Compensation

http://elyon1.court.gov.il/files/01/120/057/G11/01057120.g11.pdf

Author

concurrence

Dorner, Dalia

Author

dissent

Mazza, Eliahu

Author

dissent

Strasberg-Cohen, Tova

Author

dissent

Full text of the opinion:

In the Supreme Court

CFH 5712/01

Before: The Hon. Chief Justice A. Barak

The Hon. Deputy Chief Justice T. Orr

The Hon. Justice E. Mazza

The Hon. Justice M. Cheshin

The Hon. Justice T. Strasberg-Cohen

The Hon. Justice D. Dorner

The Hon. Justice D. Beinisch

The Petitioner: Yosef Barazani

The Respondents: 1. Bezeq – Israeli Telecommunications Company Ltd.

2. Israel Consumer Council

A Further Hearing on the judgment of the Supreme Court of July 2, 2001 in CA 1977/97 by the Hon. Chief Justice A. Barak and Justices T. Strasberg-Cohen and I. Englard

Date of submission of briefs: 17 Shevat 5763 (Jan. 20, 2003)

Attorney for the Petitioner: Avigdor Feldman, Adv.

Attorneys for Respondent 1: Avner Gabbai, Adv.

Gil Lotan, Adv.

Shiri Kasher-Hitin, Adv.

Attorney for Respondent 2: Prof. Sinai Deutch, Adv.

Facts: Respondent 1 (hereinafter: Bezeq) advertised an international dialing service (hereinafter: the Service), and represented that a customer would be charged only for the exact amount of time that he used Service. In practice, it turned out that the method that Bezeq used for its calculations resulted in overcharging the users of the Service relative to what was expected according to the advertisement.

Held:

The Supreme Court held:

(1) The provisions of sec. 2 (a) of the Law, prohibiting deceit, create a prohibition upon conduct. A “dealer” contravenes that prohibition even if the thing that he does by act or omission is “liable to mislead”, that is, whether or not a person was actually misled by that thing that he did. The standard of conduct required by the provisions of this section is one that is higher than that required by many statutes, which require a direct causal link between an act and a result – the harm caused the victim – whereas sec. 2 (a) prohibits conduct, as such, even if it does not lead to harm. That requirement is intended to protect consumers and ensure that they receive reliable information about the goods or services being offered, so that they can make informed choices about whether or not to make the transaction.

D. (Justice T. Strasberg-Cohen, dissenting):

E. (Justice E. Mazza, dissenting):

F. (Justice D. Dorner, dissenting):

Judgment

Justice M. Cheshin:

A Further Hearing on the judgment of the Supreme Court in CA 1977/97 Yosef Barazani v. Bezeq – Israeli Telecommunications Company Ltd. (55 (4) IsrSC 584).

2. The Consumer Protection Law, 5741-1981 (the Consumer Protection Law or the Law) – true to its name – places various obligations upon a “dealer” – one who sells goods or provides a service by way of dealer – to a “consumer” – one who purchases an commodity or obtains a service from a dealer in the course of his business for use that is primarily personal. One of those obligations is stated in sec. 2 (a) of the Law: “A dealer must not do anything…which is liable to mislead a consumer in regard to any material element of a transaction …”. Section 31 (a) further informs us that “Any act or omission in contravention of Chapters Two, Three or Four shall be treated as a tort under the Civil Wrongs Ordinance [New Version]”. And this is the heart of the matter before us: To what extent do the doctrines and principles of the Civil Wrongs Ordinance apply to the “tort” created under sec. 2 (a) of the Law? Shall we treat it as a “normal” tort – as if it were a tort comprised by the Civil Wrongs Ordinance – that integrates itself into the fundamental principles and doctrines of the Civil Wrongs Ordinance, or shall we say that the legislature created a special quasi-tort – a sui generis tort – that is not subject to the doctrines and fundamental principles of the Civil Wrongs Ordinance as they are usually construed?

A company advertises one of its products in a way that is “liable to mislead a consumer” in regard to a material matter. Reuben buys the product without having seen the misleading advertisement, and thus, without having been misled. Reuben later discovers the misleading advertisement, and sues the company for monetary compensation for his claimed loss, solely because the company did not keep its advertised promise. Reuben does not make do with a personal suit, but requests that the court certify it as a class action: He asks to sue on behalf of the entire public that purchased that product, and obtain relief for that entire public. Can Reuben prevail in that suit?

3. The Supreme Court ruled – by the majority opinion of Chief Justice Barak and Justice Englard – that Reuben cannot prevail in his personal suit. The reason is that in purchasing the product, Reuben did not rely upon the publication that was liable to mislead, and therefore no causal connection was shown between the publication and the injury allegedly caused to Reuben. As he could not prevail in his personal suit, he was not an appropriate plaintiff in a class action. Justice Strasberg-Cohen, dissenting, thought otherwise. In her opinion, considering the purpose of the Consumer Protection Law and the nature of a class action suit, such a person should be entitled to proceed with the suit, and there is, indeed, an appropriate causal link. Those, therefore, are the disagreements and the core of the issue that we will address in this Further Hearing. But first, the facts.

The Basic Facts

4. I will begin with a brief, preliminary statement: Reading the briefs submitted to the Court surprisingly reveals that the parties do not only disagree on the legal questions – as is usual in a Furhter Hearing – but on no small number of factual issues. The appeal is even directed at findings of fact in the Supreme Court’s judgment. We will not address those disputes, and the factual foundation that we will address is the factual foundation that grounded the Supreme Court’s judgment.

5. And now to the matter before us. Over the course of the years 1989 through 1996, the Respondent, Bezeq – Israeli Telecommunications Company Ltd. (Bezeq), conducted an advertising campaign to encourage the use of its international direct-dialing service, a service meant to replace the “188” service by which international calls were placed through an operator. The advertising campaign emphasized that “the call will be charged only for the exact time that you spoke, even if you only spoke for half a minute…”, and published the tariff that Bezeq was meant to charge for calls to various places around the world. The advertisement added that the quoted price was for a time unit of “one minute of conversation”. For example, a direct-dial call to the United States…NIS 3.53 per minute; a direct-dial call to France…NIS 3.14.

6. In practice, it turned out that call time was not calculated on the basis of minutes, but rather on the basis of meter units. The length of each meter unit – whose length is set according to the country called – was several seconds, and Bezeq calculated the last meter unit of a call as if it had been entirely used, even if the customer spoke for only part of the unit. The customer did not, therefore, pay for the “exact time” that he spoke on the phone, as several seconds were added from the meter unit to every call – or to be precise – to almost every call. Due to that manner of calculation, the price of (nearly) every call was higher than the advertised price. For example, a “one-minute call” to the United States – 60 seconds – was calculated as comprising 14.23 meter units, the price of which was NIS 3.53, which was the advertised price. But in practice, Bezeq charged more for a (precisely) one-minute call. The reason for that was that Bezeq “rounded up” the 14.23 units to 15 units, and charged the customer for 15 units, whose price – needless to say – was higher than the advertised price. That, of course, was also the case for every call that was longer than a minute. The caller was charged for the last meter unit even if he did not completely use it.

7. The Petitioner, Barazani (Barazani or the Petitioner) was a “consumer” as defined by the Consumer Protection Law, and Bezeq was a “dealer”. In 1996, Barazani initiated a monetary suit against Bezeq, along with a request that the suit be certified as a class action. Barazan claimed that Bezeq’s advertisements were “liable to mislead” consumers in regard to the true price of international phone calls, and that Bezeq had, therefore, contravened the prohibition of deceit under sec. 2 (a) of the Consumer Protection Law. Barazani claimed that the injury incurred by him was equal to the difference between the price that Bezeq advertised and the price that it actually charged him for international calls. Although Barazani incurred negligible injury, the total harm to Bezeq’s consumers – all those who had made international direct-dial calls in the relevant period – amounted to tens of millions of shekels. And, Barazani argued, Bezeq had pocketed those vast sums by misleading its customers. Barazani therefore asked that his suit be certified as a class action under the Consumer Protection Law, viz., that he be permitted to sue on his own behalf, and on behalf of all of Bezeq’s customers who made direct-dial international calls, and that he be awarded compensation for the injury incurred, i.e., compensation for the difference between the advertised price and the price actually paid by all of Bezeq’s customers.

8. But Barazani himself was never exposed to the misleading advertisement. When he made his international calls, he had no knowledge of the misleading advertisement, and thus, in any case, did not rely upon it, was not influenced by it, and was not misled by it. The question, therefore, arose whether Barazani had a personal cause of action against Bezeq by reason of the misleading advertisement of which he was not aware. We would add – and this is the main point – that under the provisions of the Law, a person cannot present himself as a plaintiff in a class action unless he has a personal cause of action. Therefore, the absence of a personal cause of action by Barazani led to the collapse of the entire suit.

9. The District Court decided that the conditions for a class action had been met, but further held that the class action could be submitted solely for declaratory relief and not as a suit for a monetary remedy. Both parties appealed that decision, and the Supreme Court decided (by a majority decision) to grant Bezeq’s appeal and deny Barazani’s appeal.

The Relevant Legal Provisions

10. The three key legal provisions in this matter are as follows: first, sec. 2 (a) of the Consumer Protection Law, which establishes the prohibition upon deceit:

Prohibition of Deceit

2. (a) A dealer must not do anything – by deed or by omission, in writing, by word of mouth or in any other manner … which is liable to mislead a consumer in regard to any material element of the transaction …

This provision limits itself to relations between a “consumer” and a “dealer” as defined under sec. 1 of the Law: A “dealer” is “a person who sells a commodity or performs a service by way of dealer and includes a producer”, and a “consumer” is “person who buys a commodity or receives a service from a dealer in the course of his business for mainly personal, domestic or family use”. The prohibition is one of conduct, and a dealer contravenes the prohibition even if he does something – by act or omission – that is only “liable to mislead” a consumer, i.e., even if no one was misled by it. Therefore, as stated in sec. 23 (a) (1) of the Law, a dealer commits an offense and is liable to punishment if “did anything liable to mislead a consumer in violation of the provisions of section 2”. The standard of conduct required under sec. 2 (a) is higher than the usual standard in other laws. Such is the case, for example, in regard to the torts of fraud and injurious falsity under secs. 56 and 58 of the Civil Wrongs Ordinance, and misrepresentation under sec. 15 of the Contracts (General Part) Law, 5733-1973. In those provisions – and in many others – a direct causal connection is required between an act and a result – injury to a victim – whereas sec. 2 (a) of the Consumer Protection Law prohibits the conduct per se, even in the absence of resultant injury. This requirement of the Consumer Protection Law is, of course, intended to protect the consumer – to ensure that the consumer will receive reliable information about a commodity or service offered to him, so that he may make a reasoned decision whether or not to make the transaction. See: Explanatory Notes to the Consumer Protection Law Bill, 5740-1980, 5740 H.H. 302; and compare: CA 1304/91 Tefahot Mortgage Bank for Israel Ltd v. Liepart, 47 (3) IsrSC 309, 326.

11. The second legal provision is that found in sec. 31 (a) of the Consumer Protection Law, from which we learn that an act or omission under sec. 2 (a) – and many other provisions – is to be treated as a tort:

Compensation

31. (a) Any act or omission in violation of Chapters Two, Three, or Four shall be treated as a tort under the Civil Wrongs Ordinance [New Version].

It would appear, therefore, that contravening the prohibition of deceit – as specified in sec. 2 (a) of the Law – is to be treated as a tort under the Civil Wrongs Ordinance, and therefore, should be adjudged according to the principles and doctrines established by the Civil Wrongs Ordinance that apply to torts under Ordinance.

12. The third relevant legal provision is sec 35A of the Law, which treats of class actions under the Law:

Class Action

35A. (a) A consumer… (hereinafter – the plaintiff), may bring suit subject to the provisions of this chapter, on behalf of a group of consumers for a cause of action under which, in accordance with this law, he could personally bring suit, and against every defendant that the consumer could personally sue (hereinafter – a class action).

(b) Where the cause of action is damage, it is sufficient that the plaintiff show that damage was caused to a consumer.

The plain-meaning of this legal provision is that an individual victim can present himself as a representative plaintiff in a class action – subject to these and other provisions – if and only if he has a personal cause of action. In other words: there is no “public” class action. The possibility of an actio popularis in the field of class actions is ruled out by the Consumer Protection Law.

13. Let us examine the opinion stated in the judgment before us in light of these provisions.

The Opinion in the Judgment under Appeal in the Further Hearing

14. The starting point for this interpretive journey is that Bezeq’s advertisement was (purportedly) something that was “liable to mislead a consumer in regard to any material element of the transaction”, as stated in sec. 2 (a) of the Consumer Protection Law. Therefore, as all three justices agreed, Bezeq breached a prohibition established by under sec. 2 (a) of the Law. However they disagreed on the question whether Barazani was harmed as a result of the advertisement. Did Barazani incur damage even though he had not rely upon those advertisements, and even though there was no causal connection, in the accepted sense, between the advertisement that ex hypothesi did not mislead him, and the harm he claims that he incurred? Or, as Justice Strasberg-Cohen stated the matter (ibid., 594):

Section 2 (a) of the Law, titled “Prohibition of Deceit”, forbids a dealer from doing anything that “is liable to mislead” a consumer in regard to any material element of a transaction, and sec. 31 of the Law establishes that violating the prohibition upon deceit is to be treated like a tort, which entitles the victim to compensation. We learn from the two sections that in order for a consumer to have a cause of action against the dealer for a breach of the “prohibition of deceit”, the consumer must show that the dealer breached the duty imposed by the “prohibition of deceit”, that the consumer suffered harm as a result of the breach of that duty, and that there was a causal connection between the breach of the prohibition established under sec. 2 (a) of the Law and the harm suffered by the consumer.

15. In her dissent, Justice Strasberg-Cohen argued that the purpose of the Consumer Protection Law – and the purpose of class actions, as well – both require that we interpret the provision of sec. 2 (a) of the Law as granting a consumer a cause of action even if he did not rely upon the misleading representation. After all, the Law speaks of something that is “liable to mislead”, and not about something that “misleads”. Therefore, once an advertisement that is “liable to mislead” is published, the dealer is under an obligation to fulfill what it promised in the advertisement, while opposite that duty stands the right of the consumer that the dealer will act in conformance with the advertisement. If the dealer breach that duty, the consumer incurs damage that entitles him to compensation. The dealer causes damage to the consumer by the very breach of the duty imposed upon him, even if the consumer was unaware of the advertisement. Indeed, the causal connection between the advertisement and the damage is not the accepted one that we know from tort law, but one that is not bound by the provisions of the Civil Wrongs Ordinance in this regard.

16. That view was not acceptable to Chief Justice Barak. The Chief Justice agreed, as we noted, that Bezeq had breached the prohibition upon publishing an advertisement that was “liable to mislead a consumer”, but he did not share the opinion that that breach entitled Barazani to sue for compensation. The reason for that was that, as we know, Barazani did not rely upon the advertisement when he made international calls – inasmuch as he was unaware of it – and there was, therefore, no (factual or legal) causal connection between Bezeq’s breach and the alleged damage caused to Barazani. In the opinion of Chief Justice Barak, as stated in sec. 31 (a) of the Law, the normal doctrines of tort law – among them the causal-link doctrine, and the rule that compensation is granted only for damage that is causally connected to the tortfeasor’s wrongful act – apply to the breach of the duty established by sec. 2 (a) of the Consumer Protection Law. Thus, in light of that, in the matter before us there was no causal connection – a causa sine qua non connection – between the advertisement and Barazani’s alleged damage, and a necessary condition for compensation was not met. Since Barazani did not have a personal cause of action for a suit for damages, he could not, in any case, act as a representative plaintiff for compensatory relief.

17. Justice Englard was of the opinion that Bezeq’s advertisements were not liable to mislead the consumer public, and that Bezeq had not, therefore, breached its duty under sec. 2 (a) of the Law. In regard to the disagreement between my colleagues Justice Strasberg-Cohen and the Chief Justice, Justice Englard concurred with the view of the Chief Justice, holding that compensation should not be awarded to a consumer who was not actually misled by the misleading advertisement. The reason for this was that “no obligation for compensation should be imposed in the absence of a causal connection between the wrong and the damage”.

The Question at Issue

18. This, therefore, is the question at issue: Reuben, a dealer who sells commodities or supplies services, publishes an advertisement that is “liable to mislead a consumer” in regard to a material element. We all agree that by doing so, Reuben violates a prohibition established under sec. 2 (a) of the Consumer Protection Law. Simon, a consumer, purchases one of those commodities or services that Reuben offers for sale. Does Simon acquire a cause of action against Reuben for damages even if he never saw the advertisement, and thus was neither influenced nor misled by it? Is a consumer who purchased some commodity or service from a dealer entitled to damages from that dealer merely by virtue of the fact that the dealer violated sec. 2 (a) of the Law by publishing an advertisement liable to mislead the consumer public in regard to that commodity or service – which is the view of Justice Strasberg-Cohen – or, as Chief Justice Barak and Justice Englard argue, is the burden upon the consumer to show not merely that he purchased the commodity or service, but also that he did so in reliance upon the misleading advertisement?

A Methodological Note concerning the Core

19. Before delving into the heart of the dispute, we would preface with a methodological observation that we deem of singular importance.

20. When Barazani’s petition for a Further Hearing on the Supreme Court’s judgment was granted, the Israel Consumer Council (the Consumer Council or the Council) requested to join as a party to the proceedings. The Court granted that request, and in lengthy pleadings, brimming with arguments and supporting sources, the Council lent its support to Barazani’s position and arguments. Central to the Council’s arguments is the view that adopting the majority’s opinion would eviscerate class actions in the framework of the Consumer Protection Law, and would thus entirely frustrate the purpose of sec. 2 (a). Here is a typical example of the Council’s arguments:

It would be hard to overstate the importance of the rule established in the Barazani case. As will be explained below, in accordance with that rule, in every instance of a misleading advertisement it will be necessary to prove that each of the consumers saw the advertisement, read it, understood it and acted in reliance upon it. Where we are concerned with a consumer class action in which tens of thousands were harmed, it is not at all practical to examine which of them saw the advertisement, which of them relied upon it and to what extent the advertisement influenced their discretion in purchasing the commodity or service.

Inasmuch as consumer class actions generally represent a very large number of consumers, and are often the result of advertisements by the relevant companies, all such cases will be denied at the stage of requesting certification, based upon the argument that personal reliance of each and every member of the class cannot be proven. In other words, it will be possible to block almost every consumer class action. Moreover, as will be explained below, this construction will inflict substantial harm upon the Consumer Protection Law, at least in regard to the civil remedies that the Law provides.

If the construction under which personal reliance of each consumer is accepted as the relevant construction for the remedy of damages under the Consumer Protection Law, the result will be that it will be impossible to sue for damages by way of a class action in cases of false advertising. This rule is liable to result in abuse, and a situation in which advertisers will not worry about making imprecise statements, as the primary remedy of a class action will not be available to the consumer public.

The Council and Barazani (the Petitioners) further explain that the Consumer Protection Law – and sec. 2 (a) thereof, with which we are concerned – was intended to protect consumers from large companies, and to deter such companies from harming consumers. In the opinion of the Petitioners, class actions are vital to the realization of that objective, as without them, the Law will not be enforced, and the obligations it places upon dealer will come to nothing. The other enforcement measures in the Law are secondary measures and inadequate. The primary means for enforcing the Law is by class actions, which place enforcement in the hands of the individual consumer, and thus appropriately lead to a distribution of enforcement. The Petitioners argue that the majority opinion would sound the death knell for class actions and should, therefore, be rejected. The Petitioners find further support for their position in the American consumer protection laws, which, they argue, do away with the need for reliance, and that, they claim, is also the case in regard to Israeli securities law. They therefore pray that we interpret secs. 2 (a) and 31 (a) of the Law broadly and generously, as does Justice Strasberg-Cohen. I believe that I would not exaggerate in saying that the class action constitutes the central pillar of the Petitioners’ argument, as if class actions are the whole Torah on one foot, and all the rest of the Consumer Protection Law is but commentary.

Bezeq replies to the Petitioners’ arguments at length and in detail, and we shall briefly refer to part of that reply.

21. We have no intention of delving into the subject of class actions for the purpose of deciding the instant case. However, we will make some observations in regard to how class actions are integrated into the provisions of sec. 2 (a) of the Law, and primarily in regard to the consequences of such actions upon the interpretation of sec. 2 (a).

22. In accordance with the provisions of sec. 35A (a) of the Law (see para. 12 above), a person cannot initiate a class action unless he has a personal right to bring suit. Compare (in regard to actions under the Securities Law, 5728-1968): CA 2967/95 Magen vaKeshet Ltd. v. Tempo Industries Ltd. IsrSC 51 (2) 312, 329, and in regard to an action on the basis of sec. 29 of the Civil Procedures Regulations, 5744-1984, see: LCA 3126/00 State of Israel v. A.S.T Project Management and Manpower Ltd., IsrSC 57 (3) 220, at para. 24 of the opinion of Strasberg-Cohen, J. A class action is a type of extension of the personal suit, and in the absence of a right to bring a personal suit, there can be no class action. A class action is like a chamber within a chamber. You cannot enter the inner chamber without first passing through the outer one. If that be the case – and I believe that to be so – then it would be difficult to conjecture from class actions to personal actions. If a person must first show that he has a personal right to sue, and if overcoming that hurdle is a precondition to a class action, then the interpretation and scope of personal actions can be influenced but little, if at all, by class actions. If that is the general case, then clearly class actions cannot be seen as independently granting causes of action. A class action is nothing but a procedural means for joining several personal actions into a single proceeding. That being the case, we cannot say that class actions might provide inspiration for interpreting sec. 2 (a) of the Law, let alone that the fundamental basis for its construction is to be found in class actions.

23. Moreover, the provisions of sec. 2 (a) of the Law, along with sec. 31 (a) – legal provisions that grant a consumer a personal right – were part of the original Law as enacted in 1981. At the time, class actions were not included in the Law. Class actions only boarded the moving train of consumer protection some thirteen years later in the Consumer Protection (Amendment No. 3) Law, 5754-1994. And see: the Explanatory Notes to the Consumer Protection Law (Amendment No. 3) Bill, 5754-1994, H.H. 5754, 396:

It is recommended that an additional chapter be added to the Consumer Protection Law, 5741-1981, that would make it possible to initiate a class action.

A class action, which saves the need for submitting a large number of individual consumer suits, is the efficient, and sometimes the only way by which consumers can contend with powerful economic bodies for which an independent suit of a single consumer, or even of several consumers together, is meaningless.

Knowing this to be the case, we can return to the question of how class actions influence the interpretation of personal suits, and say: until the institution of class actions, we had to interpret sec. 2 (a) on its own, from within and in the general context of the Law as it then was, and in the broad context of the existing legislation and the general principles for the interpretation of statutes, as normally applied. Class actions were not part of that interpretive process, as they had not yet been recognized, and therefore could not have influenced our interpretation. The interpretation of sec. 2 (a) of the Law was thus grounded before class actions were part of the Law. With the introduction of class actions in 1994, we find nothing among its provisions but the procedural expansion of the personal suit into very many personal suits. The fundamentals of personal suits did not change. As Justice Strasberg-Cohen notes in LCA A.S.T. (above, at para. 26 of her opinion):

The arrangement for submitting a class action is essentially a procedural one. It facilitates joining the individual suits of many, mostly unknown, plaintiffs, into one suit. The fact that a class action has many ramifications for various areas does not change its basic procedural nature.

Indeed, “a situation in which a single plaintiff (or a number of plaintiffs) sue on behalf of a group of individuals for harm (of a similar kind), where each member of the group was harmed by an identical breach of duty, stands at the base of class actions” (LCA 4556/94 Tazat v. Zilbershatz, IsrSC 49 (5) 774, 783). A class action “represents a collection of personal suits” (the Magen vaKeshet case, above, 324), and it does not create causes of action for the representative plaintiff or for the members of the group. Class actions are an important tool – of great value and power – and in being what they are, they influence the material rights of the parties – the defendants, the representative plaintiff, and the members of the group. However, their influence is in providing an opportunity to realize rights, rather than in the creation of new causes of action. The power and importance of a class action are expressed in its size, and in making it possible to join a large number of existing actions in one procedure, where treating each action individually would lack significance. At the same time, the class action does not grant the representative plaintiff, or any member of the group, a cause of action that he would not have were it not for the class action. How, then, do class actions influence the interpretation of what preceded them in time, as alleged?

24. We would emphasize that, of course, it is not our intention to say that a later law – that of 1994 – cannot influence the interpretation or scope of prior rights. However, in a case such as ours, we would expect that the new law would send us some sign or signal that would inform us – expressly or impliedly, directly or indirectly – that it is intended to change the mode or manner of the prior law, or, in the case before us, that it would entirely change the interpretation of sec. 2 (a). But in the 1994 law “there was no response, no one answered, no one paid attention”.[1] It is simply that sec. 2 (a) of the Law should be interpreted after 1994 as it was understood before that year, i.e., without reference to class actions as such (see and compare: HCJ 6194/97 Nakash v. National Labor Court, IsrSC 53 (5) 433, 455-456; and see: A. Barak, Interpretation in Law, v. 2 (Nevo, 1993) 51-54).

25. We would add that we do not mean, and have not said, that the provisions regarding class actions cannot, by their very nature, affect the interpretation of the personal suit. It can be argued that had the class action been created in the original law – joined at birth to the personal suit – then it could retroactively, so to speak, influence the interpretation of the personal suit. “There is no early or late in the law”,[2] and all of its provisions are part of a unified whole. Thus, provisions that, in terms of the internal logic of the law, appear to “precede” other provisions of the same law, will not be interpreted independently, in isolation from the “later” provisions. The law is like a living creature, and each of its organs affects the others, and vice versa (see and compare: CrimA 4389/93 Mordechai v. State of Israel, IsrSC 50 (3) 239, 260 ff.). However, in this regard, we would expect that the later law would send us some message telling us that it is intended to shed new light on the preexisting law. But the 1994 amendment – that which introduced class actions – says absolutely nothing that might affect the interpretation of sec. 2 (a) as it stood prior to the amendment.

26. Our conclusion is, therefore, that, as opposed to the argument of the Petitioners, class actions will not play a decisive role in the interpretation of the provisions of sec. 2 (a) or of sec. 31 (a) of the Law. That is not to say that we may not glance in the direction of class actions in the course of interpretation, since, after all, after the amendment of the Law, a class action is one of the organs of the Law (and that, bearing in mind, as we said, that had class actions been created with the Law, then it would be appropriate to interpret personal suits differently). However, the influence of class actions, to the extent that they may exert some influence – which is a separate question – will only be marginal.

27. This matter of interpretation that we just addressed is of singular importance. As we all know – and as stated – class actions are an important, valuable tool. But first and foremost – and this is the main point – it is a powerful tool. However, the synergetic power of a class action makes it a non-conventional weapon, and not surprisingly, it strikes fear into the hearts of dealers. For that reason – and primarily for that reason – we must take special care in treating of the class action, as it is a hand-grenade with the pin pulled out. We celebrated the birth of the class action, as in the “balance of terror” between dealers and consumers – particularly in a society such as our own, in which we are assured that “it will be alright” and “you can rely on me” – consumers require that power they would not otherwise have in confronting dealers. But that joy can be a mixed blessing, and we must take care that the class action not exert undue influence over the scope of personal suits.

Let us now, first and foremost, turn to the question of Barazani’s right to bring a personal suit against Bezeq.

The Nature and Category of the Right established under Section 2 (a) of the Law

28. Section 2 (a) of the Law does not inform us of the remedy that a consumer may seek from a dealer that did something “liable to mislead a consumer” in regard to a material element of the transaction. This gap – if it is a gap – is filled by the provisions of sec. 31 (a) of the Law, which informs us that an act or omission contrary to Chapters Two, Three or Four of the Law is to be treated as a tort under the Civil Wrongs Ordinance (see para. 11, above). Section 2 (a) is located in Chapter B of the Law – the chapter comprising secs. 2 through 7, titled “Deceit and Exploitation” – and we therefore know that an act or omission prohibited under sec. 2 (a) is to be treated as a tort under the Civil Wrongs Ordinance. It would appear as if the Consumer Protection Law planted sec. 2 (a) – like many other provisions – into the “Civil Wrongs” chapter of the Civil Wrongs Ordinance, and that sec. 2 (a) is the same as any of the other torts under the Ordinance. One of the necessary conclusions to be drawn from that would be that sec. 2 (a) is subject to the doctrines and principles set out in the Civil Wrongs Ordinance, which are applicable to all the torts in the Ordinance. And as Justice Strasberg-Cohen instructed us in LCA 6567/97 Bezeq – Israeli Telecommunications Company Ltd. v. Estate of Eliahu Gat, IsrSC 54 (2) 713, 717:

In practice, Bezeq cannot be directly attacked in regard to the applicable tariff, as its actions are under the aegis of the Regulations [Bezeq Regulations (Payments for Bezeq Services detailed in Schedule Two of the Law – Services in Israel), 5756-1996], and, therefore, enjoy apparent immunity by virtue of sec. 6 of the Civil Wrongs Ordinance [New Version], which grants a defense to an action under a statute, and according to sec. 31 (a) of the Law, an act or omission contrary to Chapters Two, Three or Four is to be treated as a tort under the Civil Wrongs Ordinance [New Version].

29. My colleague now reads sec. 31 (a) of the Law differently, and sec. 31 (a) no longer directs us to the Civil Wrongs Ordinance as it stands, but rather to a general law that is similar but not identical to the Civil Wrongs Ordinance, or as she describes it (at p. 605):

In my opinion, we should bear in mind that an act or omission contrary to the prohibition upon deceit established by the [Consumer Protection] Law is not a “regular” tort but it is to be treated “as a tort”. Therefore, we are not limited to “traditional” tort law – upon which my colleague the Chief Justice bases his opinion – and we should also give appropriate weight to the purpose of the Law and the purpose of class actions … [emphasis original – M.C.].

I find it hard to accept such reasoning.

30. In my opinion, sec. 31 (a) should be read and understood in accordance with its plain meaning, and the plain meaning is that the prohibition stated in sec. 2 (a) of the Consumer Protection Law is a tort for the purpose of the Law. Or, as stated in the Explanatory Notes of the bill (Consumer Protection Law Bill, 5740-1980, H.H. 5740, 302, 313), Explanatory Notes to secs. 30 through 33):

The granting of civil remedies to the harmed consumer allows him to compensate himself with relative ease for damage he incurred as the result of an act or omission contrary to Chapters B through D.

And further on (ibid., 314, in the Explanatory Notes to sec. 35):

The basic concept grounding the law is that deceiving a consumer, defrauding a consumer, and similar acts or omissions stated in the law are torts, and the consumer should be compensated for the damage caused him.

My colleague does not interpret the prepositional “kaf of comparison” prefix “as”[3] in forming the phrase “as a tort”[4] in the usual way. In my opinion, the interpretation of the prefix is “as this so this, the two are exactly identical” (Even Shoshan, The New Dictionary, 1991, s.v. “kaf” (Hebrew)), or as Jehoshafat King of Judah said to Jehoram King of Israel: “ I am as thou art, my people as thy people, my horses as thy horses” (I Kings 22:4; II Kings 3:7) (and notwithstanding the statement of the Sages that “an egg is superior to anything as an egg…” (Babylonian Talmud, Tractate Berakhot 44b), which is clearly not applicable here, as is easily seen from the context[5]). Of course, the legislature could have worded the provision of sec. 31 (a) such that an act or omission etc. would constitute a tort under the Civil Wrongs Ordinance – it would be a tort rather than be treated as a tort – but I fear that the preposition is not strong enough to support the superstructure that my colleague wishes to build upon it.

I also do not find any merit in the arguments of the Consumer Council comparing the phrase “as a tort” in our case to similar but not identical wording in other statutes. Thus, for example, sec. 11 of the Commercial Torts Law, 5759-1999, states “The violation of the provisions of Chapters One and Two is a tort, and the Civil Wrongs Ordinance [New Version] … shall apply to it…”. At times we find this wording and at times other wording, and we will not hang mountains by a hair.[6] The same is true in regard to other statutes that employ various wordings. See, for example: sec. 28 of the Adoption of Children Law, 5741-1981; sec. 5 (a) of the Prohibition of Discrimination in Products, Services, and Entry into Public Places, 5761-2000; sec. 15 of the Banking (Customer Services) Law, 5741-1981, and others. In my opinion, the purpose of the Law in this case is crystal clear, and comparisons to other laws will not succeed.

31. Indeed, nothing in the language of sec. 31 (a) of the Law would show that the tort under sec. 2 (a) removes it from the fundamental principles or doctrines of the Civil Wrongs Ordinance, and nothing therein might serve to show that a consumer is entitled to damages merely because a dealer contravened a provision of the Law. On the contrary, the Law refers us clearly and unreservedly to the Civil Wrongs Ordinance. Section 2 (a) situates itself as one of the native torts of the Civil Wrongs Ordinance, and it would therefore appear that the fundamental principles and doctrines of the Civil Wrongs Ordinance apply, in their entirety, with the same effect and force with which they apply to the native torts.

Moreover, not only is the language of the Law crystal clear, but efficiency also points to the solution presented by the Law. Inasmuch as the acts and omissions external to the Ordinance are tortious in nature, it is but natural that we should employ the same traditional, familiar doctrines that tort law created and developed over so many years such that they have become foundational to the legal system, subject, of course, to special, exceptional cases.

Application of Fundamentals Principles and Doctrines of the Civil Wrongs Ordinance to Torts external to the Ordinance

32. We have stated that the doctrines of the Civil Wrongs Ordinance “appear” to apply to the prohibited acts under sec. 2 (a) of the Consumer Protection Law. Indeed, there are differences between the native torts of the Ordinance and those external to it that are treated as torts under the Ordinance. The native torts were created together with the Ordinance’s doctrines, and they reside in the same structure. Other than in exceptional cases, the doctrines of the Ordinance will apply with full force to every tort in the Ordinance. In regard to those exceptions, see Cheshin, Chattels in the Law of Torts (Magnes, Jerusalem, 1971), secs. 168-172 (pp. 167-170). As opposed to the native torts, the external torts, among them those under sec. 2 (a) of the Consumer Protection Law, are different. Indeed, the general doctrines of the Ordinance apply to them, however, here we must take special care. Since we are concerned here with transplanting a new organ into the body of the Civil Wrongs Ordinance, we must closely examine whether any particular doctrine of the Ordinance is compatible with the foundations, essence and structure of the new tort. This question was addressed in I. Englard, A. Barak & M. Cheshin, The Law of Civil Wrongs – General Principles of Tort Law, G. Tedeschi, ed. (2^nd ed., Jerusalem, 1977) pp. 74 ff. and especially p. 81, and we shall elaborate no further. And see: CA 3666/90, 4012/90 Zukim Hotel Ltd v. Netanya Municipality IsrSC 46(4) 45, 73 [1992]; CA 804/80 Sidaar Tanker Corporation v. Eilat-Ashkelon Pipeline Company Ltd., IsrSC 39(1) 393. And so we stated in CrimA 3417/99 Har Shefi v. State of Israel, IsrSC 55 (2) 735, 766-767 [English translation: http://versa.cardozo.yu.edu/opinions/har-shefi-v-state-israel]:

And indeed, this is – in general – the relationship between the general definitions and doctrines which cut across the law lengthwise and widthwise, and specific statutory provisions. General definitions and doctrines will attach themselves to all statutory provisions and laws they wish to apply to. But where a certain specific statutory provision seeks to expel from within its bounds the general definition or doctrine—and this expulsion is derived by way of “interpretation”, in the broad sense of the concept of interpretation, including from the basic tenets of the system: logic, justice, first principles, social doctrines, etc. — the specific statutory provision prevails, while the general definition and doctrine will retreat. The general definition and doctrine will apply, as per the language of the Interpretation Law 5741-1981 in section 1, “… if there is no other provision as to the said matter, and if there is nothing in the said matter or its context which cannot be reconciled with…” the general definition or doctrine.

Elsewhere I raised the theory that the term “tort” in the Civil Wrongs Ordinance [New Version] is not limited only to those torts listed in the Ordinance. I opined that the concept “tort” is a conceptual term, and from this I concluded that there are “torts” outside of the Civil Wrongs Ordinance [New Version]. Against this background I further asked myself, what is the relationship between the doctrines that were established in the Civil Wrongs Ordinance [New Version] and those unspecified torts. I answered the question by saying that an unspecified tort will not “be controlled mechanically by the doctrines established by the Ordinance.” And that the doctrines in the Ordinance will apply to unspecified torts only “… if the application of a certain doctrine from the Ordinance is consistent with the foundations, essence, and structure of the tort at issue, and with the framework in which it is found”.

Causal Connection and Awarding Damages

33. Barazani claims damages from Bezeq by virtue of the advertisement that it published, and which – as stated in sec. 2 (a) of the Consumer Protection Law – was liable to mislead a consumer in regard to a material element. We are all in agreement that Barazani did not see the advertisement, that he was not influenced by it, and that he did not rely upon it when he made international calls. Nevertheless, and deeming himself wronged, he demands damages – and asks to sue for those damages in a class action on behalf of all those harmed – claiming that he incurred harm for which he is entitled to compensation. The damage, he argues, is the difference between the advertised price and the price he actually paid Bezeq. Here, Barazani confronts the doctrines of the Civil Wrongs Ordinance, and the question is whether those doctrines bar his path to compensation.

34. Among those doctrines, two concern us here. My colleague Chief Justice Barak addresses those doctrines in his opinion, and inasmuch as I agree with his opinion, I will be brief rather than elaborate at length.

35. One doctrine is that of causation, under which – in accordance with sec. 64 of the Civil Wrongs Ordinance – there must be a causal connection between a person’s act or omission – an act or omission that constitute a tort – and the harm incurred by the victim, for which he seeks redress. As stated in sec. 64 of the Civil Wrongs Ordinance: “… a person shall be deemed to be at fault for such damage when the fault was the cause or one of the causes of the damage”. In the matter before us, there was no causal connection between Bezeq’s advertisement and the “damage” caused to Barazani, if only by reason of the fact that Barazani never read that advertisement, and therefore, in any event, he is not entitled to sue on that basis. Indeed, Bezeq committed a tort by publishing the advertisement – that is the basic assumption in this case – but the mere existence of a tort is insufficient to entitle a person to redress. That person must show that due to that tort, he incurred harm, and that precondition was not met in regard to Barazani.

36. This is also the case in regard to the compensation doctrine. In accordance with sec. 76 of the Civil Wrongs Ordinance, and as has always been the case: a person is entitled to compensation only for harm caused as a result of the tortious act. A person will be entitled to compensation only to the extent of the harm incurred, and as stated in sec 76: “only in respect of such damage which may naturally arise in the usual course of things and which directly arose from the defendant’s civil wrong”. A fundamental principle of tort law is that of restitutio ad integrum, and therefore, a person who did not suffer harm will not be entitled to compensation. See and compare: LCA 378/96 Sagi Weinblatt v. Moshe Burstein Ltd., IsrSC 54 (3) 347, 361; CA 5465/97 Kenny Housing Ltd. v. Netanya Local Planning and Building Board, IsrSC 53 (3) 433, 440-441.

That is also the opinion of Prof. Sinai Deutch in his book Consumer Protection Law, vol. 1 (2001) 376 (Hebrew), who wrote the following about the causal link required under sec. 2 of the Law and the compensation to which a victim is entitled:

In a tort claim under the Consumer Protection Law (sec. 31 of the Law), there is no need to prove a causal connection between the mistake and the contractual agreement, but a causal connection must be shown between the deceit and the harm caused to the consumer. While sec. 2 of the Consumer Protection Law prohibits doing anything liable to mislead the consumer, and it would therefore appear that there is no requirement of actual misleading, the sanction attendant to such an act can only be administrative or penal. If, in fact, there was no misleading and no harm, damages cannot be awarded. Compensation owing to a tort can be awarded only for demonstrated harm.

Thus, publishing something that is liable to mislead, per se, does not grant a consumer a right to compensation if he was not actually harmed. That is also the view of Dr. Orna Deutch, who writes in her book The Legal Status of Consumers (Nevo, 2002) 414-415 (Hebrew):

As far as the remedy of damages is concerned, a suit under the Consumer Protection Law would require proof of the harm deriving from the deception, in other words, the existence of actual deception and action on the basis of that deception. There must be a causal connection between the deception and the harm, as is the normal rule in regard to damages. That was the majority opinion in Barazani v. Bezeq. Indeed, there is no justification for allowing a person to collect damages where he did not incur harm as a result of the deception. The purpose of damages is to require that the person responsible make restitutio ad integrum. There is no need for a causal connection in relation to any harm when a declaratory order is sought to stop the misrepresentations…

And see: Prof. Miguel Deutch, Commercial Torts and Trade Secrets (Nevo, 2002) (Hebrew) 48-50.

And if that is not sufficient, we would note the opinion of Chief Justice Shamgar in the Liefert case (Note to editor: I assume the reference is to CA 1304/91 Tefahot Mortgage Bank v. Liefert, IsrSC 47 (3) 309). In that case, the Court addressed sec. 3 of the Banking (Service to Customers) Law, 5741-1981, that prohibits a banking corporation from doing anything “liable to mislead a customer as to anything material to the performance of a service to the customer”. In that regard, Chief Justice Shamgar wrote (at p. 326):

The prohibition in the Banking (Service to Customers) Law is broad, and prohibits any act or omission liable to mislead. In other words, it is not necessary that there be actual deception (although in the absence of such deception, it is doubtful that it would be possible to point to some harm that might support a cause of action for damages under the law) [emphasis original – M.C.].

Of course, the legislature is free to deviate from this principle, and decide – for various reasons – that a victim be granted compensation without showing harm. See, for example: sec. 7A of the Defamation Law, 5725-1965; sec. 11 of the Contracts (Remedies for Breach of Contract) Law, 5731-1970; sec. 10 (a) (1) of the Employment (Equal Opportunities) Law, 5748-1988; sec. 6 (b) of the Prevention of Sexual Harassment Law, 5758-1998; sec. 3A of the Copyright Law; sec. 13 (a) of the Commercial Torts Law, 5759-1999. However, these are but exceptions to the rule. The rule is that compensation will be granted only if harm was done, and compensation will be granted only to the extent of the harm done. In the matter before us, and inasmuch as Barazani was unaware of Bezeq’s advertisements and did not rely upon those advertisements, we cannot say that he is entitled to compensation. Indeed, depriving Barazani of the right to compensation primarily derives from the absence of a causal connection between the tort and the “harm” he allegedly incurred, and the compensation doctrine simply confirms the lack of a claim for compensation against Bezeq.

37. The absence of Barazani’s right can also be demonstrated in another way. An action in tort that concerns an injury to a person, begins with that injury. When a person incurs injury as a result of the act or omission of another, we examine whether that injury was caused by a tort perpetrated by that person against the injured party, or whether that person breached some duty toward that injured party. See and compare: LCA 5768/94 A.S.I.R Import, Manufacture, and Distribution v. Forum Accessories, IsrSC 52(4) 289, 334. If that examination show that a tort was committed or that a duty was breached, and that the tort or breach of duty was the cause of the harm, then the tortfeasor will be liable for damages. However, if no connection be found between the act or omission of the tortfeasor and the harm, then damages will not be awarded, and the injury will be damnum sine injuria – a loss without a wrong.

38. In the matter before us, things appear topsy-turvy. Unlike the situation of a normal tortious event, Barazani cannot show the actual “harm” that was caused him unless we first say that the provision if sec. 2(a) of the Consumer Protection Law entitles him to damages. In that case, we would say that Barazani incurred “harm” because he is entitled to damages by virtue of the Law. His “harm” is a sort of “statutory harm” – harm ex lege. However, unlike other statutory provisions that grant a consumer a monetary right – see, for example, the provisions of secs. 10 and 17B of the Consumer Protection Law – sec. 2 (a) of the Law does not establish a consumer’s right to damages in the absence of proof of injury, or a consumer’s right to pay a particular price advertised by a dealer. And see: LCA 8733/96 Robert Langbert v. Israel Lands Administration, IsrSC 54 (1) 168. Thus, while in a normal tort case, the injured party can easily point to the harm he incurred, in the matter before us, Barazani cannot show that he suffered any real “injury”, if only because he never saw Bezeq’a advertisement. The existence of an “injury” must be derived from sec. 2 (a), which does not address compensation. We thus find ourselves locked in a vicious circle. We assume the existence of “injury”, and then find that injury has been caused on the basis of that assumption. We therefore state that just as a person is not entitled to sue a person for negligence unless that negligence caused him harm, a person cannot sue a dealer for publishing something liable to mislead in regard to a material element of a transaction if that deceit did not cause him harm. We therefore declare that in the absence of an explicit, unambiguous provision granting damages for virtual harm, like that suffered by Barazani, we cannot imagine that a court will award damages. Such significant creativity is a matter for the legislature, not the courts. The legislature did not say what the petitioner wishes to put in its mouth, and we will not usurp the role of the legislature to say what it did not.

