that contradicts identity characteristics will, by its nature, cause difficulties, and raise a heavy suspicion of discrimination. Obviously, between the extreme situations of full choice on the one hand, and coercion and lack of choice on the other hand, there may be interim situations in which the incentives that accompany the choice affect whether the condition violates a right. 
39. Scope of Conditioning – Another consideration that should be taken into account concerns the scope of conditioning: that is, the extent of exposure of the right to the restricting power of the condition. In this context, both the scope of coverage of the condition and whether it applies to the entire right or perhaps only to part of it are significant. Similarly, it may be examined whether the condition pertains to an addition to an existing eligibility, or perhaps results in the derogation therefrom.

Imposition of Conditions on Rights: From the General to the Particular

40. The application of these standards to the case before us makes clear that the Amendment in our case does not create an arbitrary connection between a legal right and the promotion of a public interest.
41. Pertinence of the Condition and its Affinity to Eligibility – The State grants child allowances to everyone (in other words, over and above what is required for the purpose of guaranteeing the right to a dignified human existence of children who grow up in conditions of poverty) in order to promote the welfare of the families who raise children and the children who are raised by them in particular, including the promotion of their health, alongside other public purposes. Thus, in this case, the conferral of the right to receive a child allowance was made contingent upon a condition that has a direct and unequivocal affinity to the purpose for which the right was conferred in the first place; the condition is based on an opinion of independent professionals who indicate that the best interests of children and of society require that they be vaccinated. In these circumstances, in which the right to the allowance is contingent upon a condition that is directly and clearly entwined with the best interests of its beneficiary, it is not difficult to hold that the condition is pertinent. The child allowances are not only granted in order to provide for the children, but for their welfare, including other basic rights they have such as education and health.
42. Indeed, an inspection of the comparative law may serve as a basis for the argument that a condition that links the acceptance of children to schools and their vaccination expresses a stronger affinity between the condition and the right than as distinguished in our case where eligibility for child allowances was made contingent upon their vaccination. However, in practice, and following further inspection, this argument is unconvincing. De facto, the only difference between the American conditioning model and the Israeli conditioning model is the time the children’s vaccination condition was imposed, not the intensity of the link between the condition and the eligibility. Both models see the need to protect the children themselves and the need to protect those who come into daily contact with them. However, the Israeli legislator wished to move up the date of the condition that incentivized children’s vaccination as a preventive measure, and thereby make redundant the future dilemma with which health policy makers in the United States and Canada are dealing, namely, when parents are required to enroll their children in the education system. In addition, earlier vaccination of infants appears to be more effective from a preventive medicine standpoint, and if so, it is more logical to create an incentive to vaccinate the children at an earlier stage, prior to sending them to the education system. In fact, insofar as the main purpose is to prevent the infection of other children, it makes sense to make the connection to the time of entrance into the educational institution. However, insofar as the purpose is the promotion of the best interests of the children themselves, an earlier date is preferable.
43. Some of the arguments advanced by petitioners attempted to undermine the assumption that conditioning the allowances indeed promotes the children’s health and their general welfare. One argument made before us on this issue is that there are views that vaccination of children does not serve their best interests and that the route of natural immunity is preferable. A second argument raised in this context is that conditioning the right to child allowance constitutes “double punishment” of the relevant children. First, they are not being vaccinated and thus their health is compromised. Second, the State does not pay their parents the full child allowance amount, and thus their welfare is also harmed. These arguments should be dismissed. The first argument, pertaining to the uselessness of vaccination for the children’s health cannot be accepted because of the factual basis underlying it. The medical opinion underlying the vaccination policy is a solid one supported by many studies. The petitioners’ arguments regarding the existence of other approaches have their due respect, but the formulation of national policy is supposed to be based on the position of the professional bodies of the government, founded on studies and examinations. Nothing in the petitioners’ arguments undermines the firm basis underlying the policy, at least for the time being. The second argument should also be dismissed. This argument is based on the assumption that conditioning part of the eligibility for child allowances on vaccinating the children is merely a sanction and cannot direct behavior. This assumption remains unsubstantiated. Moreover, the Amendment was enacted in a format that inherently attests that it was intended to direct behavior. The reduction of child allowances is not imposed as a sanction in an irreversible manner. This reduction applies only during the period in which the parents are supposed to vaccinate the child with the vaccine they avoided. During the vaccination period the parents receive several notices and warnings on the consequence of failure to vaccinate the children. Furthermore, once the suitable period for giving the vaccine passes, the allowance returns to its regular amount. Thus, it may be said that the Amendment is phrased in a manner intended to create a means for directing behavior, and at least at this stage, there is no reason to believe that it will not succeed to do so. In any event, this cannot be pre-assumed.
44. Voluntary Choice – The Amendment to the law assumes, in practice, that the impediment to vaccinating children derives from the parents’ choice not to vaccinate, and not from the fact that the State does not guarantee reasonable access for the entire population to this essential service, in terms of both location and cost. The aforesaid is particularly important in view of the fact that one of the petitions before us was filed by Adala Center, which alleged insufficient dispersion of Family Health Center services among the Bedouins in the Negev region. If indeed there was no reasonable access to the vaccination services for the entire population, then the Amendment is problematic because this would mean the denial of eligibility for child allowances is in fact arbitrary and does not in practice promote the purpose of the Amendment. In order to avoid this inappropriate result, the Amendment should be interpreted pursuant to its objective and denial of the eligibility for child allowances should only apply in situations where parents choose not to vaccinate their children, and not in situations in which the parents refrain from doing so due to lack of reasonable access to health services. De facto, the State’s arguments painted a positive picture of improvement in the level of accessibility to Family Health Center services in the Negev region, and the State is presumed to continue to act in this direction. In addition, the State has undertaken, both in writing and orally, that the vaccination fee will be cancelled, so that the cost of vaccination will not be a barrier for those who lack financial means.
45. Scope of Conditioning – conditioning eligibility for child allowances on the children’s vaccination does not apply to the entire allowance but only to part of it. Failure to fulfill the condition does not deny the entire child allowance (like it does not deny all other means that the social laws in Israel provide for the fulfillment of the child’s right to a dignified existence).
46. Thus, it may be concluded, at this time, that the imposition of conditions on eligibilities relies on solid foundations, at least when (like in the case before us) the eligibilities discussed are eligibilities pursuant to a law that promote public policy (as distinguished from constitutional rights), the condition set is related to the purpose of granting the eligibility, the fulfillment of the condition depends on the free choice of the relevant party, and especially because the conditioning does not apply to the entire eligibility.

Equality in Granting Eligibilities

47. The fourth question that should be examined, according to the order of things, also relates to the content of the conditioning, and in this context focuses on the level of equality. The petitioners argue that the Amendment to the law discriminates in issue granting full payment of child allowances between those who vaccinate their children and those who do not vaccinate their children. Is this really the case?
48. My colleague, Justice Arbel, accepts the petitioners’ argument on this matter, based on the assumption that the condition placed upon the allowance is foreign both to the structure of the allowance and to its purposes (paragraph 49 of the opinion of Justice Arbel). In my opinion, the starting point for the discussion on this issue should be different. In fact, as the discussion on the history of the child allowances makes clear, these allowances embodied several purposes throughout the years, and they are seeking, inter alia, to promote the welfare of children in Israel in general. Examining things from this perspective, it cannot be said that a condition that promotes the vaccination of children in Israel, and thus protects their health (according to the prevailing perceptions in the scientific community), is a condition foreign to the purpose of the allowances (as I explained above in paragraph 48).
49. Furthermore, it is also possible to observe the matter through a comparison of the children who receive vaccinations and those who are denied vaccinations by their parents. The conditioning of the child allowances expresses the State’s commitment to also care for the latter.
50. On a wider perspective, an important question hovering in the background is whether whenever the law distinguishes between people or groups, it is right to deem the distinction as a violation of the right to equality, and then to examine through the limitation clause; or whether there are “relevant” distinctions that would not be considered, a priori, a violation of the right to equality. For example, does the payment of child allowances only to parents of children constitute justifiable “discrimination” because it is done for a proper cause and satisfies all other conditions of the limitation clause, or is it a distinction that does not amount to a violation of the right to equality from the outset?
51. Ultimately, I am of the opinion that a ruling on these issues is not necessary in the case before us because a link exists between the distinction made and the relevant individuals’ autonomy of will. According to the judgments of this Court, the right of equality is constitutionally protected as part of the right to human dignity in those situations where the distinction projects on the individual’s autonomy of will. (See HCJ 6427/02 The Movement for Quality Government v. The Knesset [2006] IsrSC 61(1) 619, 680-691; HCJ 7052/03 Adala Legal Center for the Rights of the Arab Minority in Israel v. The Minister of Interior [2006] IsrSC 61(2) 202, 303-304). Since the Amendment has ramifications for decisions that express the parent’s autonomy of will with regard to the upbringing of their children, even if the Amendment does not violate the autonomy of will, the fact that underlying the distinction is the autonomous choice of the relevant individuals justifies holding that the Amendment violates equality in a manner that requires to examine whether it satisfies the limitation clause.
52. It is important to add that it cannot be said, based on the data placed before us, that the Amendment imposes a discriminating reality that wrongfully distinguishes between infants from the Jewish sector and infants from the Bedouin sector. Against this argument made by Adala Center the State presented figures (updated as of 2009) in which the rate of unvaccinated Bedouin children (nine percent) is similar to the rate of  unvaccinated Jewish children (seven percent), insofar as we are referring to children between the ages of two and five ( three percent in the Arab sector). In any event, the Amendment should be interpreted in a way that excludes from the condition anyone who wishes to vaccinate his children, but to whom vaccination services are not made reasonably accessible by the State. In this sense, the petitioners’ path will be open to argue against the implementation of the law (as distinct from against its constitutionality) insofar as the access to the vaccination services is not adequately available.

The Amendment to the Law through the Limitation Clause

53. Based on the above, I wish to discuss the fifth and concluding question: does the Amendment include a violation of a constitutional right, and does this violation, if any, satisfy the constitutional tests of the limitation clause.
54. Like my colleague Justice Arbel, I showed that the majority of the petitioners’ arguments regarding the violation of constitutional rights are unconvincing. In the absence of a violation of a constitutional right, the discussion ends before it begins, and all that remains is criticism (right or wrong) of a public policy that was embodied in an act of legislation and whose place is in the public sphere. The eligibility for child allowances is part of a welfare policy currently serving the best interests of many children across the country in the immediate future, as well as the best interests of the public as a whole in the long term. However, there is no constitutional right to receive it in one specific form. The State can also care for the welfare of people in general and people living in poverty by paying other allowances and introducing changes to the current allowance policy, which is not “sacred” or “set in stone.” No factual foundation has been laid out before us for the argument that child allowances are essential for the dignified human existence of their recipients, and even more so, no factual foundation has been laid out before us to establish that those who avoid vaccinating their children are people who particularly need these allowances. It should be further noted that in most cases (except when the unvaccinated child is an only child), even parents who refrain from vaccinating their children, whatever their motivations might be, are left with the eligibility for the basic child allowance. They are not denied the latter, but only the increase provided by the Amendment. The strongest argument for a violation of a constitutional right in this case was the argument on the alleged violation of the right to equality. Even if a violation of the right of equality was found, it would satisfy the tests of the limitation clause (pursuant to Section 8 of the Basic Law: Human Dignity and Liberty), as I will demonstrate briefly.
55. Under the circumstances of this case, it can easily be seen that the first three conditions of the limitation clause are satisfied almost prima facie. The classification of the eligibility for child allowances was set in an explicit amendment to the law. The purpose of the law is proper, both in the with respect to the right to health of each one of the children to be vaccinated and with respect to the sense of the national interest of public health. In any case, legislation that promotes such important purposes befits the values of the State of Israel as a state that wishes to promote the welfare of its citizens. Thus, it remains to discuss the question of proportionality, which focuses on the means chosen to achieve the purpose. A proper purpose is not enough; the means chosen to achieve the purpose must also be appropriate, suitable and proportionate.
56. The first sub-test of proportionality is the rational means test that asks, whether the means chosen are indeed expected to achieve the purpose of the legislation. The answer to this question is positive, as we stated earlier, at least for the time being. A legislative practice of granting monetary incentives (positive and negative) to promote various behaviors, by conditioning various eligibilities (in the areas of taxes and welfare) is a common matter. Underlying each and every one of these acts of legislation is the assumption that incentives direct behavior. There is no reason to believe that things will be different in our case. If different information accumulates later on, the legislature will be required to assess it.
57. At most, it may be said that the application of the first sub-test of proportionality in the case before us presents the following paradox: the means used (conditioning the eligibility on an act of vaccination) is expected to achieve the purpose, but may achieve it less effectively than harsher means (such as prohibiting acceptance of unvaccinated students to educational institutions). This is why the petitioners characterize the means used as some kind of a “sanction” and not as means of enforcement: because it cannot be guaranteed in advance that the parents will respond to the incentive the conditioning seeks to create. Using a harsher means could have guaranteed the achievement of the purpose with more certainty, but it would have come at the price of a more severe violation of rights, and in this sense would have created more difficulty within the framework of the second sub-test and the third sub-test of proportionality, discussed below.
58. The second sub-test of proportionality examines whether the chosen means are the less harmful means. It seems to me that the case before us is a clear instance where the act of legislation is based on a careful and meticulous thinking process with regard to the means chosen as compared with other possible alternatives. In the course of deliberation, arguments pointed out alternative methods that were used elsewhere or that might have been used, such as preventing unvaccinated children from studying in educational institutions (as in France and the United States) and imposing punitive sanctions, .It can easily be seen that the majority of these means are actually harsher and more harmful than the route chosen by the Israeli legislature. Preventing unvaccinated children from studying in educational institutions is a very harsh step with regards to the scope of the damage to the children. It also comes at a relatively late point in time considering the optimal age for vaccination according to the policy of the Ministry of Health. Imposing a punitive sanction on people who choose not to vaccinate their children is certainly an offensive step, which does not respect those who are deeply convinced that the vaccination will harm their children. Thus, only the tool of advocacy remains, whose value cannot be exaggerated in this sensitive context in which the parents’ level of conviction is essential to obtaining the goal of wide-scope vaccination. (Compare Michal Alberstein and Nadav Davidowitz “Doctrine of Therapeutic Law and Public Health: An Israeli Study” Mehkarei Mishpat (26) 549, 571-578 (2010)). However, the Amendment to the law was enacted after the advocacy approach failed to produce sufficiently effective results according to the Ministry of Health. It may be added that having said that refraining from vaccinating is a seemingly rational act for the promotion of self-benefit in an environment in which most people are vaccinated, the creation of a monetary incentive (if only limited) to be vaccinated is thinking in the right direction because it creates a counterbalance to the benefit entailed in the decision not to vaccinate. (Compare to the discussion in Parkins’ paper above). Perhaps an incentive that is not directly related to child allowances could have been used, and perhaps this type of an incentive should have been preferred. A “vaccination bonus” or a similar benefit could have been established for parents who vaccinate their children. Practically speaking, there is no significant difference between these two methods because in both cases the result is the denial of a benefit from a family because the parents choose not to vaccinate their children. In conclusion, the petitioners failed to indicate a measure of lesser harm that would have achieved the legislative purpose to a similar extent. (See in this context: Aharon Barak, Proportionality in the Law 399 (2010)).
59. Another consideration in assessing the existence of alternative means pertains to the fact that the basic Vaccination Program to which the Amendment applies includes vaccinations for diseases whose consequences are very severe on one hand, and the contraction of which cannot usually be prevented through other means on the other hand. This consideration is important seeing as part of the vaccination plans enforced in other countries are aimed at diseases, contracted through sexual relations or blood donations that can also be prevented in other ways. (See Note, Toward a Twenty-First Century Jacobson v. Massachusetts, 121 Harv. L. Rev. 1820 (2008); Marry Holland, Compulsory Vaccination, the Constitution, and the Hepatitis B Mandate for Infants and Young Children, 12 Yale J. Health Pol'y L. & Ethics 39 (2012)).
60. The third sub-test of proportionality, the narrow proportionality test, examines the appropriate relationship between the means chosen and the purpose, as “the end does not justify all means.” I believe that the Amendment to the law before us also passes this final sub-test relatively easily. The purpose which the Amendment to the law seeks to promote is highly important—promoting the health of young children in Israel, as well as promoting the public’s health in the face of serious diseases that break out during times when vaccination enforcement is lax. The means chosen to promote this purpose—a partial reduction of child allowances for a limited period as a means to encourage parents to vaccinate their children—is relatively mild. In addition, it should be kept in mind that currently the Vaccination Program is limited to only four vaccines (given in one concentrated shot), such that the condition to receiving the allowances is essentially limited. It was further determined that the process is reversible in the sense that once the child is vaccinated or the maximum age for vaccination passes the reduction will be cancelled and the allowance recalculated. Furthermore, the reduction of the allowance was capped and proceedings to contest and appeal the institution’s decision to limit the allowances have also been established. The importance of the purpose alongside the relatively minor harm caused by the sanction, speaks for itself. The relatively minor violation of rights in this case constitutes a counterbalance to the recognition that employing a harsher means could have created a tighter link between the means and the purpose within the first sub-test of proportionality as specified above.

Conclusion: About Rights and the State’s Responsibility

61. An overview of the petition reveals a fundamental tension between the expectations the various individuals have of the State. On the one hand, there is an expectation that the State minimize its intervention in decisions of its citizens. On the other hand, there is an expectation that the State operate in an active manner to promote the citizens’ welfare. (On the discrepancies between the various expectations from the State, compare Barak Erez, Administrative Law, on p. 54-55; Barak Erez, Citizen-Subject-Consumer, on p. 34-35). The tension that exists between these expectations might lead to a conflict, like in the case before us. When the State takes an active stance with respect to child vaccination, it is intervening in personal decisions. Thus, it is ostensibly intervening in the private sphere. However, the means used by the State in this case pertain to the granting of child allowances, the mere granting of which expresses the State’s involvement in the family sphere. Moreover, intervention in the private sphere is not necessarily bad, particularly when it is done to promote the rights of the weak individuals in the family unit, those whose voice is not always heard—in this case the children whose parents did not act to vaccinate them.
62. There may be a dispute on the scope of the requirement to vaccinate children and perhaps, over the years, changes will even occur in the perceptions that direct the policy in this area. However, on principal, the starting point with regard to the State’s intervention in promoting children’s welfare does not always have to be suspicious. Essentially, taking an active stance on the issue of child vaccination is not the State riding roughshod over rights, but rather evidence of the State’s commitment to the welfare of the children in Israel, a commitment whose importance cannot be exaggerated.
63.  

Justice E. Hayut:

1. I agree with the result reached by my colleagues, Justice E. Arbel and Justice D. Barak Erez, that the three petitions should be denied. Like them, I too believe that the petitioners in each of the petitions did not show a violation of the constitutional right to property or to a dignified human existence, and in this context I saw no need to add to the explanations in my colleagues’ opinions. As for the constitutional right to equality, Justices Arbel and Barak Erez determined that Amendment No. 113 to the National Insurance Law ([Consolidated Version], 5755-1995 (hereinafter, the “Amendment to the Law”) violates the right of equality, but further held that despite this violation, the petitions should be denied because the violation satisfies the conditions of the limitation clause. My route to the same result is different. For the reasons I will specify below, I believe that the petitioners in the three petitions failed to show a violation of the right to equality. However, before we examine the question whether the right to equality has been violated, we should inquire what is the group of equals that should be referred to in this context.
2. One of the arguments raised by the petitioners in HCJ 7245/10 is the argument that the right to child allowances a right conferred upon the child and not his parents. (compare CA 281/78 Sin v. The Competent Authority under Nazi Persecution Disabled Persons Law, 5717-1957 [1978] IsrSC 32(3) 408) and thus the relevant group of equals is the group of children who were given the right to the allowances specified in the National Insurance Law when they came into the world. According to this approach, the essence of the violation of the constitutional right to equality is that, with regard to the child allowances, it is improper to distinguish between children who were vaccinated and those who were not vaccinated. On the contrary, this type of distinction, it is argued, constitutes a double harm to the children: not only did their parents fail to vaccinate them, but the allowance for which they are eligible is reduced because of it. This argument is captivating but it appears to have no real basis in the provisions of the law. Section 66 of the National Insurance Law states that “an insured parent is eligible for a monthly child allowance under this chapter for each child.” This indicates that the right set forth in the law is the parent’s right, provided that the child for whom the allowance is paid is in the custody of that parent. (See Section 69 of the National Insurance Law). Another provision that supports this conclusion that the right to the allowance set in the National Insurance Law is the right of the parent and not the child, is Section 68(b) of the National Insurance Law, which determines a differential payment of the allowance for each of the children in the family according to the birth order. It is obvious that such differential payment is improper if the right to the allowance is the child’s right, since there is no justification to discriminate between the children with regard to the extent of social support they will receive from the State, based only upon the time they were born relative to the other children in the family. In contrast, if the allowance is the parent’s right, it makes sense and is justified to consider, with regard to the social support the cumulative amount available to the family, and therefore setting different allowance amounts for children, based on their birth order does not constitute discrimination. It should further be mentioned that in the past, a tax, in various amounts and under various conditions, was imposed on the child allowances, treating them as parents’ income. (See for example: Taxation of Allowance Points Law (Temporary Provision), 5744-1984; for support of the continuation of child allowances taxation policy see Yoram Margaliot “Child Allowances” Berenson Book Second Volume – Beni Sabra 733 (Editors, Aharon Barak and Haim Berenson, 2000); and for a historical review of child allowance taxation see paragraphs 8-15 of the opinion of Justice D. Barak Erez). The National Labor Court has also adopted the opinion that the person eligible for the child allowance is the parent and not the child. (See NIA 1117/04 Azulai v. The National Insurance Institute (November 2, 2006)). The starting point in examining the question of discrimination raised in the petitions before us is that the right to child allowance is the parents’ right, and that the parents therefore constitute the relevant group of equals.
3. Does the Amendment to the law, which is the subject matter of the petition, discriminate between the different groups of parents?

“The obligation to act with equality means giving equal treatment to equals and different treatment to those who are different.” (See, for example, HCJ 4124/00 Yekutieli v. The Minister of Religious Affairs, paragraph 35 (June 14, 2010) (hereinafter, “Yekutieli Case”)). Since the enactment of the Basic Law: Human Dignity and Liberty, the right to equality has been recognized as part of the person’s right to dignity in the sense that discrimination, even if it is unaccompanied by humiliation, will be deemed as a violation of the constitutional right to equality which enjoys the constitutional protection conferred under the Basic Law. (HCJ 6427/02 The Movement for Quality Government v. The Knesset [2006] IsrSC 61(1) 619, paragraphs 40-43 of the opinion of President Barak (hereinafter, “re: MQG Case”)). The obligation not to discriminate, which is imposed first and foremost on government authorities, is nothing but a mirror image of the person’s right to equality; therefore, a law that discriminates between equals in the aforementioned aspects may be invalidated as unconstitutional, unless the violation of equality can be justified as a violation that satisfies the conditions of the limitation clause in Section 8 of the Basic Law: Human Dignity and Liberty.

The uniqueness of the petitions before us is in that the petitioners are not arguing that it is unjustified to prefer the group of vaccinating parents over the group of non-vaccinating parents; they focus their arguments instead solely on the manner in which the legislature has chosen to express this preference. For example, the arguments of two out of the three groups of petitioners (in HCJ 7245/10 and HCJ 8357/10) make clear that they consider it very important that the population of children will indeed receive the MMRV vaccine according to the Ministry of Health’s vaccination program (hereinafter, the “Vaccination Program”), and they also deem it justified to set a policy that incentivizes parents to give their children this vaccine, in order to protect the general population from spreading of dangerous epidemics. The petitioners in HCJ 908/11 argue that the effectiveness of the vaccines is uncertain, but they do not argue that simply creating an incentive to vaccinate the children creates an irrelevant and unequal distinction, and focus their arguments on the discrepancy they believe exists between this distinction and the objective of the child allowance. It appears that there is no dispute that the State is entitled, and perhaps even obligated, to use the means available to it to maintain public health, and that according to the medical data in the State’s possession (the accuracy of which the petitioners in HCJ 908/11 dispute), the Vaccination Program is effective and essential in the prevention of dangerous diseases. From this derives the conclusion that the legislature is allowed to treat the group of parents who vaccinate their children differently than the group of parents who do not vaccinate their children, and from the arguments in all three petitions it is clear that had the legislature chosen, for example, to give a monetary bonus to the parents who vaccinate their children rather than reduce the allowance for those who do not vaccinate their children, the petitioners would have had no argument regarding a constitutional violation of the right to equality. In other words, the petitioners do not dispute the fact that the legislator may give different treatment to each of the aforesaid groups, and that it is permitted to do so, inter alia, through an economic incentive.                

4. Does the fact that the economic incentive enacted by the Knesset was incorporated into the child allowance mechanism by way of reducing the allowance (a negative incentive) cause, in itself, a violation of the constitutional right to equality?

Justice Arbel believes that the purpose of the child allowances is to help fund the families’ expenses in raising children, and thus the denial of a part of the allowance for reasons unrelated to the number of children in the family “would be foreign to the allowance, and therefore violate the right to equality.” (Paragraph 49 of her opinion). Justice Barak Erez believes that the “strongest argument, relatively, of a violation of a constitutional right in this case was the argument on the alleged violation of the right to equality,” and although she doesn’t explicitly determine that such a violation indeed exists and or indicate what makes it strong, she holds that “in any event, even if a violation of the right to equality was found, it would satisfy the tests of the limitation clause.” (Paragraph 61 of her opinion, and see also paragraphs 57-58 of her opinion).

I disagree.

The fact that the legislature amends an existing law, and at the same time creates a new distinction between the groups of those entitled to receive all rights pursuant to the amended law, does not, in itself, constitute a violation to equality, unless we believe that the groups designated as entitled persons in the original law must never be changed. It appears to me that such a rigid approach is uncalled for, and it seems that the question that ought to be examined in this context, like in other cases in which we try to identify wrongful discrimination, is whether the new distinction between the groups of entitled persons created by the law in its amended form treats equals differently. The common method in case law to identify the “group of equals” whose members are entitled to equal treatment is to examine the “objective of the law and essence of the matter, the fundamental values of the legal system, and the special circumstances of the case.” (See for example HCJ 6051/95 Rekant v. The National Labor Court [1997] IsrLC 51(3) 289, 346; HCJ 3792/95 National Youth Theater v. The Minister of Science and Arts [1997] IsrSC 51(4) 259, 281; AA 343/09 Jerusalem Open House for Pride and Tolerance v. The City of Jerusalem, paragraph 41 of the opinion of Justice Amit (September 14, 2010)). In other cases it was stated that the question of whether this is a prohibited discrimination or a permitted distinction will be examined according to the “accepted social perceptions,” (HCJ 721/94 El Al Israel Airlines Ltd. V. Danilowitz [1994] IsrSC 48(5) 749, 779; HCJ 200/83 Watad v. The Minister of Finance [1984] IsrSC 38(3), 113, 118-119; MQG Case, in paragraph 27 of President Barak’s judgment). The fundamental values of our legal system recognize legislative models in which the legislator incorporates into a law intended for a specific main objective, secondary objectives intended to promote important social purposes, even if there is not necessarily a tight link between them and the main objective of the law. For example, the main purpose of the Income Tax Ordinance is “[to] ensur[e] income for the public authority’s treasury,” but the legislature has also used the ordinance and taxation provisions to promote additional social purposes through which “[S]ociety fights phenomena that are perceived as negative. It encourages acts that it wants to encourage and deters acts it wants to prevent.” (Aharon Barak “Interpretation of Tax Law” Mishpatim 28, 425, 434 (1997); For example, see HCJ 2651/09 The Association for Civil Rights in Israel v. The Minister of Interior, paragraph 31 of Justice Danziger’s opinion (June 15, 2011)). The above also applies to customs laws intended mainly, to increase the State’s income, but at the same time serving additional purposes including the “regulation of the demand and the protection of local production and products.” (CA 2102/93 The State of Israel v. Miron Galilee Industrial Plants (MMT) Ltd. [1997] IsrSC 51(5) 160, 167). The objective of the National Insurance Law is to “guarantee proper means of existence for the insured, their dependents and survivors, whenever their income is reduced or disappears for one of the reasons set by the law.” (CA 255/74 The National Insurance Institute v. Almohar [1974] IsrSC 29(1), 11, 14). However, this law, like the other acts of legislation mentioned, promotes additional social purposes as well, such as incentivizing the social and public interest of delivering children in hospitals rather than at home (Section 42 of the National Insurance Law), performing amniocentesis for pregnant women aged thirty-five to thirty-seven (Section 63 of the National Insurance Law), and encouraging the integration of disabled persons into the workforce. (Section 222C of the National Insurance Law; and see in general, Abraham Doron “The Erosion of the Insurance Principle in the Israeli National Insurance: The Effect on the Functioning of the Israeli Social Security Scheme” Social Security 71, 31 (2006)).                   

5. Does each additional social purpose promoted by a law necessarily violate the constitutional right to equality by discriminating with respect to its general purpose? Of course not. The main question that ought to be examined in this context is not what is the relationship between the general purpose of the existing law and the additional purpose the legislator is seeking to promote, but whether, according to the general tests set in the Rekant Case and other cases which we mentioned above, the legislator has wrongfully discriminated between equals for the promotion of such purpose. For example, it was held in the past that granting tax benefits that are not based on pertinent distinctions or criteria is constitutionally discriminatory and wrongful. (Former) President Beinisch articulated this as follows:

            Granting of tax benefits is tantamount, in economic terms, to granting public funds to selected individuals. Although it is true that the State does not directly transfer funds to taxpayers (and therefore it is commonly deemed as indirect support), essentially, the indirect support is tantamount to charging all taxpayers with tax payment, and in the second stage repaying it to selected individuals only. Such a distribution of public resources, without criteria, constructs a reality in which selected individuals are preferred over others, despite the fact that there is no relevant difference between them. This amounts to a blunt disrespect for a person’s equal status before the law.

            (HCJ 8300/02 Nassar v. The Government of Israel, paragraph 46 (May 22, 2012) (hereinafter, “Nassar Case”) From the positive one can deduce the negative: the tax benefits intended to direct social behavior, although they do not directly derive from the objective of income tax, are not wrongful in themselves, unless they give preference to a group which is not relevantly different from another group.

6. The petitioners focused on the main purpose of the child allowances, i.e. the provision of social-financial support to those who are parents of children (this purpose also underwent many changes over the years, as arises from the comprehensive review of the legislative history in this regard, specified in the opinion of Justice Barak Erez). Based on this purpose, the petitioners argued that the relevant group of equals is all of the insured, as defined in Section 65(a) of the National Insurance Law, who are parents of children.

Indeed, this probably was the purpose of the child allowances on the eve of the Amendment to the law. However, the legislature has now revealed its view that it wishes to add a secondary purpose, which will affect a certain derivative of the increased allowance set in the Amendment (up to NIS 300 per family)—increasing  the rate of vaccinated children in the population in order to promote the health of children and the public. As far as the normative ranking, this additional purpose does not differ from the objective of the child allowances before the Amendment, and in this sense the former purpose has neither priority nor exclusivity for the purpose of defining the relevant groups of equals. Because the normative ranking is identical, the examination of the argument of discrimination with regard to the Amendment to the law is different from an argument of discrimination in regulations or procedures of the executive authority, in that we are often required to examine the latter in reference to the purpose of laws ranking higher on the normative ladder. (See for example HCJ 9863/06 Organization of Fighter Leg Amputees v. The State of Israel – The Minister of Health, paragraphs 11-14 (July 28, 2008); HCJ 153/87 Shakdiel v. The Minister of Religious Affairs [1988] IsrSC 42(2) 221, 240-242; HCJ 4541/94 Miller v. The Minister of Defense [1995] IsrSC 49(4) 94, 108-110). On the constitutional level, it has been held in the past that legal provisions are discriminatory with respect to the purpose of the same law when a distinction irrelevant to the purpose for which the law was intended was made. (Nassar Case, paragraphs 39-42, 50-52 of the opinion of (former) President Beinisch; Yekutieli Case, paragraph 39 of President Beinisch’s opinion. In these cases, it was a law whose clear purpose pertains to a wide group, but whose clauses were “hiding” conditions that reduce its applicability to a specific group. (On hidden discrimination, see for example HCJ 1113/99 Adala Legal Center for the Rights of the Arab Minority in Israel v. The Minister of Religious Affairs [2000] IsrSC 54(2) 164, 175; HCJ 1/98 Cabel v. The Prime Minister of Israel [1999] IsrSC 53(2) 241, 259-262). This is not the case here. The Amendment to the law which is the subject matter of this petition has altered the purpose of the child allowance in the sense that, similar to the tax legislation which promotes various public purposes, it includes the purpose of incentivizing child vaccination, incidental to promoting its general purpose as articulated above.       

7. This does not complete the examination of the violation of the constitutional right of equality. As aforesaid, the group of equals is defined not only with respect to the purpose of the law, but also with respect to the essence of the issue, the fundamental values of the legal system, the special circumstances of the case and the prevailing social perceptions. Had the legislature sought to add to the child allowance scheme another purpose that created a distinction between groups that are not relevantly different from one another pursuant to these tests, such an addition would have violated the constitutional right to equality. For example, had the distinction been between groups, the belonging to which does not depend on choice but rather derives from various characteristics of the parents, it would have been justified to wonder whether these characteristics are relevant, according to the fundamental values of the legal system and the prevailing social perceptions. In such a theoretical case, it could not have been argued that the purpose of the Amendment to the law is to promote proper behavior of the parents, and it would have therefore been necessary to deeply examine whether there is indeed a relevant distinction that would justify preferring one group over the other. In addition, regarding the aspect of providing an incentive—positive or negative—for certain behaviors, it should be examined whether the distinction between the various behaviors justifies a distinction between the legal consequences that accompany them in accordance with the tests established in case law. However, in the case before us, not only did the petitioners not support the argument that these are equal groups according to the acceptable tests accepted in case law in this context, but, de facto, they agreed that this is a distinction between groups that may justifiably be treated differently because it is necessary to protect public health, at least according to the studies held by the Ministry of Health. Hence my conclusion that in this case, the distinction set forth by the Amendment to the National Insurance Law between parents who vaccinated their children and parents who refrained from doing so, with regard to the reduction of a set amount of child allowance, does not constitute a violation of the constitutional right of equality of the parents who chose not to vaccinate their children.
8. In HCJ 7245/10, an argument was raised on the discrimination of the Bedouins in the Negev based on the fact that this sector’s access to Family Health Center services is very limited and this sector consequently finds itself in an impossible situation where it has no access to vaccines and yet is being told to vaccinate. In my opinion, this argument does not establish constitutional grounds for a violation of equality; and insofar as it indeed transpires that pursuant to the Amendment any child allowance belonging to a parent who wished to vaccinate his child but was unable to do so due to lack of suitable access to a Family Health Center was reduced, this would, in my opinion, be a good argument to raise in the contestation and appeal proceedings set forth in Sections 68(i) and 68(j) of the National Insurance Law. Without addressing the argument on the merits, it should be noted that while these petitions were being deliberated, the respondents acted to increase access to Family Health Centers in the Bedouin sector in the Southern District (see details in paragraph 62 of the opinion of Justice Arbel), and the respondents have also presented figures that show that the vaccination rates in this sector are similar to the rates in the other sectors. Therefore, the discrimination argument insofar as it was raised with regard to the Bedouin sector should be rejected in this case.
9. Before concluding and, I would like to make two notes. One pertains to the nature of the reduction contemplated in the petition. Unlike my colleague, Justice Barak Erez (paragraphs 37-53 of her opinion), I believe that a reduction of child allowances by a set amount as a result of failing to vaccinate according to the Vaccination Program is a sanction and not conditioning. As I understand it, there is an obvious difference between the reduction set by the Amendment to the law and the conditions set forth with regard to eligibility for child allowances, including: the child’s presence in the State of Israel, the child’s age is below eighteen (Section 65(a) of the National Insurance Law [Consolidated Version], 5755-1995), the child is, generally, in the custody of an eligible parent (Section 69 of the National Insurance Law), and the parent is an “Insured” within the definition of Section 65(a) of the National Insurance Law. These and others are conditions to the receipt of child allowances, which guarantee that the allowance will be given to families whose characteristics fulfill the purpose of the child allowance. However, the nature of the reduction set by the Amendment to the law is different from these conditions in several respects. First, the amended law grants an increment to the allowance and alongside such increment also determines that certain amounts of this increment will be deducted from the allowance paid to the parent if the required vaccine is not given by the date set forth in the Vaccination Program. In the words of the provision, if the child is not vaccinated “the monthly child allowance paid for him will be reduced by the sum of NIS 100.” (Section 68(d)(1) of the National Insurance Law; the emphasis has been added). A “reduction” is, as its name suggests, the denial of a right that has been granted, and therefore, it seems that the words of the law and the mechanism chosen support the viewpoint that this is a sanction. Second, this is a reduction that is intended to motivate parents to vaccinate their children using a negative economic incentive that denies part of the allowance amount due to conduct that is inconsistent with the goal the legislature seeks to promote. Such a negative economic incentive bears, by its essence and purpose, the characteristic of a sanction and has a punitive hue that is directed against someone who chooses to jeopardize the health of his children and the health of the general public. In view of my position that we are faced with a sanction and not conditioning, I did not deem it necessary to address the doctrine and the auxiliary tests, which my colleague chose to develop at length in her opinion, with respect to the issue of conditioning. I will further note in this context that the position that we are faced with conditioning was not raised by any of the litigants, and in any event was not discussed and deliberated in the petitions at bar. For these two reasons, I believe this issue may be left for the opportune moment.

1. Another remark I would like to make as a side note follows. In my opinion, while the reduction at the center of the petitions neither violates the constitutional right to equality nor other constitutional rights and, thus there is no need to grant the remedy sought in the petitions—invalidating the Amendment to the law which sets the reduction—it is difficult to avoid the impression that in the case at bar, the legislature chose a “shortcut” in order to promote the Vaccination Program of the Ministry of Health. The fact that the legislator chose to enforce an administrative Vaccination Program, set by the Director General of the Ministry of Health (Section 68(d)(3) of the National Insurance Law) through a reduction in child allowances derives mainly, it seems, from considerations of efficiency. These considerations were expressed in the Statements of Raviv Sobel, (Former) Deputy Director of Budgets at the Ministry of Finance, in a deliberation held before the Finance Committee of the Knesset:

            The data presented by Dr. Kedman regarding the ineffectiveness of the criminal supervision . . . PM Oron says that we will send an army of policemen, an army of controllers, and they will get the job done, but we see that this is not working . . . there are worse things for which the State of Israel does not indict people; and if someone thinks that the criminal tools are those through which all problems can be solved, just like they discovered around the world that this is not the way, it also became clear in Israel that this is not the way. Criminal tools are not enough. Therefore, certainly, financial incentives are also a tool.

            (Minutes of the Finance Committee’s meeting of June 24, 209, on p. 44; Annex 2 to the preliminary response to the petitions on behalf of the Knesset).  

Indeed, it is difficult to dispute the assumption that the imposition of a sanction based on the data relied upon by the authority, without having to confront the difficulties of its execution, makes the sanction highly efficient. However, without derogating from the importance of considerations of efficiency, it may have been proper to also take additional considerations into account. Perhaps, based on such considerations, it would have been appropriate to first enact a law that creates a vaccination requirement before imposing a sanction on its breach, which would also be set out in the same law. In other words, perhaps it would have been appropriate to take the statutory “highroad” and to regulate the entire issue of vaccination in a single act of legislation. In this context, it is noteworthy that if, for example, a criminal prohibition had been imposed on refraining from vaccinating children it would not have been possible to collect fines imposed on child allowances since national insurance allowances are non-attachable. (Section 303(a) of the National Insurance Law; Section 11 of the Tax Ordinance (Collection); and see also, Pablo Lerner “On the Attachment of Salaries in the Israeli Law”, Hapraklit [48] 30, 46 2005); David Bar Ophir, The Procedure and Case Law of Execution 893-894 (Seventh Edition, 2012)). Furthermore, the right to child allowances is a central and basic social right. This was expressed in both the petitioners’ arguments and in deliberations of the Knesset’s Finance Committee. For these reasons, and for other reasons that can be raised in this context, I believe that it would be appropriate to consider the use of other means to promote the proper purpose of encouraging child vaccination, such as through granting a positive economic incentive to those who vaccinate, or alternatively, through the use of different sanctions. In any event, because I have not found that the manner in which the legislature has acted violates a constitutional right, I concur with the result reached by my colleagues, Justices Arbel and Barak Erez, that the three petitions should be denied.

 

The conclusion of the judgment as per the opinion of Justice E. Arbel.

 

Issued on this date, 26 Sivan 5773 (June 4, 2013).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

starting with traffic court, and reaching where he has. His contribution covers all areas of the law, and there is no valley in which he did not stake a claim. The judgment he chose for his retirement day is characteristic of the central field of his judicial legacy, the field of torts, and within it medical negligence. For many future years the mark which Justice Rivlin has made on all branches of tort law, from traffic accident law, regarding which he also wrote a fundamental book, to the complex and sensitive issue decided today, will accompany Israeli adjudication. According to the sages, the existence of fair tort law – relations between man and his fellow (Babylonian Talmud Baba Kama 30a) – is among the foundations of just human society. In his judicial work, Justice Rivlin contributed to that. I wish him, now that he has reached retirement age, that "in old age they still produce fruit; they are always green and full of sap" (Psalms 92:14).

 

 

Decided according to the opinion of the Deputy President E. Rivlin.

 

The result of the judgment – to the extent that it regards the annulment of the cause of action of the infant – shall not apply to pending cases (including cases before us) in which an action was not submitted by the parents. Justice E. Rubinstein was of the opinion that the result of the judgment should not be applied for one year from today, and Justice M. Naor notes that the question of the law regarding a claim on the part of an infant which has not yet been submitted should not be decided in the framework of a transitional provision in the case before us.

 

Given today, 7 Sivan 5772 (28 May 2012).

 

 

 

Justice U. Vogelman

Undoubtedly, information provided to a journalist with the intention that it not be published, and which could disclose the identity of the source, is protected by the journalist’s privilege discussed by President M. Shamgar in Citrin [1]. In my view, any other interpretation will render the principle of a journalist’s privilege, as outlined in Citrin [1], empty of substance. I therefore join in the determinations made in paragraphs 98 and 99 of my colleague Justice E. Rubinstein’s opinion, and in his holding that the state may petition the magistrate court to remove the privilege in accordance with the tests established in Citrin [1]. This does not mean that I take a position – in either direction – regarding the scope of the journalist’s privilege with respect to the handing over of information that will not necessarily lead to the exposure of the source of the journalist’s information, and I wish to leave that question for further review.

 

Decided per the opinion of Justice E. Rubinstein.

 

15^th of Kislev 5773

29 November 2012.

 

 

In the Supreme Court

Sitting as a High Court of Justice

 

HCJ 4146/11

 

Before:	Her Honor, Judge E. Arbel
	His Honor, Judge H. Melcer
	His Honor, Judge Y. Danziger
The Petitioners:	Yoav Hess + 116 other Petitioners
v.
The Respondent:	The Chief of General Staff
Petition for the grant of an order nisi
Date of session:	Sivan 4, 5773 (May 13, 2013)
On Behalf of the Petitioners:	Adv. M. Sfard,  Adv. E. Schaeffer
On Behalf of the Respondent:	Adv. Y. Roitman

 

Judgment

 

Judge E. Arbel:

1.In the petition before us, the petitioners petition the Court to order the introduction of a military command prohibiting the use of white phosphorus for any purpose in settled areas and other civilian sites, as well as any use of arms containing white phosphorus in any situation in which there is an alternative weapon that is less dangerous to humans and is capable of achieving an equal or similar military advantage.

2.The need for the petition arose, according to the petitioners, following the extensive and unethical use, according to them, of weapons containing white phosphorus by the IDF during Operation Cast Lead (December 2008 – January 2009). According to them, during the operation many bombs containing phosphorus were dropped, and by the nature of things, because the [Gaza] Strip is densely populated with civilians, the result was extensive injury to civilians, some of whom were injured when the bombs were dropped and some much later, when the incendiary effect of the phosphorus was still active. According to them, the use of phosphorus endangered the lives of civilians, humanitarian employees and medical personnel. The petitioners argue that this is a substance which has potential for serious injuries to those who come into contact with it, and that its harmful effect lasts long after it is launched. The use thereof, it is argued, by its nature does not enable distinction between military and civilian targets, and thus even when it is aimed at legitimate targets, it might ultimately injure civilians. The petitioners’ main legal argument is that the use of white phosphorus constitutes a violation of the international law.

3.The respondent argues that the petition is of a type that the Court does not usually consider, as it deals with the weapons to be used by the IDF. The respondent also claims that there is no impediment under the law of armed conflict to using artillery shells containing white phosphorus for camouflage purposes only, including in urban warfare. The respondent emphasized that on the professional orders of the chief artillery officer, the use made of the “white smoke” shell is for camouflage purposes only. The State’s attorney, in the hearing before us, also gave notice that at this time the IDF has decided, even though it is not legally required, not to use shells containing white phosphorus in a built-up area, subject to two limited exceptions. The exceptions were presented to us in camera.

4.I will note that the petitioners motioned for the filing of expert opinions regarding the repercussions of the use of white phosphorus in a built-up area. The respondent objected to the motion and argued, inter alia, that the expertise of the opinion’s authors in the architecture field is not relevant to deciding  the question of the legality, in principle, of arms containing white phosphorus, from the legal and factual aspects. In light of our decision, as detailed below, we see no reason to allow the motion to file the opinion. Nonetheless, if the issue arises again in the future, there might be room to delve into it, and it will then be possible to consider the disagreement between the parties with regard to the relevancy of the expertise of the opinion’ authors to the questions under discussion.

Discussion

5.The first issue that must be addressed concerns the justiciability of the issue before us. While the respondent argues that this issue is not justiciable and is one that the Court does not usually consider, the petitioners claim that nowadays there is no doubt that the war is subject to laws and that the laws are subject to judicial interpretation. On this I must agree with the petitioners, within the boundaries of the restraint that this Court has imposed on itself of course, especially with regard to quintessential military matters. I will explain.

As is known, the choice of weapons used by the Army is not generally a matter for this Court’s consideration. Nonetheless, it cannot be said that in every case in which issues related to the use of these or other weapons arise the Court will refuse to consider the matter. Clearly, where arguments arise regarding the use of weapons in a manner that contradicts the law of armed conflict, the Court will have to “enter the battlefield” and consider the arguments raised before it. The boundaries of this Court’s intervention in matters of this kind are extremely limited, but it is reserved and occurs in exceptional and special cases where there is concern of injury to established legal norms. This Court intervenes at times in petitions even if they have political or military implications, so long as the dominant aspect considered therein is the legal aspect (see HCJ 3261/06, Physicians for Human Rights vs. The Ministry of Defense (January 31, 2011) (hereinafter: “in re Physicians for Human Rights”); HCJ 769/02, The Public Committee against Torture in Israel vs. The Government of Israel, IsrSC 62 (1) 507, paragraph 52 of the judgment of President Barak (2006)), and in the words of President Barak:

            “ ‘Israel is not a desert island. It is part of the international formation’ … the Army’s warfare operations do not take place in a legal vacuum. There are legal norms – some from the customary international law, some from the international law that is anchored in conventions to which Israel is a party, and some from the basic rules of the Israeli law – that determine rules regarding warfare management” (HCJ 4764/04, Doctors for Human Rights vs. The Commander of the IDF Forces in Gaza, HCJ 58 (5) 385, 391 (2004)).”

President Beinish has also referred to the matter:

            “We have not said and are still not saying that determining the legality of the IDF’s acts vis-à-vis the residents of the area is not at all subject to judicial review, and on various occasions we have rejected the sweeping argument that these acts are not justiciable. Accordingly, this Court has, on many occasions in the past, been required to consider matters that in certain ways touch upon professional-operational aspects, at times related to acts of warfare, where they gave rise to legal questions concerning the Army’s powers during warfare – in accordance with the law of armed conflict – and the limitations imposed on it by the international humanitarian law” (in re Physicians for Human Rights, paragraph 10).”

6.In order to maintain the balance between the restraint required in this Court’s intervention in quintessential military matters and the operational and professional discretion of the Army Command, and the need to protect and safeguard human rights and honor the international law, we believe that a multi-stage review is required in petitions of this kind. First of all, it is necessary to consider whether the petitions, ex facie, raise arguments of a legal nature that allow the Court to consider them, without such consideration amounting to intervention in the quintessential professional discretion of the military entities. A negative answer will result in the petition’s summary dismissal. A positive answer will require another prima facie review of the basis for the petition, and if it justifies, ex facie, a more in-depth review of the violation of the military means or military course of action of the law of armed conflict or the basic principles of Israeli law. At this stage, it is also necessary to consider the practical implications of the petition. There is no room for a more in-depth examination by the Court where the use of the weapons that are the subject of the petition has been ceased on Army orders. If there are still orders permitting the use, and there is a prima facie basis substantiating any legal injury, there is room for the Court to proceed to the third stage, which involves an in-depth review of the arguments raised, and obtaining extensive answers to these arguments on behalf of the State. At this stage, the Court will examine the legal and factual arguments of the petitioners on their merits, and a determination will be made with regard to the legality of the use of the weapons which are the subject of the petition.

7.The petition before us raises, prima facie, serious arguments against the use made by the IDF of shells containing white phosphorus. From the petition it emerges that this is a substance that might cause serious injuries to human beings, and that there are humanitarian, ethical and legal difficulties in its use in a built-up area, since it is not possible to distinguish between military and civil targets in the course of its use. These arguments, ex facie, oblige another in-depth examination. The arguments raised by the petitioners are of a dominant legal nature. Accordingly, these arguments justify proceeding to the second stage of review required by the Court. However, at this stage we believe that we must stop the judicial review, in light of the State’s declarations regarding the binding orders imposed on the Army with regard to the use of white phosphorus in a built-up area at this time. As aforesaid, the State’s attorney declared that it has been decided not to allow the use of shells containing white phosphorus in a built-up area. Although we were presented with two exceptions to this order, we were persuaded that these exceptions are very limited and leave the prohibition of use effective and very wide, such that it is doubtful whether this matter will realistically arise again. In these circumstances, we believe that there is no room to continue reviewing the matter beyond that. Of course, if the Army’s orders change in the future it will be possible to petition this Court again.

8.It should be emphasized that we have not overlooked the position of the petitioners’ attorney that the orders to limit the use do not resolve the matter. Nonetheless, even the petitioners’ attorney stated that the central difficulties in the current state of affairs are that the respondent has not undertaken that the orders are final, and that the nature of the exceptions are unknown to him. With regard to the nature of the exceptions, as has been noted, they were presented to us with the consent of the petitioners’ attorney “in camera,” and we were persuaded that these exceptions make the use of white phosphorus an extreme exception in the most unique circumstances. With regard to the concern regarding a change in the Army’s orders in such regard, I have two comments. Firstly, since the State has not declared before us that the orders are permanent orders that prohibit the use of the substance, in the current circumstances the IDF should engage in a comprehensive and in-depth review of the use of white phosphorus in the Army, and of its risks and harms, and primarily, it should review the possible alternatives for the use of this substance. Such a review will serve either to make the current orders permanent or to substantiate a position justifying a change in the orders. In any event, it would not be suitable to wait to review the matter in an emergency. Secondly, the State should notify the petitioners’ attorney in the event of a change in the orders, so that he may once again raise his arguments before this Court. 

 

Subject to the aforesaid, the petition is dismissed without an order for costs.

Given today, July 9, 2013.

 

___________________	___________________	___________________
Judge	Judge	Judge

 

 

The Supreme Court sitting as a Court of Appeals for Administrative Affairs

 

 

AAA 2469/12

 

 

Before:                                                The Honorable President A. Grunis

                                                The Honorable Deputy President M. Naor

                                                The Honorable Justice E. Rubinstein

 

 

The Appellants:                      1.    Morris Bremer

                                               2.    Eddie Weisbaum

                                               3.    Motty Maoz

                                               4.    David Haimov

                                               5.    Eliyahu Miller

                                               6.    Yitzchak Elkoser

                                               7.    Pinchas Tzelik

                                               8.    The General Association of the Merchants and the Self-Employed

 

v.

 

The Respondents:                   1.    The Tel Aviv-Jaffa Municipality

                                               2.    A.M.P.M.

                                               3.    Tiv Taam Daily Ltd.

                                               4.    Tiv Taam Reshatot Ltd.

                                               5.    Tiv Taam Hacarmel Holdings Ltd

                                               6.    Tiv Taam Hodnigs (sic.) 1 Ltd.

 

                                               Appeal of the judgment of the Tel Aviv-Jaffa Administrative Affairs Court dated February 22, 2012, in AP 2500/07, given by the Honorable Justice E. Covo.

 

Date of Session:                                  23^rd of Nissan, 5773 (April 3, 2013)

 

On behalf of Appellants 1-7:              Adv. Ivri Feingold

 

On behalf of Appellant 8:                   Adv. David Shub

 

On behalf of Respondent 1:                Adv. Rachel Avid

 

On behalf of Respondent 2:                Adv. Meir Porges;Adv. Shlomi Bracha

 

On behalf of Respondents 3-6:           Adv. Ronen Buch; Adv. Eli Shimelevich

 

 

 

Judgment

 

Deputy President M. Naor:

 

1. Before us is an appeal against the judgment of the Tel Aviv-Jaffa District Court, sitting as an Administrative Affairs Court (Deputy President E. Covo) in AP 2500/07 dated February 22, 2012. In the judgment, the Court rejected the Appellants' petition to instruct the Tel Aviv-Jaffa Municipality to close various businesses that are open on the Sabbath.

 

 

Background

 

2. Appellants 1-7 are owners of retail businesses selling food (grocery stores), which operate in the city of Tel Aviv-Jaffa (hereinafter: the "Appellants"). Appellant 8 serves as the representative of merchants in Israel on various matters. Respondent 1 is the Tel Aviv-Jaffa Municipality (hereinafter: the "Municipality"), while Respondents 2-6 (hereinafter: the "Respondents") operate "supermarket" stores across the city of Tel Aviv-Jaffa. The Respondents operate their businesses during all days of the week, including the Sabbath. This, in violation of the Tel Aviv-Jaffa (Opening and Closing of Stores) By-Law, 5740-1980 (hereinafter: the "By-Law"), which prohibits opening stores on the day of rest.

 

3. Prior to filing the petition to the Administrative Affairs Court, the Appellants approached the Municipality a number of times so that it would exercise its authority and close the Respondents' businesses. On July 26, 2007, the Appellants received a response from the Municipality's Inspection Department, that each Sabbath, businesses operating on the day of rest are fined in the amount of NIS 660. On July 15, 2007, the Appellants sent an additional letter in which they requested that the Municipality take action to close the businesses, pursuant to its authority by virtue of the Business Licensing Law, 5728-1968 (hereinafter: the "Business Licensing Law" or the "Law"). Until the submission of the petition which is the subject of the Appeal, the Appellants did not receive any response on the merits of the issue.

 

The Proceedings in the Administrative Affairs Court

 

4. The Appellants' complaint in their petition was that the Municipality is refraining from enforcing the laws related to observance of the weekly day of rest, as it is not taking action to close the businesses that are open on such day. They argue that the Municipality must close the businesses that are open on the Sabbath, pursuant to its authorities by virtue of the Business Licensing Law, the Municipalities Ordinance [New Version] (hereinafter: the "Municipalities Ordinance") and the By-Law. The Appellants argued that the Respondents gain a competitive advantage over the Appellants due to their openly violation of the Law, since the Respondents attract consumers who prefer to do their shopping on the Sabbath. Had the Respondents refrained from violating the Law, so it is argued, such consumers would do their shopping during the week, and at least some of them would do so at the Appellants' businesses. According to the Appellants, the Respondents' conduct amounts to "unfair competition" which compromises the Appellants' right to freedom of occupation. As such, the Municipality has a duty to take action against the Respondents, in accordance with the Business Licensing Law. The Appellants further argued that closing the Respondents' businesses is necessary in light of the social and religious objectives of the day of rest, and since the operation of the Respondents' businesses on the Sabbath constitutes a nuisance and adversely affects the residents' quality of life.

 

5. The Municipality, on its part, argued that it enforces the observance of the day of rest in accordance with what is determined in the Law and in accordance with its administrative discretion. According to it, it is not permitted to exercise the sanctions prescribed in the Business Licensing Law in order to prevent competition or to preserve the sanctity of the Sabbath, since these are not among the purposes of the Law. As for the By-Law: the Municipality argued that it is indeed acting by virtue thereof, since the By-Law, which prohibits the operation of businesses on the Sabbath, only permits imposition of monetary fines, and such fines were indeed imposed upon the Respondents. According to the Municipality, by virtue of the Municipalities Ordinance, it is vested with authority to approach the Municipal Court and to request to close a business transgressing the provisions of the By-Law, however, it argues, the exercise of such authority is subject to discretion. In the judgment it was even noted that in the case at hand, the Municipality decided not to exercise its authority in accordance with a general policy, which, according thereto, derives from the population's needs and desires. The Respondents, in general, joined the Municipality's arguments.

 

6. During the hearing of the petition, the Administrative Affairs Court instructed the Attorney General to submit its position on the matter at hand. The Attorney General did not appear at the petition hearing however submitted his position in writing. According to that stated in his position, the Municipalities Ordinance authorizes the local authority to arrange the opening and closing of businesses, inter alia, on days of rest, and taking religious tradition reasons into consideration, and grants it the enforcement and inspection authorities in the matter. The authority of local authority to arrange this matter is grounded in the perception that the authority, which represents the local residents, must strike a balance "between the interest of preserving the nature of the Sabbath as a day of rest, which has both national and social characteristics, and making certain economic activity possible." Having said that, the Attorney General emphasized that he attaches importance to the enforcement of the by-laws promulgated by the local authorities "for obvious reasons of maintaining the rule of law, and in light of the public interests of protecting the nature of the Sabbath as a day of rest, in accordance with the characteristics of each area, and taking the composition of the local population into consideration, as prescribed in the By-Law."

 

Finally, the Attorney General stated that the Business Licensing Law is not relevant to the matter, since this law was not intended to be a means of enforcing the By-Law regarding the operation of businesses on the Sabbath and on days of rest.

 

7. In its judgment, the Court addressed two main questions: Are preventing unfair competition and preserving the sanctity of the Sabbath among the objectives of the Business Licensing Law and is the Municipality permitted to close businesses that operate on the Sabbath by virtue of this law; and are there other laws that authorize the Municipality to enforce the closing of the Respondents' businesses on the Sabbath, and if so, does the Municipality's decision not to exercise its authority to request to close the businesses justify the Court's intervention.

 

8. As for the first question, the Court ruled that preventing unfair competition is not included among the purposes of the Business Licensing Law, which are listed in Section 1 thereof, based both on the language of the Law, and in accordance with case law. The Court explained that while freedom of occupation must be taken into consideration in the framework of the Law, only the freedom of occupation of the license applicant should be examined, "and the Municipality does not have the authority to consider the impact of giving a certain person the possibility of opening his business, on the level of competition in the market, or how it shall impact another person's income" (paragraph 16 of the judgment). According to the Court, such considerations could empty of content the Business Licensing Law, which was meant to ensure that businesses that comply with the purposes of the Law shall be entitled to a business license. The Court further ruled that the "inconvenience" caused to the Appellants' businesses does not constitute an infringement of their freedom of occupation, since they are all subject to the same Municipality policy. Therefore, the Court ruled that the Appellants were not discriminated against and their freedom of occupation was not infringed. As for preserving the sanctity of the Sabbath, the Court ruled that this is a clear religious purpose, which is a matter of public controversy, and in any event is not listed among the purposes of the Business Licensing Law. As such, it is not possible to take steps against businesses that are open on the Sabbath due to them "violating the sanctity of the Sabbath" and offending religious values. The Court clarified that the sanctions prescribed in the Law cannot be used other than for the purposes which the Law was meant to realize, and therefore, the Municipality should not be forced to take steps against the Respondents under the Business Licensing Law.

 

9. The Court also further rejected the Appellants' argument that the activity of Respondents' businesses on the Sabbath constitutes a nuisance. Firstly, it was determined that it is problematic that the Appellants, who are grocery stores owners, and whose first priority is their personal economic interest, present themselves as those who are also representing the interests of the city's residents. The Court further ruled that the Appellants adduced no evidence  that the opening of the Respondents' businesses constitutes a nuisance. As such, it ruled, the presumption of proper administration  applies to the Municipality.

 

10. As stated, the second question the Court dealt with was whether it is appropriate to force the Municipality to take steps against the Respondents by virtue of provisions of other laws. The Court stated that the only and direct sanction that is possible due to the violation of the By-Law is the imposition of a monetary fine, by virtue of Section 265 of the Municipalities Ordinance. As the Municipality clarified, it indeed exercises this sanction. The Court stated that notwithstanding that according to the Appellants, the fines do not deter and are "mocking the poor", the Municipality is not entitled to take other enforcement actions when the monetary fine was prescribed as the means of enforcement in the case of violation of the By-Law. As such "There is no relevance to the question whether or not the sanction that was taken in the framework of the law is effective" (paragraph 27 of the judgment).