39. Having said all that in regard to causation and damages, we would add that the (factual and legal) causal connection required by sec. 2 (a) of the Law does not unambiguously require a consumer’s explicit reliance upon a dealer’s representation, as opposed to sec. 56 of the Civil Wrongs Ordinance that explicitly requires a causal connection of reliance. It is possible for the necessary causal connection to exist even where a consumer does not directly rely upon a representation, as where the dealer’s representation (as stated in sec. 64 of the Civil Wrongs Ordinance) “was the cause or one of the causes of the damage”. That would be the case, for example, where it can be shown that a dealer’s representation that was liable to mislead a consumer in regard to a material element motivated a chain of events that resulted in injury to the consumer. For example: a certain advertisement misled a person, and it is possible to show a sufficiently proximate causal link between that person and the consumer who suffered the injury. In other words, in this context, we should broadly interpret the concept of reliance such that it comprises more than just direct reliance.

However, there must be some (appropriate) causal connection between a misleading advertisement and the injury incurred by the consumer. Thus, the two successive events for our purposes are: first, a publication that is liable to mislead a consumer in regard to a material element of the transaction, and the second, that the consumer purchased the commodity or the service that was the subject of the advertisement. In this regard, the fact that the purchase of the commodity or the service followed the advertisement in time is not sufficient, in and of itself, in order to show a causal connection between the two events, or to put it in terms of the well-known Latin fallacy, post hoc, ergo propter hoc? – after this, therefore because of this? The mere fact that event B follows event A does not mean that event B was caused by event A. There must be an appropriate causal connection between the two events, and we learn of that connection from the circumstances of each case, by the usual procedure of examining the relevant evidence.

40. A publication that is liable to mislead a consumer gives rise to a tort under sec. 2 (a) of the Law, and when there is an appropriate causal connection between that publication and the injury caused – whether a direct connection deriving from reliance, or an indirect connection deriving from an appropriate chain of causation from the publication to the consumer – the consumer will be entitled to compensation. In other words, the complaining consumer must show that the misleading publication initiated a chain of events that reached him and caused him injury.

Let us look at the case of securities. In accordance with the Securities Law, 5728-1968, the tort resulting from deceptive conduct does not require a consumer’s reliance upon a misleading publication. A party signing a prospectus that comprises a misleading element “is liable to anyone who bought securities from the offeror … for damage caused to them by the inclusion of a misleading item in the prospectus” (sec. 31 of the Securities Law. And further see: secs. 32 and 52K of that law). And as held in LCA 8268/96 Dan Reichert v. Moshe Shemesh, IsrSC 55 (5) 276 (per Strasberg-Cohen, J.), there must be a causal connection between the misleading publication and the injury incurred by the consumer (reduction of value of the security), although it is not necessary that there be direct reliance upon the publication. And see, ibid., 311-312. What applies there can be instructive here, and I believe that it should be.

41. In conclusion, what we set out above merely establishes general guidelines for the interpretation of sec. 2 (a) of the Consumer Protection Law. In the case before us, we would say that since Barazani was unaware of Bezeq’s misleading advertisement, and knowing that Barazani was neither directly nor indirectly influenced by that advertisement, we have no need to explore the issue of reliance or that of the appropriate causal connection between a misleading advertisement and the injury incurred by a consumer who purchased an commodity or service that was the subject of the advertisement. In the future, the courts will address those issues and corollary issues, and the law will develop from case to case. For our purposes, the main point is that we will always require the existence of an appropriate causal connection between a misleading publication and the injury incurred by a consumer, and in establishing that causal connection, we will find a place for including “constructive reliance” where appropriate. In other words, sec. 2 (a) will be interpreted as comprising not only direct reliance – as would be the case were we addressing the tort of fraud under sec. 56 of the Civil Wrongs Ordinance – but also indirect reliance, reliance whose practical import is an appropriate causal connection between the publication and the injury such that we might say that the plaintiff was misled in purchasing the commodity or service. The questions that present themselves are not simple at all, as the sharp disagreements testify. Indeed, American jurisprudence overflows with examples in both directions, upon which we will not elaborate for the purpose of the matter before us, but by way of example, see Mark Oliveira v. Amoco Oil Co., 776 N.E. 2d 151 (2002) and the cases cited there.

On the Uniqueness of the Consumer Protection Law

42. “We cannot suffice with literal interpretation, and must continue to seek the purpose of the law in order to discern the appropriate interpretation”. Having said this (at p. 598 of the judgment), my colleague Justice Strasberg-Cohen turned to the purpose of the Consumer Protection Law. In doing so, she found that the provision under sec. 2 (a) of the Law – in terms of its substance – does not accord with the fundamental principles of injury and the causation doctrine established in the Civil Wrongs Ordinance. In my colleague’s opinion, we are have a duty to interpret the Consumer Protection Law in accordance with its purpose, and that purpose leads to the conclusion that sec. 2 (a) would award damages to a consumer even if he did not himself rely upon the dealer’s offending advertisement. As my colleague writes:

The Law is meant to impose modes of conduct upon the commercial sector, and establish fair rules-of-the-game in the relationship between consumers and dealers. The Law intends to ensure that a dealer will not exploit its greater economic power in order to profit unlawfully at the expense of the consumer. In order to protect the consumer, the Law established “… a line of obligations and prohibitions for dealers – producers, importers, dealers and service providers – with the overall purpose of preventing deception of consumers, providing the consumer with as much information as possible about the nature of the transaction he intends to make, and giving him the tools for realizing his rights …” … the tool of class actions was intended to ensure efficient enforcement of the norms established by the Law, and to deter those with an economic advantage from any attempt to abuse the consumer’s innocence, his weakness in the contest between the two, and the inherent lack of worthwhileness in bringing suit against dealers for the injuries caused by their conduct, which may be very small relative to each consumer, yet a source of unlawful wealth for the dealer. The prohibition of deceit under sec. 2 (a) of the Law should be interpreted against the background of these objectives. Therefore, in my view, the legislature did not choose its words by accident. The statement that the “prohibition of deceit” applies to any act or omission liable to mislead a consumer was intended to establish an objective-normative test for evaluating a dealer’s conduct, and to raise the normative bar that a dealer must pass in order to meet the requirement that the Law establishes to protect consumers. A construction that would grant relief only to those consumers who were actually deceived would create an artificial distinction between the consumer public that used the goods or services that were the subject of the misleading advertising, but who were not exposed to it, and the consumer public who were exposed to the misleading information. An approach that would require actual deceit would limit the liability of a dealer only to those consumers who could show that they were actually misled by the dealer’s representation. Such an approach would reduce the deterrence that is one of the purposes of the Law, if not its main purpose. It would make deception worthwhile from the point of view of the dealer, and would undermine enforcement of the Law. Such an approach would undermine the achievement of the Law’s purpose, in general, and class actions in that framework, in particular.

And further on (ibid., 602):

In my opinion, a consumer suing on the basis of the Law is not required to show that he was actually misled in order to for him to enjoy a cause of action for damages due to a breach of the “prohibition of deceit” established under sec. 2 (a) of the Law. It is sufficient that he show that the dealer committed an act “liable to mislead a consumer”.

43. Needless to say, the Petitioners agree with the opinion of Justice Strasberg-Cohen, and add that another interpretation of sec. 2 (a) – one that would require reliance upon the misleading representations of a dealer in order for a consumer to demand compensation from the dealer – would eviscerate the Law. How? An interpretation like that of the majority would, in practice, prevent the submission of class actions for deceit, and seeing as an individual action (like that of Barazani) would not be initiated, if only due to the negligible injury to each individual consumer, the result would be that the Law would not be given effect. It would be a voice crying out in the wilderness. The benefit of the Law would be lost, and we would be left with an empty shell.

44. We addressed the issue of class actions above (see paras. 19-26), and we will comment only briefly. We do not intend to minimize the distinguished place of class actions, nor in any way detract from their importance. We would, however, add that in the absence of a clear, explicit provision –which there is not – we will not permit class actions to rule the entire field of consumer protection, while allowing it to trample fundamental principles and doctrines that have been adopted over the course of time. In this regard. We would particularly note that, from its inception, the class action was not created as a substantive right or a cause of action. A class action, for all its importance – and it is of great importance – is nothing but a procedural tool for the joining of many actions under one roof. Being what it is, we find it hard to interpret it such that it would have the retroactive power, so to speak, to change substantive principles of tort law, and among them the rules concerning causation and the principles for awarding damages. While one can question the conception created by my colleague Justice Strasberg-Cohen, it cannot be entirely ruled out. But that conception deviates so drastically from what has long been accepted, that we would expect that the Law would explicitly instruct us in this regard, and it does not.

45. When a new law is enacted, it becomes an integral organ of the legal corpus. That is true of every law, and it is true in regard to the Consumer Protection Law. A new law is not a Robinson Crusoe who comes to a place uninhabited by laws, fundamental principles, doctrines, classifications, modes of thought and legal culture. A new law must find its place and integrate itself into the thick forest and become part of the landscape. That is the background of sec. 31 (a) of the Law, which instructs us that a prohibited act under sec. 2 (a) of the Law is to be treated as a tort. Chief Justice Barak instructs us that even without sec. 31 (a), we would classify conduct contrary to sec. 2 (a) of the Law as a tort of breach of a statutory duty. But by enacting sec. 31 (a), the legislature made that unnecessary. But either way, the main point is that the Law recognized the need to weave the new law into the cloth of the general law, and found a place for it in the Civil Wrongs Ordinance. The Law thus informs us that a prohibited act in contravention of sec. 2 (a) of the Law – and contrary to other legal provisions as well – is a tort, and thereby saved us the trouble of classifying it in one way or another. As we stated elsewhere (Cheshin, Chattels in the Law of Torts, sec. 161 at p. 161, fn. 2 (Hebrew)):

Classification organized “Julian laws”, and is based upon fundamental principles established therein. Commonalities and distinctions among the rules to be classified is a fundamental principle of thought. The doctrines that apply to the rules that unify a category (capacity, consideration, proximity, etc.) are causes and effects of classification. At a given point in time, classification is made on the basis of the equivalence of doctrines that apply to various rules of law. After making the classification, and the creation of the doctrine that applies to a particular cluster of laws, the doctrine will govern all that is within that cluster because they are members of a single legal class. That will also hold, mutatis mutandis, with the creation of any specific legal rule that is a member of a particular legal class (whether explicitly or by its “explication”), which will then be governed by the doctrine pertaining to that class.

Classification in law (and in general), is intended to simplify the task of the researcher and the interpreter, but we must always bear in mind that what we are concerned with is “nothing more than a guideline, and while it would seem proper that we employ it, there is no a priori requirement that it apply, in practice, to a given legal issue” (ibid., 161). Indeed, functionality is the main thing, while “doctrines, classifications, and definitions, we have created these for our own use; they were intended to serve us; we will control them and not allow them to control us; the power is in our hands, and we will now allow our own creations to rise up against us” (the Har Shefi case, 767, and see: CrimA 4675, 4961, 4962/97 Yisrael Rozov v. State of Israel, IsrSC 53 (4) 337, 377). As for the matter before us, we find no good reason to distinguish the cause of action under sec. 2 (a) of the Consumer Protection Law, and treat it differently than any other tort.

The Consumer Protection Law – A Multidisciplinary Law

46. The Petitioners place class actions at the center of Creation, and in reading their briefs, it is hard to rid oneself of the impression that the substantive provisions of the Consumer Protection Law were created solely, or at least primarily, to honor class actions. Thus they conclude that in denying Barazani a right granted under sec. 2 (a) of the Law, we render the Law an empty vessel. The claim is readily refuted by the fact that class actions were introduced into the Consumer Protection Law only in 1994, that is, some thirteen years after the Law was enacted. It seems to me that portraying class actions as the prime purpose of the Consumer Protection Law, around which all other provisions of the Law orbit and bow down, does injustice to the Law.

47. We can all agree that the purpose of the Consumer Protection Law is to achieve an appropriate balance between the individual consumer and dealers – particularly large dealers – and the Law achieves this by placing greater burdens upon the dealers. See, e.g., the Consumer Protection Law Bill, 302; LCA 8733/96 Langbert v. State of Israel, IsrSC 55 (1) 168, 175; LCA 2701/97 State of Israel v. Chertok Daniel, IsrSC 56 (2) 876, 884. For a general survey, see especially, Dr. Orna Deutch, ibid., 27-37; Prof. Sinai Deutch, ibid., 118-128. However, the Consumer Protection Law is a multidisciplinary law. It simultaneously situates itself in private law and in public law, in public administrative law, and in criminal law. The Law integrates provisions form these various fields of law in order to serve the purpose of protecting the consumer.

48. Indeed, we find three different enforcement mechanisms in the Consumer Protection Law: an administrative enforcement mechanism, a criminal enforcement mechanism, and a civil enforcement mechanism. These three mechanisms can be found in Chapter Five (The Consumer Protection and Fair Trade Commissioner), Chapter Six (Penalties and Remedies), and Chapter Six 1 (Class Actions). These mechanisms are separate from the substantive provisions that impose specific obligations upon dealers.

49. In regard to the Consumer Protection and Fair Trade Commissioner, an examination of the relevant provisions of the Law reveals that the Commissioner enjoys many potent powers for overseeing the execution of the Law, for addressing complaints, etc. As stated in the Bill (ibid., 301, 311):

For the purpose of enforcing the law, a Consumer Protection and Fair Trade Commissioner will be appointed, who will be granted many powers to enable him to ensure that the provisions of the law are indeed carried out, and to enforce them upon dealers that do not comply.

…

The powers granted by the law to the Commissioner will grant him the status of an independent authority that can act efficiently … to this end, the Commissioner is granted powers that are not generally granted to authorities, among them – the authority to obtain an undertaking by a dealer to abstain from repeating offenses, accompanied by a guarantee of up to NIS 10,000, and the authority to publish the findings of his examinations, and to obtain a restraining order from the court. In addition to those powers, the Commissioner will have the authority to investigate, to seize documents and chattels, and additional executionary powers.

The above receives full expression in the Law. Here are a few of the powers of the Commissioner, as set out in secs. 21-22 of the Law:

Powers of the Commissioner

21. If the Commissioner or the person appointed by him for that purpose concludes that it is necessary to do so for the implementation of this Law, then he may –

(1) Enter any place used for a business, and there check whether the provisions of this Law are observed, examine documents, samples and goods, and seize anything, if it is reasonable to presume that in its respect an offense against the provisions of this Law was committed or is planned;

(2) Interrogate any person who is connected to the matter or has information about it, and demand that he appear before him, deliver to him documents, samples and information related to the investigation, on condition that the date of a person's appearance under this paragraph shall – as far as possible – be set in coordination with him and be at a reasonable time;

(3) Carry out tests of goods or services and publish their results, but he shall not publish anything that is liable to injure any person, if he had not been given an opportunity to present his arguments;

(4) Inform dealers of their obligation to stop or not to repeat practices that constitute prima facie violations of the provisions of this Law.

Auxiliary Powers

22. (a) The Commissioner or a person appointed by him for that purpose shall have the powers of a police officer of the rank of inspector under the provisions of section 2 of the Criminal Procedure Ordinance (Testimony), and section 3 of the said Ordinance shall apply to information recorded by him.

In addition, the Commissioner also enjoys additional powers, such as the power to demand an undertaking that a dealer will abstain from violating the Law (sec. 28), the authority to apply for a court order that a dealer abstain from violating the Law (sec. 30), and more.

In addition to the Commissioner, the Law backs up the obligations that it imposes upon dealers with criminal sanctions, upon which we need not dwell. However, we would especially note sec. 23 (a) (1) of the Law, under which a dealer is subject to a year imprisonment and a fine “if it did anything liable to mislead a consumer in violation of the provisions of section 2”.

50. These consumer protection mechanisms do not impress the Petitioners. They argue that public enforcement by means of the provisions of the Law is not enough, and add that in practice, there is under-enforcement by the authorities. They further argue that class actions are the – with a capital “T” – primary tool for the enforcement of the provisions of the Law, and we must not let this valuable tool slip from our hands. And see and compare: the A.S.T. case, para. 7 of the opinion of Beinisch, J.; the Consumer Protection Law (Amendment No. 3) Bill, 5754-1994, H.H. 396; Bar-Niv (Bornowski), “The Limits of the Consumer Class Action,” 19 Iyunei Mishpat 251 (1994) (Hebrew); Bar-Niv, “Enforcement of the Consumer Protection Law by the Commercial Sector,” 17 Iyunei Mishpat 299 (1992) (Hebrew). And compare: M. Agmon & D. Lachman-Messer, “Theories of Enforcement in the New Companies Law Bill,” 26 Mishpatim 543, 577 (1996) (Hebrew).

51. We would answer the Petitioners’ arguments as follows. First, we have not said – and will not say – that class actions are not an important means for the enforcement of the substantive provisions of the Consumer Protection Law. Second, and this is the main point, examining the Law from within shows that, in principle, the Law rests upon several foundations. Reviewing the powers of the Consumer Protection Commissioner and examining the penal section of the Law will show that the legislature is of the opinion that those powers and sanctions greatly strengthen the position of consumers. If the authorities have demonstrated laxity in enforcing the Law, that retrospective laxity cannot influence the interpretation of the law. We would recall how other authorities operated in the past and how they operate today. We would recall the Antitrust Commissioner and the Securities Authority – how those two operated in days gone by and how they stand today. We should remember, and hope that the Consumer Affairs Commissioner will similarly gain strength, and that the enforcement authorities of the Consumer Protection Law will follow suit in regard to penalties. But that is for the future. As for the present, the Petitioners’ arguments say nothing that would directly influence the interpretation of the Law.

52. One last comment in this regard. We have stated elsewhere (see para. 12, above) that the Consumer Protection Law does not accept the actio popularis “in blank”. The proof is that a person does not acquire a right to bring a class action unless he also has an actionable personal right (see sec. 35A (a) of the Law). If we were to adopt the interpretation of sec. 2 (a) of the law advanced by the Petitioners, we would find ourselves indirectly introducing the actio popularis into the Law, if not in its fullest sense, at least in principle. By this interpretive process, we borrow a concept of public law – from constitutional law, administrative law, and primarily, from criminal law – and make it part of private law. It is as if we have returned to the days of old, when the enforcement of the law – civil and criminal – was in the hands of the individual. In those days, and in the absence of a central government that could impose its will upon the entire state, law enforcement was decentralized, and the powers and authority of the individual were of primary importance for the enforcement of the law. Granting Barazani a right to sue, as the Petitioners understand the Law, returns us to those early days, if by a sophisticated, modern apparatus. We would immediately add that we do not mean to criticize the need for decentralization of enforcement. We say this because we do not believe that the Law intended, as the Petitioners argue, to affect such a mini-revolution as that we have described without saying anything expressly to that effect. But we have not heard the Law say anything – neither loud nor clear.

Presumption

53. Justice Strasberg-Cohen recommends that we establish a presumption that would assist consumers in their battle with dealers, or in her words (at p. 603):

Were I of the opinion that actual deception of the consumer, and reliance upon the dealer’s representation were required – and I do not – then, in light of the relative power in the relationship between the consumer and the dealer, and in order to deter the commercial sector, I would favor a presumption by which when a dealer makes a representation that is liable to mislead the consumer, and that representation is widely publicized in order that it reach the consumer public, the consumer who purchases the goods or services that were the subject of representation would be deemed to have been exposed to the representation and had relied upon it…

Chief Justice Barak preferred to leave that question in abeyance, inasmuch as there was no need to decide it (ibid., 621). Careful examination – even without delving deeply into it – shows that the subject of the presumption raises no small number of difficulties. Inasmuch as it is not necessary that we decide the issue, we will leave it for the future.

Does this spell the End of Collective Actions on the basis of the Consumer Protection Law?

54. The Petitioners raise the fear, and even argue, that the conditions of reliance, or if you prefer, the conditions of causation – as established in the judgment under review – between the conduct of the dealer and the harm to the consumer will put an end to class actions under the Law, by which we will call down great harm upon ourselves. I cannot agree. Our opinion is centered upon the question of when, and under what circumstances, does a plaintiff under the Consumer Protection Law acquire a personal cause of action against a dealer. Indeed, each one of the plaintiffs in a class action must himself have a personal right to compensation – like the representative plaintiff – and have suffered harm causally connected to the conduct of the dealer. So much for the right itself. However, the legislature and secondary legislature took a significant step toward the members of the class insofar as proving the cause of action. Thus, if the consumer prove the existence of a personal cause of action, and if the complaint be certified as a class action, then the court may decide how the members of the class are to prove the injury they incurred. Or, as set forth in reg. 9 of the Consumer Protection (Procedures in regard to Class Actions) Regulations, 5755-1995:

Actions deriving from Judgments

9. (a) If a court decides that a cause of action has been proven, it may order that every member of the class prove his right to the requested remedy by means of an affidavit in which he details the harm he incurred.

(b) …

(c) Subsection (a) notwithstanding, the court may, at the request of the plaintiff, exempt the members of the class, or part of them, from submitting affidavits if it finds, under the circumstances of the case, that submitting them will unduly burden the members of the class, and it may order that the damage be proven in another manner as it shall see fit.

In terms of the matter before us, if Barazani had a personal cause of action, and the court had recognized his right to submit a class action, and if the court had accepted the class action as such, then the court would have been free to establish appropriate means for proving the causal connection between the misleading advertisement and the harm caused each of the members of the class, as well as the harm caused to each of them, as it saw fit. Or, as stated in reg. 9 (a) above: “that every member of the class prove his right to the requested remedy by means of an affidavit in which he details the damage he incurred”. So, by affidavit, or as stated in reg. 9 (c), even in any other way that the court shall see fit.

55. Moreover, in CA 1337/97 Tnuva v. Rabi (recently delivered and as yet unpublished), Justice Naor (dissenting) stated that, in her opinion, the Consumer Protection Law should adopt an arrangement called “indemnification and special compensation” which is found in regard to class actions in several laws, among them sec. 46I of the Restrictive Trade Practices Law, 5748-1988, sec. 16I of the Banking (Service to Customer) Law, 5741-1981, and sec. 62I of the Insurance Business (Control) Law, 5741-1981. These provisions are identically worded, and we shall quote sec. 46I of the Restrictive Trade Practices law:

Indemnification and Special Compensation

46I. (a) In the case that a ruling of pecuniary compensation is handed down by a Court in a Class Action, such Court may:

…

(b) In the case that the Court believes that pecuniary compensation of all or some of the members of the group is impractical under the circumstances, either because they cannot be identified and the payment cannot be made at a reasonable cost or for any other reason, it may provide for any other remedy as it deems fit under the circumstances, whether in favor of all or some of the group, or in the public interest.

A similar – though somewhat different – arrangement can be found in sec. 216 (b) of the Companies Law, 5799-1999, which addresses damages in class actions under that law. From these provisions, we learn that where awarding separate compensation to each member of the class is impractical, the court may impose special compensation arrangements or other remedies upon the defendant, as it may deem appropriate, as long as the defendant is not required to pay more than the damage it caused. And see: Daar v. Yellow Cab Company, 433 P. 2d 732 (1967).

Comparative Law

56. The attorneys for the parties, each in its own cause, relied upon comparative legal precedents, primarily from American consumer protection law. An examination of the case law serves to show that support can be found for (virtually) every approach. American law is state based, and despite the reciprocal influences of the laws of the various states, each state follows its own path. While the language of the laws is similar – and even similar in certain ways to our own Consumer Protection Law – the interpretive policy of the courts differs from place to place. The primary differences center, not surprisingly, upon the subject of reliance and causation. Thus, for example, there are places where a precondition to the tort of consumer deception is that the consumer relied upon the misleading representation. In other places, no reliance is required at all. And still in others, the case law has created a presumption of reliance. And we need not point out that each is unlike the others.

Moreover, reading the American case law reveals variations in the application of the various laws, both in regard to the conditions for reliance and in regard to causation. Thus, for example, in the case of Miller v. General Motors Corp., 2003 U.S. Dis., Lexis 1467 (a case decided in January 2003 by the United States District Court for the Northern District of Illinois, Eastern Division), the court addresses some of the differences between the laws of the various states – primarily in regard to issues of reliance – and we find the following marginal note by the court:

Some of the issues on which differences exist include: … differences in standards of reliance.

The court adds that the law of the state of Illinois is also insufficiently clear in regard to reliance. And also see, for example: the Oliveira case (above, para. 41), Connick v. Suzuki Motor Co., Ltd., 675 N.E.2d 584 (1996); Zekman v. Direct American Marketers, Inc., 695 N.E.2d 853 (1998).

Precedents are thus brought to us from the four corners of the earth, and there is much confusion. Indeed, the legal provisions differ, as do the trends and social, economic and legal outlooks that characterize the different states and that guide the courts – each according to its own path – and we would be hard pressed to distinguish the universal from the particular. We may learn techniques and modes of thought from American law, but I fear, not much more.

57. In reviewing the sea of citations imported from the United States and laid out before us, I cannot but be reminded of the words of Justice Haim Cohn in FH 12/63 Leon v. Ringer IsrSC 18(4) 701 [1964], where the Supreme Court was asked to decide upon the “eggshell skull” rule. This is how Justice Cohn began his opinion in that case (ibid., 706):

The rule established in CA 378/62 … it that the tortfeasor is responsible for the harm caused by his negligent act, even if – due to the “eggshell skull” of the victim – the extent of the injury exceeded anything that could be expected or foreseen. In the Further Hearing on this doctrine, the learned counsels called down upon us an abundant rain of precedent, sources, articles and comments, among them Israeli, American, South African, and Australian, to the point that the waters of the foreseeability doctrine flooded the banks. In fear of being swept away by such a torrent, and drowning in a sea of various decisions and statements, I cleared my desk of all the books – among them a compendium of nineteen articles published on the subject in various journals, which the attorney for the National Insurance Institute compiled and bound for us with discerning taste – and I commenced writing with only the Civil Wrongs Ordinance, 1944, and the said decision of this Court in CA 378/62; 390/62 set before me.

Indeed, in a moment of such distress – a distress of lémbarras du choix (de richesse) – we can but latch onto the fundamental principles of the law. That is what we have done, to the best of our ability, in this opinion. And see, for example: Gary L. Willson & Jason A. Gilmer, “Minnesota’s Tobacco Case: Recovering Damages without Individual Proof of Reliance under Minnesota’s Consumer Protection Statutes”, 25 Mitchell L. Rev. 567 (1999); Samuel Issacharoff, “Class Actions in The Gulf South Symposium: The Vexing Problem of Reliance in Consumer Class Actions”, 74 Tulane L. Rev. 1633 (2000).

Conclusion

58. The Petitioner before us, Barazani, did not see the misleading advertisement, did not rely upon it – either directly or indirectly – and in any case, was not misled. There is no appropriate causal connection between the advertisement and the injury allegedly incurred by Barazani, and, therefore, his suit must be denied. I would, therefore, recommend to my colleagues that we dismiss the petition and affirm the judgment of the Supreme Court.

And it came to pass after these things[7]

59. I have read the opinion of my colleague Justice Mazza. My colleague comments rather sharply upon my opinion. He primarily seeks to smash the wall I built around the judgment, and pulverize the foundations upon which I built my legal conclusions. Inasmuch as my colleague’s opinion was not before me when I wrote my opinion, I would ask that what I wrote be seen as an answer to my colleague’s remarks. And having thus replied to my colleague, I would add two observations in regard to the disagreements that have arisen between us.

60. My colleague is of the opinion – and so he holds – that in interpreting and deciding upon the scope of the Consumer Protection Law, we must bear in mind that we are in a “consumer environment” as distinguished, for example, from a tort-law environment, and that we must give special force to the “uniqueness of the consumer cause of action”. Because we are acting in a consumer atmosphere, we must realize that the causal connection between a prohibited act and the injury in the Consumer Protection Law must be a “consumer causal connection”, that a prohibited act of deception is “consumer deception”, that the injury incurred by the consumer is “consumer injury”, etc. The borders and scope of each of these concepts – concepts whose core is the consumer as such – remain somewhat blurry. However, it is unambiguously clear that appending the term “consumer” to each of these long acknowledged concepts – the concepts of “causal connection”, “deception”, “injury”, etc. – shows that the interpretation of those concepts is not the usual one, and may contradict the usual interpretation. A “consumer causal connection” is not a regular “causal connection”, “consumer deception” is not the usual “deception”, “consumer injury” is not regular “injury”, etc. Thus, even though the Law clearly instructs us that acts and omissions prohibited under Chapters Two, Three and Four of the Consumer Protection Law are to be treated as torts under the Civil Wrongs Ordinance, my colleague intends to disengage himself – in practice – from the doctrines of tort law, while seeking to construct a new conceptual universe whose terms and expressions are the terms and expressions of concepts familiar to us from tort law, but whose content is a “consumer content” that is remote from tort law.

61. In essence, my colleague’s words destroy the existing world – the old world – and create a new world in its place. Thus, the passes the old world and a new world comes into being, all on the basis of the purpose of the Consumer Protection Law. For my part, I would argue that I find such an interpretation problematic, and I fear “the disengagement from firmly-rooted, ancient legal traditions” (Prof. Sinai Deutch, “Consumer Class Actions: The Demand for Personal Reliance on Misrepresentations of the Deceiver,” (2 Moznei Mishpat 97, 126 (2001-2002) (Hebrew)). Not only do I not find any firm anchor in the Law for my colleague’s far-reaching interpretation, but the fears gnaw at me if only because the boundaries of the new world are not sufficiently clear, and the consequences that may result from the new conception are beyond me. My colleague seeks to disengage us from the gravitational center that we have become accustomed to orbit for so many years, but he does not provide us with a firm footing to tread upon. I would go so far as to say that in this new world that my colleague creates, we must begin from the beginning. The sensation is of floating in space, and the spirit of God hovers upon the waters.

Thus we see that sec. 35A (b) of the Consumer Protection Law states: “Where the cause of action is injury, it is sufficient that the plaintiff show that the consumer suffered injury.” On this provision, my colleague states as follows:

I am of the opinion that we may learn from sec. 35A (b) that for the purpose of filing a class action, it is sufficient to show the existence of a consumer injury, and there is no need to show a factual causal connection between the breach and that injury. This construction accords with the special purposes of the consumer class action, which I addressed above, which are also not consistent with the requirement of personal reliance.

For my part, I would say that I tried but could not understand how we could award one person damages from another person for an injury that was not causally connected to that other person’s acts or omissions. What would that be like? It would be like saying that Reuben and Simon make a binding agreement between themselves solely on the basis of Reuben’s offer. Then, even if Levi breaches an obligation placed upon him, and even if Judah incurs the injury, Judah will not collect damages from Levi for that injury – so it appears to me – unless he can show some rational causal connection between Levi’s breach and the injury that he, Judah, incurred.

My colleague’s construct may have been appropriate to the formative period of the Common Law, but today, with statutes from horizon to horizon, I find it difficult to free myself from the feeling that adopting my colleague’s approach – on its face – would tresspass the boundaries of the legislature by no small measure, and first and foremost, lead us into unknown territory. I would quickly add this: I did not say – and do not mean to say – that my colleague’s approach (at least in part) is not the lex ferenda. I did not say – and do not mean to say – that it is not proper that we interpret the Consumer Protection Law in a “consumer spirit” and more broadly than tort law. I agree that it would be appropriate to do so. But I fear that my colleague may have gone too far in his interpretation of the Law.

62. A second comment: Over the course of his entire opinion, my colleague attacks the reliance doctrine, as well as my opinion allegedly based upon that doctrine. I am afraid that my colleague is mistaken. My opinion is expressly based upon the subject of the proper causal connection, and not upon the reliance doctrine in the narrow sense, and I believe that, in that regard, there are no deep disagreements between us. See, for example, paras. 39 through 41 of my opinion.

63. Unlike my colleague Justice Mazza, whose approach is a torts approach – “torts” in the broad sense of the term – my colleague Justice Dorner chose to follow a different path, one beginning in contract law and ending in the Consumer Protection Law. My colleague is of the opinion that a consumer’s right against a dealer in circumstances like those before us “is firmly anchored in established doctrines of contract law,” and upon those doctrines, she grounds her conclusion that the Petitioner is entitled to the status of a class-action plaintiff. More precisely, my colleague is of the view that the Petitioner incurred compensation-worthy injury even though he was not exposed to the misleading advertisement, and that injury can serve as a springboard to the status of a representative plaintiff.

64. I do not intend to argue with my colleague on the matter of the lex ferenda. The matter is too complex for me even to wish to express an opinion upon it, and we have heard no arguments grounded upon contract law. Our common assumption was, and is, that we are concerned with tort law. That was the field that was plowed by the plowers, and the one that we, too, plowed. For my part, I can say that to the best of my understanding, sec. 2 of the Consumer Protection Law – by its plain language and on its face – does not state what my colleague seeks to find there. The case law has always assumed that Section 2 of the Law addresses precontractual deceit, and in any case, it was the (alleged) existence of “deceptive advertising” that formed the basis of the Further Hearing with which we are concerned. That is the basis of the disagreement before us, and that – and only that – was addressed in our opinion above. See and compare: Prof. Sinai Deutch, Consumer Protection Law, ibid., 398-400, and the sources cited there.

Contract law indeed adds causes of action and remedies to those causes of action and remedies provided by the Consumer Protection Law, but consumer protection as expressed in the Consumer Protection Law did not situate itself in the field of contract law. On the contrary, consumer protection law distanced itself from the field of contracts, seeking to reside in the field of tort law. That is, after all, what the Law says in stating that a deception such as that before us is to be treated “as a tort under the Civil Wrongs Ordinance [New Version]”. Consumer protection law lives its civil life in the field of tort law, the doctrines of that field serve as the basis for the rights that the Consumer Protection Law grants to consumers, and the general atmosphere is one of tort law. Knowing that, we further know that a class action under the Consumer Protection Law – as provided under sec. 35A of the Law – treats of that “tort” action that the Law created. Thus, when sec. 35A of the Law states that a consumer may bring a class action “on behalf of a group of consumers on a cause of action under which he can bring suit in his own name under this Law, and against any defendant that the consumer may sue in his own name”, it is speaking of nothing other than that cause of action in “tort” that the Law grants the consumer. Even if the consumer has a cause of action against a dealer in “contract law” – whether directly based upon contract law or more closely related to contract law – that suit will find its place – to the extent that it has one – in general contract law and not specifically in the Consumer Protection Law. In any case, the consumer will not be able to initiate a class action based upon the Consumer Protection Law for such a cause of action.

Justice

Chief Justice A. Barak:

I concur in the opinion of my colleague Justice Cheshin. I also concur with his comments in regard to the opinion of my colleague Justice Mazza. As for the opinion of my colleague Justice Dorner, I, too, am of the opinion that, inasmuch as arguments were not heard in regard to the application of contract law to this case in the District Court, or before the three-judge panel of the Supreme Court or in this Further Hearing, I would not wish to take a stand upon that issue in these proceedings.

Justice

Deputy Chief Justice T. Orr:

I concur in the opinion of my colleague Justice M. Cheshin.

Justice

Justice D. Beinisch:

I concur in the opinion of my colleague Justice Cheshin, and thereby also add my voice to that of the majority in CA 1977/97.

The approach of my colleagues, who seek – each in his own way – to construe the provisions of the Consumer Protection Law in a spirit of a consumer doctrine that would protect class actions, is very appealing. Protecting consumers against economically powerful dealers by levelling the playing field is not merely an appropriate purpose, but also expresses values that we seek to further as part of an overall economic vision. I also agree with the approach that sees class actions as an important tool for advancing consumer protection and for restraining economically dominant bodies from abusing their power.

Nevertheless, I do not see how one can extricate oneself from the legal framework that the legislature established, under sec. 33(a) of the Consumer Protection Law, for damages for a “consumer tort”, which is a tort-law framework. For my part, I do not share my colleagues’ fear that a demand for a causal connection between the tort and the injury will eviscerate the remedy of damages that the Law provides. One must distinguish between the substance of applying tort-law doctrines and the nature of the causal connection and its proof. The nature of the causal connection, the strength of its proof and the means for its proof may be decided in accordance with the circumstances of each case, and the consumer background may result in more lenient rules. One must not, in principle, confuse that with the foundations upon which the legislature grounded the remedy of damages. The wording of sec. 31 (a) of the Consumer Protection Law bars the way to developing a theory of consumerism as a branch of compensation divorced from the foundational concepts of tort law.

We may assume that a theory of consumerism will develop, and that consumer suits will find their path in regard to the remedy of compensation, as well, and case law and practical experience will lay the appropriate groundwork for proving the causal connection, without casting off the foundational principles of the theory of compensation for loss.

Justice

Justice Tova Strasberg-Cohen:

1. The suit before us was filed on the basis of the Consumer Protection Law, 5741-1981 (hereinafter: the Law). It is based upon a cause of action and a remedy established in the Law, and it was filed as a class action in accordance with it.

The provisions of the Law that are relevant to these proceedings are sec. 2 (a), secs. 31 (a) and (a1), and sec. 35A of the Law. The central question that we must consider and decide is whether, under the prohibition upon deceit established in sec. 2 (a) of the Law, a plaintiff can be awarded pecuniary damages even if he was not exposed to the misleading representations and therefore, did not rely upon them. I addressed this question at length in my dissent in the Appeal that is the subject this petition (CA 1977/97 Barazani v. Bezeq – Israeli Telecommunications Company Ltd., IsrSC 55 (4) 584 (hereinafter: the Appeal). I have reviewed all of the relevant material in the Appeal, and especially the opinions of my colleagues Chief Justice Barak and Justice Englard, who formed the majority, as well as that of my colleague Justice Cheshin in these proceedings, and the conflicting opinions in the publications of the various scholars (Prof. Sinai Deutch, whose opinion coincides with mine, and Prof. M. Deutch and Dr. O. Deutch, whose opinions correspond with that of my colleagues, see: S. Deutch, “Consumer Class Actions: The Demand for Personal Reliance on Misrepresentations of the Deceiver,” 2 Moznei Mishpat 97, 121 (2001-2002) (Hebrew) (hereinafter: Deutch, “The Demand for Personal Reliance”); O. Deutch, The Legal Status of Consumers (Nevo, 2002) 414 (Hebrew); M. Deutch, Commercial Torts and Trade Secrets (Nevo, 2002) 49 (Hebrew). After reading all of the above, I have concluded that my opinion remains unchanged. I will, therefore, clarify my position and focus upon the questions under debate, and preface my opinion with a few words on the integration of a cause of action under the Consumer Protection Law in a class action under that law.

The Consumer Protection Law

2. The Consumer Protection Law, which forms part of the consumer legislation, serves many purposes, but at their heart is the protection of consumers against economically advantaged dealers, and narrowing the power gap and lack of equality in the relative negotiating positions of the parties. Its purpose is to impose proper conduct upon the commercial sector, and to establish rules of fair play in the relationship between consumer and dealer. It was intended to reinforce the personal autonomy of the consumer and his right to dignity by ensuring his ability to make informed choices in regard to products and services on the basis of accurate, relevant information, and by preventing abuse of the consumer’s relatively weaker position. It was intended to deny a dealer the ill-gotten gains obtained from the consumer for a product or service, and thereby restore to the consumer what had been unlawfully taken, and to make such conduct not only improper but also unprofitable. Consumer protection also serves to encourage fair competition among dealers, which is an important factor in proper market and economic activity (for a survey of the purposes of consumer law, see: O. Deutch, supra, at pp. 27-37, and see the Explanatory Notes to the Consumer Protection Law Bill, 5740-1980, at p. 302).

3. As for as consumer contracts, there are those who view them as a separate branch of general contract law. Each of those branches has its own point of reference. That of general contract law is the glorification of the autonomy of the parties. Its provisions are dispositive, and governmental intervention through criminal and administrative provisions is limited. As opposed to this, consumer protection law is obigatory, and in achieving its objectives, it comprises criminal and administrative sanctions. (For a survey of the characteristics of civil law as opposed to consumer law, see: S. Deutch, “Consumer Contracts Law versus Commercial Contracts Law,” 23 (1) Iyunei Mishpat 135, 150-152 (5760) (Hebrew); S. Deutch, Consumer Protection Law – Fundamentals and Principles, vol. 1 (5761) 294-289 (Hebrew)).

Class Actions

4. The Consumer Protection Law provided consumers with efficient enforcement mechanisms for the protection of their rights, and primary among them is the class action. I have had the opportunity to address the purposes of class actions on more than one occasion, and I shall not repeat what I have already stated (see: CA 2967/95 Magen veKeshet Ltd. v. Tempo Beer Industries Ltd. [1997], IsrSC 51(2) 312, 322-323; LCA 4474/97 Tatzet v. Silberschatz, IsrSC 54 (2) 577, 586-587; LCA 8268/96 Reichert v. Shemesh, IsrSC 55 (5) 276, 288-289; LCA 3126/00 State of Israel v. A.S.T Project Management and Manpower Ltd., IsrSC 57 (3) 220). I will suffice in saying that in the broad sense, class actions are intended to prevent the unjust enrichment of powerful economic actors that concentrate production, industry and services for mass consumption at the expense of the man in the street who turns to such actors for the goods and services that he uses. They are also a means for enforcing the law at the civil level. The possibility afforded to the individual consumer of bringing suit, by class action, in the name of an anonymous group of consumers who were harmed by a violation of the law, achieves proper enforcement and prevents situations of under-enforcement that harm the individual consumer, the group of consumers and the general public. Under-enforcement leads to the undermining of public faith in the general social order and the rule of law. Class actions also serve the public interest in efficiency and economy of resources, and prevent a lack of uniformity in the decisions of the courts in similar individual cases (see: Nina Zaltzman, Res Judicata (Ramot, 1991) 427 (Hebrew).

Interpretation

5. The suit before us is based upon a cause of action in the Consumer Protection Law, and the request that it be certified as a class action is based upon the same Law. This brings about an merger that has consequences for the proper interpretation of the provisions of the Law relevant to our examination. That interpretation begins with the language of the Law but does not end there. From among the possible interpretations that the language of the Law makes available, we must choose the possibility that is consistent with the objective and purpose of the Law. We can learn the purpose from the Law, the placement of the provision in the Law, the general structure of the Law, from the normative economic and social context of the Law’s provisions in relation to one another and in relation to other laws of similar character, and from extra-legal sources, such as the legislative and parliamentary history, all against the background of the accepted values of our legal system (CA 165/82 Kibbutz Hazor v. Rehovot Assessment Officer, IsrSC 39 (2) 70).

From reading the relevant legal provisions, and especially secs. 2 (a) and 31 (a) and (a1) of the Law, we find that the words of the Law alone are insufficient to exhaust the substance of these provisions. It seems to me that the use of the procedural device of initiating a suit as a class action, and the nature of the Law as a consumer law, pave the way for an appropriate interpretation of the Law, and for providing the correct meaning to its provisions.

What is Agreed and What is Disputed

6. At the outset, I would like to remove the stumbling blocks from the path that my colleagues and I are travelling, clarify what is and what is not in dispute, and focus upon what is in dispute.

There is no dispute that a class action does not create new causes of action and that it is but a procedural device that allows for the joining of many actions into one, for procedural and substantive reasons. There must be a personal cause of action as a precondition to making a class action available to the plaintiff. This requirement is common to all the laws that regulate class actions (in this regard, see, for example, my opinion in CA 2967/95, above). My colleague Justice Cheshin addresses this matter at length, and I will not add to that. I will only state that, like him, I was and remain of the opinion that a class action does not create new causes of action and is nothing other than a procedural device available to a person who has a personal cause of action under the Law (sec. 35A (a) of the Law).

7. From here I will now proceeed to the cause of action of “prohibition of deceit”, which is the cause of action in the matter before us, and I will begin by pointing out the questions that are not in dispute in regard to this cause of action established under sec. 2 (a) of the Law, which states as follows:

Prohibition of Deceit

2. (a) A dealer must not do anything – by deed or by omission, in writing, by word of mouth or in any other manner, also after the transaction has been contracted – which is liable to mislead a consumer in regard to any material element of the transaction … (emphasis supplied – T.S.C.).

There is no dispute that the prohibition of deceit established under sec. 2 (a) of the Law is not a prohibition of “result” that requires actual deceit, but rather a prohibition of “conduct” according to which one may not do anything “liable to mislead a consumer”. Therefore, in order for a cause of action to arise, there is no need to show actual deceit in practice. And so I stated in my opinion in the judgment under appeal:

…in my opinion, the consumer who files suit under the Law is not required to show that he was actually deceived…it is sufficient that he show that the dealer committed an act that was “liable to deceive a consumer” (p. 602).

Similarly, Chief Justice Barak states in the same judgment:

…sec. 2 (a) of the Law does not require deceit in actual practice. What is prohibited thereby is doing something “liable to deceive a consumer”. The purpose of the prohibition is to ensure that the consumer receive full and accurate information. The prohibition established by sec. 2 (a) of the Law is not a prohibition of “result”; it is a prohibition of “conduct”. The prohibition established in sec. 2 (a) of the Law… (p. 617).

And thus states Justice Cheshin in this Further Hearing:

The prohibition is one of conduct, and a dealer contravenes the prohibition even if he does something – by act or omission – that is only “liable to mislead” a consumer, i.e., even if no one was misled by it. …The standard of conduct required under sec. 2 (a) is higher than the usual standard in other laws. … whereas sec. 2 (a) of the Consumer Protection Law prohibits the conduct per se, even in the absence of resulting injury (para. 10, emphasis supplied – T.S.C.).

(And see: Deutch, “The Demand for Personal Reliance”; O. Deutch, supra, p. 390; M. Deutch, supra, p. 49).

8. There is no question that Bezeq’s advertisements appeared to be “liable to mislead a consumer” in regard to the manner of calculating charges for direct-dial international calls and their price (see: my opinion in the Appeal, at pp. 594-596); the opinion of the Chief Justice in the Appeal, at p. 617, opposite the marginal letter B). That being so, the consumer acquired a cause of action under sec. 2 (a) of the Law, and a restraining order and declaratory relief could be granted (the Chief Justice, ibid., at p. 617, opposite the marginal letter B). However, in the matter at hand, the class action that the court was asked to certify was not for declaratory relief, but rather for damages arising from injury incurred by consumers as a result of the advertisement that was liable to mislead. Here, too, my colleagues and I travel the same path, inasmuch as I agree that in order to acquire a cause of action for damages for injury caused by a publication that is liable to mislead, one must make a prima facie showing that the publication was liable to mislead, that injury was incurred, and that there was a factual and legal causal connection between the publication and the injury (see my opinion in the Appeal, at p. 602, opposite marginal letter A, and at p. 604, opposite marginal letter C).

9. No one disputes that, in the case before us, the requirement of “liable to deceive” in sec. 2 (a) of the Law was met. My colleagues and I part ways in regard to the question of whether the Petitioner-consumer suffered harm, and whether there can be a causal connection between the publication and the injury in the absence of the consumer’s reliance upon the potentially misleading publication. My answer to both questions is in the affirmative for a number of reasons. First, establishing deceit as a prohibition of conduct but recognizing a remedy of damages for its violation only if actual deceit is proven, renders the primary prohibition of the Consumer Protection Law lacking of any real civil remedy. Although sec. 32 of the Law grants the remedy of cancelling the sale, the limitations of that remedy are so numerous that there is almost no reason to employ it, and indeed, not a single example of the application of this provision of the Law is to be found in the case law. Second, it is unlikely that a consumer will go to the effort and expense involved in obtaining a restraining order for the benefit of the general public. Third, over the years of the existence of the Consumer Protection Law, only limited recourse has been made to the criminal sanction, and it would appear that the criminal sanction does not significantly deter a powerful dealer from misleading the consumer public when he can pocket large profits (ibid., at p. 106). The same is true of administrative sanctions. Fourth, an approach that makes damages contingent upon actual deceit limits the dealer’s liability only to those consumers who can prove that they were actually misled by the dealer’s misrepresentations, and makes deception worthwhile from the dealer’s perspective. Fifth, an interpretation by which damages can be sought only by those consumers who were actually misled will create an artificial distinction between those consumers who actually used the misrepresented product or service but were not exposed to the misrepresentation, and those consumers who were aware of the misrepresentation. Sixth, in other cases in the past, this Court did not hesitate to broaden the choice of remedies beyond those delineated by a law, so as not to empty the law of content (thus, for example, in regard to sec. 12 (b) of the Contracts (General Part) Law, the case law established that even though the provision provides only the remedy of damages, the available remedies should not be limited only to those set out in the law when broader remedies, like enforcement, are justified (CA 829/80 Shikun Ovdim v. Zepnick, IsrSC 37 (1) 579; CA 579/83 Sonnenschein v. Gebso Bros., IsrSC 42 (2) 278; CA 986/93 Kalmar v. Guy, IsrSC 50 (1) 185)). Such an expansion is also appropriate in regard to the interpretation of secs. 31 (a) and 31 (a1) of the Law for the purpose of protecting consumers. Here I should note that such a partial expansion was made by my colleague the Chief Justice, who was of the opinion that even a consumer who was not misled and who did not suffer injury could be granted a restraining order against a dealer, although such a remedy does not appear in the Consumer Protection Law. Seventh, the Consumer Protection Law establishes other prohibitions that do not require proof of actual reliance, and their breach entitles the consumer to a broad right to damages (thus, for example, in regard to a failure to supply particulars in regard to a credit transaction (sec. 9), the court may – in addition to the provision for cancelling the transaction and refunding the consideration or part thereof to the consumer – “charge the dealer with the expenses caused to the consumer, and it may issue any other direction which it deems just” (sec. 11)). What reason is there to grant an independent remedy of damages that includes granting broad discretion to the court in regard to a violation of these prohibitions, while not for a violation of the Law’s central prohibition – the prohibition upon deception? (also see: Deutch, “The Demand for Personal Reliance,” at pp. 106, 121-127).

As a Tort

10. All of the above reasons constitute a conceptual foundation for examining whether it is possible to interpret the relevant sections of the Law in a manner that would grant damages to a consumer in the circumstances of this case, while remaining faithful to the principles grounding the rules of interpretation. The provisions of the Law relevant to the remedy of damages are secs. 31 (a) and 31 (a1) which state as follows:

Compensation

31. (a) Any act or omission in violation of Chapters Two, Three, or Four "A" shall be treated as a tort under the Civil Wrongs Ordinance [New Version].

(a1) Consumers injured by the wrong are entitled to remedies for the wrong and so are dealers, who in the course of their business are injured by deceit, as said in section 2 (emphasis added – T.S.C.).

The upshot of these sections is that the “prohibition of deceit” shall be treated “as a tort” under the Civil Wrongs Ordinance, and that the right to a remedy for the tort is granted to an injured consumer. The wording of these sections is problematic, and raises a question as to the meaning of the phrase “as a tort”. Much was written on the meaning of that phrase in the Appeal and in the opinion of my colleague Justice Cheshin in this Further Hearing. It might be noted that a review of the statutes reveals a number of laws comprising various statements in regard to the definition of “tort” in regard to the Civil Wrongs Ordinance. Conduct in violation of the law has been defined as “constituting a tort and the provisions of the Civil Wrongs Ordinance [New Version] shall apply thereto” and a wrongful act has been defined as being “as a tort under the Civil Wrongs Ordinance [New Version]” or “as an injury for which damages may be sought under the tort law” [for a list of the laws, see: Deutch, “The Demand for Personal Reliance,” at pp. 128-129). The differences in wording may be intentional or may be accidental. In any case, it is clear that this expression makes certain legal prohibitions into prohibitions that are like torts under the Civil Wrongs Ordinance. The question is whether they thus become torts for all intents and purposes. In my view, the statement “Any act or omission … shall be treated as a tort under the Civil Wrongs Ordinance...” should be understood as creating a new cause of action that is like a tort. Such a cause of action is not parallel to a tort but comparable to a tort in the sense that it applies the doctrines of the Civil Wrongs Ordinance to the act or omission. In the matter before us, it applies the compensation doctrine and the causation doctrine (see the opinion of Justice Cheshin, para. 34). However, this cause of action is special to the Consumer Protection Law. It is independent in nature, and it must be interpreted within its context, in the framework of the purpose it was intended to serve, and in relation to the said doctrines, which must be interpreted in a manner that is consistent with the purpose of the Consumer Protection Law and its enforcement by means of class actions. Chief Justice Barak’s statement in his recent opinion in CA 2622/01 Director of Property Improvement Tax v. Aliza Levanon (not yet published) are apt to the matter before us:

A statute is a living entity that resides in its social environment. With changes in social conceptions, the meaning of the statute changes in the understanding of the social environment in which it operates. … Life is in constant motion, and with it, the law. This is the basis of the interpretive approach – accepted in England and Israel – that “the law is always speaking”, and that the law must be given an updated interpretation. Interpretation is a renewing process. Old language must be given modern meaning that is consistent with the needs of modern life. Thus the statement of Prof. Radbruch, that “The interpreter may understand the law better than its creators understood it; the law may be wiser than its authors” (see G. Radbruch, “Legal Philosophy,” in The Legal Philosophies of Lask, Radbruch and Dabin, K. Wilk, trans. (1950) 141). … The laws of a society move with it over the course of its history, and in that movement, their meaning changes in order to serve the society in which they act. I addressed this is the Lindorn case, noting:

“The meaning to be given to a legal statement – like the statement ‘his spouse’ – is not fixed for all times. The law is part of life, and life changes. As reality changes, the meaning of the law changes. The language of the law remains as it was, but its significance changes along with the ‘changing conditions of life’ (ibid., p. 32).”

I need only adopt this appropriate, correct approach in the matter before us, and applying it requires an interpretation that is appropriate and proper to the issue of injury and causation. In my opinion – as opposed to the opinions of my colleagues – the requirements of injury and causation between the violation of the “prohibition of deceit” and the injury are met in the matter before us.

Injury

11. Injury how? Section 31 (a1) of the Law states: “Consumers injured by the wrong are entitled to remedies for the wrong…”, while sec. 35A (b) states: “Where the cause of action is injury, it is sufficient that the plaintiff show that the consumer incurred injury”. In the matter before us, monetary injury is claimed as the result of overcharging consumers in comparison to what should have been charged had the calculation been made as advertised. That differential is sufficient to meet the Law’s requirement of injury. The injury incurred by a consumer who utilized the international direct-dialing service is expressed in the difference between the price advertised by Bezeq, and the price actually charged (hereinafter: the “price differential”). The price differential is an injury, inasmuch as had the advertised price been charged, the consumer would have saved the excess payment. That differential is an actual out-of-pocket loss that should be deemed an injury as required by the Law.

Causation

12. Causation how? As no one doubts that there was a publication liable to mislead, and having found that injury was caused to the consumer, we must consider whether there was a causal connection between the publication and the injury. I addressed the nature of causation in general in the Appeal, and I will not repeat what I wrote in that regard (p. 605). I will, therefore, consider the disputed issue of whether the consumer meets the requirement of causation when he was not actually misled by the misrepresentation. In my view, the required causal connection exists for the purpose of the cause of action granting a consumer damages for the injury incurred by him.

13. Inasmuch as the Law establishes that an act or omission (including a misleading publication) is to be treated as a tort under the Civil Wrongs Ordinance, and does not create a parallel to specific torts in the Civil Wrongs Ordinance, we cannot say that the prohibition of deceit under sec. 2 (a) of the Law is like the tort of fraud or the tort of negligent misrepresentation, which require reliance as a precondition (on the tort of negligent misrepresentation, see: CA 106/54 Weinstein v. Kadima Cooperative Association Ltd., IsrSC 8 1317; and on the tort of fraud, see: CA 614/84 Sapir v. Eshed, IsrSC 41 (2) 225, 239). My position is that the tort perpetrated by a publication that is liable to mislead does not require reliance in order to entitle a consumer to damages for injuries incurred by him due to that publication, and we are not bound by the reliance requirement of those torts. Had the legislature intended to draw a parallel between the prohibition of deceit and one of the torts requiring reliance, we would have expected that it would have done so expressly. Moreover, there is no logic behind creating a separate tort in a special law with a special purpose that corresponds to a tort that already exists in the Civil Wrongs Ordinance, for if that were the case, what would be achieved by enacting the separate tort? We should not assume that the legislature wasted its words, and moreover, the Consumer Protection Law was enacted in order to create special causes of action for the special area of consumer protection. In addition, it should be noted that there is no small number of torts that do not require reliance, both in the Civil Wrongs Ordinance and outside it. It would appear to me that the reliance requirement is not required for establishing causation by the wording of the Law and its purpose.

14. As a rule, the reliance requirement comprises the assumption that were it not for the representation upon which you relied, and were it not for your reliance thereupon, you would not have negatively altered your situation, and would not have acquired the service or product misleadingly represented. In other words, you would have chosen to refrain from acquiring the product or service. In the case of the service in this matter – direct-dialed international calls – there was no such choice at the relevant time. It was a monopoly of Bezeq, which was a government corporation. The service itself is one that is incomparable. Modern life is inconceivable without it. And at the relevant time, it could not be obtained from any other provider. In such circumstances, one can say that the reliance requirement is of no consequence or significance. Moreover, in the modern age, in which the consumer receives services from large public corporations – sometimes exclusive in the field – the consumer public cannot be expected to keep abreast of the “flood” of advertisements published by the various corporations in regard to discounts, promotions, etc., as a condition for obtaining damages for injury incurred as a result of misleading advertising. Consumers cannot be expected to scrutinize the accounts and calculations of those corporations, and investigate whether they correspond to their advertisements. It is not even clear that they could do so. In the matter before us, Bezeq conducted ongoing advertising campaigns, and the consumers cannot be asked to keep track of those advertisement as a condition for an award of damages. They should be able to rely upon the assumption that if a company decides to conduct a campaign or grant discounts or make calculations that are more beneficial to the consumers, and publishes that, then it will act in accordance with what it published and will grant the benefit to the consumers regardless of whether or not the consumers saw, read or relied upon the advertisements when making use of the service. Moreover, a large proportion of the consumers pay their telephone bills by means of standing bank orders. The details of the bills are not always examined before payment. I find no economic or other logic to awarding a refund for overcharging only to those few who keep track of advertisements and check bills. I do not believe that it is just or fair to “punish” the consumer who does not do so, and to allow the company to profit from the loss of the consumer that derives from the supplier’s misleading advertisements. Indeed, Bezeq is under no obligation to advertise discounts, campaigns or beneficial charging plans, but if it does so, it must stand behind those advertisements and put them into practice for the entire consumer public. Having failed to do so, it committed a tort that resulted in injury for which it is liable for damages to all the consumers who used the service, whether or not they relied upon the advertisement and whether or not they were aware of it, and it must refund the overcharged fees to the consumers. All of the above leads me to the conclusion that there is no need of reliance in order to meet the causation requirement for the purpose of obtaining damages.

15. If I were of the opinion that actual deception of the consumer, as well as reliance upon the supplier’s representation were required as a precondition to the remedy of compensation – and I do not so hold – I would favor adopting a presumption that when a supplier makes a representation that is liable to mislead a consumer, a consumer who purchases the product or service would be deemed to have been exposed the representation and to have acted thereupon. My reasons for adopting that presumption partially correspond to those that lead me to conclude that reliance is not required.

The import of the said presumption is that a consumer who purchases a product or service from a supplier may assume that the price charged for the product or service is the correct price in accordance with the supplier’s advertisements, without regard for whether or not he was exposed to the advertisements. This assumption is all the more justified when we are concerned with a product or service provided by a monopoly. Such a presumption would prevent the artificial distinction between the consumer public that used the product or service misleadingly advertised, while unaware of the misrepresentation, and the consumers who were aware of the misleading information. (in regard to the presumption of reliance, see; LCA 8332/96 Shemesh v. Reichert, IsrSC 55 (5) 276, and what was stated there in regard to securities is equally applicable to the matter before us).

16. Holding that there is no need for the consumer’s reliance upon the misleading publication does not render the need for causation superfluous. In regard to the need for a causal connection between the publication and the injury, I am in full agreement with my colleague the Chief Justice and my colleague Justice Cheshin, but as opposed to them, I am of the opinion that such a causal connection exists in the case before us, as I explained in the Appeal, and I will quote what I stated there: “In my view, the representation created by the supplier should be deemed as a promise to the consumer public, which binds it and requires it to act in accordance with the representation. That promise grants the consumer a right, and places an obligation upon the party making the representation to the consumer public. When the supplier fails to meet the obligation that it assumed by means of the representation, and charges a price higher than that promised in the representation, it breaches its obligation, and the consumer incurs injury in consequence of that breach. Therefore, even if the consumer was not exposed to the misleading publication and did not alter his manner of use of the product or service – in the matter before us, the number or duration of calls – he still incurs injury, inasmuch as the price he was charged for the product or service was higher than the price at which was entitled to purchase the product or service” (the Appeal, at p. 605, between marginal letters D and E). Take, for example, a situation in which a consumer purchases a product in a supermarket, regarding which there is an advertisement at the entrance of the store stating that the price has been lowered. The consumer does not see the advertisement (or due to a language problem, does not understand it). He purchases the product, paying the full price at the checkout. Clearly, the advertisement that the price was lower than that actually charged is liable to mislead a consumer. Similarly, I believe that the consumer incurs an injury in the form of a “price differential”, which constitutes a real, tangible loss. By an appropriate interpretation of the necessary causation, that injury is causally connected to the prohibition upon deceit, inasmuch as due to the misleading advertisement and the difference between it and the actual conduct, the consumer suffered injury. That is sufficient to meet the causation requirement both factually and legally. Factually, the said injury caused to the consumer is a result of the fact that the supplier published a representation that it did not put into practice. Legally, the injury is causally connected to the representation by the foreseeability test, inasmuch as when a supplier makes a false representation, it foresees that charging contrary to the representation will cause a loss in the form of a “price differential”. It also meets the risk test, as the injury falls within the scope of risk of the supplier’s conduct, and the common-sense test, which looks at the total conduct of the tortfeasor and its contribution to the injurious result (on the legal tests for causation, see: CA 145/80 Vaakin v. Beit Shemesh Local Council, IsrSC 37 (1) 113, 145-146; CA 576/81 Ben Shimon v. Barda, IsrSC 38 (3) 1, 7; CA 119/86 Keny Housing v. Netanya Local Planning and Building Board, IsrSC 46 (5) 727, 749).

The issues before us in this case, and the proposed solutions, are not exclusively ours. In interpreting Israeli law in regard to the subject of consumer deception in general and class actions in particular, we should also look to American law, which inspired the adoption of class actions in our legal system.

Comparative Law

17. The consumer protection laws of various states of the United States establish the prohibition of deceit in language such as “an act liable to mislead a consumer”, similar to the wording adopted in sec. 2 (a) of the Consumer Protection Law. Thus, secs. 349 and 350 of New York’s General Business Law establishes that deceptive acts or practices by a business are unlawful, as are misleading advertisements. Although the sections speak of deception and its prohibition, the New York courts have held that they should be understood as prohibiting any act that is liable to mislead a consumer (Oswego Laborers’ Local 214 Pension Fund v. Marine Midland Bank, 623 N.Y.S.2d 529 (Ct.App.1995); BNI New York Ltd. v. DeSanto, 675 N.Y.S.2d 752 (City Ct.1998), at p. 755; Small v. Lorillard Tobacco Co. Inc., 679 N.Y.S.2d 593 (A.D. 1 Dept.1998, at p. 599).

Section 2 of the Consumer Fraud and Deceptive Business Practices Act of the State of Illinois expressly establishes that deception is unlawful, whether or not any person has actually been deceived or damaged thereby. Identical wording appears in the law of the State of Minnesota (sec. 325F.69 of the Consumer Fraud Act).

18. The various wordings there are similar to the wording of our Consumer Protection Law. It is worth noting that the construction given to similar sections in various states is not uniform insofar as the requirement of reliance upon the misrepresentation for the purpose of receiving a compensatory remedy. Three basic trends can be identified: The first requires proof of reliance upon the deceptive representation. The second does not require reliance upon the representation, and it is sufficient to prove a causal connection between the deception and the injury incurred. The third does not completely abandon the requirement of reliance, but it is a reduced requirement that is met by assumptions, presumptions and conclusions drawn from the circumstances (for a survey of the American legal situation in this regard, see the comprehensive article of G. Wilson & J. Gilmer, “Minnesota’s Tobacco Case: Recovering Damages without Individual Proof of Reliance under Minnesota’s Consumer Protection Statutes,” 25 Wm. Mitchell L. Rev. (1999) 567). Below, I will note a number of cases from among the many available that demonstrate each of the said approaches. For the first approach, see Oliveira v. Amoco Oil Co., 201 Ill. 2d 134, 776 N.E.2d 151, 201 Ill. 2d 134, 267 Ill. Dec. 14 (2002); and see: Zekman v. Direct American Marketers, Inc., 695 N.E.2d 853, 182 Ill. 2d 359, 231 Ill. Dec. 80 (1998). For the second approach, see: Brooks v. Midas-International Corp, 47 Ill. App. 3d 266, 361 N.E. 2d 515 (1977) in which the defendant guaranteed in its advertisements that it would replace a muffler for only an installation charge but charged the full replacement price. The suit was certified as a class action for the purpose of seeking damages, holding that reliance is not a requirement for the purpose of obtaining damages for consumer deception. This approach is consistent with mine. The same is true in regard to the judgment in Connick v. Suzuki Motor Co., Ltd., 174 Ill. 2d 482, 675 N.E.2d 584, 174 Ill. 2d 482, 221 Ill. Dec. 389 (1996), in which a class action was certified against a company, inter alia, for publishing the safety features of an automobile based upon allegedly incorrect information that the company gave to a magazine. The Supreme Court of Illinois held that the plaintiffs did not have to prove reliance as a condition to establishing a cause of action. It further held that in the absence of proof of an intervening cause, it was sufficient that the plaintiffs show that the automobiles were purchased after the misleading information was published in order for there to be causation between the misleading publication and the injury incurred. For the third approach, see Vasquez v. Superior Court of San Joaquin County, 484 P.2d 964(S.Ct.Cal.1971), in which the Supreme Court of California held that there was no need to prove reliance upon the misrepresentations of the sellers by direct evidence, and that it could be proved implicitly by inference from the circumstances of the case, or even by a presumption of reliance. Similarly, in Amato v. General Motors Corp., 463 N.E. 2d 625 (Ct. App. Ohio, 1982), the majority of the Ohio court certified a class action against General Motors for equipping Oldsmobiles with less prestigious engines without informing the buyers. The court did not entirely waive the reliance requirement, but held that it could be inferred from the circumstances of the case, or by establishing a presumption of reliance.

As we see, people are the same everywhere, and not only are the issues and problems similar, but so are the disagreements among jurists in various states with similar, if not identical, legal foundations.

Weighing all of the considerations, balancing them, and giving due weight to each of them, tilts the scales in favor of the trend that deems misleading advertising to be an act that establishes a cause of action for damages, if injury was caused, without requiring reliance for the purpose of establishing causation between the act and the injury.

19. In conclusion, in my view, the Petitioner has a cause of action for damages for the injury caused him by the misleading advertisement, due to the overcharging. Therefore, if my opinion were adopted, the petition would be granted and the Petitioner’s suit would be certified as a class action.

Justice

Justice E. Mazza:

I have reread the opinions of the majority in the Appeal – my colleagues the Chief Justice and Justice Englard – and the dissent of my colleague Justice Strasberg-Cohen. I have also read the opinions of my colleagues Justice Cheshin and Justice Strasberg-Cohen in this Further Hearing. I cannot concur in the opinions of the majority in the Appeal and that of Justice Cheshin in this proceeding. In my view, that approach does not give proper expression to the special purpose of the consumer class action. Instead, it transfers the traditional doctrines of tort law – foremost among them the doctrine of tortious causation – to the consumer environment, in which they are inappropriate, and sanctifies them as is. As a result of this view, the approach focuses too much upon Barazani the man, and too little upon the group of consumers that he seeks to represent, and the injury that it suffered. In this regard it is important to emphasize that it was never positively proven in the proceedings before the District Court that Barazani was not exposed to the misleading advertisement. The factual assumption in this regard, upon which the majority largely relied in the Appeal, as did Justice Cheshin in the Further Hearing, is based exclusively upon the fact that Barazani did not claim that he was exposed to the advertisement. Here, too, I believe that the view of my colleagues is deficient in its almost mechanical adoption of traditional rules of proof. That approach, which I do not believe represents the desired law, is also not required by the existing law. In presenting my dissenting opinion, I will first consider the uniqueness of the consumer cause of action and the appropriate scope of consumer class actions for misleading advertising. I will conclude by addressing the matter of Barazani and the question of whether he has a personal cause of action and for which remedies.

The Purposes of Tort Law as opposed to the Purposes of the Consumer Class Action

2. The purposes of traditional tort law are not congruent with the purposes of consumer protection law and do not exhaust them. It is commonly said that the primary purposes of tort law are achieving corrective justice, effective deterrence of potential nuisances, and distributive justice (see, for example: D. More "Human Rights from a Tort Law Perspective" 12 Tel-Aviv U. Stud. L. 81, 90-93 (1994); A. Porat, “Collective Responsibility in the Law of Torts," Mishpatim 23 (1994) 311, 330-333, 344-349, 369-371). We can agree that corrective justice and effective deterrence are common to both tort law and consumer protection law. However, other important purposes are served by consumer protection law with which traditional tort law is not generally concerned. In her book, Dr. Orna Deutch lists no less than seven purposes that are special to consumer protection law: levelling the playing field; reinforcing personal autonomy; the concept of consumer sovereignty; protecting the rights to prosperity and social welfare; ensuring the credibility of the local market; and maintaining trust in the social order (O. Deutch, The Legal Status of Consumers (2002) 27-37 (Hebrew). She emphasizes that “the purpose of consumer protection is not limited to the law’s support of the individual consumer. Improper conduct toward consumers harms not only the consumer, but also honest business people and the entire commercial sector, as well as public trust in the local economy and the public authorities that oversee the commercial sector” (ibid., p. 15). Prof. Sinai Deutch suggests a somewhat different division and definition of the purposes of consumer protection law (S. Deutch, Consumer Protection Law, vol. 1 (2001) 119-126, and see the purposes listed in paragraphs 2-3 of the opinion of Justice Strasberg-Cohen in this Further Hearing). However, each of the approaches undeniably leads to the conclusion that consumer protection law is intended to realize special objectives that go significantly beyond the basic objectives of traditional tort law.

3. To these general objectives of consumer protection law one may add the special objectives of consumer class actions. We can find an expression of this in a case recently decided by this Court:

As a legal institution, the class action is of special importance in realizing objectives that individual actions cannot attain. It serves the interest of the individual by providing a remedy for injury in circumstances in which filing suit would not be worthwhile without the other members of the group. It serves the public interest that strives to deter large economic institutions from violating the law, and that seeks to achieve more effective enforcement of behavioral norms intended to protect citizens and prevent the exploitation of their weakness as individuals. It may also advance the objectives of procedural efficiency, uniformity of decisions, and reducing litigation (CA 1338/97 Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd. v. Rabi Tawfiq (not yet published), para. 2 of the opinion of Procaccia, J.).

And also see LCA 3126/00 State of Israel v. A.S.T Project Management and Manpower Ltd., IsrSC 57 (3) 220, paras. 7-8 of the opinion of Justice Strasberg-Cohen, and the citations there.

4. The material difference between the purposes of tort law and consumer protection law yield the conclusion that the traditional legal doctrines of tort law must be examined carefully – and changed and adapted as necessary – before applying them to consumer law in general, and class actions in particular. Generally speaking, one might go so far as to say that no traditional doctrine is self-evident in the context of consumer law. We are concerned with a unique area that requires distinct treatment that accords with its special purposes.

The Meaning of Section 31 (a) of the Consumer Protection Law

5. Against this background, we can proceed to the interpretation of sec. 31 (a) of the Consumer Protection Law. This provision states: “Any act or omission in violation of Chapters Two, Three, or Four shall be treated as a tort under the Civil Wrongs Ordinance [New Version]”. My colleagues are divided as to the meaning of the prepositional prefix “as” – referred to by Justice Cheshin as the “kaf of comparison”^{^[8]} – in the phrase “as a tort”. In my opinion, this question is of little importance. Even were we to assume that the prefix was of no significance, and that sec. 31 (a) should be read as if it stated that an act or omission as stated were torts, it would not mean that certain parts of the Consumer Protection Law should be treated as if they were actually comprised by the Civil Wrongs Ordinance. And clearly, changing the physical location of consumer provisions does not alter their special objectives. So, let us take go even further: even were the Consumer Protection Law, in its entirety, comprised by the Civil Wrongs Ordinance, and even if it were subject to sec. 3 of the Civil Wrongs Ordinance, according to which “the matters enumerated hereinafter in this Ordinance shall constitute civil wrongs,” even then we would have to interpret and apply these special torts in accordance with their consumer purposes, which, in general, are not identical to the purposes of the other torts established under the Ordinance.

6. Consider, for example, sec. 4 of the Civil Wrongs Ordinance, which states:

Trivial Act

4. An act shall not be considered a civil wrong where had it been a repeated act it would not lead to establishing an adverse claim, and where a person of ordinary sense and temper would not complain with regards to it.

Obviously—and so it has also been held – sec. 4 expresses the traditional doctrine of de minimis in the context of tort law. See: CA 3901/96 Ra’anana Local Planning and Building Board v. Horowitz, IsrSC 56 (4) 913, pp. 928-929, and the citations there. Adopting the approach that would apply the doctrines of the Civil Wrongs Ordinance – as is and in in their entirety – to the consumer causes of action defined in sec. 31 (a) of the Consumer Protection Law would require that we apply sec. 4 of the Civil Wrongs Ordinance to those causes of action. One will readily realize that such an approach would entirely nullify the primary purpose of the consumer class action, which is of particular importance specifically in regard to cases in which each individual claim is, itself, de minimis, and “a person of ordinary sense and temper would not complain with regards to it”. We would note that the facts of the case before us in this Further Hearing constitute a good example of such a situation. Applying the traditional de minimis doctrine to class actions would, therefore, lead to the result that most legitimate potential plaintiffs would have no personal cause of action, inasmuch as under the plain language of sec 4, the act (or omission) of the dealer who harmed them “shall not be considered a civil wrong”. The conclusion to be drawn from this is that not only is it necessary to adapt the de minimis doctrine of sec. 4 of the Civil Wrongs Ordinance to collective consumer protection before applying it (and compare: the Tnuva case, ibid., at para. 11 of the opinion of Naor, J.), but that the same is true for all the other doctrines of the Ordinance as a precondition to applying them to the consumer causes of action and to consumer class actions.

7. My colleague Justice Cheshin concludes from the absence of any provision to the contrary in sec. 31 (a) of the Consumer Protection Law, that there is no alternative to applying the doctrines of the Civil Wrongs Ordinance to a consumer tort under sec. 2 (a) of the Law. As he states:

Indeed, nothing in the language of sec. 31 (a) of the Law would show that the tort under sec. 2 (a) removes it from the fundamental principles or doctrines of the Civil Wrongs Ordinance … On the contrary, the Law refers us clearly and unreservedly to the Civil Wrongs Ordinance. Section 2 (a) situates itself as one of the native torts of the Civil Wrongs Ordinance, and it would therefore appear that the fundamental principles and doctrines of the Civil Wrongs Ordinance apply, in their entirety, with the same effect and force with which they apply to the native torts.

With all due respect, I am of the opinion that even in the absence of an express provision to that effect in sec. 31 (a) – and I question whether such an express provision is needed at all – the application of traditional tort law to consumer causes of action can and should be restricted. The need for such restriction is clearly required by the substantial material difference between the purposes of consumer torts and of the regular torts. Indeed, one can understand the problem and discomfort involved in new and different interpretation of first principles. My colleague Justice Cheshin explained it well in the case before us:

However, despite the difficulty, it is unavoidable. Prof. Sinai Deutch (the attorney for the Israel Consumer Council in this Further Hearing) addressed this in an article that referred to the case under appeal:

The Consumer Protection Law is an innovative law, inasmuch as Israel’s highest court is first addressing its interpretation only at the present time. It may also be reasonably assumed that, in the early stages of its interpretation, there will be some fear of disconnection from firmly-rooted, ancient legal traditions. However, it is the understanding of the importance of the subject that must lead to reconsideration in this regard…there is no reason to apply the rules of civil law in their entirety to the Consumer Protection Law. Independent interpretation of the Consumer Protection Law’s legal terminology is needed in accordance with its purpose and objective (S. Deutch, “Consumer Class Actions: The Demand for Personal Reliance on Misrepresentations of the Deceiver,” (2 Moznei Mishpat 97, 126 (2001-2002) (Hebrew) (hereinafter: “Consumer Class Actions”).

Even Justice Cheshin would appear to agree that the traditional tort doctrines are not “revealed truth”. He expressly notes that, “Since we are concerned here with transplanting a new organ into the body of the Civil Wrongs Ordinance, we must closely examine whether a particular doctrine of the Ordinance is compatible with the foundations, essence and structure of the new tort”. But after stating that – and referring to the sources he cited – he did not set out to “closely examine” whether the traditional doctrines were indeed compatible to the cause of action of consumer deception, but rather assumed their compatibility as if it were self-evident.

The Compatibility of the Tort-Law Causation Doctrine to a Class Action for Deceptive Advertising

8. As we have seen, the traditional doctrines of tort law must be adapted to the special purposes of the consumer class action. In regard to the case before us, it will suffice to focus upon the adapting of the doctrines of tortious causation to the special needs of a class action filed in regard to the mass publication of a misleading advertisement.

I refer to the “doctrines of causation” in the plural, inasmuch as even in traditional tort law, the subject of the existence of a causal connection between the tortious conduct and the harmful result is subject to a number of doctrines, which occasionally compete and occasionally operate in unison (see, in general: I. Englard, “Causal Connection” in The Law of Civil Wrongs – General Principles of Tort Law, G. Tedeschi, ed. (2^nd ed., Jerusalem, 1977) 178; I. Gilead, “Causation in Israeli Tort Law – A Reexamination,” 14 Mishpatim 15 (5744) (Hebrew)). The need for creating different doctrines of causation derived from the need to contend with different aspects of a complicated and complex phenomenon that earned the nickname “indeterminate causation” (see: A. Porat & A. Stein, Tort Liability under Uncertainty (2001); A. Porat & A. Stein, “The Evidential Damage Doctrine: A Positive Analysis of the Law,” 21 Iyunei Mishpat 191 (Hebrew); A. Stein, “How to Resolve the Indeterminate Causation Problem that Arises in Medical Malpractice Litigation,” 23 Iyunei Mishpat 755 (Hebrew)).

Traditional tort law proposes practical solutions for situations of “indeterminate causation” in which it would be too much to ask the plaintiff to prove positively the existence of a direct, factual causal connection between the tort of the defendant and the injury incurred, under the “but-for” test (i.e., the “sine qua non test”). Under such circumstances, when the plaintiff proves the defendant’s tortious behavior, that his injury, and the possible existence of a factual causal connection between the tort and the injury, then tort law may come to his aid and fill in what is missing for proving the existence of a factual causal connection. This legal “aid” may be expressed in various recognized ways: by transferring the burden of proof to the defendant, who will be required to prove the absence of a causal connection; by establishing presumptions against the defendant in regard to various aspects of the causal dispute; by imposing liability upon “joint tortfeasors”, where their relative part in causing the injury is unknown; in defining an injury as an “indivisible injury” that the tortfeasor must bear in its entirety, even if he caused only part; and by recognizing alternative tests to the but-for test for factual causation (such as the “common man” test or the “substantial factor” test. See: Englard, ibid., at pp. 193-195; Gilead, ibid., at pp. 17-19; Porat, ibid., at p. 376). It should also be noted that new doctrines have been added to the traditional doctrines of causation over the last few years, which primarily serve to circumvent the problems and injustices that are sometimes involved in the strict application of the traditional but-for test. Among these new doctrines, some of which have already been adopted (in various contexts) by the case law, one can find the doctrines for probabilistic damages for the loss of a chance of recovery, or for loss of chance and creation of risk, and for MSL (Market Share Liability) suits; as well as the doctrine of mass liability and the doctrine of evidential damage (see the survey in Porat & Stein, in the second, fifth and seventh chapters of their above book).

9. We can conclude from the above that even in traditional tort law – and all the more so in modern tort law – the but-for test is no longer the answer to everything. In many cases – where the purposes of tort law justify it – the right of a plaintiff to damages is recognized even when he is unable to show that no injury would have been caused but for the tort of the defendant. Against this background we may more sharply ask why the majority in the Appeal, and why Justice Cheshin in this Further Hearing, found it necessary to be so demanding in regard to the proof of reliance of Bezeq’s customers upon the misleading advertisements, as part of their insistence upon the demand for a causal connection in accordance with the but-for test. As the Chief Justice stated in the Appeal (IsrSC 55 (4) 584, 622-623), in referring to the approach of Justice Strasberg-Cohen:

As we know, the meaning of the factual causal connection is that but for the tort, the injury to the victim would not have occurred. This is the sine qua non test. In the matter before us, the factual causal connection requires that but for the prohibited deceit, the consumer would not have talked on the telephone in the manner that he actually did. Such a causal connection occurs only if the consumer relies upon the misleading character of the advertisement. If the consumer does not rely upon the misleading advertisement, then the extent of his phone calls is not influenced by the content of the advertisement. My colleague emphasizes the creation of the representation, but she does not prove the existence of the factual causal connection between creating the representation and the occurrence of the injury. In the absence of a factual causal connection, there is no possibility of examining the existence of a legal causal connection, which is based upon the factual background of the factual causal connection.

Justice Cheshin also notes – although in less emphatic language – that:

…there was no causal connection between Bezeq’s advertisement and the “harm” caused to Barazani, if only by reason of the fact that Barazani never read that advertisement, and therefore, in any event, he is not entitled to sue on that basis. Indeed, Bezeq committed a tort by publishing the advertisement – that is the basic assumption in this case – but the mere existence of a tort is insufficient to entitle a person to redress. That person must show that due to that tort, he incurred harm, and that precondition was not met in regard to Barazani.

What derives from this approach is that in order to ground a (personal or class) action for pecuniary damages for misleading advertising, the plaintiff must show that he relied upon the misleading advertisement, which led to a direct change in consumer conduct. With all due respect, I am of the opinion – which I will explain below – that this demand is not necessarily required by the language of the Law. The question, then, is what is the purpose of this demand, and what rationale does it serve? To this, I have found no convincing answer in the opinions of my honorable colleagues. It would appear that their only explanation is that class actions are a powerful tool, comprising many dangers, and should, therefore, be used with caution (see, in this regard, the opinion of my colleague the Chief Justice in the Appeal, at p. 620). That is, of course, undeniable. But defining Barazani as not being a “proper plaintiff” for a class action is based solely upon the finding that he does not meet the reliance requirement. Even if that finding were well founded – and I have questioned that from the outset – I cannot agree that Barazani’s non-reliance upon Bezeq’s misleading advertisement disqualifies him as a representative plaintiff in a class action.

10. A requirement by which a consumer can acquire a cause of action only if he can prove that he relied upon the misleading advertisement and changed his consumer conduct as a direct result would frustrate ab initio the possibility of many potential suits based upon a cause of action of consumer deception by mass advertising. The reason for this is that in many such cases the requirement cannot be met. Few consumers can recall the details of the commercial advertisements to which they are exposed, directly or indirectly, and few consumers can honestly testify that were it not for the exposure to a particular advertisement, they would not have acquired the advertised product or service, or would have used it to a lesser extent. After all, it is well known that modern mass advertising is often intended to influence consumers in strange and mysterious ways, and not necessarily by speaking directly to their consumer consciousness. Often, consumers are not even aware of being influenced by an advertisement, neither when they are exposed to it, nor after the advertisement is supposedly forgotten. And we need hardly mention that these assumptions are particularly true in regard to advertisements in regard to matters of little consequence, which are the ones that hold the primary potential for consumer class actions. Thus, the procedural solutions that Justice Cheshin mentions in paras. 54-55 of his opinion – such as that each consumer prove his right to a remedy by means of an affidavit – cannot be deemed practical.

Moreover, in many cases of consumer deception through advertising, it can be established positively that, as a result of the advertisement, there was no direct change in modes of consumer conduct of the sort that my colleagues require for “reliance”. The case before us provides a good example of this. The deception in Bezeq’s advertisements concerned a fraction of a meter unit – of several seconds – at the end of every international phone call. Would anyone imagine that a Bezeq customer, assuming he were aware of the deception, would put down the phone precisely at the end of a meter unit in order to avoid being charged for fractions of a unit as for whole unit? The obvious conclusion is that Bezeq’s deceptive advertising did not lead to customer reliance upon the content of the advertisement, and certainly did not lead to a direct change in the modes of consumer conduct. The change that the advertising may have caused in consumer consciousness – and conceivably the one that Bezeq sought to achieve by the said advertisement – was a change of a general nature in the perception of Bezeq as a reliable, fair company that charges only for the services it provides. Such a change in the advertiser’s reputation could cause – and we may assume that it indeed causes – a change in consumer consumption habits, which may be expressed in generally greater frequency of use of the advertised product or service, as well as other products or services of the advertiser. But this is an indirect – and generally unconscious – change in consumer consumption habits. It is doubtful that any of the consumers whose consumption habits were indirectly influenced by the advertisement could prove that he relied upon the advertisement, and the extent of the advertisement’s influence upon his consumption habits. But the advertiser benefits from its deceptive advertising, which indirectly led to an increase in its market share. The additional profits that the advertiser realizes from the increase in its market share – which also involve unjust enrichment at the expense of both its customers and its competitors – are, truth be told, the true injuries inflicted upon the consumer interest as a result of the misleading advertisement. It is only because those injuries are impossible – or, at least, are very difficult – to measure and quantify that the examination typically focuses only upon the direct damages that my colleague Justice Strasberg-Cohen refers to as “price differentials”. As a result, insisting upon reliance in regard to misleading mass advertising would severely impact upon the very possibility of initiating class actions for misleading advertising.

11. In his opinion in the Appeal, the Chief Justice noted the possibility of creating a “presumption of reliance” in favor of consumers, but left the matter open for future consideration (ibid., at p. 621). In his opinion in this Further Hearing, Justice Cheshin adopted a similar position. He also notes that “we should broadly interpret the concept of reliance such that it comprises more than just direct reliance”. These solutions present something of a desirable development, but I fear that their practical advantage is limited. Proving a consumer’s reliance is no simple task, and it is sometimes impossible. That is not the case in regard to an advertiser’s ability to contradict the presumption of reliance. It is sufficient that it ask each of the consumers if and how he would have changed the manner of his use of the advertised product or service were it not for the misleading element in the advertisement. At the very least, those consumers who used the product or service prior to the misleading advertisement will find it very difficult to answer that question. We can almost assume that most, if not all, will have to answer in the negative, or that they do not recall the advertisement or its details, or that they do not know the answer, and the dealer will be deemed to have met the burden of proof and refuted the presumption of reliance. On the other hand, it is clear that my colleagues do not suggest creating an absolute presumption of reliance in favor of consumers. Such a presumption would greatly improve the chances of success of a consumer class action, like that before us, but would entirely nullify the requirement – to which my colleagues cling – of a factual causal connection between the misleading advertisement and the injury incurred by the consumers.

12. It should be obvious that the requirement that a misleading advertisement lead to a direct change in modes of consumer behavior – which is what the “reliance requirement” demands –not only does not advance the special purposes of the consumer class action. Let us return to the seven objectives as set out by Dr. Orna Deutch: levelling the playing field; reinforcing personal autonomy; the concept of consumer sovereignty; protecting the rights to prosperity and social welfare; ensuring the credibility of the local market; and maintaining trust in the social order. Clearly, the demand for reliance advances none of these objectives. Rather, it leads to negating many consumer causes of action that might advance those objectives. In practice, the demand for reliance undermines those objectives and frustrates their realization. The same is true in regard to the special purposes of consumer class actions. As Justice Procaccia pointed out in the aforementioned Tnuva case, the class action “serves the interest of the individual by providing a remedy for injury in circumstances in which filing suit would not be worthwhile without the other members of the group. It serves the public interest that strives to deter large economic institutions from violating the law, and that seeks to achieve more effective enforcement of behavioral norms intended to protect citizens and prevent the exploitation of their weakness as individuals”. In those case in which the personal injury of each of the individuals is very small, one might say that there is no real importance to the personal interest involved in the class action. The primary importance of such cases is focused upon the public interest. But the public interest in enforcing law and integrity in the consumer field has little in common with the reliance requirement, and certainly not with requirement of a direct, factual, causal connection between the misleading advertisement and the harm to the consumers. The public interest focuses primarily on the violation itself and the possible harm to the public as a whole, and not upon the question of whether there was an actual causal relationship between the violation and the harm caused to some consumer. We thus find that strict observance of the demand for a causal connection – like the requirement of proof of reliance – will lead to the frustration of many consumer class actions, and the public interest that they were meant to serve suffers.

Constructive Reliance and a Consumer Causal Connection

13. From the perspective of the laws of consumer deception in advertising, the main thing is the very existence of an advertisement with the potential to mislead in regard to a material aspect of a transaction, which the advertiser intended to reach as large a public as possible, and influence modes of consumer behavior. Once the potential to deceive is proven, and once it is proven that the advertiser indeed intended that the misleading advertisement reach consumers and influence their consumer behavior, it is only right that we hold that there is a basis for the existence of constructive reliance by the consumers upon the misleading advertisement. The question of whether the dealer actually achieved its goal – i.e., that the misleading advertisement indeed reach its intended audience and actually mislead it – is of limited importance. This expresses a central difference between the law of consumer deception and general tort law (as opposed to certain particular torts, such as the torts of fraud, deceit, etc.). The normal starting point in tort law is that the tortious event was not planned by the tortfeasor, and that the tortfeasor was not interested in its occurrence. The assumption is that potential tortfeasors do not have an interest in causing injury, and that they generally have an interest in preventing injury, unrelated to the risk of being required to pay damages to the victims. From this, inter alia, we derive the principle that tort law is not intended to punish the tortfeasor, but rather to compensate the victim for his loss. For the same reason, tort law does not impose liability for the mere creation of a danger, which, in and of itself, is not deemed an injury (for a broader discussion, see: A. Porat, "Compensation for Risk-Creating and Loss of Chances," 23 Iyunei Mishpat 605 (2000) (Hebrew)). That is not the case in regard to consumer deception. The typical situation that these laws address is one in which the supplier of a product or service who publishes a misleading advertisement is interested in and intends to cause the consumer injury, inasmuch as, from its perspective, it reaps direct profit from that injury. Therefore, the incentive to cause harm in the area of consumer deception is inestimably greater than the incentive to invest in preventing harm, which is the typical fear in the field of torts. Experience shows that the fear that consumer deception may harm the reputation of the advertiser is often distant and ineffective. In any case, when it is shown that the advertiser intended to mislead, the necessary conclusion is that, at least in that case, the said fear was not sufficient to deter. Indeed, the temptation to deceive consumers – as a means for increasing an advertiser’s profits – is not inconsequential. The purpose of the tort regarding misleading advertising does not focus upon the harm caused by the advertisement to a particular consumer, but rather upon the existence of a potential for the causing of harm to the consumer public, and the advertiser’s intention to cause that harm in order to reap profits. Conceivably, that was the reason that, in defining the prohibition of deceit in sec. 2 (a) of the Consumer Protection Law, the legislature chose the phrase “liable to mislead”. Moreover, another interpretive conclusion that derives from the definition of the tort is that the legislature also intended to create a unique definition of the causal connection required for consumer deception. With all due respect, assuming that this wording is relevant only to actions for declaratory and preventative remedies renders the definition of a publication “liable to mislead” as a tort nearly devoid of all practical content, inasmuch as it is hard to imagine that any consumer would be interested in filing a suit for the sole, ultimate purpose of merely obtaining declaratory or preventative relief.