 

11. The other source of authority which the Court discussed is Section 264A of the Municipalities Ordinance. This Section grants the Municipality authority to request that the Municipal Court order owners, managers or operators of a business operating on the Sabbath to refrain from opening it contrary to the By-Law. The Court emphasized that when considering which means of enforcement to apply, the Municipality must strike a balance between the conflicting interests, including: freedom from religion, freedom of conscience, freedom of occupation and the public's needs, on the one hand, and on the other hand the desire to preserve the values of tradition and avoid offending religious feelings. The Court addressed the fact that the Municipality did not file motions to close the Respondents' businesses pursuant to Section 264A, but ruled that even if the authority refrains from using all of the means it has at its disposal for enforcement purposes, this does not suggest that there was a flaw that justifies the Court's intervention, since "as long as the Court is under the impression that the authority is not completely refraining from enforcing the law, and that it is not applying selective enforcement, as a rule, there is no place for judicial intervention" (paragraph 35 of the judgment). The Court ruled that it must take caution not to replace the authority's discretion with its own discretion, also since at hand are matters that are at the heart of public and political controversy. According to the Court, to the extent that the Appellants wish to convince that the balance struck by the Municipality between the State's Jewish character and the fundamental values that anchor individual liberties, should be altered, they should act in the public arena, and convince that their position is superior using democratic means.

 

12. In summary, the Court ruled that it must apply great judicial restraint  when it comes to an enforcement policy in a matter which is at the heart of political and public controversy. The Court determined that the Appellants did not meet the burden lies with  them to demonstrate that the Municipality's policy in enforcing the By-Law is so extremely unreasonable that it justifies judicial intervention. The Court ruled that "in these circumstances, it is presumed that the authority acted lawfully, in light of all of the facts, and its decision not to exercise the authority to file motions to close the businesses – is reasonable and proportional" (paragraph 39 of the judgment; emphasis added – M.N.). Therefore, the Court rejected the Appellants' petition and obligated them to pay the Municipality's expenses in the amount of NIS 75,000.

 

Hence the Appeal before us.

 

The Appellants' Arguments

 

13. The Appellants are claiming against the judgment of the Administrative Affairs Court. According to the Appellants, the Court erred in ruling that it is inappropriate to intervene in the By-Law enforcement policy which the Municipality is applying. They argue that as long as the By-Law remains in effect, the principle of the rule of law precludes the possibility of accepting a situation in which the Municipality does not enforce the closure of businesses that knowingly and publicly violate the By-Law. The Appellants argue that the Municipality, by contenting itself with imposing fines of only NIS 660 (the amount of the fine was raised after the petition was filed and is currently NIS 730) each and every Sabbath, and particularly when it comes to only one fine each Sabbath for each business, is making a mockery of the Law and encouraging its violation. They further argue that the Municipality's enforcement failures cause them heavy financial damage; compromise the fundamental principle of the rule of law and the principle of equality in enforcement; and prejudice constitutional basic rights, including the right to property, the freedom of occupation and equality. Since large businesses, whose daily profits exceed the amount of the fine, can allow themselves to open their doors on the day of rest despite the fine and in doing so, increase their profits, while small businesses, such as the Respondents (sic.), cannot do so, and therefore are injured.

 

14. According to the Appellants, the lower court erred when it primarily dealt with the Business Licensing Law, since, according to them, the main issue is the Municipality's duty to exercise all of the legal means at its disposal. Additionally, according to them, the Court also erred when it ruled that the Business Licensing Law does not authorize the Municipality to take action in the case at hand. The Appellants believe that in the business licenses that were issued to the Respondents by virtue of the Business Licensing Law (hereinafter: the "Business Licenses"), it is explicitly prescribed that they are not valid during the Sabbath and Israel holidays. Therefore, they argue, the activity of the Respondents' businesses is carried out on the Sabbaths without them possessing a valid business license, and therefore the sanctions prescribed in the Business Licensing Law regarding unlicensed businesses should be imposed thereupon. The Appellants further argue against the Court's ruling that the Municipality is not authorized to enforce the observance of the day of rest by means of the Business Licensing Law since such enforcement is not part of the Law's purposes. According to them, in this matter, it is necessary to distinguish between refusal to issue a license by virtue of the Business Licensing Law and enforcing such Law. While the first can be done only on grounds related to the purposes of the Law, the principle of the rule of law warrants that there be no similar distinction with respect to the enforcement of the Law – any violation of the Law, regardless of the purpose of the violation or the motivations of those requesting to enforce, must be enforced.

 

15. The Appellants also claim against the lower court's  ruling that their freedom of occupation was not infringed. According to them, the meaning of the Court's ruling that "[the Appellants] and the Respondents are subject to the same Municipality policy and therefore [the Appellants] are not discriminated against, and their freedom of occupation is not infringed" (paragraph 17 of the judgment), is that the Appellants are not discriminated against and that their freedom of occupation was not infringed because they, too, could choose to violate the Law and be fined. According to them, the harm caused to the business owners who obey the rest laws due to the violation thereof by the Respondents, is in and of itself the infringement of their freedom of occupation. The Appellants further argue that as a result of the enforcement actions – i.e. imposition of fines – which the Municipality initiated, there is discrimination between the strong and the weak. The Appellants also argue against the Court's ruling that the Business Licensing Law should not be exercised because "preservation of the sanctity of the Sabbath" is an unambiguous religious purpose, and emphasize that they did not argue a religious purpose at all.

 

16. According to the Appellants, the essence of the judgment  lies in the lower court's  ruling that it is inappropriate to intervene in matters which are at the heart of public and political controversy. However, according to them, the controversy itself is not at all relevant to the determination in the matter at hand. The Appellants argue that the principle of obeying the law is not a matter of public controversy. The Municipality cannot absolve itself from enforcing a law only because the matter the law governs is a matter of public controversy. To the extent that the Municipality is not interested in enforcing the By-Law, so the Appellants say, it must act to change it. The Appellants address the great importance of the day of rest, as is expressed also in the rulings of this Court, not only in accordance with the values of the State of Israel as a Jewish state, but also in light of universal and social values.

 

17. In light of that stated, the Respondents (sic.) argue that the lower court  erred in its decision not to intervene in the Municipality's conduct. They emphasize that there is no dispute that the Respondents' activity constitutes a violation of law. As such, according to them, the Court's ruling that it is inappropriate to intervene in the Municipality's conduct as long as it doesn't completely refrain from enforcing the law, without considering whether the enforcement actions indeed achieve the purpose for which they were intended, is unreasonable and – so they argue – contradicts case law which provides that the Court must examine the enforcement actions.

 

18. Finally, the Appellants are claiming against the NIS 75,000 expenses the Court imposed upon them. They argue that these are exceptionally high expenses which have no justification when the Appellants pointed to an undisputed violation of a law, which is related to important public matters. The Appellants further argue that the Court ignored the fact that the Appellants are people with limited means, and that they waited more than 4 years for a judgment in their petition.

 

The Respondents' Arguments

 

19. The Municipality agrees with the lower court's  judgment. It argues that the dispute lies in the question what law should be enforced and consequently, what are the means of enforcement the Municipality can apply. It argues that the law which is to be enforced is the By-Law, and according to it, it indeed enforces this law. In this context, the Municipality argues that "there is no dispute that the [Appellants'] petition was meant to lead to a change in the balance the Respondent strikes, by means of the By-Law and the enforcement thereof, between all the relevant interests to permit the opening of stores on days of rest, the social aspects of a uniform weekly day of rest, as well as those that reflect the Jewish and democratic nature of the State, and as well as those that reflect the right of an individual to freedom of occupation" (paragraph 12A of the Municipality's summations).

 

The Municipality is further of the opinion that contrary to the Appellants' claim, the Court did not determine that it is prevented from applying judicial review, but rather examined the Municipality's actions in accordance with the criteria of administrative law, and found it to be inappropriate to intervene in the enforcement policy the Municipality applies. With respect to the Business Licensing Law, the Municipality argues that there is no basis to the Appellants' argument that the Respondents' business licenses are invalid on the day of rest, and therefore, the Court justly ruled that it is inappropriate to apply the means of enforcement prescribed in that law. The Municipality emphasizes that it is not possible to apply the means of enforcement prescribed in one law due to the violation of another statute, which does not grant the authority to apply such means of enforcement. As for the expenses imposed upon the Appellants, the Municipality argues that the expenses amount was ruled following an extended  proceeding and that the Appellants did not point to a public interest which justifies exempting them from their obligation to pay expenses.

 

20. Respondent 2 adds that the Appellants are ignoring the nature of the city of Tel Aviv-Jaffa and its residents' needs. It argues that the proper nature of the day of rest is a matter of controversy and there is no justification for accepting the Appellants' position rather than the position that there should be businesses open on the Sabbath. This is particularly so in the city of Tel Aviv-Jaffa, on whose diverse nature, Respondent 2 had discussed at length. According to Respondent 2, "the burden of 'shutting down' the city of Tel Aviv on week-ends is a very heavy burden, which should certainly not be made compulsory for unfounded commercial reasons which have not at all been proven" (paragraph 10 of Respondent 2's summations). Respondent 2 also argues that the Appellants wish to compromise the basic right of each and every resident in the city to shape the content of his or her day of rest in accordance with his or her desire and taste. The Respondent argues that the legislator wished to grant the local authorities complete authorities and full discretion to determine the nature of the day of rest. Therefore, according to Respondent 2, "intervening in the broad discretion given to the Municipality and the public considerations which the Municipality considers when striking such a balance, is not within the scope of the judicial review of the 'administrative action', a fortiori when at hand […] is a matter which was defined by the initiators of the law as 'the serious problem of the dispute between secular and religious" (paragraph 17 of Respondent 2's summations).

 

21. Respondents 3-6 argue that it is inappropriate to grant, as a relief, a general declaration pursuant to which the Municipality must enforce the law. To the point of the matter, in addition to the arguments that the other Respondents claimed, Respondents 3-6 emphasize that the Municipality's enforcement policy is to exercise administrative authority, and that there is no justification to intervene in the discretion exercised as long as the Municipality did not completely absolve itself from the responsibility of the enforcement of the law. In this context, Respondents 3-6 argue that the uniqueness of the local authority – as an entity that is closely familiar with the residents' needs and preferences and as a representative democratic entity which is meant to reflect the desires of the city's residents – justifies the broad discretion vested in the local authorities. Respondents 3-6 also claim against the Municipality's policy to impose fines on businesses that are open on the Sabbath, which they argue causes them financial damage, and they argue that "the Municipality should be more attentive to various needs and preferences in the city in which a population that wishes to shop on the Sabbath resides" (paragraph 13 of Respondents 3-6's summations).

 

According to Respondents 3-6, the Municipality is not authorized to ask the Municipal Court for an order to close a business by virtue of Section 264A of the Municipalities Ordinance, since this section authorizes the Municipality to request a closing order when at hand is a business that violates a by-law that was promulgated pursuant to Section 249(21) of the Ordinance – which provides that the Municipality is permitted to consider "religious tradition reasons". According to the Respondents, it does not appear that the Municipality promulgated the By-Law pursuant to this section, but rather due to the social reasons prescribed in Section 249(20) of the Ordinance. This conclusion is reinforced, so they argue, by the fact that the By-Law was legislated many years before Section 249(21) was added to the Municipalities Ordinance. Respondents 3-6 also object to the Appellants' argument regarding the Business Licensing Law, pursuant to which the purposes of the Law relate only to the issuing of licenses and not to means of enforcement, and also argue that the By-Law was not intended to protect fair competition but rather to realize a social and religious purpose.

 

22. The Attorney General also did not appear at the hearing in the Appeal before this Court and resubmitted his position in writing, as was submitted to the lower court, and as specified above.

 

The Normative Framework

 

23. The main question which needs to be ruled upon in the Appeal before us, is whether the Municipality is to be forced to exercise means of enforcement which it has the authority to exercise, and which until now it refrained from exercising. Before I turn to address this question, I shall briefly explain the various statutory provisions which were raised in the framework of this proceeding and the enforcement authorities which the Municipality possesses to enforce them.

 

(a)Business Licensing Law

 

24. The first source of authority upon which the Appellants wish to rely, is, as mentioned, the Business Licensing Law. The purposes of this Law are prescribed in Section 1 of the Law, which reads:

 

1. (a) The Minister of Interior may, by orders, prescribe and define businesses that require licensing, in order to ensure all or some of the following purposes therein:

 

(1)     Proper environmental quality and prevention of hazards and nuisances;

 

(2)     Prevention of danger to public safety and protection against robbery and breaking in;

 

(3)     Safety of persons at or in the vicinity of the place of business;

 

(4)     Prevention of danger of livestock diseases and prevention of pollution of water sources with pesticides, fertilizers or pharmaceuticals;

 

(5)     Public health, including proper sanitary conditions;

 

(6)     Upholding the enactments related to planning and building;

 

(7)     Upholding the enactments related to firefighting."

 

25. Section 14 of the Business Licensing Law deals with businesses that are operated not in accordance with a license and it prescribes the penalties for such actions. Section 20 of the Law authorizes position holders to order a temporary break of business due to infractions of Section 14.

 

(b)The Municipalities Ordinance and the By-Law

 

26. Section 249 of the Municipalities Ordinance deals with a municipality's authorities. Sub-Section (20) therein provides:

 

"249. A municipality's authorities are:

 

[…]

      

(20) To arrange the opening and closing of stores and workshops, restaurants, coffee shops, teashops, beverage shops, cafeterias, canteens and other such institutions […] and to supervise the opening and closing thereof, and to determine – without derogating from the generality of the authority – opening and closing hours on a certain day; provided that the validity of this paragraph shall be subject to any exemption instructed in an order by the Minister (emphases added – M.N.)

 

27. Section 265 of the Ordinance provides:

 

"265. (a) The Minister, with the Minister of Justice's consent, may, by an order published in the official gazette (Reshumot), notify that an offence of a certain provision of a municipal by-law is an offence punishable by a fine, in general, or at prescribed terms or restrictions.

 

2. The Minister shall prescribe in an order published in the official gazette (Reshumot) –

 

1. The rate of the fine for each offence punishable by a fine, provided it shall not exceed NIS 730, and he may prescribe different rates for the offence, considering the circumstances in which it was committed.

 

[…]" (emphases added – M.N.).

 

28. In 1990, following a doubt that was raised regarding the authority of local authorities to promulgate provisions in by-laws regarding prohibiting opening businesses on the Sabbath and on Israel holidays, the Amendment of the Municipalities Ordinance (Number 40) Law, 5751-1990 (hereinafter: the "Authorization Law") was legislated. This law was meant to vest the local authorities with the said authority and to ensure the validity of the existing by-laws (see: Explanatory Notes to the Municipalities(Prohibition to Open Businesses and the Closure thereof on Days of Rest) Bill, 5748-1988, Bills 134 (hereinafter: the "Explanatory Notes to the Authorization Bill") (this is the original name of the Authorization Bill, see Divrei Haknesset (Knesset Proceedings) 12(3), 1191 (5751));  HCJ 5073/91 Israeli Theatres Ltd. v. The Netanya Municipality, IsrSC 47(3) 193, 197-199 (1993) (hereinafter: the "Israel Theatres Case")). To this end, the Authorization Law added sub-section (21) to Section 249 of the Municipalities Ordinance:

 

"(21) A municipality may exercise its authority pursuant to paragraph (20) in the area of its jurisdiction or in any part thereof with respect to the Day of Rest, considering religious tradition reasons, and with respect to the 9^th of Av; "Days of Rest" – as specified in Section 18A of the Law and Administration Ordinance, 5708-1948. For this purpose, the Sabbath and Israel holidays – from the entrance of the Sabbath or the holiday until the end thereof; the "9^th of Av" – as defined in the Prohibition to Open Entertainment Places on the 9^th of Av (Special Authorization) Law, 5758-1997" (emphases added – M.N.)

 

29. The Authorization Law also added to the Municipalities Ordinance Section 264A, which prescribes that the Municipality may approach the Municipal Court in order to enforce a by-law that was promulgated pursuant to Section 249(21) (see also: the Israel Theatres Case, on pages 199-200):

 

"264A. (a) If a municipality promulgated a by-law pursuant to Section 249(21) and a business opened contrary to the provisions of the by-law, the court which is authorized to address the offence under such by-law may order the owners, managers or operators of the said business, to refrain from opening the business on the days of rest contrary to the provisions of the by-law (hereinafter: a Prohibition to Open Order), if it was convinced that the business opened contrary to the provisions of the by-law; a motion to grant such an order shall be filed by whomever is authorized to file claims due to an offence under the said by-law, along with an affidavit to verify the facts upon which the motion is based, and the Court may issue the order ex parte, with only the petitioner, if it found that there is justification to do so in the circumstances at hand.

 

2. […]" (emphases added – M.N.)

 

30. The Tel Aviv-Jaffa municipality promulgated the By-Law regarding the opening and closing of stores, pursuant to its authorities under the Municipalities Ordinance, in as far back as 1980. Section 2 of the By-Law provides that businesses shall not be opened on the day of rest:

 

"2. (a) Subject to that stated in sub-Sections (c), (d) and (e), the owner of a store or coffee shop shall not open his business and shall not keep it open on the Sabbath and Israel holidays, except with a special council permit as stated in sub-section (b).

 

2. The council may grant a special permit, if the owner proved that he is not Jewish and that he closes his business on all weekly days of rest of his confessional group; such a permit can be given at such terms as the council shall deem fit.

 

3. (1) The owner of a coffee shop, other than a bar and a business that sells ice cream, may open it on the Sabbath and Israel holidays, except for the Day of Atonement (Yom Kippur) and serve meals to his customers, within the building in which the business is located, during the following hours:

 

1. On the eves of Sabbaths and Israel holidays - until 10:00 pm.

 

2. On the Sabbath and Israel holidays – between 10:00 am and 3:00 pm and from April 1 until October 31 also from 6:00 pm until sunset.

 

2. A pharmacy shall be open to sell medication on the Sabbath and Israel holidays but only in accordance with a roster which shall be duly prescribed.

 

4. On the Sabbath and Israel holidays, except the Day of Atonement (Yom Kippur), a person shall not open and shall not allow anyone acting on its behalf to open a place of public entertainment, other than for cultural and educational activities.

 

5.  On the Day of Atonement (Yom Kippur) a person shall not open, and shall not allow anyone on its behalf to open, a store or a coffee shop" (emphases added - M.N.)

 

31. Additionally, pursuant to that stated in Section 265 of the Municipalities Ordinance, the Municipalities (Offences Punishable by a Fine) Order, 5731-1971 (hereinafter: the "Municipalities Order") had been issued in the past, from which it emerges that opening a business on the Sabbath in the city of Tel Aviv-Jaffa, is an offence punishable by a fine:

 

"1. Any infraction of a provision in any of the sections specified in Column B of the by-laws specified in Column A of the First Schedule is an offence punishable by a fine.

 

2. (a) The rate of the fine for each offence as stated in Section 1 shall be as per the level of the fine that was prescribed alongside it in the First Schedule in Column C.

 

(b) In this Order -

 

 

Level of Fine	In New Israeli Shekels
A	730
B	475
C	320
D	245
E	165
F	105
G	85

           

[…]

First Schedule

[…]

Part B – Tel Aviv – Jaffa

 

Column A By-Laws		Column B Sections	Column C Level of Fine
[…]
10. Tel Aviv–Jaffa (Opening and Closing of Stores) By-Law, 5740-1980		2(a), (d), (e), 7(a)-(c)	A
		3	B
		7(d)	C

 

An offence under Section 2(a) of the By-Law, which prohibits opening businesses on the Sabbath, is ranked as a Level A offence punishable by a fine, the rate of which is currently NIS 730. This rate was prescribed in the Municipalities (Offences Punishable by Fine) (Amendment no. 6) Order, 5771-2011. The rate of the fine at this level, as was before this amendment and at the time of the filing of the petition which is the subject of this Appeal, was NIS 660, in accordance with what was prescribed in the Municipalities (Offences Punishable by Fine) (Amendment no. 2) Order, 5764-2004.

 

Discussion and Ruling

 

A.The Business Licensing Law

 

32. In the Administrative Affairs Court the Municipality was not requested to file a Statement of Response and the petition was denied. During the hearing we held in the Appeal, on March 4, 2013, the Municipality's attorney agreed to view the proceeding as though a statement of response had been filed in the first instance court. I will explain the importance of this matter further on.

 

33. With regard to the Business Licensing Law, my opinion is as the opinion of the lower court and the Attorney General, that it is inappropriate, in this matter, to discuss the exercise of authorities by virtue of this Law, even without addressing the question of which values the Business Licensing Law protects and without discussing the question of the required linkage – if any – between the purposes of the Law and the motivations of those demanding that the Law be enforced. The Appellants' position that the Respondents are violating the Business Licensing Law relies on their argument that "in all of the business licenses that the Municipality grants, it is explicitly and clearly written" that the license is not valid on days of rest. However, the Appellants have not proven this argument of theirs. The "business license" which the Appellants attached (as Annex IX of the petition which they filed to the Administrative Affairs Court) in support of their said argument, is not – as they imply – a license by virtue of the Business License Law, but rather a "permit to open a business" which was issued under the By-Law. The Appellants did not attach any business license of Respondents 2-6 by virtue of the Business Licensing Law and did not request that such license be furnished.

 

In the hearing held before us, the Appellants' attorney referred to the permit to open a business which the Appellants filed to the Court and argued that "The Municipality stipulated and obligated the permit-holder to act in accordance with the terms of the license. Meaning, this is very strong evidence that the stipulation also appears in the license. I shall mention that no one denied that. We are assuming that such stipulation exists". Additionally, when the Appellants' attorney was asked if there is a stipulation requiring the holder of the license to act in accordance with the By-Law in the Respondents' business licenses, he responded that "None of the Respondents denied this. None denied the fact that their business licenses are inherently subject to the By-Law, since otherwise this would also be an omission on the part of the Municipality […] if there is no such stipulation, the Respondents should present a business license and we shall check." However, when the Municipality's attorney was explicitly asked if there is a stipulation regarding compliance with the By-Laws in the business licenses under the Business Licensing Law, her unequivocal answer was that such a stipulation is not included in the license. Therefore, I accept the conclusion that the Appellants did not succeed in proving that the Business Licensing Law is related to the matter before us, and no infraction of the provisions of such law was proven. As such, I do not see any need to further address these matters.

 

B.The By-Law

 

34. At the outset, I request to clarify how and at what stage Section 264A of the Municipalities Ordinance was mentioned, which in my opinion is the crux of the discussion before us.

 

First I shall state that the section was not explicitly mentioned in the Appellants' early applications to the Municipality before filing the administrative petition. The section was also not explicitly mentioned in the administrative petition that the Appellants filed. However, following an oral motion raised by the attorney of one of the petitioners in the hearing before the lower court on October 21, 2009, to amend the petition by way of adding Section 264A of the Municipalities Ordinance, on October 28, 2009 – after the parties' summations regarding in limine arguments were filed, but before the petition was discussed on its merits – the Appellants filed a "Motion to Amend and/or Clarify an Administrative Petition". In the motion, the Appellants requested to add to the petition that the Respondents' activity is illegal also "under the Municipalities Ordinance, including Sections 249(20), (21); 264, 265", and, to list, among the means which the legislator granted the enforcement officials: "a motion to the court pursuant to Section 264A of the Municipalities Ordinance and in accordance with the Tel Aviv-Jaffa (Opening and Closing of Stores) By-Law, 5740-1980, to exercise the authorities granted thereto". The Appellants emphasized that "such a motion is filed solely for the sake of caution and is intended to clarify the legal sources upon which the petitions are based, particularly in light of the Court's remark during the hearing regarding referencing the relevant legislation."

 

35. In its response to the Appellants' motion to amend, the Municipality's attorney notified that she objects to the amendment of the petition if and to the extent that the purpose of the amendment is to respond to her argument regarding the purposes of the Business Licensing Law and the objectives thereof. Having said that, the Municipality's attorney added:

 

"If and to the extent that the requested amendment does not intend to materially change the petition, but only to specify additional means of enforcement which the Respondent is required by [the Appellants] to apply, within its authorities to determine the arrangements for the opening and closing of businesses on the Sabbath and holidays and to enforce them, then it is unnecessary, also according to [the Appellants], since the [Appellants'] allegations regarding how the Respondent exercises its enforcement authority and their attempt to take the Respondent's given discretion in exercising its enforcement authority away, received a response in Sections 21-22 of the Respondent's response to the petition, and in this matter, it makes no difference which means of enforcement [the Appellants] demand that the Respondent apply" (original emphases – M.N.)

 

36. The other Respondents also objected to the motion to amend. Respondent 3 (which is Respondent 2 in the case at hand) argued that at hand was an addition of a cause of action, since the petition in its existing format requested a remedy of exercising specific enforcement authorities, while respondents 4-5 (which are Respondents 3-4 in the case at hand) argued, similarly to the Municipality, that in any event the amendment shall not make any real difference since the sections of the Law that are mentioned in the petition are presented by way of illustration.

 

37. The Appellants' attorney notified during the hearing that was held on September 21, 2010, that "in light of the responses filed to the motion to amend the petition, from which it emerges that there is no need therefor, I withdraw the motion." Meaning, there was no decision not to relate to Section 264A of the Municipalities Ordinance in the framework of the proceeding before the lower court. Furthermore, all of the parties in fact related to Section 264A in the summations they filed, and thus, the lower court related to this section in its judgment.

 

38. From the material before us, it does not emerge that any discussion whatsoever had been held in the Municipality, until the examination of the petition, regarding the question whether exercising the authority pursuant to Section 264A of the Municipalities Ordinance should be considered. As stated, the Municipality agreed that the hearing shall be deemed as through a statement of response had been submitted in the first instance court, and it did not request a possibility to present additional material to us (or to the first instance court). Therefore, my assumption is that we possess all of the facts necessary to rule.

 

(1)The Enforcement Authorities in the Municipality's Possession

 

39. It is clear that the means of enforcement which are at the Municipality's disposal change according to the law, the upholding of which, it must protect. According to the Respondents, the provision violated is Section 2 of the By-Law and the Municipality is exercising the legal measure of imposing  fines in accordance with its authority by virtue of Section 265 of the Municipalities Ordinance, together with the Municipalities Order, in order to enforce the violations of the By-Law. The lower court  ruled in the matter that "with respect to the By-Law - there is no dispute the only and direct sanction for the violation thereof, is the imposition of a monetary fine" (paragraph 27 of the judgment; emphasis added – M.N.). However, as was explained above, imposing fines under Section 265 of the Municipalities Ordinance is not the only sanction in the Municipality's tool box for handling the violation of Section 2 of the By-Law. As stated, Section 264A of the Municipalities Ordinance prescribes that the Municipality is authorized to file a motion to the Municipal Court to grant a Prohibition to Open Order for a business that is violating a provision of a by-law that was promulgated by virtue of Section 249(21) of the Municipalities Ordinance.

 

40. In this context I shall state that Respondents 3-6's argument, that the Municipality was not permitted to exercise its authority by virtue of Section 264A of the Ordinance, is to be rejected. As stated, their argument is that Section 2 of the By-Law was not promulgated pursuant to Section 249(21) of the Municipalities Ordinance which authorizes the authority to consider considerations of religious tradition, but actually rather pursuant to Section 249(20) of the Ordinance. However, this argument cannot be accepted. The fact that Section 249(21) was legislated later does not lead to the conclusion that Section 2 of the By-Law does not rely thereupon. Section 4 of the Authorization Law – the law which added Sections 249(21) and 264A of the Ordinance – explicitly ratified old by-laws, while determining:

 

"4. A by-law regarding the opening and closing of businesses, which a municipality or municipal council promulgated before the commencement of this law, and which would have been duly effected had this law been in effect at such time, shall be deemed from the commencement of this law, as though it had been promulgated thereunder" (emphases added – M.N.)"

           

Two objectives underlie the day of rest: a social objective and a religious-national objective (see and compare: the Israeli Theatres Case, paragraphs 3 and 14 of President Shamgar's judgment; HCJ 5026/04 Design 22 – Shark Deluxe Furniture Ltd. v. Rosenzweig Zvika, Director of Sabbath Work Permits Department – Inspection Division, Ministry of Labor and Social Affairs, IsrSC 70(1) 38, paragraphs 16-18 and 20 of President Barak's judgment, and paragraph 2 of my statements there (2005); Yitzhak Zamir The Administrative Authority Volume A 62-63, 68 (Second Edition, 2010) (hereinafter: The Administrative Authority A)). As mentioned, the Authorization Law was intended to remove the doubt regarding the authority of local authorities to arrange the prohibition to open businesses on the day of rest and permitted the authorities to consider considerations of religious tradition in this matter (see: the Explanatory Notes to the Authorization Bill). Section 2 of the By-Law embodies both social values and Jewish-religious values and Section 4 of the Authorization Law determines that the By-Law should be deemed as though it had been legislated pursuant thereto and in accordance with the authority vested in the Municipality by virtue of Section 249(21) of the Ordinance (and see: the Israeli Theatres Case, paragraph 3 of President Shamgar's judgment).

 

41. An additional means of enforcement which may be available to the Municipality is Section 254 of the Municipalities Ordinance. This section, which was mentioned by the Attorney General, prescribes a fine in the amount of NIS 3,600 to anyone who transgresses a provision of a by-law and an additional fine of NIS 160 for each day the offence continues. However, Section 254 was not mentioned by the Appellants or the Respondents, and therefore I am not addressing the possibility of exercising this means of enforcement. In any event, the Municipality's conduct is to be examined in light of this legal situation, pursuant to which the Municipality has additional sanctions available, beyond the imposition of fines. As such, the question in which the parties are disputed is – given that the Municipality has additional enforcement authorities in order to enforce the By-Law – was the Municipality obligated to exercise them?

 

(2)The Discretion vested in an Administrative Authority in Determining an Enforcement Policy

 

42. Is it appropriate to intervene in the Municipality's "decision" to enforce the By-Law by imposing fines without exercising another sanction? In fact, and as I shall clarify, at hand is not really a "decision". There is no evidence that the question whether to exercise an additional sanction was even considered. It should be noted that the petition before us does not address considerations which the Municipality must consider when promulgating a by-law. This distinguishes the case before us from the matter addressed by this Court in HCJ 953/01 Solodkin v. The Beit Shemesh Municipality IsrSC 58(5) 595 (2004) (hereinafter: the Solodkin Case), which addressed the scope of the local authority's discretion when promulgating the by-law itself. Our matter is not the content of the by-law but rather the manner of the enforcement (or lack of enforcement) thereof.

 

43. The lower court explained that the local authority has broad discretion, specifically in all that relates to determining enforcement policy (see: HCJ 551/99 Shekem Ltd. v.  Director of Customs and VAT), IsrSC 54(1) 112, 125-165 (2000) (hereinafter: the "Shekem Case"), while stressing that it is important the Court not replace the authority's discretion with its own (ibid, paragraph 9 of Justice Zamir's judgment).

 

44. Regarding the matter of the judicial review of an administrative authority's enforcement policy, it was ruled that "indeed, in order for the Court to intervene in the level of enforcement of one law or another, the competent authorities must completely absolve themselves from their duty to enforce the law […] or refrain from fulfilling their duty in an unreasonable manner" (HCJ 6579/99 Filber v. The Government of Israel (November 1, 1999); and see also: the Shekem Case, paragraph 8; HCJ 10202/01 The Organization of Agents and Gas Station Owners in Israel v. The Attorney General IsrSC 57(5) 713, 718 (2003); The Administrative Authority A, on page 275, footnote 114). However, also when dealing with enforcement policy, the authority's discretion exists in light of the law and in light of the need to enforce it (see: HCJ 1027/04 The Independent Cities Forum v. Israel Land Council, paragraph 51 of Judge Arbel's judgment (June 9, 2011) (hereinafter: the Independent Cities Forum Case)). The authority has a duty to uphold the law and insist on its being upheld by others. As Judge Zamir said in the Shekem Case (on page 125): "Indeed, the enforcement of the law, any law, is a fundamental basis of the rule of law […] obviously that this duty [to enforce the law – M.N.] is imposed upon the competent authority. (See also: The Administrative Authority A, on pages 76, 83-84). To the extent that the administrative authority's position is that it is no longer appropriate to enforce the law for which it is responsible, it cannot absolve itself from the duty to enforce, but it rather has the option to act to change the law – and a fortiori when, as in the case before us, at hand is a by-law. However, as long as the law has not been changed, the authority must act in accordance with the legal situation actually in effect (see: the Independent Cities Forum Case, paragraph 51 of Judge Arbel's judgment; Daphne Barak-Erez Administrative Law, Volume A, Section 4.5 and the references there (2010) (hereinafter: Administrative Law A))

 

There are possible exceptions to the authority's duty to enforce the law, such as cases in which the law is anachronistic and does not accord with the existing social positions (The Attorney General's guideline not to enforce the prohibition (before it was cancelled) of homosexual intercourse between consenting adults and the prohibitions against abortions and attempted suicide, can, for example, be mentioned (and see: CrimA596/73 Machaid v. The State of Israel, IsrSC 28(1) 774, 774-775 (1974); Michal Tamir Selective Enforcement 31-32 (2008) (hereinafter: Selective Enforcement); Ruth Gavison Administrative Discretion in Enforcing the Law 61-62 (1991); Dalia Even-Lahav "The Executive Authority's Custom not to Enforce Law" Mishpat U’Mimshal (Law and Government) B 477, 486-493 and particularly footnote 50 (5755))). Such an exception does not exist in the case before us. The Municipality is not arguing that it is inappropriate to enforce the By-Law due to the nature of the city of Tel Aviv-Jaffa. It argues that it is doing so, and is imposing fines upon anyone who opens businesses contrary to the By-Law. The Respondents are the ones arguing that due to the nature of the city, the Municipality should not be forced to enforce.

 

45. From the authority's duty to ensure the upholding of the law it follows that the authority's range of reasonable discretion at the enforcement stage – as broad as it may be – is more limited that the range of discretion it had when promulgating the By-Law. After promulgating the By-Law, the authority must exercise its discretion in light of the By-Law and the objectives thereof (see: the Solodkin Case, paragraph 23; The Administrative Authority A, on pages 133 and 136). As a rule, the administrative authority must enforce the By-Law it promulgated and it no longer has broad discretion regarding the question whether to enforce it.

 

46. The purpose of exercising an enforcement policy is, naturally, to bring about the actual enforcement of the law. Exercising means of enforcement which are not effective does not realize this objective. Lack of effective enforcement of the law means a severe blow to the rule of law (see: HCJ 5377/09 Regavim v. The Minister of Defense, paragraph 7 (August 10, 2011) (hereinafter: the Regavim 1 Case); HCJ 8806/10 Regavim v. The Prime Minister, paragraph 7 (September 4, 2011) (hereinafter: the Regavim 2 Case)). It being noted that it is hard to reach a level of total enforcement. It is not always possible to reach total enforcement of the law. There is also a question of resources (see HCJ 6396/96 Zakin v. The Mayor of Beer Sheva, IsrSC 53(3) 289, 304-305 (1999); the Shekem Case, paragraph 8; HCJ 6243/08 The Preservation of the National Lands Movement v. The Minister of Defense, paragraph 23 (December 2, 2010)), and it is even doubtful whether full enforcement is always desirable (see: Selective Enforcement, on pages 42, 48-49). This is one of the reasons for the caution the Court applies when exercising judicial review on the administrative authority's priorities in enforcing a law (see: the Shekem Case, paragraph 8). When determining an enforcement policy, the authority must strike a balance between the various legitimate interests related to the matter and it is certainly possible that in light of these considerations it will not be possible or proper to apply an enforcement policy which shall reach total or almost total enforcement. However, as stated, when applying an enforcement policy, the authority must strive to promote the law's objectives and to enforce it: "Determining priorities does not exempt the authority from enforcing the law and from applying ongoing self-examination" (emphases added- M.N.) (The Regavim 2 Case, paragraph 7; and see also: The Regavim 1 Case, paragraph 9: The Administrative Authority A, on page 136).

 

47. Other than the duty to enforce, administrative law has prescribed an additional review mechanism to make sure that the principles outlined in the law and the authorities vested in the administrative authority shall not become a dead letter - the recognition of the existence of the authority's duty to exercise its discretion (see: the Regavim 2 Case, paragraph 7; Administrative Law A, in Section 6.1; Yitzhak Zamir The Administrative Authority Volume B 1079-1080, 1087-1088 (Second Edition, 2010) (hereinafter: The Administrative Authority B)). "An authority which possesses authority to consider and decide, has been handed not only a right to exercise the authority but also the duty to consider the exercise thereof and to exercise it when that is justified" (HCJ 3872/93 Mitrael Ltd. v. The Prime Minister and The Minister of Religions, IsrSC 47(5) 485, 496 (1993); and see also: The Administrative Authority B, on page 1079). Case law also provides that the granting of administrative authority to an authority is accompanied with an ongoing duty to examine the need to exercise it, also when at hand is discretionary authority:

 

"[…] Even when we say that the term "may" means granting discretion – and this is indeed what is said – the holder of the discretion is still not allowed, according to case law and law, to not consider at all if a certain person in a certain case should be granted his wish. Discretion – as a rule – is accompanied by a duty, and that duty is that the entity possessing the authority must address the matter before it and consider it. Against such duty, exists the right of the individual that the entity that possesses authority actually consider the matter. See, for example: HCJ 297/82 Berger v. The Minister of Interior [12], on page 35 (Justice Barak), and on pages 45, 46-48 (President Shamgar); Y. Zamir The Administrative Authority (Volume B) [23], on pages 700-702. After all, we are also dealing with the relationship between rights and obligations that applies in a system entailing discretion in financial outlays.

 

[…]

 

As for the actual application of the authority, we knew that in certain circumstances and given certain conditions, the entity that possesses authority must apply its authority, otherwise this would frustrate the purpose of the law. This is the case wherever the law grants discretionary authority" (HCJ 2344/98 Maccabi Health Services v. The Minister of Finance, IsrSC 54(5) 729, 758 (2000)).

 

And as my colleague Justice Rubenstein has ruled regarding exercising authority:

 

"Case law prescribes that the granting of administrative authority is accompanied with the ongoing duty to examine the need to exercise it, even when at hand is discretionary authority (HCJ 297/82 Berger v. The Minister of Interior, IsrSC 37(3) 29, according to which, once authority has been granted to an authority, it is not be left unused (Deputy President - as his title was at the time - Shamgar, on page 46); HCJ 2344/98 Maccabi Health Services v. The Minister of Finance, IsrSC 54(5) 729, 758))." HCJ 10440/08 Besserglick v. The Consumer Protection Appointee at the Ministry of Trade and Industry, paragraph 14 of Justice Rubenstein's judgment (February 15, 2009) (hereinafter: the Besserglick Case); and see also Administrative Law A, Section 6.6.

 

48. When the means applied by the administrative authority do not bear fruit, refraining from applying additional means could, in certain circumstances, lead to the conclusion that in fact the authority is refraining from fulfilling its duty to exercise discretion or that the discretion it exercised is unreasonable. In any event, when the existing enforcement policy does not lead to the desired result, the administrative authority must, at the very least, consider the exercise of additional means of enforcement that are in its authority. Refraining from considering additional means of enforcement in such circumstances could amount to a flaw in the authority's conduct which justifies the Court's intervention.

 

From the General to the Specific

 

49. Section 2(a) of the By-Law provides a categorical determination. The language of the section is that "Subject to that stated in sub-Sections (c), (d) and (e) the owner of a store or a coffee shop shall not open its business nor keep it open on the Sabbath and Israel holidays other than with a special permit of the council, as stated in sub-Section (b)" (emphases added M.N.). In the case at hand, there is no doubt that the Respondents are violating the By-Law. As such, in principle, the Municipality must act so that these businesses shall be closed on the day of rest. This matter does not stem from a "religious" or "secular" perspective. It stems from the perspective that the law, including the By-Law, must be upheld.

 

50. The Municipality indeed applies means of enforcement and the Respondents are fined each and every week. However, it appears that it is evident that in fact, the Municipality is not, to the proper extent, realizing - through the means of enforcement it chose – the objective of the law. As achieving the objective of the By-Law, in light of the social and religious values of the day of rest, would mean that the businesses would indeed be closed on the day of rest and not that businesses that wish to open their doors on the Sabbath can do so provided they are willing to pay the fine involved. While in fact, despite the fines the Municipality is imposing, the doors of the Respondents' businesses remain open each Sabbath. Therefore, in the case before us, the Municipality is not, by means of the existing manner of enforcement, realizing the law. Owners of small businesses, such as the Appellants and their like, indeed do not open their businesses on the day of rest, but the objective of the law is not at all achieved vis-à-vis the businesses that are part of large retails chains, for whom, in light of their economic resilience and their daily profits each Sabbath, it is worth their while to consistently open their doors on the day of rest, notwithstanding the fine they have to pay therefor. It emerges that these businesses, with their many branches spread all across the city, together with additional grocery stores and supermarkets which are open on the day of rest which do not belong to a given chain store, constitute a significant share of the retail activity in the city of Tel Aviv-Jaffa.

 

51. By enforcing only by means of the impositions of fines, the Municipality in fact enables, or at least turns a blind eye from, the continuous violation of the By-Law by such group. The situation which results from this enforcement activity is that the Respondents gain profits from an additional business day on the weekend, the Municipality's treasury benefits from significant amounts due to the fines it imposes upon the Respondents each week (the fine is paid to the local authority's treasury pursuant to Section 229A of the Criminal Procedure Law [Consolidated Version], 5742-1982), but the rule of law – which requires obeying the provisions of the law – is compromised. As specified above, an enforcement policy which in effect does not achieve the objective of the law is problematic (see: The Administrative Authority A, on page 136). As acting President Zilberg stated in HCJ 295/65 Oppenheimer v. The Minister of Interior and Health, IsrSC 20(1) 309 (1966) (in paragraph 9 of his judgment): "Refraining from exercising and realizing an existing and binding law, is not a policy and cannot be a policy, in any respect whatsoever; it only results in demoralization in the relationship between government and citizen, and is followed by insubordination towards all of the laws of the state" (original emphasis – M.N.). The difficulty is enhanced when it is impossible to ignore the concern that it is convenient for the Municipality – in light of the economic profits it gains from imposing the fines – not to insist upon the observance of the By-Law (see and compare to the words of Justice Cheshin in HCJ 4140/95 Superpharm (Israel) Ltd. v. Director of Customs and VAT, IsrSC 54(1) 49, 103-105 (1999); Administrative Law A, in Section 1.14).

 

52. If the nature of the city of Tel Aviv-Jaffa requires, in the opinion of its leaders who represent the population, not to close businesses such as those of the Respondents, on the Sabbath, the By-Law can be changed through the manner prescribed in the law. However, as long as the By-Law has not been changed, the point of departure is that it is to be upheld. The Attorney General stated that the Municipality is authorized to strike a balance "between the interest of preserving the nature of the Sabbath as a day of rest […] and making certain economic activity possible". However, in my opinion, the appropriate place for striking such a balance is in a Municipality decision whether to promulgate a by-law regarding the activity of businesses on the Sabbath and formulating the arrangements prescribed therein. This is what the Municipality did when it promulgated the By-Law, which includes a prohibition to open on the Sabbath, as well as exceptions to the prohibition. The Municipality chose not to include businesses such as the Respondents' businesses as exceptions to the prohibition.

 

Additionally, prima facie, if the Municipality's position is that there is no longer justification for the By-Law as it currently exists, then the use of fines as the means of enforcement is not the proper response. If the Municipality is of the opinion that, in light of the unique character of the city of Tel Aviv-Jaffa, opening stores on the day of rest should be allowed – there is no justification to obligate the owners of the stores to pay fines to operate businesses on the Sabbath. If, in the Municipality's opinion, there is nothing wrong with the Respondents' actions, what is the justification for them having to pay a fine? If, on the other hand, there is a justification for closing the stores on the day of rest, it is necessary to consider using additional means of enforcement, and first of all, the above mentioned Section 264A, since enforcement only by means of imposing fines is not achieving the purpose of the By-Law.

 

53. I accept the lower court's approach that the Municipality's authority to request a Prohibition to Open Order, under Section 264A of the Municipalities Ordinance, is a discretionary authority. The Municipality is not required to exercise this authority in each and every case of violation of a by-law, however it must consider if and how to exercise the variety of means of enforcement it has in its "toolbox" (see for example: the Shekem Case, paragraph 8; The Administrative Authority B, pages 1087-1088). The lower court ruled that "In order for the Court to intervene in the level of enforcement of one law or another, the competent authorities must completely absolve themselves from their duty to enforce the law, or when the enforcement is selective and deriving from irrelevant considerations" (paragraph 34 of the judgment), and reached the conclusion that in the case before us there is no justification to intervene in the manner in which the Municipality is enforcing the law.

 

54. I cannot agree with the lower court's conclusion. Even if the Court must take caution not to interfere in the balance of considerations struck by the authority, the principle of respecting the authorities and the limited judicial review which the Court exercises cannot exempt the Municipality from the mere duty to exercise its discretion (see: the Regavim 2 Case, in paragraph 7; Administrative Law A, Section 6.1; The Administrative Authority B, pages 1079-1080, 1087-1089). When the Municipality possesses authority to request a Prohibition to Open Order, pursuant to Section 264A of the Municipalities Ordinance, it has the duty to examine from time to time if it is necessary to exercise such authority, as well as additional authorities, to the extent such are in its possession. The continuous nature of this duty has utmost significant when the means of enforcement the Municipality chose to take, do not bear fruit (see: the Besserglick Case, paragraph 14 of Justice Rubenstein's judgment).

 

55. As I mentioned at the outset, the Municipality's attorney agreed to view the proceeding as though a statement of response had been filed. Therefore, the burden to demonstrate that the Municipality considered all of the possible means of enforcement to enforce the By-Law and that it fulfilled its duty to exercise discretion in doing so, imposed on the Municipality. However, the Municipality did not do so. The Municipality did not at all demonstrate that it examined and considered – with an open heart and willful soul - the merits of the need and the possibility of filing a motion for a Prohibition to Open Order or that there was any decision and exercise of discretion in this matter. The Municipality did not even argue that there is a general policy, which derives from actual exercise of discretion, pursuant to which the sanction prescribed in Section 264A of the Ordinance, should not be exercised. As I have clarified, there is no knowledge at all of the adoption of any "decision" not to exercise the authority prescribed in Section 264A. The Municipality did not demonstrate that this matter was considered and what the considerations were. Thus, I did not find in the Municipalities' arguments any basis to the lower court's determination that "[…] the exercise of the authority [to request that the Court grant a Prohibition to Open Order – M.N.] is subject to discretion, which it was decided would not be exercised, in accordance with the general policy which derives from the population's needs and desires" (paragraph 6 of the judgment). From the material before us it emerges that the Municipality chose to impose fines on Respondents 2-6, but it does not emerge that it even considered the possibility of approaching the Municipal Court in their matter and requesting a Prohibition to Open Order. Not considering the possibility of filing a motion for a Prohibition to Open Order nor examining any other option so as to achieve – to a reasonable and proportional degree considering all of the considerations - the proper enforcement of the By-Law, constitute a violation of the Municipality's duty to take action and exercise discretion. In these circumstances, the Municipality violated its duty to exercise discretion from time to time, and in doing so, its conduct was flawed in a manner justifying our intervention, in the sense that we shall obligate the Municipality to consider what it did not consider.

 

Epilogue

 

56. If my opinion shall be heard, the Appeal shall be accepted. The judgment of the first instance shall be cancelled and the matter shall be returned to the Municipality so that it shall exercise its discretion and adopt a decision on the merits of the manner of exercising the authorities vested therein by Section 264A of the Municipalities Ordinance or any authority in addition to its authority to impose fines. The Municipality shall examine its position regarding the enforcement of the By-Law within 60 days from the date the judgment is granted. The decision to be adopted in this matter shall be delivered to the Appellants' attorney and, of course, is subject to additional judicial review.

 

The expenses imposed upon the Appellants in the first instance shall be cancelled. There shall be no order for expenses in our instance.

 

 

President A. Grunis:

 

I Agree.

 

 

Justice E. Rubinstein:

 

1. I join the orderly, methodically arranged judgment of my colleague Deputy President Naor, on each and every element thereof. I wish to add two matters, which I shall list in their reverse order of importance: the conduct of the Municipality as a public entity, and the insult to the Sabbath as a national and religious day of rest for the Jewish people. The combination of the two in the case at hand has produced the contemptible and cheap picture portrayed before us. I shall attempt to view the matter in the context of the objective of the legislation and the nature of the State of Israel as a Jewish and democratic state, and the city of Tel Aviv, the first Hebrew city and the central urban metropolis in our country.

 

2. Before us is a municipal by-law, the Tel Aviv-Jaffa By-Law (Opening and Closing of Stores) 5740-1980, pursuant to which the opening and closing of stores on the days of rest is prohibited. As my colleague wrote (paragraph 50) "… the objective of the By-Law, in light of the social and religious values of the day of rest, in light of the social and religious values of the day of rest, would mean that the businesses would indeed be closed on the day of rest and not that businesses that wish to open their doors on the Sabbath can do so provided they are willing to pay the fine involved."

 

3. The Municipality interprets its duty to enforce the By-Law in a manner which cannot be described as other than completely emptying it of any content (unless we see a public value in NIS 2,640 per month – 660 multiplied by four – which are collected as fines from the supermarket chain stores), and dares to call this enforcement. Indeed, the matter is presented before us in the appeal of small merchants who cannot hire revolving staff as the supermarkets can and are entitled to a day of rest (it should be assumed that generally they work six days and they are not the ones who actually benefit from five working days) and they do as their fathers and forefathers did: they rest on the Sabbath. But at such time their secular customers, who wish to buy on the Sabbath, run to the open supermarket, from which the Municipality collects the "The Sabbath Tax" (heaven forbid) in the form of a weekly fine while the Municipality congratulates itself on the alleged maintenance of the By-Law. For the supermarkets this is a fraction of their income, like a light ripple on the surface of the water, almost a "bad debt" (one must assume and hope that they cannot deduct it as a tax expense to the tax authorities), and the supermarket is relieved, and the Municipality is appeased, and all the while the grocery store's door shall be sealed, and primarily - the Sabbath shall be tainted.

 

4. For the Municipality, a public entity of the highest degree, which is meant to serve all of the residents according to the law, this is a solution which – as is customary at times among us – is a Torah sanctioned "Israbluff", a "pretense" as though all of the spectators were fools. What is the Municipality's opinion regarding the significance of an offence which has infinite recidivism? Should the enforcing authority suffice with a fine and marking a "check" and just continue doing this, or must it seek another way?

 

5. It is clear – as emerges from my colleague's opinion – that in the current situation, the objective of the By-Law is not at achieved in the public arena of Tel Aviv.

 

6. Although I wonder whether it is necessary to elaborate regarding the Sabbath, I will say the following. The Sabbath has two contents, religious and national on the one hand and social on the other (see HCJ 5026/09 Design 22 v. Rosenzweig (2005), in paragraphs 16-17 and 20-21 of President Barak's judgment, and in paragraphs 2-3 of Justice Procaccia's opinion, and in the opinion of Justice (as her title was at the time) Naor). Religiously speaking, it is the fourth commandment of the Ten Commandments, the essence of the universal Jewish constitution, no less, in both of their versions: "Remember the Sabbath day to keep it holy" (Exodus 20, 8) and "Keep the Sabbath day to sanctify it, as the Lord your God commanded you." (Deuteronomy 5, 12). The religious content of the Sabbath emerges from the wording of both of these openings of the fourth commandment, but the Ten Commandments also include the social aspect. As emerges conspicuously from the wording in Deuteronomy (5, 13-15): "Six days may you work, and perform all your labor; and the seventh day is a Sabbath to the Lord your God; you shall perform no labor, neither you, your son, your daughter, your manservant, your maidservant, your ox, your donkey, any of your livestock, nor the stranger who is within your cities, in order that your manservant and your maidservant may rest like you; And you shall remember that you were a slave in the land of Egypt, and that the Lord your God took you out from there with a strong hand and with an outstretched arm; therefore, the Lord, your God, commanded you to observe the Sabbath day." There really is no need to elaborate. The Torah has done so better that I. This is the social content of the Sabbath, rest to all.

 

7. The Sabbath as a day of rest to all is a contribution of the highest degree. Our Sages say about the verse "To know that I, the Lord, make you holy." (Exodus 31,13) that "The Lord told unto Moses: Moses, I have a great gift in my treasure house. It is called Shabbat, and I wish to give it to Israel" (Bavli Sabbath, 10, 2). And as philosopher Hermann Cohen (19^th and 20^th century) said (Sefer Hashabbat– which is filled with sources – edited by Dr. Y.L. Baruch (Tenth Printing, 5723, 151)) "From the change of the wording between the first and second commandments… (between Exodus and Deuteronomy) it is undoubtedly clear that the purpose of the Sabbath is to preserve equality among people, not to notice the difference between their social status" – meaning, the expansion of the Sabbath to the human race. On the Jewish level, the renowned Zionist philosopher, Ahad Ha'am (19^th and 20^th centuries) in his essay "The Sabbath and Zionism" wrote against how assimilators were indifferent to the possibility of the cancellation of the Sabbath. Words that became an idiom: "One can say, without exaggeration, that more than Israel kept the Sabbath, the Sabbath kept them", in that it renewed the spiritual life each week. On the universal human level, philosopher Abraham Joshua Heschel (twentieth century) viewed the Sabbath as "A palace in time, and in the kingdom of time each person shall find his own place" (his book "The Sabbath" E. Even Chen translation, 2003, presented in the Gavison – Medan Covenant website). The Chafetz Chaim, Rabbi Yisrael Meir of Radin, in his book, Shem Olam, speaks of the Sabbath as "the center, from which all of the days of the week suckle… like the heart, from which the vitality continues to all of the organs" (Sefer Hashabbat, edited by Y.L. Baruch, 139). See also Aviad Hacohen "Day of Rest in a Jewish and Democratic State" Parashat Hashavua (A. Hacohen and M. Wigoda Editors, and the references there) Exodus 313-320.

 

8. I will not refrain from saying that there is a legitimate question regarding the character of the Sabbath in Israel. Many ideas and proposals have been raised, inter alia – for example the Gavison – Medan Covenant from 2003, by Prof. Ruth Gavison of the Hebrew University of Jerusalem and Rabbi Yaacov Medan of the Har Etzion Yeshiva in Alon Shvut (see the Gavison – Medan Covenant, Main Points and Principles, by Yoav Artsieli). Regarding the Sabbath, the covenant suggested (third chapter) – inter alia – that government offices, industrial factories, banks and trade institutions would be closed; however restaurants and entertainment places would not be prohibited from operating, keeping in line with certain frameworks. A limited number of small grocery stores (particularly them!), gas stations and pharmacies would not be prohibited from operating. And restaurants, museums and other entertainment places would be open on the Sabbath. Of course, this is not to be taken as gospel, but they wish to strike a balance, and there were and may be others like them. It is clear that between those who observe the Sabbath according to the religious requirements, who wish to see it observed with all of its religious details and specifications, and those who have a secular approach, there is a broad middle ground begging to be filled with content. But, until an agreed destination is reached, we must deal with the law and the By-Law.

 

1. As for the city of Tel Aviv, I am aware of its current image as a "Non-Stop City" with all of the expressions of contemporary culture, and I do not shut my eyes and ears to that. It is also presumed that the "enforcers" of the By-Law on behalf of the Municipality are tuned in to the messages of many of the leaders of the city, and it naturally follows, of a large population in the city, and attempt to reach out to them. However, with all due respect, Tel Aviv is not in another country and it also has communities that are interested in a significant character of the Sabbath and it is bound by the law of the state and by it being a Jewish and democratic state. The balance between both parts of the definition "Jewish" and "democratic" must also be sought in Tel Aviv, but it appears that currently the "democratic" angle is pushing the "Jewish" angle out. As a reminder from the past – without necessarily trying to draw a complete comparison – I shall bring from the words of Tel Aviv's first mayor, Meir Dizengoff, who was not considered "religious" in the sociological sense, at a rally in 1933 regarding public desecration of the Sabbath: "In my opinion, the meeting should not necessarily have been summoned by the Rabbinate, this is not only a question of religion, but a national and public matter. It is forbidden to publicly desecrate the Sabbath. Each and every nation has a tradition of perceptions, faiths, customs, which preserve it. This is the character of a nation, that grants it existence… the city needs a special Jewish signature." (presented in the Sabbath Book (From You To You), Y. Kaplun editor (2010), 410; and in another place Dizengoff reiterated the same words (ibid, from Tel Aviv, by A. Druyanov) "… There is an anticipated risk that our beloved city shall become a merchant and trading city as all of the cities in the east, and there shall be no remnant of the spirit of its founders, whose entire direction was to create a Jewish humanistic cultural center…". Of course, Tel Aviv today is not Tel Aviv of Dizengoff's days, and its world may be more diverse, although even then it was not a "religious" city. However, the State of Israel is a Jewish and democratic state, and the way the Sabbath day is expressed on the city streets, according to the By-Law which is the subject of our discussion, cannot be the imposition of ridiculous fines of NIS 660 per week. It is upsetting that according to the Municipality's position, it is accepted as a given that the realization of the By-Law suffices with "monetary ransom" - Where is the objective and where is the day of rest? As my colleague, the Deputy President, stated, the city council can reexamine the By-Law and if it shall deem fit – it can lawfully change it. In any event, we shall remember that for most people today, Friday is a day off. Would it be unreasonable to concentrate the shopping on Friday, and 'he who is prepared on the eve of the Sabbath shall eat on the Sabbath', and the By-Law will be observed.

 

10. The Municipalities (Prohibition to Open Businesses and the Closure thereof on Days of Rest) Bill, 5748-1988, Bills 5748, 134 – which is known as the Authorization Bill – is based on the doubt that was cast in the Court (in CrimC (Jerusalem) 3471/87 The State of Israel v. Kaplan, IsrDC, 5748 26) regarding the authority of local authorities to promulgate a by-law regarding opening businesses on the Sabbath and Israel holidays; as stated: "The purpose of the proposed law is to remove the said doubt and preserve the status quo in the matter being addressed". In presenting the law for a first reading, the Minister of Religious Affairs Z. Hamer (Divrei Haknesset (The Knesset proceedings) 11^th of Adar 5748 - February 29, 1988, page 2070), stated that the law validates the situation existing prior to the judgment which invalidated a by-law prohibiting opening places of entertainment on the Sabbath due to lack of authority. It was noted that the religious consideration receives its validity within the proposed authorization, but it does not compromise justice and equality, since "This law grants central support, as the judicial authority demanded, to the public and communities anywhere to formulate their lives as per their understanding and belief". It was further said (page 2071), that "Anyone concerned about the Jewish character of the State, about bringing Jews together, and about the character of the Sabbath, should support the law". This was followed by an argument between different parties. Eventually, when the law was presented for second and third readings by MK Uriel Lin (chairperson of the Constitution, Law and Justice Committee, it was noted (Divrei Haknesset (the Knesset proceedings) 30^th of Kislev, 5751 December 17, 1990, page 1192) that the law is presented not as the "Authorization Law" but rather as Amendment no. 40 to the Municipalities Ordinance (applicable also to local councils); and it was said that opening and closing of businesses can also be determined based on reasons of religious tradition (page 1193). We can see that the law intended to make it possible – not obligate – to grant content that also has religious context. The result is the addition of Section 249(21) and Section 264(a) (sic.) to the Municipalities Ordinance, which were presented by my colleague, the Deputy President, in paragraphs 28 and 29, which address the permission to exercise the authority of closing businesses on the days of rest "taking religious tradition reasons into consideration" (Section 249(21)), and the possibility to enforce by order (Section 264(a) (sic.)).

 

11. Indeed, the amendment in and of itself is mainly grounded in the religious aspect; however the said By-Law from 5740-1980, even preceded Amendment no. 40, and the character of the day of rest may be formulated by consent. It is in any event evident that the legislature and the secondary legislature could not have intended a "pretense", meaning that the secondary legislature would legislate a by-law to be printed in the records – while the enforcer would (in essence) pretend to enforce. The By-Law must be viewed and interpreted in light of all of the backgrounds – the religious, national and social, while striking proper balances (see HCJ 5016/96 Chorev v. The Minister of Transportation, IsrSC 51(4) 1; the above mentioned HCJ 5026/04 Design 22 v. Rosenzweig; and HCJ 953/01 Solodkin v. The Beit Shemesh Municipality (2004) for discussion of the challenges of balancing). " Sabbath comes, rest comes" and not " Sabbath comes, mocking comes ".

 

12. In light of all of the above, there is no escaping the result my colleague reached. One should hope that the leaders of the city will succeed in finding an enforcement solution which shall honor the law and the Sabbath, and also be reasonably satisfactory to the fair and rest-supporting residents of Tel Aviv.

 

 

It was decided in accordance with the judgment of Deputy President M. Naor.