14. The conclusion required from the distinctions I addressed above is that the laws of consumer deception must contend with the reliance requirement and the issue of causation differently than tort law. Instead of the requirement of personal reliance by each and every consumer – which is the requirement of traditional tort law – we should adopt a doctrine that recognizes “constructive reliance” of all the consumers at whom the advertiser directed its misleading advertisement. And rather than the requirement of proof of a factual causal connection between the misleading advertisement and the injury of each and every one of the plaintiff consumers, we should adopt a doctrine that recognizes a “consumer causal connection” that would be derived from the combination of a potentially misleading advertisement and the intention of the advertiser that the advertisement reach the consumers, mislead them and thereby influence their behavior. The elements of the suggested formula for establishing a consumer cause of action overturn the accepted formula for a cause of action in tort to some degree. Whereas in an action in tort, meeting the reliance requirement is a precondition to the existence of a causal connection, in a consumer action, the existence of constructive reliance is derived as a necessary result of proof of the elements of the consumer causal connection. But this reversal does not detract from the completeness of the formula, in all of its elements. And note: adapting the tort doctrines to the consumer tort does not contradict the legislative imperative. On the contrary, such an adaptation is part of an interpretive process that makes it possible to advance the special objectives of the consumer cause of action in general, and of consumer class actions in particular, and as I shall demonstrate below, does not contradict the language of the law.

A Pecuniary Remedy for Consumer Deception

15. When can consumers obtain a pecuniary remedy due to a potentially misleading advertisement? In my opinion, it would be proper to establish that consumer deception gives rise to a (personal and class) cause of action for pecuniary relief upon the fulfillment of three conditions: a violating advertisement, injury, and a “consumer causal connection”. As opposed to this, we should also recognize a defense that would generally be available to the advertiser if it be found that the consumer-plaintiff knew the actual facts, and the violating advertisement could not, therefore, negatively influence his behavior.

The first element (the element of breach) is fulfilled upon proof of a breach of one of the prohibitions upon deceit established under the Consumer Protection Law for which one may sue for damages under sec. 31 (a) of the Law. For our purposes, the relevant prohibition is that established under sec. 2 (a) of the Law, according to which even an advertisement that is “liable to mislead” in regard to a material element of a transaction is deemed a violating advertisement. And note: once it is proved that the advertisement is liable to mislead, there is no further need to address the question of actual deceit.

16. The second element is that of injury. While achieving the consumer objectives could suffice with the potential for causing harm to the consumer interest that is presented by an advertisement liable to mislead, in the absence of proof of injury, damages cannot be awarded to consumers claiming to have been injured by the violating advertisement. That is the import of the reference of sec. 31 (a) – titled “Compensation” – to the Civil Wrongs Ordinance. That is also the import of sec. 31 (a1), which states: “Consumers injured by the wrong are entitled to remedies for the wrong and so are dealers, who in the course of their business are injured by deceit, as said in section 2” (for a different view, see M. Deutch, Commercial Torts and Trade Secrets (2002), p. 49). This is simply the legislature’s decision to limit the scope of potential plaintiffs to that group of consumers and dealers who were actually injured and that, therefore, have a direct interest in suing and obtaining a pecuniary remedy. However, the injury that the plaintiffs must prove is not necessarily the injury that each victim can prove by direct evidence. Provable injury caused to a group of consumers can also entitle the group to global damages from the advertisers without a need for the court to determine the personal injury of each member of the group (see, in this regard, reg. 9 (c) of the Consumer Protection (Procedures in regard to a Class Action) Regulations, 5755-1995, and paras. 13-20 of the opinion of Naor, J. in the Tnuva case, above). We should also recognize the possibility that bringing evidence of the profit that accrued to the advertiser from the misleading advertisement be deemed sufficient proof of the injury to the injured consumers. My assumption is that, on the basis of such evidence, the court can award pecuniary damages, which are not necessarily restitution, to the injured consumers. As we have stated, the injury to the consumers from a misleading advertisement constitutes profits for the advertiser, and evidence proving the extent of that profit would therefore prove the extent of the injury. I would parenthetically note that, in my opinion, defining consumer deception as a tort does not detract from the victims’ right to sue for restitution, whether by force of contract (where the product or service was provided to the consumer in the context of a contractual undertaking), or upon a cause of unjust enrichment.

17. The third element addresses the existence of a consumer causal connection. As explained above, I am referring to a causal connection adapted to the special objectives of consumer protection law – both personal and collective – and in the case before us, the special needs of the laws of consumer deception. Some form of causal connection between the breach and the injury is, indeed, required. That, as my colleagues have shown, is required by the Civil Wrongs Ordinance referred to by sec. 31 (a) of the Consumer Protection Law, and it is also required by sec. 31 (a1) of the Law, under which (as earlier noted) the right to relief is granted to one “injured by the wrong”. However, an examination of secs. 2 (a) and 35A (b) of the Consumer Protection Law reveals that the existence of a causal connection – required, as noted, by secs. 31 (a) and 31 (a1) of the Law – cannot be construed as identical to the requirement of the traditional causal connection of the Civil Wrongs Ordinance. Section 2 (a) expressly suffices with a publication that is “liable to mislead”, and does not require that there be actual deception, while sec. 35A (b) of the Law – treating of “class actions” – states that “where the cause of action is an injury, it is sufficient that the plaintiff show that injury was caused to a consumer”. In addressing the meaning of sec. 35A (b), Dr. Orna Deutch writes:

The legislature provided a certain leniency in regard to consumer actions in that when injury is an element of the cause of action (such as in the tort of negligence), there is no need that the plaintiff show that he himself incurred an alleged injury, but rather it is sufficient that an injury was caused to some consumer (O. Deutch, in her abovementioned book, at p. 244).

I am of the opinion that we may learn from sec. 35A (b) that, for the purpose of filing a class action, it is sufficient to show the existence of a consumer injury, and there is no need to show a factual causal connection between the breach and that injury. This construction accords with the special purposes of the consumer class action, which I addressed above, which are also not consistent with the requirement of personal reliance.

18. It would appear that in regard to the question of the existence of a causal connection between consumer deception and the injury caused to the victim, secs. 2 (a) and 35A (b) of the Law contradict secs. 31 (a) and 31 (a1) of the Law. Whereas the latter (which are of a “general” nature) appear to reflect a requirement of a causal connection, it would appear that one may understand from the former (which are of a “specific” nature) that no causal connection be proved. However, I do not believe that the contradiction between the general provisions and the specific provisions in this matter can be resolved by preferring the specific provisions (by virtue of their being lex specialis). In the matter before us, we should prefer the interpretive principle that requires that we find a way to harmonize the provisions so that they may coexist. The formula that I suggested above for a “consumer causal connection” accords well with the appropriate interpretive approach. The requirement of a consumer causal connection – based upon a merger of the requirements for injury together with potential causation and intention to injure – prevents the possibility that liability might be imposed for the mere creation of a danger by a tortfeasor acting in good faith, and thereby gives proper expression to the purposes of the general provisions. At the same time, this formula grants preference to the consumer objectives of the specific provisions. That is expressed in the replacement of the requirement for an actual factual causal connection between the misleading advertisement and the injury under the but-for test with a requirement that suffices with proof of a potential factual causal connection (similar to the concept of apportioning tort damages based upon probability), together with proof that the advertiser intended to create an actual factual causal connection. In other words, meeting the demand for a consumer causal connection would not require proof that the advertisement actually misled the victim and caused his injury, and not even that he was aware of the advertisement and relied upon it in some way, but rather it would suffice to show that the advertisement was liable to mislead the victim and cause his injury, and that the advertiser intended that.

It would appear to me that, in the context of the prohibition of consumer deception, the requirement of a consumer causal connection also reflects the lex ferenda. Adoption of the said formula would advance the special objectives of consumer protection law and of consumer class actions, and would ensure protection of good-faith advertisers who do not intend to mislead and cause harm when the factual causal connection between their advertisements and the injury is in doubt (needless to say, when the factual causal connection is not in doubt, nothing would prevent the filing of a class action even for injury resulting from an advertisement that was not intended to mislead, but that nevertheless, actually misled). I would like to emphasize that even in the absence of secs. 2 (a) and 35A (b), which support my suggested interpretation, the tort requirement of a factual causal connection can and should be made more flexible and should be adapted to the special needs of consumer deception. I have already pointed out that such flexibility has been adopted in a variety of ways in tort law itself, for the purpose of realizing appropriate objectives of tort law. Thus, for example, Israeli law recognized the possibility of awarding tort damages based upon probability in cases in which it was not proved – as would be required by the balance of probabilities – that but for the tortious conduct of the defendant, the plaintiff would not have incurred injury. This was held in regard to the loss of a chance of recovery (see the landmark case, CA 231/84 Histadrut Health Fund v. Fatach, IsrSC 42(3) 312., which has been followed repeatedly in later cases), as well as in regard to not obtaining informed consent for medical treatment (CA 4384/90 Vaturi v. Leniado Hospital, IsrSC 51 (2) 171, 191-192, and compare CA 2781/93 Daaka v. Carmel Hospital, Haifa, IsrSC 53 (4) 526 (English translation: http://versa.cardozo.yu.edu/opinions/daaka-v-carmel-hospital). Having found that it is possible to arrive at a desired result by means of interpretation even within the confines of the Civil Wrongs Ordinance, that should be the case a fortiori in the framework of the Consumer Protection Law, whose special objectives justify and require that we not subject it to the regular doctrines of tort law.

19. On the other hand, as stated, a defense should be allowed to an advertiser on the claim that the victim was actually aware of the true facts of the situation and, therefore, the violating advertisement could not have negatively affected him. The reason for this is that the prohibition upon consumer deception is not intended to protect such victims. The prohibition upon consumer deception is intended to protect consumers who are liable to be misled, and not those who cannot be misled. In effect, this can be seen as an aspect of the good-faith duty that applies to every person seeking pecuniary redress for consumer deception. After all, it would not be appropriate to obligate a supplier of a product or service, who published a misleading advertisement, to compensate a person who was not a potential victim of the deception, and an action for compensation in such circumstances might be deemed to constitute abuse of process.

The said defense must be positively proven by the advertiser. In other words, in order to meet the burden of proof, uncertain answers like “I don’t know” or “I don’t recall” to questions put to the consumer-plaintiffs will not suffice. It may be assumed, therefore, that an advertiser may make effective use of this defense primarily in response to suits by “special” plaintiffs, such as its employees, commercial competitors, or other experts in the relevant field, regarding whom it would be possible to bring evidence in regard to the state of their knowledge at the time they acquired the service or product.

The Matter of Barazani

20. At the outset I noted that the approach of the majority in the Appeal and of Justice Cheshin in the Further Hearing focuses overmuch upon Barazani himself, and too little upon the large pubic of victims of the misleading advertisement whose case Barazani sought to press. A perfect expression of this can be found in the very establishing of the Archimedean assumption that Barazani was not exposed to the misleading advertisement and did not rely upon it, and that this is sufficient for the conclusion that Barazani is not an “appropriate plaintiff”. Of course, I do not disagree that a precondition for certifying a class action is that the representative plaintiff have a personal cause of action against the defendant. That is expressly required by sec. 35A (a) of the Consumer Protection Law. But, in my view, we should not exaggerate the importance of that condition. In ascertaining whether it has been met, the court need not split hairs in its examination of the details of the personal suit of the representative plaintiff, but should suffice with facial proof that he has a personal cause of action, and that we are not concerned with a person who is merely hitching a ride on someone else’s dispute. The court should concentrate its examination upon two other questions: Is the subject of the suit appropriate to a class action? And is the representative plaintiff qualified and equipped to properly represent the interest of the public on behalf of which he seeks to sue? These considerations are of special importance in a consumer class action. Dr. Orna Deutch addresses this (in her abovementioned book, at pp. 245-246):

The personal interest of the injured plaintiff who files the class action is, in any case, negligible in relation to the amount of the suit for the entire class. In a realistic view of the significance of the suit, it is of no consequence whether the personal suit of the victim constitutes a negligible part of the entire suit, or is actually nonexistent. In both cases, he presumably “defends the honor” of the entire group, and actually advances a different personal interest, which is the benefit that accrues from his representative standing in the suit, which is expressed in the special damages and compensation awarded to the plaintiff for his efforts. Why condition standing in the suit upon a formal demand for the existence of such minimal involvement on his part?

It would seem that it is, indeed, difficult to justify the said requirement. What must be ensured is that the representative of the group be a proper representative who can bear the burden of conducting the suit both in terms of its material and its costs, and that he not have a conflict of interests. However, there is nothing in common to these requirements and the question of whether the plaintiff was personally harmed by the act at issue. His personal injury represents but an insignificant part of the whole suit. In any case, the matter pursued is a “public suit”, while the significance of the personal suit of the plaintiff is but symbolic. In that light, I think it proper to refrain from this demand in its entirety.

The reason given for this demand, which I noted above, according to which if the plaintiff has no personal cause of action, the proceedings will focus upon the personal defense against the plaintiff, and the matter of the entire group will be sidelined, begs the question. If the law establishes that the question of the existence of a personal cause of action is irrelevant, then the defenses against the individual plaintiff are irrelevant, and the proceedings will, in any case, focus upon the entire class of plaintiffs.

In the consumer framework, the requirement of a personal cause of action leads, in practice, to one of two results: either no appropriate plaintiff will be found who is willing to “contribute” his cause of action to the proceedings in the service of the general public, or, if such a consumer be found, he will often be nothing more than a kind of “straw man” backed by some commercial group organized for the purpose of obtaining the compensation attendant to succeeding in a class action.

And indeed, the demand for the existence of a personal cause of action in the consumer context has drawn criticism in the legal literature.

(and see: M. Bar-Niv, (Bornowski), “The Limits of the Consumer Class Action,” 19 Iyunei Mishpat 251, 257-258 (1994) (Hebrew).

21. On point, I am of the opinion that Barazani showed that he had a prima facie personal cause of action – and most important – that Bezeq’s misleading advertisement, upon which his suit was based, was appropriate for a class action. Indeed, Barazani did not claim that he had been exposed to the advertisement, but he also did not state the opposite. In fact, in the proceedings before the District Court – which did not focus upon this question – Barazani was never asked if he had been exposed to the advertisement. Under these circumstances, we may, and should, assume that Barazani’s situation is no different than that of most of Bezeq’s other customers. Whether the consumers were exposed to the advertisement and remember it, or whether they learned of the matter of the advertisement at a later stage, it is clear that it would only have aroused their attention when it was discovered that the advertisement was misleading, and that as opposed to what Bezeq had promised its customers, it continued to charge them for whole meter units. It is clear from the apparent facts that the advertisement was intended to influence Bezeq’s customers to increase their use of the advertised service, and that would appear, on its face, to lead to a conclusion that the misleading advertisement could justify recognizing the concrete reliance of all the customers to whom Bezeq directed its advertisement.

The suit that Barazani submitted to the court was appropriate, by its nature, to be addressed as a class action. We are concerned with a large community of Bezeq subscribers whose accounts were charged for international telephone calls at a rate that was higher than the rate that Bezeq was entitled to charge according to its advertisement. Addressing the class action on the merits would allow the court to decide whether Bezeq’s advertisement indeed comprised the elements of a misleading publication that warranted pecuniary relief. If the court were to answer this question in the affirmative, it could easily determine the extent of direct injury. Proving the direct injury is not contingent upon the question of whether the customers made greater use of the specific service as a result of the advertisement, but upon the difference between the amounts the customers who used the service were charged and the amounts that Bezeq was entitled to charge its customers based upon its advertisement. This can easily be determined, inasmuch as Bezeq undoubtedly has all of the necessary data for calculating the difference in regard to each customer, and I cannot imagine that Bezeq would seek to conceal that information from the court.

22. One last comment in conclusion. While the District Court decision that was the subject of the Appeal dismissed Barazani’s request to permit him to file a class action for pecuniary relief, it accepted his alternative request to file a class action for declaratory relief. However, the majority in the Appeal granted Bezeq’s counter-appeal and rescinded the permission granted to Barazani to submit the suit for declaratory relief. In stating the reasons for that decision in the Appeal, the Chief Justice wrote:

Should we not recognize Barazani’s ability to serve as a representative plaintiff for declaratory relief stating that Bezeq’s advertisement was “liable to mislead” a consumer? This question raises several problems, which can be left for future consideration for the following reasons: In his complaint, Barazani defined the members of the group as the community of Bezeq customers who paid a higher fee than that advertised by Bezeq, and as a result incurred monetary harm. Barazani does not “properly represent the interests of all the members of the group” (sec. 43B (4) of the Law), inasmuch as he did not himself suffer monetary harm as a result of the deception. Therefore, Bezeq’s we should grant the appeal, and find that Barazani is also not an appropriate representative plaintiff in regard to the declaratory remedy.

Was it proper to deny Barazani the limited permission granted him to file a class action for declaratory relief? The answer to this question – that Justice Cheshin did not address in his opinion – must, in my opinion, be no. After all, even according to the approach of the Chief Justice in the Appeal, Barazani has a personal cause of action against Bezeq because its advertisements were “likely to mislead” him, in which framework he could have petitioned for non-monetary relief, such as a restraining order. The basis for denying his request to file his personal suit for declaratory relief as a class action could accord with the opinion of the majority in the Appeal if there were another representative plaintiff before the court – who met the reliance requirement and even suffered monetary harm as a direct result of the deception – who might represent the interests of the consumers better than Barazani. But I fear that such was not the case. To date, no such alternative representative plaintiff has presented himself before the court, and even if we were to assume that such a plaintiff may yet appear in the future, I fear that his suit may be denied in limine by reason of prescription.

Conclusion

23. Subject to the above, I concur in the opinion of my colleague Justice Strasberg-Cohen that the petition for a Further Hearing should be granted, and that the Petitioner should be allowed to file a class action, as requested.

Justice

Justice Dalia Dorner:

In my opinion, the Petition should be granted. The reason for this is that the Petitioner relied upon the misleading representations of Bezeq and was harmed as a result of that concrete reliance. In any case, all of the elements of the tort were present, and the Petitioner is an appropriate plaintiff for a class action.

The Legal Foundation

1. The Consumer Protection Law, 5741-1981 (hereinafter: the Law), intervenes in contracts between unequal parties, and imposes an increased duty of fairness upon the stronger party – the supplier – toward the weaker party – the consumer. See LCA 8733/96 Langbert v. State of Israel, IsrSC 55 (1) 168 (hereinafter: CA Langbert), at p. 174. The Law is firmly anchored in established doctrines of contract law. See Sinai Deutch, “Consumer Contracts Law versus Commercial Contracts Law,” 23 (1) Iyunei Mishpat 135 (2000). The purposes of the Law – among them, reinforcing personal autonomy, advancing commercial fairness and the protection of market integrity – well accord with the freedom of contract, which requires the full realization of a true meeting of minds of the parties to a transaction. This freedom is infringed when the consumer is misled into believing that he is undertaking obligations under transaction conditions that are different from the actual ones. Moreover, the duties of the dealer clearly reflect the overarching good-faith principle of Israeli contract law, which justifies eroding the once accepted principle of caveat emptor. See Gabriela Shalev, Contract Law (2^nd ed., 1995), 221.

The Law was intended to provide an additional layer of defense to the consumer public that is exposed to deception by means of well-developed marketing and advertising methods (see the Consumer Protection Law Bill, H.H. 5740 at p. 302). This is achieved both by augmenting the duties of suppliers, and by broadening the means available to consumers for enforcing their rights. These means include criminal offenses and civil causes of action, among then the tort prohibiting deceit in sec. 2 (a).

The Contractual Framework for the Relationship between Dealers ad Consumers

2. Many consumer transactions are premised upon a significant amount of consumer faith in the suppliers. In the framework of such relationships, consumers are not expected to check, before purchasing a service, that they will be charged the declared price, and they can rely upon the suppliers not to charge more than that price. If the consumer should discover at a later date that he was overcharged, he can demand and receive a refund. That is well-established in the accepted contractual doctrines that require that if a supplier charge more than the correct, advertised price, the consumers will be entitled to a refund of the difference, as well as in the social reality grounded upon them, in which consumers actually tend to place their trust in suppliers without checking that every transaction conforms with the advertisements.

A supplier’s advertisements concerning a specific price grants the consumers a right not to pay more. In any case, if the supplier charge a higher price, that would constitute a breach of contract that would entitle even consumers who were not exposed to the advertisement to a pecuniary remedy. That right can be grounded in the following three different ways.

The first way sees a supplier’s advertisement of a price as an irrevocable offer to the public, which can be accepted by the objective performance of its conditions, while the dealer is bound by the advertised price, and makes the possibility of purchasing the product or service for a price that will not exceed it, available to the public. See Daniel Friedman & Nili Cohen, Contracts, vol. 1 (1991) 182; Shalev, ibid., at p. 115. The consumers are not expected to check the price prior to the transaction. In any case, by accepting the offer, the parties agree to the advertised price. The supplier will be required to refund any additional charge to the consumer.

The second way sees the contract as comprising an implied term that requires the supplier not to charge a consumer more than the advertised prices. Such a term is required by the expectations of the parties. Overcharging constitutes a breach of that term.

The third way classifies the said overcharging, particularly where it concerns consumers who were not exposed to the advertisement, as a bad-faith performance of the contract.

3. It is on the basis of this legal conception, independent of the precise manner of its grounding, that consumers actually behave in practice. Typical Israeli consumers do not check, and are not expected to check, that the prices they are charged for each and every product in the supermarket are identical to the price printed on the product, and certainly do not check, and are not expected to check, that they received the discounts that were advertised by the chain from which they made the purchase. Consumers rely that they will be charged the prices, and credited with the discounts, as advertised. Similarly, the consumers of the telephone companies do not check the prices and current discount campaigns before each and every phone call, relying that they will be charged in accordance with the correct advertised prices.

Section 2 (a) of the Law

4. When a supplier publishes notice that the price of a service is lower than a specific price, the consumer public to which the advertisement is directed – including consumers who are not exposed to the advertisement – acquires a right to receive the service at the price stated by the supplier. When consumers purchase the services of the supplier, they rely, in practice, on the fact that the price they will be charged will be the advertised price.

That reliance exists regardless of whether the advertisement is innocent and clear or whether it is ambiguous and misleading (and see, for example, CA Langert, above). In both cases, the consumers acquire a right, and the suppliers are subject to an obligation, that they will not be charged more than the maximum price reflected in the advertisement, less the deceit, that they would be have been charged in accordance with the advertisement. The difference between the two types of cases regards the consequences that directly result from the advertisement. Only in the case of a misleading advertisement can one acquire those remedies established by law that do not require proof of injury, such as restraining orders. Moreover, only a misleading advertisement can be deemed tortious conduct. The potential to mislead must be evaluated at the time of publication, in accordance with the factual situation at that time. An innocent advertisement cannot be deemed misleading if its content is unambiguous, only as the result of the future conduct of the supplier. Otherwise, every advertisement would be deemed “liable to mislead”, as suppliers always have the ability to breach their obligations.

However, a supplier commits a tort under sec. 2 (a) of the Law even in the absence of a misleading advertisement both when he presents a consumer with an invoice based upon a price that is different and higher than the advertised price, and when he charges a consumer – e.g., by means of a standing bank order – a higher price than that advertised. Such conduct constitutes an instance of doing “anything – by deed or by omission, in writing, by word of mouth or in any other manner … which is liable to mislead a consumer on any substantive element of the transaction”. That is so because when a supplier demands or charges a particular price, he makes a representation upon which consumers rely, and according to which, that is the correct price as advertised. The consumers are entitled to purchase the service at the advertised price, whatever it may be, and when they pay the supplier the amount in the invoice, or permit the supplier to charge their accounts, they do so on the basis of reasonable reliance that the supplier will not charge more than what was advertised. There is a kind of “integrity of the price” (see Basic v. Levinson, 485 U.S. 224, 247 (1988)).

The difference between the amount the consumer should pay according to the advertisement and the amount actually charged is the injury caused to that consumer. This injury caused to the consumer is connected by a direct, factual connection to the tortious conduct of the supplier. The consumer paid the additional amount due to the supplier’s deceit. Had the supplier not breached its duty, and had it charged the consumer the correct price, the consumer would have paid the correct price and would not have been injured.

Therefore, there is no need to prove exposure to the advertisement and conduct resulting from that advertisement in order to be entitled to damages for that deceit, and it is not required under current Israeli law. Other countries that have similar tort and consumer protection laws do not all have a similar requirement, particularly in regard to class actions. Compare, for example, Slaney v. Westwood, Inc. 366 Mass. 688 (1975); Amato v. General Motors Corporation, 463 N.E.2d 625 (1982); Carpenter v. Chrysler Corporation, 853 S.W.2d 346 (1993); Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972); Seth William Goren, “A Pothole on the Road to Recovery: Reliance and Private Class Actions Under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law”, 107 Dick. L. Rev. 1.

From the General to the Specific – Bezeq and Barazani

5. Bezeq does not currently expect its customers – and certainly did not expect its customers at the time relevant for this case, when it was a monopoly – to use its telephone services only after checking their price. Thus, there is a “standing payment order” arrangement by which the consumer grants Bezeq the right to access his bank account, and the consumer absolutely relies upon Bezeq, while Bezeq des not usually append to a consumer’s bill the full details of phone calls charged. In doing so, Bezeq intends to create an equal arrangement for those who were exposed to the advertisement in regard to its fees and acted thereupon, and those who were not exposed to the advertisement and, therefore, did not act thereupon. As noted, according to the factual findings in the earlier proceedings, the meaning of the advertisement was simple and clear. Nevertheless, Bezeq made a different representation to the consumers, whether in the telephone bill or in charging their accounts, according to which the correct method for calculating was different from the method of calculation in the advertisement, and led to a higher charge. In doing so, Bezeq deceived the consumers, and committed the tortious act. There is no difference between this conduct by Bezeq’s and a case in which it would include the advertised method of calculation in the telephone bill, except that, in practice, it charged a higher fee.

Considerations of “legal causation” also do not require reducing the tortious liability. Compare sec. 16 of the opinion of Justice Tova Strasberg-Cohen in this Further Hearing, and see FH 12/63 Leon et al. v. Meshullam Ringer, IsrSC 18 (4) 701, at p. 715 per Witkon, J.; CA 145/80 Vaaknin v. Beit Shemesh Local Council, IsrSC 37 (1) 113, at p. 145; and compare Itzhak Englard, Aharon Barak & Mishael Cheshin, The Law of Civil Wrongs, Gad Tedeschi, ed., (1970) 187.

It should be noted that in light of the finding that the meaning of the advertisement – that Bezeq would not charge “for the time period not actually used for the call” – was clear, the conduct could not have constituted tortious conduct under sec. 2 (a) of the Law. But even if it had been found that the advertisement was misleading, there still would have been legitimate, concrete reliance by the consumer that he was being charged the correct amount as advertised, and therefore the elements of the tort would have crystalized on the basis of the tortious conduct committed in the charging.

Barazani therefore has a personal cause of action against Bezeq. The existence of Barazani’s personal cause of action having been proved, whether or not he was exposed to the misleading representation, the path to representing the group in a class action is open to him.

I, therefore, concur with the result recommended by my colleagues Justices Tova Strasberg-Cohen and Eliahu Mazza, according to which the Petition should be granted and the filing of the class action should be allowed.

Justice

The petition is dismissed in accordance with the majority opinion, and the judgment of the Supreme Court in CA 1977/97 is affirmed.

Given this 13 day of Av 5763 (11 August 2003).

The Chief Justice The Deputy Chief Justice Justice

Justice Justice (ret.) Justice

[1] Translator’s note: I Kings 18:29.

[2] Translator’s note: The phrase is a reference to a rabbinic principle of biblical hermeneutics, see, e.g., Mekhilta deRabbi Ishmael, Masekhta deShira 7; Sifrei Numbers, Beha’alotekha 64; Babylonian Talmud, Tractate Pesaḥim 6b.

[3] Translator’s note: The original Hebrew employs the letter kaf as a prepositional prefix, called the “kaf of comparison”, meaning “as” or “like”.

[4] Translator’s note: The original Hebrew phrase is “ke-din avla”.

[5] Translator’s note: The Talmudic quote is a wordplay that exploits the use of the word beitza to mean an egg and to designate a measure of volume. In its original context, the phrase means “an egg is superior to any other food of an equal amount”.

[6] Translator’s note: The reference is to Mishna Ḥagigah 1:8 “The laws concerning the Sabbath, festival offerings and the trespass of consecrated objects are as mountains hanging by a hair, that have few supporting scriptural verses but many laws”.

[7] Translator’s note: Genesis 22:1

[8] See note 3, above.

Full opinion:

Barazani v. Bezeq.pdf

Link to original Hebrew text of decision on official ISC website:

Tnuva Central Cooperative v. Raabi Estate

Case/docket number:

CA 10085/08

Date Decided:

Sunday, December 4, 2011

Decision Type:

Appellate

Topics:

Abstract:

[This abstract is not part of the Court's opinion and is provided for the reader's convenience. It has been translated from a Hebrew version prepared by Nevo Press Ltd. and is used with its kind permission.]

An appeal and cross appeal challenging the decision of the Tel Aviv District Court (Partial Judgment and Supplementary Judgment,) where the court partially granted a consumer class action suit, which was granted leave to be submitted in CC 10085/080 (hereinafter: Tnuva). The class action suit revolved around the misleading of the consumer public and the production of a milk product in violation of binding official standards that were in effect in the relevant period of time. The product was long life low fat (1%) milk to which silicone was added and which Tnuva manufactured and marketed from January 25, 1995 until September 6, 1995, without listing the silicone component on the product. (The silicone was added to the mild – in a total amount of approximately 13 million liters of milk – in order to remedy a problem of over whipping.) The court helf that the number of members of the class were about 220,000 people, and that members of this group were entitled to compensation for the autonomy infringement and that half (110,000 people) were also entitled to additional compensation for negative emotions experienced after learning that the milk they had been drinking contained silicone. Under the circumstances, the court found it fit to award compensation according to the mechanism set in section 20(c) of the Act, where ultimately it was ruled that Tnuva must pay a total compensation amount of NIS 55 million, which reflects an estimated personal damage of NIS 250 to each of the members of the group for the general damages, without distinction between group members who experienced negative emotions and those in whose regard a consumer report has proven that they did not experience such emotions. It was held that the only actual remedy would be a remedy to the benefit of the group, which ought be divided to three purposes: reducing the cost of the product; a fund for research and grants in the field of food and nutrition; and distributing free milk to needy populations. Additionally, a NIS 4 million partial attorneys’ fees were awarded (the heirs of the class action plaintiff were awarded NIS 500,000, the Israeli Council for Consumerism was awarded NIS 1 million, and the representatives of the class action plaintiffs were awarded NIS 2.5 million.)

At this stage of the appeal, Tnuva no longer disputes that it mislead its consumers. However, according to its approach, the lower court’s decision must be reversed, or alternatively the amount of compensation it was obligated to pay must be drastically reduced. The essence on Tnuva’s arguments is that its misleading caused no real and compensable harm to any of the group members, and sadly this is a negligible matter that does not justify compensation. Even had any damage been caused, no causal connection was proven between the claimed harmed and the misleading it did. In the cross appeal, the class action plaintiffs claim that a higher compensation should have been awarded.

The Supreme Court (in an opinion written by Justice E. Hayut, with Justice I. Amit and U. Vogelman concurring) granted the appeal by Tnuva in part and rejected the cross appeal, for the following reasons:

Misleading consumers as a class action tort: The legal field where the outcome of Tnuva’s actions must be examined in this case is tort law, to which section 31(a) of the Consumer Protection Act refers. In other words, in order for a plaintiff according to this consumer tort would be awarded financial compensation they must show damages as well as a casual connection between the tortuous conduct and the alleged harm. However, when a class action claim is concerned, the court must integrated the general tort law and principles and rules taken from class action law, among others, by softening the requirements necessary for showing the harm caused to group members. Therefore, the court must not limit itself to examining the remedy under general tort law which apply to individual suits and it must rather fold into its decision principles and rules taken from class action law.

Negligibility: Indeed, not every case where there was a flaw in the listing of a food product’s ingredients this would justify compensation for autonomy infringement or negative emotions and there may certainly be cases where despite the existence of a particular flaw in the listing of the product’s components this would not justify compensation when the harm constitutes de minimis… in the words of Justice Naor. However, this does not benefit Tnuva, because in this case the lower court’s finding that under the circumstances the consumer’s autonomy to decide whether he wishes to put into his body milk that contains silicone or not was well founded. And as the lower court correctly held, this is not an infringement that constitutes de minimis, from the group-class action perspective.

The court noted that the rule regarding de minimis does not apply in its plain meaning on the damage element of a typical class action suit because “a central characteristic of it is the accumulation of small damages that independently would not have led to legal proceedings.” This in approach that has precedent in the jurisprudence of this Court. Still, it is important to note that the fact that a large group of plaintiffs argue in a class action suit for the accumulation of small damages, does not necessarily in itself negate the possibility of de minimis in the group context as well. Even in a procedure of a class action the answer to the question when is there a negligible harm that does not justify compensation depends on the circumstances of the case and it may change considering the entirety of circumstances involved.

Autonomy infringement: in CA 2781/93, the Dakka case, Israeli law first recognized that general damages involving autonomy infringements is a “damage” as understood by the Torts Ordinance and that as such it warrants compensation. The fundamental right to autonomy, as the Court held in Dakka is the right that every person has “to decide about his actions and his desired according to his choices, and to act according to such choices.” This right, it was held, encompasses all the central aspects of one’s live, and it results, among others, in “each person having liberty from intervention in his body without his consent.” It was additionally held that that liberty is one of the expressions of the constitutional right to dignity granted to each person and enshrined in Basic Law: Human Dignity and Liberty. In contrast to Tnuva’s argument, recognizing this cause of action of autonomy infringement is not limited and should not be limited to cases of medical malpractice or bodily autonomy violations alone. The principles at the basis of recognizing this cause of action and the constitutional right this recognition is designed to protect justify in the appropriate cases awarding compensation for autonomy infringement even when other torts, such as the consumer tort in our case, exist.

The causal connection requirement: Indeed in the Barzani further hearing, the Court ruled that the requirement of a causal connection established in section 64 of the tort ordinance applies to consumer torts in terms of misleading advertising as well as cases where such tort constitutes cause for a class action suit. Still the Court also ruled there that to the extent that consumer torts are concerned the reliance requirement that derives from the causal connection requirement must be interpreted “in a broad context, to include more than mere direct reliance” but rather “an indirect causal connection through a proper chain or causation from the advertisement to the consumer.” It was also held in Barnzani that a process for a class action suit based on the instructions of chapter F1 of the Consumer Protection Act and the regulations made by it in this matter (instructions that have since been repealed by the Class Actions Suit Act) may require a softening of the means of proof considering the unique nature of this procedure and that “the court may establish proper means, as it sees fit, for the ways in which the element of causal connection between the misleading advertisement and the damage caused to each group member including the harm caused to each and every one of them, may be proven.” However, Tnuva’s attempt to rely on the Barzani rule and argue that in this case, too, no causal connection between Tuva’s conduct and the general damage for which it is sued was not proven, must be rejected and this for several reasons.

First, Tnuva raised the claim at the stage after the class action was approved, and to the extent it addressed the class as such it must be remembered that about the three years after the decision in the Barzani further hearing the Class Action Suit Act was enacted to aggregate the principles and rules that must be applied to class actions in their various forms. Among others, the Act permits granting remedies to the benefit of the public in appropriate cases where it is impractical to prove the harm caused to each and every group member and therefore also the causal connection between that harm and the conduct of the damaging party (section 20(c) of the Act.) This is the guideline adopted by the lower court and under the circumstances the requirement to prove, for each and every individual member of the group, the causal connection between Tnuva’s conduct and the harm is an overly burdensome requirement. Second, to the extent that the consumer tort upon which the class action suit is based is a misleading through failure to act (in the form of failure to disclose, as in the case at hand, as opposed to active misleading as was the case in Barzani) this may justify softening and flexibility in terms of proving the causal connection between the tortuous conduct and the claimed harm. Third, as opposed to the Barzani case, where monetary damages were sought (differences in rate), the damage sought in our case goes to general damage of autonomy infringement. For this type of damage, it was ruled there is no need to prove causal connection between the failure to disclose and the harmed party’s choice.

However, even had it been decided that under the circumstances here proof that members of the group would not have purchased the milk had they known it contained silicone was required, it is possible that the requirement for a causal connection would have been satisfied in the class action suit here by finding there was a “class causal connection.” Such class causal connection maybe be based on the assumption that the class members, and sadly most of them, would have responded in the negative had they been asked in advance whether they would consider consuming milk to which Tnuva added, in violation of a binding standard, an artificial additive of which they are unaware in order to fix a problem of over whipping.

However, the Court rejects the objective approach for evaluating compensation for autonomy infringement. The Court’s approach is that the compensation for autonomy infringement is granted for a subjective outcome damage that is expressed through emotions of anger, frustration and similar additional negative emotions caused by the damaging party’s conduct. This conclusion leads to another conclusion which is that there is no place to divide the compensation for autonomy infringement and the compensation for suffering and negative emotions caused to the harmed party due to that infringement (as opposed to general damage that relies on other harms in the same claim.) therefore, where it was proved that some members of the class remained indifferent to the autonomy infringement, there is no place to award compensation for this type of damage.

In this case, the court’s finding that the class includes 220,000 members is a careful and conservative finding in which we must not intervene. However, the data presented by the class action plaintiffs themselves (statistical data and expert opinion) there is foundation for the conclusion that 30% of the group members remained indifferent to the silicone addition in the milk. Therefore, they did not experience any negative emotions even once they learned that the milk they consumed contained silicone and that Tnuva failed to detail this ingredient on the packaging. Therefore, the extent of the class entitled to compensation for autonomy infringement that caused them negative emotions includes only 154,000 people.

This is a group that consists of more than 100,000 people, who cannot be identified or located. Even had it been possible to locate them there is doubt as to whether it is appropriate to order that each and every one of them – or even some of them – would submit affidavits to detail the depth of the negative emotions they experienced, in order to make it possible to award them compensation according to one of the mechanisms established in section 20(a) of the Class Action Suit Act. Once it is impossible to determine the harm based on individual evidence or an accurate calculation, and once it is impossible to identify the members of the group entitled to compensation, we are left with the compensation mechanism established by section 20(c) of the Class Action Suit Act, which permits setting a total compensation through estimates to the benefit of the entire class or to the benefit of the public.

The compensation amount: In light of the diversity in class members in terms of their consumer habits of the long life milk that contained the silicone and in light of the additional characteristics of autonomy infringement in this case, including the severity of the harm (when one can imagine worse harms) and the limited period of time in which group members experienced negative emotions, the Court believed the sum of NIS 250 is acceptable as a suitable amount for setting the standard individual compensation. This sum, multiplied for the number of class members who suffered the outcome damage of autonomy infringement brings us to a total compensation amount of NIS 38,500,000 (250 X 154,000). Therefore, the total compensation the Tnuva must be obligated to pay in this case according to the formula adopted in the decision is a sum of NIS 38.5 million, valued for the day the lower court’s decision was handed down (October 7, 2008).

The manner of dividing the compensation: Under the schedule set in section 20 of the Class Action Suit Act, priority must be given as much as possible to the mechanisms of compensations that fit this order as such, and even when coming to award compensation under section 20(c) in the absence of possibility to award it under sub section (a) and (b), it must be attempted as much as possible to design the mechanism for allocating the collective compensation in a manner that allows some link between the group of compensated parties and the group of harmed parties.

Under the circumstances, the Court has concluded it is best to do without allocating part of the compensation to the discount arrangement and instead to focus on the two other goals set by the lower court, which serve worthy purposes to benefit the public. The part missing from the discount arrangement (22%) would be divided equally between the two goals in the following manner: the research and grants foundation 44.33% and provision of milk products to the needy 55.66%.

As a result of the reduction in the compensation amount, the award Tnuva must pay the class action plaintiffs and the attorney’s fees it must pay their representative were also reduced. The award to Reevi’s heirs stands at NIS 300,000. The award for the Israel Consumer Council stands at NIS 550,000 and the rate of the attorney’s fees to the plaintiffs’ representatives stands at NIS 1,500,000.

Voting Justices:

Hayut, Esther

Primary Author

majority opinion

Amit, Isaac

Author

concurrence

Vogelman, Uzi

Author

concurrence

Full text of the opinion:

CA 10085/08 and

Counter Appeal

CA 6339/09

CA 7607/09

Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel

1. Estate of the late Tufik Raabi

2. Israeli Consumer Council

The Supreme Court sitting as the Court for Civil Appeals

[29 November 2010]

Before Justices E. Hayut, U. Vogelman, Y. Amit

Israeli Legislation Cited

Class Actions Law, 5766-2006, ss. 20, 22, 23

Restrictive Trade Practices Law, 5748-1988

Banking (Service for Customer) Law, 5741-1981

Equal Rights for Disabled Persons Law, 5758 – 1998, ss. 19 (54) - 19 (64)

Male and Female Workers Equal Pay Law 5756- 1996, s. 11

Standards Law 5713-1953, ss. 9(a), 17 (a) (1), 17 (b)

Israeli Supreme Court Decisions Cited

[1] CA 1338/97 Tenuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd v. Raabi, IsrSC 57 (4) 673 [2003]

[2] CA 1977/97 Barazani v. Bezeq Israel Telecommunications Company Ltd, IsrSC 55 (4) 584 (2001);

[3] FHC 5712/01 Barazani v. Bezeq Israel Telecommunications Company Ltd, IsrSC 57 (6) 385 (2003);

[4] CA 2781/93 Daaka v. Carmel Hospital, Haifa IsrSC 53(4) 526 [1998-9] IsrLR 409

[5] LCA 3126/00 State of Israel v. E.S.T. Project Management and Manpower Ltd, IsrSC 57 (3), 220 (2003)

[6] FHC 5161/03 E.S.T Project Management and Manpower Ltd v. State of Israel, IsrSC 60 (2) 196 (2005)

[7] CA. 8430/99 Analyst I.M.S. Trust Funds Management (1986) v. Ard Industrial Investment and Development, 256 IsrSC 56 (2)

[8] LCA 4556/94 Tetzet v. Zilbershatz, IsrSC 49(5) 774 (1996);

[9] CA 345/03 Reichart v. Raabi Moshe Shemesh Heirs (not yet reported) 7.6.2007)

[10] CA 3506/09 Zaig v. Waxelman, Waxelman Accountants (not yet reported)( 4.4.2011)

[11] CA 3613 Ezov v Jerusalem Municipality IsrSC 56 (2) 787 (2002).

[12] LCA 8733/96 Langbert v. State of Israel – Israel Lands Administration, IsrSC 55 (1) 168 (1999).

[13] CA 7028/00 A.B.A. Trust Funds Management Ltd v. Elsynth Ltd (not yet reported, 14.12.2006)

[14] HCJ 2171/06 Cohen v. Knesset Speaker (not yet reported, 29.8.2011)).

[15] CA 10262/05 Aviv Legal Services Ltd v. Hapoalim Bank, Head Management (not yet reported, 11.12.2008)

[16] CA 3901/96 Local Planning and Building Committee v. Horowitz, IsrSC 56 (4) 913, 328 (2002)

[17] CA 4576/08 Ben-Zvi v. Prof. His (not yet reported, 7.7.2011)

[18] CA 8126/07 Estate of the Late Bruria Zvi v. Bikkur Holim Hospital (not yet reported, 3.1.2010);

[19] CA 9590/05 Rahman Nuni v. Bank Leumi LeIsrael Ltd , (not yet reported 10.7.2007)

[20] CA 6153/97 Shtendal v. Prof. Yaakov Sadeh , IsrSC 56 (4) 746 (2002)

[21] CA 9936/07 Ben David v. Dr. Entebbe (22.2. 2011)

[22] CA 9817/02 Weinstein v. Dr. Bergman, (not yet published, 16.6. 2005)

[23] LCA 9670/07 Anon v. Anon (not yet reported,6.7.2009)

[24] CA 2967/95 Hanan Vakshet Ltd v. Tempo Beer Industries Ltd, IsrSC 51 (2), 312 (1997)

[25] FHC 4693/05 Carmel Haifa Hospital v. Malul (not yet reported, 29.8.2010)

[26] 355/80 Anisimov Ltd v. Tirat Bat-Sheva Hotel. IsrSC 35 (2) 800 (1981)

[27] CA 4022/08 Agbaba v. Y.S. Company Ltd],(21 October 2010 paras 10 – 24;

[28] C.A. 754/05 Levi v. Share Zedek Hospital) (2007) IsLR 2007 131

[29] CA Reznik v. Nir National Cooperative Association for Workers Settlement [not yet published] (20.7 2010]

[30] CA 1509/04 Danush v Chrysler Corporation (not yet published, 22.11.2007)

[31] CA 9134/05 Adv. Eliezer Levit v. Kav Of Zafon, Cooperative Association for Services Ltd [not yet reported, 7.2.2008)

[32] AAA 2395/07 Accadia Software Systems Ltd v. State of Israel – Director of Tax and Stamp Duty 27.12.2010)

[33] CA 7094/09 Borozovsky Conveyancing Ltd v. Ichurn Itur Veshlita Ltd (14.12.2010)

American Cases

[34]Affiliated Ute Citizens of Utah v. United States 406 U.S. 128, 153-154 (1972) ;

[35 ]Binder v. Gillespie 184 F.3d 1059, 1063-1064 (9th Cir. 1999)

[36]; Poulos v. Caesars World Inc. 379 F.3d 654, 666 (9th Cir. 2004

[37] Kennedy v. Jackson National Life Insurance Company, 2010 U.S. Dist. Lexis 63604, 25-28 (N.D.Cal 2010)

[ 38] Negrete v. Allianz Life Insurance Company of North America 238 F.R.D 482, 491-492 (C.D. Cal. 2006)[.

[39]Klay v. Humana, Inc.382 F.3d 1241, 1259 (11th Cir. 2004)

[40] Johnson v. The Goodyear Tire & Rubber Company, Synthetic Rubber Plant, 491 F.2d 1364, 1379-1380 (5th Cir. 1974);

[41]Cooper v. Allen, 467 F.2d 836, 840 (5th Cir. 1972)

[42]Allison v. Citgo Petroleum Corp., 151 F.3d 402, 417 (5th Cir. 1998);

[43 ]Reeb v. Ohio Department of Rehabilitation and Correction, 435 F.3d 639, 650-651 (6th Cir. 2006);

[44] Fuhrman v. California Satellite Systems, 179 Cal. App. 3d 408, 424-425 (1986);

[45] Altman v. Manhattan Savings Bank, 83 Cal. App. 3d 761, 767-769 (1978);

[46] Stilson v. Reader's Digest Association, Inc., 28 Cal. App. 3d 270, 273-274 (1972);

[47] Birnbaum v. United States, 436 F. Supp. 967, 986 (1977).

[48] Bates v. UPS 204 F.R.D. 440, 449 (N.D. Cal. 2001)

[49] Olden v. LaFarge Corp. 383 F.3d 495, 509 (6th Cir. 2004)-

[50] Hilao v. Estate of Ferdinand Marcos, 103 F.3d 767, 782-787 (9th Cir. 1996)

[51 ] Wal-Mart Stores, Inc. v Dukes, 131 S. Ct. 2541, 180 L. Ed. 2d 374 (2011)

[52] Midwestern Machinery v. Northwest Airlines 211 F.R.D. 562, 572 (D. Mn. 2001)

[53 ] McLaughlin v. American Tobacco Co.

[54 ]: Pettway v. American Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974);

[55] Stewart v. General Motors, 542 F.2d 445 (7th Cir. 1976);

[56] Bowe v. Colgate-Palmolive Co., 489 F.2d 896 (7th Cir. 1973);

[57] United States v. Wood, Wire & Metal Lathers Int. Union, Local Union 46, 328 F.

[58]Hood v. Eli Lilly & Company 671 F. Supp 2d 397, 434-453 (E.D.N.Y. 2009)

[59] Long v. Trans World Airlines, Inc., 761 F. Supp. 1320 (N.D. Ill. 1991))

[60] Allison v. Citgo Petroleum, 151 F.3d 402, 414-415 (5th Cir. 1998);

[61] Lemon v. Int'l Union of Operating Engineers, Local No. 139, AFL-CIO 216 F.3d 577 (7th Cir. 2000);

[62] Jefferson v. Ingersoll Int'l, Inc. 195 F.3d 894 (7th Cir. 2001);

[63] Reeb v. Ohio Department of Rehabilitation and Correction, 435 F.3d 639 (6th Cir. 2006).

[64] Fibreboard Corp., 893 F.2d 706, 712 (5th Cir. 1990).

[65] Windham v. American Brands, Inc., 565 F.2d 59 (4th Cir. 1977)

[66] Redish; Powell v. Georgia-Pacific Corporation, 119 F.3d 703, 706 (8th Cir. 1997)

[67] Airline Ticket Commission Antitrust Litig, 268 F.3d 619, 625 (8th Cir 2001)

[68] Folding Carton Antitrust Litig. 744 F.2d 1252 (7th Cir. 1984)

[69] Houck v. Folding Carton Admin. Comm., 881 F.2d 494 (7th Cir. 1989)

[70] Cuisinart Food Processor Antitrust Litig38 Fed. R. Serv. 2d (Callaghan) 446 (D. Conn.1983).

[71] Democratic Cent. Comm. v. Washington Metro. Area Transit Comm'n

[72] Domestic Air. Transp. Antitrust Litig

For the petitioners — T. Feldman, Y. Elam, F. El-Ajou, H. Jabarin.

For the respondents — A. Helman, A. Segal-Elad, H. Gorni.

JUDGMENT

Justice E. Hayut

The decision forming the subject of the appeals before us was given in a consumer class action that was approved for filing against Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd (hereinafter – “Tnuva”). The suit concerns the misleading of the consumer public and the production of a dairy product in contravention of the official standard in force on the dates relevant to the suit, by reason of the addition of silicon to long lasting low fat (1%) milk, that was manufactured and marketed by Tnuva, without making any mention of the silicon component on the product.

Factual Background and the Process of Approving the Suit as a Class Action

1. At the end of 1993 a problem of over-frothing arose in the process of mixing long lasting milk containing 1% fat (hereinafter: “the milk”) as a result of a problem in one of the machines on the production line. Given the high cost of the malfunctioning machine (about 300 – 400 thousand U.S dollars) the personnel of the Rehovot dairies decided to solve the problem of frothing by adding a chemical substance known as “Polydimethyilsiloxane” , the trademark for which is E-900, to the milk. This substance is known as “silicon” and was purchased by the dairy in Rehovot, from Amgal Production of Chemicals (1989) Ltd (hereinafter: "Amgal") without informing the central management of Tnuva. The Amgal company purchased the silicon from an English company. The aforementioned addition of the silicon to the milk continued from 25 January 1994 until 6 September 1995, just after the affair was exposed. During that period the Tnuva dairy in Rehovot produced and marketed to the public an overall amount of 13 million liters of milk.

The addition of the silicon to the milk was first exposed in the media on 30 August, 1995 and Tnuva's initial reaction consisted of a sweeping denial of the allegation against it. This was the case both in an interview of the director of the Tnuva Milk department, Mr. Yosef Yudovitz and in the official press releases on behalf of Tnuva published in a number of papers on 31 August, 1995, in which it stated that the Tnuva long life milk was free of the silicon supplement and that independent laboratory tests verified this (similar pronouncements also appeared on 1 September, 1995). The Tnuva representatives continued to deny the addition of silicon in a hearing conducted in the Knesset Economic Committee on 5 September 1995, but soon after that, on 10 September 1995 an internal commission of inquiry appointed in the wake of the publication determined that indeed a silicon supplement had been added to the long life milk that contained 1% fat, in the Tnuva dairy of Rehovot, and the commission's conclusions were published in the media. In the wake of these conclusions, Tnuva recalled all of the cartons of 1% long life milk from the shelves of the stores, to which it was feared that the silicon had been added, and the manager of the Rehovot dairy was suspended from his position. The National Food Service of the Ministry of Health likewise decided that Tnuva would have to destroy all of the milk containing silicon and it was prohibited to use it, even as food for animals. It was further decided on 12 September 1995 to revoke the permit that had been given to Tnuva confirming appropriate conditions of production. Tnuva on its part decided on the same day to establish a commission to investigate the affair, which would give recommendations on "lessons to be learnt and conclusions to be drawn in each and every area that it found appropriate, including personal conclusions" The committee headed by Prof. Yehuda Danon, and after it had heard the testimonies and examined the documents, it published the "Committee's Report on the Examination of Long Life Milk" (hereinafter: the Danon Committee Report"). In the framework of the Report criticism was leveled against senior workers in the Tnuva dairy, against the senior management of Tnuva by reason of the absence of supervision and inspection in the Tnuva dairy, and even against the Food Service in the Ministry of Health, and the Institute for Inspection and Quality in the Trade and Industry Office that was supposed to have conducted supervision and inspection of the quality of the food.

2. The state on its part on 30 January, 1996 filed an indictment against Tnuva in the Magistrates Court of Rehovot, and against its CEO and against the manager of the Milk Department and the manager of the dairy for offences of misleading in an advertisement, pursuant to ss. 2(a), 7 (a)(1), 23 and 27 of the Consumer Protection Law 5741-1981 (hereinafter:
"Consumer Protection Law") and against Tnuva and the manager of its dairy in Rehovot for the offences of failing to comply with an official standard pursuant to ss. 9(a), 17 (a)(1) and 17 (b) of the Standards Law 5713-1953 (hereinafter:"Standards Law"). On 4 March 1997 the defendants were convicted by force of their confessions for the offences that were ascribed to them, and the Court accepted the plea bargain that was reached between them and the state, in accordance with which a financial penalty was imposed on Tnuva and the other defendants (the financial penalty imposed on Tnuva was for the sum of NIS 28,000).

Another proceeding instituted against Tnuva was the present proceeding, which began in a suit filed in the Tel-Aviv Jaffa District Court on 14 September, 1995 by the late Tufik Raabi (hereinafter: "Raaabi") along with an application for the certification of the suit as a class action (CF 1372/95, Mot. 11141/95. In his (amended) suit, Raabi claimed that he had consumed long lasting low fat (1%) milk during the relevant period and that the silicon was not specified as one of the ingredients on the packaging of the product, and as such Tnuva had violated the provisions of sections 2,4, and 17 of the Consumer Protection Law. Raabi further alleged a infringement of an “unwritten contract” with him and with the consumer public in its entirety and negligence on the part of Tnuva in all of the stages involved in “production, supervision, marketing and advertising of the facts related to the addition of the prohibited material to the milk and the fact of the reasonable probability of a real and/or potential health hazard in the product that it marketed”. In his petition Raabi requested restitution of the sums he had paid in consideration for the milk that he had purchased in the relevant period and compensation for the mental anguish caused to him by the addition of the silicon and by reason of the “misleading and contemptuous” conduct of Tnuva. Raabi’s request for his suit to be recognized as a collective action relied on Chapter F’1 of the Consumer Protection Law, which at that time included an arrangement for the filing of a collective action based on the grounds specified therein.

3. The Tel-Aviv District Court (the late Honorable Judge M. Telgam), on 13 June 1996 certified Raabi’s request to file a class action in the name of all of the milk consumers during the relevant period, but the court stressed that in this case it would not certify the remedy of restitution because Raabi had already consumed the milk and had not claimed that any real damage had been caused by its consumption, and he further stressed that even though there was nothing to prevent Raabi from proving that his health had been damaged thereby, he was not permitted to represent the members of the group regarding “future bodily damage”.

An appeal and a counter appeal against the certification decision were filed by the parties to the Supreme Court (CA 1338/97 Tnuva Central Cooperative for the Marketing of Agricultural Produce in Israel Ltd v. Raabi [1] (hereinafter: Decision on the Certification Request)). Tnuva challenged the certification of the suit as a class action and Raabi challenged the determination that the class action would not include the remedy of restitution, and the fact that there was no award for legal fees in his favor. The Israeli Consumer Council joined as a party to the hearing (Raabi and the Israeli Consumer Council will hereinafter be referred to as “the representative plaintiffs”), and in the Attorney General joined as a party in the appeal proceedings, in support of the confirmation of the class action

4. On 19 May, 2003 in a majority decision, this Court rejected the aforementioned appeals filed by the parties and left the decision of the District Court intact in the sense of certifying the filing of a class action. Regarding this, Justice M. Naor held that the damages claim by Raabi concerns the non-pecuniary damage that was caused to him by negative feelings, and feelings of disgust, which stem from the consumption of milk that contains silicon “with all of the associations attendant thereto” and that damage of this kind was prima facie “remunerable damage”. The justice further ruled that the addition of the silicon supplement to the milk in defiance of the standard constitutes an infringement of individual autonomy, and that under the circumstance this not a “trivial matter) (de minimis), and that despite the fact that the Consumer Protection Law does not contain a provision that enables a compensatory award for the benefit of the public or the benefit of a group (all or in part) the court is permitted to award this kind of remedy in a suit under the Consumer Protection Law in appropriate cases in which there is a structural difficulty in locating the consumers. All the same, Justice Naor ruled that the Court would not intervene with the District Court’s decision not to award restitution in this case. Regarding the plaintiffs’ group Justice Naor ruled that it would include all those who had consumed long life milk of 1% to which silicon was added during the period between 23 October 1994 and September 1995”, having regard for the fact that the provision in the Consumer Protection Law that allowed the filing of a collective action came into effect on the 23 October 1994 and the fact that in the month of September 1995 the dairy products containing silicon were removed from the shelves.

Deputy President, S. Levin concurred with the ruling of Justice Naor (subject to the issue of awarding a remedy to the public being left as requiring further consideration), and Justice Proccaccia ruled in her minority opinion that the suit should not be recognized as a class action. She held that the chances of Raabi’s personal suit succeeding are not “self evident” and in her view, "the claim concerning the injury as a result of the inclusion of the supplement in the food product, in deviation from the standard, but without having caused any damage to health, does not dictate, "self evidently" that damage flows naturally in the regular course of events". Justice Proccaccia added that she would also have refrained from approving the suit as a class action in accordance with the discretion conferred to the court in this matter (s. 35A of the Consumer Protection Law), inter alia given the fact that the nature of the alleged damage is not necessarily common to the entire consumer public, and "it is connected to the individual health threshold of each consumer and significantly dependent upon it."

The Class Action Proceedings

5. Once the suit was certified as a class action, the District Court (Judge Dr, E. Benyamini) ordered the publication of a notification to the public and the filing of amended claim sheets in accordance with the prescribed conditions of the certification. In the amended statement of claim that they filed, the representative plaintiffs claimed that the approximate number of members in the plaintiff group was estimated at about 43% of the population, which constitutes over two million consumers, and that the members of the group should be compensated for infringement of their autonomy and negative feelings occasioned by inter alia deception, contempt, mental anguish, nausea, aversion to essential food products, fear and anxiety. According to the representative plaintiffs, the members of the group in their entirety should receive compensation of NIS 8000 for each consumer included in the plaintiff group. Tnuva on its part argued that the claim relating to the infringement of individual autonomy should be rejected, because no such infringement was actually caused, and if caused, it was minor and peripheral, in the category of de minimis. In this context Tnuva stressed, inter alia that the addition of silicon to the milk did not harm the consumers and that silicon was a recognized, approved, and frequently used food supplement all over the world.

6. The first stage of preliminary proceedings in the Lower Court was intended, inter alia to crystallize the proceedings for the hearing and the means of proving the suit. In this framework the Lower Court ruled that the evidentiary stage would not be divided into separate hearings for the question of responsibility and the question of damage. The court further rejected Tnuva's request to establish a system for proving the non-pecuniary damage on an individual basis, ruling that already at the preliminary stage "it was clear that the only way of proving damage in this case, if at all, in the absence of any method for locating the purchasers of the milk, is by way of market surveys for the entire consumer public, or even a few sample affidavits of milk consumers, along with the affidavit of [Raabi]” (para. 14 of the decision). On the other hand, the court left open the question of whether it was possible to award general compensation to the entire plaintiff group based on this form of proof. In addition the court ruled that insofar as in accordance with the standard silicon was prohibited for the use of cows' milk for drinking, there was no need to rule on the question of whether its use constitutes a health hazard, but it added that when examining the non-pecuniary damage caused by an infringement of autonomy and negative feelings, importance attached to the question of whether there are studies that show the possibility of damage to health as a result of the use of silicon and the question of the quantity necessary to cause such a risk. The reason for this is that if there are experts who contend that there is a possibility of damage to health, then it becomes necessary to address the question of the consumer’s right “to decide whether he was interested in refraining from taking any risk involved in the consumption of the milk”. The court further ruled that to the extent that there was proof for the ground of the claim and the alleged damage, and it was determined that compensation should be ruled for the benefit of the group or the public, it would consider the appointment of an expert- examiner and Tnuva would be obligated to supply him with the required economic data.

On 13 October, 2004 the Court actually appointed an expert-examiner in accordance with Regulation 124 of the Civil Procedure Regulations, 5744-1984 (Prof. Yechezkel Ofir, an expert in economic and marketing (hereinafter – Ofir)), and in its decision of 17 March, 2005 the Court further ruled that “the relevant population for this claim is, essentially, the people who actually purchased the milk” and that the intention was to those who purchased the milk in Israel (para. 16 of the decision). All the same, in that decision the Court ruled that the plaintiff group would also include persons who had consumed the milk in hotels, restaurants, and cafes (as distinct from those who consumed it at places of work and who did not actually purchase the milk that was consumed), notwithstanding that with respect to them it would be difficult to prove an infringement of autonomy because they did not choose the category of milk that they had drunk..

The Partial Decision of the District Court

7. In its partial decision of 7 October 2008 the District Court ruled that the class action suit should be accepted. In its opening comments the Court noted that the Class Action Law, 5766-2006 (hereinafter – “the Law” or the “Class Action Law”) which was enacted and came into force after the certification of the suit as a class action, would also apply to suits pending at the time of its publication, and hence would also be applicable to this particular class action suit. Even so, the Court ruled that “regarding the ground of claim and the plaintiff group, a decision would be given in accordance with the Consumer Protection Law, which as stated, only applies to the a “consumer” as defined in the law”, while also pointing out that with the enactment of the Class Actions Law, the representative plaintiffs had not petitioned to amend the statement of claim and broaden the scope of the group in accordance with the broadened grounds of claim for which a class action can be filed under the Law.

In the partial decision the Court conducted an extensive survey of the evidentiary material submitted to it, including, inter alia, the Report of the Danon Committee, an expert opinion and public opinion surveys. Regarding the criminal proceedings, the Court held that for purposes of the class action it was not possible to base "factual findings" on the holdings of the Court in the criminal proceedings, inter alia because in that proceeding, witnesses were not heard and evidence was not submitted. Still, the Court ruled that Tnuva's admission to the commission of the offences and the convicting verdict also constitute evidence against it in the proceeding at hand ( whether by force of an admission of a litigant or by force of the provision of section 42A of the Evidence Ordinance [New Version] 5731-1971).

As a preliminary remark, with implications for both the grounds of the suit and the proof of damage, the Court ruled that it was not required to rule on the "scientific question" pertaining to the existence of a health risk in the drinking of milk containing silicon, and that for purposes of the suit it was sufficient to examine the question of whether it was possible to rule out the possibility of such a health hazard. The Court determined that based on the evidentiary material presented, it could rule that even if there was no proof that the drinking of milk containing silicon caused, or was liable to cause immediate health damage to the consumers, it was not possible to rule out the existence of a health hazard in the long term, especially for children. The Court added that according to its approach, the consumers were entitled to know that the milk contained silicon in defiance of the law and the relevant standard, and that in these particular circumstances it was not possible to rule out the health risk involved its consumption, and it also added that had it been required to rule on the aforementioned scientific question it would answered it in the affirmative, given the existence of a standard which was presumably based on considerations of public health and which would transfer the onus of proving the absence of a health hazard to the party in breach, and Tnuva, had not discharged that onus.

8. In adopting Raabi's version, which was that he purchased within the State of Israel (and not within the areas of Judea and Samaria) as claimed by Tnuva, low fat long life mile of Tnuva which was produced in the Tnuva dairy in Rehovot in the period relevant to the suit, the Court held that Raabi has a personal ground of claim against Tnuva. The Court likewise held that even had its conclusion been different it would not have determined the fate of the class action, inasmuch as following the certification, the suit was that of all of the members of the group, and at all events, it was possible to replace a representative plaintiff who lacked a person grounds of claim, by force of s.8(c) (2) of the Class Actions Law

Regarding the existence of the ground of misleading, the Court noted that in fact it was not disputed that Tnuva misled its consumers and added that "misleading" is too delicate a word to describe Tnuva's conduct, which bordered on consumer fraud". This act of misleading, he added ,was done intentionally with respect to matters that were most definitely essential from the consumers' perspective, because it was an act of misleading regarding the essence and nature of the product (s. 2(a)(1) of the Consumer Protection Law), its components (section 2(a) (2) of the Consumer Protection Law), the risks involved in its use (s. 2(a)(4) of the Consumer Protection Law), and relating to its compliance with the standard (2(a) (11) of the Consumer Protection Law). The Court stressed in this context that the milk was a product that was supposed to be "as pure and natural as possible" and that to a large degree it was consumed by a relatively vulnerable population. It should also be added that the misleading in this case was compounded with the breaching of the obligations imposed on Tnuva by force of the Standards Law, and in this context the Court addressed the fact that the Israel Standard relating to drinking milk which prohibited the addition of silicon to milk is a binding official standard which also involves (as opposed to the "general" Israeli standard) "significant obligations", and it is prohibited to produce or to trade in a product that does not comply with its conditions. By the same token, Tnuva did not indicate the existence of the silicon supplement on the packaging, and in doing so breached its disclosure duties pursuant to section 4(a) of the Consumer Protection Law, because the product that did not meet the requirements of the standard and was substantively defective and in accordance with section 17 (a) of the Consumer Protection Law. The Court further held that once it was proved that Tnuva as a dealer had made a misleading representation, the assumption should be that the consumers were exposed to the representation and acted upon it, and the Court emphasized that misleading with respect to the Consumer Protection law can also take place by way of failure to make proper disclosure. In this context the Court further ruled that it was not necessary to prove what exactly each consumer knew and the presumption was that the consumer placed his trust in the dealer and there were no grounds for imposing a duty upon the consumer to clarify whether the product he had purchased complied with the requirements of the Law or the standard. In view of this the Court ruled that in the case before us the foundation of misleading was fulfilled.

9. In referring to the rule established in CA 1977/97 Barazani v. Bezeq Israel Telecommunications Company Ltd, [2] at p. 584 (hereinafter "Barazani"); and FHC 5712/01 Barazani v. Bezeq Israel Telecommunications Company Ltd [3] at p. 386 (2003) (hereinafter Further Hearing Barazani the Court noted that the misleading of a consumer constitutes a grounds in tort, by force of the provision of s. 31 (a) of the Consumer Protection Law, and that as such, it was subject to the "doctrinal first principles of the Tort Ordinance [New Version]. The Court further added that even if it was a conduct based grounds (as opposed to consequential) for the purposes of the receiving compensation it was necessary to prove damage and a causal connection between the act of misleading and the damage, as wall as the consumer's awareness of the misleading picture and his reliance thereupon. In our case, so ruled the Court, there was misleading by way of omission, "and it is undisputed that the consumers relied on the fact that the milk that Tnuva produced complied with the requirements of the Law and the standard also indicating that Tnuva never claimed to the contrary.

Regarding the categories of damage by dint of which the action was approved as a class action, the Court noted that these included "non pecuniary, non-tangible, damage that included negative feelings, such as the feelings of disgust, mental anguish and discomfort, as well as the infringement of individual autonomy" , the thrust of which was the right to formulate a decision whether to agree to a certain proceeding, in a considered, intelligent and informed manner and with knowledge of the relevant facts. The Court further noted that the non-pecuniary damage caused as a result of the infringement of autonomy admitted of compensation even in the absence of bodily damage, in accordance with the criteria established CA 2781/93 Daaka v. Carmel Hospital, Haifa [4] 526 (hereinafter – Daaka). In that context the Court rejected Tnuva's claim that the suit should be rejected given that the injury falls into the category of a "trivial matter", holding that that fact of the damage being mild need not stand in the plaintiff's way, and the very fact that the act damaged the public at large indicates that the act is not trivial. According to the Court's approach, the severity of the act in this case must be assessed from the perspective of the group in its entirety and not that of the individual consumer. According to this approach an act consisting of the misleading of the broad consumer public regarding the contents and legality of the production of milk, which is a basic product, cannot be considered as "trivial"..

Regarding the proof of personal damage that was caused to Raabi, the Court adopted the essence of his claim, which was that as a result of his exposure to the case he experienced negative feelings such as disgust, anger and annoyance by reason of the fraud and anxiety regarding the consequences of drinking. The Court noted that though it could be argued that Raabi's feelings were "exaggerated" it was not possible to argue with subjective feelings., and it rejected Tnuva's claim that his feelings stemmed from the publications in the media according to which silicon is suspected of being a carcegengous product. Regarding the damage caused to the members of the group, the Court noted that in principle they were obligated to prove the alleged damaged that they sustained, but that in a mass collective action, as in the case before us, it is not practically possible for each one of the members of the group testify, or even to actually locate all of the milk consumers. Referring to Regulation 9 (c ) of the Consumer Protection (Procedure for a Class Action), 5755-1995, and s. 20 of the Class Actions Law, the Court ruled that under these circumstances it would suffice to prove the damage in "from a general perspective". The Court noted that the representative plaintiffs had sufficed with the testimony of Mr. Raabi and in the expert opinion prepared by the experts Prof. Mevorach and Dr. Katz on behalf of Maagar Mohot based on a telephone consumer survey (hereinafter: “computer survey”), and that they should rather have filed the affidavits of a number of consumers; however, its position was that the evidence filed was sufficient for the proof of the damage and the determination of its rate, and in this context the Court rejected the claims raised by Tnuva against the consumer survey and its reliability, noting inter alia that drafters of the expert opinion had made a reliable impression, and that they had knowledge and experience in their field.

10. Giving detailed consideration to the results of the consumer survey the Court noted that the survey indicates that the range of negative feelings (including revulsion, anxiety, fear, anger hatred, disappointment) were to a large or intermediate degree shared by about 66% of the milk consumers. At the same time, the Court accepted Tnuva’s claim concerning a certain inconsistency between the data presented and its claim that in the fifth question, (pertaining to the time at which the negative feelings emerged) the interviewees should not have been presented with the representation whereby the publications concerning the health hazards of silicon were verified both by the Ministry of Health and by Tnuva. However, since the two questions defined by the Court as “cardinal” questions in the survey (the feelings of the interviewees and the grading of their severity) were asked before the question tainted with the aforementioned defect, the Court deemed that there was no concern that the survey was biased. The Court was prepared to assume, to be on the safe side, that the survey’s findings tended to somewhat exaggerate the negative feelings, but ruled that this did not lead to the conclusion that the survey was defective in its entirety, and it further held that it had been persuaded that the survey was adequately grounded and that its findings were consistent with plain common sense.

In this context the Court further added that Tnuva on its part had sufficed with claims against the consumers survey presented by the representative plaintiffs, but did not present its own consumer survey from the relevant period and one can only wonder why. Accordingly, despite the element of exaggeration evident in the survey data presented by the plaintiffs, the Court deemed that its conclusion should be accepted, namely that various non-pecuniary damages were caused to the majority of the consumers, unrelated to the question of the health hazards involved in the consumption of milk containing silicon. On this count the Court dismissed Tnuva’s claims, based on the survey conducted by Prof. Gotlieb on its behalf in 2004 and the expert opinion of Prof. Hornik and Prof. Perry that it had submitted. The Court stated that indeed there is a hierarchy in the categories of infringements of individual autonomy, but this, and the conceivable existence of damages graver than those in the case at hand, does not compel the conclusion that Tnuva’s conduct did not cause a substantial infringement of the consumer’s autonomy. The Court also rejected additional arguments made by Tnuva concerning the proof of the damage in this case, pointing out, inter alia, that for purposes of proving the damages head of infringement of autonomy it was not necessary to prove that the plaintiff would have refrained from acting in the manner that he acted had he been aware of the true situation, and for our purposes – that the consumers would have refrained from purchasing the milk had they known that it contained silicon. A fortiori there is an infringement of the consumers’ autonomy when it can be reasonably assumed that most of them, indeed, would not have purchased the milk had they known that the “classic health product” was actually manufactured in defiance of the Law and the standard, using silicon at a rate that was ten times greater than the rate permitted in other food products, and especially if they had known that some of the experts maintain that consumption of milk containing silicon may be a health hazard. In this context the Court rejected Tnuva’s argument that silicon is a food supplement in other food products and is not harmful, pointing out that the silicon was purchased by Tnuva as a cleaning product, and which was not supposed to have been in the milk. The Court further noted that the infringement of individual autonomy emerges clearly from the consumers’ survey, but its approach was that it was not necessary to produce evidence of this damage – “the infringement of autonomy occurs along with the violation of the obligation to provide the consumer with all of the information, and the violation is an immanent result of tortuous conduct. The denial of the consumers’ right to decide whether to purchase and consume Tnuva milk, in a balanced, informed and knowing manner, being aware of the relevant facts, constitutes independent remunerable damage, even in the absence of any other damage, and even absent proof that the consumers would have avoided purchasing the milk had they known all the facts”. The Court added that the fact that Tnuva concealed the insertion of the silicon into the milk from its consumers, combined with the fact that this was a matter critical for the consumers, is proof of the infringement of the consumer's autonomy in terms of being denied the right to choose the product of his choice in a considered, intelligent and informed manner, in other words the right to prefer a product that does not contain silicon manufactured in compliance with the requirements of the law and the standard. The Court further ruled that the right to autonomy is a basic constitutional right, the infringement of which mandates a appropriate and significant compensation.

11. Regarding the evaluation of the damage the Court held that it was appropriate to have consideration for the gravity of the infringement of the right on Tnuva’s part in this case, and the infringement’s influence on the consumers’ decision and its degree of importance for them (in as much as the issue concerns a basic, “pure” product consumed by a vulnerable population. The Court added that even after giving consideration for the fact that the feelings of the interviewees may have been significantly affected by the media publications concerning the health hazard attendant to the consumption of milk containing silicon, half of those asked experienced negative feelings that are unrelated to anxiety, and it ruled that feelings of anxiety do not necessarily stem from the publications, but rather from Tnuva’s conduct. In this context the Court rejected the claim that the media publications severed the causal connection between the acts of Tnuva and the damage, stressing that the consumer cannot be expected to undertake an in-depth investigation of medical studies before he purchases milk, and if the addition of silicon to the milk was proscribed by law and the standard, and there are experts who deem that it may constitute a health hazard under certain circumstances, then the fear of the consumers is understandable and natural. This concern, it was ruled intensifies the infringement of the consumer’s autonomy, just as it intensifies the accompanying negative feelings. The consumer is permitted to assume, and presumably did assume that the milk standard is intended to protect his health , and when Tnuva absolutely ignored the standard, the fear for health is justified and well based, even without the publications to the effect that silicon is suspected of being carcegenerous.

Accordingly, it was held that it had been proved that the group in its entirety had incurred damage by reason of infringement of individual autonomy. The Court further determined that about a half of the group’s members suffered non-pecuniary damage that found expression in various negative feelings, based on the consumers' survey and an estimation that took into account the possibility that exaggerated media publications had partially contributed to the negative feelings.

Regarding the size of the group, in other words, the number of consumers in Israel who purchased the silicon during the determining period (between 23 October, 1994 and September 1995) for domestic needs, or for hotels, restaurants and cafes, the Court endorsed the expert opinion of Ofir, the court expert, being impressed by his reliability and expertise, and preferring it over the expert opinions submitted by Tnuva. The Court further mentioned that Ofir had determined (based on the weighted average of the various methods of calculation) that 166, 307 households had purchased the milk, but given that in an average household a number of people purchase milk, Ofer determined that the number of people who had purchased the milk ranged between 166,307 (number of households) and 330,000 (adult purchasers) with a tendency towards the lower number. This being so, the Court determined that the number of members in the group, i.e. the adults who purchased the milk during the relevant period, was 220,000 people, and that the members of this group were entitled to compensation for an infringement of their autonomy and a half of them were entitled to additional compensation by reason of negative feelings.

12. The plaintiffs requested that the remedy be calculated the sum of the damages to be awarded to each one of them multiplied by their total numbers and in this context the Court noted that the high road was indeed that of individual compensation for each member of the group (sections 20(a)(1) and 20 (a) (2) of the Class Actions Law). This however is only possible when the number of members in the group is not large, when their identities are known and where they are able to prove their damage in the customary manner. On the other hand, there is a need for a certain degree of flexibility in proving damage when there is a practical difficulty of requiring each group members to prove his claim in the customary manner (by reason of their large numbers or because they cannot be expected to retain the relevant documents), and also where there is no practical means of locating all the members of the group or where many of them will simply not bother to prove their damage due to its low rate. To overcome the difficulties involved in proving damage, its allocation and quantification in such cases, case law in the U.S.A developed a mechanism known as (FCR) Fluid Class Recovery, which was dwelt upon extensively by this Court. The Court did not ignore the fact that the case law in the U.S.A in this context is not uniform but deemed that with the necessary caution “ideas can be drawn from it” for our purposes, while stressing that from the Explanatory Note to the Class Actions Law it emerges that the Israeli legislator “had this mechanism”. The Court referred to section 20(a) (3) of the Class Actions Law in accordance with which the Court is entitled to award overall compensation to a group, indicating that this section refers to the granting of a personal remedy to the members of the group and seeks to overcome the difficulty in calculating personal damage. The Court likewise referred to section 20 (c ) of the Law that allows an award of a general compensation to the public or to the members of group, all of them or in part, while pointing out that this section is intended for cases in which it is not possible to locate the members of the group or to pay them compensation on a personal basis, notwithstanding that for purposes of granting this remedy too it is appropriate “to attempt to evaluate the sum of personal compensation owing to each individual member of the group in order to determine the sum of the overall compensation, and to ascertain that the sum of overall compensation does not exceed the estimated sum of aggregate damage that was caused to the group members…. it is likewise important to determine, at least by way of estimation the number of members in the group. This will assist the court to determine in the most accurate manner possible the overall sum for the group, for purposes of granting a remedy to the group or to the public” (para. 107 of decision).

On the other hand, the Court stressed that this sum of overall compensation does not necessarily reflect the product of the sum of personal damage suffered by each member multiplied by the number of members in the group, and some of the group’s members may actually not receive compensation at all, whereas other, non-members, will benefit from the compensation. The Court further added that the infringement of autonomy and the “negative feelings” in this case are at all events non-pecuniary damages the determination of which by definition requires estimation and hence by nature cannot be precise. Accordingly, it is possible to determine the compensation for non-pecuniary damage by way of estimation alone and then to multiply it by the number of members in the group, which can similarly be determined on the basis of estimation, or the global payment can be determined by way of estimation. The Court mentioned that at all events, the unavoidable reality of it being an estimate need not negate the granting of a remedy in the group’s benefit. The Court did not ignore the fact that section 20 (a)(3) of the Law states that the court may award an overall pecuniary compensation that will be divided between the members of the group, provided that it admitted of “precise calculation” but it deemed that this term should be interpreted in accordance with the purpose of the law and the section. The Court further mentioned that this term is missing from section 20 (c ) of the Law, which deals with a remedy for the benefit of a group or the public and that s. 20 (e) of the Law stressed that the demand for the proof of damage would not prevent compensation for non-pecuniary damage. The Court further mentioned that occasionally the practical goal of the legal process requires that compensation be awarded in accordance with a uniform criterion even if it is clear that there are differences between the various plaintiffs, and this is the case at hand. The Court addressed the consumers survey that was presented and ruled that it proved the damage relating to the negative feelings in accordance with the degree of certainty required in a civil proceeding, especially having consideration for the fact that it only concerned the criterion or calculating the global compensation that could be determined on the basis of an evaluation. Similarly, the Court noted that in the decision pertaining to application for confirmation of the suit as a class action, the Supreme Court assumed that there was no escaping the award of compensation for the benefit of the group, and it further mentioned that Tnuva’s claims in the respect undermine the decision to approve the suit as a class action. The Court further rejected Tnuva’s alternative claim to the effect that at the very most it was possible to base the compensation on “wrongful profit” that it gained by reason of the acts forming the subject of the suit. The Court likewise rejected Tnuva’s claim that at the end of the day it had only incurred losses by reason of the affair and as such it had no wrongfully gained profits. The additional claim raised by Tnuva as an alternative claim, argued that the profit made reached amounted to NIS 350,000 only and it was likewise rejected by the Court

Regarding the determination of the damage, the Court stressed that in its claim sheets Tnuva did not refer to section 20 (d)(2) of the Class Actions Claim which authorized the court to have consideration for the damage liable to be caused to the defendant or to the public requiring its services due to the payment of the compensation. All the same, and even though no claims or explicit data was presented to it regarding this matter, the Court ruled that the evidential material indicated that the compensation would not impair the ongoing activity of Tnuva or jeopardize its economic stability and that at the very most, the compensation would have a negative effect on its profits in the near future. The Court similarly emphasized that in order to achieve the aims that are at basis of the class action, the remedy for the plaintiff groups must be efficient and substantive.

13. For all of the reasons mentioned, the Court decided on a monetary remedy in favor of the group, by force of s. 20 (c) of the Class Actions Law, to be calculated on the basis of an identical sum for each member of the group. The Court further ruled that awarding compensation for the sum of NIS 8000 for each member of the group, as requested by the representative plaintiffs, was perhaps appropriate for a personal claim, but in this particular class action would have meant a monetary remedy amounting to an overall sum of NIS 1.76 billion, which is unreasonable. Having consideration for the entirety of the data, the Court ruled that Tnuva should pay a global sum of NIS 55 million, which reflects personal damage at the sum of NIS 250 for each member of the group (NIS 250 X 220,000), while pointing out that this sum, and even in excess thereof, was most definitely suffered by each members of the group, even if only by reason of the breach of individual autonomy.

The Court further determined that the sole practical remedy was the remedy in favor of the group, which should be divided in accordance with three objectives:

(1) Awarding a benefit to the members of the group by reducing the price of the product (or increasing its contents without raising the price). The Court noted the difficulties involved in the realization of this remedy, noting that its certification would require an economic expert opinion, the certification of the Director of Antitrust and the position of the Attorney General, and supervision of its execution by force of s. 20 (f) of the Law;

Transfer of part of the compensation sum to a research and scholarship fund in the field of food and nutrition which have implications for public health
Distribution of milk free of charge to populations in need via non-profit organizations so involved.

The Court further ruled that “the allocation of the sum between the three approved objectives will be determined after it becomes possible to confirm the discount from the price, in accordance with the conditions determined, and after an allocation plan is filed for the two other objectives”, and it noted that it could be expected that the parties would reach agreement concerning the manner of allocation of the sum of compensation in accordance with the above, so that the Court would not be compelled to enforce a settlement upon them.

Regarding the compensation for the representative plaintiffs and the legal fees for their attorney, the Court noted that the application for a legal fees award for the sum of NIS 400 million is unreasonable and unfounded. It further ruled that at that stage the compensation and legal fees should not awarded given that the final conclusions had yet to be drawn regarding the manner of allocating the overall sum of compensation, but after having considered the criteria for the determination of the rate of legal fees and compensation, the Court ordered the payment of an intermediate sum “against the account of the final sums” as follows: compensation to Raabi's heirs for the sum of NIS 150,000; compensation to the Consumers Council for the sum of NIS 250,000; legal fees for the sum of NIS 500,000; and court expenses for the sum of NIS 100,000.

Tnuva rejected the partial decision of the trial court and appealed against it in this Court (CA 10085/08; hereinafter – the Tnuva appeal); the representative plaintiffs on their part filed a counter appeal against the decision (hereinafter: the appeal of the representative plaintiffs) but before the hearing of these appeals, the District Court gave a supplementary decision

The Supplementary Decision of the District Court –

The Final Compensation and Legal Fees Awarded and the Manner of Allocating the Compensation

14. In the supplementary decision of 17 June 2009, the District Court gave effect to the agreements reached by the parties, with the cooperation and the agreement of the Attorney General. The agreements were as follows: (a) The allocation between the three objectives would be – the discounts arrangement 22%, the research and scholarship fund 33.33%, and the distribution of milk products to the needy 44.6%; (b) the distribution of milk products (not only the long lasting milk forming the subject of the suit) would be over a period of five years, beginning as of the commencement of fulfillment of the decision, via a NPO known as "Latet" ["To give" – Trans.] and Mishulhan leShulhan ["From One Table to another Table" – Trans.]; (c )For purposes of transferring the compensation for research purposes in the field of food and nutrition, a research fund would be established, headed by the Chief Scientist of the Ministry of Health. The management of the fund (whose members are stipulated in the agreement) will select the research programs that will be entitled to the scholarships and supervise them. The sum of the compensation will be utilized over a period of five years, unless the need arises to continue to use the sum thereafter as well; (d) the particulars of the discounts arrangement will be formulated following the decision on the appeal filed against the partial decision and will be based on the existing data at that time and will apply to all categories of long lasting milk (1% to 3% fat) and will be completed within five years from the commencement of execution. This arrangement merited the certification of the Director of Antitrust but the Court noted that there might be a need to return to the Court in the event of a significant time period passing until the beginning of its execution. The Court further mentioned that should the parties fail to agree on the details of the discounts arrangements, it would appoint an expert to determine its details. The Court further added that the execution of the partial decision in accordance with the agreements specified would be delayed until a decision was given on the appeal that was filed against it.

Regarding the final compensation and legal fees the Court ruled that the interim sums determined in the decision were to be supplemented by the following sums: Raabi’s heirs would receive compensation for the sum of NIS 350,000; the Consumer Council would receive compensation for the sum of NIS 750,000; the attorneys of the representative plaintiffs would receive the sum of NIS 2,000,000 and regarding this the parties agreed that the compensation would be paid within thirty days of handing down the supplementary decision, as well as 60% of the fees that was to be awarded and that payment of the balance would be postponed until after the decision on the appeal. Finally, the Court ruled that an advertisement should be published in the three main newspapers, including the central elements of the decision.

The parties have also challenged the supplementary decision before us. The representative plaintiffs on their part appealed this decision ( CA 6339/09) and Tnuva too has requested our intervention (CA 7607/09). The parties' claims in the appeals against the partial decision and the supplementary decision (which will hereinafter be jointly referred to as “the decision” were filed together).

Tnuva’s Claims

Tnuva claims that the Lower Court's decision should be overturned, and alternatively that the sum of compensation ruled against it should be significantly reduced. They claimed that the District Court had aimed at accepting the class action and had avoided the accepted procedural rules. Tnuva further argues that from the decision it emerges that the basic principles of tort law do not apply to consumer class actions for non-pecuniary damage, and that this unlawfully defies the parameters of the Class Actions law contrary to its language, its guiding principles and in defiance of the law determined in the further hearing in the matter of Barazni [2] . Tnuva claimed that the Lower Court actually cancelled the requirement for a causal connection between the misleading and the damage, and emphasizes that in the decision in the matter of Daaka [4] the infringement of the autonomy stemmed from the urgency of the information and its centrality in the individual decision making process. It follows that when the information does not influence the individual decision making process there is no basis for awarding him compensation. Alternatively Tnuva claims that if the Daaka [4] decision is interpreted as a decision that which abandons the requirement of the causal connection, it should be restricted to its specific context and the exceptional circumstances in that case that pertained to the infringement of informed consent to medical treatment, and it claimed that a deviation from the classical rules of tort is not justified in the context of the tort consumer deception and deviates from the Supreme Court’s decision in the Barazani Further Hearing [3] Here, Tnuva refers to the Court’s decision to the effect that for purposes of compensation under the tort head of infringement of autonomy, there is no requirement for an examination of the personal particulars of each victim, and the conclusion is that the victim himself does not constitute a factor in the calculating formula

Tnuva further claims that the representative plaintiffs did not prove that they incurred any damage as a result of its acts and that in fact, the damage was caused as a result of media publications and not as a result of the negating of their choice in purchasing milk. Tnuva further claims that the Court erred in its estimation of the sum of compensation in a uniform manner for all members of the group, notwithstanding the differentiation in the sum of compensation that the members of the group are prima facie entitled to based on their personal particulars. Its claim, which it seeks to anchor in the Israeli and American case law, is that non-pecuniary damages are by definition individual and cannot be assessed in a uniform manner, and that they include the damage caused by infringement of autonomy which likewise is individual-subjective. Furthermore, Tnuva claims that in the case at hand compensation for the group and the public should not have been awarded and that at all event there was no basis for calculating the overall damage based on a simple multiple of the number of members in the group by the rate of personal damage. Tnuva also claims that the sum assessed by the Court as representing the damage from which each member of the plaintiffs group suffered - NIS 250 – is an arbitrary sum that was determined without any supporting evidence and without giving any substantive reasons for the manner of its determination. In addition, Tnuva points out that in awarding a uniform damage the Court failed to distinguish between the members of the group, who according to its own determination had suffered from negative feelings as a result of the consumption of the milk, and those who did not suffer these feelings; nor did it distinguish between those for whom the fact of the addition of the silicon would have influenced the decision to consume the milk and those for whom it would not have influenced is consumer conduct.