 

Given today, 17^th of Tamuz, 5773 (June 25, 2013).

 

 

 

 

                                                                                    AAA 3782/12

 

The Appellants	1. Tel-Aviv Jaffa District Commander – Israel Police 2. Central District Commander – Israel Police 3. Israel Police
	v.
The Respondent	The Israel Internet Association
The Formal Respondents	1.      012 Smile Telecom Ltd. (pro forma) 2.      018 Xphone Ltd. (pro forma) 3.      Bezeq International Ltd. (pro forma) 4.      013 Netvision Barak Ltd. (pro forma)

 

In the Supreme Court sitting as the Court of Appeals in Administrative Matters

[24.3.2013]

Before: President A. Grunis, Justices E.Vogelman, N. Sohlberg

 

Appeal against decision of the Tel-Aviv- Jaffa District Court of 2 April 2012 in Case AAF 45505-10-10 handed down by Deputy President Hon. Judge Michal Rubinstein

 

Facts: In August 2010, the Israel Police ordered major Israeli Internet access providers to block access to eight gambling websites operating outside the State of Israel. The orders were based on section 229 of the Penal Law that permits the District Police Commander to order the closure of any illegal gaming, lottery, or gambling place. The access providers complied with the orders and the Israel Internet Association petitioned the Administrative Affairs Court against the District Commander, contesting the closure, in the interests of Israeli web-users and the general public. The Internet access providers did not petition against the closure of access to the gambling websites. On April 2, 2012 the Administrative Affairs Court (per Judge Michal Rubinstein) granted the petition, holding that the police had no authority to order Internet service providers to block access to gambling websites. 

 

In granting the petition, the Administrative Affairs Court ruled that the Israel Internet Association had an independent right of standing, given the important public interest in enforcing constitutional values and maintaing the rule of law, notwithstanding that no petition was filed by access providers themselves. Furthermore, the closure of Internet websites violated freedom of expression. Even if the content curtailed was of little social utility, websites closure can only be done with legal authority. Primarily the provision in the Penal Law allowed the closure of a physical “place” and did not include the closure of an Internet website. In this context no analogy can be drawn from the closure of prohibited physical places to the closure of prohibited websites, notwithstanding their similar purposes, because the potential for violating freedom of expression and freedom of occupation, and because blocking access to the Internet poses technical, political and legal difficulties, including the possibility of blocking legitimate websites and innocent users. Blocks by third parties – the access providers – also raises questions relating to liability, the manner of blocking and its costs. In view of all these factors the petition was granted.

An appeal was filed against the decision in the Supreme Court.

 

Held:

Regarding freedom of expression, the Supreme Court agreed unanimously that the content blocked on the gambling websites is limited in this case and hence the violation of free speech that resulted from blocking lawful content on gambling websites is of limited degree and lawful. Moreover, the primary infringement here relates to the website operators’ freedom of occupation. In this regard, the case law has already held that the infringement of freedom of occupation, the infringement satisfies the constitutional tests.

 

With respect to the concern that protected information on websites would be blocked, the Court noted that website owners can make such information available on alternative websites, or even on the same website while blocking only prohibited gambling.

 

Regarding standing, Justice Vogelman ruled that the Internet Association satisfies the conditions for recognizing a public petitioner, given that it seeks to promote the public interest of Internet users, an interest shared by the general public, or significant parts thereof, rather than protect its own special interest. Given this case presents a first attempt to define the boundaries of the district police commander’s authority under section 229 of the Criminal Law to block access to Internet gambling websites, the question is a fundamental one that justifies hearing through public petition. As to the sufficiency of the factual infrastructure, had the Appellants felt that any issue was not sufficiently clarified, they could have acted to remedy the situation. Moreover, the public petitioner is required to present the factual infrastructure sufficient for the proceeding. In the current case the factual infrastructure was indeed sufficient for purposes of judicial review.

 

The dispute and the result involved two basic issues: first, whether the language of the Penal Law authorizing police to close a “place” can and should be interpreted broadly to include a virtual Internet website, which is not a physical place, without a specific legislative amendment. The second and more important question was whether the police can and should be permitted to exercise their authority of closure with respect to a website by way of a third party, namely the access providers. 

Justice Vogelman (for the majority, with concurrence by President Grunis), wrote that a gambling website may be viewed as a “place,” and its blocking can also be viewed as its “closing” within the meaning of section 229(A)(1). Additionally, an online gambling site may be considered a “prohibited gaming venue,” under a purposive interpretation of the Criminal Law’s relevant provisions and in the context of time and advancing technology, which render section 229 of the Criminal Law applicable in the “virtual” world. Nonetheless, the main obstacle to such interpretation is the lack of express authority to order private third parties – access providers – to assist in implementing the authority to block websites. According to Justice Vogelman, when the law empowers a governmental agency, it is assumed that the legislature intended that agency, and not another, would implement that authority, and that the agency may act only within the boundaries of the authorizing law. Even if the authorization to close a place can be interpreted as authorizing closing websites, it is not identical to authorizing third parties to block access to websites.

 

This is consistent with the principle of administrative legality which only permits an agency to act within legislation that empowers governmental agencies to order third parties to assist in exercising that agency’s authority. Such authority is not even implied in the Penal law’s provision concerning police authority to order the closing of a place.  Absent explicit statutory source, it is impermissible to compel a person or private entity to act for the authorities. Hence the orders to access providers here violated the principle of administrative legality. The current statutory framework is insufficient because it lacks authorization to order a third party to assist enforcement agencies in exercising their powers.

Even though the rule is that the authority is permitted to receive assistance from private persons or entities as far as the technical aspects of fulfilling their task, there is also an interpretative presumption against delegating authority to private entities and in the absence of appropriate legislative framework, enforcement authority cannot be granted to those not part of the enforcement mechanism

Even if the access providers were not required to exercise discretion, and the police only requested help from them in the exercise of its authority – in the technical act of blocking a website identified through its IP address specified on the order – it is still necessary to prove that the access providers agreed to assist the police. Once the police imposed an obligation upon access providers, it can no longer be considered assistance – hence the need for explicit statutory authorization.

 

Justice N. Sohlberg, writing for the minority, found that as a rule the court will not grant a public petition where there is a private victim in the background who chose not to apply to the court for relief, and that in light of the website owners failure to file an appeal, it is doubtful whether the Internet association has standing. Furthermore, granting standing when the relevant party did not file a petition might mean that the required factual infrastructure would not be presented to the Court. Nonetheless under the circumstances, where the Administrative Court recognized the Internet Association’s standing and ruled on the merits, it would be inappropriate to reject the appeal for of lack of standing without examining the matter on the merits.

 

Regarding the substantive issue, though a specific legislative arrangement would be preferable, the law’s existing language provides a satisfactory solution as to the police authority to issue orders, and waiting for legislative authority frustrates appropriate response in law enforcement and service of justice.

Both in terms of language and purpose the word “space” should be interpreted to also mean virtual space, given that terms that serve in virtual space are borrowed from the tangible world. Accordingly there is no deviation from the principle of legality by finding that “place” also includes virtual space. As the damage wrought by gambling on the Internet is immeasurably greater than that which is caused in physical places and that the legislative purpose was to prevent illegal gambling regardless of its location, a purposive interpretation would and should interpret “place” as meaning virtual space. Accordingly, apart from certain, isolated exceptions, the rule should be that the Internet fits the definition of place.

With respect to the difficulty in using third parties for carrying out a criminal proceeding, the law recognizes the possibility to use a third party to present an object necessary for interrogation or trial. Considering the license the State has granted them, access providers bear public responsibility. It is therefore justified to use them to execute orders to restrict access, given that the order requires the technical acts that do not involve any discretion regarding the closing of a site with a particular IP address specified in the order. Regarding the requirement for third party consent, Justice Sohlberg analogized the status of the website owners to receptionist in a physical place whom the police would have been authorized to require to open.

 

Justice Sohlberg also found that failure to petition against blocking access may be viewed as the website’s owner’s consent to to being used to carry out the police order. Justice Sohlberg based this conclusion on the Talmudic rule of "silence is regarded as admission.”

 

Legislation Cited

Administrative Affairs Court Act, 5760-2000, s. 5 (1)

Basic Law: Human Dignity and Liberty

Civil Procedure Regulations, 5744-1984, reg. 3(a)

Criminal Procedure (Arrest and Search) (New Version) Act, 5729-1969, s.20 23

Criminal Procedure (Powers of Enforcement- Communication Data), 5768-2007, s.1, 3 (2)

Interpretation Act 5741-1981, s.17

Penal Law, 5737-1977 s. 224, 228, 229

Police Ordinance [New Version], 5731-1971, s. 3

Prohibition of Discrimination (Products and Services) in Entrance to Places of Entertainment and Public Places, 5761-2001, s.2

Regulation of Sports: Gambling Act, 5727 – 1967

 

Supreme Court Decisions Cited

[1] HCJ 243/62 Israel Films Studios Ltd v. Levi [1962] IsrSC 16 2407.

 

[2] HCJ 651/03 Citizens Right Bureau in Israel v. Chairman of Central Elections to the Sixteenth Knesset [2003] IsrSC 57 (2) 62.

 

[3] AAA 4436/02 Tishim Kadurim Restaurant, Member’ Club v. Haifa Municipality [2004] IsrSC 58 (3) 782.

 

[4] HCJ 8070/98 Citizens Rights Office in Israel v. Ministry of the Interior (10.5.04).

 

[5] LCA 4447/07 Mor v. Barak I.T.T. [1995] Society for the Bezeq International Services Ltd (25.3.10).

 

[6] CA 9183/09 The Football Association Premier League Limited v. Anon (13.5.12).

 

[7]  Cr.A 1439/06 Zaltovski v. State of Israel (28.3.06).

 

[8] CrA. 7430 /10  Anon. State of Israel (5.2.2010).

 

[9] LCrApp 787/79 Mizrahi v. State of Israel [1980] IsrSC 35 (4) 421.

 

[10]  (HCJ 131/85Savizky v. Minster of Finance [1965] IsrSC 19 (2) 369.

 

[11] HCJ 651/03 Citizens Rights Bureau in Israel v. Chairman of the Sixteenth Knesset Central General Elections Committee [2003] IsrSC 57 (2) 62.

 

[12] HCJ 3809/08 Citizens Rights Bureau v. Israel Police (28.5.2012).

 

[13] Association of Renovations Contractors for Restoration v. State of Israel (14.3.2011).

 

[14] HCJ 1/81 Shiran v. Broadcasting Authority [1981], IsrSC 35 (3) 365.

 

[15]  HCJ 910/86 Ressler v. Minister of Defense [1988], IsrSC 42 (2) 441.

 

[16] HCJ 287/91 Kargal Ltd v. Investments Center Council [1992], IsrSc 46 (2) 851,

 

[17] HCJ 962/02 Liran v. Attorney General(1.4.2007).

 

[18] HCJ 4112/99 Adalah Legal Centre for Arab Minority Rights in Israel v. Tel-Aviv Municipality [2002] IsrSC 56(5) 393.

[19] HCJ 80/70 Elizur v. Broadcasting Authority [1970],IsrSC 24 (2) 649.

[20] HCJ 852/86 Aloni v. Minister of Justice  [1987], IsrSC 41 (2) 1.

 

[21] HCJ 606/93 Kiddum Yezumot v. Broadcasting Authority  [1994], IsrSC 48(2) 1.

 

[22] HCJ  2303/90 Philipovitz v. Registrar of Companies [1992], IsrSC 46 (1) 410.

 

[23] (HCJ 2605/05 Academic Center of Law and Business v. Minister of Finance, (19.11.2009).

 

[24]  AAA 6848/10 Erez v. Giva’ataim (30.5.2012).

 

[25] HCJ 5031/10 Amutat Ir Amim v. Israel Nature and Parks Authority (26.3.2012).

 

[26]CA 630/97 Local Committee for Planning and Building Nahariya v. Shir Hatzafon Construction Company Ltd [1998] IsrSC 52 (3) at 399.  

 

[27]  HCJ 5394/92 Hoppert v ‘Yad Vashem’ Holocaust Martyrs and Heroes Memorial Authority [1994] IsrSC 48(3)353.

 

[28] 7368/06 Luxury Apartments Ltd v. Mayor of Yabneh (27.6.2011).

 

[29[ HCJ 6824/07 Mana v  Taxation Authority (20.12.2010).

 

[30]  HCJ 7455/05 Legal Forum for Land of Israel v. Israeli Government [2005] 905.

 

United States Decisions Cited

[[31] Center for Democracy & Technology cy & Technology v. Pappert, 337 F.Supp.2d 606 (E.D Penn. 2004).

 

 

For the Appellants: Advs. Yuval Roitman; Adv.Orli Aharoni

 

For the Respondent: Adv. Haim Ravia, Adv. Dan-Or Hof; Adv. Yossi Markovitz

 

Judgment

 

Justice N. Sohlberg

 

1.         The Israel Police issued orders restricting access to gambling websites on the Internet. The Tel-Aviv-Jaffa District Court, sitting as the Court for Administrative Affairs (Judge Michal Rubinstein) granted the petition by the Israeli Internet Association and ruled that the orders were issued ultra vires and should therefore be voided. The Israel Police appealed and requested the orders be resotred.

Background

2.         Crime is burgeoning and taking new forms. As a result, on 1 January 2006 Government Decision No. 4618 was adopted, establishing a Standing Committee for Direction and Coordination of Activity in the Battle Against Severe Crime and Organized Crime and their Offshoots. The Committee determined that because its far-reaching and grave consequences the phenomenon of Internet gambling would be a central enforcement target combining several tools – criminal, fiscal, and administrative. This is a growing crime-generating phenomenon that is accessible to a broad segment of the population. Within this context, with the knowledge of the Attorney General and the State Attorney, the Committee decided to restrict Israeli users’ access to gambling websites. Internet access providers were issued warning letters and given a list of gambling sites and their IP addresses to be blocked. The access providers and the website operators were also allowed the opportunity to object. In August 2010 the orders were issued. In October 2010 the Israel Internet Association petitioned to the Administrative Affairs Court to revoke the orders, and in April 2012 the petition was granted

The Ruling of the District Court

3.         The principle elements of the Administrative Affairs Court’s ruling are:

(a)        Locus Standi: The direct victims – the access providers and the website operators – chose not to exercise their right to petition against the orders. Nonetheless the court found there were grounds for recognizing the locus standi of the Israel Internet Association, given that it does not represent the interests of the access providers and website operators, which have primarily commercial interests, but rather as the representative of users in Israel and their rights to free expression and access to information. This is a matter of general public importance pertaining enforcing constitutional values and maintaining the rule of law. 

(b)        Restricting access to Internet gambling sites infringes freedom of expression: The Internet is an excellent tool for exercising the right to access information in a practical, efficient, cheap and reliable manner. It is a democratic tool that promotes equality, enables a decentralized and diverse discourse, facilitates economic growth, and is an excellent platform for business ventures. Access to information is a constitutional right and limitations on the use of Internet are therefore rare. yet, the Internet is also subject to abuse, to violation of copyright, publication of slander, pornography, encouragement of violence, drug abuse etc. The desire to minimize the harm caused by damaging uses of the Internet has led the authorities of different countries to adopt various means, including blocking access to websites that function as platforms for illegal activity, or use technological screening measures. The Israeli approach has been that freedom of expression is “all encompassing” and applies even to expressions that encourage illegal activity.  Still, freedom of expression is not an absolute right. When there are interests that justify it, such as security, or social, political and other interests, freedom of expression may be curbed. When applying a proportionality test, the balance may vary according to the type of expression and its inherent social value weighed against the benefit of restriction. The content of illegal gambling sites – for example game instructions, various lists, graphics and other audio-visual aides – are, generally speaking, of little social value. The expressions are of a purely commercial nature, encouraging acts restricted under criminal law. Conceivably, limiting access to such expressions may be justified by legitimate purpose. But the mere fact that an expression may be harm does not exclude it from protection. As such, restrictions on free speech, even on expressions with little social value such as those in illegal gambling sites, must pass constitutional muster and be legally authorized.  

(c )       The Police has no authority to order Internet access providers to restrict access to gambling websites.  The relevant sections of the Police Ordinance [New Version], 5731-1971 (“Police Ordinance”), and the Penal Law, 5737-1977 (“Penal Law”), through their language and purpose, authorize the Israel Police to order the closing of places where gambling is takes place, but these are only physical places, as opposed to preventing access to an Internet website. A website is not a “place” but rather an amalgamation of information and applications installed in a computer that communicates with other computers via the Internet. Information is transferred from the computer to the server. The police is authorized to order the closing of a “place” of prohibited games or a “place” where lotteries or gambling are held, but preventing access to a website is not equivalent to the closing of a place, and is not covered by that authorization, neither explicitly nor implicitly. That the law grants the police the power to shut down physical places cannot, in itself, be understood as legislative intention to broaden the authority to allow “censorship” power to the police, without clear guidelines for its exercise. Even if the purpose of the orders – reducing the prevalence of gambling – is identical to that of the authorizing closing down physical gambling places, blocked access to a website implicates freedom of expression and freedom of occupation differently.  Blocking access to the Internet poses technical, political and legal difficulties: the concern for possibly blocking legitimate websites or innocent users. Executing blocks by a third party – the access providers – raises questions of liability, methods for blocking and costs. The appropriate legal policy would be to wait for explicit regulation of restrictions to free expression on the Internet in primary legislation, following in depth public debate. “Acrobatic” interpretations should not be invoked to authorize the police to violate civil rights. Furthermore, over the past few years the legislature has considered proposals for legislative amendments on this issue, but the legislative initiatives were hindered for being insufficiently balanced. The subjective and concrete legislative intention indicates a desire not to authorize the police to block access to gambling websites at its own discretion.

In short, the orders to restrict access to gambling websites were issued ultra vires and should be voided. This was the ruling of the Tel-Aviv-Jaffa District Court, sitting as the Court for Administrative Affairs.

Principal Arguments of the Parties

4.         Attorneys for the State argue that the Administrative Affairs Court erred in determining that the Israel Internet Association has standing.  The latter is a public petitioner with no personal interest in the orders, and his petition should therefore have been dismissed in limine, especially given the existence of petitioners who could have presented the factual infrastructure required, yet they ultimately refrained from filing a petition. The petition seeks to permit illegal activity, rather than preserve the rule of law, and there was no justification for conducting a judicial hearing for this kind of petition by a public petitioner. Attorneys for the State further argue that the Administrative Affairs Court erred in holding the orders infringe freedom of expression. The websites subject to the orders do not serve as a venue for expression and their entire raison d’etre is conducting prohibited gambling. There is no justification to fully exempt the Internet from rules that apply to other media. Blocking access to gambling is accepted practice all over the world, and is necessary for crime prevention.

5.         The primary claim the State’s attorneys make is that the police is authorized to order blocking access to websites. The Administrative Affairs Court adopted a “rigid” interpretation that failed to fully account for the law’s language and purpose. The Administrative Affairs Court failed to consider a possible alternative in the authorizing statute. In any case the relevant provision can be seen to include Internet space, as well as physical space: a “place of gambling” is also a “virtual place”. The authority to close a place also encompasses orders to block access to virtual space. The attorney for the State argues that when the law was passed it was impossible to anticipate the existence of virtual space, but the purpose is the same: preventing illegal gambling, which causes immense harm to both the individual and the public. Waiting for primary legislation to explicitly grant parallel authority to virtual space means perpetuating Internet gambling, its grave consequences and its harm, while forcing the police to combat it with hands tied behind its back.

6.         On the other hand, the Israel Internet Association discussed the public interest in Internet access, and as a natural outcome, its right of standing in this petition vis-à-vis its activities to promote Internet use in Israel as a technological, research, educational, social, and business resource. The limited economic interest of website owners and access providers is not comparable to the public interest in having unfettered access to the Internet. This is the purpose of granting standing rights to a public petitioner, thus enabling judicial review in a matter of public and constitutional importance that implicates the rule of law. The Israel Internet Association also emphasized the right to know. “A governing authority which claims the right to decide what the citizen ought to know, will eventually decide what the citizen should think; and there is no greater paradox to true democracy, which is not ‘guided’ from above” (HCJ 243/62 Israel Films Studios Ltd v. Levi [1] at p. 2416). A website consists of layers of information, each of these a protected expression, including: the code, the graphic design, games, trailers, data and explanations. The suspicion of a criminal offense does not excuse limits on expression in advance.

7.         The Israel Internet Association further claims that the law does not authorize the Police to order a third party to block access to gambling websites. An Internet website is neither a “place”, nor “premises” but rather a collection of “pages” which contain information collected from files on a service computer that communicates with other computers via the Internet (Abraham Tenenbaum “On Metaphors in Computer and Internet Law”, Sha’arei Mishpat 4 (2), 356, 374 (2006)). The analogy between “site” and “place” is fundamentally flawed. Blocking access to knowledge is distinguishable from closing a physical place, inter alia because of the infringement upon freedom of expression. Physical closing does not implicate the rights of the general public. Blocking access to knowledge does. Internet access providers are not enforcement agents of the police. They serve as a channel for providing information to Internet users, and they have an immensely important role in exercising the right to access information.

8.         The Israel Internet Association requests we uphold the Administrative Affairs Court’s decision regarding standing based also on the fact that the consequences of blocking access to a website differ from the consequences of blocking a physical place. Blocking access to websites involves technical challenges that may block access to innocuous sites. Blocking may be ineffective, as well. It may have implications for international obligations, and raise questions about access providers’ liability. Costs are likely to be “rolled” onto users. As a matter of judicial policy, infringements upon freedom of expression and access to information should only done in explicit primary legislation. The Knesset debates around private bills on the matter reflect substantive reservations against conferring the police with the requested powers. Upholding the appeal would turn the police into investigator and prosecutor, judge and executor, while performing interpretive acrobatics and infringing free expression.

Discussion and Ruling

9.         I divide the discussion into three categories, following the path taken by the Administrative Affairs Court:

(a) Standing; (b) Freedom of Expression; (c) Police Authority.

 (a)       Right of Standing

10.       As mentioned, the orders compelled Internet providers to block access to a number of websites used for illegal gambling. The access providers and the website owners chose not to challenge the orders. Prima facie, as claimed by the attorney for the State, the Israel Internet Association is stepping into a dispute in which it has no part. The Administrative Affairs Court deviated from the rule that “the court will generally not grant a public petition where there is a private victim who chose not to turn to the court for relief ” (HCJ 651/03 Citizens Right Bureau in Israel v. Chairman of Central Elections to the Sixteenth Knesset [2] at p. 68).  Recognition of standing rights for the Israeli Internet Association prompted the petitions’ adjudication without presenting the Administrative Court with the required factual infrastructure. The precise contents of the websites subject to the orders were not presented, nor was a full description of the technical ability to block access. No basis was presented for the argument – which the Administrative Court found acceptable – that blocking access to gambling sites could also be expected to block other sites.

11.  The Israeli Internet Association further argued before the Administrative Affairs Court that the Internet providers’ right to hearing had been violated. It further argued that the decision to block certain sites was discriminatory. The problem however is that these are not arguments that can be raised by a public petitioner. These are arguments that only the website owners and the access providers could have raised, had they so wished to do so.

12.       It seems that a priori the petition should have been dismissed in limine in the absence of standing. However, post factum, once the Administrative Affairs Court recognized the Israel Internet Association had standing, and ruled as it did on the merits, it seems inappropriate at this stage to uphold the appeal merely based on his issue, without ruling on the merits of the appeal itself. It is incumbent upon us to rule on the legality of the orders.

Freedom of Expression

13.       The attorneys for the parties spoke loftily and at length about freedom of expression and the right to access information that derives from it. Indeed, we must make every effort to avoid infringing the free dialogue in the new “town square” and the flow of information on the Internet. Freedom of expression is the air we breathe, and the right to access information – our daily bread. All the same, in its decision, the Administrative Affairs Court stated that illegal gambling on the Internet certainly is not a protected right, and that in such circumstances indeed there is no “discourse of rights” (para. 21). However, the gambling sites also feature additional content: expressions, pictures, texts, explanations, lists and other audio-visual information. According to the Administrative Affairs Court all of these are of social value, concededly of “low value”. Nevertheless, “in the prevention of access to gambling websites the Respondents infringed the freedom of expression of users interested in entering the website and in browsing the information and of the site owners who uploaded the content” (para.23).

14.       This infringement upon free expression was scathingly criticized by the Israel Internet Association, but it appears to me that the alleged infringement is not quite what it was made out to be.  Attorneys for the State dispute this, claiming that the aforementioned gambling websites contain gambling content and nothing else, and that in any event, it is not content of a kind to which access cannot be denied based on freedom of expression. As mentioned, the petition was filed by the Israel Internet Association and not by access providers or website operators, with whom the relevant information is stored. This matter again exemplifies the problematic nature of granting standing to a party meddling in a dispute that is not its own, because the factual infrastructure laid before the court was insufficient and a court may follow it blindly.

15.       Regardless, even had the gambling websites under discussion included legitimate content alongside platforms of illegal gambling, there is nothing to prevent website owners from making the information accessible to users by one of two methods: either on an alternative site, or on the same site, together with blocking possible engagement in prohibited gambling there. The infringement of free expression is therefore quite marginal, if at all.

16.       We should not forget that the closure of a physical gambling place violates the right to property, a basic constitutional right, but is nonetheless permitted and frequently done according to the law. Case law, too, has permitted the closure of a physical gambling place, even when it serves for other legitimate activities (per former Justice Grunis in AAA 4436/02 Tishim Kadurim Restaurant, Members’ Club v. Haifa Municipality [3] at p.798 (hereinafter: Tishim Kadurim). As mentioned above, the Israeli Internet Association argues that not all of the content on the gambling sites at issue is illegal and that these sites serve as platforms for chatting and other legitimate uses. This is a factual claim that requires factual substantiation. But assuming it is correct, we again analogize to a physical gambling place, which may undisputedly be legally closed. In addition to serving for illegal gambling, such a place can also serve as a place for social interaction, where conversations, even on matters of highest importance, may be held. But this would not rise to the level of speech protected by the right to free expression that would prevent closing a physical place of gambling. Visitors would be able to continue to meet, to speak, and to exchange opinions in alternative venues.  Similarly, there is nothing to prevent taking the same action regarding a website where illegal gambling takes place.  Access to the latter would be blocked, and to the extent that other legitimate activities took place on the website, there would be no impediment to continuing those, whether on this site or on another site.

17.       Hence, in terms of practical implementation the concern for violating a fundamental principle has been alleviated. The elevated status of freedom of expression is far beyond dispute. It remains intact and its status is securely enshrined, and access to illegal Internet gambling can be restricted without infringing freedom of expression or the right to access information. I make additional comments on guarding against any infringement of free expression below, in my discussion of discretion in exercising police authority.  

(c)  Police Authority

18.       Law enforcement agencies source their actions in two statutory provisions. Section 3 of the Police Ordinance provides that: “The Israel Police shall work toward prevention and detection of offences, apprehension and prosecution of offenders, safe custody of prisoners, and maintenance of public order and the safety of persons and property”. This is a basic and important provision, but because of its generality is of limited value to us. A more important provision for our purposes is the specific provision of section 229(a)(1) of the Penal Law, which addresses “closure of places”, as follows:

 “A district police commander may order the closing of a place for prohibited games or a place for the conduct of lotteries or gambling.”

19.       There are two, similar alternatives. The first: “a place of prohibited games”, and the second, “a place for the conduct of lotteries or gambling”. The Administrative Affairs Court focused on the first alternative, which is defined in section 224 of the Penal Law:

“‘Place of prohibited games’: premises where prohibited games are held regularly, whether open to the public or only to certain persons, regardless of whether those premises are also used for some other purpose.”

Based on dictionary definitions in both Hebrew and English, the Administrative Affairs Court ruled that the statutory definition refers to a physical, delineated place; such as a house, building, field (para. 36 of the Administrative Affairs Court opinion). The court relied on Y. Kedmi’s book, which interprets premises “in the broad and comprehensive sense of the concept... Immovable property as distinct from movable property.” (Yaakov Kedmi, The Criminal Law (Part IV)  2283 (2006).

20.       Can the term “premises” be said to include the world of Internet? In my opinion “virtual premises” are also “premises” but this question can be left for future decisions. Section 229(a)(1) of the Penal Law, as mentioned above, consists of two alternatives. The second alternative, as worded, does not necessitate reference to the definitions section. The question therefore arises as to whether “place” can be broadly interpreted to mean “virtual space”. The Administrative Court answered this question in the negative, with sound, logical and, at first blush, persuasive reason: 

“Moreover, relating to a website as a ‘place’ is inconsistent with its mode of operation. A website, by definition, is an agglomeration of information and applications, installed on a computer, that connects with many other computers over the Internet. When a user ‘enters a website;, their personal computer contacts another computer (‘the website server’) which is found elsewhere, and requests information. The user’s computer has a unique number (IP address) and the website server has a unique number (a different IP address). The website server transmits the information to the personal computer, which uses a browser to arrange the information for reading. When “actions” take place on the website, the personal computer asks for new information from the website server, receives it, and arranges it on the personal computer. Information is transmitted between the personal computer and the server, but there is no “place” here at all. Justice Tenenbaum described this well in his article: ‘The choice of the Hebrew word “site”, intuitively conjures the notion of a geographical site. Perceiving the site as a “place” induces us to say “enter a site”, “exit a site” and the like… all the sites on the Internet are connected to each other and the vulnerability of one also harms the other… the Internet was created, developed and exists by virtue of all the individuals which support it and maintain its integrity. Correct and appropriate public policy must be based on this and facilitate these efforts… a “website” is not a place. In fact, a “site” is nothing more than a computer that holds software that regularly communicates with many other computers’” (para. 37 of the Administrative Affairs Court opinion).

21.       These comments were repeated and reiterated by the attorney for the Israel Internet Society, and I am prepared to endorse them unreservedly. A website, in essence, is not a “place” according to its technological definition. However, even if this is our point of departure, the necessary conclusion does not specifically exclude virtual space from the scope of section 229(a)(1) of the Penal Law, as will be explained. But prior to doing so a few comments must be made about the Internet, progress and the attempts of law and justice to keep up with the times. 

22.       Humanity in its entirety, laymen and experts, almost all of us are still learning, wondering and marveling at the Internet. Its influence is felt all over the world, but it will certainly take a long while before we can assess its full effect and implications: “We are living at the height of a revolution: Technological development in the computer realm, digital information and digital networks are generating a social, economic and political upheaval (Niva Elkin-Koren and Michael Birnhack, Introduction, in Legal Network: Law and Information Technology (with Niva Elkin-Koren, 2011);

The computer – and with it the Internet – are not merely a mutation of previous life forms that we have known, which we have given a home to in the legal system. They are a new life form, and their movement is not the movement of the life forms with whom we are accustomed to live. They move in the manner of the knight (the horse) in a chess game; its movement is not altogether forward, nor altogether backward or altogether to the side. It is not altogether diagonal. Its movement is a tinkling of this and a tinkling of that, and it exists in its own right. But here is how the new life form differs from the knight: we know in advance how the knight will move and we know, more or less, how to protect ourselves when it attacks us. As for these new life forms of the computer and the Internet – we have yet to fully explore them; we have yet to reach the bottom of the pit. One click in Jerusalem, and you are in Tel-Aviv, a second click and you are in Australia, a third click – and the system rebels and everything is erased as if it never was. We have begun to move at the speed of light whereas our bodies are in the carriage, and our stream of thought moves at the speed of the carriage (Mishael Cheshin, “Introduction” The Computer and the Legal Proceeding: Electronic Evidence and Procedure  (2000).

Some view the Internet as a new universe. “In a short time the Internet has created a new universe of inconceivable dimensions. This universe dominates almost every aspect of civilization, replicates it and corresponds to it” (Rubick Rozental, A Few Comments on the Language of Internet, Legal Network: Law and Information Technology, eds Michael Birnhack and Niva Elkin-Koren, 2011, 61).  The Internet has come to our world, entering into its inner domains, but we still have trouble defining it. It exists all over the world and simultaneously in no place at all. More precisely, there is access to Internet and its activity all over the world, but its existence is “nowhere”.     

23.       As is well known, the law follows sluggishly in the footsteps of innovations, and legislation does not keep up with the pace of scientific progress. Offenders against the law adapt to progress more rapidly than its enforcers. This is axiomatic. The former have no restraints; the latter do. Many years passed between the invention of the computer and the enactment of the Computers Law, (1995). Less than a generation or two passed in terms of computers, and the law is already out of date, because the legislature did not foresee, nor could it have foreseen the innovations in technology. But not only is the legal world perplexed. Psychology too has encountered new phenomena of addiction and psychological injuries, and is attempting to develop updated, “on the go” reponses.  The same is true for sociology, and other disciplines in social sciences, natural sciences and the humanities. Not surprisingly, the world of law too is still unequipped. Some have taken an extreme view, claiming that given the virtual nature of the Internet, it cannot be subjected to the laws of space, time and state (see written references for this approach in the article of Yuval Karniel and Chaim Wismonski, Freedom of Expression, Pornography, and Community in the Internet, Bar Ilan Law Studies 23 (1) 259 (2006); Michal Agmon-Gonen, The Internet as a City of Refuge?! Legal Regulation in Light of the Possibilities of the Technological Bypass Technologies and Globalism of the Net, Legal Network: Law and Information Technology, eds. Michael Birnhack and Niva Elkin-Koren, 2011, 207).

24.       This extraterritorial approach is unacceptable. Concededly, an abundance of legislation that would impair the tremendous benefit inherent in the Internet is undesirable, nor is there any point in legislation which is unenforceable given the characteristics of the network. However, for good or bad, virtual space exerts a tangible influence over the concrete world, and our world will neither consent to nor tolerate the virtual realm’s exemption from the law. Act of pedophilia committed online are still pedophilia, drugs sold via the Internet still have the same addictive and destructive affect as drugs sold on city streets, the terrible harms of Internet gambling are no less damaging than danger from gambling in a physical place. Quite the opposite, the Internet opens new horizons for the world of crime. They should be blocked. The approach of excluding law and justice from virtual space must be kept off bounds.

25.       All the same, undeniably, the legal regulation of activity in virtual space is complex and complicated. Normative claims as to what the law ought to be are difficult to make, nor is it easy to apply the existing law. Not by chance, there are those who have concluded that this is an area best suited for legislation; while others feel that case law is the appropriate method for adjusting the law to the Internet era. Both camps are uncertain about the extent to which Internet users should participate in formulating the rules governing virtual space and their application. (For a comprehensive review of the possible models, see: Iris Yaron Unger Uncovering the Identity of an Anonymous Internet wrongdoer – Comparative Review, The Knesset, Legal Department, Legislation and Legal Research, 2012).  A variety of models in case law and legislation have been adopted by states around the world (Miguel Deutch, Computer Legislation in Israel, Tel-Aviv Law Studies 22 (2) 427, 428 (1999)). The issue is weighty and broad and its influence far-reaching, but I will not elaborate on it beyond what is required for discussing the concrete questions of this appeal: the authority of the police to issue an order restricting access to gambling websites on the Internet.

26.       It seems that a comprehensive statutory regulation of this field, in a precise manner adjusted to the virtual era is preferable.  The question is whether, absent updated and comprehensive legislation, the law as currently worded satisfactorily considers the police’s authority to issue the orders in question. The Administrative Affairs Court decided to defer the legislative process, but to void police powers to order closure of virtual gambling places until the statute is expressly amended to confer such authority. This ruling involves difficulties.

27.       The ‘waiting period’ created restricts, and occasionally frustrates, appropriate responses toward law enforcement and justice.  This approach, coupled with the previously described pace of technological progress, can be expected to lead to a situation where many legislative acts will be neither relevant nor applicable. Even after the legislature has amended the legislation, it is entirely possible that within little time that amendment will no longer be useful. Hence waiting for the legislature to act will not necessarily provide a solution. “The judge interprets the law. Without his interpretation of the law, it cannot be applied. The judge may give a new interpretation. This is a dynamic interpretation that attempts to bridge between the law and changing reality without having to change the law itself. The law remains as it was, but its meaning has changed because the judge gave it a new interpretation that is consistent with society’s new needs. The court ... realizes its judicial role in bridging law and life (Aharon Barak, The Judge in a Democratic Society 57 (2004); and see HCJ 8070/98 Citizens Rights Office in Israel v. Ministry of the Interior [4], para. 12 of former Justice Grunis’ opinion; LCA 4447/07 Mor v. Barak I.T.T. [1995] Society for the Bezeq International Services Ltd (hereinafter: Mor) paras. F-I, of Justice Rubinstein’s opinion; CA 9183/09 The Football Association Premier League Limited v. Anon [6] paras. 4-6 of Justice Melcer’s opinion (hereinafter:  Anon)).

28.       On one hand, Internet crime is becoming increasingly sophisticated. On the other, criminal law develops slowly. The chasm between the two must be bridged. The Knesset achieves this through legislation, while the courts through case law. The reality of life does not allow us to wait for the Penal Law to be amended to determine which offences can escape sanction when committed over the Internet and which cannot.  Nor is it legally necessary to wait until the legislature has reviewed all of the criminal law’s provisions and decided which of them are applicable to the Internet. The court must respond to the specific matter brought before it and rule one way or another. This is not a question of ‘judicial legislation’, but rather of ‘judicial creation’. The same criminal offences proscribed many years ago and committed on city streets, are now committed on a larger scale and with greater force via the Internet. Occasionally, the actus reus is identical, the mens rea is identical, the legislative purpose is identical, and the damage, is quite often more extensive and severe in the virtual realm.  

29.       Needless to say, we are still bound by linguistic restraints and cannot deviate from their boundaries to cast our net over whatever we see as a crime or a tort in the “real world” and possibly appears as such in the virtual domain. All the same, the legislative purpose, generally common to all offences, whether committed here or there, requires an interpretative effort to prevent greatly harmful artificial loopholes in enforcement. The tremendous damage that can be wrought by the Internet was descussed by Justice E. Hayut: “The infringement concerned enlists human progress and technological innovations in computing in the service of crime, thus yielding a new and dangerous form of criminality that cannot be taken lightly. This form of criminality does not involve physical-tangible harm that leaves its marks on the victim’s body. It is committed remotely, with the click of a button, but its damage is extensive and carries different levels of implications, including to, as stated, a victim’s personal security and privacy, his property, his business, and his commercial secrets” (Cr.A 1439/06 Zaltovski v. State of Israel [7]). In the same vein, former Justice Grunis wrote: “The Internet is fertile ground for committing different types and categories of criminal activity, and inter alia, activities directed against state security. That the Internet era has made it significantly easier, technically, to commit offences such as a conspiracy to commit an offence cannot be ignored. Hence, in the case before us it is undisputed that “A” and “S” became acquainted by chance… via the Internet. In other words, conceivably, if not for the chance Internet meeting they would not have met and could not have conspired to commit the acts described in the indictment. Hence, the case before us demonstrates a need to impose punishment that deters from the negative and criminal side-effects that accompany technological developments” (CrA. 7430 /10 Anon v. State of Israel [8]). There are numerous other examples, and we take judicial notice of the Internet being exploited for grave and dangerous harm on a broad scale.

30.       Pedophilia is a pernicious scourge on the Internet. Is pedophilic material in virtual space nothing more than a collection of ‘pixels’ – with no substance – that the law is powerless to reach?  In practice, the courts do not stand idly by, and they ideed apply the Penal Law’s provisions to offences committed over the Internet. Naturally, this is not done reflexively, but rather the required physical and mental elements have been examined, under the circumstances of each case, and the principles of criminal law have been applied. (See Assaf Hardoof, Cybercrime, 17 (2010) who sharply criticizes the approach that the Internet’s characteristics undermine the foundations of criminal law. According to his approach, the mental complexities leading to criminal conduct committed in a physical environment also exist on the Internet.)

31.       We will return to the meaning of a “place… of gambling” in section 229(a)(1) of the Penal Law, which the police is permitted to close. If, according to the Administrative Affairs Court’s decision, it refers to a physical and not virtual place, then logic dictates that this would also be the meaning of a “place… of gambling” immediately above in section 228 of the Penal Law. If so, then not only would the police be prevented from issuing orders restricting access to gambling websites, but it is doubtful it would even be possible to convict a person operating, over the Internet, “a place for prohibited games or a place for the conduct of lotteries or gambling” (section 228 of the Criminal Law). On its face, this would conclusively preclude not only restricting access to illegal gambling websites, but also the enforcing the prohibition of possessing or operating illegal gambling websites. This state of affairs would remain until we are saved by a statutory amendment, which may or may not come soon.

32.       Moreover, in Israeli legislation, the term “place” is used for different offences and in numerous contexts. For example, “public place” is defined in section 34(24) of the Penal Law and is mentioned in numerous other sections concerning offences and punishments; Chapter C of the Preliminary Part of the Penal Law, deals with “Applicability of Penal Laws according to Place Where the Offense Was Committed  (emphasis mine – N.S.). A place in which an Internet website is viewed, or is used is a “place” that establishes judicial jurisdiction. Should we exempt the Internet from the Penal Law going forward because it is excluded from the definition of a “place”? Similarly, would we permit discrimination on the Internet just because it is excluded from the definition of a “public place” in section 2 of the Prohibition of Discrimination (Products and Services) in Entrance to Places of Entertainment and Public Places, 5761-2001? (See e.g. the conviction for supporting a terrorist organization on the Internet, where the internet was found to be a “public place” CrimF (Nazareth) 12641-11-10 State of Israel v. Abu-Salim (Deputy President Yung-Gefer) paras. 47-56 (1.4.12)).

33.       The civil law, too, is frequently required to apply the concept of “place” to the Internet. On more than one occasion courts have held that Internet-based conduct fall within the jurisdiction of courts all over the country. For example, in a breach of copyright and intellectual property case, concerning a website for a virtual shop selling household goods and gifts, the court held that “the picture was presented on the Internet, namely – in each and every place within the area of the State of Israel. It is therefore clear that the place of the omission was in the entire state and by extension in each and every district… the territorial jurisdiction extends to the entire area of the State of Israel” (Comments by Judge Tenenbaum in App. (Magistrates – J-Lem) 8033/06 Steinberg v. Levi (10.4.2007). These remarks, made in his role as judge are inconsistent with his decisive remarks in his role as scholar in the article cited above: that “an Internet site ‘is not a place’, which the Administrative Affairs Court relied upon in the decision appealed here (para. 37)). Even more accurately, all the alternatives stipulated in Regulation 3(a) of the Civil Procedure Regulations, 5744-1984 employ the language of “place” (place of residence, place of business, place of creating obligations, place intended for fulfillment of obligations, place of delivery of asset, place of act or omission).  Is it possible to exclude the Internet from territorial jurisdiction because it does not fall into the category of “place”?

34.       Due to space constraints and in the absence of satisfactory arguments it cannot be responsibly councluded that wherever the term “place” appears in primary or secondary legislation it must be applied to the Internet as well. Conceivably, there could be certain, isolated exceptions, but the rule should be that the Internet fits the definition of “place”. The Israeli Internet Association’s claim, which the Administrative Affairs Court accepted, that both in truth and according to its dictionary definition, virtual space is not a “place” is not sufficiently persuasive. The settled, entrenched and well-accepted law is that “the words of the law are not fortresses, to be conquered with the help of dictionaries, but rather the packaging of a living idea which changes according to circumstances of time and place, in order to realize the basic purpose of the law” (comments by then Justice A. Barak (LCrApp 787/79 Mizrahi v. State of Israel [9] at 427). There, the Court held that the “one who escapes from lawful custody” refers not only to an inmate who literally escapes from prison but also to a prisoner who fails to return from furlough: “it may be argued that our concern is with a criminal provision that should be accorded a narrow construction, by attaching only ‘physical’ meaning to the terms ‘custody’ and ‘escape’. I cannot accept this line of thought. A criminal statute, like any other statute should be interpreted neither narrowly nor broadly but instead by attaching to it the logical and natural meaning that realizes the legislative purpose" (ibid).These statements have retained their vitality and are applicable to our case too, and even a fortiori: in that case the issue concerned a criminal offense, whereas our concern here is with an administrative measure.

35.       As stated, the legal world is still not best prepared to handle the Internet, and this is also true of the world of language.  The terms that serve us in virtual space are borrowed from the tangible world. On the Internet we use a “desk top”; the user “cuts”, “copies”, “pastes” and “deletes”; “writes” “notes”; “stores” in “files”; and “sends” to the “recycling bin” and receives “documents” and “junk mail” into a “mail box”. Given this background, the word “place” is by no means exceptional. It would not be a deviation from the ‘principle of legality’, nor from the rules of interpretation were we to determine that “place” also includes virtual space, and that its meaning also encompasses a website. Since we speak of an Internet “site” in our daily conversations, we should remember its dictionary definition and its Talmudic root (b.Zevahim 7a): a “site” is a “place”.

36.       Therefore, in interpreting section 229(a)(1) of the Penal Law, I see no justification for taking a literal and narrow approach, which interprets the word “place” as a physical place only. In the current modern era, a website is also a type of place. The section’s language also tolerates the classification of virtual space – or perhaps better termed as “computerized space” – as a “place”.

37.       From language to purpose: In the case of Tishim Kadurim [3] then Justice A. Grunis explained the purpose for prohibiting certain games as a value-based goal. Man is born to labor rather than easy enrichment based on luck. Addiction to gambling is a serious scourge that harms the individual, their family and society as a whole. Before the Penal Law there was the Criminal Law Amendment (Prohibited Games, Lotteries and Bets), 5724-1964, and before Justice A. Grunis there was Justice Haim Cohn who made the following remarks about the legislative purpose behind the previous statute:

                        The legislative purpose, as reflected clearly in the nature and the language of the law, is to combat, by criminalization, the scourge of gambling and betting – the scourge of winning money or its equivalent other than by work or other reasonable consideration, but rather by the luck of the draw. Mr. Terlo rightly mentioned the well-known fact that mankind has an evil tendency to try his luck in gambling. One need not have a particularly developed commercial instinct to assess the tremendous prospect for profit in the commercial exploitation of this natural human tendency.  Mr. Terlo said, and I agree with him, that such commercial exploitation, in all of its various forms, produces demoralization. I further add that from my perspective, the wrong that the law seeks to prevent is not only the encouragement of desire for lawful easy enrichment without labor, but also – and perhaps primarily – the placing of an obstacle before the blind, where instead of spending his money on his own sustenance and that of his household, he invests in dubious ventures based on luck (HCJ 131/85 Savizky v. Minster of Finance [10] at 376).

38.  As we can see this plague is nothing new to us. The following is a reliable testimony from two hundred years ago about this phenomenon and the harm it causes, relating to the fate of those who wager on dice: “The number of those involved has multiplied, where their foolish preoccupation is such that they spend nights and days gambling, in their homes, on their roofs and on street corners, until they lose everything. Even if they are wealthy, eventually they lose all and must steal and resort to violence, while their family members starve; their children beg for bread, and there is none to give them, for they do not work to bring food to their families. And one sin leads to another, in that they neglect prayer and fulfillment of the commandments, for when temptation seizes them and they engage in gambling, it is extremely difficult for them to forsake it, as difficult as separating one’s fingernail from one’s flesh. They do not take care of themselves and do not tear away from gambling, even to eat at the time for eating and to sleep at the time for sleeping. One who is addicted to gambling will not leave it even when he is old, for only will-power can separate from it.” (Rabbi Eliezer Papo, Pele Yo’etz, Constantinople, 5584 - 1824).[1] […]

39.   In 1975 the legislature added a provision to the Penal Law Amendment (Prohibited Games, Lotteries and Bets), 5724-1964, which granted the District Commander of the Police the authority to issue an order to close “a place for prohibited games or a place for the conduct of lotteries or gambling” (S.H 5735, No. 779, 222). According to the introduction to the Explanatory Note of the bill, the legislature was dissatisfied with the existing criminal sanction, and sought to close places where prohibited games were conducted, as a preventive measure: “The Law imposes a punishment on the possessor or operator of a place for conducting games with cards, dice, game machines, and the like, But there is no law that prevents the actual existence of such place… The proposed law seeks to establish provisions… by enacting legislation directly designed to address the phenomenon of the crime that thrives in such places, and to confer the authority for the advance prevention of the opening of businesses that are liable to harm public safety and generate crime. It also proposes to stiffen the punishments and to adapt them to any given situation (H.H. 5735-1975).” Incidentally, the Explanatory Note refers to the closing of “a certain place”. In light of our conclusions above, it is not inconceivable that “a certain place” encompasses the Internet, it being a place where anonymity is preserved and where we have no knowledge of a website owner’s or users’ identities, nor do we know what that place is, or where is it located, all of these are considered  “anonymous".

40.       The harm wrought by gambling on the Internet is immeasurably greater than that which is caused in physical place. Gambling websites on the Internet are accessible to all sections of the population, from adult to child, the rich and the poor, the honest and the corrupt, the wise and the legally incompetent. With just a click of a button and press of a key any novice can gamble on the Internet. But not only accessibility is concerning, there is also availability – at  any time and any hour.  Identity can be disguised to enable the use of all features of virtual spaces. All of these come together to exacerbate the phenomenon and its range of harms: addiction, vast loss of funds, money laundering, tax evasion, incidental crime, and more. A large physical gambling venue can hold hundreds, perhaps even thousands of clients, but it pales in comparison to the Internet, which is available to millions of people. With these capacities, the number of victims also rises exponentially, as well as the amounts of funds dubiously invested.

41.       When section 229(a)(1) of the Penal Law was enacted, the legislature did not anticipate the Internet and by extension did not consider the illegal gambling that would be conducted there. However, the legislative purpose evidently was to prevent illegal gambling, regardless of location.  The police pursuit of offenders does not end at virtual space; the Internet cannot become a city of refuge. The material factor is not the platform for illegal gambling but rather the phenomenon itself. “Do not look in the canister, but at what is inside (Mishnah, Avot 4.2)” If it is technically possible to close a gambling place, even if the closure is not an enclosure but rather a prevention of access, the legislative purpose should be realized, to the extent possible, through proper interpretation. And again, if we assume that it refers to a physical place, then illegal gambling need not necessarily be conducted in a closed structure, for example, a vast area in which illegal gambling takes place.  The possibility of ordering its closure exists and can be done by preventing access through the gate. The police would be authorized to close the gate and prevent access to a space used for criminal activity. In the same vein, the Internet too is a space: a computerized space (some have used the expression “global public space”. See Jurgenb Habermas, The Structural Transformation of the Public Sphere, Thomas Burger & Frederick Lawrence translations (1989); Tal Samuel-Azran, Global Public Sphere on the Internet: Potential and Limitations, Legal Net:  Law and Information Technology, 433, 434 (Niva Elkin-Koren and Michael Birnhack eds, 2011)). Entrance into computerized space is also through a “gate” embodied by the access provider and the website operator. Concededly, the entrance is not physical, actually consists of communication between computers, but this is immaterial, because the technological definition is inconclusive as to the interpretative question.

42.       Jewish Law can enlighten us. The Torah was given at Mt. Sinai. In the ancient world, modern technology and the Internet era were unimaginable. Nonetheless, the Torah seeks to adapt to present and future reality by way of interpretation, for otherwise it would become a dead letter instead of a living document. Interpretation must adhere to language in order to fulfill the Divine words and to not deviate from them in any way. It was specifically because of this that the Talmudic Sages saw no difficulty in adapting terms such as ox or donkey or camel, used in those times for labor and transport, to the context of vehicles and planes. This is the present need for otherwise Jewish law will no longer be relevant or valuable. Rabbi Aharon Lichtenstein made remarks pertinent for our purposes, and they should guide us: 

                        In the developing technological reality the ability to cause damage, physical or even virtual continually increases, without incurring any liability under the criteria of Nahmanides or of Rabbi Yitzhack.[2] The harm may be more abstract and the process of causing it may be more indirect than the minimal threshold for liability under garma.[3] Nonetheless, the result is quite severe.

                        Accordingly, a learned and sharp-minded thief would be able to plan and execute the perfect burglary, with the assistance of grama tools for breaking in, without consequences, whether due to direct damage or force of garmi.  Should we persist to grant exemptions in this kind of scenario based on the law of grama in torts?...

                        The request is simple, the authority exists and eyes are raised in anticipation. In the event that leading Jewish authorities succeed in enacting an amendment for this matter it would provide a  remedy for a real concern for society, and at the same time, would  elevate the glory of the Torah (Lessons of Rabbi Aharon Lichtenstein, Dina d'Grami, 200 (5760); See also in the comments of Justice N. Hendel, para. 6 Anon.)

43.       Thus far on the laungauge and the purpose. We now proceed to address some of the difficulties the Administrative Affairs Court considered in the decision appealed here, in terms of applying of the law to the virtual sphere. These difficulties also lead the court to conclude that the solution lies with the legislature and not the court, and that it is appropriate to wait for legislative amendment.

44.       A primary difficulty is that the orders restrict access to the Internet through third parties – the access provider. According to the Administrative Affairs Court, based on the Israeli Internet Association’ claim, the law authorizes closing a place, but does not authorizes ordering a third party to prevent access to an Internet site. The claim is a weighty one. Access providers’ legal responsibility poses questions in different legal contexts. For example, in the Mor [5] case the Court held that the provider is not obligated to disclose the identity of anonymous “talkbackers”, and called upon the legislature to regulate the matter. Similarly, in Anon [8] the Court ruled that a supplier cannot be compelled to reveal the particulars of a site owner who breaches copyright in order to file an action for that breach. This decision was also accompanied by a call for legislation of the matter. At the same time, the Court held that if a certain matter did not find a legislative solution, courts would have to provide solutions in case law, and the legal doctrines required to fill in the lacunae were presented. The matter before us is different. Here, it cannot be said that there is no legislative provision that confers authority. There is no need for primary legislation of the issue. The section’s interpretation leads to the conclusion that the section applies to the virtual realm. Legal issues concerning the access provider may be adequately resolved in the context of how the police may exercise its authority to order restricted access to gambling websites. That such difficulties exist should not be a determinative factor in whether the authority exists.

45.       I also believe that the legal challenges involved in restricting access to gambling websites vis-a-vis the access providers were exaggerated. First, using a third party to execute criminal proceeding is not illegitimate. The law recognizes, for example regarding a summons to present evidence for investigation or a trial (section 43 of the Criminal Procedure (Arrest and Search) (New Version) Act, 5729-1969. Second, given the license they receive from the State, access providers have a public duty. They sit at a central intersection – the “Internet points of control” – and under these circumstances using them to execute orders restricting access is justified.  Third, it appears that had it concerned the closure of a physical place by the police, with third party assistance, there would have been no problem.  The attorneys for the State demonstrated this in another context thus: Illegal gambling is being conducted in an isolated villa. A guard is in charge of the path leading to the villa. Would the police not be authorized to order the policeman to prevent gamblers’ access to the path leading to the villa? Fourth, a police order directed at access providers instructing the to restrict access to illegal gambling websites does not require them to conduct any investigation or inquiry and does not unlawfully breach any of their rights, ordering them only to “execute a technical act that does not involve any discretion of the closing of a site with a particular IP address, explicitly specified in the order” (section 41 of the State’s summations). Case law has stressed that imposing legal responsibility on the supplier raises concerns that should be regulated statutorily (see Rachel Alkalai, Civil Liability of Internet Services Suppliers for Transfer of Harmful Information Hamishpat 6, 151, 154 on the Report by the Knesset Sub-Committee for Communications and Information on the Need for a Legislative Arrangement). However the situation in the case before us differs from the one described there. We do not hold that Internet providers are legally responsible to prevent, on their own initiative, access to websites used for illegal gambling.  Moreover, our ruling does not prevent access providers from petitioning a court in appropriate cases in order to subject it to judicial review. This right is stipulated in section 5(1) of the Administrative Affairs Court Act, 5760-2000 (item no. 7 of the First Schedule). Recall that the access providers did not exercise this right and did not challenge the order.

46. The Israeli Internet Association claims that this is an “unprecedented and exceptional measure” (page 1 of the summations). This is not so. The Administrative Affairs Court recognized that restricting access to Internet websites used for gambling is accepted practice around the world: “The desire to minimize the harm from negative uses has led certain authorities, even in liberal democratic countries, to take various measures against websites that support anti-social activities (see: Betting on the net: An analysis of the Government’s role in addressing Internet gambling, 51 Fed. Comm. L. J. (1999)). One of those measures is blocking access to websites that are breading grounds for illegal activity, by various technological means…” (para. 19 of the opinion) (ed. note: translated form the Hebrew opinion’s translation).  In Australia, a law was enacted in 2001, stipulating that “access providers shall block access to illegal gambling sites should they receive an express demand to do so from the authorities” (ed. note: translated from Hebrew opinion’s translation), subject to the conditions set forth in the Interactive Gambling Bill 2001. In 2006, the United States passed a law prohibiting Internet gambling – the Unlawful Internet Gambling Enforcement Act of 2006, which inter alia allows that under certain circumstances, the court may grant orders to compel internet providers to block access to gambling websites (paras. 54- 55 of the Administrative Affairs Court opinion).

47.       Additional restrictions are common around the world. The Council of Europe’s Convention on Cybercrime deals with the adoption of legislation intended to protect society from crimes committed online (http://conventions.coe.int/Treay/en/Treaties/Html/185.htm). It provides inter alia that all parties to the convention will adopt legislative and other measures as may be necessary to criminalize various acts of child pornography, which is disseminated over computer systems (Article 9). In 1998, Sweden passed a law addressing liability for electronic bulletin boards, including various categories of Internet pages (Act (1998:112) on Responsibility for Electronic Boards).  This statute requires service providers who store information (as distinct from Internet access providers) to make illegal content inaccessible or to remove the content. If further refers to a number of provisions in Sweden’s Penal Law, for example, incitement to racism, or child pornography (http://www.nai.uu.se/forum/about-nai-forum-1/SFS-1998_112-Act_E-boards.pdf.).

48.       Australia established an agency known as Australian Communications and Media, which is charged with, inter alia, regulating Internet content. The agency is authorized to investigate potentially prohibited content on the Internet, and to issue access providers “notice of warning and removal” relating to the contents of Internet websites used for illegal gambling. In Italy, since 2006, Internet gambling has been prohibited, unless on authorized websites.  Internet access providers are required to restrict access to unauthorized websites listed in a “black list” kept by an administrative body: Autonomous Administration of State Monopolies, http: www.aams.gov.it/site.php?id=6560).  As it turns out the restriction of access to websites is an accepted measure, occasionally following an order by an administrative body. The a priori involvement of a judicial body is not always necessary, and there is no need for a criminal investigation to precede the administrative directive. States around the world acknowledge the necessity of restricting prohibited activities on the Internet as well. The State of Israel is not a pioneer in this realm.

Police policy is to exercise this authority with caution. The investigations and intelligence branch prepare the infrastructure required for issuing an order.  Legal counsel to the police examines the material, and so does the State Attorney.  Immediately before issuing the order, the access providers and websites operates are given the right to present their arguments. The decision to issue the order is given at the level of the district commander.  A party who could have been aggrieved may file an application for a second review, and following that, as stated, may also petition the courts. After issuing the order, the police examines it periodically, and at least once a month considers whether to extend it, revoke it or amend it. Against this background, if the police orders, consistent with its authority, a third party to assist it in preventing an offence, and if the latter agrees, why should the court prevent it from doing so? If the same access providers wish to object, the doors of the court are open to them in order to hear their claims.

50.       As we have said, the authority is there; the manner of exercising it is subject to discretion and judicial review. Recall, that the access providers filed no petition to any court, and in this sense, the Internet Association is indeed meddling in a dispute to which it is not a party (HCJ 651/03 Citizens Rights Bureau in Israel v. Chairman of the Sixteenth Knesset Central General Elections Committee PD 57(2), 62.) Regardless, in the absence of appropriate factual infrastructure, there is no practical possibility or legal need to elaborate further on this matter.

51. The Administrative Affairs Court stated that restricting access through the orders in question could incidentally block innocent websites. Attorney for the State responded to this argument, claiming that from a technological perspective this fear was negligible because the IP address can be crossed with the website’s URL address in order to prevent restricted access to innocent sites. Personally, I see no need to rule on this point, given that it was not fleshed out in the Administrative Affairs Court.  The state can consider these claims in light of its discretion to exercise the authority. In preparing the order, the police must ensure that execution by access providers does not harm innocent websites, but only restricts access to the targetted website. Where it is impossible to avoid harm to innocent websites, as a side-effect of blocking access to a gambling website, to the extent that the Israeli Internet Association is correct and such situations indeed occur, the police would not be permitted to order restricting access to the site. Presumably, a provider wishing to avoid harm to innocent websites would present such claims under the right to be heard, in a petition for second review by the police, or in a petition to the court.

52.       The Israeli Internet Association also claimed that restriction of access was ineffective. The attorney for State argued in response that the inefficacy claim directly contradicted the Israel Internet Association’s claim concerning the damage such orders would cause: If the orders are ineffective, then naturally no harm would be caused. In any event, the court has no expertise regarding the efficacy of the orders. The position of the Israel Police – the professional body charged with the matter – is that the orders have a substantial effect and that this is another effective tool against illegal Internet gambling.  The Israel Police is aware of the methods used in an attempt to ’bypass’ the orders (for example, changing the URL website address, or its IP address). But this involves costs and not all end users know how to do it, and the police also has the tools for dealing with ‘bypass’ attempts. Actually, enforcement difficulties are not unique to virtual space and are common in all areas of crime: “For by wise counsel thou shalt make thy war” (Mishlei 24:6).