16. Tnuva also claims that the overall compensation awarded by the Court is exaggerated and unprecedented and it stressed that its entire profits from the sale of milk during the relevant period stood at NIS 3.4 million. The claim was that the Court actually awarded penal compensation as attested to by the “penal” terminology that is used in the decision, even though this has not place in the framework of a class action, in accordance with the provisions of section 20 (e) of the Law.

Tnuva found an outstanding example of this in the Court’s rulings regarding the health hazard in the consumption of food containing silicon and argued that the sole purpose of the discussion of the matter was to clarify to the reader exactly “why Tnuva is deserving of a punishment”. Tnuva claims that in this matter the Court handed down contradictory decisions as well as decisions that contradict that which was stated in the decision relating to the certification application. It further argues that the trial court avoided the exercise of its authority to rule on the veracity of the claims of the representative plaintiffs, and that it imposed a “featherweight” evidentiary because it contented itself with the existence of a few studies (which were presented to it incidentally), without ruling on their veracity, and without having been presented with a detailed expert opinion on the matter. Tnuva emphasized that the official standard prohibited the addition of any substance to the milk (apart from Vitamin A or D in particular circumstances) and did not relate specifically to the addition of silicon. Similarly, Tnuva claimed that the official force of the standard had already expired in 1998 and that it was no longer binding upon milk producers, and that in other standards it had been permitted to add silicon to food products, even to such as are consumed by infants, in quantities similar to those that it added to the long standing milk and in dimensions in excess of those involved in the case at hand. Tnuva further added that the trial court’s determination that the health hazard could be inferred from the very violation of the standard was unfounded and was actually in contravention of the provision of s. 17C (a) of the Standards Law. Tnuva further argued that the absence of a health hazard from the consumption of silicon may be inferred from the Danon Committee Report and the holdings of the court in the criminal proceeding conducted against it. At all events, its approach was that even given a determination of the possibility of a health hazard, this would not constitute sufficient basis for a ruling of compensation, because compensation cannot be ruled based on a possibility, not proven, of negative feelings being caused by a theoretical risk to health. In this context Tnuva added that the Court’s determination to the effect that milk is a “natural and pure” product cannot stand, because the consumer conception is that milk is a processed product that contains different food supplements and only a minority of consumers are of the opinion that was presented by the Lower Court. Tnuva also dwelt on the discrepancy between the compensation awarded in the case at hand and the compensation ruled in other class actions.

17. Tnuva further claimed that s. 20 (c ) of the Class Actions Law establishes compensation for cases in which there is no possibility of determining or locating the members of the plaintiff group, and hence the Lower Court erred when determining that the section applies when it is not possible to determine the sum of the damage. Tnuva stresses that the section was not intended to “supersede” the regular rules of evidence and to enable an arbitrary determination of the amount of scope of the damage and sums of compensation. Furthermore, Tnuva argues that the Lower Court erred in determining that the compensation mechanism of s. 20 (a)(c) of the Law differed from that of s. 20 (c) of the Law, claiming that compensation under s.20( c) was also subject to the requirement of “precise calculation” prescribed in s. 20 (a)(c ) of the Law. Accordingly, compensation for the public benefit or for the benefit of a particular group can only be awarded when personal compensation would not be practical were the requirement of “precise calculation” to be complied with. Tnuva submitted that insofar as the case at hand does not admit of accurate calculation of the damage or even estimation based on “stable” statistical data, the Court had no choice other than to reject the suit. Tnuva further added that in the U.S.A., when there is no possibility of accurately calculating the damage to a group or where the damage is non-pecuniary, the Court does not approve the filing of a class action.

Alternatively, Tnuva claims that even if the case at hand warrants the ruling of compensation for the benefit of the group’s members, it should not have been assessed in the manner adopted by the Lower Court. Its argument was that since the damage caused to each member of the group cannot be determined it is not correct to arbitrarily determine the compensation based on multiplying any particular sum of damage by the number of members in the group. Rather, it should be based on the "wrongful profit" that it accumulated. Tnuva claims that compensation based on calculation of profit overcomes the difficulties in the case before us: it would reflect the consequences of the event that gave rise to the suit; it would prevent the difficulty of assessing non-pecuniary damage and the unified "pricing" of the negative feelings, despite the differences between the members of the group. It will also prevent the difficulty of assessing damages in accordance with unsubstantiated surveys. According to Tnuva, the profit it gained from the execution of the wrong is NIS 1,645,900 in the terms of the principal, and with the addition of the interest and linkage differentials (from the middle of the period) it comes out to NIS 4,981,616. Alternatively, Tnuva claims that the compensation should be calculated based on the sum saved by using the silicon to solve the problem of frothing, which comes out to USA$400,000 (which with the addition of linkage differentials and interests comes out to NIS4, 346,991). It was claimed that this sum can be supplemented by a reasonable deterrent factor. In addition, Tnuva claims that even if it be determined that the number of members of the group should be multiplied by any particular sum of damage, certain substantive defects in the method of evaluation conducted by the Lower Court must still be remedied. Its claim was that this multiplication should only include consumers who suffer from substantive negative feelings due to the consumption of milk and it should not include feelings related to "positions or viewpoints" which they hold as a result of the Tnuva's conduct (such as temerity and contempt). Tnuva's position is that based on the data presented in the court, consumers who answer that definition constitute about 15% of the members of the group defined by the District Court. Tnuva also maintains that the number of members in the group should be fixed at 166,000 (the minimal threshold determined in Ophir's expert opinion) and alternatively at 200,000 (allegedly claimed by Ophir in his testimony.

18. Tnuva further claims that the sum awarded by the Lower Court for remuneration and legal fees is excessively high, emphasizing that it constitutes 7% of the total sum of compensation. In addition, it claims that this sum deviates from the guiding criterion for such matters, prescribed in the Law (ss. 22 and 23 of the Law) and in settled case-law. Regarding the Israeli Consumer Council Tnuva argues that the former did not invest significant work, nor did it assume any risk; that it is a budgeted statutory body and not a private person who requires incentives; that the Consumer Council did not initiate the proceeding and joined it at a relatively late stage; and finally, that its degree of involvement was minimal and negligible. Regarding the legal fees of the representative plaintiff's attorneys, Tnuva claims that the fee is unprecedented, that has no consideration for the manner in which the suit was handled and the discrepancy between the remedies that were requested and those that were ultimately awarded, and adds that the sums awarded by the Lower Court are liable to pave the way towards abuse of the tool of the class action.

Claims of the Representative Plaintiffs

19. In the counter appeal, the representative plaintiffs claim that given the Court's holding that the sum of NIS 8000 for each consumer is appropriate for a personal claim, there is no justification for reducing it to NIS 250 just because the context is that of a class action. They stressed that Tnuva too did not claim that the defense under s. 20 (d)(2) of the Class Actions Law was applicable to this case. The representative plaintiffs further claim that the reduction of the compensation empties the class action proceeding of its contents and is inconsistent with the Court's determinations to the effect that grave damage was caused, justifying commensurate compensation. The representative plaintiffs add that increasing the compensation sum will not harm the public, inter alia having consideration for the sales data and profits of Tnuva, and they complain that the group of those represented was significantly reduced, to include only those who purchased the milk regularly, whereas it should also have included incidental purchasers. They add that the sole reason for the reduction of the group was that Tnuva provided partial information to the court expert who was appointed for purposes of assessing the size of the group.

The representative plaintiffs further claim that Tnuva's pleadings ignore the decision given on the certification application, in an attempt to revisit an already settled matter. Regarding Tnuva's claims concerning the health risks posed by the milk, the representative plaintiffs claim that the Lower Court ruled on this matter in the wake of Tnuva's request to present evidence on the matter and that the findings themselves were over and above what was required. According to the representative plaintiffs, the very prohibition on the addition of silicon to the milk in an official, binding standard (published as a regulation of legislative effect) and its breach, combine to establish the grounds for claim in the framework of the suit. In addition, there was proof of the grounds for action under the Consumer Protection Law (also having consideration for the provisions of the Standards Law). It was proven that silicon posed a potential health hazard, and it was proven that Silicon was aware of the problem and of the defect involved in the addition of silicon to the milk. In this context the representative plaintiffs stress that when Tnuva purchased the silicon from the Amgal company, it made a representation that it was purchasing it as a cleaning material and they also stress that silicon was added to the milk at a rate that was ten times higher than the level permitted under the provisions of the silicon producer for purposes of using silicon in food (they claim that the silicon was added at a rate of one liter per 10000 liters of milk, whereas according to the manufacturer’s instructions it is permitted to add it at the rate of a “ten parts for a million”). The representative plaintiffs further claim that both in relation to Raabi and in relation to the group as a whole, damages had been proved with respect to infringement of autonomy and negative feelings relating to the consumption of milk. The representative plaintiffs stress that in this context it was proved that had the consumers been aware of the existence of silicon in the milk they would not have purchased it, and this is by virtue of both the importance of the official standard and the fact that its breach renders the product “worthless at best”. The representative plaintiffs also add that there are likewise no grounds for interfering with the findings of the Court regarding the occurrence of damage and the gravity of Tnuva’s acts in view of the positive impression made by the witnesses and the experts on behalf of the court. They also stress that the autonomy of the individual is a constitutional right, and hence its infringement should merit commensurate compensation, and they claim that this does not constitute an award of punitive compensation.

The representative plaintiffs add that there are no grounds for interfering with the Lower Court ’s holding that the damage caused as a result of the infringement of autonomy is an inherent element of the tortuous conduct, and that this is also the conclusion from the Daaka [ 4 ] ruling. In addition, they claim that in the present case it is appropriate to award uniform compensation based on an assessment stating that inasmuch as the right to autonomy is a constitutional right, it is an identical right for each member of the group, and that the provisions of the Class Actions Law enable a cumulative calculation of the damage incurred by all the members of the group. They further add that the damage caused in this case is essentially given to assessment by way of estimation; that the arrangements in the Law enable the proof of damage in a manner that is not particularistic and individually based but rather general and all inclusive and that the tendency in case law is consistent with the need to award uniform and equal compensation to all of the plaintiffs as such. The representative plaintiffs stress that this result does not contradict the ruling given in the Barazani Further Hearing [3] and they add that as opposed to Tnuva’s argument, the FCR mechanism does not negate awarding compensation in cases of this kind, indicating that in certain cases American case law awarded “average compensation” multiplied by the estimated number of members in the group. They further state that the FCR mechanism is essentially intended for the distribution of overall compensation, and that the current criticism of this mechanism pertains to the question of distribution of compensation to a group or the public and not to the manner of evaluation of the compensation in accordance therewith.

20. The representative plaintiffs further request to dismiss Tnuva’s argument for reducing the sum of compensation owing to them, emphasizing that the compensation awarded to them constituted a mere 2.5% of the sum ruled in favor of the group as a whole. The attorneys for the representative plaintiffs argue that in fact the Court “punished” them for the discrepancy between the sum ruled in favor of the group (which was unjustifiably reduced) and the remedy which they petitioned for in the name of their principals. Their argument is that in this context the Court mistakenly applied the provision of s. 23 (b) (5) (which provides that in ruling attorneys fees the court may have consideration for the discrepancy between the remedy sued for and the remedy actually awarded), and that it failed to consider all the relevant factors The attorneys for the representative plaintiffs claimed that they had done a significant amount of work, directing attention to the novel claims that they raised in the proceeding, and they challenged the Lower Court ’s determination that part of the proceeding had not been properly conducted, pointing out that all of their objections had been relevant.

The Class Action and the Consumer Protection Laws - Meeting of Principles

21.The class action is a special procedural tool for the effective and efficient promotion of principles, values and substantive legal rights. This legal institution is currently regulated in the Class Actions Law which is a comprehensive and detailed framework law that established standard rules for the filing and conducting of class actions. The Law was enacted in 2006 after this Court called upon the legislator to regulate the institution of a class action in a comprehensive statutory arrangement (see LCA 3126/00 State of Israel v. E.S.T. Project Management and Manpower Ltd [5]; FHC 5161/03 E.S.T Project Management and Manpower Ltd v. State of Israel [6], but the importance of the class action had been recognized in Israel many years before the enactment of the Class Actions Law. Thus, a series of laws and “local” arrangements relating to the filing and conduct of class actions was already in place, most of which were incorporated as chapters in those laws during the nineties of the previous century. They included provisions that are essentially similar to the criteria and conditions the fulfillment of which enables the filing of a class action in that particular realm. See Chapter F’1 of the Restrictive Trade Practices Law, 5748-1988 (hereinafter – the Restrictive Trade Practices Law); Chapter F’1 of the Banking (Service for Customer) Law, 5741-1981 (hereinafter – the Banking Law); ss. 19 (54) - 19 (64) of the Equal Rights for Disabled Persons Law, 5758 – 1998; s. 11 of the Male and Female Workers Equal Pay Law 5756- 1996. All of these specific arrangements were repealed with the enactment of the Class Actions Law (see ss. 32 – 35, 38 – 40, and 42 of the Class Actions Law) and even before its enactment, the E.S.T [6] decision negated the possibility of basing a class action on Regulation 29 of the Civil Procedure Regulations, 5744-1984, which until that time had served as a normative source and a procedural framework for the filing of class actions in areas lacking a specific statutory arrangement as mentioned above.

This importance of the class action was discussed by this Court both before and after the enactment of the Class Actions Law in a series of decisions that address its advantages as a legal tool for enabling the realization of the right to file a personal claim in cases where the filing of a claim was not profitable or not feasible for the individual. In addition, this Court’s case-law has dwelt upon the importance of the class action in the promotion of public interest as a legal tool that assists in the efficient enforcement of the law and deters financial magnates who rely on the passivity of the individual, abuse their power, and harm unincorporated groups such as consumers or investors in securities. An additional element of importance of the class action considered in the case-law is that this procedure prevents the multiplicity of suites and hence saves judicial resources, and from this perspective too, the institution of class actions makes its contribution from a public interest perspective (for the definition of the objectives and goals of the Class Action, see s.1 of the Class Actions Act; on this matter see also: CA. 8430/99 Analyst I.M.S. Trust Funds Management (1986) v. Ard Industrial Investment and Development, [7] at p. 256; 8 LCA 4556/94 Tetzet v. Zilbershatz, pp. 783-785 [8]; CA 345/03 Reichart v. Raabi Moshe Shemesh Heirs, paras. 8 – 9 of opinion of the President Beinisch [9]; Sinai Deutch “A Decade for the Class Action Suit – Interim Summary and Looking to the Future Shaarie Mishpat 4, 9, 21- 24 (5765) (hereinafter – Deutch - Decade for the Class Action); Steven Goldstein and Talia Fisher “Interaction Between Mass Actions and Class Action: Procedural Aspects” Mishpatim 34, 21, 24- 26 (5764) (hereinafter – Goldstein and Fisher)).

Along with the inherent advantages of the class action it should be remembered that incorrect use of this tool involves not insignificant dangers (see Analyst [7], at p 256; Tetzet [8], FHC E.S.T [6] at p. 785 [6] at p. 237; Alon Klement “The Boundaries of the Class Action in Mass Tort”, Mishpatim 34, 301, 325- 331 (5764) (hereinafter – Klement, Boundaries of the Class Action)). The laws of class action and their judicial supervision are thus intended to maintain an appropriate balance between the risks and chances of the proceeding and to ensure that it realizes the legal, economic and social goals for the promotion of which it was established (see CA 3506/09 Zaig v. Waxelman, Waxelman Accountants [10] paras. 7 – 8 ; and Tetzet [ 8] at pp. 785 – 786).

22. One of the outstanding areas in which the advantages of the class action are demonstrated is the laws of consumer protection. Israeli legislation contains a large series of legislative acts intended for consumer protection. The central law in this context is the Consumer Protection Law, enacted in 1981. This law includes detailed provisions concerning the duties and prohibitions applicable to dealers, in other words, to manufacturers, importers, tradesmen and providers of services, with the aim of subjecting the business sector to a regime of appropriate conventions of behavior, to establish fair game rules in dealer-consumer relations, and to prevent the misleading of consumers with regard to an asset or service that he consumes (on the goals of the Consumer Protection Law - see Sinai Deutch, Consumer Protection Law 120 – 126 (Vol. A. 2001); Explanatory Note for the Draft Bill (Hatza’ot Hok 1469, 302- 303, 5740). Other laws intended for a similar purpose are for example, the Banking Law (Service to Customers), Supervision of Financial Services (Insurance) Law, 5741-1981 and the Restrictive Trade Practices Law. These laws and additional laws admitting of classification in the category of consumer protection law regulate various aspects of this protection and are intended to prevent unjust enrichment on the part of large financial concerns or on the part of State authorities, at the expense of the individual.

The point of departure for consumer protection law is the structural imbalance that characterizes the consumer transaction when struck between a financial body, occasionally a large and multi-tentacled company, or even a retail trader and the individual consumer (assuming that he lacks the size advantage of organized consumption). The legislator accordingly pinpointed this population sector as requiring intensified legislative protection to ensure that the dealer, having the advantages of knowledge and economic ability, does not misuse these advantages for reaping quick profits at the consumer’s expense, while deceiving him in essential matters affecting the nature of the transaction. For example, the Consumer Protection Law seeks to ensure that when entering into a transaction the consumer has full and fair information concerning the nature and the details of the transaction, the assumption being that this will enable the consumer to plan his actions and enter into a transaction that is optimal and desirable from his perspective. Additional prohibitions in the Consumer Protection Law concern the exploitation of the consumer’s distress, exploitation of his physical or mental weakness, or his ignorance of the language, and the prohibition of exerting undue influence upon him (see CA 3613 Ezov v Jerusalem Municipality [11 ], at p. 801; LCA 8733/96 Langbert v. State of Israel – Israel Lands Administration [12], pp. 175- 176 (hereinafter – Langbert); Sinai Deutch “Consumer Class Actions: The Requirement for Personal Reliance on the Misrepresentation of the Deceiver” Nethanya Law Review 2, 97, 110 – 114 (5762) (hereinafter – Deutch, The Requirement for Personal Reliance). Apart from the importance of the consumer protection laws in redressing the imbalance of power between the dealer and the consumer and strengthening the consumer’s personal autonomy, these laws are also important in realizing public interest of inestimable importance such as: the notion of consumer sovereignty; protection of the right to welfare and social rights, promotion of the principle of fairness in trade, protection of the reliability of the local market, and maintaining trust in the social order and the provisions of the law.

23. Having synoptically outlined the underlying objectives and goals of consumer protection law, and the objectives and goals of the class action as a legal procedural institution, we can easily identify the “meeting of principles” between the goals intended to be promoted by the class action tool and the values and rights that these laws seek to protect. Hence, the class action can overcome both the inbuilt balance of power between the dealers – those with the economic advantage - and the consumers, and the lack of profitability that frequently accompanies the filing of a claim by the isolated consumer, given the relatively small amount of damages he has incurred (See Barazani [2]; Deutch - The Requirement for Personal Reliance, 115. Regarding the systems for civil enforcement in the area of consumer protection, see Moshe Bar-Niv (Bornovski)).

Indeed, the tool of the class action is actually one of the most significant measures placed by the legislature at the consumer’s disposal for the enforcement of his rights under the laws of consumer protection (see Deutch – a Decade for the Class Action, 18 – 20 according to which most of the class actions filed in Israel are “consumer actions” by force of the various consumer laws. On the other hand, the implementation of the provisions pertaining to consumer class actions has also been criticized. See Deutch “Consumer Class Actions – Difficulties and Proposed Solutions” Bar Ilan Law Studies 20, 299 (2004); see also CC (Center) 5567-06-08 (Nazareth) Bar v. Ateret Industries 1996 Ltd, para. 39 [ ] where the court observed that in many of the cases it would have been preferable had the consumer deception been handled in an alternate framework, such as the imposition of punitive compensation rather than as a class action proceeding). As mentioned, the provisions for filing a class action under the Consumer Protection Law used to be included in Chapter F’1 of that law, along with additional enforcement measures included therein, inter alia - the administrative mechanism in the charge of the Commissioner of Consumer Protection, and the Consumer Protection Authority, and the criminal system which purported to enforce the norms established by this law via the criminal law With the enactment in 2006 of the Class Actions Law and the establishment of a comprehensive framework arrangement for the filing and conduct of class actions, came the revocation inter alia of Chapter F’1 of the Consumer Protection Law, so that as of today, as mentioned, the provisions of the Class Actions Law govern the filing and the conduct of class actions in all areas, including in the areas of consumer protection (see s. 3 of the Class Actions Law, and item 1 of the Second Schedule of the Law).

Tnuva’s Act of Misleading

24. The proceeding before us began with an application for the certification of a class action, filed in 1995 in reliance on the provisions of Chapter F’1 of the Consumer Protection Law. As described above in the chapter on the facts, already in 1996 the District Court approved the filing of Raabi’s personal claim as a class action, and Tnuva’s appeal against the certification decision was rejected by this Court in the year 2003 (CA 1338/97). The proceedings for the certification of the class action were similarly handled in accordance with the provisions of Chapter F’1 of the Consumer Protection Law then in force. However, after the District Court began hearing the approved class action, the Class Actions Law was enacted, and as indicated by the decision of the Lower Court, its provisions provided the basis for the decision on various issues, including the provisions pertaining to the compensation and fees. The application of these provisions to our proceeding was correct, given the provision of s. 45 (b) of the Class Actions Law, which determines that the provisions of the Law (apart from the provision of s. 44) “shall also apply to application for a certification of a class action and a class action that was pending before the court on the date of publication of this law” (see CA 7028/00 A.B.A. Trust Funds Management Ltd v. Elsynth Ltd [13] paras 16-18 ; HCJ 2171/06 Cohen v. Knesset Speaker [14] para. 46. The Lower Court further added, and rightly so, that even though the Class Actions Law did not limit the grounds for a class action exclusively to the “consumer”, as defined in the Consumer Protection Law, the class action in this case should be adjudicated in accordance with the original grounds that were based on the Consumer Protection Law and in relation to a consumer group answering the definition of “consumer” in that law (“one who purchases an asset…..primarily for his personal, domestic or family use”, given that the representative plaintiffs did not apply to amend the claim and file additional evidence in the wake of the new law, that broadened the circle of potential plaintiffs in this context (and see Alon Klement “Guidelines for the Interpretation of the Class Actions Law, 5766-2006), Hapraklit 49, 1354-135 (5767) (hereinafter – Klement).

25. In the class action before us it is claimed that Tnuva violated the prohibition on misleading established in s.2 of the Consumer Protection Law, which provides that

A dealer shall do nothing—by an act or an omission, in writing, by word of mouth or in any other manner—likely to mislead a consumer as to any matter material to a transaction (any such act or omission hereinafter referred to as a “misleading act”…)

The thrust of the misleading act ascribed to Tnuva is that Tnuva added silicon to low fat (1%) long lasting milk without this ingredient being mentioned on the packaging and in defiance of the official and binding standard in force at that time, and in so doing mislead the members of the group, consumers of long lasting milk regarding a “material aspect of the transaction” pertaining to the “the quality, nature, quantity and type of any commodity or service” (s. 2 (a) (4); and “the conformity of the commodity or service to a standard, specification or model” (s. 2 (a)(11).

It was further claimed that Tnuva breached the duty of disclosure imposed on it as a dealer, pursuant to s. 4 (a) of the Consumer Protection Law, to disclose to the consumer, inter alia:

(1) any defect or qualitative inferiority or other feature known to him that materially diminishes the value of the commodity;

Likewise it was claimed that Tnuva had breached the obligation of indication as prescribed in section 17 of the Consumer Protection Law, which likewise expresses the broad duty of disclosure imposed on the dealer and which provides inter alia that:

A dealer shall indicate the following particulars upon, or upon a thing attached to, goods intended for the consumer:

------

(a) the quantity of the commodity and a detailed statement of the basic materials of which it consists.

The prohibition on misleading and the duty of disclosure and indication imposed on dealers in accordance with the Consumer Protection Law, were intended to realize one of the Law’s central underlying goals, namely providing all of the information required by the consumer in order to enter into an intelligent engagement that gives true expression to the principle of the freedom of contractual engagement (see Langbert [12], p. 175 – 176).

26. The Lower Court accepted the claims of the representative plaintiffs, and in its decision ruled that the Tnuva had committed an act of misleading that was prohibited under the Consumer Protection Law and had breached its statutory duties of disclosure by adding silicon to the milk without disclosing that fact to the consumers and without disclosing that the addition of silicon as stated contravenes Standard No. 284 of the Israeli Standards Institution, which at that time was the official and binding standard for purposes of “cow’s milk for drinking” (hereinafter: “the standard).

Evidently, at this stage of the hearing of the appeal, Tnuva no longer contests the fact that it mislead its consumers. Indeed, in the summations filed on its behalf in the appeal it confirms that it “mislead the consumers by way of omission in its failure to indicate on the packaging of the long standing milk that a froth preventing food supplement was added, bearing the trade name “E-900” (section 2.1 of Tnuva’s summations). Similarly, it would seem that there can be no doubt regarding the consumer’s right to be aware of the ingredients of the product that consumes . This right is the basis of the duties of disclosure and indication imposed on the dealer in this context, which we addressed above, and it may be asserted that these duties become doubly important when considering that the issue concerns milk which is a basic food product consumed by numerous consumers.

As mentioned, one of the substantive matters to which the prohibition of misleading applies under the Consumer Protection Law is the “conformity of the asset or service to the standard, specification or model” (s. 2 (a)(11)). In our case Tnuva contravened the prohibition in this sense too because the definition in s. 105 of the standard enumerates the materials that can be added to the various milk products and silicon is not included among these products. Our concern is with a standard that was declared as the Official Standard on 13 October. 1987 (O.G. 3473, 2274). As such Tnuva is bound by s. 9 (a) of the Standards Law, which prohibits the production and the sale of a milk product that does not comply with the requirements of the standard (for an analysis of the grounds for declaration of a standard as official and the duties established by the standards (see Eliyahu Hadar, Behind the Standards Law, 56- 92 (1997)), and accordingly Tnuva mislead its consumers with respect to the product’s conformity to the standard (see also s. 107.5 of the standard, which establishes that the supplements – if added - must be indicated, and see Official Standard No. 1145 regarding the “Indication of Prepackaged food”). Parenthetically, it bears note that nonetheless, in 1998 the declaration concerning the official status of some of the sections, including s. 105, was cancelled, and today they have the status of recommendations only (see Notification of Expired Validity of Standards (Food Standards) as Official Standards, O.G. 4649, 5759, 334, 336). Tnuva argues this issue is also of substantive significance for purposes of this proceeding too, and this claim will be discussed below.

27. As mentioned, Tnuva no longer disputes the fact that its acts are tainted by having been misleading within the meaning of the Consumer Protection Law and by its violation of the disclosure duties imposed on it by force of that Law. Nonetheless, Tnuva maintains that the Lower Court erred in ruling that it must compensate the group members for the non-pecuniary damage allegedly caused to them under the circumstances. The thrust of Tnuva’s claims as dwelt upon above, is that the act of misleading did not cause any real and compensable damage to any of the group members , and that even if thy incurred real damage, the causal connection between the alleged damage and the act of misleading was not proved. At all events, Tnuva further added that the Court erred in holding that compensation must also be awarded under the head of infringement of autonomy to group members in respect of whom it was not proved that they had experienced negative feelings due to their consumption of milk containing silicon.

Misleading a Consumer as a Wrong in Tort in the Representative Context

28. The legal field in which the consequences of the Tnuva’s actions must be examined in this case is the field of Tort, referred to by s.31 (a) of the Consumer Protection Law, which instructs us that:

“Any act or omission in contravention of Chapters Two, Three or Four shall be treated as a civil wrong under the Civil Wrongs Ordinance (New Version)”

Our concern is with a consumer tort rooted in the Consumer Protection Law, but the body and head of which are formulated in accordance with the basic principles and doctrines of Tort Law. In other words, to merit a pecuniary remedy based on a consumer tort the plaintiff must prove damage and demonstrate the causal connection between his tortuous conduct and the alleged damage. This applies both to an individual suit relying on a Consumer Protection Law and to a class action relying on that kind of tort (see comments of Justice (former title) M. Cheshin in Barazani Further Hearing [3]. Still, it bears note that to the extent that our concern is with a class action, the court’s application of Tort Law must also be based on the specific principles and rules drawn from the specific field of class actions, which occasionally pose practical problems relating to the location of the members of the group and awarding compensation to each one of them, as well as difficulties in proving the causal connection and proving the damage caused to each one of the group members. There may also be cases in which had a single plaintiff filed a monetary suit by reason of a consumer tort his suit would have been rejected by reason of the negligibility of the remedy – being in the category of des minimis, which does not justify compensation under the general law of Tort (see s. 4 of the Tort Ordinance). On the other hand, when concerned with a consumer tort committed against an entire group of consumers and not just against the single plaintiff, the court will be required to take a different perspective of the remedy requested in the name of the group in the framework of the class action. In such a case the court will be required to examine the class action and the requested remedy taking into account the underlying principles of this specific proceeding, which is intended inter alia to provide a solution to sub-enforcement in cases in which the individual claim would be considered as a negligible claim. When hearing a class action the court cannot limit itself to examination of the remedy in accordance with the regular laws of Tort that would be applicable to an individual suit, and its decision must incorporate the principles and rules drawn from the specific field of class actions.

The need to combine the general laws of Tort with the principles and rules drawn from the laws of class actions, inter alia by relaxing the requirements pertaining to the proof of the damage caused to the members of the group, was dealt with by Justice M. Cheshin (former title) in Barazani Further Hearing [3] (ibid, 423 – 425). Today, with the enactment of the Class Actions Law, the legislature has equipped us with a detailed statutory arrangement that consolidates the principles and the rules to be applied to the various kinds of class actions and provides a solution to the typical difficulties, some of which we dwelt upon above, and which may arise in this particular proceeding. For example, s. 20 of the Law, to which we will return below, relates to “proof of entitlement to a remedy and payment of financial compensation” and prescribes the specific arrangements for the award of remedies in class actions. The unique nature of the class action proceeding and the need for awareness thereof in the application of principles of the general law of Tort to such an action were addressed by Deputy President E. Rivlin in CA 10262/05 Aviv Legal Services Ltd v. Hapoalim Bank, Head Management [15] where he stated that:

It cannot be denied that that in certain cases the collective-representative character of the proceeding may affect the manner of examining the causal connection, just as it has implications for other elements. The subject of the causal connection in class action suites was discussed at length in Barazani Further Hearing [3]. The majority view as penned by Justice Cheshin dwelt on the basic need for fulfillment of the elements of a personal claim as a condition for the certification of the representative proceeding, specifically the foundation of the causal connection required for certain grounds of claim. The court noted that the representative context may influence the interpretation of the foundation of the personal grounds, but noted that this possibility was limited and qualified. Conceivably and without making a definite determination on the matter at this time, the Class Actions Law may extend this possibility in view of its emphasis on the collective aspect and its relaxation of the conditions required to be fulfilled for the collective action, all with the purpose of realizing the objectives of the class action… A strict and case specific interpretation of the foundation of the causal connection would thus be liable to seal the fate on numerous class actions, contrary to the objective of the Class Actions Law. According to another approach, in suitable cases there would be an examination of the causal connection from the perspective of a “meta-plaintiff” who reflects the shared interest of all of the potential plaintiffs, and takes the cumulative damage into account. Such an examination of the causal connection could fulfill the requirement of the causal connection even in cases where it would not have existed in accordance with the individual case based examination.

De Minimis

29. The representative plaintiffs claimed that the group members should be compensated for the non-pecuniary damage caused to them under the circumstances, under two heads of damage: One of them is the infringement of the personal autonomy of the group members and the other for the negative feelings that they experienced upon being informed that they had drunk milk containing silicon.

Upon certifying Raabi’s claim as a collective suit this Court, per Justice M. Naor, in the decision on the certification application, ruled that:

“The damage claimed by Raabi consists of non-pecuniary damage; negative feelings and feelings of repulsion. The non-pecuniary damage claimed by the plaintiff is the feeling of repulsion stemming from the fact that the case concerns silicon, with all of its negative associations. In my view, damage of this kind is prima facie compensable damage. The act of misleading regarding the contents of the milk in this case is prima facie an infringement of individual autonomy” (p. 681- 682 of the decision).

In that decision, this Court further noted that the infringement of individual autonomy had already been recognized in Tort Law as a compensable head of damage, referring to the decision in Daaka [4]. In its discussion of the class action that was certified as stated, the Lower Court deemed that in the circumstances of our case the group members suffered non-pecuniary damage and in this context dismissed Tnuva’s claim that the failure to specify all of the product’s ingredients did not gave rise to an infringement of autonomy and did not justify the alleged negative feelings. This is Tnuva’s argument before us.

Indeed, a defect in the indication of a food product’s ingredients will not always warrant compensation for infringement of autonomy and negative feelings, and there may certainly be cases in which notwithstanding the existence of a particular defect in reporting the contents of a product, compensation will not be justified. Justice Naor dwelt on this point in the decision on the certification of the application, noting that:

The insertion of a silicon supplement in the milk, in defiance of the standard constitutes an infringement of individual autonomy, but my comments should not be taken to mean that any case of a deviation from a provision of a standard or of inaccurately reporting its contents will justify a suit. There may be quite a few cases in which a slight deviation from the provisions of any particular standard, even where it concerns food, will not justify a personal suit and by extension a class action. A suit will not be justified where the infringement is de minimis …. (p, 684).

I concur with Justice Naor’s comments, but they are of no avail to Tnuva in this case, for as noted by the Lower Court, the harm in this case is not in the category of de mimimis from the collective-representative aspect.

30. In support of its claims in this matter Tnuva presented the expert opinion of Prof. Hernik who evaluated “from the perspective of a researcher of consumer behavior (the marketing person) whether and if so to what extent, there was an infringement of what is referred to as the consumers' 'autonomy of will'". In his expert opinion, Prof. Hernik acknowledged that in principle and conceptually there was an infringement of the autonomy of will in any case in which the list of contents does not actually conform to the ingredients of the product, except that in order to assess the degree of harm one must evaluate the influence of the misleading act on the consumer’s ability to choose. Prof. Hernik determined that according to his approach, the harm to infringement of autonomy caused to the consumers in this case was negligible and that the misleading media publications had generated a public storm, and lead to an 'imaginary infringement' of autonomy of the consumers' will.” Tnuva also presented the expert opinion of Prof. Michael Perry who reached a similar conclusion and noted that in accordance with the criterion he had established for examining whether substantive harm had been caused to the autonomy of the consumer’s will, the harm in this case did not exceed a harm that was “trifling” and did not justify compensation.

I do not accept this approach and as I mentioned above, my view is that the Lower Court was correct in its dismissal of Tnuva’s claim that the harm was “trifling” and “negligible” and not deserving of compensation.

The concept of “de minimis” is one that does not admit of advance demarcation and in another context it has already been ruled that:

The question is how to measure harm and when to consider harm as being minimal, The answer depends on the nature of the right that was violated, the purpose of the infringement and additional circumstances of each particular case, and in accordance with which it may vary from case to case (see citation in CA 3901/96 Local Planning and Building Committee v. Horowitz [16]

In the case at hand Tnuva added silicon to low fat long lasting milk to overcome the problem of over frothing and it chose this solution to save the cost of replacing a machine that was broken. In doing so Tnuva contravened the official standard then in force, according to which it was prohibited to add supplements to the milk that were not specified in that standard. Furthermore, Tnuva failed to indicate on the packaging that the milk contained silicon and the Lower Court established a factual finding that the silicon added to the milk was purchased by Tnuva as a cleaning material from the Amgal company (paras. 35 and 144 (b) of the decision ). In its appeal Tnuva challenges this factual finding but I have not found grounds for interfering with it, and given that this finding remains intact it supports the conclusion that in the first place Tnuva sought to conceal the fact that it had added silicon to the milk. A similar conclusion also emerges from Tnuva’s conduct after the exposure of the case, when it denied having added silicon to the milk. Tnuva’s problematic conduct as described supports the presumption that the omission of silicon from the list of the ingredients specified on the relevant package was not incidental and that its purpose was to blind the consumers to the fact that the milk it produced and marketed included this ingredient, in the knowledge that this was a substantive matter that was likely to influence the consumers’ decision whether to purchase the milk.

This was therefore a conscious and illegitimate act of misleading by the intentional concealing of information with all of its attendant severity in terms of the relations between Tnuva as a dealer and the relevant consumer group. Furthermore, silicon is an artificial chemical substance which has absolutely no nutritional value and should not be found in milk. Accordingly, the reasonable consumer does not expect to find it in milk. Tnuva’s effort in its summations to present the silicon, post facto as a popular “food supplement” in food products lacks sufficient anchorage in the evidence and cannot be accepted, especially given that it emerged that the Tnuva’s sole reason for adding the silicon was its desire to resolve the problem of frothing for a low cost. Likewise, no substantive significance can be given to the fact that the standard for cows milk for drinking was officially cancelled already back in 1998. Tnuva repeatedly stresses this fact in its summations and attempts to derive therefrom that adding supplements to the milk, including the addition of silicon, is not a negative act However, it would seem undisputed that even after the cancellation of the aforementioned standard as a binding standard, silicon did not become a supplement for milk with any of its producers, including Tnuva. We may therefore continue on the assumption that even in the absence of a binding standard, this was a substance that the reasonable consumer would not expect to be added to the milk that he consumed.

31. Another claim stressed in Tnuva’s summations is that silicon is not likely to cause damage to health. Regarding this matter Tnuva relies inter alia on the conclusion of the Danon committee and the findings of the Magistrates Court in the criminal proceeding, as well as on the expert opinion of Dr. Aharon Eizenberg and Prof. Nissim Garti, submitted on its behalf. In the absence of damage to health Tnuva contends that no damage was caused to the milk consumers that we are concerned with and that at the most this is a trifling matter that does not warrant compensation. Indeed, the representative plaintiffs did not present an expert opinion on their behalf to prove the allegation hat silicon is injurious to health and neither did the District Court rule on this matter, writing that:

Indeed, it has not been proved that drinking milk containing silicon caused or is liable to cause immediate harm to the health of consumers. However, in the view of Health Ministry experts, also representing the position of the Ministry of Health as presented by the Attorney General in the appeal against the decision to certify the suit, it is not possible to rule out the existence of a health hazard in the long run, primarily to children, in the wake of drinking milk that contains silicon in view of the fear of consumption in excess of the acceptable daily intake (ADI)…

In the framework of this proceeding there is no cause for ruling on the scientific question of the degree to which the drinking of milk containing silicon poses a health risk. For purposes of this claim it suffices that the existence of such danger cannot be ruled out, at least according to some of the experts. From the plaintiffs’ perspective, it suffices that it was proved that Tnuva’s consumers were entitled to know, upon deciding to purchase milk that it had produced, that it contained silicon in defiance of the law and the standard and that under certain circumstances one cannot rule out the risk to health posed by its consumption” (para. 35, emphasis added).

In this ruling, the Court relied largely on the position of the Attorney General that was submitted to this Court in the framework of an appeal against the decision concerning the certification of the suit as a class action, which it stated that:

In an examination conducted by the National Food Authority of the Ministry of Health, it was not found that this substance is harmful to health, but the fact that there was a determination of ADI [acceptable daily intake) indicates that in excess of ADI there is no certainty concerning its safety in terms of health and the existence of a long term risk cannot be ruled out. Given that in Israel large quantities of milk are consumed (not necessarily long lasting milk) primarily by children, then with respect to the consumption of milk containing silicon the consumption may exceed the ADI level. The position of the Ministry of Health is therefore that it lacks information indicating that silicon is harmful to health, but it cannot rule out the existence of a long term risk, in cases involving the consumption of large quantities [para.3, emphasis added]

In addition, regarding this matter it would not be superfluous to refer to the Danon Report which Tnuva seeks to rely upon. The Danon Commission did indeed conclude that experience shows that silicon is not harmful to health, does not cause birth defects and that there is no scientific proof of it being carcinogenous (p. 55 of the Danon Commission Report). All the same, the Commission took into consideration the fact that Tnuva had added silicon to the milk “to a degree that exceeded what was permitted according to the manufacturer’s instructions, without examining and considering the effects of its heating and the attendant dangers. The Report further mentioned that “attempts were made in the dairy to reach a dosage that would be suffice for the required blocking of the froth, but without consulting with any entity in the Ministry of Health or any other licensing authority”, and that the silicon was added to the milk in a quantity and dosage that exceeded the level approved for foods other than drinking milk that this fact “necessitates an additional investigation of matters relating to the ordering of the material and the use thereof (p. 14-15 of the Danon Commission Report).

Accordingly it is difficult to accept Tnuva’s claim that there are unequivocal conclusions regarding the influence of the silicon added to the milk with respect to its influence on the consumers’ health, and this is sufficient grounds for not interfering with the Lower Court ‘s conclusion that under certain circumstances one cannot rule out the possible health risk involved in the consumption of milk containing silicon. Similarly, I also accept the Lower Court’s position that at all events every person has the right to choose whether he wishes to expose himself and his family to the material the nature of which is unknown to him. Hence, the fact that it was not positively proved that silicon is actually liable to harm consumers’ health has implications for the intensity of the infringement of autonomy (see Daaka [4 ], p. 583; Nili Karako-Ayal, “Estimation of Compensation Due to Damage from Infringement of the Right to Autonomy” - in the wake of CA 2781/93 Ali Daka v. Carmel Hospital, Hamishpat, 11, 267, 270-271 (5767) (hereinafter – Karako-Ayal)), but not on its infringement per se as a result of the fact that the consumer introduced a chemical substance into his body, the essence and character of which were unknown to him without having had the opportunity of deciding whether he wanted it (see s.1 of the Attorney General’s response to Tnuva’s application to submit additional evidence in the framework of the hearing on the application for certification in this Court. Regarding the significance of the health risk in class action proceedings in the case law of the District Court, see also CF 2593/05 (Tel-Aviv Jaffa) Solomon v. Guri Import and Distribution Ltd, para. 44 [ ] ; CF 1624/07 (Capp 8767/07)(Tel-Aviv Jaffa) Hova v. Milko Industries Ltd [ ](27.1.2020); CF. 1126/07 (CApp 3058/07) (Tel-Aviv Jaffa) Arges v. Tnuva Central Cooperative for Marketing of Agricultural Products in Israel Ltd, para. 16 [ ] ; CF 1545/08 Alfasi v. Super Pharm Israel Ltd [ ] and CF 1424/09 ((Tel-Aviv Jaffa) Guttman v. Neviot – Teva Hagalil Ltd.

In view of all the above, there is grounds for the Lower Court’s determination that under these circumstances there was an infringement of the consumer’s autonomy to decide whether or not he desired to consume milk containing silicon and prima facie this is not a “trifling” infringement falling into the category of de minimis, not warranting compensation.

32. This conclusion gains added force inasmuch as our concern is with a class action in which it was proved that Tnuva’s act of misleading harmed the broad consumer public and the Lower Court rightly ruled that under these circumstances the severity of the harm must be examined from the perspective of the entire group and “not from the perspective of an isolated consumer”. Indeed, I already mentioned the approach whereby the de minimis rule does not apply, in the simple sense, to the foundation of damage in a typical class action, insofar as “its central feature is the accumulation of insignificant instances of damage, which when considered individually would not have materialized into a legal proceeding; this approach has established itself in the case law of this court (see Aviv Legal Services Ltd [15], para. 10; also see comments of Justice Mazza in Barazani Further Hearing [3], 447). All the same, it should be emphasized that the fact that a large group of plaintiffs in a class actions alleges an accumulation of minor damages, does not necessarily negate the possibility that the matter is de minimis from the group perspective as well. As noted, the precise borders of this concept do not admit of determination in advance and in a class action proceeding the answer to the question of whether the damage is of a minimal nature that does not warrant compensation depends on the circumstances of each case and may change having consideration for the particular circumstances of each case.

At all events, in the case before us, given the existence of a large group that alleges damage as a result of Tnuva’s actions, the severity of which from a consumer perspective has already been discussed, precludes the conclusion that the matter is de minimus, even in the context of a class action. This is the case even though one cannot rule out the possibility that the existing discrepancy between the members of the group in terms of the intensity and scope of the injury may lead to the conclusion that had each member of the group filed a personal claim the remedy claimed by each one of them separately would be de minimis. Another question concerns the number of group members who are entitled to compensation for this injury and what is the rate and the model of compensation for purposes of ruling in our case. When considering the number of the members of the group entitled to compensation attention should also be given to the issue of splitting up the compensation for non-pecuniary damage in the current case. The reason for this is that the Lower Court held that compensation should be awarded for the Tort head of infringement of autonomy and separately for the tort head of negative feelings. It will be recalled that in this context the Lower Court accepted the position of the representative plaintiffs and in reliance on the consumer survey that was presented to it (adjusting its results downwards), and ruled that: "a uniform rate should be ruled for the infringement of individual autonomy, whereas with respect to about half of the members of the group it will be supplemented by damage by reason of negative feelings" (para. 84 of decision). Nonetheless, it bears note that ultimately the Lower Court ordered the payment of overall compensation (NIS 55 million), stating that this sum "reflects the personal damage that is estimated for each individual of the group, of the sum of NIS 250 (para. 134 of decision), and without actually distinguishing between the heads of damage that were mentioned and without differentiating between the members of the group in its entirety whom it had determined were entitled to compensation for the infringement of autonomy and half of the members of the group, who were additionally entitled to compensation for negative feelings. Accordingly in their appeal the representative plaintiffs challenge this ruling, and we must therefore address the fundamental issue of the splitting up of the non-pecuniary compensation, as mentioned.

However, prior to addressing the subject of the scope of the compensation awarded we must first address the essence of the central damages head which was at the forefront of this class action.

Infringement of Autonomy

33. In the Daaka [4] case, Israeli law recognized for the first time that the non-pecuniary damage involving the infringement of autonomy is "damage" in the sense of the Torts Ordinance, and that as such is compensable (on compensation for non-pecuniary damage in Tort Law in general, see s. 76 of the Torts Law. Also see CA 4576/08 Ben-Zvi v. Prof. His [17] (hereinafter: Ben Zvi); Eliezer Rivlin " Compensation for Non Pecuniary Damage –Broadening Tendencies" - Shamgar Volume, Part 3, 21, 45 (2003); Yifaat Biton Dignity Aches: Compensating Constitutional Harms, 9 MISHPAT UMIMSHAL (Haifa University LR) 137 (2005) (hereinafter: Biton). In the Daaka [4] case the court held that the fundamental right to autonomy means the right of every person "to decide his or her deeds and wishes in accordance with his or her choices, and to act in accordance with those choices". It ruled that this right encompasses all of the central aspects of a person's life, from which it may be derived inter alia that "every person has freedom from unsolicited non-consensual interference with his of her body". It further held that this freedom is one of the expressions of the right to dignity given to every person, and is anchored in Basic Law: Human Dignity and Freedom.

These rationales, which in Daaka [4] lead to the recognition, protection and compensation for an infringement of autonomy of the body, are relevant and applicable to cases in which there is an infringement of the victim's autonomy in central aspects of his life due to the denial of his freedom to choose and the breach of the duty of disclosure to him. For example, the court recently recognized the damages head of infringement of autonomy in a case in which the autonomy violated was that of the family relatives of the deceased person, and pertained to the manner of treating his body (see in Ben- Zvi [17]. Hence, contrary to Tnuva's claim, the recognition of the damages head of infringement of autonomy is not, and should not be limited to cases of medical negligence or exclusively to autonomy of the body. The principles underlying the recognition of this head of damages and the constitutional right protected by such recognition, in appropriate cases, will justify compensation for infringement of autonomy even where other torts are concerned, such as the consumer tort in our case (see Tzachi Keren-Paz "Compensation for Violation of Autonomy: Normative Evaluation, Developments and Future Trends" Hamishpat 11, 187, 192-194 and the examples cited in the footnotes) (2007) (hereinafter – Keren-Paz); Dafna Barak – Erez, "Constitutional Torts in the Era of Basic Rights" Mishpat UMimshal 9, 103, 121-122, 129 (2006)). In her in her decision to certify Raabi's suit as a class action, Justice Naor was guided by the approach that rejects the limitation of the boundaries of the damages head of non-pecuniary damages for infringement of autonomy to Tort of negligence in general and specifically medical negligence. Her approach was rightly adopted by the Lower Court when it awarded compensation for the damages head of infringement of autonomy, having found that by its actions Tnuva had committed an act of misleading against Raabi and against the group of consumers that he represented, by failing to disclose the existence of silicon on the packaging of the milk that it produced and marketed.

34. It is important to note that in the Daaka [4] case the infringement of autonomy was classified as a head of non-pecuniary damage in the framework of the tort of negligence, and not as a separate tort in its own right. Following the decision in Daaka [4] the view was expressed that it was appropriate to recognize the infringement of autonomy as a constitutional tort that gives rise to an independent grounds of claim (on this, see the comments of the Deputy President in CA 8126/07 Estate of the Late Bruria Zvi v. Bikkur Holim Hospital [18]; Ben-Zvi [17] in para. 54 of his decision and in the same vein, the opinion of Justice Amit, in Ben Zvi para. 21. Also see Rivlin, 45 and see and compare to Keran Paz; Nili Krako Ayaal "The 'Informed Consent' Doctrine – An appropriate Ground of Claim where the Patient's Right to Autonomy was Violated" Hapraklit 49, 181, 222-223 (2006)). However, our case law has yet to give deep consideration to this weighty issue of recognizing a new tort created by case-law and the case at hand does not require a discussion and decision on the matter. The reason is that the representative plaintiffs in this case took the path of settled case -law, and classified the infringement of autonomy as a non-pecuniary head of damage in the framework of the tort of misleading which it attributed to Tnuva in accordance with the Consumer Protection Law. Inasmuch as the representative plaintiffs did not claim in the Lower Court or before us that in this context the plaintiff's right to compensation for infringement of autonomy should be recognized as a (sic)right ,should be recognized as an independent tort based on the violation of a constitutional right entitling the plaintiff the issue can be left pending further examination and there is not cause for us to address the matter on refer to it on our own initiative.

The Requirement of a Causal Connection

35. Tnuva further added that the Lower Court erred by deviating from the law set forth in FHC Barzani [3 ] dwelt on above, and had actually waived the requirement for a causal connection between the act of misleading and the damage. Tnuva claimed that the representative plaintiffs failed to prove that their decision would have been influenced by having been informed in advance. Since the grounds of misleading, by definition, requires that the consumer rely upon the dealer’s conduct, then absent proof of such reliance, according to Tnuva, there are no grounds for an act of misleading under the Consumer Protection Law.

On the other hand, the representative plaintiffs claim that to the extent that the concern is with the head of damage in the form of infringement of autonomy, then it will be regarded as having been proved, even if the victim would have acted in the same manner had he been presented with all of the information, and that at all events, in the case at hand it had positively been proved that the consumers would not the purchased milk containing silicon.

36. Indeed, in the Further Hearing Barazani [3] and we already addressed this point above, the court ruled that the requirement for a causal connection in s. 64 of the Tort Ordinance also applies to consumer torts pertaining to misleading advertising, and even where the tort is grounds for a class action. All the same, the court also ruled that to the extent that the matter concerns consumer torts, the requirement of reliance deriving from the requirement for a causal connection will be interpreted broadly so as not to include to direct reliance only” but also “an indirect causal connection by way of a reasonable chain of causes from the publication and until the consumer” (ibid., 414- 415). In Barazani [2] it was further ruled that in a class action proceeding based on the provisions of Chapter F’1 of the Consumer Protection Law and its relevant regulations enacted by force thereof (provisions that as stated were cancelled in the interim in the Class Actions Law) it may be necessary to relax the stringency in proving the causal connection having consideration for the nature of this unique proceeding, and the fact that “the court is entitled to prescribe appropriate methods of proof at its own discretion for the causal connection between the misleading publication and the damage caused to each one of the members of the group, including the damage that was caused to each and every one of them (ibid., 424). In that matter there was no proof at all of a causal connection, not even indirect, as claimed by Barazani, given that Barazani was not actually exposed to the publication. For this reason the court dismissed Barazani’s application to approve his personal claim as a class action and ruled that his personal suit does not show any grounds.

Tnuva’s attempt to rely on the Barazani ruling and to claim that in this case too it was not proved that there was a causal connection between its conduct and the non-pecuniary damage being claimed, cannot stand, for a number of reasons:

First, the claim was raised by Tnuva at the stage following the certification of the class action and to the extent that it is directed against the group as such, it must be remembered that three years after the decision in the Further Hearing Barazani [3], the Class Actions Law was passed, unifying all of the principles and rules to be applied to the various categories of class actions. The Law consists of a comprehensive, detailed statutory arrangement, including the methods of proving entitlement to the remedy being claimed, and inter alia it enables the granting of remedies for the public good in appropriate cases where it is not practical to prove the damage caused to each member of the group and a fortiori the causal connection between the damage and the tortfeasor’s conduct (s. 20 (c ) of the Law). As specified below, this outline was adopted by the Lower Court and under these circumstances the demand to prove the causal connection between Tnuva’s conduct and the damage in respect of each individual of the group is problematic.

Second, the decision in Barazani [3] concerned misleading by action due to the misleading advertisement of Bezeq concerning the tariffs per conversation, and as mentioned it was held that insofar as Barazani was not even exposed to the misleading advertisement, there was no causal connection between the publication and his alleged damage. Our case on the other hand concerned misleading by omission committed by Tnuva in its failure to disclose the fact of the silicon being added to the milk. Tnuva claims that the plaintiffs must prove that had they been exposed to that fact in a timely manner they would not have purchased the milk. It would seem that a requirement of a plaintiff to prove that had he been aware of the fact he would have acted otherwise would be particularly difficult to prove and in many cases even impossible. Indeed, this position is reinforced to the extent that our concern is with a class action. On the difference between misleading by an act and misleading by omission with respect to proving a causal connection in the representative context, see our comments in CA 9590/05 Rahman Nuni v. Bank Leumi LeIsrael Ltd [19] which overturned the District Court’s decision to dismiss the application for certification of a class action because of the plaintiff’s failure to prove the causal connection. In our judgment in the appeal we reversed this decision and ordered that the file be remanded to the lower court, indicating that “it seems that the question of the requirement of the causal connection in this case is also worthy one further consideration. This matter involves complex questions, the first of which is whether to apply the rule set by this Court for purposes of the ground of misleading, in FHC 5712 Barazanai [3] even where it concerns the grounds of “non-disclosure” (ibid., para. 6) (regarding the similar approach taken in American Law in various contexts, see: Affiliated Ute Citizens of Utah v. United States 406 U.S. 128, 153-154 (1972) [34]; Binder v. Gillespie 184 F.3d 1059, 1063-1064 (9th Cir. 1999) [35]; Poulos v. Caesars World Inc. 379 F.3d 654, 666 (9th Cir. 2004) [36 ]. See also, CF (Tel-Aviv-Jaffa) 2405/04 Ben Ami v. Hadar Ltd [ ] paras. 72- 73 (14.2.2010).

We may thus conclude that to the extent that the consumer tort on which the class action is based on is misleading by way of omission, (by way non-disclosure) this may justify leniency regarding the proof of the causal connection between the wrongful conduct and the alleged damage.

Third, as opposed to the Barazani case [2], which was a monetary claim (tariff differentials), the head of damage being sued for in this case pertains to non-pecuniary damage in the form of infringement of autonomy. Regarding this head of damage it was ruled that there was no need to prove a causal connection between the failure to disclose relevant information and the choice made by the victim (see: Daaka [4], 567-570; CA 6153/97 Shtendal v. Prof. Yaakov Sadeh [20], at p. 760; CA 9936/07 Ben David v. Dr. Entebbe [21] para 11 of Justice Hendel’s decision; CA 9817/02 Weinstein v. Dr. Bergman,[22] para. 18). For a critique of the Daaka [4] decision, see Assaf Yaakov “Informed Consent and Duty to Disclose, Tel-Aviv University Law Review 31, 609 (2009). The rationales in this context that guided the court in Daaka [4] and in other matters pertaining to medical negligence are applicable to the same degree with respect to an infringement of autonomy caused as a result of the consumer tort committed by a dealer who misled a consumer. Indeed, the non-disclosure per se involves the denial of the consumer’s freedom of choice. In our case, by failing to specify silicon as one of the components of the product, Tnuva deprived the consumers of the possibility of making an intelligent choice and deciding whether they wish to purchase and consume it. This suffices as proof of an infringement of autonomy. Another question is whether this suffices to establish a right to compensation or whether it must further be shown that consequential damage was also caused to the plaintiff, finding expression in negative feelings given the denial of his freedom of choice. I will address this point further on.

37. At all events, even had we ruled that the circumstances of this case necessitated bringing proof that the members of the group would not have purchased the milk had they known that it contained silicon, this requirement for a causal connection in a class action might conceivably have been satisfied by a determination in the manner of a "collective causal connection" (on this see Aviv Legal Services [15]para. 10). This kind of collective causal connection may be substantiated by the assumption that the group members, and at least the majority thereof, would have replied in the negative had they been asked in advance whether they would purchase milk to which Tnuva had added an artificial supplement the nature of which they were ignorant, and in defiance of the standard, in order to overcome the problem of excessive frothing (compare C.F. 1036/66 (Capp. 1877/06) (Tel-Aviv Jaffa) Tal v. Rabin Medical Center (Beilinson Campus), para. 12) [ ] See also regarding the use of "generalized evidence" in American Law: Kennedy v. Jackson National Life Insurance Company, 2010 U.S. Dist. Lexis 63604, 25-28 (N.D.Cal 2010) [37]; Negrete v. Allianz Life Insurance Company of North America 238 F.R.D 482, 491-492 (C.D. Cal. 2006)[38]; Klay v. Humana, Inc.382 F.3d 1241, 1259 (11th Cir. 2004) [39]. Regarding the exception to the application of the doctrine in cases in which extensive differentiation between the members of the group was proved, see Poulos v. Caesars World, Inc. [36]. Further support for the application of this doctrine in the circumstance of the case before us can be adduced from the fact that it was Tnuva's intentional actions that created the situation which encumbered the process of locating the members of the group and the conduct of an individual examination of each of the elements that must generally be proved in the according to the law of tort. Additional support for the existence of a causal connection between the act of misleading committed by Tnuva and the consumers' choice to consume the milk, can be fond in the trends evidenced in the consumers survey that was presented, and which we will address further on.

38. Tnuva further adds that at all events, the publications in the press concerning the damage to health caused by silicon consumption severed the causal connection between its own acts and the bad feelings experienced by consumers, which it claims were by and large the result of publications that post facto turned out to be unfounded. This claim regarding the causal connection is not grounded in evidence, and in this matter as the one whose act of mass misleading caused uncertainty regarding the precise influence of the publications on the feelings of the consumers, it is Tnuva that bears the onus of proving the opposite (compare: Johnson v. The Goodyear Tire & Rubber Company, Synthetic Rubber Plant, 491 F.2d 1364, 1379-1380 (5th Cir. 1974)[40]; Cooper v. Allen, 467 F.2d 836, 840 (5th Cir. 1972) [41]. Accordingly, this argument is rejected.

Assessment of the Compensation for the Infringement of Autonomy – The Objective Approach and the Splitting Up of the Compensation for Non-Pecuniary Damage.

39. How does one assess the compensation for the tort head of infringement of the right to autonomy?

Based on the constitutional features of the right to autonomy some favor the objectification of the assessment of the compensation for its infringement. For example, Dr. Tzahi Keren-Paz argues that "freedom of choice can be viewed ….as an asset with objective value" and hence "it is appropriate to award a sum that reflects the social value attaching to the denial of freedom of choice. This sum should even be awarded absent proof of consequential, subjective damage (feelings of shock and anger) by reason of the denial of freedom of choice" (Keren-Paz, 196-198). Keren-Paz sees special justification for an objective assessment of compensation for infringement of autonomy in the consumer context. In his view, "the deterrent consideration (that focuses on the dealers) must also justify the compensation award in circumstances in which the compensatory factor (that focuses on the legitimate damaged interest of the consumer) does not provide sufficiently strong support for the compensation due to the problem of under-deterrence of the dealers…"(Keren-Paz, 242). The scholar Dr.Nili Karko-Ayal likewise suggests that compensation should be assessed in accordance with the value of the right to autonomy on the one hand, and the gravity of its infringement, on the other hand (see Karko-Ayal and see the opinion of Judge Strasbourg-Cohen in the Daaka case [4], at p. 619).

This approach deviates from the traditional principles of the laws of tort, that are based on a subjective, individual assessment of amount of compensation, and from the conception of compensation as being intended to restore the victim's position to the status quo ante and to provide him a remedy for the damage caused to him, including non-pecuniary damage. This point was mentioned by Justice Or in the Daaka case [4 ] when he awarded compensation for a victim under the tort head of infringement of autonomy, where he said:

Naturally, matters relating to the proof and the extent of damage are determined in accordance with the particular data in each individual case and the evidence submitted in court. The substantive criterion for generally determining the amount of compensation to which the victim is entitled is the criterion of restoring the situation to its original [ex ante – ed.] state. This criterion is an individual one. It requires an individual assessment of the gravity of the harm caused to the specific victim (p. 582-583)

The difficulty involved in application of a "pure" objective criterion for purposes of determining the sum of the compensation for an infringement of autonomy was likewise addressed by scholar Prof. Dafna Barak-Erez in her discussion of claims filed by the individual against an authority, where she emphasized that in this context as well:

…the principles of tort should not be deviated from by awarding compensation that is detached from the concrete infringement and its circumstances. The sum of the damages cannot and need not reflect the universal value of the right… compensation that purports to reflect the general value of the right should be rejected for a number of reasons. First it is illegitimate from a principle-value based perspective, because it purports to attach a price tag to the right itself. Second, it benefits the plaintiff in a manner that extends beyond his own particular damage, and thus deviates from the principle of restoring the status quo ante. In the realm of Tort law, compensation is determined in accordance with the damage to the victim himself, and not in accordance with the value of his right from the perspective of the other person (Dafna Barak-Erez, Constitutional Torts 277 (1993) (hereinafter – Barak-Erez)).

It is not superfluous to mention that in academic writing in the field of tort one can discern trends that deviate from the traditional perception whereby Tort law is intended to grant remedial damages to the specific victim in order to restore the status quo ante. Hence for example, there are some who contend that punitive damages that are not derived from the victim's damage may in appropriate cases provide a solution to sub-enforcement and therefore constitute an efficient form of deference A. Mitchell Polinsky & Steven Shavell, Punitive Damages: An Economic Analysis, 111 Harv. L. Rev. 869 (1998), as well as to heal societal damages caused by the tortfeasor to the victims who did not come to court (Catherine M. Sharkey,Punitive Damages as Societal Damages, 113 Yale L. J. 347 (2003). Deputy President, E. Rivlin recently addressed this matter in the matter of Ben Zvi [17] in where he treated the matter of punitive damages, noting that today, the case law in Israel too has recognized the court's authority to award damages of this kind in the framework of the law of tort, and he also mentions that :"despite the sharp analytical distinction between punitive damages and remedial damages, on a practical level the contradiction is not so sharp, at least in the realm of non-pecuniary damage" (paras. 37- 39 of his opinion, see also in LCA 9670/07 Anon v.Anon [23], paras 22-27 or the opinion of Justice E. Rubinstein, and the opinion of the Deputy President E. Rivlin).

However, to the extent that the compensation to be evaluated and awarded is claimed as part of a class action, one must remember the provision of section 20 (e) of the Class Action Law, which provides that:

In a class action the Court shall not adjudge exemplary compensation and it shall also not adjudge compensation without proof of damage….but the aforesaid shall not prevent the award of compensation for other than monetary damage.

Thus, the Class Actions Law stymied the possibility of awarding punitive damages in a class action. All the same, the Law established other special compensatory mechanisms that enable realization of the principle of remedial justice, for example, by way of imposing a cy-pres obligation on the tortfeasor for the damage caused, and principles of efficient deterrence, such as obligating the tortfeasor to provide a remedy for the public interest for the widespread social damage that he caused, and I will address this matter below.

40. I do not accept the objective approach to the evaluation of the sum of damages for infringement of autonomy that I reviewed above. The head of damage of infringement of autonomy is encapsulated in the negation of the victim’s freedom of choice, and in the majority of cases involves the non-disclosure of a matter that is critical for the victim. Accordingly at the very least as far as it concerns class actions, a presumable starting point for evaluation of the non-pecuniary damage caused to those whose autonomy was violated, is that as a result of that infringement they experience anger, frustration and insult (of varying degrees of intensity, according to the concrete circumstances of the case). These feelings which resulted from the tortfeasor’s conduct, justify compensation for non-pecuniary damage. However, there is no conclusive presumption that these feelings are experienced by the victim in every case of an infringement of autonomy. Accordingly, should the tortfeasor successfully prove that notwithstanding that his conduct negated the freedom of choice of the plaintiff or of the members of a group, they remained indifferent and unmoved, it may be determined that they are not entitled to damages under this head of damage because in truth, despite the denial of their freedom of choice, they did not sustain any non-pecuniary damage as a result. My approach, whereby the compensation for infringement of autonomy is awarded by reason of the subjective consequential damage expressed in feelings of anger, frustration and other similar negative feelings caused by the tortfeasor’s conduct, gives rise to the another conclusion – that there are no grounds for severing the compensation for infringement of autonomy from the compensation for mental anguish and negative feelings caused to the victim by that infringement (as distinct from the non-pecuniary head of damage relating to other infringements in framework of the same claim). A different approach to this matter was expressed by the Lower Court, even though, at the end of the day, as mentioned, the Lower Court awarded a sum total of NIS 250 as non-pecuniary damages for each member of the group without distinguishing between those members of the group who experienced negative feelings and those regarding whom it was proved by the consumers survey did not suffer feelings of this kind (regarding this matter, see the dispute between the Deputy President E. Rivlin and Justice Y. Amit, in the matter of Ben – Zvi [17] (see Keren-Paz, 203-208).

A conclusion similar to my conclusion on the matter also emerges from the findings of Justice M. Naor in the decision given in the appeal on the decision to approve Raabi's suit as a class action. In that context Justice Naor relates in the same breach to the non-pecuniary damage caused by the infringement of autonomy and to the negative feelings attendant to that damage. In her own words:

…..[t]he damage claimed by Raabi is non-pecuniary damage, negative feelings and feelings of revulsion. The non-pecuniary damage which he claims is characterized by the feeling of revulsion that stems from the fact that the material concerned is silicon with all of its attendant associations. In my view damage of this kind is compensable damage. The act of misleading concerning the contents of the milk in this case, prima facie, constitutes, an infringement of individual autonomy. Our concern is with a food product. Consumers are entitled to determine what to ingest into their mouths and bodies and what to avoid. For example, if a person wishes to only eat kosher food and post facto it becomes clear to him that the food that was misleadingly presented to him, was not of that nature, will feel a sense of revulsion and an infringement of his autonomy… (ibid. 681-682, emphases added).

Indeed, to the extent that it concerns Raabi - the representative plaintiff – after hearing his testimony and the testimony of his son, the Lower Court ruled that Raabi had experienced substantial negative feelings upon becoming aware that the milk that he had consumed contained silicon, and that Tnuva had refrained from specifying this component on the packaging; in the words of the Lower Court:

,,,[a]s a result of these acts the plaintiff was denied the ability to make an intelligent and informed choice concerning the purchase of an alternative product, that does not contain a supplement that it prohibited by law for use in milk for drinking. It is likewise clear that the negative feelings experienced by Raabi stem from the acts of Tnuva. It could be claimed that these feelings were exaggerated, having consideration for the fact that it was not proved that silicon causes a health risk. But one cannot dispute his [Raabi's] feelings as such: [Raabi] subjectively felt a sense of disgust (nausea), anxiety, as a result of having drunk the milk containing silicon as well as anger and rage by reason of the fraud. All of these fall into the category of non–pecuniary damage that is neither peripheral nor negligible and is indeed compensable… " (para. 57, emphases added).

There is no justification for interference with these rulings of the Lower Court, for as stated they are based on the testimonies of Raabi and his son, and on the Court's direct impression from those testimonies. However, in order to determine the precise compensation to be awarded, if at all, in favor of the group on whose behalf Raabi handled the class suit, proof of subjective damage caused to Raabi will not suffice and additional complex questions must be addressed, relating to proving the entitlement of the members of the group to the pecuniary compensation that was claimed, including, inter alia, the question concerning the difference between the group members who experienced negative feelings as a result of the denial of their right to chose whether nor not to consume milk containing silicon and the group members who remained indifferent to the aforementioned denial of their free choice.

41. As mentioned above, under the circumstances, at the time of the handing down of the decision on the class action it was not possible to individually identity each member of the group and to determine the individual right of each one of them to a remedy. As such it was not possible to rule on the class action in favor of the group in accordance with the evidentiary paths set forth in section 20(a) of the Class Actions Law. In order to determine the compensation, the Court was required to utilize the framework of s. 20 (c) of the Class Actions Law, which was intended for those cases in which "Court concluded that, under the circumstances, pecuniary compensation for all or some members of the group is not practical, either because they cannot be identified and the payment cannot be made at a reasonable cost, or because of other reason".

Based on the opinion of Prof. Ofir, who was appointed as expert on the Court’s behalf, the Lower Court ruled that during the relevant period 220,000 consumed the long-lasting milk containing silicon. Basing himself inter alia on the data he received from Tnuva, Prof. Ofir estimated that the number of households that had purchased the milk stood at NIS 166,307, and in his testimony in Court Prof. Ofir noted that the number of adult purchasers during the relevant period stood at 330,000. As such, according to his approach, the number of members in the group ranged from between 166,307 to 330,000 (p. 672 of the protocol). The Court’s determination that in this context one should consider a group number about 220,000 persons is therefore a cautious and conservative estimate (see comments of Prof. Ofir, p. 672 – 674 of the protocol), which will not be interfered with.

What remains to be examined is how many of those belonging to the aforementioned group of milk consumers actually experienced negative feelings as a result of the infringement of their autonomy.

The representative plaintiffs submitted an expert opinion drawn up by Dr. Katz and Prof. Mevorach, based on a consumers survey, from which it emerges that 26% of those questioned, who represent the general population, were indifferent to the publication to the effect that the milk contained silicon. Under the assumption that this percentage, pertaining to the general population, is also likely to reflect the interviewees who did not actually consume the long lasting low-fat milk during the relevant period, it would be appropriate to address the essential findings of the expert opinion that reflect the percentage of consumers of this milk before the publication from out of the total population (43%), and the percentage of consumers from out of these who continued to drink this milk even after the publications concerning the inclusion of silicon therein (30% out of the 40%, which represents 13% of the entire population). The expert opinion of Dr. Mevorach and Dr. Katz indicates that 66% of those who previously consumed long lasting, low fat milk of Tnuva (which they claim represent 28% of the total population) experienced negative feelings in the wake of that publication, at various levels of intensity, including "revulsion, nausea, anxiety, fear, anger, hatred, disappointment, deceit, lying, fraud, temerity, contempt, irresponsibility, bad feelings (section 3 of the survey), whereas 30% continued to consume the milk even after the publication.

In our case and based on the data presented by the representative plaintiffs, there are grounds to conclude that some of the group members remained indifferent to the addition to the silicon to the milk. 26% of those asked specifically stated that this was their feeling: "indifference, no problem, not correct and other feelings that are not negative"- page 5 of the expert opinion of Dr. Katz and Dr. Mevorach, subsection (b) of the answers to question 3, and "nothing, unmoved and indifferent" and "they made a mountain out of a molehill" – (the encryption page of the answers to question 3), and in the absence of a datum in the survey conducted regarding how many of those questioned had consumed silicon in the past, I think that the percentage of "indifferent consumers" can be derived from the datum in the expert opinion relating to those who continued to consume long lasting milk even after the publication of the silicon matter (30% of the overall number of consumers in the past, and 13% of the entire population). Accordingly, from out of the overall number of consumers of long lasting low fat milk during the relevant period, the number of whom stood at 220,000 according to the determination of the Lower Court there should be a reduction of 30% of "indifferent consumers" who did not experience negative feelings even after having been informed that the milk that they had consumed contained silicon, and that Tnuva refrained from indicating this element on the packaging. The scope of the group entitled to compensation for the infringement of autonomy that caused them negative feelings, therefore stands at 154,000 people.

42. In its pleadings, Tnuva objected on a number of counts to the Lower Court's willingness to base findings and conclusions on the consumer survey relied upon in the expert opinion of Dr. Katz and Dr. Mevorach. Basing findings concerning subjective feelings on surveys is problematic. Even so, inasmuch as the Lower Court ruled that the structure for proving the pecuniary compensation to be awarded in this case is the one prescribed by s. 20 (c ) of the Class Actions Law in view of the practical impossibility of identifying the group members and in ruling individual compensation, under the circumstances, the reliance on an expert opinion based on a consumers survey gives expression to a degree of leniency regarding the modes of producing evidence which is occasionally required in the context of class actions. The need for such leniency was already addressed by the court in Barazani [3], as mentioned above and is now grounded in explicit legislation in the provision of s. 20 (c ) of the Class Actions Law (on the "enlisting" of statistic data for proof of damage where there is structural vacuum in terms of the possibility of presenting individual data, see and compare: Eliezer Rivlin and Gai Shani "A Rich Conception of the Principle of Restoring the Status Quo Ante in the Doctrine of Compensatory Damages" , (hereinafter: Rivlin and Shani); Gai Shani: "The Principle of 'the Matter Speaks for Itself' in the Law of Torts – Revisited”; A. Porat & A. Stein Tort Liability under Uncertainty 87-92 (2001); Naturally, the court's reliance on the expert opinion based on the consumers survey is conditional upon the court having found the expert opinion to be worthy of reliance, having considered the entirety of claims raised regarding it.

In the case before us, having examined the survey's findings, the expert opinion of the Dahaf Institute on Tnuva's behalf (drawn up by the expert, Dr. Mina Zemach), and the expert opinion of the Court expert who gave his opinion on the survey, the Court held that "The testimony of Professor Mevorach and Prof. Katz made a reliable impression, and my impression is that they are professionals with experience and knowledge in their field" (para. 60). The Court rejected Tnuva's claim that the survey's results are biased, and that the questions presented to the interviewees included the assumption that silicon causes health hazards. For example, Dr. Mina Zemach on Tnuva's behalf mentioned question three that was presented to the interviewees ( "What did you feel in the wake of the publications concerning Tnuva's insertion of silicon into long lasting low fat milk, and its health risks?"). She claimed that the final clause of the question relating to health risks was altogether unnecessary and that there was reasonable grounds to fear that "this biased wording contributed to part of the serious defects of the study" (page 4 of the expert opinion, page 11 of the expert opinion). Rejecting this assertion, the Court ruled that the presentation to the interviewees was authentic because it was proved that at that time there were publications concerning the health risks of silicon. All the same, to be on the safe side, the Court was prepared to assume that the survey’s findings that tended to exaggerate the negative feelings somewhat, even if not to the extent of justifying the survey’s disqualification, as claimed by Tnuva, should be taken into account when determining the number of consumers who experienced negative feelings (about half according to the Lower Court’s holding as opposed to 66% according to the survey). There was no justification for interfering with the conclusion that the wording of question number three did not warrant interference (regarding this, see comments of Prof. Mevorach in his testimony, p. 287 – 291, 296- 298 of the protocol). Furthermore the Court further ruled, correctly, to disqualify the fifth question of the survey, in which the interviewees were asked “Did your negative feelings emerge immediately with the initial publications or after that publications were also verified by the Ministry of Health and by Tnuva. The Court noted that this question contains potentially misleading information because of the possible implication that Tnuva and the Ministry of Health had verified the publication concerning the health hazard, when in fact this was not the case/

Accordingly no defect can be found in the Lower Court’s willingness in this case to rely on the expert opinion of Dr. Katz and Prof. Mevorach (that relies on a consumers survey) for purposes of determining the portion of the group that experienced negative feelings as a result of the infringement of their autonomy. By extension our own reliance on this expert opinion cannot be negated as a means of determining the size of the group, along with the deletion of the “indifferent consumers” as set forth in section 41 above.

The Degree of Damage

43. We are required to determine the degree of damage, which in this case means the non-pecuniary damage incurred by consumers as a result of drinking milk containing silicon. Assessing the degree of damage expressed in victim’s negative feelings of anger, frustration and insult, and other like feelings caused by the tortfeasor’s wrongful conduct, and determining the compensation owing to him by reason of such damage, is no easy task. The reason is that damage of this kind is essentially subjective-individual damage, largely dependent upon the personal emotional barometer of each individual. This point was addressed by Justice T. Or in the Daaka [4] case in his ruling on the specific, non-pecuniary damage incurred by the plaintiff due to the infringement of his autonomy. He wrote the following:

The damage in this kind of case involves a predominantly subjective aspect, giving rise to inevitable difficulties in assessing it. Ultimately, the sum of compensation in each particular case, similar to compensation for other non-pecuniary damages, is a matter of judicial discretion, and it is thus determined by making an evaluation based on all the relevant circumstances and the impression of the court. The court must therefore adopt a balanced approach. It should give the appropriate weight to the fact that basic human rights were violated, which dictates an award of appropriate compensation as opposed to a symbolic compensation. On the other hand, considering the difficulties inherent in the procedure of accessing the damage, judicial restraint is required, and exaggerated compensation awards should be avoided.

If the assessment of non-pecuniary damage for infringement of autonomy poses difficulties in individual cases, the difficulty is multiplied sevenfold when the court is required to assess the damage in a class action, and particularly when it is impossible to locate the members of the group and form an individual assessment regarding each member concerning the intensity of the infringement of autonomy and the subjective negative feelings experienced by reason of the infringement. The subjective nature of the damage also impedes upon ‘damage averaging’ and for this reason in the U.S.A. there is a reluctance to approve a class action for compensation for non-pecuniary damages (see Allison v. Citgo Petroleum Corp., 151 F.3d 402, 417 (5th Cir. 1998)[42]; Reeb v. Ohio Department of Rehabilitation and Correction, 435 F.3d 639, 650-651 (6th Cir. 2006)[43]; Fuhrman v. California Satellite Systems, 179 Cal. App. 3d 408, 424-425 (1986) [44] ]; Altman v. Manhattan Savings Bank, 83 Cal. App. 3d 761, 767-769 (1978) [45]; Stilson v. Reader's Digest Association, Inc., 28 Cal. App. 3d 270, 273-274 (1972)[46]; Birnbaum v. United States, 436 F. Supp. 967, 986 (1977) [48].

See also the comments of Justice A. Proccaccia in a minority opinion in the decision on the application for certification, 697.

In Israel, this approach was rejected by Justice Naor, with whom the Deputy President S. Levine concurred. In the application for certification, Justice Naor held as follows:

The court will not award penal compensation in a class action, and similarly will not rule compensation without proof of damage, other than as specified in item 9 of the Second Schedule. However, the aforementioned does not preclude the ruling of compensation for non-pecuniary damage (emphasis added).

All the same, while there is no impediment in principle to the awarding of non-pecuniary compensation, in the framework of a class action, cases may arise in which the difficulty of determining the rate of damage will justify non-certification of the filing of a class action or its dismissal on its merits (regarding this, see the case law of the district courts before and after the enactment of the Class Actions Law (CC (TA-Jaffa) 388/96 Yaari v. Israel Lands Administration, [ ] s. 6 (e) and (f); CC (TA-Jaffa) 2331/06 Lubinsky v. Nazrian, [ ] 5- 6 ; CApp (Naz.) 1528/05 Barzilai v. Frinir (Hadas 1987) Ltd,[ ]s. 27.2 (d). On the other hand, see CC (TA-Jaffa) 1586/09 Hayyut v. Telran Immediate Messages Ltd [ ]para. 4 (b) (5); CC (TA) 1341/00 Mazal v. Discovery International Modelling Agency Ltd [ ].

44. In our case, the Lower Court deemed that the difficulties in assessment of damage by reason of it being pecuniary damage and by reason of the practical difficulty of locating the members of the group and forming an individual impression of the damage caused to each one of them, do not justify the dismissal of the class action. For purposes of assessing the damage and fixing the compensation, it resorted to the specific mechanisms of s.20 of the Class Actions Law, and fixed the complex model for compensation that we described above, and in accordance with which it ultimately determined the remedy.

In this appeal, Tnuva again argues that our concern is with tortuous compensation that is generally assessed on an individual basis, and that given the representative plaintiff’s failure to prove the precise damage caused to each member of the group, the Court erred in its failure to dismiss the suit for that reason. Tnuva further claims that the damage in this case does not admit of “uniformity"” because the degree of damage incurred by each consumer differed, hence it argued that the sum awarded by the Court to each member of the group (NIS 250) was arbitrary and with no evidentiary grounding and should thus be set aside.

The representative plaintiffs claim on the other hand that the Lower Court rightly determined that this case admits of an “average reasonable compensation” which when multiplied by the number of the members of the group would constitute the overall sum of compensation and that its determinations in this regard are consistent with the legislative intention as well as with the American case law in this context. However, their claim is that the sum per individual as determined by the Court is too low and in their appeal they seek to fix it at a minimum of NIS 8000, in view of the Court’s own determination to the effect that had it been confronted with an individual claim, this is the sum that is could have awarded for non-pecuniary damage.

45. Section 20 of the Class Actions Law, titled “ “Proof of Entitlement to Remedy and Payment of Pecuniary Compensation” provides as follows:

(a) If the Court decided all or part of a class action in favor of all or part of the group in whose name the class action was conducted, than as part of its decision to award pecuniary compensation or other relief to members of the group it may make, inter alia, an Order specified below, as the case may be, on condition that doing so will not place an unnecessarily heavy burden on members of the group or on the parties:
	(1) to pay pecuniary compensation or to provide some other relief, at a rate and in a manner that it will prescribe, to each member of the group whose entitlement to the said compensation or relief has been proven;
	(2) that each member of the group prove his entitlement to the compensation or other relief;
	(3) to pay pecuniary compensation in an overall amount and how to calculate the share of each group member, on condition that the total compensation can be calculated exactly on the basis of evidence before the Court: if the Court ordered compensation to be paid in a said overall amount, then it may order how the remaining amount is to be divided among the members of the group in proportion to their damage, if one or several members did not claim their share, did not prove their entitlement to compensation or relief, were not located or could not be paid their share for some other reason; however, no member of the group shall receive pecuniary compensation or other relief in excess of the full compensation or relief due to him; if, after the said distribution to the members of the group an amount is left, then the Court shall order it to be transferred to the State Treasury.
(b) If the Court ordered that every group member prove his entitlement to pecuniary compensation or other relief, then it may make Orders about:
	(1) how and when entitlement shall be proven by members of the group and how it is to be divided, and for that purpose it may appoint a person with suitable qualifications (in this section: the appointee); if the Court decided to appoint an appointee, then any person who deems himself injured by an act or omission of the appointee may apply to the Court that ordered the appointment and the Court may approve, cancel or change the act or omission and make any Order on this matter, all as it finds proper; the appointee's pay and expenses, as well as how they shall be paid, shall be prescribed by the Court;
	(2) the payment of expenses to a group member, in an amount to be set by the Court or by the appointee, for the trouble involved in proving entitlement to the said compensation or relief.
c) If the Court concluded that, under the circumstances, pecuniary compensation for all or some members of the group is not practical, either because they cannot be identified and the payment cannot be made at a reasonable cost, or because of some other reason,

In the Reichart [9] case, Justice Adiel pointed out in that in class actions there are a variety of methods of determining the damages, which are applied to a broad range of circumstances and in addressing the provisions of section 20 of the Class Actions Law he stated that:

…[O]n the other hand the point of departure may be the means of proof prescribed in s. 20 (a) (2) of the Class Actions Law….

whereby damage is proved by affidavits filed by each member of the group. Additional means of proof, essentially similar to the individual process, are based on the determination of damage for each member of the group, but without the conduct of the detailed process of filing affidavits, but rather by a general calculation based on undisputed factual data or admitting of simple proof. Naturally, the two methods may be combined by drawing up a general formula to be applied to each individual of the group, in accordance with data specifically concerning him. On the other hand, there are additional ways of determining compensation, based on determining an overall sum of damages that was caused to the group in its entirety, using the methods outlined above. Finally, in cases in which the damage cannot be calculated (even where it is undisputed that it was incurred) there is the possibility of determining the sum of compensation by way of estimate (para. 67 of his opinion).

Justice Adiel further noted that Israeli law, similar to American law outlines two principal methods for determining damages in class actions. The first is the individual calculation whereby the damage is determined giving distinct consideration to each member of the group. According to this approach, after establishing the responsibility of the defendant in the question common to all of the group members, a separate decision is made regarding the damage caused to each one of its members and the cumulative sum of damages proved by the group members will constitute the sum of the defendant’s final liability. This method of calculation is anchored in s. 20 (a) (1) and (2) of the Class Actions Law, cited above. Its advantage is that is consistent with the method of compensation prescribed in the General law and the principles of rectificatory justice on which it is based. It is generally involves the acceptance of affidavits from the group members or a calculation based on undisputed factual data or such as admits of simple proof (see Reichart [ 9 ], para. 67). In American law various additional mechanisms were established, intended to assist in the individual assessment of damages in an efficient and economic manner (see e.g. Bates v. UPS 204 F.R.D. 440, 449 (N.D. Cal. 2001) [48] – the conduct of separate actions following the date of establishing the tortuous liability); Olden v. LaFarge Corp. 383 F.3d 495, 509 (6th Cir. 2004) [49]- the appointment of an expert whose role was to conduct separate hearings for each victim). Some of these found their way into Israeli law (see se\. 20 (b)(1) of the Class Actions Law (see E.S.T Project Management[6], pp.. 246-347; and Tetzet [8], 788)

46. Given the advantages of the approach based on individual calculation, it would seem that it is to be preferred or purposes of determining the remedy in class actions, to the extent that it is possible and this indeed was the approach taken by the court in Reichart where it stated that “inasmuch as our case enables the determination of damages on an individual basis, I see no grounds for taking the path of the overall calculation (see Reichart para. 72). However this approach is not always applicable. The difficulty in applying it arises for example when the group members cannot be identified or located; when under the circumstances it is not possible to present data or documents sufficient for proving individual damage; when the damage incurred by each member of the group is minimal and presumably the group members or most of will be unwilling to cooperate for purposes of proving it on an individual basis. Likewise, where the clarification of the individual damage caused to each one of the group members requires the investment of expensive resources and considerable judicial time which have no justification under the circumstances, (see Steven Goldstein “The Class Action Suit – For What and Why” Mishpatim 9 (5739 416, 430 – 431) (hereinafter: Goldstein))

The first difficulty that we addressed, of locating the members of the group is characteristic of representative plaintiffs in consumer matters (see decision in the certification application, p. 685) and as mentioned, this difficulty also arose in our case given the impossibility of locating all of the consumers who consumed long lasting low fat milk during the relevant period. In confronting difficulties of this nature and others, some of which we mentioned, American law developed a second method of calculation – the method of overall calculation which was also adopted in Israeli law. According to this method, a “group compensation” can be determined on the basis of the damage caused to the group as a whole, even if the damage incurred by each member of the group was not proved prior to the determination of the overall compensatory sum. The purpose is to prevent the frustration of the goals of the class action in cases in proving individual damage is problematic. In the same vein, there were cases in which American case law resorted to “hybrid mechanisms” such as: an expert using a statistical formula to calculate the damages of the group members; an expert who conducts hearings and individual evaluations in relation to a representative sample of victims (Hilao v. Estate of Ferdinand Marcos, 103 F.3d 767, 782-787 (9th Cir. 1996)[50](even though it appears that the use of this mechanism was restricted in a recent case: Wal-Mart Stores, Inc. v Dukes, 131 S. Ct. 2541, 180 L. Ed. 2d 374 (2011) [51] (hereinafter Wal-Mart); the division of the group into sub-groups bearing typical features and the determination of an overall compensatory sum for each sub-group (see also LabA (NLC) 633/08 Erez v. Gal Maton Newspaper Marketing and Distribution Ltd [23], para. 18 (11 January, 2011)

The development of the system of overall calculation in American law began with the establishment of the Fluid Class Recovery mechanism (FCR), dwelt upon by the District Court in its decision. In its classical format, this is a three stage mechanism intended for compensation of the group members, and was described by the Californian Supreme Court as follows:

First, the defendant's total damage liability is paid over to a class fund. Second, individual class members are afforded an opportunity to collect their individual shares by proving their particular damages, usually according to a lowered standard of proof. Third, any residue remaining after individual claims have been paid is distributed by one of several practical procedures that have been developed by the courts" (The State of California v. Levi Strauss & Co. 41 Cal. 3d 460, 472-473 (1986)

(hereinafter: Strauss)

The first stage of this mechanism is the determination of the sum of the group compensation which the defendant must pay and which he will deposit in a special fund established for that purpose. At the second stage members of the group are given an opportunity to prove (at level of proof lower than the accepted level in personal suits) the individual damage and in doing so receive their portion as personal compensation. At the third stage the balance of the sum is allocated in accordance with the various models that were developed by the court for that purpose. It is quite apparent that the three stages of the FCR process described do not provide an answer to all of the difficulties we mentioned. For example, in cases which preclude a determination of the sum owing to each member of the group, or such as the case before us, in which there is no possibility of locating the members of the group. In order to provide a solution for these cases American law developed a variety of methods that deviate from the classic FCR model, some of which will be considered in what follows, along with the challenges raised against them, as we will presently show. (until here Case Review)

47. In Israeli case law, the overall calculation approach was mentioned as a possible method of calculation already before the enactment of the Class Actions Law. For example, Justice (former title) Cheshin wrote in the Barazani Further Hearing [3] that: "Where awarding separate compensation for each of the group members is not practical, the court is permitted to obligate the defendant to pay compensation using special compensatory systems or other remedies, as it deems appropriate, provided obviously that the defendant is not compelled to pay more than the damage that was actually incurred" (ibid, at p. 425. See LCA E.S.T. [5]; the decision on the certification application, at pp. 685-688; CC (TA – Jaffa) 2036/01 Mannela v. Mifal HaPayis [ ] para. 8). The mechanism of the overall calculation method was further established as part of the individual arrangements interspersed among the various legislative acts and by force of which class actions could be brought in the past (see e.g. the provisions established in s. 216 (b) of the Companies Law, 5759-1999; in s. 46I of the Restrictive Trade Practices Law, 5748; s. 16 I of the Banking (Customer Service) Law 5741-1981). This mechanism appears in s. 20 (a)(3) of the Class Actions Law, that as mentioned, replaced the individual arrangements and which regarding this matter states that the court may rule that:

"payment of pecuniary compensation in an overall amount and how to calculate the share of each group member, on condition that the total compensation can be calculated exactly on the basis of evidence before the Court…."