53.       The Administrative Affairs Court had difficulty not only with “place”, but also with “the closure”. According to the court, “closure is one thing, blocking access is another” (para. 41), and “even a broad interpretation of the law cannot confer the police commander authorities not specified in the law”  (ibid). My opinion is different. If the police is authorized to fully close illegal gambling websites on the Internet, then let alone it should be authorized to block or restrict the access to them. This is a less harmful measure. Section 17(b) of the Interpretation Law 5741-1981 provides that “any authorization to act or compel action implies the auxiliary authorities reasonably required therefore.” Authorization to close (and afortiori if closing is not possible) also means granting powers to block access.

54.       The Israeli Internet Association opposed various claims by the State’s representatives regarding the legislative regulation of the issue. This may be so, and it would have been preferable had they spoken in one voice, but we must remember that the issue raises real doubt. There is nothing to prevent changes in views or thought processes, and in making deliberations more productive. The binding position of the State’s representatives, at the end of the day, is that of the Attorney General, and the arguments were made on his behalf. Without derogating from its claims here, the State also submitted the draft bill to clarify the situation, but one cannot know how the legislative process will develop. The same applies to the four previous draft bills presented to the Knesset. Each one of them attempted to explicitly authorize the police to order access suppliers to block access to gambling websites, but none of them materialized into a legislative act. The Knesset members expressed varying opinions but I do not think it is possible to distill a clear conclusion from their comments regarding the subjective intention of the legislature, as concluded by the Administrative Affairs Court: “The fact that the legislator debated the proposal substantively and decided not to enact it, indicates that its subjective intention was not to apply its principles in fact… the subjective and concrete intention of the legislature in this matter, indicates that it sought not to give the District Commander authority to block access to gambling sites pursuant to his own discretion”  (para. 61). In my view, this conclusion is by no means inevitable. According to the record, some of the Knesset Members felt that a legislative amendment was entirely unnecessary, and that the authority already exists. In view of the differing views, additional possibilities exist. Summing up the debate, the committee chairperson pointed out the difficulties that were raised, but the general position was to conduct another hearing. A small part of the legislative proceedings and a few Knesset members who are members of the Constitution, Law and Justice Committee cannot provide a basis for a generalized legislature’s subjective intention.

Final Word

55.  I do not think that there was any justification to cancel the orders issued by the police, with the State Attorney and the Attorney General’s knowledge, to restrict access to gambling websites. First, it is doubtful whether the Israel Internet Association has locus standi in this petition; second, the alleged infringement of free expression is certainly not as serious as was alleged; third, the main point is that section 229(a)(1) of the Penal Law constitutes an authorization for the police to issue the orders. This is consistent with the section’s language, its logic, the legislative history and the legislative purpose.  I therefore propose to my colleagues to strike down the decision of the Administrative Affairs Court and to order the restoration of the orders to restrict access to gambling websites.

Note

56.       After reading the opinion of my colleague, Justice U. Vogelman, my impression is that he was slightly tough on the State regarding the use of a third party – access providers – for purposes of exercising the authority under section 229 of the Law. I addressed this point in paragraphs 44-45 above. I will add just this: My colleague mentioned the well known distinction between delegating authority which also includes the exercise of discretion, and receiving assistance in technical matters related to exercising that authority. My colleague acknowledges that the access providers were not required to exercise discretion, and the police only requested their help in exercising its own authority – in the technical act of blocking a website identified by its IP address as specified in the order. However, according to my colleague, it is still necessary to show that the access providers agree to assist the police, and once the police imposed an obligation upon the access providers, it can no longer be considered assistance.

My view is different. First, let us assume that the police district commander seeks to order the closure of a room used for gambling. To do so he orders a third party, in possession of the keys to that place, to lock the door, without requesting consent. Is there anything wrong with that?  Had the place of gambling not been an Internet site, but rather a room in a hotel, would the police not be authorized to order a reception clerk to assist it in exercising its authority to close that room or to open it? Would this require a legislative amendment?

Second, as mentioned in para. 49 above, prior to issuing the order the access providers were given the right to present their claims; the access providers are entitled to request a second review of the decision to issue an order, and the access providers are also permitted to petition the Administrative Affairs Court. In fact, the access providers took none of these steps. They may have reconciled themselves to the orders as a token of good citizenship; they may have an interest in preventing access to gambling websites, because in doing so they reduce their exposure to law suits (for example: parents suing them for their damages as a result of their children’s Internet gambling). I will not belabor the point speculating because the facts suffice: The access providers did not institute any legal proceedings to express their objection to the orders. My colleague seeks to be meticulous about the access providers’ rights, and requires that their consent be “explicit”, “sincere and genuine willingness”. Under the circumstances, my view is different. In the Haggadah of Pessach, tomorrow night, with respect to the son who does not know how to ask, we say “you shall open your mouth for him”. By way of analogy, this is how we relate to a mute, who is incapable or does not know how to present claims or to ensure their rights are protected. Access providers do not fall into this category and I see no justification for treating them under the criterion of “you shall open your mouth for him”, when the gates of the court were open to them, and they knowingly refused to enter. More precisely, in the future too, whenever the police seek to issue an order, Internet providers will be able to object and to present their case before the order is issued, after it is issued, and also to file an administrative petition. It therefore seems that we may appropriately apply the Talmudic rule that “silence is regarded as consent” (Bavli, 87b), to infer their agreement, and thus remove the obstacle to the exercise of the police authority to restrict access to gambling websites.

 

Justice U. Vogelman

Is the District Police Commander of the Israel Police authorized to order Internet access providers to restrict Israeli users’ access to gambling sites on the Internet, under their authority under section 229(a)(1) of the Penal Law, 5737-1977 (hereinafter: the Penal Law), to close down gambling places? This is the question before us.

General

1.         The appearance of the Internet has radically changed our world.  It enables easy and convenient communication between people. Some use it for interactive entertainment; others use it for electronic trade. Many use it – occasionally on a daily basis – to send electronic mail and for sending instant messages. A countless number of websites enable video and audio, and others enable telephony, files sharing, and the like (Assaf Hardoof, Hapesha Hamekuvan) [CYBERCRIME], 114, 117 (2010)). The web also enables access to immense quantities of information pooled on the Internet – an ever growing collection of documents created by independent authors and stored in servers’ computers. In that sense, the Internet is the most outstanding feature of the “information era” in which we are living, an era in which advanced technological reality enables the immediate transfer of data on a massive scale compared to the world around us (see HCJ 3809/08 Citizens Rights Bureau v. Israel Police [12] para.1 (hereinafter: the “Big Brother” law). In this way the Internet has and continues to contribute to social, economic, scientific and cultural developments around the world. Alongside these numerous advantages, phenomena of lawbreaking are likewise are not absent from the virtual world. The Internet enables activity that is defined as a criminal offence or civil tort, as well as technologies that enable the commission of torts or offences (Michal Agmon-Gonen, The Internet as a City of Refuge?! Legal Regulation in Light of the Possibilities of the Technological Bypass Technologies and Globalism of the Net, in Legal Network: Law and Information Technology, eds. Michael Birnhack and Niva Elkin-Koren, 2011). Illegal gambling enabled by the Internet is part of the content available on the Internet. Gambling websites offer their services from their locations in countries that permit it, and are accessible from different states around the world, including those in which participation in gambling is prohibited or restricted. Over the past few years these websites have become increasingly ubiquitous, given the high financial incentive for establishing them. Online gambling is one of the most profitable branches of trade on the Internet (Chaim Wismonsky, Sentencing Guidelines for Computer Crimes, Bar-Ilan Law Studies 24(1), 81, 88 (2008)).

2.         There is no need to elaborate on the negative social value involved in gambling. My colleague Justice N. Sohlberg also discussed this at length. This phenomenon has seen plenty of opposition, including the claim that a one’s livelihood should be based on work, a vocation or some other legitimate activity rather than easy enrichment based on luck. Whereas participating in gambling is not creative and undermines one’s work-ethic, a person participating in prohibited games may become addicted to this “occupation”, and the addict could cause extensive losses to themselves and their family and ultimately become a burden upon their family and upon society. As known, there are a few legal arrangements that permit gambling games under state auspices, encompassed in the Regulation of Gambling in Sports Act, 5727-1967 and in section 231(a) of the Penal Law. Mifal HaPayis,[4] for example, operates under such a permit. Notwithstanding that state-sponsored permitted gambling enables quick enrichment based on luck and also poses the danger of addiction, it should be distinguished from illegal gambling. Permitted gambling enables fundraising for public causes; they are not usually accompanied by negative elements such as coming under the control of organized crime, and finally, the state can oversee their mangagement and the distribution of funds (see AAA 4436/02 Tishim Kadurim [3] at p. 804,806; Ofer Grusskopf, Paternalism, Public Policy and the Government Monopoly over the Gambling Market, Hamishpat (7) 9, 28 (2002)).  As an aside, it should be noted that in many states gambling is permitted on a wider scale, but needless to say, our decision at this stage is restricted to Israeli Law and the legislatures’ values-based determinations.

3.         Techonolgically, it is now possible to block access to a particular website (compare:  Rachel Alkalai, Civil Liability of Suppliers of Internet Services for Transfer of Damaging Information, Hamishpat  (6) 151, 159 (2001)). This is the background for the orders subject to this proceeding. The events concerning us unfolded as following. At the end of June 2010 Israel Police district commanders sent warning letters to Internet access providers, notifying them of their intention to order blocking Israeli users’ access to various gambling websites (hereinafter: the warning letters). In the warning letters the district commanders specified the URL addresses and IP addresses of these websites. Notably, the Appellants claimed that the website operators also received a similar warning. The Internet access providers received a 48-hour extension to submit their challenges of the orders, and a further extension was granted to providers who so requested. One provider, Respondent 2, exercised its right to object to the orders. In a letter to the district commanders, Respondent 2 claimed that the orders because were unlawful because the district commander is only authorized to order closure of physical places; and also because the Penal Law does not authorize a district commander to use the providers to prevent users in Israel from having access to gambling websites. In August 2010 the police gave notice that it had rejected these claims and the orders forming the subject of the appeal were subsequently issued.

4.         Our decision in this appeal therefore relates to the legality of these orders. My colleague, Justice N. Sohlberg, found that there is a doubt regarding the locus standi of the Israeli Internet Association in this petition; and that there was no justification to declare the orders invalid because they were issued by the district commander without authority, as per the ruling of the District Court. Having read the comprehensive opinion by my colleague, and having considered the matter, I have concluded I cannot concur with the result that he reached. My conclusion precedes the analysis. As detailed below, in my view, section 229(a)(1) is short of authorizing the police to issue the relevant orders. In the first part of my remarks I will discuss the locus standi of the Israeli Internet Association. Next, I discuss the source for the claimed authority – section 229 of the Penal Law, and examine whether it sufficiently authorizes ordering the Internet providers to block access to gambling websites.

Locus Standi of the Public Petitioner

5.         The Israeli Internet Association is a non-profit organization that works to promote the Internet and its integration in Israel. The Association seeks to further the interests of Internet users. It has no self-interest beyond the interests it shares with the general public, or at least with significant parts thereof, and as such its petition is a “public petition”. As a rule, this Court’s jurisprudence has taken a permissive approach to standing rights of public petitioners (HCJ 5188/09 Association of Renovations Contractors for Restoration v. State of Israel  [13] para. 7.) Our firmly settled rule is that a public petition will be recognized where “the matter raised in the petition is of a public nature, which has a direct effect on advancing the rule of law and establishing policies to ensure its existence in practice” (HCJ 1/81 Shiran v. Broadcasting Authority [14] at p. 374; see also HCJ 910/86 Ressler v. Minister of Defense [15], at 462-463). Who can serve as the public petitioner? It could be any one of many people aggrieved by a certain administrative act (HCJ 287/91 Kargal Ltd v. Investments Center Council [16] at p. 862), including any one who is unable to indicate a personal interest in the matter or harm caused to them personally (HCJ 651/03 Citizens Rights Bureau in Israel v. Chairman of Central Elections Committee for Sixteenth Knesset [11] at p.68)). The judicial policy on this issue was and still is influenced by fundamental value-based concepts about the role of judicial review in protecting the rule of law and supervising appropriate functioning of public administration. As such, the court should refrain from refusing the hear a person who claims that an administrative authority has violated the rule of law for the sole reason that they have no personal interest in the matter, given that this would lead to providing the authority with a stamp of approval to continue violating the rule of law (HCJ 962/02 Liran v. Attorney General [17] para. 14 (hereinafter: “Liran”). Yitzchack Zamir Administrative Power Vol.1 120-121 (2^nd ed. 2010) (hereinafter: Zamir)). Along with broadening of the scope of standing rights, the principle that the court will not generally grant a public petition where there is a particular person or body who has a direct interest in the matter should be preserved, unless they themselves have failed to petition the court for relief in the matter concerning them (see Liran [17]). In the words of former Justice M. Cheshin in HCJ 4112/99 Adalah Legal Centre for Arab Minority Rights in Israel v. Tel-Aviv Municipality [18]: “…in a case of this kind we would tell the public petitioner seeking to claim the right of the individual injured: Why are you meddling in a quarrel which does not involve you? If the victim did not complain about the infringement that he suffered, why have you come to provoke dispute?” (ibid., p. 443).  

6.         My colleague Justice N. Sohlberg felt that the Internet Association was “meddling in a quarrel which does not involve it”. I do not share this position. In the case before us, the Internet Association has raised grave claims about the alleged overstepping of authority in issuing orders to Internet access providers. Our concern is with a first attempt to define the scope of the district commanders’ authorities under section 229 of the Penal Law, in terms of blocking access to Internet gambling websites. This is a fundamental question. It is undisputed that the administrative authority’s activity within the boundaries of its authority are central to maintaining the rule of law. This Court has already held that claims of exceeding of authority are categorized as claims that justify broadening standing rights, for “...a court takes a more lenient attitude to the right of standing of persons not directly and substantially harmed where it concerns exceeding authority of a tribunal or agency, or where it concerns an act committed unlawfully, as distinct from other cases” (per Justice Kister in HCJ 80/70 Elizur v. Broadcasting Authority [19] at p.649; compare HCJ 852/86 Aloni v. Minister of Justice  [20], at p.63).

7.         One of the underlying considerations in Justice N. Sohlberg’s position on the Internet Association’s standing was the concern that conducting a proceeding on the part of the Internet Association might mean that the court would not be presented with the required factual foundation.  While I do not deny this concern, it seems that it need not undermine the Association’s standing.  First, we may assume that had the Appellants who participated in the proceedings in the lower court wished to clarify any factual matter or otherwise, they would have done so. For example, consider the Appellant’s complaint that the trial court was not presented with a full description of the technological ability to order blocking access to the websites. Without making an iron clad determination on the question at this stage, it suffices to say that nothing prevented the Appellants themselves from presenting data on this point, to the extent that they disputed the factual infrastructure in the petition. Second, nothing prevents the public petitioner from presenting the necessary factual foundation. In this case, too, I do not find the legal foundation presented to the Court to have hindered judicial review. Consequently, in my view, there is no ground for us to intervene in the District Court’s ruling that the Internet Association has locus standi in this proceeding.

With this in mind we can proceed to the merits of the matter.

The Question of Authority

8. Section 229(a)(1) of the Penal Law, titled “Closure of Places” provides that “A district police commander of the Israel Police may order the closing of... a place for prohibited games or a place for the conduct of lotteries or gambling”. In section 224 of the Law, a “place of prohibited games” is defined as “premises in which prohibited games are habitually conducted, whether open to the public or only to certain persons; regardless of whether those premises are also used for some other purpose”. In order to determine that the orders directed at the access providers requiring them to block access to gambling websites, are within the authority detailed in section 229 of the Law, three interpretative moves are necessary. First, we must determined that a website fits the definition of “place” as defined by the law; second, that blocking access to the website is the equivalent of “closing” as defined in the Law; and third, that the access providers can be used to exercise such authority.

9.         I am prepared to assume, in line with my colleague Justice N. Sohlberg’s holding that a website could constitute a “place” as defined in different contexts in our legislation, and that an online gambling website may be viewed as a “place of prohibited games” as defined in section 229 of the Penal Law. In this regard, I tend to agree that a purposive interpretation of this legislation, in the spirit of the times and technological progress, may indeed lead us to the conclusion my colleague reached that section 229 of the Penal Law could be also applied to “the virtual world” (compare Assaf Hardoof Criminal Law for Internet Users: The Virtual Actus Reus, HaPraklit (forthcoming) (52) 67, 122-124 (2012) (hereinafter - Hardoof)).

10.       Regarding the infringement of free expression. Internet sites indeed serve for voicing opinions and exchanging ideas, but – as is well known – the law does not treat each and every expression similarly. Even had some of the gambling websites included pictures, explanations concerning the rules of different games, information about gambling relations, chat rooms, and others – this is content located at the periphery of the protected value. As such, even if blocking gambling websites may cause blocking access to lawful content, it must be remembered that the value of the “expression”, which we are asked to protect, is not high and that the extent of protection afforded corresponds to the extent of the interest in question (HCJ 606/93 Kiddum Yezumot v. Broadcasting Authority [21] at p. 28). Moreover, to the extent that it concerns the blocking concrete websites, it seems that the primary infringement relates to the website operators’ freedom of occupation. Our precedents have already held that this is an infringement that passes constitutional tests (Tishim Kadurim [3] at pp.814-815). However, despite this and though I am prepared to assume that the extent of the infringement of freedom of expression is limited, I think it important to note that I share the general approach of the District Court, that when dealing with the sensitive topic of blocking Internet websites, we should particularly scrutinize the concern for infringement of freedom of expression. With respect to gambling websites, and only to them, my opinion, as mentioned above, is that the infringement of free expression that resulted from blocking lawful content on the gambling websites, is of a limited degree, On the other hand, it is certainly possible that other cases will reache us in the future, where there may be reason to significantly broaden the scope of protection afforded to expressions displayed on any particular website. Each site has its own characteristics.

11.       Aadditionally, the sensitivity of the matter – blocking websites – has another aspect , given that the trial court also found that blocking illegal gambling websites could also block access to “innocent” sites which the order did not target.  An unintentional block may occur because a number of websites, not linked to each other, may be located on a server with the same address. Regarding this point, the trial court referred to Center for Democracy & Technology v. Pappert [31] 337, F.Supp.2d 606 (E.D Penn. 2004), in which the United States Federal Court struck down a law that enabled censorship of pedophile websites, among others because of the filtering of “innocent” websites. The Appellants, for their part, challenge this holding. They claim that from a technological perspective, the fear of blocking sites that are unconnected to gambling activity is negligible, because the access providers were requested to block websites based on the combination of the IP address and the website address (the URL). This combination of the IP address and the URL address, allegedly, minimizes any possibility of blocking innocent websites. Apparently, this point was not fully clarified because even after examining of the papers filed with the trial court, it is unclear whether it is technologically possible to block only “targeted” gambling websites, as alleged by the Appellant, or perhaps, technologically, it poses difficulties. If indeed, there is danger of blocking “innocent” websites, then this would clearly constitute a grave infringement of free expression and the right to access information – an infringement that would necessitate explicit statutory authorization as well as compliance with the limitations clause.

12.       Had the question of blocking “innocent” websites been the only difficulty arising from this case, it might have been appropriate to remand to the trial court for an in-depth examination of this issue. However, the central obstacle the Appellants face is fundamental and disconnected to the previous question, namely using a third party to execute an authority, without explicit statutory empowerment to do so. In my view, section 229 cannot be sourced to exercise the authority by giving an order directed at a third party – the Internet access providers. My colleague, Justice N. Sohlberg, found that restricting access to gambling websites through a third party does raise concerns, but in his view these difficulties do not negate the authority to do so. My view is different, and I will clarify my reasons.

13.       Our concern is with a district police commander who issued orders to the Internet access providers to block access to gambling sites. These are “personal orders” – in other words, orders directed at a particular person or entity, imposing a prohibition or a duty upon them. This is an individualized rule of conduct. This kind of order, like any administrative decision, requires a written statutory source (Zamir, at 284).  The question therefore is whether the district police commander is authorized to order the providers – a private body that is not accused of any offence – to perform various actions on behalf of the Israel Police, and to actually serve as its long arm. This authority, arguably, is found in section 229 of the Penal Law, which authorizes the district commander to order the “closure” of places used for gambling.  As mentioned, I accept that had law enforcement authorities been able to affect the closure of websites used for gambling criminalized under Israeli Law (for example by disconnecting the website from its connection to the Internet or by shutting down the server’s activity) there would be no question regarding authority.  However, in this case, the relevant websites were not actually “closed”. Instead, the district police commanders ordered third parties – the Internet access providers – to block access to those websites. The issue then becomes whether the powers granted by by section 229 support doing so.

14.       When a governmental authority is conferred with a power, according to settled case law, the authority must exercise this power itself. When the legislature specifies an authorized office holder, it is presumed the legislature wishes that particular office holder, and that alone, exercise it (HCJ 2303/90 Philipovitz v. Registrar of Companies [22] (hereinafter: Philipovitz), at p. 420; see also Daphne Barak-Erez Administrative Power, 178 -170 (hereinafter: Barak-Erez)). These comments are particularly true for criminal enforcement. In the absence of appropriate legislation, law enforcement authority cannot be given to those not part of the enforcement mechanism. Criminal enforcement authority is one of the classic authorities of the state. This authority enables the state to fulfill its responsibility to enforce criminal law through its own execution. It is the state that exercises the Government’s authority over the individual in the criminal proceeding. Therefore, the state – having established the behavioral norms and having been charged with their enforcement – is the entity directly responsible for caution and restraint required for exercising this power. It is the entity that is accountable to the public for the way it executes its powers (HCJ 2605/05 Academic Center for Law and Business v. Minister of Finance [23], para. 28 of former President D. Beinisch’s opinon and para. 14 of Justice A. Procaccia’s opinion.)

15.       By attempting to source the authority in section 229 of the Penal Law, the State maintains it is exercising the authority by itself, and that enlisting Internet access providers to block gambling websites is merely exercising auxiliary powers that administrative agency must employ in order to exercise its authority (section 17 of the Interpretation Law, 5741-1981). I cannot accept this construction. As well known, there is a distinction between delegating authority that includes exercise discretion regarding a particular authority, and receiving assistance in technical matters related to exercising the authority (Philipovitz [22] at p. 424). Whereas the authority is permitted to receive assistance from private bodies about technical aspects of fulfilling their task, there is also a presumption against delegating authority to private entities (AAA 6848/10 Erez v. Giva’ataim [24] para 18; HCJ 5031/10 Amutat Ir Amim v. Israel Nature and Parks Authority [25] para. 18). Here, the access providers were not required to exercise discretion regarding the websites to which access was to be blocked. As such, it could be argued on its face that the authority did not delegate power but only requested assistance in exercising it, and that such assistance is in principle permitted. However, where assistance is concerned, the first and foremost element to demonstrate is that the person or entity whose assistance is required consents to assisting the authority, regardless of whether consent is motivated by commercial and economic motives (compare to Philipovitz [22] at 415), or by voluntary motives. The most important thing is that the authority may receive assistance only from those seeking to offer assistance based on pure and genuine motives and after securing explicit consent. When the authority imposes a duty on a person or entity to perform any act, one can no longer speak of assistance. In our case, the Appellants claim that the expression “closing of a place for prohibited games” mentioned in the relevant section of the Penal Law, also contains the possibility of ordering closure of access routes to that place using auxiliary authority. This is not so. Our concern is with orders that compel a private body – the Internet access providers – to “assist” the authority. Consequently the argument that the providers are an entity that grants its services voluntarily must fail. This is doubly important when the orders themselves warned, in bold print, that failure to comply with the order could constitute an offence of breaching a statutory provision, an offense of assisting the conduct of prohibited games, and an offence of assisting to maintain a place for prohibited games (sections 287, 225, and 228 of the Penal Law, combined with section 31 thereof).

16.       Additionally, I wish to clarify that were there an explicit statutory authorization it could be possible to “impose a duty” and receive assistance from any person for the purpose of realize various legislative goals. Indeed, different pieces of legislation empower an authority to order a third party to assist it, even in the criminal context. For example, section 20 of the Criminal Procedure (Arrest and Search) Ordinance [New Version], 5729-1969 provides that every person must help a police officer to arrest any person whom they are authorized to arrest. In a matter close to our own, a similar arrangement exists: the Criminal Procedure (Powers of Enforcement-Communication Data), 5768-2007 (also known as the “Big Brother Law”) allows Israeli investigatory authorities to be assisted by “holder[s] of a Bezeq license” (as defined there) in order to receive communications data on Bezeq subscribers for various purposes, such as discovering and preventing offences (section 1 and section 3(2) of this law). The various Internet providers are among the companies that may be required to submit communications data (see in the matter of the “Big Brother” law, para.2). This affirmation however also implies the opposite. Imposing a duty, coupled with a sanction, requires legislative bases. Without explicit legislative authority, it is impossible to charge a private entity with performing actions for the authority (compare: Civ.App. 90868/00 (District-T.A.) Netvision Ltd. v. Israel Defense Force- Military Police, para.9 (22.6.2000); Crim.F. 40206/05 (District-T.A.) State of Israel v. Philosof para. 8 b) (5.2.2007)). We are thus left with the need for explicit lawful authorization. In our case however, the language of section 229 of the Penal Law does not contain so much as the slightest hint of an authorization to impose a duty on a third party. And for good reason. Such authorization involves complex matters of law and policy.  In 2008, when the Knesset deliberated over the legislative amendments that would confer authority to block access to gambling websites, representatives of the Minister of Justice (as well as representatives of the police) expressed reservations about conferring authority as stated, for various reasons which will not be addressed here. Today the position of the authorities – with the support from the Attorney General – is different. Of course, the authorities are not bound by their former position, but the only lawful way to confer the district commander with the authority to order a third party service provider, in my view, is an amendment to primary legislation (an amendment which, needless to say, would have to satisfy the limitations clause in Basic Law: Human Dignity and Liberty). Accordingly, the manner in which the orders were issued here deviated from the principle of administrative legality, which is a fundamental norm of administrative law. “This principle teaches that the power of the public authority flows from the powers conferred upon it by law and nothing else. It is the law that grants the license to act, and defines the boundaries of its scope. This is the ABC of administrative law” (Baruch Beracha, Administrative Law, Vol.1 35 (1987); CA 630/97 Local Committee for Planning and Building Nahariya v. Shir Hatzafon Construction Company Ltd [26], at pp. 403-404; HCJ 5394/92 Hoppert v.'Yad Vashem' Holocaust Martyrs and Heroes Memorial Authority[27] at , 362 (1994);  HCJ 7368/06 Luxury Apartments Ltd v. Mayor of Yabneh [28], para. 33; see also HCJ 6824/07 Mana v  Taxation Authority[29]; HCJ 7455/05 Legal Forum for Land of Israel v. Israeli Government [30] at p. 910; Zamir, at 74-890; Barak-Erez at p. 97 and on). This is especially so in context of a mandatory authority, as anchored in the Penal law (see and compare Hardoof at p. 124).

17.       Could future legislation enable imposing the task of blocking gambling websites upon Internet access providers? An arrangement of this kind might take several forms. The legislature might determine that a court must grant such an order; it might grant the district police commanders – or any other authority – the authority to issue these orders, without petitioning a court (compare with “Big Brother” Law, para. 2). We assume that this legislation would also resolve additional concerns stemming from imposing the duty on access providers, while considering the costs likely involved in ensuring effective blocks, including the definition of access providers’ responsibility towards third parties, such as users and website owners whose access to them is blocked, and the like. In any event, it is clear that in our legal system the legislature is branch competent to consider the appropriate way to handle blocking access (Hardoof, ibid). Therefore we shall not jump the gun. We are not required at this point to pronounce on future legislation that has yet to be enacted and the details of remain unknown (and which, as mentioned, will also have to satisfy the limitations clause).

Other Legal Systems

18.       My colleague, Justice N. Sohlberg, found that restricting access to websites used for gambling is acceptable practice all over the world. Before we consider his comparative analysis, we should again note that the treatment of gambling in some countries is more lenient and as such no conclusive analogy can be drawn from the existing law in those countries to our legal system. On the merits of the matter, while certain countries receive assistance from Internet access providers to block gambling websites, as noted by my colleague, these are generally arrangements explicitly mandated by legislation, rather than acts designed to exercise general administrative powers. I will provide some examples.

19.       In the United States, gambling is regulated primarily at the state level rather than the federal level. There are significant differences between the various states in whether and how they view gambling and how they treat it. Federal legislation is therefore designed to assist states in enforcing local gambling laws where gambling activity extends beyond state-lines. Four primary pieces of federal legislation serve the authorities dealing with the gambling phenomenon: The first is the Federal Wire Act, of 1961 (18 U.S.C. §1084), which targets interstate gambling through linear communication. Though this law was enacted years before the Internet came into common use, and long before the online gambling became prevalent, this is legislation that authorities relied upon in the earlier days of the problem (see e.g. United States v. Cohen 260 F. 3d 68 (2d Cir. 2001)). The second act regulating the issue is the Illegal Gambling Business Act of 1970 (18 U.S.C. §1955) that was passed to battle organized crime that used gambling businesses as a main source of income, and it regulates the criminal responsibility of owners of large gambling businesses. The third is the Travel Act of 1961 (18 U.S.C. §1952), which prohibits the use of mail and interstate travel and travel outside the United States for unlawful purposes, including illegal gambling. The forth piece of legislation is the Unlawful Internet Gambling Enforcement Act (31 U.S.C. §5361-67), which prohibits gambling businesses from knowingly receiving payment linked to one’s participation in online gambling. It is interesting to note that law enforcement authorities occasionally found it difficult to rely on old statutes to receive Internet access providers’ assistance in closing gambling websites. Hence, for example, in April 2009 authorities in Minnesota instructed Internet service providers to block state residents’ access to 200 online gambling sites – an instruction given under the Federal Wire Act. However, this was challenged in court based on the argument that this act is inconsistent with the First Amendment’s protections for freedom of expression, and with the Commerce Clause (Edward Morse, Survey of Significant Developments in Internet Gambling, 65 Bus. Law, 309, 315 (2009)). In response, the Minnesota enforcement authorities withdrew the orders issues to the access providers (Lindo J. Shorey, Anthony R. Holtzman, Survey of Significant Developments in Internet Gambling 66 Bus. Law. 252 (2010)  

20.       In Australia, the Australian Communications and Media Authority’s power to order providers to block access to illegal gambling sites is regulated in detail in the “Interactive Gambling Act 2001 (sections 24-31) and in the regulatory code enacted under it (Interactive Gambling Industry Code (December 2001)). In Italy, a state my colleague referred to in his opinion, authorities’ authorization to order access providers to block illegal gambling sites is also set in legislation. Section 50(1) of Law No. 296 of 27 December 2006 (the Budget Law for 2007) established the authority of AAMS (Amministrazione Autonoma dei Monopoli di Stato), an organ of the Italian Ministry of Finance, to instruct, in an order to the communications bodies, to take measures toward removing illegal gambling websites, while setting an administrative fine of €30,000-80,000 for any breach by the communication providers. Under this law, Administrative Order No. 1034/CGV of 2 January 2007 was issued. It details the manner of exercising the power. According to the AAMS data, as of October 2010, 24000 websites were included in the “black list”. Every month hundreds of websites are added.

21.       Therefore we must conclude that even were there countries around the world that recognize the possibility of assistance from Internet access providers in blocking illegal gambling websites – this possibility is authorized there in explicit legislation. Where the subject was not regulated in explicit legislation, questions s about the power of the authorities to do so were raised in various countries, for reasons similar to those given by the District Court.

Afterword

 22.  Before concluding I would like to respond briefly to my colleague Justice N. Sohlberg’s comment regarding my position (para. 56 of his opinion). I wish to clarify that the thrust of my opinion does not turn on the interest of the access providers and the question of their concrete consent to blocking the websites. The conclusion I reached is based on the rule that an authority can only act within the boundaries of the powers the law conferred upon it, and that when exercising police powers the strict application of this rule is especially important. I would point out that I do not accept, as a given, my colleague’s assumption that a third party can be compelled to become “the long arm” of the police without its consent. Take a situation in which the reception clerk of a hotel (an example my colleague provides) fears a confrontation with criminal elements and has no interest in coming into contact with them. Would it also be possible then to compel the clerk to close the room? In my view this question is not free of doubt, but regardless, this we are required to rule on this question. In our case the totality of the circumstances that I presented and the sensitivity of the material discussed, in my view, lead to the conclusion that the existing authorization lacks the power necessary for exercising the alleged authority. 

Epilogue

I have reached the conclusion that section 229 of the Criminal Law does not authorize a district police chief to issue orders directed at Internet access providers, ordering them to block access to gambling websites. In my view, this requires express statutory authorization and the current arrangement is insufficient, because it does not contain authorization to order a third party to assist the enforcement authorities in exercising the power.

            For this reason, were my opinion to be followed, I would dismiss the appeal against the decision of the Administrative Affairs Court and would order the Appellants to pay the Respondents’ attorneys fee, for the sum of NIS 25,000.

 

                                                                                                Justice

 

President A. Grunis

My colleagues, N. Sohlberg and U. Vogelman are in dispute both about the preliminary issue of the locus standi of the Appellant and about the substantive issue of the district police commander’s authority. Regarding the first matter I see no reason to express a position. My colleague, Justice N. Sohlberg who addressed the position that the Appellant had no locus standi in the Administrative Affairs Court, analyzed the substantive issue, and concluded that it would not be proper to allow the appeal based on the preliminary issue without having considered the legality of the orders issued by the district police commanders. Under these circumstances I agree that it is appropriate to address the issue on its merits. Regarding the substantive issue, I concur with Justice U. Vogelman. That is to say, that I agree that the district commanders of the Israel Police do not currently have the authority to issue orders to Internet access providers to block access to gambling websites. The solution lies with the legislature.

 

                                                                                                            The President

 

It was decided by a majority opinion (President A. Grunis and Justice U. Vogelman) against Justice N. Sohlberg’s dissent, to dismiss the appeal, and to order the Appellants to pay the Respondent’s attorneys fees in the sum of NIS 25,000.

 

Handed down today 13th Nissan 5773 (24 March 2013).

 

 

 

In the Supreme Court as High Court of Justice

 

HCJ 6971/11

 

Before:                                    The Honorable President A. Grunis

                                    His Honor Justice N. Hendel

                                    His Honor Justice Z. Zylbertal

 

The Petitioner

 

                                    1.         Eitanit Construction Products Ltd.

 

                                    v.

 

The Respondents:

 

                                    1.         The State of Israel

                                    2.         The Knesset

                                    3.         Minister of Environmental Protection

                                    4.         Minister of the Treasury

5.         Mate Asher Municipality

                                    6.         Israel Union for Environmental Defense

                                    7.         Association for Quality of Life and the Environment in

Nahariya

 

                                    Petition for Temporary Injunction and Interim Order

 

Date of session:           23th Elul 5772; October 9, 2012

 

                                    Adv. Pinchas Rubin

                                    For the Petitioner

 

                                    Adv. Sharon Rotanshker

                                    For Respondents 1, 3-4

 

                                    Adv. Avital Semplinski

                                    For the Second Respondent

 

                                    Adv. Eitan Maimoni

                                    For the Fifth Respondent

 

                                    Adv. Keren Halperin-Mosseri

                                    For the Sixth Respondent

 

                                    Adv. Moshe Goldblat

                                    For the Seventh Respondent

 

 

 

 

Judgment

 

Justice N. Hendel

1.A petition against the constitutionality of section 74 of the Prevention of Hazards from Asbestos and Harmful Dust Act, 2011 (“Asbestos Act”) is before us. This section declares the launch of a project to remove asbestos waste from the Western Galilee (“The Project”). The petition objects primarily to the requirement that the Petitioner, Eitanit Construction Products Ltd. (“Eitanit”), to shoulder half of the expenses of the project, up to NIS 150m.

General Background – Asbestos:

2.Asbestos is an umbrella term for a group of fiber minerals, with high insulation and resilience properties. Because of these qualities, for hundreds of years asbestos has been widely used for industrial purposes, such as producing protective gloves and other gear, acoustic insulation boards and more.

Currently, it is known that crisp asbestos, that is: asbestos in ground or powder state, is a dangerous substance that may cause cancer. Crisp asbestos releases tiny fibers into the air, which enter the respiratory system and harm lung tissue. Among the first diseases recognized as linked to asbestos was asbestositis: the shrinking and scarring of lung tissue, which causes shortage of breath and a decline in lung functions. Another disease is mesothelioma: a cancerous tumor that harms the lungs, heart and abdomen.

The petition before us, as will be explained below, deals with a material called asbestos-cement. It is a compound made of approximately 10% asbestos and 90% cement, in hard from. Out of this asbestos-cement mixture products such as pipes and boards may be manufactured. As long as the asbestos-cement remains in hard from, the asbestos fibers are contained in the cement. This may change when the asbestos cement – or the product manufactured from asbestos-cement – is eroded, cracked or broken, then the dangerous asbestos fibers are released into the air.

Awareness of the dangers of asbestos has grown over time. As early as the beginning of the 20^th century, information about the prevalence of asbstositis among workers exposed to asbestos has accumulated. Later reports proliferated about different cancers among asbestos workers. In 1976, after a comprehensive examination of the scientific material, the International Agency for Research of Cancer (IARC) recognized asbestos as a substance certain to cause cancer in humans (Class I). Additional research indicated that health risks were caused not only to asbestos workers but to those who live in close proximity to asbestos mines, as well as family members of asbestos workers (generally, for an updated review of asbestos risks by IRAC, see Monographs.iarc.fr/ENG/Monographs/vol100C/mono100C-11.pdf)

The Petitioners and the Asbestos Industry

3.In 1952 Eitanit set up an asbestos-cement factory in the Nahariya area (“the factory”). Work in the factory included two stages: in the first stage, the factory imported raw asbestos to Israel and made asbestos-cement out of it. In the second stage, final asbestos-cement products, such as pipes and boards, were manufactured. The factory was closed in 1997.

Over the years, and during production processes, a significant amount of industrial asbestos waste was amassed in the factory (“the waste”). Eitanit disposed of the waste in two ways: one, it sold or gave away the waste to third parties, which I will refer to as end users, that used the waste primarily for surfacing, for instance to pave roads or parking lots. Second, Eitanit buried the waste in the ground. The first method of removing the waste – that is, selling or giving it away, probably stopped around the late 70’s.

In any event, the waste was distributed in dozens of locations around the Western Galilee. Both the waste that was buried and the waste that was used for surfacing risks area residents’ health to this day. The waste is partly crumbled, causing asbestos fibers to be released into the air. Additionally, the daily use of the surfaces which were covered with asbestos uncovers masses of crisp asbestos and create a health hazard. Surveys commissioned by the State revealed that the asbestos waste distributed in the Western Galilee amounts to about 30,000 cubed meters and the State evaluates that the clean soil that was polluted by this waste amounts to about 150,000 cubed meters The Petitioner, however, believes that the ratio between the waste and the polluted soil is 1:3, not 1:5.

The Previous Proceedings Regarding the Petitioner:

4.The petition before us deals, as mentioned, with a project to remove asbestos waste that arguably came from Eitanit’s factory. But this is not the first round of proceedings on this matter between Eitanit and State authorities.

As some point, Eitanit began to remove some of the asbestos waste to a site within Shlomi municipality (Hanita mine), without permit or license to do so. In 1981 the Ministry of Health demanded Eitanit cease from this practice and the site was closed. Consequently, Eitanit buried waste at the Sheikh Danon site, also without permit or license. In March 2002 the Ministry of Environmental Protection (“the Ministry”) issued conditions for temporary permits that would allow restoring the site at Sheikh Danon. In a petition by Eitanit against the Ministry, which was dismissed, the court pointed out that the demand to require Eitanit shoulder the cost of the site’s restoration is “natural and obvious” (AP 589/02). Ultimately, in 2003, after additional legal proceedings, the Sheikh Danon site also closed.

In 1998, after the factory was shut down, the City of Nahariya initiated a project to build an amusement park called “The Children’s Land.” The park was meant to be located on the beach, adjacent to the closed factory. When it was revealed that the area was polluted with asbestos, the Ministry issued a decree to preserve cleanliness, according to section 13b of the Maintenance of Cleanliness Act 1984. The City of Nahariya announced it would clean the area from asbestos, and consequently sued Eitanit for reimbursement of costs. In 2007 the dispute between the City and Eitanit regarding that area was settled.

In 2005 the Minister of Environmental Protection (the Minister) met with representatives of Eitanit and of the City, in an attempt to reach an agreement for co-funding asbestos waste removal from the Western Galilee. The attempt failed. In May 2007 negotiations between the parties resumed. Eitanit proposed, among others, that it remove the waste on its own. In November 2008, the Ministry notified Eitanit of a decision that the State would no longer facilitate a mutual agreement.

In December 2008 the Asbestos Act memorandum was distributed. The Act aimed to resolve a whole host of environmental issues around asbestos hazards in Israel. Among others, the Act included a specific section that addressed the project of removing asbestos waste from the Western Galilee. This is section 59 of the bill, which eventually became section 74 of the final Act and is the section at the center of this petition. We will address the Act and the section in further depth. Briefly, the section required Eitanit to fund half the project to remove asbestos waste from the Western Galilee. In 2009 the bill passed its first reading, and was referred to the Interior Committee and the Environmental Protection Committee. Eitanit’s representatives attended the committee’s meetings, and presented their arguments against the proposed arrangement. In March 2011, the bill passed its second and third readings.

Simultaneously, the Ministry published a tender to select a corporation that would manage the removal project. Negotiations were conducted with Eitanit, along with others, and in December 2009, it proposed participating in the project at the cost of NIS 10m, a sum that was later updated to NIS 15m. There were big gaps between parties regarding calculating costs, including due to different estimations of the amount of soil polluted and of the cost of removal. In November 2010, when the negotiation was complete, the Ministry of the Treasury notified Eitanit that its financial proposal for the project was rejected and Eitanit responded by withdrawing the proposal altogether.

In June 2011, after the Act’s publication, Eitanit complained to the Minister of Environmental Protection that section 74 creates extraordinarily important constitutional problems. It suggested the Minister institute regulations that would prevent, or at least reduce, the infringement of Eitanit’s rights. In response, the Minister emphasized that the constitutional issues were already discussed comprehensively and thoroughly before the bill passed. Later, in August 2011, the Minister provided Eitanit with a draft of instructions for implementing section 74 for its review. The draft did not satisfy Eitanit, and correspondence between the parties continued. Eventually, in September 2011, the Minister signed the final version of the instructions. Once Eitanit concluded it had exhausted the proceedings to temper section 74, without a satisfactory minimization of its harm, it filed the petition before us.

On the Prevention of Hazards from Asbestos and Harmful Dust Act (Asbestos Act)

5.The Asbestos Act was designed to reduce the environmental and health hazards caused by asbestos or by other harmful dusts. The purpose is ensuring an adequate environment under the principle of preventative care and the improvement of quality of life and the environment (section 1).

The Act expressly prohibits manufacture, import, possession and use of asbestos in any way and for any purpose, unless permitted by the Act (section 3). The Act regulates the continual use of existing asbestos in public places and factories (sections 4-8). The Act prohibits anyone from creating an asbestos hazard, that is: causing the existence of asbestos fibers in the air, and requires the creator of the hazard to remove it at their own expense (sections 10-11). The Act also regulates methods for handling asbestos, including the granting of licenses and working with asbestos (chapters E-F). There is also an option to apply several of the Act’s provisions to other materials that may be defined as harmful dust (section 71).

Section 74 was designated to address the asbestos hazards in the Western Galilee. This is the section the petition before us focuses on. The language of the section is as follows:

“(a)            In this section –

“the project to remove asbestos from the Western Galilee” – a project to locate, remove, and bury asbestos waste which originated from a factory for asbestos manufacture in the Western Galilee, which was buried or distributed in a radius of up to 15 KM from the factory, except for land owned by asbestos companies, at an extent and measures instructed by the Minister in consultation with the Minister of the Treasury, and as it pertains to the funding aspects of the project, with the consent of the Minister of the Treasury;

“Asbestos Companies” – companies that manufactured asbestos in the Western Galilee prior to the day this Act came into effect.

(b)              The project of asbestos removal from the Western Galilee will be funded through the State budget, payments from asbestos companies, and payments from local authorities within whose jurisdiction the project will take place (“local authorities”).

(c)              A separate account will be managed in a trust to preserve cleanliness and will be used to fund costs, direct or indirect, of the project for asbestos removal from the Western Galilee (in this section – “the separate account”).

(d)             The Minister, with the Minister of the Treasury’s consent, after providing the local authorities and the asbestos companies the opportunity to present their arguments, will order the sums that the local authorities and the asbestos companies will transfer into the separate account and the schedule for payments, as long as the entire sum from asbestos companies will be equal to the entire sum from the state budget and the local authorities combined. However, the entire sum from the asbestos companies may not exceed NIS 150m.

(e)              While setting payment sums and schedules according to section (d), the Minister will consider, among others, the scope of the state budget dedicated to funding the project generally, the sums already actually expended, and regarding local authorities – the identity of property rights holders in the land where asbestos is found, the use of these lands and the extent of the authorities’ responsibility over them, as well as the local authorities financial state.

In other words, a project for the removal of asbestos waste from Eitanit’s factory that was buried or distributed in a radius of up to 15 KM from the factory would be launched. In this regard “asbestos waste” includes asbestos that was broken, cracked or fractured, or broken as well as asbestos that is unused (as defined in section 2). It should be noted that the statute does not explicitly mention Eitanit’s name, but instead uses general language – “asbestos companies” and “a factory for asbestos manufacture”. Still, as will be clarified below, there is no dispute that the statute in effect targets only Eitanit and its factory; it is the only company in the Western Galilee area that manufactured asbestos.

The project would be funded from three budgetary sources: the State, the local authorities in whose jurisdiction the project will take place, and Eitanit (who, as mentioned, is not explicitly mentioned by name in the section.) The Minister will establish the extent and process of the project. Additionally, the Minister will set the sums that the local authorities and that Eitanit will transfer, once their arguments are heard. Setting the amounts of participation is subject to two restrictions. First, the sum that Eitanit transfers will be equal to the total sum the State and the local authorities transfer, combined. Second, the sum Eitanit transfers must not exceed NIS 150m.

In September 2011 the Minister signed the implementation instructions. They stipulate that the project will take five years, and will be executed by a managing company chosen by tender. A local authority’s participation will be calculated as 10% of the removal cost, through equally valuable operations, including restoration. To set the sums required from Eitanit, the company will receive itemized reports of expenses every three months, along with a detailed report of the sites where the removal was done and the amount of waste removed. Eitanit will have 30 days to respond to each bill (annexure 20 to the State’s responding papers.)

The Parties’ Arguments

6.Eitanit claims, in essence, that section 74 infringes its right to property and rights to equality, without passing the conditions of the limitations clause.

The infringement on property rights manifests in the very imposition of financial burdens, exacerbated by the severe and retroactive responsibility without demonstrating fault or liability. The infringement of equality was caused by discriminating against Eitanit compared to others – asbestos importers, end users and future polluters – who have been partially or fully absolved from any liability regarding asbestos waste.

The infringement of property and equality does not pass, as the argument goes, the tests set by the limitations clause. It is not an infringement or restriction by statute, as this is personal legislation. It is not for a worthy purpose that befits the values of the State of Israel, as Eitanit was retroactively tainted as a lawbreaker without evidence it actually did pollute the land. And finally, the infringement is not proportional: the statute does not advance the end of channeling the conduct of offenders or to deter them, so that there is no rational connection between the ends and the selected means. Other less restrictive means were available, for instance: allowing Eitanit to execute the project on its own or valuing its participation in funding the project according to the extent of its liability. In any case, the benefits of this section are minimized compared to the harms caused to Eitanit.

Ultimately, Eitanit asks we void section 74. Alternatively, it suggests other remedies, in the following order of preference: directing the Minister to set regulations that would de facto release Eitanit from the mandates of section 74, allowing more proportional means (such as paving paths or performing other aspects of the project by Eitanit), directing the Minister to hold a proceeding where Eitanit could be heard and the Minister would be able to consider the extent of its liability regarding the entire area effected by the project.

7.The State emphasizes that section 74 is designed to apply only to industrial waste that resulted from Eitanit’s factory’s operations. It does not apply to complete asbestos-cement products that were purchased by end users and then disassembled and discarded, but only to the waste that Eitanit produced.

The State is willing to assume that the statute infringes upon Eitanit’s property rights. However it disputes the infringement to the right to property: it raises misgivings as to whether the right to equality should apply to corporations, and argues that in any case Eitanit’s right to equality was not infringed here as there is a relevant difference between Eitanit and the other entities it had identified.

The State continued its constitutional analysis on this foundation. The infringement is by statute, albeit personal legislation. The infringement is for a worthy purpose – the removal of serious environmental hazard in the Western Galilee. The statute relies on the principle of “the polluter must pay” that derives from rationales as efficiency, deterrence, and justice. As for the issue of proportionality, there is an obvious connection between the ends – cleaning the Galilee from asbestos waste, and the means – launching the project. The mean selected is mild, as Eitanit shoulders only about half of the project’s cost, and in any case no more than NIS 150m. The proposal that Eitanit itself will clear the land was discussed between the parties for a long period of time, but turned out to be impractical and ineffective. Finally, the benefit derived from the statute (eliminating proven health risks) far outweighs the harm caused to Eitanit, if any.

8.Many of the sites intended for waste removal are located within the territory of the local authority of Mate Asher, the Fifth Respondent. In its response to the petition, the local authority emphasized that Eitanit turned a substantial profit from selling asbestos-cement waste, though it knew in real time, or at the very least should have known – about the dangerous outcomes of asbestos exposure. The local authority additionally notes that the basic rights on which Eitanit hangs its hat, if any, should yield to the rights to life and to bodily integrity of those actually and potentially harmed by asbestos.

The Sixth and Seventh Respondents are public non-governmental organizations active in environmental preservation and protection. They reiterate that the statute was born out of all the failed attempts to consensually address Eitanit’s financial liability. In this regard, the Respondents refer to the principle of extended producer responsibility (EPR), which would have manufacturers responsible for their products’ environmental impact during the entire life cycle of the product. This principle is applied in different contexts in many of the OECD states, an organization of which Israel is now a member.

9.To paint a complete picture, we should note that on October 9, 2012 a hearing was held for this petition. At the end of the hearing we ordered the parties to notify the Court, within 60 days, whether a settlement was possible. On November 16, 2012, the Respondents notified the Court that they believe any arrangement different to that which the legislature mandated in section 74 would be inappropriate. We must therefore rule on this petition.

It should also be noted that Ms. Ayelet Bruner has moved to join as respondent. As the motion explains, her husband – a resident of Kibbutz Kabri, which is adjacent to the factory – died of mesothelioma due to asbestos dust exposure, and Ms. Bruner has therefore filed a tort suit against Eitanit and the State. Ms. Bruner argues that she holds additional evidence that Eitanit and the State notified here at the relevant times about the risks of asbestos. Under the circumstances her arguments were included, explicitly or implicitly, in the other parties’ arguments, and thus we do not believe it appropriate to formally join her to the petition.

Discussion and Ruling

I. Comparative Law

10.The issue before us is universal. It stems from the connection between humanity and the land. In more detail, it is a result of the conflict between humanity’s desire to control the environment and the cost of this progress.

The dialectics that arise because of humanity’s ambition to develop and evolve is addressed in Jewish law, and is timeless. Its roots can be found in the first human himself. In the Book of Genesis, man is commanded: “be fruitful and multiply and inherit the earth” (Genesis 1, 28). In his monumental manifest, “The Lonely Man of Faith,” written almost 50 years ago, Rabbi Yosef Dov Halevi Soloveitchik mentions that in the beginning of the Book of Genesis there are two descriptions of the creation of man to emphasize his two facets. The first man, described in chapter 1 of Genesis, about whom it was said that he was “created in God’s image” (Genesis, 1, 27), is creative. “He engages in creative work, trying to imitate his Maker … In doing all this, Adam the first is trying to carry out the mandate … "to fill the earth and subdue it." … man’s dignity, manifested in man’s awareness of his responsibility and ability to fulfill his duty, cannot be realized as long as he does not control his surroundings… there is no dignity without responsibility, and one cannot shoulder responsibility as long as one cannot fulfill the commitments involved… we have obtained the following triple equation: human dignity-responsibility-majesty.” (The Lonely Man of Faith, J.B. Soloveitchik, Tradition Magazine (summer 1965), Rabbinical Council of America. Hebrew translation by Mossad HaRav Kook Publishing, 8^th edition, 2002, pp. 13-18.) Control over the environment – a mixed blessing. In conquering nature, humanity is impressive in its creativity and progression from one generation to the next. However, its comprehension is limited. Humanity cannot know, at the same time it controls the environment, what toll this “progress” may take.

Jewish law was even sensitive to this aspect. The rule is – do not destroy (Talmudic Encyclopedia, volume 3, under “do not destroy”, in Hebrew – “Bal Tashchit”.) Originally, the prohibition is on destroying fruit-bearing trees during a wartime siege: “should you siege a city many days in order to fight and conquer, you shall not destroy its trees.” (Leviticus 20, 19-20). However, Jewish law’s sages interpreted the prohibition broadly. The Book of Education (=Sefer ha-Chinnuch), that summarizes all 613 commandments (authored in the 13^th century, likely by Rav Aharon Levi of Barcelona), explains the reasons and application of this commandment:

“The root of the commandment is known to be teaching us to love good and utility and stick to it, and in turn good will stick to us and we will distance from all evil and destruction. It is a way of the pious and men of action, peace lovers, those who rejoice in the good of people and bring them closer to the Torah, who will lose not even a mustard seed, and will grieve any loss or destruction that they come across, and if they could they would rescue anything from ruin with all their might.” (Torah portion of “Judges” [=Shoftim].)

Rav Shneor Zalman of Lyadi, (founder of Chabad Russia in the 18^th century) believes the “do not destroy” prohibition applies even to the abandoned:

“Just as one must be careful of loss, damage or harm to one’s body, so must he be careful of loss, damage or harm to his funds. And anyone who breaks tools or clothes or demolishes a building or clogs a pool or discards food or spoils anything else that should be enjoyed by people is violating the commandment ‘do not destroy’… even if abandoned.” (Shulchan Aruch Harav, Choshen Mishpat…)

Therefore the matter is not preserving the property rights of others in the private sense, but of the environment as a right to property.

The above functions as normative background to the issue at hand. In recent years, all around the world, countries have been required to face different dilemmas regarding the environment. A significant portion of these dilemmas incorporates legal, economical and moral aspects, among others. Among these, the removal of polluting waste – the issue at the core of this petition – is a matter that carries real weight. Asbestos, specifically, has proven to be a strong, efficient material, with many uses. Over time, its harm was discovered to tremendously outweigh its utility.

Since the 20^th century, different countries have faced the problem of cleaning the environment from asbestos, determining who must shoulder the burden of implementing and funding the task. Therefore, I found it fit to turn to the relevant legal framework in several key countries overseas. Of course, we should not automatically apply those here. But because of the universal character of the issue before us, I believe there are benefits to paying attention to legal trends in the world. It should be noted, before presenting the legal situation in other countries, that the legislation I mention applies to asbestos as part of a broader group of polluting or dangerous materials.

11.In 1980 the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) was passed in order to address environmental hazards. CERCLA was designed to regulate the removal of polluting materials from dangerous waste sites that were abandoned or stopped operating. It places the obligation to fund the cleaning process on the creator of the hazard (see Karen S. Danahy, CERCLA Retroactive Liability in the Aftermath of Eastern Enterprises v. Apfel, 48 B 509, 530 (2000)). Below we focus on two elements of CERCLA that are particularly pertinent to the case at hand: strict liability and retroactivity.

The case law has found CERCLA to establish strict liability. There is no question whether, and to what extent the hazard creator violated its duty of reasonable care or is in any way blameworthy for the risk it created. Therefore the creator of the hazard will be liable even without proof that a duty of care was not fulfilled (Alexandra Klass, From Reservoirs to Remediation: The Impact of CERCLA on Common Law Strict Liability Environmental Claims, 39 Wake Forrest L. Rev. 903 (2004) and see Israel Gilad, Tort Law – Liability’s Limits, 1190 B.H.S. 167 (2012), which addresses the distinction between strict liability and absolute liability, where the latter “is not subject to any defenses.”) Although the principle of strict liability was not written explicitly into CERCLA, the case law found that the legislative history – including minutes from committees and general discussions in the House of Representative and Congress – reveal this was the legislature’s intent (see New York v. Shore Reality Corp., 759 F.2d 1032, 1042 (2^nd Cir. 1985); General Elec. Co. v. Litton Indus. Automation Sys. Inc., 920 F.2d 1415, 1418 (8^th Cir. 1990); Burlington N. Santa Fe Ry. V. United States, 556 U.S. 599, 608 (2009)).

The strict liability standard did not appear out of nowhere. At common law, strict liability is a prevalent standard for particularly dangerous tortuous activity. A British judgment from the 19^th century, Rylands v. Fletcher, considered a water reservoir that exploded and flooded a neighboring coalmine (Rylands v. Fletcher, L. R. 3 H.L. 330 (1868)). The House of Lords held the defendant liable, though no negligence by him was proven, because the reservoir was found to be “likely to do mischief if it escapes.” Nowadays, the second and third Restatement of Torts notes that whoever conducts abnormally dangerous activity will be liable for damages resulting from that activity, even if maximal precautions were taken (Restatement (Second) of Torts § 519(1) (1977); Restatement (Third) of Torts: Liability for Physical and Emotional Harm § 20 (2010)). This is the historical-legal foundation from which CRECLA’s strict liability standard stems.

Based on the legislative history, the case law and the scholarship presented about CERCLA, another reason for strict liability arises: conventional legal methods have failed to combat the occurrence of polluting waste. This reason, which is rooted in the legal realism school of thought, has helped to shape legal policy. Among other considerations in favor of placing strict liability are reasons of justice: in the absence of blameworthiness, it is justified to place a risk on the party who created that risk and has financially benefited from it (Lynda J. Oswald, Strict Liability of Individuals Under CERCLA: A Normative Analysis, 20 B.C. Enntl. Aff. L. Rev. 579 (1993)). While the legislation has been opposed for placing liability without fault, the position that allocating costs to the polluter was found to outweigh placing those costs on all of society. This was also due to the link between the polluter and harm, both in terms of creating that harm and in terms of profiting from it.

From another perspective, one might ask what is the economic benefit in placing liability without fault? Where is the deterrence in this? The answer is in the distinction between cost internalization and cost externalization. Under this theory, whoever handles material that pollutes or is likely to pollute should consider the possibility of strict liability. To reduce potential future costs, such party would initiate from the get-go research and experimental activity the produce a more cost-effective and environmentally friendly product, or at least one that has less potential for harm. The polluting party, who has expertise and capabilities, is in a better position to take such preventive measures. Under this approach, it is strict liability that creates deterrence (for more, see Mark Wilde, Civil Liability for Environmental Damage: A Comparative Analysis of Law and Policy in Europe and the United States (2002); Lucas Bergkamp, Liability and Environment: Private and Public Law Aspects of Civil Liability for Environmental Harm in an International Context (2001)).

As mentioned, CERCLA imposes liability even on whoever produced and distributed dangerous materials before the legislation’s enactment, though this activity was permissible at the time. CERCLA had to face facts already on the ground. In this context, too, the American statute did not explicitly create retroactive liability. American law, it should be reiterated, includes a rebuttable presumption that legislation does not apply retroactively, unless the legislative intent was clearly different (Landsgraf v. Usi Film Prods., 511 U.S. 244 (1994); Eastern Enterprises v. Apfel, 524 U.S. 498 (1998). However, the case law recognized CERCLA’s retroactive application, realizing this was clearly the legislative intent. It was understood from the statute’s language, its history and the payment mechanisms it established (U.S. v. Hooker Chem. & Plastics Corp., 680 F. Supp. 546 (W.D.N.Y. 1988); U.S. v. Olin Corp., 107 F.3d 1506 (11^th Cir. 1997)).

CERCLA’s retroactive application survived judicial review. The case law held that this aspect of the statute did not violate due process, because of its rational and legitimate purpose to clear sites that are no longer in operation of their dangerous waste. Additionally, the legislation was not arbitrary or irrational because it burdened the entity that polluted and profited from that pollution (U.S. v. Ne. Pharm. & Chem. Co., 810 F.2d 726, 732-34 (8^th Cir. 1986)). The case law found that without retroactive application achieving the legislation’s purpose – cleaning existing waste – is impossible. We should note the similarities between these tests to those in Israeli law’s limitation clause.

12.In 2004, a directive was passed by the European Union (“EU”) regarding the liability for environmental harms: Environmental Liability with Regard to the Prevention and Remedying of Environmental Damage (ELD). The core principle of the directive is “the polluter must pay” – whoever caused environmental harm through their actions must shoulder the financial consequences.

The ELD’s instructions do not require EU member states to set retroactive application. Put differently: liability applies to environmental damage even if it occurred before the statutory prohibition came into effect. As to the scope of liability, the ELD directive distinguishes between categories. The first is that of strict liability and it applies to harm caused by dangerous activities listed in the directive’s third appendix. The second category is of fault-based liability, and it applies to all other activity that may have caused harm to nature reserves or protected animal species. Notably, earlier versions of the directive expressed support for broader application of strict liability. In 1993 the Commission issued a “green document”, a non-binding working paper of sorts, that detailed the justifications for a strict liability standard for environmental damage (Commission Green Paper on Remedying Environmental Damage (COM 1993) 47 final (May 14, 1993)). Consequently a semi-binding principles document, a “White Paper” was issued in 2000 (Commission White Paper on Environmental Liability (COM 2000) 66 final (Feb. 9, 2000)). This document discussed at length the evidentiary challenges of a fault-based standard, which may be resolved by a strict liability standard, and argued that there is greater level of justice in imposing strict liability on polluters. Additionally, the doctrine of cost internalization was emphasized as a measure of deterrence.

In reality, European countries adopted various approaches (on the legal state in Europe, see: Chris Clarke, Update Comparative Legal Study (2001); Robert v. Percival, Katherine H. Copper & Matthew M. Gravens, CERCLA in a Global Context, 41 SW. L. Rev. 727 (2012); N.S.J. Koeman, Environmental Law in Europe (1999). Sweden imposes strict liability for any pollution that harms or may harm people and the environment (Sweden Environmental Code, 1998). Such is the law in Switzerland, which is not a member of the EU (Environmental Protection Act of 1983, §4), and in France (Percival, Cooper & Gravens, 740). Holland distinguishes between two pieces of legislations: the statute from 1982 (Soil Clean-up (Interim) Act of 1982) applies retroactively from 1975 onward, because a polluter from that date forward ought to know it may be liable for its actions. This means that should the state remove pollution created after 1975, it may demand the polluter to shoulder costs, as held by the Holland Supreme Court (State v. Van Wijngaarden and State v. Akzo Resins (24.4.1992)). The legislation from 1994 focuses on administrative orders for removal of hazards. The agency employs this legislation, with a degree of success, to order a polluter or landowner to remove pollutions created before 1975. There is also a mechanism of environmental insurance shared by Dutch insurance companies (Nederlandse Milieupool), which aims to provide coverage, including for costs incurred by removing pollution, through direct payments to end users (Percival, Cooper & Gravens, 744; Wilde 203). In Spain, the relevant statute (Wastes Law tit. V (B.O.E. 96, 1998)) places responsibility for cleaning the polluted site on the polluter. This is retroactive and strict liability. In 1998 Germany adopted the federal statute that regulates protection of land from pollution (The Federal Soil Protection Act). The Act establishes strict liability, but the scope of actual compensation may be reduced according to the extent of the polluters’ liability. In Finland, new legislation from 2000 (Environmental Protection Act) applies strict liability on any kind of pollution, but not retroactively. The situation in Britain is highly similar to the legal situation in the United States under CERCLA. The British Environmental Protection Act of 1995 imposes retroactive strict liability for removal of hazards, regardless of the time the pollution was created and without an exhaustive list of polluting materials.

In Canada, relevant environmental legislation is not federal. Generally, legislation in most of Canada’s provinces is based on the principle of “the polluter must pay” while adopting strict liability standards. In Saskatchewan, legislation imposes strict liability to remove hazards on their creator (Environmental Management and Protection Act). In Nova Scotia, anyone who releases polluting material into the environment is obligated to reverse the pollution and remove the polluting material (Nova Scotia Environment Act, 1994-1995 S.N.S., ss. 67(2), 68(2)). The most restrictive standard of liability is that of British Columbia (Environmental Management Act, S.B.C.). This statute requires the manufacturer of a dangerous material, or anyone interested in that dangerous material’s removal, to remove it, as well as places retroactive strict liability upon them for the removal and rehabilitation of the polluted area. The statute clarifies that this obligation applies even when no legislation prohibited pollution at the time the pollution was created.

The Constitution of South Africa guarantees the right of each person to an environment that is not harmful to health or welfare (S. Afr. Const. §24(a), 1996). Following this right, South Africa’s National Environmental Management Act of 1999 (NEMA) requires anyone who has polluted or harmed the environment to remove that hazard and rehabilitate the damaged area. The statue does not explicitly establish strict liability, but the South African High Court (Transvaal Provincial Division) ruled that strict liability applies to owners of polluted land. However, the court ruled that the legislation is not retroactive as the legislature did not intend as such (Chief Pule Shardrack VII Bareki and Others v. Gencor Limited and Others (2005)). 

13.To end this part, let us recall that the environmental policy termed “Extended Producer Responsibility” (ERP) is widespread in Europe. This policy aims to extend the manufacturer’s liability to a product’s entire life cycle, even after the product is out of the manufacturer’s possession, or is no longer in use. It is rooted in the expectation that a more suitable policy would incentivize manufacturers to factor in, as early as when a product is being designed, environmental concerns such as improving the prospects for recycling the product, reducing the use of materials, etc. (see an overview by the OECD: www.oecd.org/env/tools-evaluation/eprpoliciesanIsrSCroductsdesigneconomictheoryandselectedcasestudies.htm).

In practice, the EPR doctrine brings different policy tools together: burial tolls, deposits, subsidies, and other taxes. Therefore, for example, in 1994 the EU issued a directive regarding packaging waste. The directive regulates manufacturing packages, as well as sets quantity goals for collecting and recycling packaging waste (for more on implementing the EPR policy in European Union countries see: Aaron Ezroj, Extended Producer Responsibility Programs in the European Union, 20 Colo. J. Int’l Envtl. L. & Pol’y 199 (2009)).

14.In summary, the overview above reveals different and similar components. As far as imposing strict liability on the polluter, a consensus emerges, certainly regarding inherently dangerous materials such as asbestos. Of course there are countries that have tied the extent of that strict liability to the level of fault. As for retroactive application, it appears there are different approaches: those who support retroactive application and those who oppose it. The implication of this review on our case will be clarified below.

II. Constitutional Analysis

15.We now turn to examining the constitutionality of section 74 in Israeli law. First we must consider the rights Eitanit argues were violated. Then we may discuss whether that violation, if any and to what extent, passes the tests established in the limitation clause of section 8 of Basic Law: Human Dignity and Liberty.

A. The Violated Rights

(1). The Right to Property

16.The right to property is enshrined in our law in section 3 of Basic Law: Human Dignity and Liberty. This right is accorded to corporations as well (see HCJ 4885/03 Israel Poultry Farmers Organization, Cooperative Agricultural Union Ltd. v. the Government of Israel, IsrSC 59(2) 14, (2004) at para 41 of Justice Beinisch’s opinion and citations there.)

The State agrees that section 74 infringes Eitanit’s right to property. In any event, this point needs no elaboration. I will only remark that according to Eitanit its property rights are violated not only by imposing financial obligations, but also by imposing a seemingly retroactive obligation without examining whether Eitanit is at fault. I will address these to aspects of section 74 in depth below.

(2) The Right to Equality

17.Eitanit’s argument is twofold. First, it should enjoy constitutional protection of its right to equality. Second, this right has been violated.

Still, the first prong is not at all simple. In Israel, constitutional protection of equality rights flows from the constitutional protection of human dignity. This is because the right to equality is not explicit in the Basic Laws. It is a hybrid model of sorts, in the sense that violations of equality rights are recognized only in the – rather broad – context of harms to human dignity. In regards to the latter the case law has adopted the approach that the constitutional protection covers not only humiliation or indignities, but also other aspects closely related to human dignity. For our purposes, this means that the constitutional protection of equality applies only to discrimination that humiliates and disgraces, or discrimination that is closely linked to human dignity (HCJ 5427/02, Movement for Quality of Government v. the Knesset, IsrSC 61(1) 619, at para 38 of President Barak’s opinion (2006); HCJ 6304/09 L.H.B v. the Attorney General, at para 76 of Justice Procaccia’s opinion (Sep. 2, 2010)). In this view, it is doubtful whether the constitutional right to equality should extend to a legal entity that is not flesh and blood (compare: HCJ 4593/05 United Mizrahi Bank Ltd. v. the Prime Minister, at para 10 of President Barak’s opinion (Sep. 9, 2006); HCJ 956/06 Israel Bank Union v. Minister of Communication, at p. 12 of Justice Hayut’s opinion (March 25, 2007); Ofer Sitbon, On People, Corporations, and everything in between, Kiryat HaMishpat 8, 107 (2009)).

In the case before there is no need to decide the general issue of the scope of constitutional protection for corporations’ equality rights. The reason for it is that I believe, as detailed next, Eitanit was not discriminated against at all. Incidentally, there may be instances where discrimination or lack of equality in the corporation context would require consideration. Two examples suffice: first, a statute that taxes a company owned by Arabs differently than a company owned by Jews. Even if the State would argue that the taxation applies to the corporation and not the individual, this is a matter that must be adjudicated. This example is easier because although there is discrimination between corporations – it is based on grounds involving people. The second example, which is the more pertinent for our purposes, is that of a corporation that claims a certain tax is imposed only on that corporation and not on any other corporation in the country. The argument is clear and notable, and renders discussion. However the violation, to the extent it exists, is not one of human dignity as applied to a corporation but of the right to property. The approach that infringements upon human dignity do not apply to a corporation, does not absolve the state from its duty to fend off the argument that the statute infringes upon the right to property, even if that infringement stems from a discrimination claim. Clearly, fleshing out the infringement upon property is different than fleshing out a direct infringement upon equality. The State may overcome the argument about violations of property rights in at least two ways: first, that there is no violation, and second, that the violation withstands the limitations clause. In our case, to me, the State’s response on this point is satisfactory even if we assume that a corporation has a constitutional right to equality, and this is also true when we explore the lack of equality in the context of infringement of property rights.

18.On one hand, Eitanit claims it suffered discrimination because it was required to shoulder the costs of removing asbestos waste discarded by asbestos importers. Additionally it is required to bear removal costs instead of those who have purchased final asbestos-cement product from Eitanit over the years, used them, and ultimately discarded of them. Obviously, there are financial ramifications to this.

Yet these arguments must be rejected in light of the statute’s language. The “waste population” subject to section 74 is industrial waste that came from operations at Eitanit’s factory. This definition excludes two types of waste: (a) completed asbestos-cement products, such as pipes and boards, that have been passed on to end users and then dismantled, discarded and gradually became waste (“the first exception”); (b) asbestos waste that came from production processes of others besides Eitanit (“the second exception”). These two exceptions are not included in the definition of “waste population” to which section 74 applies.

To clarify, the record reveals that professionals can easily distinguish asbestos waste that originated in production processes from completed asbestos-cement products that have been discarded post-use (the first exception). First, asbestos waste is a batter-like, non-homogenous mix that comprises of lumps and excess raw asbestos, cement, board and pipe debris made out of asbestos-cement. Additionally, some of the waste sites are built in layers: a layer of waste, above it a layer of soil, then again a layer of waste, and so on. In some sites the sacks used to bring in the waste were visible. These techniques indicated the methodical and lengthy process of waste removal, through burial or surfacing. These are not  random or accidental piles of asbestos-cement products that have been worn out and discarded absentmindedly.

This said, the language of the statute releases Eitanit from paying for the second exception – asbestos waste that originated in the production processes of others. This raises a separate question: how do we know that Eitanit will not be required to pay for waste that did not come from its own factory, under the second exception? There are several indications for this. First, section 74 targets only waste found in a radius of 15 KM from Eitanit’s factory. Second, Eitanit’s factory was at the time the only factory in Israel to process raw asbestos into final asbestos-cement products. The industrial waste from these production processes has unique characteristics, as discussed above. Other factories processed completed asbestos-cement products, and thus their industrial waste would have been consistent of only asbestos-cement and dust. Third, there is no evidence that other factories had indeed removed their waste in the same manner Eitanit did. Fourth, there is no evidence that asbestos importers operating in Israel alongside Eitanit at the relevant time, distributed asbestos in the area, and in any event the State clarifies that those importers used materials for acoustic and thermal isolation without cement. Fifth, in a survey from 2007, different witnesses reported out of their personal knowledge purchasing or receiving the waste from the factory and scattering it in the ground. These finding have been confirmed, the State argues, by soil samples and drilling.

The mounting of all this evidence, along with the above findings about the type of waste and its systematic discarding, indicates – to me – that there is a “presumption of burial” against Eitanit in the context of section 74. This presumption means that asbestos waste with certain common characteristics, that was buried in systematic and organized methods, all in a limited and confined area in the factory’s vicinity, would have come out of Eitanit’s factory. Lest we forget: this is a rebuttable presumption. After all, the legislature afforded Eitanit a right of hearing before the Minister, about specific areas where waste did not originate from Eitanit’s factory (according to section 74(d) of the Act and according to the instructions by the Minister – see above section 5, and the State’s attorney declaration that the content of the objection and the relevant instruction’s interpretation – p. 9, line 28 of the hearing transcript).

To summarize, the Act requires Eitanit to bear the cost of removing industrial waste that originated from the operations in its factory. Eitanit’s arguments in this regard cannot be addressed to the legislature, as the legislature expressly stipulated that Eitanit is only responsible for its own waste. These arguments may be relevant, at most, at the administrative level, if and when there are challenges to the Act’s implementation, and not at the clearly constitutional level we are concerned with here.

19.The argument regarding the end users, who received asbestos waste from Eitanit and used it to cover soil, is more complicated. Analytically, Eitanit’s argument is twofold. First, Eitanit was required to pay while the end users were exempted from direct payments. Second, Eitanit was required to pay for waste from which the end users also benefited. In my mind, the answers to the first aspect effectively resolve the difficulties in the second aspect. The main point is there is a relevant difference that justifies distinguishing the end users, who were not directly required to bear costs, and Eitanit. Recall that not every distinction is prohibited discrimination. Warranted distinctions, which are based on a relevant difference, will not usually be seen as prohibited discrimination (for example see the matter of LHB, para 77; HCJ 10203/03 The National Census Inc. v. The Attorney General, para 53 of Justice Procaccia’s opinion (August 20, 2008)). To me, there are three differences between Eitanit and the end users: the awareness test, the control test, and the profit test. Each and every one of these independently, let alone put together, constitutes a relevant difference that separates Eitanit from the end users and that warrants the distinction between them – from both aspects.

First, it appears from the material before us, that in the relevant time period, Eitanit had a notable advantage of information compared to the end users. This advantage manifested, primarily, in scientific knowledge that existed – or should have existed – for Eitanit even at that time about the potential health risk posed by asbestos waste. Indeed, there is no intention to find fault in Eitanit on neither the criminal or tort levels. Rather the presumption is that Eitanit must pay due to strict liability, not as a result of a finding that it breached any duties of care. However, the focus is on Eitanit’s awareness of potential risk caused by asbestos compared to other entities – the end users – to whom it asks to be considered similarly situated. The relevance of the awareness issue will be discussed more below.

In May 1969 Professor Schilling visited Eitanit’s factory. At the time, Professor Schilling headed the Department for Occupational Health at the London School of Hygiene & Tropical Medicine. After his visit, Professor Schilling authored a report, which was attached as Annexure 7 to the Respondents’ reply. In the report, Schilling points to severe health risks that are caused by exposure to dust in asbestos factories, including asbestositis, lung cancer and mesothelioma. He emphasized that the factory must take immediate precautions to reduce the risk of these diseases’ development.

In 1970, an organization of Israeli occupational doctors dedicated a conference to issues of employees and asbestos-cement factories. During the conference, an article written in collaboration with the factory representatives was presented. This article was submitted as Annexure 8. As early as the opening paragraph, the authors state that there is “clear awareness of health risks caused by asbestos and the prevalence of cases of asbestositis on one hand, and cancer on the other.

In April 1976, Yekutiel Federman, one of the holders of controlling interest in Eitanit, sent a letter to the factory manager, Mr. B. Friedrich. In that letter Mr. Federman states that: “The asbestos industry is currently the target of a witch hunt… Should we receive a positive report that proves the allegations are exaggerated and are not serious, and that it is more dangerous to walk down a street breathing in gas emissions from cars, and this report will be prepared by the Ernst Bergman Foundation, which is renowned in the science community, we will be able to combat the attacks academically and scientifically.” This letter, too, demonstrates that Eitanit was aware, at this stage if not sooner, of the scientific claims that were common at the time about the severe health risks caused by asbestos.

What is more, certain aspects of that time’s labor laws indicated the dangers of asbestos. As early as 1945 the British Mandate defined asbestositis as an occupational disease. This meant that a diagnosis of a factory worker with the disease was required to be reported. Additionally, the employment of women and teenagers in processing asbestos or its industrial use was prohibited. These directives were incorporated into Israeli law in the early 1950s. In 1964 The Safety at Work Regulations (Medical Examinations of Workers with Asbestos Dust, Talc and Silicon) 1964 were legislated. The Regulations set restrictions on the ways asbestos workers were employed, and required that workers receive periodic medical examinations. In 1978 The Safety at Work Regulations (Restrictions on Spraying Asbestos) 1978 were added. Those prohibited spraying crisp asbestos for isolation purposes. All of these were in force during the same period when, by Eitanit’s own admission, it passed on the waste to the end users, let alone when the waste was buried in the ground. Later, in 1984, the old Regulations – from both 1964 and 1978 – were incorporated into The Safety at Work Regulations (Occupational Hygiene of the Public and Workers with Harmful Dust) 1984. The new Regulations additionally prohibited the use of asbestos to pave roads. In 1988 this prohibition was expanded to manufacturing, importing and selling asbestos for road paving.

On the other hand, we do not have a sufficient factual foundation about the scope and depth of the end users’ awareness of the health risks caused by asbestos waste. However, on its face, it is doubtful that Eitanit and the end users are in the same category as far as what was known or should have been know. For decades, Eitanit imported raw asbestos, processed it into asbestos-cement, and manufactured final products from it. In effect, it was the dominant – if not only – entity in this industry. By virtue of this position Eitanit was likely familiar in real time with the relevant scientific research about Asbestos’ health risks. Not only did Eitanit apparently follow the developments, but was an active observer in the research (see, for example the article from 1970 and the Mr. Federman’s letter from April 1976, mentioned above). As an employer of asbestos workers, Eitanit was also subject by law to different duties that reflected the health risks asbestos posed. The end users, on the other hand, are in a different category. The material shows that they were not manufacturers of asbestos, nor were they industrial factories, but mainly the towns, kibbutzes and private persons in the area. These are probably not experts in asbestos, asbestos employers or workers, or even active in the scientific research scene.

Analogously, tort law attributes significant weight to knowledge gaps between parties. For instance, a doctor’s duty to disclose to clients stems from the presumption that there are major knowledge gaps between the parties, though their scope may change from case to case (see for this topic, CA 2342/09 Joubran v. Misgav Ledach Hospital (April 6, 2011)). Similarly, the scope of an insurance agent to a consumer depends, among others, on whether there are information gaps between the consumer and the insurance agent or insurer (LCA 5696/06, Saif vs. Mari, para 14 (Sep 21, 2009)).

Truth be told, factoring in the knowledge gaps between Eitanit and the end users is only part of a broader context. Eitanit is distinct from the end users because the products and waste left a factory it owns. This fact points to the material difference between Eitanit and the end users – Eitanit is the manufacturer of the waste. The end users were Eitanit’s customers. These are two different groups that must be distinguished. The distinction is consistent with the principles of EPR, mentioned above. The duties placed on manufacturers are not as the duties placed on the user. The manufacturer has control over the product’s design, assembly, and finalization. In any event is it highly logical to place extended liability on the manufacturer and placing financial burdens upon it, both for reasons of justice and fairness and of economic efficiency. In the matter at hand, the control test has an additional aspect. It is appropriate to weigh the fact that arises from the record, that Eitanit sold the waste for a low price, sometimes giving it away. This, too, solidifies the link between Eitanit and the waste, including that which is not on factory grounds, but in the land around it up to 15 KM. The awareness test thus connects to the control test and to economical aspects, and we must not neglect the profit test.

Applying economic approaches to law, it is clear that Eitanit and the end users are not similarly situated, as a function of the profit test. Comparative case law, primarily American case law, finds merit in placing the costs of asbestos removal on the manufacturing corporation because of its status as manufacturer. This consideration is relevant not only from an economical stand point, which may justify shifting the financial burden of removing hazards to the manufacturer’s shoulders, but also for reasons of justice and fairness. From this perspective, there is no discrimination against the petitioner but achieving the statutory purpose of “the polluter must pay.” We come back to this point when examining the issue of a worthy purpose which is, of course, one of the tests established by section 8 of Basic Law: Human Dignity and Liberty.

To summarize this point: there were knowledge gaps – actual and theoretical – between Eitanit and the end users. Moreover, Eitanit, as a manufacturer is clearly distinguishable from the end users. This distinction reflects the difference between the two aspects of the control test, as well as the profit test. The combination of all these – awareness, control and profit – establish, in my view, a relevant difference between Eitanit and the end users, in terms of its obligation to share up to half of the costs of removing the waste.

20.Eitanit additionally, claims it suffered discrimination compared to the local authorities. Eitanit bases its claim on the right to be heard by the Minister which section 74 grants the local authorities and which allows them to reduce the rate of their participation in funding the project. In reality, an arbitrary and low rate of only 10% was set in regulations which go as far as permitting “payment” of this rate by provision of services. Eitanit, on the other hand, was denied the option of carrying out the project on its own.

Here, too, I believe Eitanit and the local authorities are not similarly situated. There is a relevant difference between Eitanit and the local authorities, based on reasons stated above: Eitanit is the manufacturer of the waste, and created its implications. The local authorities, as the record reflects, are not even part of the “end users” addressed earlier. Their link to the waste is indirect, and they are merely a default in funding the project. Furthermore, the mechanism set in the Act splits the costs equally between Eitanit (on one end) and the local authorities and the state (on the other end.) Each and every Shekel that is reduced from the local authorities’ obligations will be added to the bill served to the State. Put together, the local authorities and the State will fund only half of the project’s cost. The result, therefore, is that – willing or not – taxpayers will directly shoulder at least half of the project’s costs. For this reason, too, the discrimination claim must fall.

21.Finally, Eitanit claims it was discriminated against in comparison with future polluters. It argues the Act stipulates that anyone creating asbestos hazards will bear the costs of removal according to their share of liability, and they will be permitted to remove the hazard (section 11(e) of the Act). Additionally, a bill for Prevention Soil Pollution and Restoration of Polluted Grounds 2011 (“the bill”) is pending before the Knesset. The bill, Eitanit maintains, is more lenient toward owners of polluted properties and considers the extent of their fault. Contrastingly, Eitanit bears the brunt of a strict liability standard regardless of fault and it is denied the opportunity to remover the waste on its own.

Regarding the claim of discrimination in terms of the bill, I see no reason to discuss a claim of discrimination in a bill that has yet to have been passed. As far as the discrimination claims about other statutory provisions go, I do not find it necessary to examine these provisions in detail, nor to consider whether they are discriminatory against Eitanit or perhaps favor it. This is because the project of removing asbestos waste from the Western Galilee merits regulation unique to it. I will elaborate on this point below, in relation to the argument that the Act constitutes personal legislation. As an aside, recall that the new asbestos statute prohibits manufacture of asbestos products, places full responsibility for pollution on the polluter, and only allows the polluter to remove the waste independently with the property owner’s consent. On its face, it does not appear that the statutory arrangement that applies to the petitioner is clearly more egregious than statutory arrangements that will exist going forward. Quite the contrary.

22.To conclude this part, I accept Eitanit’s argument that section 74 infringes upon its property rights. However, Eitanit’s argument about a violation of its equality right, insofar that it is a right independent of the property right, and this for the reasons described above. Based on these conclusions, I move on to examine whether the infringement on Eitanit’s right to property passes the tests set in the limitations clause of section 8 of Basic Law: Human Dignity and Liberty, entitled “Violations of Rights”:

“There shall be no violation of rights under this Basic Law except in legislation befitting the values of the State of Israel, designed for a worthy purpose, and to an extent no greater than required or by such a law enacted with explicit authorization therein.”

B. Violation of Rights In Legislation Or By Explicit Authorization Therein

23.Eitanit’s position is that the said violation of the right to property (and in its view the right to equality, too) is not in legislation or by authorization in legislation, because the Act constitutes personal legislation, with a specific target – Eitanit. Eitanit maintains that a statute that is not generally applicable cannot be considered legislation for the purposes of the limitations clause.

I cannot accept Eitanit’s position. Recall that the case law found the prong “in legislation or by authorization therein” to be a formalistic test that seeks whether the infringement upon basic rights was done by primary legislation or was authorized by primary legislation (see the matter of The National Census, para 9 of President Beinisch’s opinion; the matter of L.H.B, para 104 to Justice Procaccia’s opinion; see also Aharon Barak, Interpretation in Law Volume 3 – Constitutional Interpretation, 489-498 (1994)). To compare, section 5 of the European Covenant of Human Rights addresses ways to limit liberties, including a requirement that the limitation is done in legislation, or in the Covenant’s language: “in accordance with a procedure prescribed by law). Similar language appears in section 10(2) of the Covenant regarding limits on free speech. The European Court of Human Rights pronounced, in various contexts, on the interpretation of “in legislation,” and concluded that in order for a particular provision to be considered legislation for these purposes, it must be clear and accessible, that is, published to everyone (see: Tonilo v. San Marino & Italy, §46 (26.6.2012); Telegraaf Media v. Netherland, §§89-102 (22.11.2012)).

The piece of legislation at hand is a product of extended preparation. After passing the Knesset’s first reading, the Act was considered by the Knesset’s Interior and Environmental Protection Committee. The Committee dedicated over ten meetings to discuss the details of the Act. During the discussions, the constitutional issue was also examined. Eitanit argued boisterously, but its arguments were rejected. Once the Committee completed is process, the Act passed in second and third readings and was published officially. This in mind, the argument that the final produce is not legislation must fail. It appears Eitanit’s arguments about the lack of the Act’s general application repeat, in a sense, the arguments about discrimination against it – arguments I have addressed at length above – or, in a different sense, are claims about the Act’s wrongful purpose, claims that I will address below. And again recall: the Act does not expressly mention Eitanit or its factory. Instead, it uses terms such as “asbestos companies” and “factory for the manufacture of asbestos.” It is true, however, and undisputed, that only Eitanit meets the definitions in section 74. This matter might increase the need to guarantee the Act is proportional and does not overly infringe Eitanit’s property rights. Still, that the Act effectively only applies to Eitanit is not in and of itself sufficient for a finding that the Act is not “legislation.”

C. For a Worthy Purpose Befitting the Values of the State of Israel

24.What is the purpose of section 74, and is this purpose worthy and befitting? Section 1 states the Act’s general purpose: to minimize asbestos hazards in Israel. This is also the source for section 74’s actual purpose: to launch a project for the removal of asbestos waste from the Western Galilee. The explanations that accompanied the Act’s bill, as well as the State’s response in this petition, described how this severe and unique environmental hazard was formed in the Western Galilee. A very large amount of asbestos waste was scattered or buried in many dozens of sites. Some of the waste is buried deep underground, and some is used in surfacing trails, private gardens, agricultural land and the like – all, as mentioned, in dozens of different locations. I elaborated upon the harms caused by this waste in depth, and it is unnecessary to repeat it all here. The purpose of section 74, therefore, is to remove or reduce as much as possible this health risk, which in some ways is a “time bomb” threatening the health and welfare of many of the area’s residents. There is no doubt then that it is a worthy and important purpose, and the sooner it is achieved, the better.

This purpose is not only worthy, but also befits the values of the State of Israel as a Jewish and democratic State. I recently discussed Jewish law’s approach to protecting the environment, from a religious and civil perspective (HCJ 1756/10 The City of Ashkelon v. The Minister of the Interior (January 2, 2013)). I specifically mentioned Jewish law’s approach to attending to waste and the financial mechanisms it put in place in order to achieve this.

Additionally, the purpose of section 74 is worthy because it realizes area residents’ rights to health and to quality environment. There is no need here to go into the constitutionality or the scope of these rights (see: HCJ 3071/05 Luzon v. The Government of Israel (July 28, 2008); HCJ 11044/04 Solomtin v. The Minister of Health, paras 11-13 to Justice Procaccia’s opinion (June 27, 2011); Daniel Sperling and Nissim Cohen, The Impact of The Arrangements Act and Supreme Court Decisions on Health Policy and the Status of the Right to Health in Israel, Laws (4) 154, 218-225 (2012)). All these are complex, serious and weighty questions, but they are irrelevant to the case at hand. All that matters here is that cleaning waste is meant to remove a grave hazard that threatens the health of residents, and it is a welcome initiative. As presented above, this concern to the health of residents is typical of democratic states, which have invested substantial efforts in regulating removal in modern environmental legislation.

25.The State presents an additional reason for the way section 74 sets the funding mechanism: the principle of “the polluter must pay”. Truthfully, I am not convinced this principle is in fact the purpose of the Act in terms of the limitations clause. Arguably, this principle justifies choosing this particular mechanism, rather than the legislative goal. Put differently: it is the justification for the means chosen to achieve the end. Therefore, the principle must pass the limitations clause in the context of proportionality, not in terms of purpose. Yet the state explicitly argues that the Act has the purpose of realizing the principle of “the polluter must pay” (p. 9 of the record). However, even under this approach the principle is not a single purpose, but is intertwined with the central purpose, which is cleaning the Western Galilee from Asbestos Waste.

As I said, I doubt whether the principle of “the polluter must pay” is a purpose – even secondary – of the Act. It is possible this position, which upgrades the means to the level of an end, is meant to boost the legitimacy of the selected funding mechanism. Another possibility is that the State grabbed the bull by its horns. In other words, being aware of the distinct difficulties presented by the principle of “the polluter must pay” and by applying it, the State categorized it as a secondary purpose, willing to subject it to the proper constitutional review. But, as I will clarify, I cannot accept that this categorization of the principle as an end will injure Eitanit and prevent it from examining the proportionality of the funding mechanism established in section 74. For the purpose of ruling in this petition, I am willing to assume – for the sake of a complete discussion – that the principle of “the polluter must pay” is a secondary purpose of the Act in terms of the limitations clause. This approach demands that the matter be subject to a strict review of proportionality. Lest we forget, the worthy purpose test is but a threshold requirement (Aharon Barak, Proportionality in Law, 297 (2010)). That is, in the absence of a worthy purpose, a statute must fail constitutional review. For this reason precisely the worthy purpose test is not conclusive. It is not the end of the enquiry, but its beginning. The difficult task of constitutional review is yet before us. As former President Barak wrote: “It is a mistake to examine constitutionality of means through the lens of the end’s constitutionality. It would be too premature” (Id. at 299). Thus we must first evaluate whether the principle of “the polluter must pay” is indeed a worthy purpose befitting the values of the State of Israel. This discussion is separate from the discussion whether the principle of “the polluter must pay” and its application in the present case is proportional, given that it places strict liability, and does so retroactively.

The principle of “the polluter must pay” is simple. Whoever caused the pollution will fund its removal and be liable for harms that have and will continue to be caused. This principle stems also from efficiency reasons, with the premise that placing the financial burden on polluters will incentivize them to minimize the scope of the pollution. The goal is to reduce the amount of waste to be removed and to encourage the polluter to take precautions and develop “green” technology. This economical approach finds support in the theory of costs internalization. Coupled with the considerations of justice, which dictate that it is unfair for the polluter, who has profited from polluting, would deflect costs toward the public (see: Marsha Glefi, Ruth Plato-Shinar and Amichai Kerner, Lenders’ Liability for Environmental Hazards Caused by Borrowers, The Attorney (50) 439, 443-47 (2010); Isaschar Rozen-Tzvi, Who The Hell Does This Waste Belong To? Waste Removal and Environmental Justice in Israel, Law Research (23) 487, 553-54 (2007)). This approach was recognized by many democratic states, as reviewed above.

We will note that in Jewish law, too, the basic obligation of waste management is placed on the waste’s owner. It is thus generally prohibited to remove raw materials – such as rocks and dust – or actual waste into public spaces, and the owner is expected to be liable in torts, or subjected to fines (Tosefta Bava Kamma 2; Tosefta Bava Metzia 11, Babylonian Talmud, Bava Kamma 30, 1; Maimonides, Yad ha-Chazaka, Hilchot Nizke Mammon 13, 13-17; Shulchan Aruch, Choshen Mishpat, 414, 2; also see my opinion on the matter of The City of Hulon.)

The principle of “the polluter must pay” is well established in our current law. It is also the answer to the Petitioner’s claim that section 74 is out of place in the legal landscape. The Prevention of Environmental Hazards Act (Civil Suits) 1992, authorizes courts to order anyone who causes environmental hazards to cease from doing so, to correct the hazard, or to restore, and this regardless to the level of fault, if any (section 2-4.) Additionally, a string of legislative amendments in this vein was incorporated into The Environmental Protection Act (The Polluter Must Pay) (Legislative Amendments) 2008. Further, in terms of industrial waste, the principle of “the polluter must pay” translates into a similar principle of “manufacturer responsibility”. That practical meaning of this is that the costs of taking care of and recycling waste will generally be placed upon the factory that manufactured the polluting products in its production processes (see above regarding EPR policies). This has many aspects in the new environmental legislation in Israel. We will mention here The Environmental Care for Electric and Electronic Equipment and Batteries Act 2012, The Regulation of Care for Packaging Act 2011, The Beverage Container Deposit Act 2001 – amended in 2010 to set quotas for bottle collection by manufacturers, The Removal and Recycling of Tires Act 2007, and The Preservation of Cleanliness Act 1984 – amended in 2007 to set a mechanism for burial tax (see the matter of The City of Hullon, para 31 of Justice Barak-Erez’s opinion).

Incidentally, the State points out that the principle of “the polluter must pay” is reflected in statutes that were already in effect when Eitanit created the asbestos waste. For instance, section 54(1) to The People’s Health Ordinance, num. 40 of 1940 stipulates that the local authority or the ministry are authorized to order a person who created a hazard to remove it. For these purposes, a hazard is any place whose state or use endanger or damage public health (section 53).

To summarize, Eitanit does not dispute that the purpose of the Act insofar that it is to remove asbestos waste from the Western Galilee is a “worthy social purpose” (see section 107 of the petition). The Petitioner’s primary opposition is for the principle of “the polluter must pay”, particularly in terms of the strict liability standard and the retroactive application. In this context, Eitanit challenges the efficiency of applying the principle of “the polluter must pay” and the fairness in applying it. Therefore, assuming that “the polluter must pay” is a worthy purpose because of its contribution to ecology, the question remains whether the funding mechanism is proportional. This question leads us to the main issue, which is the establishment of retroactive and strict liability.

D. Proportionality

26.The last requirement of the limitations clause is that the infringement of a constitutional right is “to an extent no greater than required”. This is the proportionality requirement. The case law has articulated three sub-prongs for evaluating the proportionality of infringements of constitutional rights: the rational connection test, the least restrictive means test, and the cost-benefit test (narrow proportionality). 

Before we begin, recall that the proportionality criterion does not dictate selecting only one mean to achieving the legislative end. There is a collection of – perhaps many – alternative measures, all of which may in themselves be proportional. These measures are different in terms of the scope of their infringement on constitutional rights, as well as how they may achieve the legislative purpose. This creates a range of proportionality within which the legislature may operate. The legislature has room to maneuver, and it may choose certain alternatives over others so long as they sit within the range of proportionality (compare: HCJ 2605/05, The Academic Center for Law and Business v. The Minister of the Treasury, para 46 of President Beinisch’s opinion (November 19, 2009)).

(1) Rational Connection

27.Under the first proportionality sub-test, we must examine whether there is a logical link between the Act’s purpose and the means selected to achieve it. As I have discussed above, for purposes of our discussion, the Act has two goals: to clean the Western Galilee of asbestos waste, and to realize the principle of “the polluter must pay”. These are the legislative ends. The means that legislature selected is the mechanism set in section 74, specifically its funding aspect (which is at the core of this petition). We will explore the link between the selected means and each of the purposes.

28.Regarding the first purpose, I do not find it necessary to elaborate, because the link here between the means and the end is practically obvious. The first purpose is to remove asbestos waste from the Western Galilee. The selected means is the relevant project, arranging for its budget and funding and authorizing the Minister to establish operative regulations. The means leads directly to the end.

29.As for the second purpose, the case is more complex. Eitanit raises a string of questions about the link between the funding mechanism established and the principle of “the polluter must pay”. Eitanit’s criticism includes four arguments. First, Eitanit claims there is no evidence it scattered the waste. Second, Eitanit is subjected to strict liability, and it is required to pay for conduct that was not legally proscribed at the time. Second, Eitanit maintains that a significant portion of the waste was distributed by the end users and not by Eitanit. Third, Eitanit challenges the strict liability imposed upon it, along with the requirement to pay for conduct that was not statutorily prohibited at the time. Fourth, Eitanit argues that it must pay for past-conduct such that the aspect of channeling behavior and deterrence is non-existing here. Retroactive payment, Eitanit believes, is also unfair. Therefore there is no link, to Eitanit, between the type of payment the Act imposed upon it and the principle of “the polluter must pay”.

The first argument raises a factual issue, which I have addressed above. Repeated briefly, the accumulation of several indications demonstrates that there is a “presumption of burial” against Eitanit in terms of section 74: the asbestos waste, that has similar characteristics, was buried by organized and systematic techniques, and all in a limited area around the factory. Even if this not an absolute presumption, Eitanit has the opportunity to argue that the waste in a specific location did not originate in its factory. To what extent a petitioner may attack the factual basis for the Act is a good question. I my view, such attack is not identical to attacking the factual basis for an administrative decision, or even to an administrative petition in the High Court of Justice, or to a factual dispute between parties of the civil or criminal case. Yet, as mentioned before, the broad legal issue need not be decided here, as the factual basis is well substantiated. The truly relevant question is what this factual basis means.

The second argument does not negate the rational connection between the means and the end either. It is true that some of the waste was layered on the ground by the end users. However, one of the important justifications for the principle of “the polluter must pay” is cost internalization by whoever benefited from creating the pollution. In our case, Eitanit fits this criterion because it profited from the production processes that resulted in buildup of industrial waste. Additionally, it profited – albeit indirectly – from passing the waste from the factory on to the end users. In any event, there is a clear rational link between the means – mandating that Eitanit share the cost of removing the waste – and the relevant purpose – the principle of “the polluter must pay”. Eitanit’s arguments on this point may be seen from a different angle that focuses the discussion on the question of equal burden. In other words, why would Eitanit alone shoulder the financial burden and not the end users? The answer is twofold. First, there is no discrimination between Eitanit and the end users. I discussed this in depth above. Second, the possibility of a different allocation of financial burdens as to reduce the harms to Eitanit. I will discuss this below, when analyzing proportionality’s second and third sub-prongs.

The third and fourth arguments revolve round the strict liability and its retroactive application. Regarding the rational link between the means – the funding mechanism – and the secondary purpose – the principle of “the polluter must pay,” it seems that imposing payments on the entity that created the hazard and benefited from it advances this purpose and puts it into practice. Refer to the discussion above as to how the principle of “the polluter must pay” is based on justice and fairness. It is only reasonable and logical that whoever created a hazard and was the primary beneficiary of it would be the one required to pay for it. In this context, it would be appropriate to combine the two purposes the State finds in the Act. It is necessary, as Eitanit also agrees, to remove the asbestos waste from the Western Galilee. The legislature elected, as did other legislatures in democratic states, to impose special costs on the asbestos company – the manufacturer and direct profit-maker – compared to others, including the public.

To sum up this point, this is not a case where the means do not promote the end. The contrary is true. Recall that the “the rational connection test, like the worthy purpose test – is a threshold test. It is not a balancing test. It does not weigh the worthy purpose against the infringement” (Proportionality in Law, p. 387). However, there is the approach that the first sub-prong is not technical: “this sub-test is not satisfied with the existence of a merely technical causal connection between the means and the end. Therefore the requirement for a rational link is designed, among others, to restrict arbitrary, unfair or illogical means” (HCJ 2887/04 Abu Madigam v. Israeli Land Authority, IsrSC 62(2) 57, para 37 of Justice Arbel’s opinion (2007)). In my own opinion, the natural place for testing the justice and fairness of a means is in the contest of the second sub-prong, and more so in the third sub-prong. That said, I am willing to assume that in extreme cases where the means’ arbitrariness and unfairness are obvious this should be considered even in the first sub-prong. This certainly is not the case: here, applying the second and third sub-prongs will shed light on the extent of justice and fairness in the chosen means.

(2) The Least Restrictive Means

30.We now approach proportionality’s second sub-test. The question before us is whether, of all the alternative means that may achieve the purpose of the Act, the means selected is that which least infringes Eitanit’s right to property. Put differently, we ask whether there is a less restrictive alternative that will similarly achieve the Act’s purpose (compare HCJ 10202/06 The City of Nahariya v. The West Bank Military Commander, p. 12 (November 11, 2012)).

In this context, Eitanit identifies two alternatives for the mechanism established by the Act. One is to “repair” the sites where the waste serves to cover the land. The second is allowing Eitanit to execute the removal project on its own. We will explore each alternative.

31.The first alternative is only generally argued by Eitanit, without adding details that can illuminate the primary relevant question: is it expected to achieve the same purpose while harming Eitanit less. Recall, that, as Eitanit presented things, re-covering and sealing the paths that were surfaced with asbestos is a partial solution to the waste problem at best. Whether this is a real fix, including for the paths themselves, is doubtful. Moreover it is unclear to Eitanit what the solution for other types of waste, such as waste that was buried underground. We cannot therefore find that the suggested alternative would sufficiently accomplish the Act’s purpose of cleaning the Western Galilee from asbestos waste, while lessening the harm to Eitanit.

32.We are left with the second alternative: Eitanit’s consent to removing the waste independently, instead of paying for removal (the “self-removal” alternative). However, the Petitioner did not meet its burden to prove that this alternative will serve the Act’s purpose adequately.

The task of removing the asbestos waste was discussed among the parties for a long time. Eitanit’s proposal to remove the waste, through a sub-contractor it will employ, was also subject to discussion. After several rounds of negotiation, the proposal was rejected. I will here refer to a detailed and reasoned letter that Mr. Oshik Ben-Atar, a senior deputy to the Accountant General, sent to Eitanit in November 2010, in which the State notified Eitanit that its self-removal proposal is impractical. The letter states that Eitanit estimated the project to cost between NIS 166-300m, if not more (see also section 120 of the petition). These are substantial gaps that elicit concerns that Eitanit’s low estimate will prevent it from completely and successfully executing the project. This is coupled with the doubt that Eitanit has, on its face, little incentive to execute the project as best as possible. This is also because it is not expected to profit from executing the project and it has no incentive to conduct thorough surveying and locating all the polluted sites.

Eitanit maintains the recently completed removal of asbestos from a certain area, under State supervision, and the costs of that removal was approximately 65% lower than the costs estimated by the State. The State, on the other hand, maintains that the experience with Eitanit in this regard is not positive. The State supervises Eitanit’s work to restore waste sites in Sheikh Danon and in Shlomi, as well as work to remove asbestos waste in other areas. These projects have been found to have professional deficiencies, and these deficiencies have caused major delays in the projects.

I do not intend to rule on the factual disputes between the parties, as if this were a civil dispute or an administrative petition. Such a ruling is not necessary for our purposes. We are concerned with section 74 of the Act, not with administrative or appellate review. The question before us is whether there is an alternative means that will impose less harm upon Eitanit, while achieving the legislative purpose behind section 74. From this perspective, Eitanit has not met its burden. I am not persuaded that the self-removal option will lead to the end that inspired enacting section 74 – cleaning the Western Galilee from asbestos waste. We were even presented with material that supports the State’s position, or at the very least demonstrates its logic.

33.The perspective we so far employed has been negative: whether there are alternatives that achieve the statutory purpose while lessening the harm caused to Eitanit. Eitanit emphasized this approach. However, the issue can be examined, simultaneously, in a positive perspective: whether the mechanism elected by the legislature includes checks and balances that reduce the harm caused. In this contest there are five elements: (1) Eitanit would be required to pay no more than half of the estimated removal costs – half, perhaps less but certainly no more; (2) In any event, Eitanit’s funding obligation shall not exceed NIS 150m; (3) The funding mechanism the legislature selected, along with supplementary instructions from the Minister, ensure that this is not a fine or a compensation. Eitanit’s financial obligation will be used to (partially) cover the costs of removal alone; (4) The relevant removal project is limited to a radius of 15 KM around the factory. Section 74 does not compel Eitanit to participate in funding the removal of asbestos waste if that waste is in locations beyond that area. Finally, the Minister’s instructions create a mechanism of supervision and checks that will allow Eitanit to challenge each and every payment it is required to submit in terms of specific waste sites.

The five elements mentioned are no hypothesis or creative interpretation. These are checks and balances built into the explicit language of section 74 and its supplementary instructions. They reduce the harm caused to Eitanit’s property, while still achieving the primary purpose of cleaning the Western Galilee of asbestos waste and the secondary purpose of “the polluter must pay” (to the extent this purpose exists).

The elements above can be categorized through three questions: how much, for what, and how. “How much”: 50 percent, which shall not exceed NIS 150m. In examples from the United States and from other countries, some legislation required funding up to 100 percent, without setting a maximum amount. The gap in the amount is substantial. It is another rebuttal for Eitanit’s argument that it would have been appropriate to impose some liability for removing the waste upon the end users. As mentioned before, I am not persuaded that the maximum amount set does not reflect a fair estimate of potential costs. Moreover, even were the Petitioner to dispute the estimates for removal, because the State bears half the costs, it has no interest in inflating costs. “For what”: for cleaning a defined area. The significance of this is that there is no penalty or sanction. Restricting the project that Eitanit must fund further supports the conclusion that the means of imposing liability is not an end unto itself. The “for what” element is joined by the scope of the territory – a 15 KM radius around the factory. This area is not only limited but also reflects the history of Eitanit’s conduct in terms of distributing industrial asbestos waste. This history include the fact that Eitanit buried some of the asbestos waste, as well as passed it on to the end users in the area for very low cost, or no cost at all. This supports the assumption that implementing the principle of “the polluter must pay” is neither arbitrary nor irrational. The third question is “how”: the section includes an internal mechanism that ensures that Eitanit is able to present its position as to the periodical invoices it would receive. The reservations Eitanit may raise in this context are not limited to calculations, but also to the issue of whether particular piles of waste in fact originated in its factory. The State stipulated this in section 121 of its responding papers. This element contributes to the proportionality of the selected means. The internal mechanism emphasizes supervision rather than top-down orders.

(3) Narrow Proportionality

34.We are thus left with the third and last sub-prong of constitutional review: the narrow proportionality test. This tests measures the appropriate ratio “between the public benefit of a statute subject to constitutional review and the infringement of a constitutional right caused by that legislation (the matter of The Academic Center, para 50 of President Beinisch’s opinion; see also HJC 2651/09 Association for Civil Rights in Israel v. The Minister of the Interior, para 22 of Justice Naor’s opinion (June 15, 2011). It weighs cost against benefit in the constitutional sense – social gain versus infringement of rights.

The case law expressed the view that “this is the most important of the three sub-prongs” (Justice Dorner in HCJ 4541/94 Miller v. Minister of Security, IsrSC 49(4) 94,140 (1995)). Either way, it is not a threshold test. Being the last obstacle in the constitutional journey a spotlight is pointed at this test. Though it is termed “narrow proportionality” is it not narrow at all. It poses a special challenge to judges. In my view, and precisely because of it, the test may develop over time – including setting standards for its application – more than the other sub-tests.

In any event – in our case – it is crystal clear that the Act is immensely beneficial. Therefore, it may be determined that the section is unconstitutional only if the infringement on Eitanit’s property rights – the other side of this equation – is so great that it eclipses the benefit.

By imposing financial obligation, section 74 infringes upon Eitanit’s right to property. Its arguments articulate three aspects that exacerbating the infringement: (1) the Act is personal; (2) the Act imposes strict liability; (3) the Act is retroactive. For each aspect, I first present the substance of the harm argued, then the actual scope of the harm: has the Act crossed the constitutional line and thus must be struck down; is the harm indeed as severe as argued or can it be mitigated by elements of the Act. This analysis will illuminate the constitutionality of the ratio between the cost and the benefit.

Personal Act

35.It is undisputed that even though the Act does not explicitly mention Eitanit, it is personal legislation as it effectively applies specifically to Eitanit.

In a broad sense, one of the basic traits of a statute, that in principle distinguishes it from other arbitrary norms, is its general application. This trait usually manifests in application over a non-specific group of subjects, or in that the statue mandates, prohibits or authorizes constant or organized conduct (aspects discussed by H. L. A. Hart, The Concept of Law (1961); see also Chaim Ganz, On The Generality of Legal Norms, Iyunei Mishpat (17) 579, 579-85 (1992)). This distinction constitutes one of the differences between a law that addresses the public at large and a judicial decision that addresses a single individual. Therefore, arguably, though this is a statute enacted through the proper legislative process, substantively, it is so flawed that it infringes Eitanit’s right to property.

I respond to this with the justification for Act targeting only Eitanit. It is not a question of numbers, that is, how many are subjected to the Act, and the fewer the number, the more personal the statute. Rather, we must ask whether there is good reason for applying a statute only to a limited group. The examination must be done carefully when few are concerned, let alone when only one factory is.

What is the context around section 74? It appears there is no arbitrariness, whim, or specific persecution. The legislature prioritized a project for cleaning the Western Galilee. The section was designed to respond to a unique situation – extensive accumulations of asbestos waste, in a defined geographical area, that was created systematically by one dominant entity. Eitanit presented no arguments to the effect that this is not exclusive to the Western Galilee. It should also be noted that Eitanit enjoyed its status as a lone and dominant manufacturer in the local asbestos market.

The heart of the matter is that Eitanit’s special position is not born of legislation but of reality. Presumably, and as reflected in comparative foreign legislation, in a more sizable country, the market would include more than one player. And yet, the Israeli Act was designed to remove the waste through the shared – but not full – participation of the entity that created it and profited from it. That this is a single entity does not compromise justice or fairness. From this perspective, I do not believe that the fact that Eitanit was a single factory indicates, in constitutional terms, excessive infringement of property rights. In my opinion, these considerations mitigate the alleged harm caused by the sections lack of general application. I will also note that to the extent that Eitanit claims that the Act’s lack of general application is discriminatory, I cannot accept this argument for the reasons detailed at length above, when discussing the issue of infringement of equality.

Incidentally, the Israeli legal code already includes complete statues that are clearly personal. For instance, President Haim Weitzman Act (Retirement and Estate) 1953 sets the retirement amount that was paid to the first President’s widow. Another example is the Bank Shares Settlement Act 1993, which addressed the nationalization and privatization processes of the four big banks at the time (Leumi, HaPoalim, Discount, and Mizrahi), in light of the bank shares crisis of the 1980s. These examples support the argument that unique situations calls for unique legislation, and may even justify personal statutes.

Strict liability

36.The Petitioner points to another factor that exacerbates the infringement upon its property: the de facto strict liability standard. In other words, the legislature imposed upon Eitanit liability for polluting activity it committed in the past, though on its face these activities did not constitute breaching any duty of care at the time, and in any event no court found otherwise. Eitanit argues this aspect exacerbates the infringement upon its property rights.

It is true that on its face, strict liability raises concerns and warrants examination. In my view though, three factors mitigate, or balance out, the constitutional challenge involved in imposing strict liability.

First, the support for imposing strict liability in comparative law, which I elaborate on further below. Second, imposing strict liability in the context of removing polluters relies on weighty considerations. I mentioned justice and fairness, along with the economic rationales of deterrence and cost internalization. Another justification is the evidentiary challenges that follow from a fault-based standard, and may be avoided through a strict liability standard (see above the discussion of European and American law). Third, I believe that in this case there is a unique element that takes a little bit of the sting out of strict liability. Foreseeability is a relevant consideration when it comes to strict liability. Thus in American law, for instance, The Third Restatement of Torts explains that strict liability for abnormally dangerous activity is desirable. Activity is found to be abnormally dangerous when several cumulative conditions are met including that the activity creates a foreseeable and highly significant risk of harm, and that the activity is not one of common usage even when the actor has taken reasonable precautions (Restatement (Third) of Torts: Liability for Physical and Emotional Harm §20 (2010); see further Gilad, p. 1293-97). In light of this, foreseeability sets the limits of strict liability in one sense, and justifies the imposition itself, in another. It should be noted that the Restatement is not binding law in the United States, but it is considered to reflect the current state of the law and is commonly used in American case law. It is also true that in the United States, waste pollution is regulated in specialized legislation. However, in my opinion, the above is relevant for constitutional challenges to strict liability.

Jewish law may serve to clarify the point. The Mishna states, in the context of torts, that “one will always err, whether by mistake or on purpose, whether awake or asleep” (Babylonian Talmud, Bava Kamma 26a). This is a type of strict liability. Maimonides qualifies the scope of liability:

“When do we say that the person asleep must pay? When two who slept side by side, and one of them rolled over and injured the other or ripped his clothing. But if one was asleep and another joined him and lay by his side – the person coming last is the wrongdoer, and if the person asleep caused the injury, the latter would be absolved. And likewise if a pot were placed next to the sleeping person and the latter broke it, he would be absolved, as the person who placed the pot is the negligent wrongdoer” (Mishneh Torah, Book of Torts, Hilchot Chovel U’Mazzik 1, 11.)

This teaches us that if, for example, a person sleeps in another’s home by a lamp and during their sleep they strike and break it, they must break it. However, if after a person has fallen asleep, someone places the lamp by their side, and during the night the sleeping person breaks it, they are not liable for the damage. The relevance to our matter is that even with a strict liability standard, putting an object in play without the knowledge of the injuring party, may absolve them from responsibility. This approach is reminiscent of the innocent owner defense: under the CERCLA, a landowner is not liable if at the time they purchased the land they “did not know, and had no reason to know, that they had any hazardous substance” (42 U.S.C §9601(35)(A)(i)).

In our case, the material shows that Eitanit’s activity with the waste was not conducted without any foreseeability or knowledge about the harms of asbestos. I have discussed this, when examining the knowledge gaps between Eitanit and the end users. Professor Shilling’s report from 1969 detailed the health risks caused by exposure to asbestos dust, including asbestositis and cancer. An article from 1970, authored in collaboration with representatives from Eitanti’s factory, states that there is “clear awareness of health risks caused by asbestos, and the prevalence of asbestositis cases on one hand, and of cancer on the other.” A letter from 1976 by Mr. Yekutiel Federman, one of Eitanit’s controlling shareholders, addresses the scientific research of the time that discussed asbestos health risks. Additionally, Eitanit, as an employer of asbestos workers, was subject to different labor laws that acknowledged the risks caused by asbestos: defining asbestositis as a vocational disease, prohibitions against employing teens and women in asbestos factories, the requirement for periodical medical examinations, and so on.

This means, in other words, that Eitanit had a certain extent of factual foreseeability or knowledge about asbestos health risks. It should be noted, to clear any doubts, that I am not dealing here with the necessary bar to meet the burden of proof for tort, criminal or other liability. This is not the topic of discussion, nor is it the standard. We are concerned with constitutional review. The issue at hand is what the scope of harm Eitanit has been caused is, and particularly – what weight should be attributed to imposing strict liability. In this view, the indicators I have listed should not be ignored, as they demonstrate Eitanit’s foreseeability or knowledge – even some – and all to the extent relevant for the matter at hand.

As a court comes to examine whether there is constitutionality of the infringement caused by imposing financial obligations on Eitanit, I believe that even partial knowledge lessens the infringement of her property rights. Put differently, even in the absence of liability or in the existence of strict liability, the link between the liable party and the conduct still warrants scrutiny. Put differently still: had section 74 imposed liability on a different company that did not manufacture asbestos in the relevant time period, or did so but not in the Western Galilee, the concerns around section 74 would significantly multiply. And again recall that section 74 does not impose on Eitanit tort or criminal responsibility. The statute does not convict, taint, or even attribute liability to Eitanit. And the means chosen is not a fine or compensation. It is designed to remove asbestos waste from the Western Galilee. Of course, this does not mean that the legislature may impose liability arbitrarily and as it sees fit. Therefore section 74 must be tested according to the limitations clause. We believe, as explained above, that there is a link between Eitanit and the waste that justifies the strict liability standard set in the section.

To summarize, though strict liability poses difficulties, considering the circumstances as a whole, the existence of similar standards regarding removal of dangerous buried waste in many other countries, the justification of “the polluter must pay”, the element of Eitanit’s knowledge or foreseeability about the specific harms and risks, and the type of financial obligation that is not a fine or compensation but the cost of cleaning the area in order to halt the development of serious harms to the residents and the environment, it seems that the benefits outweighs the infringement of the right.

Retroactive Legislation

37.A separate issue arises as to the temporal application of the Act. Eitanit claims that this is retroactive legislation, and therefore increases the infringement of its property rights. By this logic a retroactive statute comes into effect after conduct was complete, but changes the rules of the game for the future. The State, though, believes that the statute applies actively, and thus Eitanit’s claim is mitigated. That State’s position is that retroactive legislation cannot be precluded in every scenario. Who is correct about this? The issue of temporal application is complex. Therefore, first we generally present the relevant terms. Then we analyze the issue in the context for section 74, including the extent of harm to Eitanit.

Retroactive legislation changes for the past the legal status of activity that occurred before the legislation came into effect. Retrospective legislation changes for the future the legal consequences of activity that occurred before the legislation came into effect. Prospective legislation changes for the future the legal statues of activity that will occur after the legislation comes into effect.

To illustrate the differences, consider the following hypothetical: Reuben smokes a cigarette in a public space on January 1, 2012. At the time this was not prohibited. On February 1, 2012, a statute was enacted that imposes a steep fine on smoking in public places. If the new statute applies only on whoever smokes in public places from February 2, 2012 on, this is a prospective statute. If however, the statute stipulates that it came into effect on January 1, 2012, it is a retroactive statue. It alters the legal status of Reuben’s smoking, and subjects him to a fine. However, the statute is retrospective if it stipulates that anyone who smokes between January 1, 2012 and the day the statute was enacted did not commit any offence, but is required to participate in a class offered by the Ministry of Health about the harms of second-hand smoking. The statute did not alter for the past the legal status of Reuben’s smoking – which is not an offense – but did change for the future the consequences of his action. In this case, the unique status of a retrospective statute is obvious: the statute clarifies that Reuben did not commit an offense and the consequences he must face are not a fine or penalty, which is inconsistent with retroactive legislation. Reuben would still have to bear certain consequences for his past conduct, which is inconsistent with prospective legislation. It should be noted that this distinction, between retrospective application and retroactive application, is not acceptable by all, but has been established in the jurisprudence of this Court and in several other legal systems, such as Canada (for more on these definitions, see CA 1613/19 Arviv v. The State of Israel, IsrSC 46(2), 765 (1992); Aharon Barak Interpretation in Law, vol 2 – Legislative Interpretation, 609-45 (1994); Yoram Margaliot, Discrimination in Regulating Financial Savings and its Proposed Solution, Mishpatim 31, 529, 552-56 (2001); Yaniv Rosnai, Retroactivity: More Than Just ‘A Matter of Time’!, Law and Business 9 395 (2008); Daphne Barak-Erez Administrative Law, vol 1, 351-52 (2009)).

Another categorization that may be relevant for our purposes is active legislation: a piece of legislation that changes for the future the legal consequences of a situation that already existed the day the statute came into effect. Obviously, active legislation is closely linked to retrospective legislation. The difference between the two is that active legislation applies to situations that exist in the present, whereas retrospective legislation applies to activity that has already concluded in the past. For the hypothetical above, assume that the new statute would believe the impact of smoking in public places to leave residue for two months, and impose obligations accordingly – this is active legislation. It is another way to justify obligating whoever had smoked in a public place a month prior to the statute’s effect to participate in the course, as the hypothetical goes.

In his book, Professor Barak presents another example to illustrate the difference between retrospective application and active application. The difference depends on the purposive interpretation of the relevant statute:

“Take a new statue that stipulates that anyone convicted of an offense cannot serve as a Knesset Member. Would the term ‘anyone convicted of an offense’ point to an activity or a situation? Would applying the statute on anyone who was convicted of an offense before the law came into effect constitute retrospective application?... If the statutory purpose is to set an additional sanction – beyond the criminal sanction – for anyone convicted, then it addresses the activity that led to the conviction in the past. Applying the new law to such activity constitutes retrospective application of the statute. However, if the statutory purpose is to ensure public trust in elected officials and government institutions, then it addresses the situation of ‘convicted’. Applying the new statute on a situation that existed before the statute came into effect and continues to exist in the present does not constitute its retrospective application” (Aharon Barak Interpretation in Law, vol 2 – Legislative Interpretation, 628 (1994).

38.Equipped with these tools, where does the case before us fall? Section 74 of the Act requires Eitanit to shoulder the costs of removing waste it buried in the ground or passed on to the end users. On one hand, this is not retroactive application: the section does not change the past, and does not define Eitanit’s past conduct as an offense or as conduct that creates liability in torts. On the other hand, this is not prospective application, as we are concerned with removing existing waste and not waste that will accumulate in the future. The question is therefore whether this is active or retrospective application. On one had, arguably, this is active application: the Act addressed a current situation – waste that threatens public health. This is the State’s position. Alternatively, it can be argued that this is retrospective application: the Act changes the legal consequence of the burial and giving away that Eitanit did in the past, and imposes a new sanction on Eitanit. This is, effectively, Eitanit’s position.

The dispute between the parties is not merely theoretical, and the categorization of section 74’s temporal application holds constitutional significance, because the four main categories of temporal application – prospective, retrospective, active, and retroactive – may be organized along a “spectrum of legitimacy”. This spectrum reflects how we treat a piece of legislation. The premise for the “spectrum of legitimacy” is as such: the more the statute sends its tentacles significantly toward the past – so do more concerns come up about the statute’s legitimacy. The intuition behind this has many rationales: the rules of the game must be clearer from the outset, for reasons of justice and fairness, and the legislature should not be permitted to change them retroactively. Additionally, retroactive changing of rules compromises public trust in the legislature, limits the statute’s ability to channel future behavior, and undermines stability and certainty. It should be emphasized that a statute should not automatically struck down only for its location on the spectrum. Yet the justification for a statute’s temporal application must be more persuasive (this is not so for criminal legislation, see section 3 of the Penal Law 1977; a similar state exists in Canada: Canadian Charter of Rights and Freedoms §11(g), in India: Constitution of India, §20(1), in South Africa: Constitution of South Africa, Chapter 2 – Bill of Rights, §35(3)(1), and in Norway: Kongeriket Norges Grunnlov, §97).

On one end of the “spectrum of legitimacy” we find prospective application. This is more acceptable because it has no impact on past actions or past situations. On the other end we find retroactive application. This application is the type most difficult to swallow because it pulls the rug from underneath activity that has already been concluded and changes its legal meaning. Active application is situated between retrospective application and prospective application, because it applies to situations that are rooted in the past but that continue into the present. Therefore, in some sense, it is more acceptable and reasonable than retrospective application, which entirely addresses actions that have ended in the past. Thus the relative importance of the issue before us, about the categorization of section 74 – retrospective or active?

I have given much thought to this question. It is true that the Act applies to an existing situation. We are concerned with removing waste that is already buried in the ground, or is used to cover it in order to create different types of surfaces (roads, pavement, etc.). In this sense, the law applies actively. Yet I believe that categorizing section 74 under active application misses the point. Recall that this is not a case where only several of the factual elements have occurred in the past. Here, all the factual elements have occurred in the past: the waste has already been buried or placed as surfaces. In such a case, I doubt whether active application in the traditional sense is appropriate (compare: CA 6066/97 The City of Tel Aviv-Yaffo v. Even Or, IsrSC 54(3) 749, 755 (2000)). Moreover, section 74 does not address the future at all. Consider, for comparison, the example by Professor Barak that I presented above, about the new law that would stipulate that anyone convicted of a crime would be excluded from serving as a Member of Knesset. Such a hypothetical statute is partly concerned with the past (people who have already been convicted), and partly concerned with the future (people who would be convicted in the future). However, section 74 is not future facing at all. It addresses asbestos waste that Eitanit buried in the distant and not so distant past. The section does not address, and neither does it purport to do so, the burial of asbestos waste going forward. This is the concern of other sections of the Act, but not section 74. It is possible, then, that we are faced with a new category – narrow active application. Going back to the “spectrum of legitimacy”, I believe section 74 and the category of narrow active application are closer to the legitimacy position of retrospective application than to that of active application. Either way, the probability that section 74 is not an obviously retroactive statute, weakens Eitanit’s claim regarding the extent of the infringement of its property rights.

Still, without deciding the theoretical question of the Act’s categorization, we must keep in mind that even were this a strictly retroactive statute – and that is certainly not the case here – it should not mean that statute must be automatically struck down. We would still need to examine the entirety of arguments, factors, and considerations regarding the statute, in light of the limitations clause, including the statutory purpose, its benefits and its infringements of protected rights (compare: HCJ 1149/95, Arko Electric Industries Ltd. v. The Mayor of the City of Rishon L’Tzion, IsrSC 54(5) 547, para 10 of Justice Strasberg-Cohen’s opinion (2000); HCJ 4562/92, Sandberg v. The Broadcast Authority, IsrSC 50(2) 793, para 33 (1996)). In other words, the analysis I have conducted so far regarding temporal application is yet another consideration in the cost-benefit analysis. Indeed, another consideration but not a decisive one.

In my view, balancing benefit against the infringement of rights, there are three considerations that support the former and tip the scale against the harm caused by the statute’s retroactive application. Again, I do not believe this is per se retroactive application, but for purposes of convenience and brevity I will so term it. Of course this is not merely a matter of convenience: section 74 and its unique formulation, reeks of retroactivity, even if it should not be categorized as such.

As for the first consideration, my position above regarding the element of foreseeability characterizes Eitanit’s conduct to a certain extent. This has implications not just for issue of strict liability, but also for that of retroactivity. United States courts, as explained, interpreted CERCLA as having retroactive application, even though this is not explicit in its language, and though American law has a rebuttable presumption against retroactive application. One reason for this interpretation was linked to the foreseeability element: “While the generator defendants profited from inexpensive wasted disposal method that may have been technically ‘legal’ prior to CERCLA’s enactment… it was certainly foreseeable at the time that improper disposal could cause enormous damage to the environment.” (U.S. v. Monsanto Co., 858 F. 2d 160, 174 (4^th Cir. 1988))

Put differently, while it is true that waste removal activity was formalistically permitted at the time, it was still possible even then to expect that such activity would cause grave harm to the health of residents and to the environment. In other words, foreseeability or awareness of the harm is some justification for imposing “retroactive” liability. We see a similar line of thinking in Holland, as I explained above. The Dutch Supreme Court ruled that a law from 1982 applies retroactively from January 1, 1975 onward. This date was chosen because starting then every polluter should have been aware that it was likely to be liable for polluting. Therefore, foreseeability or expectation of harm – not in the criminal or civil sense, but for the purposes of constitutional review – may justify retroactive application.

This is coupled with a second consideration: the extreme harm to the public. This risk is not reduced over time, and it must be addressed. Doing so increases the social benefit that comes out of section 74, even if it holds quasi-retroactive elements. Ignoring the risk caused by asbestos amounts to exposing citizens to a ticking time bomb. No wonder the legislature seeks solutions. Removing asbestos waste is an urgent priority. Failing to do so is not an option – “You shall not overlook” (Leviticus 22, 3). Regardless, the responsibility for an asbestos hazard already created will be quasi-retroactive. Therefore the question is not whether to impose retroactive liability, but whom to impose it upon (including the option of distributing costs between different parties). Of the options to impose financial obligations on the polluting corporation and imposing it on the public, fairness requires that we opt for the former. Indeed, the Israeli legislature’s solution, regulated through section 74, is designed so that at most only half of the expenses are placed on Eitanit.

Regarding the third consideration, we turn again to comparative law. Many countries – though not all of them – have recognized retroactive application. This position, as explained above, is primarily justified by fairness and necessity.

I am not ignorant to the fact that in terms of section 74 there is some link, perhaps even intermingling, of the concerns about retroactivity with the concerns about strict liability. This is understandable. As far as the infringement of Eitanit’s property right, retroactivity and strict liability walk hand in hand. The two, together and separately, raise concerns about imposing financial burdens on Eitanit for actions that were not impermissible when taken, and were not even found to constitute a breach of any duty of care. Ultimately, we must look into the details of section 74. This examination reveals that, on one hand, there is no finding of fault, but on the other hand, there are policy reasons, as mentioned, that warrant the conclusion that the infringement is outweighed by the benefits.

39.For the purposes of the third sub-test, the narrow proportionality test, three of Eitanit’s arguments were emphasized for the difficulties they create: personal legislation, strict liability, and retroactive application. Having analyzed each of these arguments independently, it appears the extent of the harm is not as great as initially thought. The additional conclusion is that Eitanit failed to demonstrate that the infringement upon its property rights surpasses section 74’s extensive benefit to the public.

Remarks Before Summarizing

40.Before I finish applying the limitations clause to this case, I should emphasize two important points. These were weaved throughout the constitutional analysis, but it would be appropriate to bring them to the fore of the discussion in order to acknowledge their significance.

The first point is the comparative law one. We are concerned with a legal area completely new to Israeli law. The issues raised here, were raised in similar dress in many other countries. Asbestos, as a member in the group of dangerous and polluting materials, is a problem that crosses borders. When a court subjects a case like this to constitutional review, I believe there is significance to the fact that many countries have walked a similar path to that of section 74. Caution is warranted when looking abroad as the Israeli system is independent. 65 years from the country’s founding, Israeli law can be seen as a dynamic creation with a life of its own. Israeli law defines the question, and supplies the answer. However, beyond the fact that this is an issue common to Israel and to other countries, I have not seen the matter to be unique – certainly not clearly or obviously – to Israel and distinct from that in other countries around the world. This is not to say that the State has absolved itself by demonstrating that the statue legislated here is consistent with international consensus. But by the same token, it cannot be said that comparative law is an irrelevant consideration, particularly when it reveals that other countries’ constitutional jurisprudence regarding similar statutes enriches our constitutional discussion. The project of comparison supports the state’s argument that section 74 is constitutional. This is a factor that should be taken into account here (and see CA 1326/07 Hammer v. Amit, para. 34 of Deputy President Rivlin’s opinion (May 28, 2012), re wrongful birth). However, this is certainly no substitution for independent constitutional review under section 8 of Basic Law: Human Dignity and Liberty.

Substantively, the above review of the legal state in Western countries reveals one clear point: that a standard of strict liability is common and acceptable in the context of removing dangerous and polluting materials. Thus in the United States, where the courts found the legislative intent behind CERCLA was to establish a strict liability standard. The European Union’s Directive, the ELD, recommends imposing strict liability on harm caused by dangerous activities listed in the third annexure. This type of liability was de facto imposed in Sweden, France, Holland, Germany (to some extent), Finland and the United Kingdom. This is also the case in many other countries that are not members of the European Union, such as Switzerland, Canada and South Africa. Retroactivity is less common, compared to strict liability, but it exists, too. In the United States CERCLA’s retroactivity passed judicial review. So did the statutes of British Columbia. Some European states adopted retroactivity as well, including Spain, the United Kingdom, and Holland (to some extent).

We have seen the commonalities. We have noted that they are material. To the relevance of this, I move onto the second point. We are concerned with constitutional review, rather than administrative. The test is not reasonableness, but the limitations clause in section 8 of Basic Law: Human Dignity and Liberty. The range of possibilities is broader, though in order to remain within this range a statute must meet the specific conditions the legislature set in the limitations clause. A court is aware of its own limits, but also of its responsibility. As noted, there is no single legislative fix for a legal problem. But in our case, it was possible to reach a statutory framework that would have passed constitutional review. Section 8 is the key. In our case, my opinion is that the State is correct that the legislature overcame all the obstacles.

Summary

41.The petition before us focused on the constitutionality of section 74 of the Asbestos Act, and of the project it launched to remove asbestos waste from the Western Galilee.

First, we must locate the rights infringed. My conclusion is that section 74, with which we are concerned, infringes Eitanit’s property rights. Indeed, the State conceded this right is infringed. Still, I do not believe that section 74 discriminates against Eitanit compared with other entities: the legislature did not obligate Eitanit to pay for final asbestos-cement products that were discarded by the end users, nor for asbestos waste that originated from other factories’ manufacturing processes. The “waste population” that is, the waste to which section 74 applies, includes only the industrial waste that came from the production processes in Eitanit’s factory.

In this context, I explained why Eitanit’s participation in removing the waste that was used for covering surfaces is justified over that of the end users. I believe there is a significant and relevant difference between Eitanit and the end users, which is based on three tests: the awareness test – Eitanit had an obvious advantage in knowledge compared to the end users. For decades Eitanit was Israel’s primary importer, manufacturer and marketer of asbestos. By virtue of this position Eitanit was familiar with the scientific research on asbestos risks and was also subject to the different statutory obligations that reflected these health risks. Under the control test, Eitanit is the manufacturer while the end users were the consumers or customers. As a manufacturer, Eitanit controlled the production of waste and its distribution, and in any event there is much logic in placing the financial burden on it. Under the profit test, there is clear justification for requiring the corporation that produces asbestos, and which more than any other entity had profited from the activity that caused the polluting hazard, to shoulder the costs of removal. All these reasons hold even more force in terms of the distinction between Eitanit and the local authorities, which do not even constitute “end users.”

Once I have concluded that Eitanit’s right to property was infringed, the issue became whether the infringement could pass muster under the limitations clause of section 8 of Basic Law: Human Dignity and Liberty. The comparative law in the background of this analysis was reviewed at length, among others because this is a novel legal issue that carries clear universal aspects and because no unique characteristics were presented for the Israeli context. Another point that should be emphasized is that we are charged with constitutional review, not administrative review. This influences the breadth of the Knesset’s discretion.

I first clarified that the infringement was made through primary legislation, that is, a statute that the Knesset passed appropriately and legally. Eitanit’s argument that this is not a “statute” for the purposes of the limitations clause because it is a personal statute is incorrect. It is a formal test that inquires mainly whether the infringement upon basic rights was made in primary legislation or according to such legislation. In this case, the answer is in the affirmative.

In the next step we explore the purpose of section 74. The sections’ primary purpose is to launch a project for the removal of asbestos from the Western Galilee. This is encompassed in the statute’s broader purpose: minimizing asbestos hazards in Israel. There is no doubt that this is an important and worthy purpose, befitting the values of the State of Israel. Indeed, it appears even Eitanit does not dispute this. I tend to think that this is the sole purpose of the statute. However, the State articulates another purpose: realizing the principle of “the polluter must pay.” I, myself, believe that this principle justifies the funding mechanism selected in the Act, rather than its purpose. Yet for the sake of a comprehensive analysis I assumed that “the polluter must pay” was a secondary purpose of the Act. Here, too, I find this to be an appropriate and befitting purpose: “the polluter must pay” principle relies on important and worthy rationales – efficiency considerations, cost internalization, justice and fairness – and it is even reflected in Jewish law and an array of recent pieces of legislation in Israel.

Is the means selected in section 74 proportional? I first examined the issue of the rational connection, in terms of each of the two purposes. As for the primary purpose, the link between the means and the end are obvious: the project directly leads to achieving the end of cleaning asbestos waste from the Western Galilee. As for the secondary purpose – “the polluter must pay” – here, again, I find a fit between the means and the end: placing financial obligations on Eitanit, which profited from burying the waste or passing it on to the end users, achieves the end of “the polluter must pay.” Even the legislature’s choice to impose a kind of retroactive and strict liability advances the principle of “the polluter must pay,” primarily from the perspective of justice and fairness.

The next step is the least restrictive means test. Here, the main alternative that Eitanit proposed is the self-performance, that is, that Eitanit or a contractor it would hire would remove the waste independently. However this option was already discussed by Eitanit and the State for a long period of time and was ultimately rejected. Under such circumstances I was not persuaded that the self-performance alternative would achieve the purpose behind section 74 – cleaning the Western Galilee from asbestos waste. Additionally, from a positive perspective, the mechanism the legislature opted for incorporates checks and balances that limit the harm to Eitanit. Eitanit would not be required to fund more than half of the removal project’s estimated costs, and in any event no more than NIS 150m. The funding mechanism insures that this is not a fine or compensation, but rather a fund dedicated to removing the waste. The removal project is limited to a radius of 15KM around the factory, and in any case there is a mechanism for checking and monitoring the length of the project, which allows Eitanit to challenge any requirement to pay for specific waste piles.

The final step is the narrow proportionality test. In this context I emphasized three points at the heart of Eitanit’s claims. On the generality issue, it is undisputed that section 74 specifically targets Eitanit, and Eitanit alone (aside from the State and the local authorities.) Only that the focus on Eitanit is not a whim that took over the legislature, but an outcome of the reality that was created by Eitanit itself. The section was designed to address a unique situation: a large amount of waste, in a defined geographical area, created systematically by one dominant entity – Eitanit.

On the issue of strict liability, it is true that on its face this is a harsh standard that raises questions and concerns. However, three considerations alleviate these difficulties. First, there are weighty justifications for strict liability, primarily justice and fairness, deterrence and cost internalization, as well as the evidentiary challenges of a fault-based standard. Second, there is support for strict liability in many European countries, in the United States, and in other countries. Third, a certain extent of factual expectation or awareness by Eitanit regarding the risks of asbestos (of course, not in the tort or criminal sense.)

Finally, in the issue of the Act’s temporal application, my conclusion is that the Act carries a narrow active application. Though it does apply to an existing state of affairs, there is no active application in the regular sense. All the factual elements have materialized completely in the past and section 74 does not at all address the future. Regardless, even if this was a completely retroactive statute – this is not a determinative factor, but merely another consideration in the constitutional fabric. At this point I discussed three mitigating elements: first, the expectation or knowledge element regarding the risk. Second, the scope of the risk; the finding that failure to treat the asbestos waste leaves many citizens exposed to a ticking time bomb in terms of their health. We cannot leave things as they are. In weighing imposing costs on Eitanit against imposing costs on the public, Eitanit’s connection to the waste as its producer puts the thumb on the scale, or at least allows for it. And third, the support for imposing retroactive liability in the United States and in other countries (such as Spain and Britain.)

We cannot ignore the infringement on Eitanit’s rights, or that the legislature created a new regime. However, it is my view that the infringement upon Eitanit’s constitutional rights – as an outcome of section 74 – passes the tests of the limitations clause.

Final Thoughts

42.Such is the way of the law. It is challenged by an ever-changing reality that requires the legislature to find solutions for problems that in one way or another threaten society. To achieve this purpose, occasionally there is need to design statutes that rely on new perspectives on legal principles. This was also the case in the past, and we shall present several examples of this.

The common law found it difficult to find legal justification to impose upon a stranger the duty to assist another person in distress. Still, for certain circumstances where official rescue services are far removed, the law has created obligations to rescue, for example the duty to save lives at sea, imposed on ships passing by (Scaramanga v. Stamp, 5 C.P.D. 295, 304-305 (1880); The Beaver, 3 Chr. Rob. 292 (1801); Sophie Cacciaguidi-Fahy, The Law of the Sea and Human Rights, 1 Panoptica Vitoria 1, 4-5 (2007)). Another example is the possibility of filing class action suits. Given the concern that absent a primary injured party who suffered damages in substantial amounts injuring parties would continue their harmful behavior, the law has developed this new procedural tool and recognized the possibility to file suit on behalf of a large group of injured parties. The novelty is both in the legal possibility to create a group of plaintiffs, who in large part did not express any position on the matter, and in the economical consequences even for a strong defendant (see the Class Action Act, 2006). Another example is the development of corporate law, on different levels. First, the recognition of a corporation’s independent status as a separate legal entity and the elimination of stock holders’ personal liability was a legal novelty and was a significant incentive to use the legal tool of incorporation. Later in legal history the pendulum swung back, to some extent. The legislature began imposing various obligations on the organs and office holders of corporations, such as duties of care and trust, based on understanding the web of interests that dictate their actions (Irit Haviv-Segal, Corporate Law, chapter 10 (2007); P. M. Vasudev, Corporate Law and Its Efficiency: A Review of History, 50 American Journal of Legal History, 237 (2010)).

As we can see, the law has gone through an evolution. To fit the it to reality, laws were passed that on their face strayed from the legal norms that were familiar and entrenched up to that point. It seems that our case, too, as part of Israel’s new environmental legislation, joins this list. The great potential for harm that asbestos waste causes and the complexity of the issue demand a solution that does not move on the currently acceptable axis of tort liability. As a rule, finding solutions to intricate problems is not necessarily a legal compromise in the sense of giving in. This is how the law advances. Hand in hand, in the constitutional era of recognizing rights, it is the role of the Court to make sure that the legislature’s selected solution meets the constitutional standards of the limitations clause. The mere existence of a problem does not open the gate for any solution. Judicial work is subtle, but necessary. In a constitutional regime, one would hope that the legislature would exercise better care. It would be aware that Basic Laws look over its shoulder “watches through the windows, peeking through the cracks (Song of Songs 2, 9.) It would strive to withstand constitutional review. This hope does not always materialize. In our case, section 74 includes elements that reflect the legislature’s attempt to meet constitutional standards. This attempt has been successful.

43.Ultimately, I would propose to my colleagues to reject the petition, and under the circumstances and the merits to require Eitanit to pay costs and attorneys’ fees as follows: for respondents 1, 3 and 4 together a sum of NIC 100,000; to respondent 5 and respondents 6-7, a sum of NIS 70,000 for the entire group; and for respondent 2 a sum of NIS 25,000.

 

___________________

Justice

 

 

 

President A. Grunis

I concur.

 

 

___________________

President

 

 

 

 

 

Justice T. Zylbertal

I concur.

 

 

___________________

Justice

 

 

Decided according to the judgment of Justice N. Hendel.

 

Handed down today, April 2, 2013.

 

 

 

 

 

 

In the Supreme Court

Sitting As a Court of Civil Appeals

CA 5365/11

CA 5489/11

 

Before:			His Honor, Justice E. Rubinstein His Honor, Justice Z. Zylbertal Her Honor, Justice D. Barak-Erez
The Appellant in CA 5365/11 and the Ninth Respondent in CA 5489/11:			ACUM – The Association of Composers
v.
The Appellant in CA 5489/11 and the Ninth Respondent in CA 5365/11:			EMI Music Publishing Ltd
v.
The Respondents:	1. The Director-General of the Antitrust Authority
	2. The Association of Restaurants in Israel
	3. Partner Communications Company
	4. The Association of Function Hall & Garden Owners
	5. Golden Channels
	6. Matav Cable Communication Systems
	7. Tevel Israel International Communications
	8. Anana Ltd
	9. EMI Music Publishing Ltd

 

Appeals against the judgment of the Antitrust Tribunal in Jerusalem on June 2, 2011 in AC 513/04 by Her Honor Judge N. Ben-Or

 

Date of Session:	Nisan 3, 5773 (March 14, 2013)
On behalf of the Appellant in CA 5365/11 and the Ninth Respondent in CA 5489/11:	Adv. Uri Sorek, Adv. Assaf Neuman
On behalf of the Appellant in CA 5489/11 and the Ninth Respondent in CA 5365/11:	Adv. Michelle Keynes

 

 

On behalf of the First Respondent:	Adv. Uri Schwartz, Adv. Yael Sheinin, Adv. Elad Mekdasi
On behalf of the Third Respondent:	Adv. Eyal Sagi, Adv. Amir Vang
On behalf of the Fourth to Seventh Respondents:	Exempt from appearance and representation
On behalf of the Eighth Respondent:	Adv. Ronit Amir-Yaniv, Adv. Ido Hitman

 

JUDGMENT

 

Justice D. Barak-Erez

 

1.         Which principles should guide the activity of ACUM with regard to the management of copyright in musical works in Israel? This question has been presented to us in full force against the background of the finding by the Director-General of the Antitrust Authority that ACUM’s activity creates a cartel, in order to review the conditions prescribed for the approval of the cartel in a way that will balance the rights of authors with the general interest of works being used in public.

 

Background and Previous Proceedings

 

2.         “The Association of Composers, Authors and Publishers,” known as ACUM, is a corporation that operates in order to manage the copyright of its members – lyricists, composers, arrangers, translators, and others – in Israel. ACUM members transfer their rights in their works to it, whilst ACUM acts on their behalf in order to license the use of those works in consideration for royalties that it collects for its members. Ordinarily, the licenses that ACUM grants are sweeping licenses ("blanket licenses") that permit licensees to make use of the whole repertoire of works managed by ACUM (mainly by making them accessible to the public in various ways). In addition, ACUM is bound by agreements with foreign copyright collective management entities (hereinafter "affiliates"), by virtue of which it administers in Israel the rights that are managed by the affiliates abroad.

 

3.         On April 30, 2004 the Director-General of the Antitrust Authority (hereinafter "the Director-General") published a ruling pursuant to section 34(a)(1) of the Antitrust Law, 5748-1988 (hereinafter "the Antitrust Law" or "the Law") according to which ACUM’s activity involves the creation of cartels (both between ACUM members and between ACUM and the affiliates) and a declaration under section 26(a) of the Law that ACUM’s activity as a cartel creates a monopoly in the market of managing copyright in musical works (or more precisely, with regard to management of  broadcasting, public performance, copying, recording, and synchronization rights in those works). The decision was made by the then Director-General, Mr. Dror Strom. However, it also reflects the position of the officers who have succeeded him, Ms. Ronit Kan and currently, Prof. David Gilo, as detailed below. Reference to the position of the Antitrust Authority will henceforth be made without specifically referring to those successors, using the general title – the Director-General.

 

4.         At that stage, ACUM instigated legal proceedings before the Antitrust Tribunal (hereinafter "the Tribunal") – an appeal against the determination of the Director-General that its activity involves cartels (AT 512/04) or, alternatively, an application for the approval of a cartel in accordance with sections 7 and 9 of the Antitrust Law, on the grounds that the cartel's approval is necessary in the public interest (AT 513/04). Both proceedings were heard together. Subsequently, to ACUM’s request, the appeal it filed was withdrawn, leaving only its application for approval of the cartel. The Director-General did not oppose the cartel's approval considering the public importance involved in ACUM's activity, as explained below, but the Tribunal was moved to set conditions to the approval so as to protect not only the public interest but also the individual rights of authors.

 

5.         To make its continued activity possible until completion of the litigation, ACUM filed a request for a provisional permit for operation of the cartel. The Tribunal granted the request and on December 28, 2004 it granted a provisional permit for ACUM’s activity subject to certain conditions (hereinafter "the Provisional Permit"). As detailed below, those conditions regulated, inter alia, situations in which authors could exclude rights in certain works from ACUM’s management so that those authors, rather than ACUM, would themselves deal with granting licenses to exercise those rights (hereinafter "the Exclusion Mechanism"). Over the years the Provisional Permit was extended from time to time based on of the Director-General’s recommendation, various amendments and modifications introduced to its terms. The last of those provisional permits (before the Tribunal's judgment), granted on February 24, 2009, introduced several significant changes, including making the Exclusion Mechanism "tougher," as detailed below.

 

6.         In addition to the position of the Director-General, oppositions to the cartel's approval were filed to the Tribunal by several other entities, including the Association of Function Hall & Garden Owners, Partner Communications Company (hereinafter "Partner"), the Association of Restaurants in Israel, and several cable companies – Golden Channels, Matav and Tevel (hereinafter "the cable companies") (whose activity has since been consolidated).

 

7.         At a later stage, an application to join the proceedings was made by two publishers that represent authors, the publishers themselves being members of ACUM – Anana Ltd (hereinafter "Anana") and EMI Music Publishing (Israel) Ltd (hereinafter "EMI Israel"). Those applications, like the time when they were made, were explained by the changes that had been made to the Provisional Permit’s conditions on February 24, 2009 as regards the Exclusion Mechanism. On December 1, 2009, the Tribunal partially allowed the applicants to join the proceedings in the sense that it permitted each of the two applicants to file a brief document with reference to the conditions that were acceptable to them and to make summations without extending the existing factual basis of the discussion.

 

8.         In its decision of January 25, 2009, the Tribunal stated that by consent of the parties it would rule based on the parties’ summations and supplemental oral arguments, without hearing evidence. The decision further stated that all of the parties agreed to ACUM's approval as a cartel, and took issue merely with regard to the terms of that approval. Consequently, the conditions of the Provisional Permit of February 24, 2009 (hereinafter "the Provisional Conditions") would serve as point of reference for the parties' positions. Accordingly, each of the parties filed its reservations regarding the Provisional Conditions in such manner that enabled the Tribunal to decide which of the conditions would be adopted as is within the permanent conditions, and which would be modified.

 

9.         On June 2, 2011 the Tribunal approved ACUM’s activity as a cartel, subject to a series of conditions (hereinafter "the Permanent Conditions"), which would remain in force for five years from the date of their approval. The Tribunal stated that the basic premise for reviewing the parties' arguments with regard to the conditions was that the anticipated benefit from the cartel substantially exceeded the damage likely to be caused by it, as required by section 10 of the Antitrust Law. In this context, it was explained that ACUM’s activity benefited not only its members – copyright owners (hereinafter "the authors") but also the general public who uses the works it manages (hereinafter "the users"): on the one hand, the sweeping licenses permit the users to make use of the whole repertoire of works that ACUM holds, thereby sparing the public from having to locate the owners of various rights and to negotiate individually with each of them; on the other hand, the sweeping licenses also benefit the authors since they streamline (and, to a great extent, enable) collection of royalties and enforcement of their rights.

 

10.       Since all parties agreed on principle to the approval of the cartel, the Tribunal hearing focused on the nature of the conditions to which the approval should be subject in order to dispel concern as to its abuse with regard to authors or users. The point of departure for the hearing was, as aforesaid, the Provisional Conditions, some of which were agreed upon by all parties, whilst others were in dispute. The disputes on which the appeal before us focuses pertain to the conditions prescribing the extent of the duty owed by ACUM to appoint external directors and the extent of ACUM members’ ability to exclude their rights from its management, as detailed below.

 

11.       Other controversies, including those concerning the definition of acts that would be construed as an abuse of ACUM's position and the way in which ACUM should act in taking legal action against users, were ultimately not considered by us since only few of the arguments concerning them were raised within the written appeal, while the arguments before us did not in fact concentrate on them.

 

12.       The appointment of external directors – the position of the Director-General was that a condition should be added to the Permanent Conditions to the effect that ACUM should appoint external directors in a proportion of no less than one third of the total members of its board and those directors would be responsible for the internal plan to enforce antitrust law that ACUM is obliged to implement (in accordance with section 10 of the Provisional Conditions). ACUM objected to this requirement, on the grounds, inter alia, that it is not a public company where the appointment of external directors is necessary in order to protect minority rights, and in any event ACUM's articles of association ensure due representation for each category of its members, and even guarantee numerical balance between the categories.

 

13.       The Tribunal accepted the Director-General's position on this matter, noting that a corporation for the collective management of copyright naturally raises concern as to the abuse of power against the authors themselves. Appointing a substantial number of external directors and entrusting them with the internal enforcement plan, it was held, would help deal with that concern, especially considering the fact that the corporation's members are dispersed and lack management expertise. The Tribunal also attributed importance to the fact that from ACUM's position in the proceedings it appeared that ACUM itself acknowledged the need to appoint external directors and was willing to do so even before the Tribunal’s judgment in order to reinforce the "managerial, professional, economic character of ACUM's board of directors".

 

14.       The extent of ACUM members’ ability to exclude rights from ACUM’s management – the Provisional Permit that ACUM had originally obtained (in 2004) included, in section 2.3 of the Provisional Conditions, a mechanism permitting a member to give notice "at any time, of his desire to assume all or any of the copyright with regard to any of his works, with regard to all users or specific categories of users," such that the works included in the notice would cease to be part of ACUM's repertoire, and copyright ownership would revert to the notifying member (hereinafter "the broad exclusion mechanism"). Underlying this mechanism was the concept that a “liberal” option to exclude any right in a work, even specifically, would intensify competition and increase the authors' power against ACUM. Later on, based on the experience accrued from the implementation of this arrangement, the Antitrust Authority reached the conclusion that the broad exclusion mechanism was not yielding the anticipated results with regard to enhancing market competition, and in contrast was aggravating the concern for abuse of the exclusion ability. For example, it turned out, according to the Director-General, that the broad exclusion mechanism that enabled interested authors, inter alia, to exclude from ACUM's management merely the use of "new media" (such as mobile phones and the Internet) and to leave it with the power to grant sweeping licenses for broadcasting rights only in "traditional media" (like television and radio), might undermine the justification for ACUM's existence as a corporation whose purpose is to reduce the substantial transaction costs involved in individually contracting with each of the authors. Accordingly, in 2009 the exclusion mechanism in section 2.3 of the Provisional Conditions was limited in two ways: first, the Provisional Conditions provided that an exclusion notice could only be given with the consent of all joint authors in a collective work whose exclusion was sought (for example, the lyricist, the composer of the music, and the arranger); second, it was provided that partial exclusion, namely exclusion of some of the uses of the work, could only be done in accordance with four "exclusion baskets" concerning different categories of use (hereinafter "the narrow exclusion mechanism"): presentation of the work in an audio format (for example radio broadcasting); its presentation in an audio-visual format (for example in a television program); copying the work; and recording it. The narrow exclusion mechanism therefore did not permit the author to exclude the work in various formats at his discretion, as specifically chosen by him (for example, excluding the work's use only with regard to mobile phones).

 

15.       The Director-General's position, joined by ACUM, Partner, and the cable companies on this issue, was that the narrow exclusion mechanism should be included in the Permanent Conditions. In contrast, EMI Israel and Anana believed that the broad exclusion mechanism should be adopted with regard to both aspects that distinguish it from the narrow exclusion mechanism and they challenged both the requirement for unanimous consent of all authors of a joint work and the restriction of exclusion according to "exclusion baskets."

 

16.       EMI Israel pleaded that the narrow exclusion mechanism improperly infringed on the constitutional property rights of the authors it represented, both because the predefined "exclusion baskets" limit the prerogative of the right’s owner to permit or prohibit certain uses of his work, and because the vast majority of musical works managed by ACUM are jointly owned by several authors. Under these circumstances, it was argued, making the exclusion conditional upon the consent of the other owners in fact negates the ability of a given author to permit or prohibit the use of his work. EMI Israel further asserted that adopting the narrow exclusion mechanism would compromise the competition among ACUM's members in the sense that only large corporations would be able to afford managing rights outside of ACUM, while individual authors would not be able to bear the financial and logistical burden it involves.

 

17.       Anana pleaded that adopting the narrow exclusion mechanism would lead to infringement on its reliance interest, given the fact that, relying upon the wording of the broad exclusion mechanism, it had already excluded works it managed from ACUM's repertoire with regard to the use of "new media" that it would now have to restore. In addition, it made a series of arguments concerning the restrictions set forth in the narrow exclusion mechanism – a lack of distinction between authors whose contribution to a joint work was significant and authors whose contribution was negligible (who nevertheless obtain a de facto veto right to exclude the work); impairing the ability of authors to maximize their profits; as well as infringing on the moral aspect of the author’s right (in the sense that an author who wishes to preclude the use of his work for religious, image-related, or moral reasons would find it difficult to do so under the narrow exclusion regime). Anana further contended that making the exclusion conditional upon the consent of all joint authors effectively makes it a dead letter since joint authors would frustrate any attempt to reach the necessary agreements.

 

18.       The Tribunal held that the approval should be made conditional upon a narrow exclusion mechanism and in that respect it adopted the position of ACUM and the Director-General (joined by Partner and the cable companies). The Tribunal explained that such exclusion mechanism provided an appropriate answer to the necessary balance between enhancing market competition and protecting the individual author's proprietary right. The Tribunal went on to state that a corporation for the collective management of copyright is in any event not intended to enable its members to realize their rights in full. On the contrary, such arrangement is based upon a waiver of complete and total freedom with regard to the works in consideration for reducing the cost of managing and enforcing copyrights. EMI Israel and Anana, the Tribunal held, were in fact seeking to enjoy the benefits of belonging to a cartel without bearing the costs. The Tribunal further explained that copyright grants an author a monopoly that may harm the general public, a concern which is intensified when authors are incorporated in a cartel. Therefore, there is no reason to avoid subjecting the cartel's approval to conditions that restrict the individual author's proprietary right in his work.

 

19.       As aforesaid, the Tribunal ultimately approved ACUM's activity as a cartel, subject to a series of conditions, including those mentioned above. The two appeals before us – the appeal by ACUM and the appeal by EMI Israel – were filed against its said judgment – as detailed below.

 

The Appeals

                       

20.       ACUM's appeal (CA 5365/11) concerns, as aforesaid, only one aspect of the Tribunal's judgment – the condition regarding the duty to appoint external directors. Its arguments in this respect are directed both against the basic obligation to appoint external directors and against their number.

 

21.       EMI Israel’s appeal (CA 5489/11) originally revolved around several of the other conditions to which the Tribunal made the permanent permit subject, but at the hearing before us EMI Israel concentrated its arguments on the details of the condition regulating the rights exclusion mechanism. It should be noted that Anana, which did not appeal the Tribunal’s judgment, appeared at the hearing as a respondent and in that capacity it presented arguments in support of EMI Israel's basic position.

 

22.       Generally, EMI Israel believes that the narrow exclusion mechanism impairs the protection of the authors' rights and reinforces ACUM's monopoly. More specifically, EMI Israel pleads that implementing the narrow exclusion mechanism would lead to infringement on authors' proprietary rights and would impair the possibility of creating a competitive copyright market. According to EMI Israel, the protection of copyright necessitates both recognition of the power of each author to implement the exclusion mechanism with regard to a work he helped create, even without obtaining the other authors’ consent, as well as authors’ right to exclude their works outside of the "exclusion baskets" that necessitate "crude" and imprecise choices that do not express important distinctions, primarily the distinction between "old" media (like radio and television) and "new" media (such as mobile phones).

 

23.       On the other hand, the Director-General believes that both appeals should be dismissed. He supports the Tribunal’s judgment and emphasizes that the conditions it approved are required in order to protect authors and users against the monopolistic power of ACUM and in order to protect the public interest involved in the use of the works.

 

Our Ruling

 

24.       Having reviewed the parties' arguments we have reached the conclusion that both appeals should be dismissed. We are convinced that, at the moment, the Permanent Conditions, including the conditions against which the appeals have been addressed, are all necessary in order to dispel the concerns raised inherently by a cartel related to the collective management of copyright. These conditions are necessary in order to ensure that the cartel’s benefit to the public will exceed the perceived damage from it. Indeed, as detailed below, reviewing the parties' arguments has made it clear that the distinction between "new" and "old" media within the exclusion mechanism is an evolving issue, the regulation of which should be monitored. However, as noted, the approval and its conditions have been set for a period of five years, of which two have already passed (as the conditions relating to the narrow exclusion mechanism were approved by the Tribunal in June 2011). At the end of that period, it will be possible to revisit the conditions and the way they are being implemented in order to make decisions towards the future. In that sense, our ruling reflects the facts presented in the proceedings, including the experience accumulated in the Israeli market and its existing uses of copyright.

 

The Normative Framework: Between Copyright Law and Antitrust Law

 

25.       Two normative frameworks frame our discussion: copyright law – as a framework that seeks, inter alia, to balance the author's rights in his work and the public interest to enjoy the fruit of the work for the benefit of all, in order to promote culture and knowledge; and antitrust law – which recognizes, inter alia, the possibility of approving a cartel, subject to conditions aimed at protecting the public from the abuse of monopolistic power. Copyright law is currently governed by a relatively new statute – the Copyright Law, 5768-2007 (hereinafter "the Copyright Law"), which replaced the relevant British Mandate statute, while the issues concerning the activity of cartels are regulated by the Antitrust Law.

 

26.       The activity of ACUM should be evaluated and examined according to these two perspectives. As mentioned in the introduction to our judgment, ACUM was established for the collective management of copyright in musical works. From the perspective of copyright, that management should be for the benefit of authors and in the name of protecting their rights, but without neglecting the public's ability to enjoy the works; from the perspective of antitrust law, that management, which constitutes a cartel and monopoly, should be for the benefit of the public and should ensure that public access to the works is not unreasonably denied. More specifically, in order to comply with the provisions of sections 9 and 10 of the Antitrust Law with regard to the approval of a cartel, it has to be ensured that the benefit to the public from such collective management substantially exceeds the damages that it might cause to all or some of the public.

 

27.       In many ways, the controversies that have arisen before us pinpoint once again the dilemmas that underlie copyright law. Recognition of copyright is aimed at encouraging the creation and dissemination of expression but also at balancing this benefit against the costs of limiting access to protected works (cf: Guy Pesach, The Theoretical Basis for the Recognition of Copyright, 31 Mishpatim 359, 410 (2001)). In the words of Vice President (retired) S. Levin:

 

            "In Anglo-American law the basic justification for these laws is perceived as the desire to provide an incentive to the author in order to achieve maximum access to the work by the public at large. This is the heritage of Israeli copyright law" (CA 326/00 Holon Municipality v. NMC Music Ltd, PD 47(3) 658, 671 (2003)).

 

Copyright Management Corporations: ACUM as a Test Case

 

28.       The case before us should be examined not only in light of the general principles of copyright law, on the one hand, and antitrust law, on the other hand, but also in light of the experience accumulated from copyright management through corporations established for such purpose. ACUM is a local corporation that was established back in pre-state Israel (see: Michael Birnhack, Colonial Copyright: Intellectual Property in Mandate Palestine 185-186 (2012)). Nevertheless, more broadly speaking it is merely one of many examples of corporations known as "copyright collection societies" or collective management organizations" (hereinafter "collective management corporations"). Such corporations operate in many countries and thereby provide an answer to a genuine need of authors who cannot routinely manage the grant of licenses to use their works, collect royalties, and enforce copyright law on those who infringe their rights. These corporations manage the rights of many authors collectively and thereby contribute to reducing the costs of negotiating with users and reducing enforcement costs. At the same time, the mechanism of collective management also benefits the public who uses the works because it allows bringing these works to the public on a regular basis. The collective management corporation typically offers users "a blanket license" in relation to the corporation's whole repertoire, thereby saving them the need to negotiate individually with each of the authors of works included in the repertoire. Such users are for the most part broadcasting stations owners, producers, hall owners, and others, through whom the works are made accessible to the public at large (see: Ariel Katz, Monopoly and Competition in the Collective Management of Public Performing Rights, 2 Din Ve'Devarim 551 (2006); Guy Pesach, Associations for the Collective Management of Rights – Another Look at Effectiveness and Fairness, 2 Din Ve'Devarim 621 (2006) (hereinafter "Pesach"); Walter Arthur Copinger, Copinger on Copyright, pp 1790-1794 (16th ed., 2011) (hereinafter "Copinger")).

 

29.       Alongside recognizing the fact that collective management corporations are a well-known and widespread phenomenon, the concern that accompanies their activity is also acknowledged. Collective management of copyright involves a significant challenge from the perspective of antitrust law, considering the fact that it has centralized characteristics and therefore raises the concerns involved in the creation of a cartel, including the concern of acquiring and abusing monopolistic market power, either by demanding high royalties or in other ways. Against those disadvantages, we usually weigh the necessity of such activity for effectively managing copyright and it is therefore common to regard collective management corporations as "natural monopolies" (and, to a certain extent, something of a necessary evil) and to allow them to operate subject to supervisory mechanisms and regulation (see: Ariel Katz, The Potential Demise of Another Natural Monopoly: Rethinking the Collective Administration of Performing Rights, 1 J. Comp. L. & Econ. 541, 544-548, 551-553 (2005) (hereinafter "Katz"); Copinger, pp 1798-1800). It is along these lines that the activity of the two major collective management corporations in the U.S. – the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc (BMI) – is regulated by special judicial orders ("consent decrees") as part of antitrust law. These orders, whose conditions are revised from time to time, place collective management corporations under a host of constraints in order to ensure their compliance with the competition criteria set forth in antitrust law (for a discussion of the supervisory mechanisms of collective management corporations in the U.S., see: Stanley M. Besen, An Economic Analysis of Copyright Collectives, 78 Va. L. Rev. 383 (1992).) Similarly, collective management corporations that operate in Europe are under supervision, subject to the antitrust law of the European Union (see: Lucie Gaibault & Stef Van Gompe, Collective Management in the European Union, in Collective Management of Copyright and Related Rights 135 (2nd edition, Daniel Gervias ed. 2010); Copinger, pp 1801-1808).

 

The Conditions in Dispute: Public Directors and the Exclusion Mechanism

 

30.       As already mentioned, the controversy before us does not concern the basic authority for ACUM’s operation as a cartel but rather the conditions that have been prescribed for its activity, or, more precisely, two of these conditions. In that sense, the discussion is based on the accepted notion, explained above, which views collective management corporations as something of a "natural monopoly," the existence of which is essential but their activity necessitates supervision and restraint in order to protect the public from the potential negative effects of substantial market power being accumulated by a single entity. The conditions for ACUM’s operation should therefore express the balance between the proprietary right of authors and the public interest in a market free of monopolistic influences, which acquires a unique aspect with regard to the market of creative works that naturally need to be accessible to the public (albeit for a fee).

 

31.       Ultimately, the hearing in this case revolved around two matters: the requirement to appoint directors, and the scope of the rights exclusion mechanism. Both of these need to be examined from the unique point of view that combines the purposes of copyright law with those of antitrust law, paying attention to the balance that both those sets of laws seek to achieve between individual proprietary rights and economic interests, on the one hand, and the public interest, on the other hand.

 

The Appointment of Public Directors: Between the Public Interest and the Interest of the Rights Owners

 

32.       The first condition that was prescribed for the approval of the cartel was to appoint public directors who will constitute a third of the total number of board members (which in practice means appointing four such directors). As aforesaid, ACUM has objected to this condition both in principle and in practice.

 

33.       In principle, ACUM asserted that it is not a public company and therefore there is no justification to enforce on it a supervisory mechanism appropriate to public companies. In this context, it was further asserted that its board of directors includes a delicate balance between all the sectors ACUM represents, which in itself ensures protection of the public interest (article 30.2 of ACUM's current articles of association provides that the company's board of directors shall consist of nine members that include two lyricists, a writer, two easy listening composers, one composer of concert music, one publisher, and two external directors). ACUM also noted that its corporate governance is dispersed and therefore does not raise an "agency problem" of the type with which the mechanism of external directors is designed to deal. ACUM also asserted that in any event it has in place adequate mechanisms to resolve potential disputes and conflicts of interest, including an internal arbitration mechanism as well as the Permanent Conditions that prohibit ACUM from discriminating between its members. According to ACUM, the appointment of public directors would "dilute" the authors' control over their property rights. In practice, ACUM further noted the costs involved in the appointment of the requisite number of public directors, which lead ACUM to be willing to appoint no more than two public directors.

 

34.       According to the Director-General, the need to appoint public directors stems from two factors: first, it will help ensure that ACUM serves the interests of all its member authors, taking into account the interests of individual authors rather than only the group interests of certain categories of authors. Second, the appointments will ensure that at least some of the directors have professional skills in the area of corporate management.

 

35.       With regard to the proportion of public directors on the board, the Director-General's position is that the requirement that no less than a third of the board would be comprised of external directors is justified, since the need for external directors is specifically greater under ACUM’s circumstances, where the corporate structure is dispersed and lacks a distinct controlling shareholder. In this respect the Director-General went on to explain that, in his opinion, ACUM's members need even more protection than "ordinary" shareholders, considering the fact that their livelihood depends on the corporation and they cannot sell their shares to "realize their profits."

 

36.       Having reviewed all this, we have reached the overall conclusion that ACUM's case in this respect should be dismissed.

 

37.       The appointment of public directors – that is, directors who are not employees or shareholders of the company – is one mechanism which allows supervising the behavior of the company, its managers, and its controlling shareholders and helps dispel the various agency problems involved in its activity (see: Irit Haviv-Segal, Company Law, 429, 438 (2007) (hereinafter "Haviv-Segal")). It can be said that the essential contribution of the public director lies in the "external dimension" that he brings to the board's work – as someone who reviews matters referred to the board from a broad, objective, and balanced perspective that also takes into account the public implications of its activity. The provisions of section 240(a1)(1) of the Companies Law, 5759-1999 (hereinafter "the Companies Law"), according to which a public director shall have professional skills or accounting and financial expertise, ensure that his appointment will add a professional dimension to the company that will contribute to its satisfactory management (see: Joseph Gross, The New Companies Law, 386-387 (Fourth Edition, 2007) (hereinafter "Gross")).

 

38.       The mechanism of appointing public directors is typically operated in the context of the activity of public companies – section 239 of the Companies Law requires a public company to appoint at least two public directors, whilst sections 114 and 115(a) of that Law require a public company's board of directors to appoint an audit committee from amongst its members, on which all the public directors shall serve. In addition, there are laws that impose a duty to appoint public directors to serve on the board of certain corporations whose shares are not held by the public, but whose activity has other public importance. Thus, for example, a mutual fund must appoint at least five directors to serve on its board and the proportion of public directors is the same as required of a public company (see: section 16(a) of the Joint Investments Trust Law, 5754-1994); while an insurance company, as defined in the Control of Financial Services (Insurance) Law, 5741-1981, must appoint public directors who will constitute a third of the total members of its board (see: section 2(1) of the Control of Financial Services (Insurance) (Board of Directors and Its Committees) Regulations, 5767-2007). In addition, the board of directors of a company that manages provident funds is required to appoint an investment committee for each fund it manages, the majority of committee members being qualified to serve as public directors (see: section 11(a) of the Control of Financial Services (Provident Funds) Law, 5765-2005).

 

39.       Having reviewed the case, we are satisfied that the condition concerning the appointment of public directors to serve on ACUM's board is consistent with the purpose underlying the approval of the cartel. Although ACUM is not a public company, it does essentially manage a resource that has clear public aspects. From the point of view of the authors, ACUM provides an essential service, without which it would be difficult for them to produce financial benefit from their works. In many ways, that is also the case from the point of view of the public at large: the protected works belong to the authors (and to whoever has acquired rights in them) but it is important that they are used in such a way that will also benefit the general public. Indeed, these public aspects of ACUM's activity underlie its approval as a cartel. At the same time, ACUM's monopolistic characteristics and its status as a cartel in the domain of musical copyright grant it a public dimension in and of themselves. The requirement to appoint external directors to provide a further layer of supervision over ACUM's activity is therefore called for and inherent to the rationale of the cartel's approval in order to protect both authors and users. It should be noted that making the approval of a cartel conditional upon the appointment of external directors, even when the corporation in question is not a public corporation in the ordinary sense, is not unprecedented. Thus, for example, the approval as a cartel of the recycling corporation that was established as a joint venture of manufacturers and importers of soft drinks in Israel was made subject to a similar condition (see section 4 of the Conditions for the Operation of the Recycling Corporation, as approved in AT (J'lem) 4445/01 Shufersal Ltd v. The Director-General of the Antitrust Authority (November 5, 2001)). The same applies to the approval as cartels of two other collective management corporations: the Israeli Federation of Independent Record Producers Ltd. (hereinafter "PIL") (see section 11.3 of the Conditions for the Operation of the Israeli Federation of Independent Record Producers Ltd., as approved in AT (J'lem) 3574/00 The Israeli Federation of Independent Record Producers Ltd. v. The Director-General of the Antitrust Authority (April 29, 2004)), and the Israeli Federation for Records and Cassettes (hereinafter "IFPI") (see: section 13.3 of the Conditions for the Operation of the Israeli Federation for Records and Cassettes Ltd, as approved in AC (J'lem) 705/07 The Israeli Federation for Records and Cassettes Ltd. v. The Director-General of the Antitrust Authority (February 3, 2011).

 

40.       With regard to authors' protection, there appears to be grounds to the argument concerning the importance of protecting the common interests of ACUM's members, regardless of the “category” to which they belong. Public directors can express "cross-category" interests that concern the benefit of authors generally in their relationship with ACUM, as opposed to the benefit of particular categories of authors. Moreover, without laying out hard and fast rules, it can be said that there is prima facie grounds to the assertion that the importance of the public director institution is in fact greater in a corporation characterized by dispersed ownership, in the absence of controlling shareholders, as is the case with ACUM. The agency problem in companies of this type is characterized by interest gaps between management and shareholders (as opposed to interest gaps between the controlling shareholder and minority shareholders, which are typical of companies that have controlling shareholders). Some view the appointment of public directors as a central mechanism for dealing with such gaps (see Haviv-Segal, pp 438-439). Clear expression of this distinction can be found in the First Schedule to the Companies Law, which contains suggested provisions for the corporate governance of public companies. Paragraph 1 of the Schedule prescribes the recommended percentage of independent directors, distinguishing between companies that do and do not have controlling shareholders. With regard to the latter, the Schedule provides that a majority of the directors should be independent, whilst in the former it provides that it is sufficient for a third of the directors to be independent.

 

41.       Furthermore, even assuming that the present structure of ACUM's board of directors faithfully represents its member authors, that structure does not prima facie guarantee that the protection of authors will also take into account the public interest more broadly. Indeed, a public director's fiduciary duty to the company is no different than that of an ordinary director, in the sense that he too must act for the benefit of the company (see: Gross, p. 406; cf: CA 610/94 Buchbinder v. The Official Receiver, para. 43 (May 11, 2003)). However, the public director will presumably represent a broader, more objective point of view, cognizant of the public implications of the corporation's activity.

 

42.       Moreover, as already explained, the appointment of public directors also has great importance as regards guaranteeing a minimum number of directors with professional managerial skills. In fact, ACUM itself acknowledged the professional advantages of appointing public directors even before the Tribunal's judgment was handed off and the revised version of ACUM's articles of association now require the appointment of two such directors. The fundamental aspect of this controversy has thus somewhat eroded and it has become a matter of extent and degree. We believe that the proportion of directors set forth in the Permanent Conditions – a third of the board members – is not excessive or unreasonable, considering ACUM’s character as a corporation whose ownership is dispersed and especially given the lingering concern of abusing monopolistic power.

 

43.       This discussion, which is "internal" and concentrates on corporate and antitrust law, can be supplemented by an "external" discussion, based on the significance that entities with public aspects have from the perspective of public law. According to this Court's case law, a private corporation whose activity has clear public aspects might be regarded as a "hybrid" entity, which places it under additional duties over and above those it is subject to in accordance with private law. Care must be taken not to overextend the category of hybrid entities in order to avoid eroding the significance of acknowledging a public status and blurring the lines between the public and private spheres. Moreover, under the current circumstances, there is no need to rule on whether ACUM should be regarded as a hybrid entity and a complete discussion of the criteria for the recognition of an entity as hybrid is unnecessary. However, it should be noted that ACUM's activity does entail many of the criteria mentioned in previous case law as characterizing a hybrid entity. Thus, for example, in HCJ 731/86 Micro Daf v. Israel Electric Corporation Ltd PD 41(2) 449 (1987) (hereinafter "Micro Daf"), where the question of hybrid entities was discussed for the first time – in the context of the Electric Corporation's activity – the factors taken into account were the monopolistic aspect of the corporation's activity, the nature of the resource it manages, and the fact that statutory powers have been entrusted to it. These factors were not considered an "exhaustive list" and since then entities which lacked those characteristics, at least to the same extent, have also been recognized as hybrid (see: CA 294/91 Jerusalem Community Hevra Kadisha Burial Society v. Kastenbaum PD 46(2) 464 (1992)). For further discussion, see: Daphne Barak-Erez, Administrative Law vol. 3 - Economic Administrative Law 463-492 (2013)). With regard to ACUM, the monopolistic aspect of its activity is beyond dispute. In Israel, although there are other collective management corporations, including the abovementioned PIL and IFPI, the product they supply – licenses for the broadcasting and public playing of sound recordings – does not substitute the product ACUM supplies. As the Director-General stated in his declaration, ACUM has no direct competitors in its relevant market and although formally nothing stops authors from managing their works themselves, few of them find such course of action practical or worthwhile, so that in fact the vast majority of works for which royalties are paid in Israel are under the management of ACUM. The same applies to the implications that the resource managed by ACUM has on the general public. Although the licenses that ACUM offers are acquired by a relatively small category of users, those licenses feature the right to play the works in public (or make them otherwise available to the public). Hence, they have a very significant effect on public access to the works. In other words, the public aspect of ACUM's activity also derives from the fact that the product it supplies is not in fact the musical works themselves but rather the collective management mechanism, which facilitates (and to a great extent enables) playing those works in public and therefore constitutes a product of clear public importance. Finally, although ACUM does not exercise statutory powers, its approval as a cartel entrusts it with power that derives from a statutory decision established in the Antitrust Law. These characteristics, even if they are insufficient to define ACUM as a hybrid entity in the ordinary sense of the term (and, as aforesaid, we have no need to rule on this issue), do support the basic justification for the Director-General's requirement under the current circumstances. Indeed, the appointment of public directors is ordinarily not imposed on a hybrid entity. However, the fact that ACUM constitutes an entity that owes important duties to the public can serve as a factor in the Director-General's decision to subject a cartel to conditions.

 

The Rights Exclusion Mechanism

 

44.       The other condition at the center of the litigation before us concerns, as aforesaid, the rights exclusion mechanism. Underlying the controversy were two questions: first, is the requirement for the consent of all joint authors of a work in order to exclude it from ACUM's repertoire justified or should that power be held by each of the authors individually? Second, how delicate and precise should the "segmentation" mechanism be with regard to the exclusion ability, as regards the distinction between different types of uses? We shall clarify those questions below.

 

The Rights Exclusion Mechanism: the Consent of All Authors or a Personal Right?

 

45.       The requirement that the exclusion of the work should be conditional upon the agreement of all its authors prima facie imposes a constraint on the right of each of the authors to control the rewards of his work. For that reason it has been criticized by EMI Israel and Anana. In contrast, the position of the Director-General and ACUM is that making the exclusion conditional upon the consent of the other authors is essential to protect both users and authors. The main argument regarding the protection of users relates to the concern that a "liberal" exclusion mechanism that would give an independent exclusion right to each author would impair ACUM's ability to offer sweeping licenses and thereby undermine the basic justification for its existence from the perspective of public interest. With regard to the protection of authors, it is asserted that the ability to exclude rights without the agreement of the other authors would encourage abuse of that power by "powerful" authors at the expense of the other authors of the work. ACUM explained that if each author of a joint work could exclude his rights from ACUM’s repertoire without the agreement of the other authors, it would grant veto power to that author to prevent works from being used by those to whom other authors wish to grant permission. ACUM also emphasized that where the rights in a work are vested in several authors veto power will forever be involved and the remaining question is only which veto power is least damaging: that of an author wishing to prevent the work's exclusion and leave it with ACUM's repertoire, or that of the excluding author to prevent any use of a work contrary to the position of the other authors. According to ACUM, the former is infinitely preferable. Having reviewed the case, we have reached the overall conclusion that we accept the position of the Director-General and ACUM in this respect.

 

46.       We accept as a starting point for our discussion the (reasonable) assumption that the rights in the type of works that ACUM manages are often shared by several authors. This can be illustrated by the typical case of a song. According to copyright law, every song is made up of several independent works, the rights in each of which are vested in different authors – the words of the song are a literary work owned by the lyricist; the music is a musical work owned by the composer. Moreover, there are also cases in which several composers or lyricists collaborate in the process of creating a work and in such cases the circle of rights owners expands even further. Considering this situation, it is easy to understand EMI Israel and Anana's grievances: making the exclusion power conditional upon the agreement of all authors undoubtedly burdens the individual author who seeks to exclude his work. However, this does not suffice. The question before us is whether this burden is justified, considering the purpose of the permanent permit – and our answer to that question is in the affirmative.

 

47.       In order to discuss this question it is necessary to return to the original reasons that led to managing rights through a corporation like ACUM. The most important tool available to ACUM for the collective management of rights is the grant of a sweeping license known as a "blanket license," the advantages of which in terms of transaction costs constitute the basic reason that legitimates ACUM's activity, despite difficulties in terms of antitrust law. Extending the ability to exclude rights from ACUM's management will naturally impair its ability to offer blanket licenses and thereby reduce the public benefit from its operation as a cartel. Over-extending that possibility will impair the public benefit from ACUM’s activity to such extent that it will no longer be the case necessarily that the benefit substantially exceeds the potential damages to the public interest from the cartel's operation. Having considered matters, we are satisfied that the grant of a personal "exclusion right" to each author would amount to such over-extension. Considering the typical ownership structure of musical works, an exclusion mechanism that is not conditional upon the agreement of the other authors effectively means granting authority to a single author, regardless of his part in the work, to exclude the work as a whole from ACUM's blanket license regime. Thus, a user who wishes to make lawful use of the work would have to negotiate with the excluding author in addition to acquiring the sweeping license from ACUM. Such a state of affairs would greatly limit the benefit of the cartel for users to the point of raising doubts as to whether the cartel is indeed "in the public interest," as required by section 9 of the Antitrust Law whenever a cartel is approved.

 

48.       Furthermore – accepting the position whereby the consent of all the authors of a joint work is unnecessary to exclude it would also raise difficulties for the relationship between the authors themselves as it may enable some of the authors – usually the more "powerful" ones – to exploit their exclusion power at the expense of the other authors. This may occur in situations where the user has already acquired most of the rights to use the work by means of a blanket license and merely needs to "supplement" the excluded right. This may give rise to phenomena of "extortion" and "free-riding," so that the remaining owner of the right will demand exceptionally high license fees for his share. We have already discussed the problem of such a state of affairs from the user's point of view. However, in truth, the problem also exists from the perspective of the excluding author making excess profit at the expense of the other authors. This difficulty is intensified in light of the fact that the ability to exclude rights from ACUM's management – given the complexity involved in negotiating with users individually – would essentially be of benefit to powerful rights owners, like large publishers, as opposed to individual, independent authors.

 

49.       It should be noted that we have so far used the expression "joint authorship" in order to describe all the cases in which the rights in a particular song are shared by several authors, although in fact it is prima facie possible to distinguish between two models of joint authorship. One model, of "joint authorship in indefinite shares," relates to two or more authors who collaborated in such way that it is impossible to distinguish the share of each of them in the finished work. In such a case, the work is considered a "joint work" according to section 1 of the Copyright Law. The other model, of "joint authorship in definite shares," involves a finished product, like a song, which is made up of several units, each of which was created by a different author and is a protected work in itself (for example the words of the song, which were written by one author, constitute a literary work; while the music, which was composed by another author, constitutes a musical work). The authors in such a case are not regarded as joint authors according to the Copyright Law, despite the fact that their relationship is substantively founded upon sharing. It is interesting to note that the American copyright law does distinguish between works where the shares of the various authors are inseparable and works where the shares of the various authors are interdependent. Nevertheless, both situations are considered "joint work" (see: Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 6.4 (2002) (hereinafter "Nimmer"). In any event, for the purpose of the present discussion concerning the ability of authors to exclude rights from ACUM’s management we need not consider this distinction. In both cases, splitting the licensing authority would place practical obstacles for using the joint work.

 

50.       In fact, the controversy before us derives not only from the different interests that the various parties represent but also from the fact that the Copyright Law does not expressly regulate the issues to which joint authorship gives rise (see: Michael Birnhack, A Cultural Reading: the Law and the Creative Field, Authoring Rights: Readings in Copyright Law 83, 105-106 (Michael Birnhack & Guy Pesach, Editors, 2009) (hereinafter "Birnhack"); Gilad Wexelman, Corporate Creation and Cooperative Creation, Authoring Rights: Readings in Copyright Law, 167, 177-178 (2009) (hereinafter "Wexelman"). Cf  Margaret Chon, New Wine Bursting from Old Bottles, Collaborative Internet Art, Joint Works and Entrepreneurship, 75 Or. L. Rev. 257 (1996)). In fact, the only arrangement the Law establishes with regard to joint works (as defined in section 1) relates to the period of protection of the work, which is measured according to the age of the surviving joint author, plus 70 years (section 39 of the Copyright Law).

 

51.       Additionally, reference to comparative law does not yield an unequivocal answer, considering the numerous potential approaches to this issue. Thus, for example, subject to certain restrictions, the law in the U.S. vests each of the joint authors with an independent right to permit use of their work even without the consent of the other authors, provided that they are paid their proportional share of the profit produced from the work (see: Nimmer § 6.10; Russ VerSteeg, Intent, Originality, Creativity and Joint Authorship 68 Brooklyn L. Rev. 123, 149-150 (2002)). In contrast, according to the approach prevailing in English law, the agreement of all authors is necessary in order to permit use (see: Copyright, Design and Patents Act 1988, section 173(2). See also: Copinger, p 334.) For the purpose of the ruling before us, we must be cognizant of the fact that the variety of existing approaches regarding copyright management of joint works attests not only to the great complexity of the matter but also to the fact that recognizing authors' proprietary rights does not inherently dictate a particular result.

 

52.       Since there is no specific regulation of the issue of jointly owned copyright within the Copyright Law, we may turn to legislation in other contexts concerning the joint ownership of property rights. Detailed regulation of this sort exists regarding the joint ownership of land in sections 27 to 36 of the Land Law, 5729-1969 (hereinafter "the Land Law"). According to section 9(e) of the Movable Property Law, 5731-1971 (hereinafter "the Movable Property Law"), arrangements concerning joint ownership of land essentially apply to movable property too, "save as may be otherwise provided in a co-ownership agreement." By virtue of section 13(a) of the Movable Property Law, such arrangements also apply to joint ownership of "rights." Nevertheless, reference to the Land Law with regard to the legal regime governing joint authorship should be made with care. As Prof. Michael Birnhack has noted:

 

            "Even if a model of joint authorship is prescribed, the socio-legal institution can be designed in various ways, ranging from management based on the decisions of all owners, through consent-based management, to each author having freedom of use. Selecting the appropriate point on this range should be influenced by an understanding of the law concerning the creative process and the reciprocal relationship between joint authors, between each of them and the work, or anywhere else where the work and its significance are formed" (Birnhack, p 106).

 

Similarly, Dr. Gilad Wexelman has also written:

 

            "A joint work raises problems of a different type, when compared with the joint ownership of tangible resources and applying the doctrines that exist regarding joint ownership of tangible resources to joint authorship is therefore improper and inappropriate. These doctrines do not provide the necessary solutions for joint authorship. The inference deriving from this is that it is appropriate to adopt a broader, different conception of the joint authorship process, rather than a conception influenced by the private property model" (Wexelman, p 178).

 

53.       One way or the other, before we seek to draw an analogy based on the arrangements relating to joint ownership of land, it is important to emphasize that we need not consider the legal regime that governs the relationship between joint authors as an independent issue. The question of joint authorship should be analyzed in the case before us merely in the particular context of a joint work's management by a collective management corporation like ACUM – which naturally goes beyond the default rules that apply to joint authorship. In any case, under the circumstances,  reference to the existing legal arrangements regarding the management of joint rights should serve merely as a framework and a starting point for the discussion.

 

54.       The arrangement prescribed in the Land Law concerning joint ownership is based on a concept of management by majority decisions, except for matters that go beyond ordinary management and use, in which unanimous agreement is required. In this respect, section 30 of the Land Law provides:

 

            (a)       The owner of a majority of the shares in any joint property may determine all matters relating to the ordinary management and use of the property.

 

            (b)       A joint owner who considers himself aggrieved by a determination under subsection (a) may apply to the Court for directions and the Court shall decide as seems just and expedient under the circumstances of the case.

 

            (c)       Any matter outside the scope of ordinary management and use requires the consent of all the joint owners.

 

55.       The joint owners of a land can agree upon a different method for the management of their rights but, as provided in section 29 of the Land Law, this is the arrangement that applies "unless otherwise provided in a joint ownership agreement" (subsection (c)) (see also: CA 810/82 Zol Bo Ltd. v. Zeida PD 37(4) 737 (1983); CA 663/87 Nathan v. Greener PD 45(1) 104 (1990)).

 

56.       At the same time, section 31(a)(1) of the Land Law provides that each joint owner may, without the consent of the other joint owners, make reasonable use of the joint property, provided that he does not prevent another joint owner from conducting such use. In other words, none of the joint owners of land may stop his fellow owners from using the property, so long as it applies to reasonable use.

 

57.       What can be learned from these arrangements for the case in question? Applying the arrangement prescribed in section 30, mutatis mutandis, leads to the conclusion that the requirement of a "unanimous" decision is appropriate insofar as management or use out of the ordinary is involved. It can therefore be argued that the management of copyright through an entity like ACUM is the ordinary, accepted method worldwide for the management of individual authors' rights, and departing from that arrangement therefore constitutes an "extraordinary" decision outside the ordinary realm of rights management. It should therefore be made unanimously, exactly as provided by the conditions that have been approved.

 

58.       Indeed, as stated above, the considerations relevant to joint ownership of land are not necessarily apt with respect to joint authorship. Thus, for example, the arrangement contained in the Land Law can be seen as "hostile" to a state of joint ownership, recognizing that joint ownership of land may burden its efficient management. Section 37 of the Land Law therefore provides that "each joint owner of immovable property is entitled at any time to demand the dissolution of the joint ownership." Yet, joint authorship is not a "pathological" condition. On the contrary, the process of authorship frequently involves collaboration – either direct or indirect – between several authors and dissolving the joint authorship should not be regarded as socially desirable. It is also likely to be more difficult to appraise the value of the work for the purchase of one of the joint authors' shares than severing the joint ownership of land. Consequently, as already mentioned, the analogy from the Land Law should be drawn with all due care. However, even taking into account the difference between joint ownership of land and joint authorship, it does appear that the requirement of unanimous consent for the exclusion mechanism is proper. Particularly because joint authorship is a "natural" condition and typical of many works, it is appropriate to be apprehensive about an exclusion mechanism that is based on each of the authors having an individual right of action, reinforcing the status of strong authors and burdening public access to the works, as explained below.

 

59.       Examining the rule with regard to the reasonable use of jointly owned land also leads, prima facie, to a similar conclusion. By drawing an analogy based on section 31(a)(1) of the Land Law it can be inferred that leaving the work under the management of ACUM constitutes reasonable use, considering the fact that it is the typical, widespread method for the collection of royalties. According to this logic, there appears no justification for adopting an exclusion mechanism that enables a joint author, who so desires, to prevent his fellow author from making reasonable use of the work, by excluding it from the collectively managed repertoire.

 

60.       It should be noted that this Court has previously considered the question of collaboration between joint authors, in CA 1567/99 Sivan v. Sheffer PD 57(2) 913 (2003) (hereinafter "Sivan"). Under the circumstances of that case, we recognized the right of each of the joint authors to terminate a contract that had been made in connection with the use of the rights when the contract was breached. Can it therefore be inferred that it would be proper in the current case to permit each of the joint authors to individually decide on exclusion? Despite the apparent similarity between the situations, in fact they are quite different and the conclusion should therefore be different too. In Sivan the issue was the rescission of a contract due to its breach and ipso facto it was possible to rely on the principle that whosever right has been infringed on is not required to forgive the infringement. This result is supported by considerations deriving from the law of obligations and in particular from the issue of multiple creditors. In contrast, in the case at hand, the question is posed for the purpose of delineating the ordinary rules of management, in the absence of any alleged breach. The relevant considerations are thus different, and so is the result that they dictate. Indeed, in Sivan the Court has made a clear distinction between these two questions. In fact, it noted that it was not ruling on the question of unilateral exercise of copyright in a joint work, which is more similar to the present case, and it went on to state that section 31(a)(1) of the Land Law prima facie makes it possible to adopt a flexible approach in such cases (Sivan p 942).

 

61.       Taking a broader view, it appears that the position presented to us by EMI Israel and Anana does not give proper weight to the effect of high transaction costs and free-riding in the management of multiple ownership resources, a phenomenon referred to as "the tragedy of the anti-commons" alongside the better-known term "the tragedy of the common property" or "the tragedy of the commons" (see generally: Michael Heller, The Tragedy of the Anticommons: Property in the Transition from Marx to Markets, 111 Harv L. Rev 621 (1998); James Buchanan & Yong J. Yoon, Symmetric Tragedies: Commons and Anticommons, 43 J. L. & Econ. 1 (2000)). Indeed, the narrow exclusion mechanism that the Tribunal approved appears more suitable for dealing with these phenomena. In connection with joint authorship, “the tragedy of the anti-commons” is manifested in sub-optimal use of the work as a result of uncoordinated behavior by its owners. In a legal regime where a license to use a particular work necessitates the agreement of all its owners, each of the owners might act to maximize his own profits by claiming a high fee for agreeing to its use, without considering the negative externality that such behavior for the other owners. Ultimately many users will find it difficult to meet the overall price required of them and the work will be used to a lesser extent, thus harming both the joint authors and the public, whose access to the work has been limited. It is common to believe that the solution to this problem is one of the major advantages embodied in the activity of collective management corporations (see: Katz, p 561; Francesco Parisi & Ben Depoorter, The Market for Intellectual Property: the Case of Complementary Oligopoly in The Economics of Copyright 162, 168-169, Wendy J. Gordon & Richard Watt eds. 2003 (hereinafter "Parisi & Depoorter")). Since dealing with the market failings associated with joint authorship is one advantage that justifies the monopolistic activity of corporations like ACUM, great importance is attributed to the design of an exclusion mechanism that will not frustrate that advantage by vesting veto power in each joint author who wishes to preclude use of a joint work.

 

62.       Ultimately, even under the narrow exclusion regime joint authors can agree in advance, contractually, on the scope of their understandings with regard to the work's exclusion from collective management. In fact, the narrow exclusion regime merely provides the default with regard to the inclusion of a joint work in the repertoire managed by ACUM. Insofar as the authors wish to agree on a different decision-making mechanism with respect to the management of joint works, they are at liberty to do so. Presumably such an arrangement, made before any of the parties is in a position for extortion or "free-riding," will help limit the coordination difficulties asserted by EMI Israel and Anana with regard to obtaining the consents necessary for the exclusion of a joint work. In view of the aforesaid, the default mechanism prescribed – according to which in the absence of an agreement between the joint authors to the contrary, the consent of all authors is necessary to exclude the work from management by ACUM – is appropriate.

 

The Rights Exclusion Mechanism: the Degree of Segmentation and the Distinction between New and Old Media

 

63.       As mentioned above, the arguments by EMI Israel and Anana also revolved around the fact that the "exclusion packages" defined in the Permanent Conditions do not distinguish between uses for the purpose of "old media" and uses for the purpose of "new media." In this respect Anana reiterated the case that it made before the Tribunal concerning the impairment of authors' ability to exhaust the full financial potential embodied in their works by excluding the works from management by ACUM solely with regard to "new media," and concerning the damage caused to Anana itself, having prima facie relied upon the previous exclusion mechanism in excluding rights that it will now have to restore to ACUM’s management.

 

64.       In contrast, the Director-General and ACUM argued before us that categorizing the necessary permissions according to types of media will allow ACUM members to abuse their power against users by forcing them to purchase specific uses (for example using the work on a cellular platform) in addition to the general fee for the license awarded through ACUM. In addition, ACUM mentioned that the adoption of a "liberal" exclusion regime enabling a precise "segmentation" of the excluded uses of any work would involve a significant logistic and financial burden on its ability to manage copyright of its repertoire.

 

65.       Deciding between the conflicting positions in this respect has proven to be more complex than the parties' arguments revealed. In truth, as we explain below, both positions are extreme and fail to fully address the difficulties they entail. Consequently, at present, we believe that the exclusion mechanism approved by the Tribunal should be upheld, provided that the question of excluding "new media" – subject to conditions and constraints – will be comprehensively reviewed towards the renewal of the cartel’s approval. We shall explain our said position.

 

66.       The present exclusion mechanism, as expressed in section 2.3 of the Permanent Conditions, enables an author to exclude his rights completely, in respect of all their potential uses. Moreover, the mechanism allows excluding the rights in respect of some of the uses, yet solely in accordance with one of four alternatives – "the exclusion packages" that stand at the center of the discussion. Because of their importance, we shall lay them out in full below:           

 

            "2.3.1  Excluding the rights for audiovisual broadcasting, including synchronization and recording for the purposes of such broadcasting, and including the provision of interactive and/or on demand services and any similar service, including by television, Internet, telephony or mobile phone.

 

            2.3.2   Excluding the broadcasting rights by means of audio, including recording for the purposes of such broadcasting, and including the provision of interactive and/or on demand services and any similar service, including by television, Internet, telephony or mobile phone.

 

2.3.3   Excluding the right of copying. For the avoidance of doubt, it is clarified that excluding the right of copying does not include the right of copying for broadcasting purposes.

 

2.3.4   Excluding the right of imprinting and/or recording. For the avoidance of doubt, it is clarified that excluding the right of imprinting and/or recording does not include the right of imprinting and/or recording for broadcasting purposes".

 

67.       The alternatives at the center of the present controversy are the first and the second (and to a limited extent also the fourth, insofar as the exercise of the right of copying is aimed at integrating a musical work in the soundtrack of an audiovisual work). These alternatives deal with uses that make the work available to the general public – its broadcasting on television or radio, making it accessible by means of "streaming" technology, which enables viewing or listening to content through the Internet without copying it to the user's computer, and the like. The main distinction that the exclusion mechanism makes in this context is between presenting the work by audiovisual means and presenting it by audio only. Thus, for example, given the present situation, an author can be represented by ACUM for the purpose of playing songs on the radio but not for using them in the format of television content.

 

68.       Presumably, maximum protection of the author's rights and his financial interests should have enabled every author to make specific exclusion decisions as much as possible – even with reference to a specific work in a particular use. Along these lines, ACUM's present exclusion mechanism permits, as aforesaid, limited "segmentation" by types of use. However, it has been argued before us that this does not suffice. The dispute revolved around the degree of precision required by segmentation. While the present segmentation mechanism essentially distinguishes between audio and audiovisual uses, EMI Israel (supported by Anana) also wishes to distinguish between "old media" – like television and radio – and "new media" – such as the Internet and cellular phone services. This position was presented to us as warranted by technological progress and the launching of new channels to use works, as well as the protection of the author's prerogative to manage the works he owns. However, as we explain below, this position raises fundamental and practical difficulties and thus cannot be adopted in the format in which it was presented.

 

69.       It should be stated that the question of excluding "new media" should first be considered in light of the two perspectives that fashion the discussion as a whole – that of copyright law and that of antitrust law. However, in this context, it is important to bear in mind another point of view which relates to the interface between law and technology and focuses on the adaptation of the legal framework to technological developments as well as its implications to future technological development, for better or worse (see and compare: Dotan Oliar, The Copyright-Innovation Trade-Off: Property Rules, Liability Rules and Intentional Infliction of Harm, 64 Stan. L. Rev. 951 (2012)).

 

70.       At the outset, we should consider the fact that the ability to exclude "new media" that EMI Israel seeks to adopt relies primarily on a technological distinction between "old" and "new" communication platforms. This distinction is replete with difficulties. The world of communications is characterized by constant, rapid technological development. More importantly, the technological aspect of this area is characterized by a phenomenon sometimes called "technology collapse": with the development of technology the walls that separate various media platforms gradually collapse and different types of technology "collapse" into each other, creating new interfaces. Thus, for example, a movie that is distributed through the Internet is also available for viewing on a smartphone, while traditional radio stations also broadcast songs and programs by streaming technology over the Internet. Given this technological reality, the distinction between "old media" and "new media" is not dichotomous, nor is it permanent or stable. In fact, EMI Israel and Anana did not even explain how these categories should be defined in their view, and settled for giving clear-cut examples (such as using a song as a ringtone), which were insufficient to delineate the boundaries of the distinction. Their case therefore left many practical questions unanswered. For example, no explanation was given as to whether the transmission of television broadcasts through the Internet to be viewed on smartphones would, according to the proposed approach, require a license for "new media" or "old media" or in any event how would this example be classified to one category or the other. The rapid, constant development of new communication technology guarantees that questions of this type will not remain theoretical. In this context, we should note the interesting case of the American company MobiTV, which at the beginning of the 21st century developed technology that enabled receiving satellite or cable broadcasts and viewing them on mobile phones. A dispute (which gave rise to several legal proceedings) arose between MobiTV and ASCAP, one of the two largest collective management corporations in the U.S. The dispute concerned the purchase of a blanket license necessary to legitimate the transmissions, as a result, among other things, of MobiTV's objection to being charged a "new media" rate even though the content it offered its customers was the same as broadcast by traditional means (although ultimately the judgment did not rule on this question directly. See: United States v. ASCAP, 712 F. Supp. 2d 206 (SDNY 2010)). With regard to the controversy relating to the classification of MobiTV's services as "new media," see also its preliminary response in the legal proceeding it initiated (Applicant Mobitv, Inc's Pre-Trial Memorandum at 25, United States v. ASCAP, 712 F. Supp. 2d 206 (SDNY 2010)).

 

71.       Insofar as the distinction between "new media" and "old media" is intended to extend to situations in which the content of radio and television programs is transmitted through the Internet to computer screens or by cellular phone services to mobile phone screens, adopting this distinction is likely to have a "chilling effect" on the use of the works in "old media" too. This is because users would presumably refrain in advance from integrating excluded works in productions intended for "old media," if only given their concern of future marketing constraints in "new media." Thus, for example, when a television program is produced, certain songs might not be included in it – as a cautionary measure – so as not to impair the possibility of broadcasting the program over the Internet too. Such indirect implications are not always clear "in real time" to an author who wishes to exclude his work, but recognizing them might also be weighed against the distinction proposed by EMI Israel and Anana.

 

72.       Another aspect to be considered is the likely implications of the exclusion mechanism on cyberspace users. In their arguments before us EMI Israel and Anana concentrated on institutional and corporate users, such as large communications companies, thereby presenting only a partial perspective on the matter in dispute. However, the exclusion mechanism they sought to adopt is not intended to apply only to such users. In fact, a sweeping exclusion of "new media" uses is likely to lead, without distinction, to difficulties for small website operators, including, for example, Internet radio operators, for which the ability to contract with collective management corporations constitutes a lawful, practical way for making regular use of a wide variety of works (and indeed some believe that the activity of collective management corporations is of especial importance for authorized use of musical works over the Internet. See, for example: Daniel Gervais, The Landscape of Collective Management Schemes 34 COLUM. J. L. & ARTS 591, 601 (2011) (hereinafter "Gervais, Landscape"). For a discussion of the importance of collectively managing works in a digital environment, see also: Recommendation 2005/737/EC on collective cross-border management of copyright and related right for legitimate online music services [2005] OJ L276/54 (hereinafter "the 2005 EC recommendation"); Proposal for a Directive of the European Parliament and of the Council on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market (July 11, 2012) (hereinafter "the 2012 proposed directive"). See also Copinger, pp 1816-1826).

 

73.       The effects of the requirement to distinguish the use of new technologies on making works accessible to the public should also be considered in view of past experience in similar contexts. Thus, for example, in New York Times Co. v. Tasini 533 US 483 (2001) (hereinafter "Tasini"), the US Supreme Court considered whether a newspaper (the New York Times) could upload articles by freelance writes to a computer database. After lengthy litigation, the US Supreme Court accepted the position of the writers who argued that the license previously given to the newspaper was merely for the purpose of printed publication, as opposed to electronic media. Following the judgment the newspaper had to acquire permission from the writers to publish their articles in the database. Yet, since the newspaper believed that taking such action would not be financially viable, the result in practice was the removal of the articles from the database, thereby denying public access to them. We do not need to go into the merits of the judicial ruling in Tasini insofar as it relates to the understandings between the newspaper and its writers at the relevant times. In fact, the ruling in Tasini is not directly relevant to the technological aspects of the publication format and is instead focused on whether uploading the articles to a general computerized database (of numerous articles from various newspapers and journals) could be construed as a newspaper publication (indeed, in another case of similar circumstances the Supreme Court of Canada held that a newspaper could copy articles published in its printed edition to digital CDs containing articles of that newspaper alone. See: Robertson v. Thomson Corp. 2006 SCC 43 (2006)). Nevertheless, the results of this case embody an important lesson. Taking the broader view it teaches us that an arrangement that does not take into account the dynamic nature of uses might prove to burden and damage the public interest. Taking a forward-looking view, it appears that experience teaches us that it is difficult to base licenses for use on a distinction between technologies as this might subsequently frustrate broad access to cultural assets (see also: Francesco Parisi & Catherine Sevcenko, Lessons from the Anticommons: The Economics of New York Times Co. v. Tasini, 90 Ky. L. J. 295 (2001-2002)).

 

74.       What is the experience of other legal systems regarding the exclusion of "new media"? On the face of it, this is an important question, considering the fact that the challenges of technology in the area of copyright are by no means unique to Israel. However, for the reasons detailed below, the benefit of a comparative study has proven limited at the present stage of developments in the area.

 

75.       Truth be told, reference to legal developments in Europe and the U.S. shows that the exclusion of "new media" is often recognized as possible. Presumably, this reinforces the position of EMI Israel and Anana. However, studying matters in depth indicates that this experience has limited application to the case before us, because, among other reasons, the issue under consideration here is still in the early stages of formulation, trial, and controversy in other systems too.

 

76.       The two major collective management corporations in the U.S. – BMI and ASCAP – recently permitted two of their members (including global EMI) to exclude the rights owned by them from collective management for the purpose of certain aspects of the works' use in "new media" (as detailed on their websites – http://www.bmi.com and http://www.ascap.com). Yet, it is important to note that the ability to do so is embodied in the decisions of the corporations themselves rather than the result of external regulation. Moreover, the American rights management corporations operate in a different way than ACUM in the sense that they manage only one type of rights – public performance rights, which concern the permission to perform the work in public, to broadcast it, or to make it available to the public (but not the permission to copy the works or integrate them in audiovisual productions). That is, the starting point for the exclusion is a market of rights that is more "split" than the market in which users and authors operate in Israel. This background is likely to influence the factors relating to the desirable exclusion mechanism. Subsequently, it should be noted that reference to the exclusion of "new media" from administration by collective management corporations in the U.S. is not made in "all or nothing" terms, and in fact includes certain restrictions. For example, BMI's most up to date announcement on the matter (as published on its website) has clarified that the ability to exclude "new media" is aimed at cases where the work's use necessitates more than one type of license, while ASCAP has emphasized in addition that exclusion is possible with regard to making works accessible to the public exclusively through "new media," and does not apply to users that are broadcasters. Finally, and this is a major point, it cannot be ignored that some of the decisions on these matters are very recent (for example, BMI's announcement, of February 11, 2013, was published long after the litigation between the parties before the Tribunal had ended). It is therefore difficult to draw inferences from other legal systems' sustainable experience in this area. In fact, it can be said that at this stage the secondary effects of the "shock waves" that the new reforms have created for users have not yet been fully clarified, although the existence of such "shock waves" is already apparent. For example, we may point to a new development – lawsuits brought by users against management corporations to reduce the fee charged for a "blanket license," since "the blanket" no longer covers "new media" too (for instance, the claim brought against ASCAP by a large Internet radio company called Pandora at the end of 2012, which is still pending. For reports in the media about the case, see, for example: Don Jeffrey, Pandora Media Sues ASCAP Seeking Lower Songwriter Fees (November 6, 2012, available at http://www.bloomberg.com/news/2012-11-05/pandora-media-sues-ascap-seekin... Ed Christman, Pandora Files Motion to Keep Low Publishing Rates (June 20, 2013) available at http://www.billboard.com/ biz/articles/news/digital-and-mobile/1567890/pandora-files-motion-to-keep-low-publi-shing-rates).

 

77.       In principle, European law permits a rights owner to join a collective management corporation even when he seeks to reserve the use of the rights on the Internet or through CDs (see: Commission Decision of August 6, 2002 in case COMP/C2/37.219 Banghalter/Homem Christo (Daft Punk) v. SACEM. See also: section 5(3) of the 2005 Commission recommendation and the 2012 proposed directive, mentioned above). Nevertheless, it is important to bear in mind that this arrangement is also the result of factors irrelevant to Israeli reality, primarily the desire to reach a standard, coordinated pan-European regulation where there are multiple collective management corporations.

 

78.       Another factor that should be mentioned parenthetically involves the broader context in which the exclusion mechanism is embodied, with regard to the acceptance of the Conditions towards authors' freedom of action and freedom of choice. In this context, for example, it is significant that the Permanent Conditions ensure the right of each of ACUM’s members to contract with users individually and to offer them individual licenses to use certain works alongside the management of those works by ACUM, without excluding them from its repertoire (section 2.4 of the Permanent Conditions). This is similar to the U.S. practice and different from the norm in Europe, where most collective management corporations require exclusivity from their members in respect of all rights in their work (see: Gervais, Landscape, p 598). Indeed, it is possible that this course of action will not be frequently used and it is likely to be significant mainly from the perspective of users who do not require blanket licenses but rather individual licenses for certain works. However, from a more general perspective, this mechanism creates something of a balancing effect on ACUM's coercive power (see also and compare: Parisi & Deporter, pp 170-172).

 

79.       More generally, it can be said that EMI Israel and Anana’s requirement to allow a sweeping exclusion of "new media" uses was based on the assumption that they are entitled to enjoy the fruits of the cartel while realizing the financial potential embodied in the works they manage to its fullest. That is a mistake. Indeed, once ACUM's activity was recognized as a cartel, which raises concern of abuse of monopolistic power against the public, it can no longer be said that ACUM members are entitled to fully exercise their proprietary rights while enjoying the benefits of the cartel. Although the cartel has been approved, its approval was made subject to conditions. Those conditions bear a price that ACUM and its member authors must pay in order to balance the excess benefits such membership confers and to ensure that the public is protected against the concerns involved in the cartel's activity. In fact, what we have previously stated regarding the exclusion of a work without the consent of all joint authors is also appropriate with regard to the issue of segmentation – the adoption of a segmentation mechanism that enables the exclusion of works based on a technological distinction between new and old media, without reservation, might reduce the benefit that ACUM’s activity yields for the public to such extent that may undermine the justification of its approval as a cartel.

 

80.       We can therefore sum up and say that even if the ability to exclude "new media" uses should not be outright dismissed, EMI Israel and Anana have at present failed to lay a substantial foundation for the considerations and details of the exclusion mechanism they wish to adopt, regarding, inter alia, the ability of such a mechanism to provide an answer to the concerns indicated above. For that reason, we cannot accept their position. We should parenthetically emphasize that we have not ignored the possibility that the ability of an author to manage his works independently in the realm of "new media" might prove to be significant for some authors, including "small" or independent ones. The Internet is a flexible technological platform that is far more accessible to private agents than traditional media. It allows direct, convenient, and relatively easy communication between the rights owner and the individual user and thereby yields more direct patterns of consumption, sometimes dramatically reducing transaction costs and thus enabling "small" authors to profit from their works without the assistance of collective management mechanisms (see: Casey Rae-Hunter, Better Mousetraps: Licensing, Access and Innovation in the New Music Marketplace, Journal of Business & Technology Law 7(1) 35, 39 (2012)). However, this is merely one of many considerations and it has not been argued before us. Thus, for example, in contrast, the ability to exclude "new media" might actually be damaging to small authors in particular given the "dilution" it would generate in the value of blanket licenses. Consequently, as a general rule and as already mentioned, the question of "new media" should be revisited comprehensively as part of the cartel's re-approval at the end of the five-year period allotted to it. This is based on the understanding that one cannot rule out in advance the possibility that a delineated and limited format of "new media" exclusion (insofar as such a format is proposed in the future) might enable interested authors greater independence in the management of their works, without impairing the interests of the public at large, to an extent that will undermine the reasons underlying the cartel's approval.

 

81.       In other words, the precise definition of the "exclusion category" sought in respect of "new media" is likely to have a decisive impact on whether the overall exclusion mechanism yields a balanced result. An important, albeit not the only, aspect of this definition relates to the phenomena of "technology collapse" and "content leakage" that we have already considered. As previously mentioned, a sweeping, generalized definition of "new media" regarding the exclusion ability would yield uncertainty in respect of the scope of the excluded uses, might lead to many users being charged double fees (not only by ACUM but also by authors themselves), and would create a "chilling effect" from the users’ perspective, as they might refrain from including an excluded work in productions intended for "old media" based on their concern that new media marketing will be limited in future. In contrast, a narrower definition of excludable uses, particularly a definition that focuses on uses designated for new media (for example the production of a ringtone based on an existing tune) would help reduce the awkwardness that numerous exclusion possibilities yield, moderate the negative effects of "content leakage" between different technological platforms from the users’ perspective, and reduce the damage caused to their financial interests. In this context, we may add that part of the negative experience accumulated from the operation of the broad exclusion mechanism (in the scope of the Provisional Conditions for ACUM’s activity before their 2009 amendment) resulted from the fact that it granted complete flexibility with regard to the exclusion format and did not consider the significance of the term "new media" nor did it regulate the boundaries of the exclusion options related to it.

 

82.       To complete the picture it should be noted that the issue of excluding rights in "new media" from collective management as part of a cartel's approval in Israel has not arisen for the first time in ACUM’s case. As already mentioned, the Tribunal had authorized in the past the activity of two other collective management corporations that were also considered a cartel – PIL and IFPI. In both cases the conditions for the approval regulate the corporation members’ ability to exclude rights from collective management in accordance with a predetermined "exclusion basket," and include several categories concerning various Internet and mobile phone uses (see: section 3.3 of the conditions for the operation of IFPI and section 2.2 of the conditions for the operation of PIL). Recognition of this is prima facie relevant to the discussion. However, we should consider the fact that both those entities deal with the management of producers rights (the owners of sound recordings), an area which is not identical to the area in which ACUM operates (management of composers, songwriters, and arrangers rights). We expected the parties before us to refer to this comparison – one way or the other – but they failed to do so. Each of them clung to the position of "all or nothing" and sided, respectively, either with a complete exclusion of "new media" or an absolute negation of the ability to exclude new media uses. Thus, the option of excluding "new media" and the conditions for it were not fully addressed.

 

83.       What emerges from all the aforementioned is this: reviewing the implications of excluding "new media" shows that it is not necessarily justified to completely negate the option to exclude works for the purposes of "new media." Nevertheless, there are clear indications that this applies only to a limited exclusion mechanism, which concentrates on certain types of "new media" uses and strives to minimize the harm caused to users. Such an exclusion mechanism cannot be based merely on a technological distinction between "old media" and "new media" which allows a sweeping exclusion of all uses of the latter type – as proposed by EMI Israel and Anana. In any event, examining the possibility of another exclusion category concerning "new media" and fashioning the boundaries of that category should be done with care after studying the positions of all interested parties and all the relevant facts. As aforesaid, this matter is for the Tribunal to consider when the extension of the cartel's approval arises. Our position is also supported by the temporary nature of the approval – for only five years. At the end of that period (two years of which have already passed), the Tribunal will revisit the approval of the cartel, at which time it can also reconsider the scope of the exclusion mechanism's "segmentation," on the basis of five years’ experience with the operation of a "narrow" exclusion mechanism. That experience will join with lessons already learned from the operation of an unlimited exclusion mechanism (as part of the Provisional Conditions) and will help the Tribunal evaluate the possibility of adopting a balanced, intermediate alternative that will permit the exclusion of limited uses for the purposes of "new media," without undermining ACUM’s purpose as a collective management corporation. Presumably, by the time the Tribunal considers the extension of the cartel's approval, international experience on this issue will also be established which will enrich the set of facts before the Tribunal.

 

84.       To sum up, our opinion is that the conditions for the permanent approval should be left as they are for the time being, including the issue of excluding works for the purposes of "new media," based on the assumption that the Tribunal will be able to revisit this issue when the current conditions expire. It should be emphasized that this does not express any substantive holding regarding the result to which the Tribunal should reach on this or any other issue, beyond the general statement that the possibility of permitting a limited, well-defined exclusion of "new media" uses should not be ruled out. On the basis of the up-to-date facts laid out before it, the Tribunal will presumably reach a correct decision regarding the proper and most effective way to do so, insofar as it deems fit to follow such path.

 

Conclusion

 

85.       The appeals before us revolved around ACUM’s activity, yet they necessitated a broad discussion with regard to the collective management of copyright, considering not only the complexity of jointly owned works that derive from the talents of several authors but also the complexity of the variety of uses in a constantly changing technological world. At the present time we have reached the overall view that according to the facts before us we should not intervene in the conditions attached to the cartel's approval – from the perspective of balancing the proprietary rights of all authors against the public interest of accessibility to works that are part of the general cultural repertoire and it is therefore important to avoid placing substantial barriers to their use. We have not ruled out the possibility that in future the proper balance between authors’ rights and the public interest might dictate a different result with respect to integrating the distinction between different types of "new media" and "old media" in the rights exclusion mechanism. To a great extent, this issue represents the challenge of collectively managing rights in the modern era with its changing technological and business environment, where the practice of collective management is more essential than ever but also raises more serious difficulties and complexities than ever. The answer to these challenges (both with regard to "the segmentation mechanism" and with regard to other matters discussed before us) lies in a delicate, changing balance between the relevant interests. As we have mentioned, this balance might be affected by changes in technological platforms and business practices, by studying new information, and by lessons derived from ACUM’s activity in Israel and the operation of collective management corporations worldwide.

 

86.       In conclusion, I would suggest to my fellow justices to dismiss both appeals. ACUM would bear the Director-General's costs in the amount of NIS 20,000. EMI Israel would bear the Director-General's costs in the amount of NIS 40,000 and Partner's costs in the amount of NIS 10,000.

Justice Z. Zylbertal

 

I concur.

 

Justice E. Rubinstein

 

A.        I concur with the comprehensive opinion of my colleague, Justice Barak-Erez.

 

B.        Without wishing to gild the lily, I would like to add brief remarks. We are dealing with ACUM, a special entity established in 1936, during the British Mandate, to protect the rights of authors and artists in their intellectual property and it is as though it has always been a fundamental Israeli institution. Indeed, perhaps if we could start over today it would have been possible to think of other ways of organization for this purpose, not necessarily a private company, but such is the situation we are facing, in which we are called upon to have our say. However, even given the current situation, the challenges of dealing with the rights of those in need of ACUM’s services are ever-changing, especially with the dynamic technology, and it is not without reason that my colleague qualified the second part of her opinion with regard to the exclusion mechanism, by looking to the future.

 

C.        With regard to public directors, the Tribunal was indeed right in its decision. In my opinion, the more the better, provided that these directors do their work faithfully as agents of the public and it is to be hoped that this is the norm, in which case the financial expense involved is justified. Regarding their duties, see Prof. J. Gross, Directors and Officers in the Era of Corporate Governance (Second Edition, 2011) Chapter I, p 1 et seq and the references there; and see also Amendment No. 8 to the Companies Law (2008) with regard to the possibility of appointing independent directors; I. Bahat, Companies, 12th edition, 5771-2011, 386. My colleague described in detail the circumstances of this case but also added notes drawn from general public law, namely when a particular entity appears to be hybrid, and as derived from this analysis – the fact that ACUM is similar to that model in view of its duties to the public, without deeming it necessary to rule that it is indeed a hybrid entity. I myself would tend to say that we are indeed dealing with a hybrid entity, whether we take a relatively narrow view of it, through the eyes of its direct beneficiaries, or a broader view of the general population of users; see also my comments in ALAA 1106/04 Haifa Local Planning and Building Committee v. The Electric Corporation (2006), paras. C and D.

 

D.        The author A. Harel in his work Hybrid Entities – Private Entities in Administrative Law (5768) enumerates (pp 118-125) criteria for analyzing the hybrid nature of an entity, including a vital public function, providing a service to the public, not-for-profit activity, a monopoly, the concentration of great power that might be abused, and functional public funding. When dealing with a monopoly, as in the case before us, although ACUM is incorporated as a private company, it is painted in bold colors of hybridity, in particular considering the narrow choice given to individuals (ibid, 115). Indeed, in a rapidly changing world of varied technological possibilities for using works, the interest of authors and artists, as well as the general public, is one of fairness towards everyone; see also D. Barak-Erez, Citizen, Subject, Consumer and Government in a Changing Country (2012), 119, 121, who characterizes an entity as hybrid, when, inter alia, it serves as an actual substitute for government involvement. In the case before us, as implied above, the matter could have presumably been dealt with through a regulatory framework and this component justifies, in my view, a thorough discussion of the issue of public representatives. Indeed, before us is a private company, yet this is merely its framework and shell while its content is significantly broader; even the name attests to its belonging to the public realm – the Association of Composers, Authors and Publishers. ACUM's articles of association (as last approved on July 21, 2013 according to its website) include external directors and the controversy consists merely of their number. According to its website, ACUM presently has approximately 7,500 author members; don’t they deserve extensive protection against a potential clash of interests between various groups within the company?

 

E.         Now a few words on the role of external directors, which is the current legal term, or public directors; as we know, the Companies Law, 5759-1999 refers to an external director (article five, sections 239 et seq) but the literature uses this expression interchangeably with public director, as it was termed in the Companies Ordinance (section 96(b)(c)). Indeed, according to the learned author J. Gross (Directors and Officers in the Era of Corporate Governance (2011) 92), the external director "does not represent the regulator or the general public. He owes a fiduciary duty to the company and to it alone and he only has to bear the interest of the company in mind"; and see also Dr. O. Haviv-Segal, Company Law (2007) 438. However, even if this narrow definition is correct in principle, without going into a comprehensive discussion, the current case involves a special instance of a "private-non-private" company, which does not strive to maximize its profits. In this context, see by analogy the statement by Haviv-Segal, ibid, about the external director’s function in restraining "opportunistic behavior" by a controlling shareholder or management: "in this respect the external director can be regarded as the representative of the public shareholders on the company's board of directors." We should also mention (Gross, p 93) that the external director "brings with him knowledge, experience, and objective judgment and might balance the various views within the company, especially when the board of directors is made up of several cohesive groups"; he is "removed from the shareholders' personal interests… can express objective opinions in cases where differences have arisen between various groups in the company and balance the different interests in the company…". By analogy, this statement is presumably consistent with the present case, despite ACUM's "private" corporate framework. Therefore, the external directors have a particularly important role from the broad, overall perspective of the interests of ACUM's members generally as well as the public at large; see also Hadara Bar-Mor, Corporate Law III (5769-2009) 307-309. Thus, we should not intervene in the ruling of the Tribunal on this matter.

 

Regarding my colleague's remarks concerning the rights exclusion mechanism and old and new media, what can be inferred from them is a lesson in complexity and arbiter humility. We are dealing with money and maximizing authors’ benefit but the question is whether the baby won’t be thrown out with the bathwater. My colleague pointed out the difficulties and her conclusion is that more experience and study is necessary in order to reach a proper balance (see para. 82). My sense is that this appears difficult and challenging; the technological means are constantly changing before our very eyes, along with their implications to the issue before us, and hence solutions are likely to be short-lived. The regulator, the Director-General of the Antitrust Authority, has an extremely important role in this respect since the Tribunal has only what its eyes can see, while the Director-General is equipped with available monitoring tools. Finally, this summer I have had the opportunity to serve as a "secondary partner" in three intellectual property decisions. Their common denominator is the complexity caused by time, complexity of different types, technological and economic. Studying the fascinating collection Copyright – Readings in Copyright Law (M. Birnhack & G. Pesach, 5769-2009) reveals a variety of insights that will concern us a great deal in the future. Apart from the need to plough through the specific material, the constant changes, perhaps more than in any other area of civil law, also place the courts, and equally so – the regulatory entities, under weighty responsibility. The tension between property and competition, and between the long, short and medium term, poses real challenges. The professionalism of the regulators – be it the Patent Office or, as aforesaid, the Director-General of the Antitrust Authority – helps courts in making their rulings but does not relieve them of their responsibility. In these matters comparative law may also be useful. The bottom line is that this judgment ought to be a starting point for lessons to be learned; over, but not done.

 

Held as per the opinion of Justice D. Barak-Erez

 

September 3, 2013 (Elul 28, 5773)

AAA 9241/09

 

Sheleg Lavan (White Snow) 1986 Ltd

v.

1. Ashkelon Municipality
2. Ram K.R.M. Ltd
3. Tnufa Personnel Services Ltd
4. J.J.A. Maintenance and Services Ltd.

 

The Supreme Court

Sitting as a Court of Appeals for Administrative Affairs

[8 July 2010]

 

Before Justices E.E. Levy, E. Arbel and N. Hendel

 

Appeal of an Administrative Affairs decision of the Beersheba District Court dated 8 November 2009 in AA 357/09, issued by the Honorable President J. Elon.

 

Facts: The respondent, the Ashkelon municipal government, issued a tender for the provision of cleaning services. The tender documents set a minimum bid price in accordance with the exact amount of the wages for cleaning workers as determined in a government circular establishing a national standard for such wages. Respondent 2 submitted the lowest and ultimately winning bid. As part of the tender process, respondent 2 explained its ability to pay the minimum wage while also covering expenses and earning a profit by noting its expectations that a percentage of its workers at any given time would not have acquired enough seniority to entitle them to pension and other benefits; thus, savings with respect to the compensation of its workers would allow the respondent to cover its expenses and earn a minimal profit. The lower court upheld the award of the tender to the respondent, noting that the tender itself had included no requirement regarding the seniority of workers and that the bid was therefore entirely acceptable. The appellant, which had tendered unsuccessfully on the basis of a higher salary cost, appealed.

 

Held: The appeal against the lower court’s decision was allowed in full. There is no ground for distinguishing between the rules governing this matter in a national government context and the rules that apply to local government; recently enacted regulations and government directives make clear that the upholding of workers’ rights is of paramount importance and will be a relevant consideration in government tender decisions, because of the administrative authorities’ obligations vis-à-vis the public. Although it is impossible to predict or to prevent every possible violation of workers’ rights through the tender process, a government authority issuing a tender to contract for services with an external party must nevertheless provide as much forward-looking protection for the contractors’ workers as is possible. Thus, when a bidder has expressly stated a plan to dismiss workers after particularly short periods of time in order to minimize the burden of social benefit payments, the bid cannot be accepted.

 

Appeal allowed.

 

     Legislation cited:

Severance Pay Law, s. 3.

Local Councils Order (a), 5711-1951, s. 192.

Local Councils Order (Regional Councils), 5718-1958, s. 89.

Mandatory Tenders Law, 5752-1992.

Municipalities Ordinance [New Version], 5724-1964, s. 197.

Municipalities Regulations (Tenders), 5748-1987, reg. 11.

 

Supreme Court Case Cited

[1]...... HCJ 10245/07 Israel National Organization of Guarding and Security Companies v. Minister of Justice (2007) (unreported).

 

District Court Cases Cited

[2]       AP (TA) Modi’in Ezrachi Ltd v. Association of Dan Region Municipalities (2008).

[3]       AP (Jerusalem) 1077/06 Koach Otzma Ltd. v. Jewish National Fund/Keren Kayemeth Le’Israel (2007).

[4]       AP (Nazareth) 117/08 Reshef Security [1993] Ltd v. Afula Municipality (2008).

 

Labor Court Cases Cited

[5]       NLC 45/44-3 Kara v. Ofir (1995) (unreported).

[6]       LabA 122/03 Waxman v. ITC 24 Around the Clock (2007) (not yet reported).

[7]       LabA 420/06 Kogen v. Kfir Electronic Security and Protection Ltd (2007) (not yet reported).

 

For the appellant — R. Barak; R. Garber.

For respondent 1 — Y. Avishur.

For respondent 2 — G. Tavur.

For respondent 3 — A. Shur; A. Lazar.

For respondent 4 — A. Kaminetzky.

 

JUDGMENT

 

Justice E.E. Levy

Factual background

1.    In May 2009, respondent 1, the Ashkelon municipality, published a tender for the provision of cleaning services in its offices and in the city’s educational institutions. The tender covered a period of two years with the possibility of an extension for an additional period. The appellant and the respondents were among those that submitted bids for the tender, and respondent 2, Ram K.R.M. Ltd, was awarded the contract.

Section 2 (b)(3) of the tender conditions provided as follows:

‘Bids will be based on the tender documents [including] the “Tender Participant’s Proposal” form which includes the costing of wages for the employer (Appendix A to the Proposal Form).’

Appendix A, which is the Tender Participant’s Proposal form, adds the following:

‘The amount per work-hour [proposed by the participant] will not be less than the minimum amount of NIS 28.64.’

Section 4 of the tender conditions provides that a bid specifying an amount lower than the minimum amount will be disqualified.

The minimum amount is based on a single variable: the cost of the lawful employment of a cleaning worker. The calculation made by the municipality relies on Directive No. 2007-2-41, published by the Ministry of Finance Accountant-General and dated 10 Av 5767 (24 July 2007), entitled “Protection of Rights of Workers Employed by Service Contractors.” The Directive was made binding on the local authorities in Circular No. 460 (December 2007) of the Director-General of the Center for Local Government, as ordered by the Director-General of the Ministry of the Interior.

The appellant proposed to provide the service for NIS 29.34 per work-hour. The party that was awarded the contract, Ram K.R.M., submitted a lower bid, in which it offered the prescribed minimum price. However, since it is presumed that a bid submitted in a tender reflects not only the costs of the wages to be paid to the bidder’s workers, but also additional expenses (here — materials, equipment and supervision costs), as well as a profit, the winning party was asked to explain to the tenders committee how the terms of its bid would allow it to comply with the tender conditions. After a discussion that I see no need to describe at length, the winning party submitted a calculation which indicated that it would be able to comply with the tender conditions, and even to earn a profit – even if it was charging the municipality only the minimum price. The calculation was simple: while the wage components as laid out on the basis of the Accountant-General’s specification related to workers with more than one year of seniority, the winning bidder presumed that a certain percentage of the workers that it would employ would have less seniority than that, and the cost of their employment would therefore be lower. In calculating the costs of the allocations for pensions, which the employer is required to set aside only after six months of employment, the winning party calculated that “20% of the workers are expected not to work for more than half a year” (Pricing Letter dated 16 July 2009, Exhibit G of the appellant’s exhibits). Regarding the cost of severance pay and of seniority-based salary increments, to which a worker with one year or more of seniority is entitled, “the consideration was of [only] 60% of the employees[,] who are expacted to work for more than one year” (ibid.). The National Insurance payments component was also set at a lower rate than that established in the Accountant-General’s directives, based on an assumption that the savings in the above-mentioned salary components would generate savings in relation to the obligatory National Insurance payments related to such components. Based on these calculations, the party that was awarded the tender argued that it could pay the workers their legally mandated wages, and at the same time pay all the expenses involved in the provision of the service and also generate an (admittedly low) profit from the contract with the municipality — a profit of two percent of the value of the transaction.

2.    The Beersheba District Court dismissed the appellant’s argument that the tender should be cancelled in the absence of any legally acceptable estimate and that in any event the winning bid should be disqualified, on the grounds that it reflects either an underpayment of the amounts to be paid to the workers, meaning a violation of their rights; or, alternatively, a financial loss to the party submitting the bid, meaning a deficit bid which it could not fulfill. The District Court held that the “calculation made by the Ram Company regarding the mix of seniorities for the workers that it would employ to carry out the work, as reducing the marginal costs proposed in the context of the pricing, is acceptable, and it is not unrealistic” (third paragraph of the decision). “There is no doubt,” the President wrote, “that it would be preferable for the workers that their employment be long-term. However, this item is not a material condition of the tender — either express or implicit — and the tender’s retroactive expansion so as to include the item as a threshold condition is a contravention of the principles of the law of tenders” (ibid., at para. 5). “The bid price,” the lower court added in its holding, “thus ensures the payments to the employees” (ibid., at para. 4). Regarding the tender itself, the court held that “the appendices establishing the minimum price bid for the cost of average work-hours comply with the required criteria, in light of the nature of the tender — in which the pricing and the costs are comprised, almost exclusively, of the costs of an average work-hour” (ibid., at para. 7).

This is the main issue in the appeal before us, and it appears to me to be obvious that the appeal must be allowed.

The normative framework

3.    Section 197 of the Municipalities Ordinance [New Version], 5724–1964 (like its parallel provisions, s. 192 of the Local Councils Order (a), 5711–1951 and s. 89 of the Local Councils Order (Regional Councils), 5718–1958), establishes that municipalities are required to contract for the execution of work through the issuance of a public tender. The Ordinance, like the Municipal Regulations (Tenders), 5748–1987 — which were enacted pursuant to the Ordinance — does not refer to any obligation to be especially meticulous regarding the rights of the employees of the contractor with whom the municipality enters into a contract. The Mandatory Tenders Law, 5752–1992, which establishes the duty of government ministries and of other public entities to contract through public tenders, also did not include — until recently — any provision in this spirit.

However, the regime that protects the rights of the employees of bidders at public tenders is an integral part of the law of tenders — in theory, and since recently, recently in practice as well. This regime is derived, first and foremost, from the fiduciary duty that the administrative authorities owe to the public (D. Barak-Erez, Administrative Law (2010), at p. 631); from the fact that the objectives in pursuit of which the authorities act are not purely economic (O. Dekel, The Tenders Requirement for Administrative Entities (2001), 49, at p. 293); and from the fact that the activity of these authorities is subject to all aspects of public policy — i.e., that they are subject to all the “basic principles of the legal system” (S. Gavish, Issues in the Law of Public Tenders (1997), at p. 24). It is undisputed that the protective labor laws constitute an essential part of these principles. Thus, the case law also reflects the concept that “when the state contracts with external parties, it is entitled, and even obligated, to do what it can in order to ensure that the protective laws are upheld and that the scope of the violation of the rights of the workers is minimized” (HCJ 10245/07 Israel National Organization of Guarding and Security Companies v. Minister of Justice [1]). And in this respect, the rule applicable to the state is also applicable to the local authorities, whose activities are subject to the same principles of public law.

Alongside this obligation in principle, a number of concrete steps have been taken in recent years to intensify the protection of the rights of the workers of parties bidding in a public tender. In February 2007, the Government adopted Resolution no. 1134, which directs the Ministry of Finance’s Accountant-General to extend the applicability of the labor laws to cover parties providing services to the government in labor-intensive fields, and to establish directives that protect the rights of their workers. At the same time, the Director-General of the Ministry of the Interior and the Director of the Government Companies Authority were ordered to implement these rules within the local authorities and the government companies. Consequently, the Funds and Economy By-laws ([known by their Hebrew acronym as] the Takam), issued by the Accountant-General, which include rules protecting workers’ rights, came to be binding on most public authorities (see also G. Shalev, “Public Tenders After the Mandatory Tenders Law, 5742-1992” 2 Mishpat U’Mimshal (Law and Government) 455 (1995), at p. 457; S. Herzig, Law of Tenders (vol. 2, 2002), at p. 72).

In February 2009, the Mandatory Tenders Regulations, 5753-1993, KT 6750, were amended; the main part of the amendment entered into effect in June 2009. The duty to be meticulous regarding workers’ rights runs through the Regulations like a crimson thread. Thus, for example, a tenders committee is authorized to invalidate bids the acceptance of which would involve a violation of workers’ rights (Regulation 20(d)); a bid submitted by a party that was convicted of a violation of labor laws during the years preceding the tender must be rejected (Regulation 6a(a)); and the matter of diligence regarding workers’ rights is established as one of the criteria to be used in weighing the qualified bids that have been submitted (Regulation 22(a)(6)). The literal language of these Regulations does not bind local authorities, as they cover only those entities that are subject to the Mandatory Tenders Law; however, in the absence of any substantive basis for distinguishing in this matter between government ministries and the local authority, it is only natural that those matters that have not yet been regulated in express language by the legislator will be supplemented by the case law, taking a coherent view of the principles of the public tender.

The fundamental principle –– i.e., that as part of the requirement within the law of tenders that a bid must be examined on the basis of its benefit for the public and its fair and reasonable price, it is also necessary to examine the treatment, within the framework of the bid, of the rights of the workers who will be employed thereby –– has already found expression in the rulings of the administrative tribunals of the lower courts. In a recent case, Judge M. Rubinstein of the Tel Aviv-Jaffa District Court aptly described the matter as follows:

‘A reasonable decision by a tenders committee can lead to the selection of a bid which is not the cheapest, but which considers additional matters beyond the price criterion. The bidder’s ability to ensure the rights of its workers in the framework of the project which is the subject of the tender could be [one such] additional consideration. This consideration is different from considerations such as the bidder’s experience, training, reliability, etc., since it does not relate to the customer’s ability to provide the services that are being requested through the tender, and instead refers to the interest of a third party — the bidder’s workers — who are not technically a part of the contractual relationship between the parties. Although this consideration does not pertain, on its face, to the relationship between the customer and the bidder, there has been a clear tendency in recent years, both on the part of government entities and on the part of the courts, to insist that tenders for the provision of services to public entities also ensure the rights of the workers of the providers of those services’ (AP (TA) 1705/07 Modi’in Ezrachi Ltd v. Association of Dan Region Municipalities [2], at para. 12).

Public tenders as a platform for the violation of workers’ rights

4.    The juridical approach described here developed against a background in which violations are committed — a reality that unfortunately has been the norm for many years in service industries such as security and cleaning, and which has penetrated to the heart of public service as the number of contracts with external contractors has increased. A major characteristic of contracts of this type is the buffer zone that they create between the direct employer and the worker, which reduces the “visibility” of the latter as well as his negotiating power and the knowledge that is made available to him, and which opens a very wide door to a diminution of the worker’s rights. “The hiring of manpower services”, writes Dr. Omer Dekel, “has long since become an easy way to bypass the statutory constraints regarding minimum wages, the requirement to provide social conditions to workers, etc.” (Dekel, The Tenders Requirement for Administrative Entities, supra, at p. 371, n. 42). A clinical study conducted several years ago at the Hebrew University of Jerusalem observed this phenomenon at close range:

‘Service contractors work for profit, and it cannot be presumed that they are willing to finance the gap between the cost of providing the service and the price they ask for their services . . . The workers, who are the weakest link in the chain, are the ones who generally pay the price for the low bid [in the tender]. In a field project that documented the employment terms of forty-six contract workers at government ministries (especially cleaning workers), there were very high rates of violations of protective rights with respect to almost all the issues about which the workers were questioned. Most of the workers (almost forty workers out of forty-six) reported that they do not receive the pension payments to which they are entitled pursuant to the Expansion Orders relating to the cleaning industry. A similar number of workers reported that they do not receive payment for holidays, and the same was true regarding payment for overtime and for sick days. Twenty-eight workers (out of thirty-six who answered the question) reported that they do not receive an annual vacation; thirty-one workers (out of forty-three) reported that they are not paid convalescence payments. Most of the workers reported a high number of violations that are committed concurrently. Similar findings were reached through field checks regarding the violation of the rights of security workers employed through contractors . . . The deficit tender method has become an “incubator” for violative employment’ (A. Benish and R.Tsarfatie, “When Labor Becomes a Commodity Again: A Critical Examination of Abnormally Low Bids in the Procurement of Employment Services”, 1 Maa’sei Mishpat 93 (2008), at p. 98 (emphases added)).   

A glimpse into the manner in which these phenomena occur in practice was provided at a meeting of the Knesset’s Labor, Welfare and Health Committee on 22 May 2005. The subject of the meeting was the situation of workers in labor-intensive services, and one service contractor testified about a practice which is common among many employers:

‘I can tell you that because of the current state of the market, I automatically do not pay for workers’ social benefits, [and I do this] in order to survive. [Only] if a worker asks for such, I will not refuse, and this is the highest level of fairness being practiced in my market . . . I must pay the minimum wage plus National Insurance and vacation pay, then I fire [the worker] after seven or eight months, and I am not required to pay towards a pension, convalescence or severance pay for him,. . .’

The Law of Tenders as a Preventative Measure

5.    Various mechanisms, from several areas of law, come to mind — mechanisms which can reduce these violations of the labor laws. Some of them are invoked after the violation has occurred, and are based on ex post considerations. These include, inter alia, various supervisory measures that the issuer of the tender can implement vis-à-vis the party that is awarded the contract. They also include the labor laws that are available to a worker who wishes to defend his rights, and the principles of administrative law, pursuant to which complaints may be submitted to a government authority that is not fulfilling its public obligations. By their nature, these ex post measures are more precise in their treatment of a violation that has already taken place, as they can take into consideration, inter alia, the nature of the violation, its circumstances and its intensity. However, their power as a preventative measure, the main point of which is to deter the violator, is limited. To the extent that the matter depends on a party issuing the tender, it is doubtful that such a party would be motivated to reopen a contract that it has already found to be preferable in terms of its price, and the replacement of which, or the enforcement of its specific terms, entails a complicated and expensive process. Regarding a worker whose interests have been violated, reality demonstrates that his access to information regarding his rights will be limited, and his willingness to pursue those rights of which he is aware will be even less.

6.    Nevertheless, the law of tenders seeks to examine a possible violation of workers’ rights from a forward-looking perspective (ex ante) and to prevent the violation before it takes place. Naturally, the manner in which the law is applied is derived from the fact that at the preliminary stage, the details of a particular violation which has not yet occurred cannot be known — and all that can be done is to prescribe a general framework that will reduce the chances of its occurrence. Such a framework, included as an integral part of the tender conditions with which all bidders must comply, is certainly not an exact one. For example, a tender issuer who wishes to reduce the risk of a violation of the rights of female employees, and to ensure that bidders will comply with their obligations under the laws that protect women at work, can choose to require that bidders demonstrate that they are capable of honoring, meticulously, the special rights granted to working women. This is an option even when it is not known whether any women will actually be employed in the work under tender, or what percentage of all the workers may in fact be women. Obviously, the estimation component of every such measure detracts from that measure’s ability to totally prevent all future violations. But a prospective view makes a unique contribution to the combined effort to reduce the risk of a violation of the workers’ rights. It thus appears that the prevention of a violation at an early stage is more efficient, not only in terms of the principles of labor law, but also with regard to the additional objectives of the tender process. I strongly support the statement that “the state, in the role of customer, is the most effective means of preventing this phenomenon [of the diminution of workers’ rights] (Benish & Tsarfatie, “When Labor Becomes a Commodity Again”, supra, at p. 104).

The unique aspect of public tender law is that it stands at a legal junction, at which basic elements of various legal fields meet. Administrative and economic efficiency, morality, public ethics, the observance of freedom of contract in its broader sense, diligent observance of the principle of equality — including equality of opportunity — are some of the principles that meet within the law of tenders (O. Dekel, Tenders (vol. A, 2004), at p. 92; O. Dekel, “The Purposes of the Tender: Equality is not the Main Point,” in Y. Dotan, A. Bendor, eds., Y. Zamir Volume on Law, Government and Society (2005), 441, at p. 474). In my view, the realization of protective labor law is one of the goals of the law of tenders, alongside the other objectives of this particular field of law.

The basic principles of labor law — a degree of social security for the worker

7.    The protective labor laws also have several objectives. One of them is to ensure a certain degree of social security for the worker is one of them. The essence of this objective is to establish that when a worker is unable to work, he will be able, for a certain period of time, to continue to support himself. A worker who becomes ill is entitled to sick pay. A female worker who has given birth is entitled to maternity leave. A worker who has been dismissed is entitled to severance pay, and the purpose of such pay is to provide a means of support for the worker while he looks for alternative work. A worker who is either on convalescence leave or in a period of convalescence will continue to receive a salary even without actually being at his place of employment. Some of these social rights result from the connection between the employee and his place of work. A dedicated worker, who is sufficiently connected to the workplace to allow the employer to feel secure with respect to his ability to keep the business going, is entitled to the same level of security with respect to his own ability to earn a living. One indication of the existence of an established employment relationship is the seniority accumulated by a worker at the place of work. The labor laws therefore establish that a worker whose connection to the employer is severed after a few months will be treated differently from one who has worked at a single place of employment for a period of a year or more.

However, this concept, together with its accompanying logic, might do more harm than good. An employer, who benefits from the worker’s labor, is nevertheless liable to terminate the employment relationship if, according to the employer’s calculation, the financial profit that he derives from the worker is less than the cost of the social payments that he will be required to make for the worker over time. This situation is not generally the lot of well-placed workers who carry substantial market power. But it is very common in relation to workers whose position is weak, and whose professional skills can be provided by replacement workers with less seniority andwho have not yet accumulated any rights. Workers in the labor-intensive service industries, such as the cleaning industry, are workers of this type. It is therefore not surprising that some employers of cleaning workers habitually terminate the employment relationship with their workers before the first year of employment has ended, in order to increase the financial profit that they can produce. In relation to the submission of bids for a public tender for cleaning services, in which the profit margins are in any event very low, the concern that such a process will be followed increases drastically.

8.    Market forces cannot provide a response to this issue. Regulatory action is required. A number of tools have been developed within the field of labor law to deal with such situations. Thus, the law does not recognize the legitimacy of a termination of an employment relationship when there is a basis for concluding that the reason for the termination was avoidance of an obligation to pay for social benefits. Section 3 of the Severance Pay Law, 5723-1953 establishes a presumption according to which “a dismissal shortly before the end of the first year of employment will be considered — unless proven otherwise — as resulting from the intention to avoid the obligation to pay severance pay, and such a dismissal will not adversely affect the right to severance pay.” The case law has added that this provision is to be implemented on a substantive level, meaning that even if a worker’s dismissal did not occur close to the end of the first year, but did take place against a background indicating an intention to avoid payment of social benefits, the employer will not be exempt from liability for the said payment (NLC 45/44-3 Kara v. Ofir [5], at para. 11; LabA 122/03 Waxman v. ITC 24 Around the Clock [6]; Y. Luvotsky, Concluding Employment Relationships (2004), at pp. 3-9). Similarly, it has been held the employment of a worker for a period which is limited, not because of the needs of the actual job, but because of an intention to prevent the worker from accumulating seniority, cannot serve to deny the worker his entitlement (LabA 420/06 Kogen v. Kfir Electronic Security and Protection Ltd [7], at para. 12(b)).

9. These are, as stated, ex post measures, designed to deal with the deliberate evasion of obligations to workers, after the employers have already made attempts to engage in such evasion. But they suggest a general principle of law — that the employer’s termination of an employment relationship, when the reason for such is the avoidance of the realization of the employee’s rights, will not be recognized. An implication of this rule, when it is viewed from the perspective of the law of tenders, is that a bidder may not, in attempting to make his bid the preferable one, rely on the dismissal of a worker or on any other limitation of a worker’s rights.

A tender issuer who wishes to safeguard the rights of the workers of the winning bidder can use a variety of measures (see, for example, Dekel, Tenders (vol. A), supra, at p. 414). One of these is the measure used in the present case, which is the establishment of a minimum price that reflects the proper cost of the employment of workers, as a part of the tender conditions themselves. This measure, being a preventative measure which is adopted in advance, cannot be absolutely precise and cannot respond, from the outset, to every possible violation. By its nature, it will focus on the establishment of threshold requirements that are designed to deal with the source of wrongful conduct on the part of employers. Because a key aspect of the harm that is done to the workers is the phenomenon of dismissal before the end of a year of employment, there is good reason to calculate the cost of the employment of workers on the basis of the wage components of workers who have been employed for over a year. Of course, this measure cannot ensure that no violation will occur. Nevertheless, it can reflect the position of the public authority issuing the tender that it will not accept a diminishment of the workers’ rights; furthermore, it may be assumed that a bidder who has made a commitment from the outset to a price that properly reflects the transaction will be able, in the end, to comply with the tender conditions, and that such a bidder’s incentives to violate his workers’ rights in order to win the tender and to execute it will be reduced. This is similar to the rationale underlying the invalidation of a deficit bid, regarding which there is a concern that ultimately the winner will encounter difficulty in complying with the tender conditions (S. Herzig, Law of Tenders (vol. 1, 2001) at p. 217; O. Dekel, Tenders (vol. B, 2006), at p. 123). Nevertheless, I would strongly emphasize that the approach whereby workers’ rights should be protected through the tender itself does not draw its main strength from the benefit derived from ensuring the tender’s implementation according to the terms included in the winning bid. Instead, it stands independently, as one of a number of objectives that the law of tenders seeks to realize.

The tender conditions and the preparation of an estimate

10.  The above discussion clearly indicates that the establishment of a minimum price, based only on the cost of the employment and ignoring the cost of other components of the tender such as other expenses and profit, will not achieve the above-mentioned objective. It, too, generates the concern that if a bid indicating the threshold price is not a deficit bid, it will necessarily involve a violation of the workers’ rights. A tender with conditions such as these essentially calls for a violation of basic elements of labor law, or alternatively, of the principle of efficiency. It is therefore impossible to allow it to stand. A minimum price mechanism is not, as I have already noted, the only tool, or a necessary tool, for protecting the workers’ rights, but if the authority has chosen to use it, it must make certain that the mechanism provides true protection, and it must certainly ensure that the minimum price mechanism itself is not the cause of the future violation that the authority seeks to prevent.

11. The natural place for the above-mentioned cost elements is in the estimate that the local authority issuing the tender is required by law to formulate, in compliance with its obligation pursuant to Regulation 11 of the Municipalities Regulations (Tenders). This regulation requires that the authority deposit in the tender box, in advance, a “detailed estimate of expenses or income involved in the proposed contract”. According to its purpose, the estimate serves as a measurement for objective assessment, against which all the qualified bids that have been submitted are measured (Dekel, Tenders (vol. A), supra, at p. 385). It must include a specification of all the expected cost elements, against which the tenders committee will measure the cost elements in the bids. It is presumed that the estimate expresses the proper value of the contractual relationship, but this presumption can be refuted when it is proved that the amount in the estimate is unreasonable (ibid.). The result of an unreasonable estimate will vary depending on the circumstances (Herzig, Law of Tenders, supra, at p. 220). However, I see no need to discuss the matter at length, since I believe that it is a basic principle that the estimate does not replace the substantive conditions of the tender. It is nothing more than a helpful tool to be used by the tender issuer in formulating the conditions and in examining the bids. But it is therefore clear that even a reasonable estimate, which has been properly prepared, cannot compensate for a defect in the tender conditions.

The tender in this case

12.  In my view, this case involves a bid that was submitted on a deficit basis or that violates the workers’ rights. Such a bid should not have been accorded preference, because the bidder, by virtue of the price tendered, indicates that it will encounter difficulty in fulfilling the tender conditions and in realizing its objectives. According to the bid that was tendered, the profit for the party winning the tender was dependent on the realization of several assumptions regarding the composition of the future work force that the contractor would employ. Respondent 2 was unable to explain — either to the tenders committee in the context of a clarification that it conducted, or in its response to this appeal — the basis for the belief that these assumptions would be realized. The matter works against them in two ways: either these were theoretical assumptions that cannot serve as a basis for winning the tender — regarding which it has been said that “in such cases, it is not sufficient to rely on estimations and unfounded assumptions made by the companies submitting bids in the tender, assumptions regarding the future that are difficult to check, to monitor and to ascertain that they have indeed come to fruition” (AP (Jerusalem) 1077/06 Koach Otzma Ltd. v. Jewish National Fund/Keren Kayemeth Le’Israel [3], per Judge Y. Tzur, at para. 22); or respondent 2’s estimation is based on a future intention regarding the employment of its workers which is inconsistent with the principles of labor law. Regarding such intentions, it has been written that “the tenders committee ought not to confirm [a bid] which is neither ethical nor worthy, in that the [bidder’s] intention to violate the conditions of its workers’ employment is made evident in advance (AP (Nazareth) 117/08 Reshef Security [1993] Ltd v. Afula Municipality [4], per Justice B. Arbel at para. 55). Either way, this bid cannot be deemed legitimate, and in any event it should not have been preferred over the bids tendered by other bidders.

13.  However, it was not only the winning bid that was seriously defective, but also the tender itself. The minimum price set did not take into consideration the additional cost elements and the profit, and in this way, respondent 1 essentially invited the bidders to submit unacceptable bids. Presumably, if the municipality had included, as required, an estimate based on all the cost components of the tender, the tenders committee would have easily noted the defect. This did not happen, and in any event the defect cannot be corrected, even if a different bid had been chosen instead of the winning bid.

In light of this, I suggest that we allow the appeal, and declare the tender to be void, and in any event disqualify the winning bid. I further suggest that we order each of respondents 1 and 2 to pay the appellant’s attorneys’ fees in the amount of NIS 20,000 and to pay to respondents 3 and 4 the amount of NIS 10,000.

 

Justice E. Arbel

I agree.

 

Justice N. Hendel

1.    I agree with the conclusion that my colleague Justice E. Levy has reached, although on a narrower basis.

The phenomenon noted by my colleague Justice E. Levy — a violation of the workers’ rights by the contracting companies, by way of a tender conducted by a public authority — is indeed harsh, and requires correction. The routine dismissal of workers after a short period of time, with the objective of withholding various benefits from such workers, is inconsistent with the function of a public authority. The latter must serve as an example and honor the rights of its workers in practice. The situation must be changed. The issue of which body is responsible for effecting this change — or more precisely, how the task should be divided between the judicial authority and the legislative authority — is a separate question.

The difficulty involved in accepting this appellant's argument is the following: the calculation of the payment for a work-hour used by respondent 2, who won the tender, is based on the assumption that 40% of all workers to be employed in executing the tender project will work for less than one year. This data is found in the pricing sheet of respondent 2’s bid (see page 2 of the corrected calculation). As the material indicates, the one year seniority period has clear financial consequences. Nevertheless, the payment offered by respondent 2 for one work-hour meets the minimum threshold of the tender. Employing workers for more than one year is not a condition of the tender, nor is it a statutory requirement. The question thus arises as to whether accepting the appellant's argument would be an expression of the ideal law, as opposed to the existing law. In other words, do the facts of this case and its circumstances allow for the court to intervene in the tender proceedings? The answer to these questions must be determined according to the reasonableness of the manner in which the authority — respondent 1, the Ashkelon municipality (hereinafter: “the municipality”) — conducted the tender.

2.    In its briefs and in its pleadings, the municipality stresses that the “calculation of the cost of wages to the employer for a work-hour, attached to the bidder’s form as Appendix A . . . has been prepared in accordance with Circular No. 460 (December 2007) of the Director-General of the Center for Local Government, entitled ‘Protection of the Rights of Workers Employed Through Service Contractors’, which provides that the local authorities must implement the Accountant-General’s guidelines when it enters into contractual relationships with service contractors. Attached to the Director-General’s circular is the Accountant-General’s guideline, including the ‘Price Schedule Reflecting the Employer’s Cost per Work-hour with Respect to Cleaning Workers’”. Thus, in establishing a wage per work-hour of NIS 28.64, the municipality acted on the basis of the provisions of the Director-General’s circular. This was the basis for the calculation. However, this amount did not include various additions that the bidder should have taken into consideration, such as: equipment, materials, various expenses, and of course profit.

Despite the above, or more accurately, because of the above, once respondent 2 had tendered a bid that included a work-hour wage of NIS 28.64 — the tender’s minimum requirement — the municipality acted reasonably in its decision to demand that respondent 2 clarify that part of the calculation. This was also necessary in order to ascertain that the bid was not a deficit bid. Respondent 2 and an additional bidder were invited to appear before the tenders committee. This clarification process was not formal of course, but was instead directed at checking the matter in a substantive manner. The municipality acted in a similar fashion in deciding not to accept the first calculation presented by respondent 2. Under the circumstances of the case, the municipality acted correctly when it allowed respondent 2 to present an additional calculation. However, this calculation made clear that respondent 2 had assumed that 40% of the workers would not be employed for more than one year.

3.    Given the municipality’s public function, the explanation provided should have set off a warning bell. A public authority is not subject to the same rule as a private business. The authority is bound by public norms; it is a normative body. Profit is of less importance vis-à-vis the objectives and trends that it must adopt and promote. When the data were presented, it became clear that respondent 2 intended to limit the seniority of the workers who would be hired, such that some of them would work for less than one year and some (20%) would work for even less than half a year (a period which also has a certain significance). This result is incompatible with the public authority’s duty to the public. It is not even consistent with the Director-General’s circular. It is a calculation which can adversely affect almost one half of the potential workers. In light of this, it should be noted that the contract period, according to the tender, is two years, with an option to continue for an additional two years.

This point became clear through a discussion of the matter before the tenders committee. I do not wish to establish a general duty or quasi-duty regarding the employment of workers for a particular period of time. In the context of this case, it is sufficient to point to the original sin of this particular tender process. It is true that the municipality established a work-hour wage based on the provisions of the Director-General’s circular, which also referred to an increased wage based on seniority. However, it adopted the wage as it was presented in that circular, without taking into consideration the fact that the winner of this tender would be required to make additional payments for various expenses. Thus, a situation developed in which the municipality made it possible, through the tender, for bidders to bid unrealistic offers that could only be realized through a contraction of the workers’ conditions. This result, on its face, is unreasonable and contravenes the mandate given to the public authority to conduct its affairs. The obvious conclusion is therefore that the tender must be nullified.

4. In summation, I concur, as stated, in the result reached by my colleague, Justice E.E. Levy.

 

Decided as per Justice E.E. Levy.

 

26 Tammuz 5770

8 July 2010

 

 

HCJ 5167/00

1              Professor Hillel Weiss, Esq.

2.            Moshe Feiglin, Chairman of ‘Zoh Artzeinu’ Organization

v.

1.            Prime Minister of Israel

2.            Government of Israel

3.            Israeli Knesset

HCJ 9607/00

1.            Yoram Sheftel, Esq.

2.            Doron Beckerman, Esq.

v.

1.            Ehud Barak, Prime Minister of Israel

2.            Government of Israel

3.            Elyakim Rubenstein, Attorney General

HCJ 84/01

1.            Akiva Nof

2.            Dov Shilansky

3.            Dr. Yosef Faber

4.            Yehiel Hazan

5.            Esther Shternberger

v.

1.            Ehud Barak in his Capacity as Prime Minister of Israel

2.            Government of Israel

HCJ 86/01

1.            Gabi Butbul

2.            Yossi Ben Shahar

v.

1.            Prime Minister and Minister of Defense – Ehud Barak

2.            Government of Israel

3.            The Attorney General – Elyakim Rubenstein

HCJ 147/01

1.            Yaakov Elias

v.

1.            Prime Minister, Ehud Barak

2.            Government of Israel

 

Formal Respondents

 

1.            The Attorney General – Elyakim Rubenstein

2.            Professor Daniel Friedman

3.            Professor Shimon Shetreet

4.            Professor Shlomo Avineri

5.            Moshe Negbi, Esq.

 

The Supreme Court Sitting as the High Court of Justice

[January 25th, 2001]

Before President A. Barak, Vice President S. Levin, Justices T. Or, E. Mazza, I. Zamir, J. Türkel and I. Englard.

 

Petitions to the Supreme Court sitting as the High Court of Justice for an order nisi and an interlocutory order.

 

Facts: The Prime Minister resigned, and he and the Ministers of the outgoing government continued to fulfill their duties as prime minister and ministers until the new government was to take office.  In this framework the outgoing government continued to conduct political negotiations with the Palestinian Authority with the aim of reaching an agreement before the elections. 

 

Held: The majority opinion was written by President Barak.  The petitioners claimed that the outgoing government was not authorized to conduct the political negotiation.  They asked the court to direct the government to end the political negotiation until the establishment of a new government following the special elections.  The basic issues that were addressed in this case were:  what is the scope of the authority and discretion of an outgoing government?  Is it permitted to conduct political negotiation and sign an agreement?  And what is the scope of judicial review of decisions of the outgoing government? 

 

The petitions were denied.

 

Vice-President S. Levin and Justice Zamir wrote separate opinions supporting the majority conclusion.

 

Justice Türkel wrote a dissenting opinion.

 

Basic laws cited;

Basic Law: Jerusalem, the Capital of Israel (Amendment).

Basic Law: the Government

Basic Law: the Knesset

 

Legislation cited:

Government and Justice Arrangements Law (Revocation of Application of the Law, Judiciary, and Administration) 5759-1999.

Local Authorities (Election of the Head of the Authority and his Deputies and their Term in Office) Law 5735-1975, s. 27a

Transition Law, 5709-1949, s. 1.

 

Israeli Supreme Court cases cited:

[1]          HCJ 5/86 SHAS Party Association of Sephardim Shomrei Torah in the Knesset v. Minister of Religions, IsrSC 40(2)742.

[2]          HCJ 4676/96 Mitral Ltd. v. Knesset of Israel, IsrSC 50(5) 15.

[3]          HCJ 5621/96 Herman – Head of the Municipality Ofakim v. the Minister of Religious Affairs, IsrSC 51(5) 791.

[4]          HCJ 2533/97 Movement for Quality Government in Israel v. Government of Israel and Others IsrSC 51(3) 46.

[5]          HCJ 2534/97, 2535/97, 2541/97 MK Yahav and Others v. State Attorney and Others IsrSC 51(3) 1.

[6]          PPA 7440/97 PPA 6172/97 State of Israel v. Golan IsrSC 52(1)1

[7]          HCJ 4354/92 Temple Mount Faithful v. Prime Minister IsrSC 57 (1)37.

[8]          HCJ 6057/99 MMT Mateh Mutkafei Terror v. Prime Minister (unreported).

[9]          HCJ 7307/98 Polack v. Government of Israel (unreported).

[10]        HCJ 2455/94 ‘Betzedek’ Organization v. Government of Israel (unreported).

[11]        HCJ 4877/93 Irgun Nifgai Terror v. Government of Israel (unreported).

[12]        HCJ 3125/98 Abed Elaziz Muhammad Iyad v. IDF commander in Judea and Samaria (not yet reported).

[13]        HCJ 6924/00 Shtenger v. Prime Minister (not yet reported).

 

Israeli books cited:

[14]        A. Rubinstein, Constitutional Law in Israel 536 (vol. 2. 4th Expanded Edition, 1991).

[15]        Y. H. Klinghoffer Selected Material in Matters of the Day 1970-1979, 64, at 71 (1979).

[16]        A. Rubenstein and B. Medinah, Constitutional Law of the State of Israel, 91 (vol. A. 5th edition (1996).

 

Israeli articles cited:

[17]        Klein, ‘The Powers of the Caretaker Government: Are they Really Unlimited?’ 12 Isr. L. Rev. 271 (1977).

[18]        Shetreet ‘Custom in Public Law’ Klinghoffer Book on Public Law (edited by I. Zamir) 375 (1993

[19]        Shetreet, ‘The Knesset’s Role in Signing Treaties’ Hapraklit 36 at 349 [19] S. Shetreet

 

Foreign books cited:

[20]        T. Maunz, G. Drig Kommentar zum Grundgesetz (Mnchen).

[21]        J. Esensee, P. Kirchhof Handbuch des Staatsrechts (Heidelberg, Bd. II, 1987).

[22]        G. Burdeau, F. Hamon, M. Troper Droit Constitutionnel (Paris, 26טme ed., 1999).

 

Foreign articles cited:

[23]        Boston, Levine, McLeay, Roberts and Schmidt, ‘Caretaker Government and the Evolution of Caretaker Convention in New Zealand’, 28 VUWLR 629 (1998). 

 

Jewish law sources cited:

[24]        Proverbs 28:14

 

HCJ 5167/00

For petitioners – Dr. Chaim Misgav.; Howard Griff.

For respondent – Osnat Mendel.

 

HCJ 9607/00

For petitioners – Yoram Sheftel

For respondent–Osnat Mendel

 

HCJ 84/01

For petitioners – Akiva Nof

For respondent – Osnat Mendel

 

HCJ 86/01

For petitioners – Shmuel Lavi; Ran Shalish; Eiran Tzur

For respondent – Osnat Mendel

 

HCJ 147/01

For petitioners – Himself

For respondent – Osnat Mendel

For formal respondent no. 3 – Professor Shimon Shetreet

 

 

JUDGMENT

 

President Barak

The Prime Minister resigned.  He and the Ministers of the outgoing government continue to fulfill their duties until the prime minister and ministers of the new government take office.  In this framework the outgoing government is conducting negotiations for a political arrangement with the Palestinian Authority, with the aim of signing an agreement before the elections.  What is the scope of the authority and what is breadth of the discretion of the outgoing government?  Is it permitted to conduct the political negotiation and sign the agreement?  What is the scope of the judicial review of the decisions of the outgoing government?  These are the basic issues that have arisen before us in these petitions.  These are weighty questions.  In the normal course of events significant time is required for a judgment on such issues.  Such significant amount of time is not at our disposal, as the passage of time will undermine the rationale at the foundation of the petitions.  We have done all that we could to hear the petitioners arguments and to respond to them as speedily as possible.  We now present our judgment.  We have in all likelihood been brief where it would have been proper to expand.  We have tried to do the maximum possible in the brief time that was at our disposal.

The petitions and the responses to them

1.            The Government of Israel has been conducting negotiations for many months with the Palestinian Authority.  The Attorney General has explained the characterization of this negotiation in a memo (dated December 12, 2000) which was given to the Prime Minister:

‘The agreement that is now being negotiated is different from all of its predecessors ever, in every direction, as to its challenge and risks.  The challenge is ending the difficult conflict between Israel and the Palestinians, which all desire; the risk is the surgical operation, difficult beyond all difficulty, which the agreement demands.’

The negotiation and its content are a subject of sharp debate in Israel.  Against this background – and against the background of other internal matters – the Prime Minister, Mr. Ehud Barak, resigned from his position as Prime Minister (in effect as of December 12, 2000).  Special elections for Prime Minister were set for June 2, 2001.  The political negotiation with the Palestinian Authority continues to be conducted even after the resignation of the Prime Minister.  Against this background the petitions before us were submitted.  The petitioners are citizens who claim that the outgoing government is not authorized to conduct the political negotiation it is conducting.  They request that we direct the government to stop the political negotiation until the establishment of a new government after the special elections.

At the foundation of these petitions is the viewpoint that the outgoing government is a ‘transitional government’ whose authority is qualified, in the sense that it is entitled to deal only with ongoing matters.  This qualification, according to the petitioners claim, stems from the interpretation of the Basic Law: The Government and constitutional custom.  So too, this qualification is derived from the principle of reasonableness.  In these contexts the Government and Justice Arrangements Law (Revocation of Application of the Law, Judiciary, and Administration) 5759-1999 and the Basic Law: Jerusalem the Capital of Israel (Amendment), which require, as said in them, Knesset decisions for any territorial changes, were mentioned.  The outgoing government does not have a majority in the Knesset, and therefore could not fulfill these requirements.  Even this narrows the authority of the outgoing government.  This is primarily so, when the supervision by the Knesset – which is in recess – of the activities of the government, is not being implemented in actuality.

2.            In its response (from January 4, 2001) the Attorney General notes that the constitutional principle is of ‘continuity of government’.  The interpretation of the Basic Law: the Government does not lead to the application of limits on the authority of the outgoing government.  There is no basis to the claim as to the existence of a constitutional custom which limits the authority of such a government.  However, exercise of powers during a period of elections requires great caution.  The attorney general further added and noted that any agreement that would be reached, if it is reached, requires Knesset approval.  Every government decision, according to which the law, judiciary, and administration of the State of Israel will no longer apply on an area where it applies today, requires Knesset approval with a majority vote.   Every decision as to the transfer of powers in the area of Jerusalem to a foreign entity requires a basic law which is to be passed by a majority vote.  In a supplementary response (from January 17, 2001) – which followed questions we asked during the course of the petitions – the attorney general added that ‘the measure of caution is not a new legal standard, just like reasonableness or proportionality’.  In the opinion of the attorney general, ‘a determination on the question whether the government undertook proper caution is found . . .  in the public-parliamentary realm’.  The attorney general further added in response to our questions that ‘if an agreement is signed by the Prime Minister, in outline, or in another manner, its validation will be conditioned on the approval of the Government, and the required internal approvals, and this will be stated in the agreement itself.  As is common as to such agreements, this agreement will also be brought for Knesset approval.’

The normative framework

3.            With the resignation of the Prime Minister ‘special elections will be held’ (section 23(c) of the Basic Law: the Government).  What are the powers of the Prime Minister and the ministers upon the resignation of the Prime Minister and approaching the special elections?  Sections 31 and 32 of the Basic Law: Government address this:

‘Continued Functioning of the Prime Minister and Ministers

31(a) A Prime Minister who has resigned or in whom the Knesset expressed no confidence will continue in office until the newly elected Prime Minister assumes office.

(b) In the event of the Prime Minister’s death, permanent incapacitation, resignation, removal from office, or an expression of no confidence by the Knesset, the Ministers will continue in office until the newly-elected Prime Minister assumes office.

Continuity of Government

32. During the election period for the Knesset and the Prime Minister or during special elections, the Prime Minister and the ministers of the outgoing Knesset will continue in office until the Prime Minister and the ministers of the new Government assume office.’

Thus, the Basic Law: the Government establishes the principle of government continuity (section 32) ‘governments rise and fall, but the government forever stands.’(HCJ 5/86 SHAS Party Association of Sephardim Shomrei Torah in the Knesset v. Minister of Religions [1] at p.  751; and compare: section 37 of the Basic Law: the Knesset and HCJ 4676/96 Mitral Ltd. v. Knesset of Israel [2]). The resigning Prime Minister continues in office until the newly elected prime minister assumes office.  Upon his resignation, the ministers continue in office until the newly elected prime minister assumes office (section 31).  At the foundation of this provision is the approach that with the resignation of the Prime Minister a governmental ‘void’ is not created, and the government continues to function which serves as the executive branch.  The continuity and the stability are thereby ensured.  And note: the act of resignation of the Prime Minister, restores, in fact, the confidence that was given him, to the decision of the people, who are sovereign.  In this situation, he indeed continues to serve in office by authority of section 31 of the basic law, when the basis for his continuation in office is in the law’s provision.  This is so, until the newly elected prime minister, who won the public’s confidence in the special elections, assumes office.

4.            Indeed, in the case before us the Prime Minister has resigned.  He and the members of his cabinet continue to serve in office, by authority of section 31 (and 32) of the Basic Law: the Government.  Is there a formal limitation on their authority?  The answer is in the negative.  There is nothing in the Basic Law: the Government which narrows the formal authority of the resigning prime minister and the formal authority of the ministers, to ongoing activities only.  Justice M. Cheshin expressed this approach when noting:

‘The world-of-law acts according to its way and the powers of operation exist, whether in the days between one election and another and whether during the days of the election.  The authority of the government stands every day of the year and from year to year, so too regarding the powers of members of the cabinet.’ (HCJ 5621/96 Herman – Head of the Municipality Ofakim v. the Minister of Religious Affairs [3] at p. 804.)

5.            The petitioners have argued before us that indeed there is a limitation on the authority of the outgoing Prime Minister and government who continue in office after the special elections.  This limitation limits the bounds of authority of the government only to the government’s ‘ongoing operations’, and not to determination of matters of principle with far-reaching ramifications.  Indeed, the claim of ‘ongoing’ operations of the government (expedition des affaires courantes) is not an innovation of the petitioners.  This approach is common in a number of countries which have a parliamentary regime (see Klein, ‘The Powers of the Caretaker Government: Are They Really Unlimited?’[17]; Boston, Levine, McLeay, Roberts and Schmidt, ‘Caretaker Government and the Evolution of Caretaker Convention in New Zealand’ [23].  This approach was examined in Israel by a public committee (Justice Z. Berinson (Chairperson), S.Z. Abramov, Dr. A. Ankorin, Professor B. Aktzin, Professor Y. Dror, Y. Zamir, and Dr. A. Yadin).  This committee dealt with the scope of powers of a ‘transitional government’ (according to the prior Basic Law: the Government).  It examined the adoption of the ‘law of ongoing operations’ and decided not to adopt it.  In the committee’s report it was written:

‘The Committee weighed the question whether the powers of a transitional government are to be limited in any way.  Such as: limitation of powers to ongoing  matters or matters that cannot stand delay (similar to the law of ongoing  matters which is accepted in France, Italy and Belgium and other European countries) or limiting its operations in specific areas, subject to Knesset approval, or limiting its power to present draft laws in fundamental matters that are in dispute.  The Committee decided for reasons of practicality and in light of the special circumstances of the State, that reducing the functional areas in which a transitional government will be permitted to operate will cause too drastic a change from a regular government to a transitional government, will damage the proper functioning of the government and may damage vital activity of state institutions in the case of a sudden crisis.  Abstract formulations such as ‘ongoing matters’ cannot promise the degree of certainty needed for proper constitutional functioning.  In light of these rationales the Committee did not even see fit to recommend determining a period of time after which the transitional government would be limited in its powers or to recommend distinctions as to limitation of powers between different types of transitional governments’  (‘Report of the Committee on the Matter of Transitional Government’, p. 6)

In relating to cases in which the government left office under the prior Basic Law: the Government, Professor Rubinstein writes:

‘In all of these cases the outgoing government continues in it duties as usual.  Section 25 of the Basic Law establishes that the President will begin the processes to put together a new government but ‘the outgoing government will continue to fulfill its functions until the new government is established’.  The law does not determine a time frame for such a government which does not have the Knesset’s confidence.  In popular language such a government is called a ‘transitional government’ and this term indeed is fitting to describe the interim situation between one government and another.  In terms of its powers and role a transitional government is no different from a regular government which has the Knesset’s confidence.  An attempt has been made to give limited meaning to the term ‘will continue in its functions’, but it has failed.  A similar arrangement is practiced in England, where the resigning government stays in office during the period of elections until establishment of the new government after the elections, however, there the period of transition is shorter.’  (A. Rubinstein, Constitutional Law in Israel [14] 536).

In relating to the continental doctrine as to the power of an outgoing government to deal only with ongoing matters, Professor Klinghoffer has noted that in Israel ‘transitional governments have always seen themselves as permitted to exercise the full powers of a regular government, this position did not contradict explicit provisions in the written law’ (Y. H. Klinghoffer, Selected Material in Matters of the Day [15] at 71.  In relating to the nature of the continental doctrine as to ongoing powers of a transitional government, Professor Klinghoffer noted that: ‘there is much doubt if abstract formulas such as these, founded on the term ‘ongoing  matters’ can ensure the degree of certainty needed for sound constitutional life’ (Ibid, p. 71).

6.            Moreover: with the establishment of the Basic Law: the Government the Knesset decided to continue with the accepted practice, and refrained from making a formal change in the powers of the outgoing government.  Against this background we are of the opinion that it not proper now, by way of construction, to bring in to Israel the continental doctrine as to limitation of the powers of the outgoing government (as to a similar approach in Germany see Herzog, Maunz-Durig, Grundgesetz Kommentar, Art 69 III 46, 60 [20]; Schroeder, Handbuch des Staatsrechts, 43 (Band II, par. 51) [21]).  Of course the Knesset as an establishing authority may, after examining the issue as to all of its aspects, limit the powers of the outgoing government, if it sees fit (compare section 29(b) of the Basic Law: the Government as to the voiding of the powers of the acting prime minister to disperse the Knesset; compare also section 27a of the Local Authorities (Election of the Head of the Authority and his Deputies and their Term in Office) Law 5735-1975).  On this matter various ideas have been proposed for legislation, such as subjecting the government – which no longer has the confidence of the Knesset – to Knesset decisions (see Klein, Ibid, [17] p. 285; Rubenstein, Ibid, [14] p. 502; Klinghoffer, Ibid, [15] p. 71).

7.            It has been argued before us that there is a constitutional custom, according to which the outgoing government is limited to ongoing operations (‘maintenance’ operations) alone.  So too it was argued, that there is a constitutional custom, according to which international treaties of special importance that Israel is party to require Knesset ratification.  This constitutional custom, so it was argued, is not limited only to retroactive ratification by the Knesset but requires advance consent of the Knesset before the government signs them.  We cannot accept these arguments.  The question of the validity of constitutional custom in Israel has yet to be examined by this court.  For myself, I am prepared to presume, without making a judicial determination on the matter, that constitutional custom is a legal source for creating binding constitutional law in Israel (See Shetreet ‘Custom in Public Law’ Klinghoffer Book on Public Law [18] 375; A. Rubenstein and B. Medinah, Constitutional Law of the State of Israel [16] at pp. 95-96.  It will suffice for me to say, for purposes of the matter before us, that it has not been proven to us, in the accepted manner for the proving of (constitutional) customs, the existence of a constitutional custom according to which the outgoing government has only ongoing powers (or ‘maintenance’ powers).  As to the ratification of international treaties of special importance, the government accepts (as per the Attorney General before us) that any agreement that will be made in this matter will be brought before the Knesset for ratification (see also Shetreet, ‘the Knesset’s Role in Signing Treaties’ [19] at 349; Rubinstein, Ibid, Ibid [16]).  The existence of a constitutional custom by which the consent of the Knesset must be given in advance, has not been proven to us.

8.            From the above it can be seen that constitutional law in Israel does not recognize a special doctrine according to which with the resignation of the prime minister, his powers and the powers of the ministers – and for our matter we can say, the powers of the outgoing government – are limited to ongoing  operations (‘maintenance’ operations) alone.  However, the outgoing government, like every government in Israel, must act with reasonableness and proportionality, when the difference between it and a regular government is expressed in the scope of the coverage of the test of reasonableness.  Indeed, the principles of reasonableness and proportionality are general legal principles, which apply to the activities of every government, including an outgoing government.  The ‘range of reasonableness’ which determines the range of operations beyond which the action of the government is not reasonable, also applies to the operations of an outgoing government.  As is known, an outgoing government can be created in various forms (such as the resignation of the prime minister, expression of no-confidence in the prime minister by the Knesset, dispersal of the Knesset by the prime minister with the consent of the president, dissolution of the Knesset, and even a regular situation of a government that operates after timely elections).  We are dealing in the petitions before us with one of the forms of an outgoing government, which is, resignation of the prime minister.  The rest of the judgment is aimed at these circumstances.

9.            What do principles of reasonableness and proportionality tell us about the activities of an outgoing government where the prime minister resigns?  In answering this question we must return to the purpose at the core of the continuation in office of the prime minister and the ministers, despite the resignation of the prime minister.  This purpose is twofold: on the one hand it is intended to prevent a governmental ‘void’ and ensure stability and continuity.  On the other hand, the special status of the outgoing prime minister is to be taken into account, where ostensibly upon his resignation his role was meant to end, but he continues to fill it until the chosen prime minister enters office, and this by power of the provision of the basic law itself (compare Klein, Ibid [16] at p. 276).    Against the background of this double purpose the following conclusion arises: the prime minister who resigned and the ministers of his government must act out of awareness of this purpose.  On the one hand, they must act with restraint appropriate for the status of an outgoing government.  On the other hand they must ensure stability and continuity.  The duty of restraint does not exist where there is a vital public need to act.  It is self-evident that where such a vital need exists, it must be realized, in appropriate measure.  It is a matter, thus, of a flexible approach that balances between restraint and action, according to the circumstances of the case and taking into consideration the changing reality.  The question that the principles of reasonableness and proportionality pose is whether the action is ongoing or exceptional.  The correct question is, whether in the overall balance – which takes the totality of circumstances into account – restraint or action is required.

10.          Every entity operating by the law has a ‘range of reasonableness’ which reflects the range of legal actions which that entity may undertake.  The scope of the range as to the given matter is dependent on the characteristics of the power.  Justice Zamir writes:

‘The question as to whether an administrative decision suffers from extreme lack of reasonableness is dependent on the limits of the range of reasonableness, which is the range in which the administrative authority may decide according to its discretion: what is the language and the purpose of the authorizing statute; who is the authorizing entity; what is the matter administered by the authority; whether the authority is operated primarily on the basis of factual findings, on the basis of policy considerations, or on the basis of professional criteria, such as: medical or engineers criteria; and the like.  The range of reasonableness changes in accordance with these characteristics: at times it is broad and at times narrow’ (HCJ 2533/97 Movement for Quality Government in Israel v. Government of Israel and Others [4] at p. 57).

Justice Or wrote in a similar vein:

‘The range of reasonableness draws the area in which the authority’s decision will be reasonable, in the sense that there are no grounds to intervene in the decision.  But the range of deployment of this range is not uniform.  It may change in accordance with the circumstances of a given case.  It is derived from the quality of the operating values in a given matter.’ (HCJ 2534/97, 2535/97, 2541/97 MK Yahav and Others v. State Attorney and Others [5] at p. 58).

Against this background the conclusion is to be drawn that as to given matters the range of reasonableness of the prime minister who has resigned and the members of his cabinet is narrower than the range of reasonableness of a prime minister and government who are operating normally.  The reason for this is that the prime minister on the one hand and the outgoing government on the other must take into account the special criterion – a criterion that the government normally does not have to take into account – and that is the purpose and the source of its authority.  Moreover: the ‘range’ of reasonableness of such prime minister and government changes as the date of ending the time in office of the elected prime minister nears.  Therefore, the ‘range’ becomes narrower – and the need for restraint and reserve made more necessary – after the elections, and before the elected prime minister begins his term in office, and all subject to vital public needs?  Thus, for example, as a rule, it is appropriate in the framework of domestic policy, that the outgoing prime minister and the members of his cabinet not make appointments to senior positions, and leave the work of appointments to the elected prime minister and his government, unless, under the circumstances, the demands of the position create a vital public need to man the position without waiting for the beginning of the term of the elected prime minister, or where it is a matter of a professional appointment when there is not sufficient reason to postpone the appointment.  The same is true in the management of foreign policy or defense.  No one would think that the outgoing prime minister and his government cannot protect state security from a war that broke out just because the days are the final days of an outgoing government.  Defense of the State from war, certainly raises a vital public need, that every prime minister, including an outgoing prime minister must deal with.

Judicial review

11.          What is the scope of the judicial review of the decisions of the resigning prime minister and his ministers?  The answer is that such a government does not enjoy a special status as to judicial review.  Every government is subject to judicial review, and a prime minister who resigns and the ministers of his government do not have immunity from judicial review.  Therefore the court will ask itself – in the framework of the judicial review of the reasonableness of the decision and the proportionality of government decisions – whether the decision of the government is a decision which a reasonable government may make.  The court will not ask itself which decision it would have made if it was operating as the government.  This criterion also applies, of course, as to the review of the actions of a prime minister who resigned and the ministers of his government.  The court will ask himself if the balance the prime minister and his ministers made between the need for restraint and the need for action, is a balance a reasonable outgoing prime minister is permitted to make (compare Burdeau Hamon, Troper Droit Constitutionnel [22] at 633-634).  The court will not ask itself what the balance is that it would have made were it acting as a prime minister who has resigned.

12.          The scope of the judicial review will be influenced by the scope of the administrative power.  Although the grounds for review do not change, the scope of the power determines the limits of judicial review.  Justice Zamir explained this when he noted:

‘The essence of administrative power also impacts the scope of judicial review.  Indeed, the rules of review do not change from power to power: every power must be used in order to serve the purpose of the law, on the basis of relevant considerations, in a reasonable manner and to the extent necessary, however the content of the rules changes from power to power. And not only do the purpose of the law and relevant considerations change according to the essence of the power, broad or narrow.  The essence of the power to manage a prison, because it is so complex, requires the court to act with great care, so that it does not narrow the range of reasonableness of the Prison Services in a manner that will prevent orderly administration of the prison.’ (PPA 7440/97 (PPA 6172/97 State of Israel v. Golan [6] at p. 8).

If this is the case for the administration of a prison, all the more so as to fundamental questions of policy.  Thus, for example, the court will not direct the prime minister and the members of his cabinet whether to undertake a policy of privatization or a policy of nationalization.  In the framework of the power of government, it is a matter for the prime minister and his ministers, and not the court, to decide.  The Knesset oversees the prime minister and his ministers and review of the policy of a government operating within the range of reasonableness is in the hands of the Knesset.  This is so as to a regular prime minister and government; and it is so as to a prime minister who resigned and the ministers of his government.

From the general to the specific

13.          The government is the executive branch of the State (section 1 of the Basic Law: the Government).  Based on this power and additional powers given to it (see, for example, sections 40 and 41 of the Basic Law: the Government) it is empowered to administer the foreign and defense policies of the State.  The power of the one holding the power (the government) and the essence of the matter (foreign and defense affairs; peace or war) lead to the government having a broad range of reasonableness in these type of matters.  Within the bounds of that range the court will not replace its discretion with that of the government.  Supervision of the utilization of the powers of the government in these matters is in the hands of the Knesset.  Therefore, were these petitions filed prior to the resignation of the Prime Minister, we would more than likely have dismissed them.  One government has one policy.  Another government another policy.  Each is in the hands of the government.  The choice between the policy paths is a matter for the government and the supervision of the policy is purely a matter for the Knesset.  The choice within the bounds of the range of reasonableness is not to be made by the court.  Indeed, in a long line of decisions, we dismissed petitions which dealt with the government’s policy for resolving the Israeli-Arab conflict (HCJ 4354/92 Temple Mount Faithful v. Prime Minister [7] (negotiation with Syria in the matter of the Golan Heights); HCJ 6057/99 MMT Mateh Mutkafei Terror v. Prime Minister [8]; HCJ 7307/98 Polack v. Government of Israel [9]; HCJ 2455/94 ‘Betzedek’ Organization v. Government of Israel (release of hostages in the framework of a political agreement) [9]; HCJ 4877/93 Irgun Nifgai Terror v. Government of Israel [10] (negotiations over the Oslo Accords).

14.          Does the conclusion need to be different only because this is an outgoing government?  Our answer is in the negative.  The choice between the need for restraint (as the petitioners claim) and the need to act (as per the government’s stance) is entirely saturated with considerations of security and peace.  The Attorney General (in his supplementary response) rightfully noted that:

‘the negotiators see in it a rare window of opportunity and necessitated by reality at this time.  On the other hand, the petitioners raise various concerns lest the negotiation at this time will bring about damage in the future.  The arguments come from here and from there, and they are found within the political and parliamentary realm.  Determination as to specific arguments, in one direction or another, puts the court in the shoes of those making the political decisions.’

And in the letter of the Attorney General (from December 26, 2000) that was presented before us the Attorney General writes:

‘I am aware of the risks that you describe in the government, in the case that there is no agreement – risks toward neighboring states Egypt and Jordan – who have already made peace, risks toward the total Arab world and the like.  These are understood, although there will also be risks if an agreement is obtained which cannot be realized, even if ‘fortunate is the man who is anxious always’ (Proverbs 28:14 [24]), the question is reward versus loss, and that is the leadership’s decision.’

Thus, against the background of these matters, which are brought in the statements of the Attorney General, and according to the material before us, we have not been convinced that in the matter before us negotiation by the outgoing Prime Minister and the members of his cabinet deviates from the range of reasonableness, and that the hand of restraint or of action is supreme.  But it is natural that the degree of intervention in a matter such as this will take place in exceptional cases.  Beyond this, determination of this question – whose dominant elements are political, and which are found in the center of the social debate in Israel – must take place within the political dialogue in Israel, via the instruments of the Knesset or national vote (HCJ 3125/98 Abed Elaziz Muhammad Iyad v. IDF commander in Judea and Samaria [12].  Indeed in comparative literature, where the constitutional custom is occasionally accepted which limits the powers of the outgoing government, the emphasis is placed on political review of decisions of the outgoing government and not judicial review (see Klein, Ibid [17] p. 285; Boston and others, Ibid [23] p. 641).  And note: our approach is not that there is no place for judicial review.  Our approach is that in the framework of judicial review, and according to its worldview, it is appropriate in the state of affairs as it is before us, and according to the characteristics of the special questions before us, that the review of the decisions of the outgoing government will take place within the Knesset.

15.          It has been argued before us that the Knesset cannot act, and therefore this ‘alternate remedy’ no longer exists.  We cannot accept this position.  The 15th Knesset continues to serve.  It continues its legislative work.  It can continue its review of the actions of the outgoing government.  It has the necessary tools in its hands.  It has been said to us in this context that a draft Basic Law: the Government (Amendment – Qualification to Signing an Agreement) which has not been advanced in the legislative process has been proposed in the Knesset.  It is true, from the moment the Prime Minister announced his resignation the effectiveness of the supervision of his actions is weakened, to the extent it is a matter of the ability to bring about special elections.  At the same time, although the Prime Minister is elected in direct elections (section 3(b) of the Basic Law: the Government) the parliamentary principle of supervision of the Prime Minister and the government still stands (see HCJ 6924/00 Shtenger v. Prime Minister [13]).  Indeed, ‘the Knesset is the parliament of the State’ (section 1 of the Basic Law: the Knesset) and it is its ‘house of legislators’ (section 1 of the Transition Law, 5709-1949).  Despite the resignation of the Prime Minister the Knesset has broad power to supervise the Prime Minister and his cabinet.  This is so according to the existing law, and this is also possible if the existing law is changed – something that is in the establishment and legislative power of the Knesset.  It is found that, it has in its hands, the ability, if it sees fit (and we express no opinion on this), to decide whether the actions of the resigning Prime Minister and the members of his cabinet fit the purpose and the source of power of the outgoing government.

16.          Our conclusion is, therefore, that within the bounds of the petitions before us, and in accordance with the totality of the data before us, the review of the balance between the need for restraint and reserve and the need for action is in the hands of the Knesset.  This conclusion is based, inter alia, on the declaration of the Attorney General, that if any agreement is signed between the representatives of the outgoing government and the representatives of the Palestinian Authority, it will be established in the agreement itself that a condition for the validity of the agreement in the international arena is that the agreement receive the necessary approvals in accordance with domestic law, including the fact that it will be approved by the government and the Knesset.

The conclusion is that there is no legal basis to grant the petitions therefore they are denied.

 

Justice T. Or

I agree.

 

Justice E. Mazza

I agree.

 

Justice I. Englard

I agree.

 

 

Vice-President S. Levin

1.            I agree with my hon. colleague that the petitions are to be dismissed, but my path for reaching this conclusion is somewhat different from his.

2.            I agree that the outgoing government has not deviated from its formal power in negotiating with the Palestinian Authority and I also agree that it is within the power of the Court in principle to intervene in its action according to the rules of public law; according to these rules the Court may intervene in an act of an outgoing government that deviates significantly and categorically from the accepted area of operation of an outgoing government; indeed the question whether there has been such a deviation may also be subject to debate and on this matter there is a fairly wide range of discretion in which the Court will tend not to intervene.  Beyond this range the court may intervene.  However, this is not the only factor which may impact the willingness of this court to intervene.  Given that the subject of the petition is a matter of sharp public debate, the court may, by power of its discretion, refrain from intervening where the Knesset has the power to explicitly limit the power of the outgoing government to undertake an action which it is not proper to undertake.  From the material before us I have not been convinced that the Knesset does not have the power to intervene.  It has even done so in the past; were it not for this consideration I would have had to decide whether we have had placed before us a foundation which justifies the determination that the outgoing government deviated significantly and categorically from the range of activity of an outgoing government.  If I had found this to be so and were it not for the consideration which is similar to the quasi existence of an alternate remedy, which has moved me to dismiss the petition, I would make the orders nisi absolute; in light of said consideration, which in my view is of determinative weight, it is not necessary for me to express an opinion as to the existence of a factual foundation, as stated.

 

 

Justice  J. Türkel

1.            I agree with the mode of analysis of my hon. colleague President A. Barak.  I do not agree with his conclusion: that ‘we have not been convinced that in the matter before us negotiation by the outgoing Prime Minister and the members of his cabinet deviates from the range of reasonableness, and that the hand of restraint or of action is supreme’; and that ‘within the bounds of the petitions before us, and in accordance with the totality of the data before us, the review of the balance between the need for restraint and reserve and the need for action is in the hands of the Knesset’.  Due to the time constraints I will explain my position in a summary of a summary.

2.            I am of the opinion, generally, that the range of reasonableness of a prime minister that resigned and the ministers of his government is narrower than the range of reasonableness of a prime minister and ministers who serve regularly.  Moreover, this range becomes narrower and narrower – and the duty of restraint applicable to them continues to increase – from day to day and from hour to hour with the approach of the end of the term in office of the prime minister.  In this I am going – with a slight change in emphasis – in the path of the President.  However, in my opinion, the conclusion is also derived from this  that the weight of vital public need which is required according to the approach of the President – to which I also agree– in order to justify action by the resigning prime minister and the ministers of his government during the period of transition also continues to increase.  In other words, as the date of the conclusion of the term in office of the resigning prime minister approaches it is no longer sufficient that the public need is merely vital, but the public need must be very vital in order for it to cancel out the duty of restraint which is imposed on the resigning prime minister and the ministers of his government during the period of transition.  It may be possible to also say that as the days go past the ‘burden of proof’ that the prime minister and the ministers of his government are operating within the range of reasonableness, is transferred to their shoulders.  If in the beginning of the term the burden is on those who are challenging their actions to show that there is not a vital public need which justifies doing a specific action, then toward the end of the period the prime minister and the government must show that there is a very vital public need that justifies the action.

3.            I have been convinced that political negotiation between the government and the Palestinian Authority in and of itself – not to mention agreements and understandings that may be reached during its course – may tie the hands of the prime minister and the next government if another prime minister is chosen.  The special elections for prime minister will take place on February 6, 2001; meaning in another 12 days.  The question, which is before us for determination is not whether the negotiation that the government is engaged in with the Palestinian Authority – which is undoubtedly fateful as to the future of the State – is within the range of reasonableness.  The question is whether conducting negotiation in the period that is so close to date of the special elections is within the range of reasonableness.  As to this matter we are not required to make any determination as to the contents of the negotiation, the desired political arrangement, considerations of security and peace and the like.  In my view, the question that is to be determined is whether there still exists a vital public need – and in my view, whether it is a very vital public need – to conduct the negotiation in this time period particularly.  The representatives of the government have laid out many and varied reasons as to why the hands of the resigning prime minister and his government ministers are not to be tied, but they have not pointed to a vital public need – and in fact, have not shown any reason – that would justify conducting such an important and fateful negotiation, which in itself may tie the hands of the prime minister that will be elected (if the resigning Prime Minister is not re-elected) and his government ministers.  In the absence of such vital public need it is to be determined that continuation of the negotiation in the short time period that is left until the special elections deviates from the range of reasonableness and is to be terminated until the elected prime minister and the ministers of his government start their term in office.

4.            Who is meant to hold the sword of review of the policy and the actions of the government?

I also agree that, generally, review of the policy of the government operating within the range of reasonableness and the exercise of its power is placed in the hands of the Knesset.  I will add and say that – and this too is in general – it is better for the court to rarely intervene in such matters.  However, the matter before us is exceptional and unusual and requires us to move outside the area of the rule.

Indeed, in theory, the Knesset has in its hands the legal tools necessary to realize its power of review; however, I have been convinced that in actuality this is not the case.  As has been clarified it has not been possible for 61 members of the Knesset – despite the fact that they are a majority of the Knesset – to advance the legislation of the Draft Basic Law: the Government (Amendment – Qualification to Signing an Agreement), whose purpose is to prevent the progress of the political negotiation.  Without expressing an opinion as to the draft law itself and the question whether it was possible to advance it in the period that passed since it was submitted, in fact the draft law is ‘stuck’ in the depths of the Knesset and its committees.  Today the Knesset is not capable, for one reason or another, of realizing its power of review.

In this situation and when little time remains, therefore, the sword of review is in the hands of this court alone.  It is not entitled to spare itself from the law and withdraw its hands from the decision.  It appears that in such a situation the words of our national poet H.N. Bialik are appropriate.

‘And the hour was the hour of mayhem, of mixing of realms

of ending and beginning, of contradiction and building, of age and youth.

And we the children of the interim, knowingly and unknowingly,

bowed and thanked before both authorities at the same time;

hanging in the balance between these two magnets

all the emotions of our indecipherable hearts then asked the prophet;’

[C.N. Bialik ‘To Achad Ha’am’]

The hour has come for the Supreme Court to be the ‘prophet’ and say its word.

5.            If my opinion were heard I would grant the petitions in the sense that an order would be given which directs the Prime Minister and the government to refrain from reaching agreements, consents or understandings with the Palestinian Authority, whether in a document or whether by another means, and not to create obligations in any way, in the negotiation currently being conducted, which may tie the hands of the prime minister and the government that will be elected.

 

 

Justice I. Zamir

I agree with President Barak that the Basic Law: the Government does not state, neither explicitly nor impliedly, that an outgoing government (which is itself a vague term) is more limited in its powers than a regular government.  By law a government is a government, and the law does not create two types of governments, or more.  So too, after the prime minister resigns as well.  The law grants power to the institution, which is the government, and the change that takes place in the instrument of the institution, which is the prime minister, does not change the powers of the institution itself.

I also agree with President Barak that there is not a constitutional custom in Israel which limits the powers of the outgoing government.  A constitutional custom, like any custom, requires proof.  No proof has been brought for the existence of such a custom.  And the court is not meant to create a custom ex nihilo in a judgment.

Therefore, the question in this case is not a question of power, but a question of discretion.  In other words, according to the law the government today has power like the government of yesterday, including the power to conduct political negotiation, but the question is whether the discretion of the government, in conducting such negotiation, was lawfully exercised.  Is there a legal defect in the discretion of the government which justifies intervention by the court?

The discretion of the government, like the discretion of every minister in the government and every other authority, is limited and guided by the legal rules, and the court is in charge of the fulfilment of these rules.  Inter alia, the government must exercise its powers based on relevant considerations, and not on the basis of foreign considerations, in the framework of the range of reasonableness and in a proportional manner.  These rules apply to every government, including an outgoing government, and according to these rules the court is authorized to review decision of every government, including an outgoing government.

These rules do not change from authority to authority or from matter to matter.  However the application of the rules may change according to the authority and according to the matter.  In accordance with this, the application of the rule of reasonableness, for example, may change when a regular government becomes an outgoing government.  In an outgoing government the range of reasonableness may, in certain circumstances, be narrower.  As a result, the intervention of the court in the discretion of the outgoing government may be broader.  An outgoing government must take into account, daily, that the range of reasonableness which it has in application of its powers may be narrower, and plan its steps accordingly.  Thus, for example, in relating to the appointment of public servants to senior positions or in giving benefits that have no other reason except the reason of the upcoming elections.  It might be said in the language of President Barak that in certain matters the outgoing government must act with proportional restraint.

This is an important rule.  It is innovative, as to date the court has not had the opportunity to state that the range of reasonableness of the outgoing government can be narrower than the range of reasonableness of a regular government.  Time will tell where this rule will lead us.

These petitions do not contain the argument that negotiation by the outgoing government with the Palestinian Authority stems from alien considerations, and even if based on the substance of the matter there is no applicability to the test of proportionality.  However, the petitioners claim that in conducting the negotiation the government has crossed the boundary of the range of reasonableness.  Based on the claim, conducting the negotiation today, by the outgoing government, a short time before the elections is unreasonable to an extreme degree.  Therefore the court is asked to rule that conducting the negotiation, although it was considered lawful by all until a short time ago, has become unlawful after the Prime Minister resigned, and to issue an order which prohibits the government from continuing with the negotiation, or at the very least, to declare that the negotiation is not lawful.  Is it proper for the court to prevent the negotiation?

Before the court examines the discretion that the government exercises in conducting negotiation, and determines if it is unreasonable and unlawful, the court must exercise its own discretion, and decide if it is appropriate for the court to intervene in such a matter.  As is known, this court has discretion, and it is authorized to summarily dismiss a petition, without discussing it substantively, in accordance with certain rules.  Thus, inter alia, the court may and also will, according to its discretion, summarily dismiss a petition because of delay in filing or because an alternate remedy exists.  So too, in the case in which the petition raises a matter of a purely political nature, of the type of matters that are entrusted, by law, or by substance, in the hands of the government or the Knesset.  This case resembles a case where there is an alternate remedy: there are cases in which the alternate remedy is a suit in another court or appeal to a certain tribunal; and there are cases where the alternate remedy is the handling of the matter under discussion in the government or the Knesset, depending on the substance of the matter.  In such matter another entity is considered more appropriate and better suited than the court to handle the matter.  Foreign relations of the State are, and have always been, a classic example of such a matter.  Thus, as far as is known in every court and every state.  In Israel, as well, this court has handed down many decisions in which it summarily dismissed petitions because of the political nature of the petitions, and in all of this, many of the petitions dealt with relations between the State of Israel and the Palestinian Authority.  And this is not because the court does not have the authority to intervene in such a matter.  It has the authority.  But the authority is entails discretion.  Indeed, the court can exercise its discretion, in a special case, even to intervene in a purely political matter.  But in each case the court must exercise its discretion and decide if it is proper, under the circumstances, to intervene in such a matter.  Meaning there are two stops on the pathway of the court, in these petitions as in every other petition: at the first stop it must exercise its discretion and decide if it is proper to intervene in the substance of the petition; at the second stop, it must examine the discretion of the government or of another authority, according to the issue.  The court must pass the first stop, before it reaches the second stop.  In these petitions the court still finds itself, in my opinion, at the first stop.

During the course of the proceedings, the court asked the petitioners if they know of another case in any state, at any time, where a court intervened in political negotiation which was being conducted by a government and prohibited it with an injunction from conducting the negotiation or declared that the negotiation is unlawful.  The petitioners’ response was, that they searched, but did not find.  I will risk surmising that they have not found it because it does not exist.  As far as is known, there was no such case even in the states where there exists a doctrine which establishes that the outgoing government only has the powers of a maintenance government.  And why? Because even in those countries it is accepted that the review of the conduct of negotiation by the outgoing government, even where the claim is made that the negotiation is unjustified and even unreasonable, is in the hands of the elected house, or directly in the hands of the public, and not in the hands of the court.  In a democracy the court has a very important role, but a limited role and it is not meant or able to solve every mishap and provide salvation for every crisis.

The petitioners ask that the law come out of Zion.  And I respond, not this law, as it is not the law of truth.  Generally, the court in Israel, like the court in other countries, does not have the capacity to assess whether this negotiation or another is reasonable or whether is crosses the boundaries of the range of reasonableness, and the court is not allowed to take upon itself the responsibility of granting an injunction proscribing the political negotiation.  A court injunction, which proscribes or terminates political negotiation, in itself may be unreasonable or irresponsible.

I do not find it necessary to provide a long explanation as to the significance and ramification of the court’s intervention in political negotiation, inter alia, in terms of the status and role of this court in society.  Those who need to comprehend, will comprehend.  However, in order to explain I will linger briefly on the central claim of the petitioners according to which the very conduct of negotiation by the outgoing government, even without signing an agreement, is unlawful.  Why? Because in such negotiation the government presents political positions, such as, willingness to concede on this matter or another, and this can make it more difficult for the next government.  However, if this is so, would it be unlawful if the prime minister of the outgoing government publicly declares, without negotiation, for example, during the election campaign, that the government is willing to make certain concessions?  Such a declaration, to the whole world, may also make it more difficult for the next government, just like presenting a position in the framework of political negotiation.  Is it proper therefore, for the court to issue an order which prohibits the prime minister of the outgoing government from presenting his policy before the broad public? The court too has a range of reasonableness.

In conclusion, these petitions deal with political negotiation, of a purely political nature, which divides the public in a sharp debate.  Whether it is appropriate to conduct such a negotiation or not, and in this matter each person lives by their own beliefs, in any event the government has notified the court that if the negotiation leads to an agreement, it will be explicitly stated in the agreement that it will not be valid unless it is approved by the government, and then is later approved by the Knesset, and will also fulfill all the conditions that were determined for such an agreement in the laws of Israel.  In such a case, the government and the Knesset will discuss the agreement substantively and before it is given any validity.  Moreover, even at this stage while the negotiation is going on, the Knesset can intervene in the negotiation as it sees fit.  That is its power.  Therefore, it is also its responsibility.  Therefore, this is also the right path to follow.  Under such circumstances and taking into account the rest of the circumstances of the case, I believe that no court in the world would take it upon itself to intervene and terminate the negotiation by way of order or declaration.  In these circumstances, this court also does not need to do so.  Therefore, I agree with President Barak that the petitions are to be denied.

 

It was decided as per the opinion of President A. Barak, and against the dissenting opinion of Justice J. Türkel.

 

Petitions denied.

 

1 Shvat 5761