Furthermore, s. 20 (a)(3) of the Law contains a provision regarding the division of the compensation according to which in the event of a balance remaining after the distribution of the compensation to those victims who proved their damages and claimed compensation, it will be allocated proportionately between the group members, "provided that no member of the group shall receive pecuniary compensation or other relief in excess of the full compensation or relief due to him" and in that case the balance will be transferred to the State Treasury.

This provision is essentially similar to the classic format of the FCR mechanism mentioned above, and it enables the Court to determine overall compensation subject to the conditions prescribed in the section. In Reichart [ ] the court emphasized in this regard that the condition for the determination of overall compensation under s. 20 (a) (3) of the Law is that "the sum of overall compensation admits of precise calculation based on evidence before the court", and the court further added that "in terms of the principles for calculating the damage and its manner of determination, including the evidentiary law concerning weight and admissibility, there is no substantive difference between the methods used for an overall calculation and the methods used for establishing individual damage…". The court further stressed in Reichart [9] that even at the stage of allocating compensation among the group members consideration may be given to special individual data that is proved with respect to its individual members (para. 64 of the decision).

The difference between the various alternatives established in s. 20(a) relating to the manner of calculating the compensation and its allocation among the group members is that in first two alternatives (s.s. (1) and (2) the method of calculating damage proceeds from the individual to the general, and the sum imposed on the defendant is the sum total of the amounts to be received by each one of the group members. In the third alternative, on the other hand (s.s. (3)) the process is reversed in the sense that initially the overall sum for the which the defendant is liable is determined, after which that sum is allocated between the group members in accordance with the court's instructions, and subject to the caveat that overall compensation will not be awarded unless admitting of precise calculation based on the evidence before the court.

48. We already mentioned that the classic format of the FCR mechanism did not resolve all of the problems that arose in American Law concerning entitlement to a remedy and pecuniary compensation in class actions. This is also true with respect to the overall calculation method prescribed in s. 20 (a)(c), under the inspiration of that mechanism. The Israeli legislator was aware of this and hence added further mechanisms in s. 20 (c) of the Class Actions Law for determining remedies in class actions. Given the importance of this section for our purposes, we will again present the provision verbatim, which provides as follows:

"If the Court concluded that under the circumstances pecuniary compensation for all or some of the members of the group is not practical either because they cannot be identified and the payment cannot be made at a reasonable cost or because of some other reason then it may order other relief to be given for the benefit of all or part of the group or for the benefit of the public, as it deems appropriate under the circumstances of the case"

Is the court's permission to grant a remedy under this section "for the benefit of all or part of a group" or "for the benefit of the public" subject to the conditions enumerated in s. 20(a)(3) of the Class Actions Law, including the condition concerning "exact calculation" of the sum of overall compensation, as argued by Tnuva?.

The Lower Court dismissed this claim and ruled that:

Section 20 (a)(3) [enables] the calculation of the overall compensatory sum for the group, and the waiver of individualized proof of damage. However, this is still considered as personal compensation or a remedy for those members of the group who can be located and whose entitlement was proved, by way of allocating the sum of overall compensation between the those members. This must be clearly distinguished from the additional possibility at the court's disposal under s. 20(c ) of the Law, to rule a relief for the benefit of all or part of the group or for the benefit of the public in those cases in which the Court concluded that under the circumstances pecuniary compensation for all or some of the members of the group is not practical either because they cannot be identified and the payment cannot be made at a reasonable cost or because of some other reason" (para. 104 of the decision, emphasis in source).

Thus, according to the approach of the Lower Court s. 20(a)(3) of the Law establishes an independent for the determination of remedies and compensation in collective suits, existing alongside the other tracks prescribed in this context in s. 20(a)(1) and (2) and in s. 20(a)(3). The Lower Court further added that in any case it was also unable to accept the interpretation that Tnuva attempted to give to the requirement for “precise calculation” included in s. 20(a)(3) of the Law, writing that:

Regarding that requirement for “precise calculation” of the overall sum of pecuniary compensation, it bears note that this requirement is implemented in a liberal manner in the U.S.A. and it would seem that the legislative intention in Israel was to the take the path of American judicial experience. As noted by Hon. Justice Adiel (paras. 63 and 67) the overall calculation in U.S.A. relies on statistical calculations, such as sample testing, or the use of mathematical models, which by definition do not lead to a “precise” calculation of the damage caused to the group. Likewise, and this point too was mentioned by Judge Adiel, the overall calculation system is used to overcome the difficulty of “simply calculating the damage of each individual of the group”, for example, in the absence of admissible documents or the difficulty of locating all of the members of the group. Likewise, there is a difficulty in “precisely” calculating non-pecuniary damage, which necessarily involves estimation. Under these circumstances it is clear that the calculation of the compensation cannot be mathematically precise, and this was not the legislative intention. It is further important to point out that the requirement for “precise calculation” of the sum of the overall compensation was established in section 20(a)(3) of the Law, which deals with personal compensation, for the group members, but not in s. 20(c) of the Law which relates to the a remedy for the for the benefit of the group (para. 100 of the decision, emphasis in source).

49. I accept the Lower Court's position that the mechanisms of s. 20 (c ) of the Class Actions Law are intended to provide an answer for those cases in which it is not possible to precisely calculate the damage and distribute it according to one of the mechanisms prescribed in s. 20 (a) of the Law. Indeed, contrary to the position presented by Tnuva, s. 20(a) is not limited to difficulties in distributing the compensation between the members of the group ("because they cannot be identified and the payment cannot be made at a reasonable cost"). Section 20 (c) of the Law enables the award of a flexible remedy "for the benefit of the group" or "the benefit of the public" even in cases in which the awarding of compensation to the members of the group is not practical "for some other reason". Another reason of this kind may exist in those cases that preclude a precise calculation of the overall damage given that the data indicating the damage are not external data, such as a price hike of defined sum, but rather a collection of individual damages the precise proof of which depends on the testimony of each and every member of the group and obtaining these testimonies is problematic – by way of example – if there is no possibility of identifying the members of the group. In that situation, adherence to the regular rules of compensation in tort would frustrate the rationale and the underlying goals of the institute of the class action, which is intended to "protect the interest of the individual harmed who does not bother bringing an action; it represents a public interest in enforcing the provisions of the Law of which the class action is a part; it has a deterrent value against the violation of Law; it prevents the abuse of power by holders of control, whose portion of the capital is occasionally totally disproportionate to their power, and hence prevents manipulations at the expense of the "small investor"; it saves resources and prevents the multiplicity of suits" (CA 2967/95 Hanan Vakshet Ltd v. Tempo Beer Industries Ltd [24] at p. 323. See also the goals enumerated in s. 1 of the Law). It is for these reasons that the Class Actions Law outlines special arrangements that "occasionally deviate from the regular law and leave a broad margin of discretion for the court) Hanan Vakshet Ltd v. Tempo Beer Industries Ltd (as per President D. Beinisch, para. 6 of her opinion).

Structural failures of the kind discussed above in terms of the ability to prove "by precise calculation" the overall damage that was caused to the group or the individual damage caused to each member of the group, are particularly typical of consumer class actions. In cases of this kind there is an increased risk that the tortfeasor will profit and the profits reaped as a result of the tort committed will remain in his hands purely because of the difficulty of arriving at a precise calculation of the damage which is spread over a large group of victims who cannot be identified (see Deutch, "A Decade for the Class Action Suit", 33). American case-law refers to these profits as "ill-gotten gains". Regarding the justification for deviating from the classic principles of rectificatory justice in tort in this context, the Supreme Court of California wrote the following in the aforementioned Strauss case:

Fluid recovery may be essential to ensure that the policies of disgorgement or deterrence are realized. Without fluid recovery, defendants may be permitted to retain ill gotten gains simply because their conduct harmed large numbers of people in small amounts instead of small numbers of people in large amounts" (Strauss, p. 472).

50. Indeed, s. 20 (c) of the Class Actions Law deviates substantially from the correlative principle underlying the regular principles of compensation which mandate total correlation between the circle of victims and the circle of the compensated. Compensation funds are not transferred to the victims and are used for "the benefit of the group" as such or "the benefit of the public", the assumption being that the victims will derive indirect benefit. As such, the victims' interest in receiving compensation for the damage incurred is not realized in full. However, from the victim's perspective the alternative of no remedy at all being awarded would support the award of a remedy for the benefit of the group or the public, because partial and indirect benefit is preferable to not receiving any remedy at all.

A similar rationale also underlies the developing trend that has developed in general Tort law, other than in the context of the class action, in cases of repetitive tendency. This tendency reflects the recognition that when applying the balance of probability rule in examining the causal connection between the acts of a particular tortfeasor and the damages caused to the victims at large it is preferable to promote the principle of rectificatory justice, even by way of cy pres comme possible, because the application of the principle in the classical sense, will in many cases achieve a result that is altogether remote from the restoration of the status quo ante. This point was addressed by Deputy President E. Rivlin in FHC 4693/05 Carmel Haifa Hospital v. Malul [25] where he noted:

…in certain cases the principle of rectificatory justice should be adjusted so that it focuses on the overall picture and not just on the isolated claim of a particular plaintiff before the court. This enables a harmonization between the conception of rectificatory justice and the notion of relative compensation (para. 52 of his opinion. See also in para. 48 of Justice M. Naor's opinion).

If the general law of tort is prepared to deviate from the principle of correlativity in suitable cases then a fortiori it is both appropriate and correct to do in class actions. This is because in the class action and primarily those concerning consumer wrongs, the fundamental principle and goal that we seek to realize focuses on the achievement of effective and efficient deterrence against the dealers who breach the law and the consumers' rights ( see Deutch. "A Decade for the Class Action Suit", 33). For otherwise the ones who profit are the tortfeasors who are large bodies that provide services to immense numbers of clients, and as such spread their damages among a large group of victims whose identity is not known, and their ill-gotten gain will remain in their own hands. Redressing the injury caused to the individual victim on the other hand, is a less dominant interest in the class action given the fact that in most cases the damage caused to the individual consumer is relatively minor.

Regarding the awarding of a remedy in the area of class actions in the U.S.A. by application of the principle of cy pres comme possible which originates in the laws of trust and means "as near as possible" and is also referred to as "next best recovery" see Natalie A. DeJarlais, The Consumer Trust Fund: A Cy Pres Solution to Undistributed Funds in Consumer Class Action, 38 Hastings L.J. 729 (1987); Stewart R. Shepherd, damage Distribution in Class Actions: The Cy Pres Remedy, 39 U. Chi. L. Rev. 448 (1972))for a critique of the expansive application of this principle, see M. H. Redish, P. Julian & S. Zyontz, Cy Pres Relief and the Pathologies of the Modern Class Action: A Normative And Empirical Analysis, 62 Fla. L. Rev. 617 (2010) (hereinafter" Redish).

Hence, in terms of policy considerations both those anchored in the general rules of tort and those specific to the laws of class actions, we should strive to ensure that inability to identify the victims does not create an insurmountable obstacle to filing a claim in court (see A. Porat, "Collective Liability in Tort Law", Mishpatim 23, 311, at pp. 384-385), and see also comments of Justice E. Mazza in Barazani Further Hearing [3], at pp. 449 – 451). In this context, for purposes of the class action proceedings the possibility of awarding a remedy for the benefit of a group or the public as established in s. 20 (c ) of the Class Actions law constitutes an important component.

51. All the same, we should not forget that another one of interests to be pursued in the class action proceeding is that of fairness to the defendant and protection of his substantive and procedural rights. From this perspective, and given that our concern is with a monetary remedy, we are obligated to ensure that the relaxing and flexibility of the procedural rules anchored in the Class Actions Law do not produce a situation in which obligation imposed upon him exceeds the sum of the damage that he caused) (regarding the dismissal of the motion to certify a class action inter alia by reason of this concern, see McLaughlin v. American Tobacco Co. [53 ]. Indeed, from the tortfeasor's perspective less importance attachés to the question of how the compensation is distributed. His substantive interest concerns the extent of the sums that he will be obliged to pay, and less with the question of how they are utilized thereafter. The desire to protect the interest of the defendant as mentioned underlies, inter alia, the provisions of the s. 20 (e) of the Class Actions Law, which negates the awarding of exemplary damages against the defendant and also negates the awarding of compensation without proof of damages (apart from in a suit in accordance with s. 9 of the Second Schedule). Another balance between the public interest of the victims on the one hand, and the defendant's interest on the other hand may also be found in the provision of section 20 (d)(2) of the Class Actions law in accordance with which in the awarding of the remedy the court may also have consideration for "the damage that is liable to be caused – by the payment of compensation, its amount or the manner of its payment – to the defendant, to the public that uses the defendant's services or to the general public by damaging the defendant's economic stability, as opposed to the expected benefit for members of the group or for the public". Parenthetically, it should be noted that Tnuva did not make any claims in court in reliance on the provisions of s. 20(d) (2) of the Law. It was for this reason that the Lower Court found no reason to consider these provisions and there are no grounds for us to address them at the appeal stage.

52. American case-law offers a variety of approaches to the question of whether and under what circumstances the sum of compensation in class actions can be determined other than by a precise calculation. Some have contended that where there is no possibility of determining the overall sum in a precise manner, there are generally no grounds for using the FCR doctrine (on this interpretation of the FCR doctrine, see Michael Malina, Fluid Recovery as a Consumer Remedy in Antitrust Cases, 47 NYU L. Rev. 477, 488-491 (1972)). All the same, in order to resolve the difficulties that arise in this context the various U.S.A. courts, the courts have developed statistical mechanisms that enable the evaluation of the damage caused to a group, while waiving to certain degree the demand for "precision" (hence damage was determined in relation to the average wage which was determined based on statistical means, see: Pettway v. American Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974) [54]; Stewart v. General Motors, 542 F.2d 445 (7th Cir. 1976)[55]; Bowe v. Colgate-Palmolive Co., 489 F.2d 896 (7th Cir. 1973) [56]; United States v. Wood, Wire & Metal Lathers Int. Union, Local Union 46, 328 F. Supp. 429, 442 (S.D.N.Y. 1971)[57]. Similarly, the court enabled proof of damage by way of sampling and by means of other statistical methods. See e.g. Hilao v. Estate of Ferdinand Marcos [50]. For a different approach see Hood v. Eli Lilly & Company 671 F. Supp 2d 397, 434-453 (E.D.N.Y. 2009) 453 [58].

In Another case (Long v. Trans World Airlines, Inc. 761 F. Supp. 1320 (N.D. Ill. 1991 [[59]) the court wrote that:

"Defendant has no "right" to an individualized determination of damages for each plaintiff; the desire for accuracy must be balanced against other factors such as the burdens of discovery in relation to the size of the individual claims." (Id. at 1327).

Even among scholars it has been contended that creative use should be made of "aggregate proof) in order to assess the rate of collective damage caused to the members of a group. This was noted by the scholars A. Conte & H.B. Newberg, in their book Newberg on Class Actions (Vol. 3, 4^th ed.2002):

"There are occasions when it is feasible and reasonable to prove aggregate monetary relief for the class from an examination of the defendant's records, or by use of a common formula or measurement of damages multiplied by number of transactions, units, or class members involved, or by reasonable approximation with proper adherence to recognized evidentiary standards". (Id. 476).

53. The interests we have examined that underlie the class action lead to the conclusion that where a remedy is awarded for the benefit of a group or the benefit of the public under s. 20 (c ) of the Class Actions Law, we should aspire to ensure that the overall sum of liability is consistent with the overall damages caused by the defendant. In order to determine this sum there is no impediment to adopting a method of estimation, which is an accepted and recognized method in our system for quantifying damages in cases in that do not admit of precise calculation of the damage incurred by the individual victim. This point was addressed by this Court in CA 355/80 Anisimov Ltd v. Tirat Bat-Sheva Hotel [26],:

In those cases, in which, the nature and character of the damage, enable the production of accurate data, the victim-plaintiff must do so, and should he fail to do so damages will not be awarded to him. On the other hand, in cases in which the character and the nature of the damage render it difficult to prove the degree of damage and rate of compensation with certainty and accuracy, it will not frustrate the victim's claim, and it will suffice if adduces such data as can reasonably be obtained, while granting discretion to the court to make an estimate that supplements that which is missing (p. 899).

It was further ruled that in appropriate cases statistical data can be used for determining the scope of the damage (see; Rivlin, Shani, at pp. 506 – 507), and the expert opinion. As such, and a fortiori, this method may be used where it concerns a group. All the same, it is stressed that the evaluation of the damage by estimation does not mean the determination of an arbitrary amount which seems to be no more than a guess, and the court using its discretion in such a case must base the sum it determines upon appropriate anchors that enable the evaluation of damage by way of estimation, as stated (see Daaka [4] at p. 583, Barak Erez, 277).

54. The non-pecuniary damage which the Lower Court was requested to award in this class action is in the genre of damages the nature and character of which do not admit of precise calculation and in cases of individual claims too, will always be subject to the court's estimation (apart from compensation claims for road accidents in respect of which the Compensation for Road Accident Victims (Calculation of Compensation for Non-Pecuniary Damages) Regulation 5736-1976 (hereinafter Road Accident Regulations), prescribes formula for determining non-pecuniary damage as a derivative of the rate of disability and a ceiling sum determined in the ss. 4 (a)(3) and 4 (b) of the Compensation for Road Accident Victims Law, 5735-1975). Regarding the essence and the methods for calculating non-pecuniary damage in differing contexts, see CA 4022/08 Agbaba v. Y.S. Company Ltd [27], paras 10 – 24; C.A. 754/05 Levi v. Share Zedek Hospital [28]).

In s. 20 (e) of the Class Actions Law, the legislator authorized the court to award compensation for non-pecuniary damage caused to the group member. However, the determination of non-pecuniary damage in the present case is no simple task. As mentioned, there is no possibility of identifying the group members who consumed long lasting, low fat milk during the relevant period for the suit, and hence the Court availed itself of statistical data and expert opinions in reliance upon which it reached a conservative, cautious determination that the group comprised 220,000 members. We concluded that the reference group for purposes of compensation for damage occasioned by infringement of autonomy is limited to that portion of the consumers group who incurred consequential damage due to the infringement of autonomy and who experienced negative feelings in various forms upon becoming aware that the milk they drank contained silicon. Our determination regarding the number of group members included in the group of those entitled to the said compensation (154,000) was also based on statistical data and the expert opinions presented in the proceeding. Our concern is therefore with a group numbering over 100,000 people, whom can be neither identified nor located, and even were it possible to locate them, it is doubtful whether it would even be appropriate to instruct each one of them, or even some of them to submit an affidavit specifying the intensity of the negative feelings that they experienced in order to award compensation in accordance with one of the mechanisms established in s. 20 (a) of the Class Actions Law. Given the impossibility of determining compensation based on individuated evidence or precise calculation and the impossibility of identifying the members of the group entitled to compensation, we are left with the compensatory mechanism established in s. 20 (c ) of the Class Actions Law, which enables the determination of overall compensation based on an estimation for the benefit of the group or the public. The question that presents itself is how, if at all, to estimate the "collective" non-pecuniary damage in this case, and whether the fact of its being non-pecuniary damage that is characterized by subjective, individualistic features, should preclude the possibility of "uniformity" in determining the overall sum of compensation, due to the differences between the victims in terms of the results of the damage.

In rejecting Tnuva's claim in this context, the Lower Court ruled that "It is no longer possible to make a sweeping claim that uniform compensation cannot be awarded for non-pecuniary damage, absent the possibility of proving individuated damage" (para. 128) and hence the court fixed the sum of compensation at NIS 55 million, stating that this sum reflects uniform compensation for the sum of NIS 250 for each victim (220,000 X 250) for the non-pecuniary damage caused to the members of the group. The Court further mentioned that had a non-pecuniary compensation for Tnuva's action been awarded in the framework of an individual suit, the sum of the compensation would have been higher, but the court's approach was that this context demanded consideration of the fact that the issue was one of overall compensation being ruled for the group in its entirety or for the benefit of the public, in the absence of the possibility of having consideration for the individual damage caused to each one of its members. In the courts' words:

[a]fortiori the court does not examine the individual damage of each member of the group, given that not only is the remedy awarded to the group as a whole, but it is also given to the group and not to its individuals. The court is even entitled to fix the overall sum of compensation for the group based on estimation. This does not mean that the court should avoid the determination of important parameters for purposes of calculating the overall damage. The court must definitely determine the number of members in the plaintiff group, at least by way of estimate. Similarly, the court must assess the scale of the individual damage caused to each one of the group members, to ascertain that the overall sum of compensation awarded to the group does not exceed the aggregate damage caused to its individuals. However, at the end of the day, the court must determine an overall sum of compensation to be awarded to the group having consideration for the totality of considerations, but it must not ignore the fact that the compensation is not intended as individual = compensation for each of the group members. The overall compensation must be commensurate and in proportion to the wrongful act and the circumstances of its commission, even if the division of the sum by the number of group members would indicate a lower rate of compensation by comparison to the rate of individual compensation that would have been awarded had a personal claim been filed against the defendant by reason of that tort.

Granting the plaintiffs' request would have meant determining Tnuva's liability for an overall sum of NIS 1.76 billion (NIS 8000 X 220,000 members of the group). It is absolutely clear that this result is unreasonable and unrealistic. Having considered all of the circumstances as set detailed above, I determine an overall sum of compensation for the group of NIS 55 million which reflects an estimated rate of damage for each members of the group of the sum of NIS 250. This degree of damage, and even higher, was most definitely caused to each member of the group, even if only by reason of the infringement of individual autonomy (para, 134 (b) of the decision, emphasis in source).

55. In this appeal, Tnuva challenges the determination of the compensation according to the mechanism prescribed in s. 20 (c ) of the Law, arguing that given the type of the damage (non-pecuniary damage, with subjective-individual features), and given the impossibility of proving the damage to the group in terms of its individual members due to the impossibility of identifying its members, there were no grounds for determining uniform compensation for the group, even at a minimal rate NIS 250 for each individual). On the other hand, Raabi claims that given the Court's view that the appropriate compensation for the infringement of autonomy had it been a personal suit was not less than NIS 8000, it should have awarded that rate of compensation multiplied by the number of members in the group (which was similarly challenged on the part of Raabi, as detailed above), and the fact that such a significant figure was received as a result

Indeed, in cases in which there is significant differentiation between the group members it may yield the conclusion that the matter is not suited for adjudication as a class action (see s. 8 of the Class Actions Law; CA Reznik v. Nir National Cooperative Association for Workers Settlement [29] paras. 24 – 27 (hereinafter: Reznik), See also LabApp (Nat.) 425/00 Goldberger v. Guards Association Ltd [ ] para. 8 ; Civ.App. (Naz) 1528/05 Barzilai v. Ferinir (Hadas1987 ) Ltd (para. 27.2) [ ]; on the other hand, see TM 105/06 (CivApp.30858/06) (Tel-Aviv-Jaffa) Feldman v Municipalities Sewage Association (Dan Region) para. 52 ; CF (Tel-Aviv-Jaffa) 2719-06 Levi v. Israeli News Company Ltd para. 17; and see also Klement, "Boundaries of the Class Action", at pp. 345-346). It would seem however that the claim concerning differentiation between the group members has the power to bring about the non-certification of the suit as a class action and even its rejection if certified, in those cases in which the differentiation has implications for the establishment of liability or even the very existence of an actionable cause. The main concern in this context is that it may prejudice the defendant's right to a fair proceeding and to be able to defend himself against each and every one of the group members. This happened in the Resnik [29] case where the defendants raised the prescription claim, the decision on which was not necessarily identical with respect to each and every member of the group, and for that reason the court did find grounds for its certification as a class action. In that case Justice Gronis stated that "Certain solutions for the absence of homogeneity between the group members are found in ss. 20 (a) – (c) of the Class Action Law, that includes provisions regarding the remedy that will be awarded by the court". The court further added that it was not required to rule on the question of the "cases in which the suit should be certified as a class action notwithstanding the existence of individual features, by having resort to the mechanisms of s. 20 of the Class Actions Law, or other solutions" but it still saw fit to stress that there are cases in which "these solutions are unable to provide a solution" and as a result they cannot be certified for filing as a class action (ibid, para. 27). The issue of differentiation (the foundation of commonality) between the group members was likewise the subject of discussion in recent decision of the Supreme Court of the U.S.A in the Wal-Mart issue. In that case a request for certification of a class action was filed in the name of a million and a half employees of the Wal-Mart network based on illegal discrimination against them as women with respect to matters of salary and promotion. The trial instances and the appellate instance certified the suit as a class action Dukes v. Wal-Mart Stores, Inc. [51] . The Supreme Court however reversed the decision, ruling that the suit should be be certified in view of the plaintiffs' failure to prove that the company had conducted a general policy of discrimination, in other words, it failed to prove the existence of a grounds for claim regarding every single group member. It also held that under the circumstances it was not possible to calculate a compensation sum by statistical methods and by way of a representative sampling, inter alia in view of the defense claims in the law itself, which the company was able to raise regarding each and every company in the group.

Tnuva's argument concerning differentiation is to no avail in our case. Its argument relates exclusively to negating the possibility of awarding uniform compensation for the non-pecuniary damage sustained by the group members under the circumstances, in view of what it claims is the lack of uniformity among the victims in this context. In the Court's eyes, this differentiation did not justify the non-certification of the suit as a class action and I concur with the stance of the Lower Court that neither does it preclude the award of a remedy after the clarification of the class action that was certified as stated. First, even in suits that are not conducted as class actions in which there are multiple plaintiffs, such as suits for building defects, the court does not refrain from awarding uniform compensation by way of estimation for the non-pecuniary head of damage (on "uniformity of damage" for mental anguish in regular suites filed on behalf of a number of plaintiffs, see the district court decisions cited in para. 121 of the decision). Second, as distinct from differentiation among the members of the potential group, that may have implications for the existence of an actionable cause and the basic entitlement of each member to a remedy, where the differentiation concerns the sum of compensation, it finds its solution in the various mechanisms of s. 20 of the Class Actions Law that deal with the remedy that the court is authorized to award. The establishment of these mechanisms is intended to ensure that the differentiation among the group members regarding the determination of the remedy, just like other difficulties in proving damage which stem from the inability to identify or locate the group members, will not frustrate in limine the clarification of the matter by way of a class action and the realization of the goals upon which this proceeding is based in terms of the public interest and in terms of the group concerned, which we dealt with above at length. Accordingly, differentiation relating to the rate of the damage, will not in general prevent the clarification of the class action and the award of a remedy in the framework thereof, including with respect to the award of uniform compensation that will be determined by way of estimation, unless under the circumstances of the particular case prevent the award of an appropriate remedy in accordance with one of the mechanisms set forth in s. 20.

56. That said, it would not be superfluous to note that differentiation between the group members may occasionally be raised as an argument for denying certification of suit as a class action, or against the award of a uniform compensation in the framework thereof, specifically from the perspective of the potential group members, in those cases in which awarding uniform compensation prejudices the rights of those group members who wish to prove their suit on an individualized basis and thereby merit larger compensation. American case-law treated this concern as a potential violation of due process rights, which in turn lead to the rejection of the certification applications for class action suits, stressing the fact that the mechanisms established in the relevant statutory provisions do no include the right to opt-out of a class action proceeding, see - Federal Rules of Civil Procedure, Allison v. Citgo Petroleum, 151 F.3d 402, 414-415 (5th Cir. 1998) [60]; Lemon v. Int'l Union of Operating Engineers, Local No. 139, AFL-CIO 216 F.3d 577 (7th Cir. 2000) [61]; Jefferson v. Ingersoll Int'l, Inc. 195 F.3d 894 (7th Cir. 2001) [62]; Reeb v. Ohio Department of Rehabilitation and Correction, 435 F.3d 639 (6th Cir. 2006) [63].

For additional cases in which class actions were not certified in the U.S.A. against the background of the differentiation between the group members, see In re Fibreboard Corp., 893 F.2d 706, 712 (5th Cir. 1990) [64]; Windham v. American Brands, Inc., 565 F.2d 59 (4th Cir. 1977) [65]. However, in the U.S.A. this approach is not relevant to certification applications for class actions in accordance with legislative provisions that contain mechanisms for an opt-out right.

Israeli law in this context differs. The Class Action Law mandates the registration of the application to certify the suit as a class action, and the registration of its certification in the Class Actions Register (ss. 6 (a) and 14 (b) of the Law, and irrespective of the nature of the suit each and every group member is entitled to give notice that he does not wish to be included therein (s. 11 of the Law). Moreover, proponents of the approach that views the group as an entity in its own right have opined that there is need for a "sacrifice" on the part of each member of the group of with respect to his individual rights as a litigant, in view of his obligation to "tie his fate" with the fate of the group (see David L. Shapiro, Class Actions: The class as Party and Client, 73 Notre Dame L. Rev. 913, 919 (1998).

The claim raised by Raabi in his appeal concerning the paucity of the uniform sum that was awarded is not based on the claim of differentiation and the claim that any particular member of the group suffers as a result. Raabi does not dispute the fact that in this case, in the framework of a class action, it was not possible to clarify the individualized damage incurred by each and every group members nor does he dispute that it was not possible to identify or locate them. His claim relates solely to the smallness of the sum awarded as uniform compensation (NIS 250), given the fact that the Lower Court expressed its view that had the case been adjudicated as an individual claim it would have been appropriate to award far higher compensation (NIS 8000). Accordingly, Raabi claims that the sum of uniform compensation for purposes of calculating the overall compensation for the benefit of the group should be set at NIS 8000.

57. Examination of the Raabi's testimony (pp. 71-81 of the protocol) indicates that over a period of years that included the entire period that was relevant for the class action (23 October 1994 until September of 1995) he consumed significant quantities of long lasting low fat milk. However, the range of consumers of long lasting milk is varied both in terms of the duration of the consumption period and in terms of the scope of consumption. Hence, it may be assumed that the relevant group includes those who did not consume the milk for the duration of the period, those who consumed it in far smaller quantities than those consumed by Raabi and those who drank fresh milk on a regular basis and who only consumed the long lasting milk that they had purchased on rare occasions, when under various circumstances it served as substitute for fresh milk. This varied range of consumers of long lasting milk that contained silicon must be taken into consideration when determining the uniform compensation to be awarded for the violation of the autonomy of the group members who suffered consequential damage as a result. The claim of the representative plaintiffs' that the group in its entirety should be awarded the same compensation (NIS 8000) that was demanded by Raabi as the main plaintiff, fails to consider the differentiation between the group members that we discussed above, and for that reason alone we can dismiss the claim. Furthermore, contrary to the position of the Lower Court, even on an individual level I see no justification for awarding Raabi compensation for the sum of NIS 8000 (as valued on the date of the suit) for the damage head of infringement of autonomy. This takes into account the fact that we are no concerned with an infringement of the highest conceivable level and the fact that as distinct from compensation awarded in other contexts of non-pecuniary damage, our concern is with negative feelings experienced by the group members for a limited time, the peak of which was presumably when it became known to those who had consumed the milk, post factum, that it contained silicon. In other words, the non-pecuniary damage is not of the kind that accompanies the victim for life, such as pain and suffering in the wake of permanent physical disability as a result of medical negligence. As such I think that on an individual level too, even where it concerns a permanent consumer of long lasting low-fat milk for the entire relevant period, the compensation sum awarded for consequential damage (feelings of anger, frustration, revulsion, anxiety, fury etc) resulting from the infringement of his autonomy should not be exaggerated. A fortiori, the uniform compensation to be awarded to the entire group should not be exaggerated, given the differentiation between its members in terms of the scope of the damage and its intensity.

58. This brings us back to the question of what constitutes the group compensation to be awarded in the case at hand, and whether the path taken by the Lower Court was appropriate for its ruling. As mentioned, the Lower Court concluded that compensation amounting to NIS 1.76 billion, which is arrived at by multiplying NIS 8000 for an individual by the number of group members (220,000), is a result that "is unreasonable and unrealistic" and it therefore set the sum of the overall group compensation at NIS 55 million, stating that this sum "reflects an estimated individual damage of NIS 250 for each of the individuals of the group".

In view of the great variety in the group in terms of its habits of consumption of long lasting milk containing silicon and in view of other features of the infringement of autonomy which we discussed above, including: the intensity of the infringement, and the fact that one can imaging higher rates of intensity, and the limited duration of the time during which the members of the group experienced negative feelings, I believe that the sum of NIS 250 can be accepted as a sum that is commensurate for purposes of setting the individual, uniform compensation. The multiplication of this sum by the number of group members who suffered consequential damage by reason of the infringement of autonomy gives us an overall compensation sum of NIS 38,500,000 (250 X 154,000). In its pleadings, Tnuva proposed that to the extent that it be obligated to pay compensation, it would be appropriate that the profit it made should serve as a basis for its calculation, indicating that the profit was NIS 1,645,900 in terms of the principal and with the addition of interest and linkage differentials (from the middle of the period) - NIS 4,981, 616. In principle, this model for calculating compensation should not be negated (on the approach whereby compensation based on denial of the tortfeasor's profits realizes the principle of corrective justice in the law of tort, in appropriate cases, see Ernest J. Weinrib Restitutionary Damages as Corrective Justice 1 Theoretical Inquiries in Law 1 (2000). It has even been claimed that this model is preferable for class actions in which the compensation awarded is a compensation for the benefit of the public under s. 20 (c ) of the law. This is because in cases like these there is no real correlation between the obligation imposed upon the tortfeasor and the public of those who are compensated, and the purpose of remedying the damages of the victims is not really achieved due to the practical inability to identity the members of the group, to identify them or to compensate them. As such, the emphasis should be placed on the other objectives of the law of tort, including effective deterrence and prevention of unlawful enrichment of the tortfeasor. Indeed, the use of unlawfully obtained profit as a departure point for calculating compensation maintains the correlation between the intended purpose of the compensation and the manner of its calculation. However, even though on the level of principle the model based on the denial of profit for calculating compensation for the benefit of the public under section 20 ( c) of the Class Actions Law should not be dismissed, it must be remembered that this model is not appropriate and not applicable in all of the cases. For example, it would difficult to apply it in a case which the tortfeasor did not profit as a result of the wrongdoing. As such, when awarding compensation for the benefit of the public the court must examine all of the data before it, and in accordance therewith to formulate the model best suited for its ruling. In our case, at the very outset Tnuva did not present us with detailed, substantiated and reliable data on the basis of which it would have been possible to examine the possibility of calculating overall compensation based on the denial of profit model. For example, Hagit Adler (who was employed in Tnuva as of 1996 and who served as the marketing manager when she gave her affidavit), stated that at the time of giving the affidavit (November 2004) “Tnuva does not have ….precise data regarding the rate of profitability of long lasting milk of 1% fat during the relevant period (section 17 of the affidavit). Adler did propose to base the findings in this case on the rate of the profitability of long last milk with 1% fat on the later years (1999 – 2001), but regarding these years too, the only thing that was attached was a page of pricing relating to these years, taken from a document that was not presented in full, the authorship of which is not clear nor the data on which it is based, One of the other possible models or purposes of determining compensation for the benefit of the public, is the model that was adopted by the Lower Court and which we too endorsed. This formula, based on statistical data (regarding the number of victims) and uniform individual compensation, complies – albeit in the form of cy-pres calculation - with the traditional and accepted method of calculating compensation in torts law. All the same, and given that our concern is with cy-pres calculation, the application of the this model must be subject to the caveat that the cy-pres calculation must be done with the requisite caution and tend to be conservative, so that the sum of overall compensation will not spill over into the realm of punitive exemplary compensation which are not to be awarded in representative suits, pursuant to the legislative fiat in section 20 (e) of the Class Actions Law.

In conclusion, the overall compensation that should be imposed on Tnuva in this case according to the model that we endorsed is fixed at NIS 38, 500,000 as valued at the date of the decision of the Lower Court, (17.10.2008).

The Method for Distributing the Compensation Awarded for the Benefit of the Public

59. In order to balance between the public objectives and the private objective, American law has formulated a variety of mechanisms for providing a remedy for the benefit of the group in its entirety or for the public benefit, including discount mechanisms (“price rollbacks”); the transfer of the compensation funds to government body by way of their designation for goals that will benefit the actual victims (“earmarked escheat”); a “consumer trust fund”; and in appropriate cases, the relative participation (pro rata) of the current group members in balance of the funds (“claimant fund sharing” (regarding this, see Strauss, at pp. 473- 476). All the same, there are those who have sharply criticized the use of collective compensatory mechanisms for the public benefit in cases in which it is difficult or impossible to the individually compensate the members of the group (see e.g. Redish; Powell v. Georgia-Pacific Corporation, 119 F.3d 703, 706 (8th Cir. 1997) [66]; In re: Airline Ticket Commission Antitrust Litig, 268 F.3d 619, 625 (8th Cir 2001) [67].Regarding the variety of approaches adopted in American case-law on this matter and the differing approaches to the most optimal correlation between the distributive mechanism and the goals of the particular suit and the interests of the group members, see In re Folding Carton Antitrust Litig. 744 F.2d 1252 (7th Cir. 1984) [68] ; Houck v. Folding Carton Admin. Comm., 881 F.2d 494 (7th Cir. 1989) [69]; In re Cuisinart Food Processor Antitrust Litig.38 Fed. R. Serv. 2d (Callaghan) 446 (D. Conn.1983) .[70]; Democratic Cent. Comm. v. Washington Metro. Area Transit Comm'n [71] ], 84 F.3d 451 (DC cir. 1996); In re Domestic Air. Transp. Antitrust Litig, 148 F.R.D. 297 (ND Ga 1993) [72] .

On the approaches adopted by scholars on this issue, see Newberg, 505-543; Anna L. Durand, An Economic Analysis of Fluid Class Recovery Mechanisms, 34 Stan. L. Rev. 173 (1982); Kerry Barnett, Equitable Trusts: An Effective Remedy in Consumer Class Actions, 96 Yale L.J. 1591 (1987); Christopher R. Leslie, A Market-Based Approach to Coupon Settlements in Antitrust and Consumer Class Action Litigation, 49 UCLA L. Rev. 991 (2002).

See also Goldstein, 430- 431. on the use of systems of collective compensation in the Common law states, see Rachel Mulheron, The Class Action in Common Law Legal Systems: A Comparative Perspective, 426-430 (2004)

As indicated by the provision of section 20 (c ) of the Class Actions Law, the Israeli legislator chose an approach that enables an award of compensation for the benefit of the group as a whole and for the benefit of the public according to a system of collective compensation, even in the cases in which technical reasons preclude individuated compensation for the group members. In doing so the legislator expressed the view that the public goals which the Class Actions Law is designed to serve and which we dwelt on at length above are of no less importance than the private goals and hence the reason to strive to realize those goals even where various difficulties prevent the proving of the precise aggregate of the individual damages caused to the group and the maintenance of conformity between the public of victims and the public of those who are compensated. At the same time, it is important to note that according to the hierarchy prescribed by section 20 (c ) of the Class Actions Law, preference should be given, to the extent possible, to compensatory mechanisms that reflect such conformity, and even when awarding compensation according to section 20 (c ), in the absence of the possibility of awarding it under sub-sections (a) and (b), every effort should be made to structure the mechanism for distribution of compensation in a manner that achieves at least an element of connection between the public of those compensated and the public of victims.

60. In the case before us, regarding the distribution of the Lower Court held as follows regarding the distribution of the

“Having consideration for the difficulties involved in the solution of the reducing the price of milk, given the immense sum of overall compensation ruled in favor of the group (NIS 55 million) and for reasons of the benefit of the group and the public – the sum of the compensation should be designated for three essential goals – First, benefitting the group members by reducing the price of the product (or increasing the contents without raising the price); second – research and scholarship fund in the field of food and nutrition which have implications for public health; third - distribution of milk free of charge to populations in need via non-profit organizations so involved (para. 144 (O), of the decision, emphasis in source).

In holding that one of the objectives for which part of the compensation sum should be awarded is the providing of a benefit via a discount from the product price, the Court, by its own account, was at the every least attempting to establish a group connection between the victims of Tnuva’s conduct and those who would gain from the benefit. However, in our case it is doubtful whether such a connection actually exists. The connection which the Lower Court sought to establish in this context proceeds from the assumption that those who consumed long lasting low fat milk of Tnuva during the relevant period continue to do so today as well. The problem is that there is only a low probability that this assumption actually materialized, inter alia because of the passage of time and changes in consumption habits and even more so when considering our conclusion to the effect that compensation for infringement of autonomy during the relevant period (23 October 1994 – September 1995) should not be awarded exclusively according to objective criteria and the victims group should be limited to those who suffered consequential damage as a result of the infringement and experienced revulsion, frustration, anger, and other similar negative feelings. When supplementing this by the considerable dangers generally involved in a discounts arrangement that requires a detailed examination of the influence manner in which the arrangement affects the relevant market (see Amir Israeli “Settlement in a Class Actions that Infringes Free Competition, in the wake of CF 1012/02 Yifaat v. Delek Motors Ltd [ ] Hearat Din 2 (2) 112, 118 – 125) (5665), and the need to receive a reconfirmation from the Director of Antitrust (due to the passage of time from the time of that the gave the previous confirmation in this context) it would seem that in the current case it is preferable to waive the allocation of part of the compensation for the purposes of the discounts arrangement and to focus on the two other objectives determined by the Lower Court, which serve worthy interests for the benefit of the public in its entirety. The portion deducted for purposes of the discount arrangement will be divided equally between these two objectives and hence the compensation sum shall be distributed in the following manner:

a. For the study and research fund – 44.33% and for the distribution of milk products to the needy 55.66%.

b. The distribution of the milk products (and not just long lasting milk that formed the subject of the claim) will be effected over a period of five years from commencement date for the execution of the decision, by way of the 2 non-profit organizations "latet" and “Mishulhan leShulhan” both of which supply food to dozens of other non-profit organizations around the country, as held by the Lower Court in its decision of 17 June 2009, which gave force to the agreements reached between the parties with the cooperation of the representative of the Attorney General and with his consent, attached to the notification of the parties dated 10 June 2009, in the Lower Court (hereinafter: “the supplementary decision”).

c. For purposes of transferring the compensation for research purposes in the field of food and nutrition, a study fund will be established, headed by the Head Scientist of Ministry of Health. The fund management will choose the studies that are to receive scholarships, and will supervise them. The members of the management will be the entities specified in section 6C of the agreements reached between the parties and which were approved in the supplementary judgment. The intention is to use the entire sum of compensation earmarked for the study fund within 5 years, unless it becomes necessary to use the sum thereafter as well, in keeping with the Lower Court’s decision in the supplementary decision.

Compensation for the Representative Plaintiffs and

61. In its partial decision and its supplementary decision the Lower Court ordered the payment of compensation and advocates fees to the representative plaintiffs and their attorneys, and all told ordered Tnuva to pay the sum of NIS 500,000 to the Raabi heirs; the sum of NIS 1,000,000 to the Israel Consumer Council and the sum of NIS 2,500,000 to the attorneys of the representative plaintiffs.

Tnuva argues that according to the criteria outlined regarding this issue in the Class Actions Law, there were no grounds for awarding such high sums to the representative plaintiffs and their attorneys. In this context Tnuva contends inter alia that the involvement of the Israeli Consumer Council in this context was only minimal, that it did not assume any risk and did not require any monetary incentive for acting in consumer related matters. It further submits that the rate of the compensation and advocates fees awarded is far in excess of the rate awarded in other cases, and that in this context it would have been appropriate to have consideration for the discrepancy between the sums demanded by the representative plaintiffs (who initially set their at NIS 4 billion) and the sum that was finally awarded.

The representative plaintiffs on the other hand claim that there are no grounds for interfering in the rate of compensation fixed by the Supreme Court, which does not deviate from the criteria prescribed by statute and case law in this context. On the other hand, they see cause for interfering in the sum of fees awarded to their attorneys and contents that the considerations that guided the court in this matter were mistaken. Inter alia they argued that there was no basis for the finding of the Lower Court to the effect that "the case was not always handled in "the best and most efficient manner" and that under the circumstances there were no grounds for attaching weight to the discrepancy between the sum demanded and the sum awarded and that their attorneys invested extensive and intensive work over the years in this precedential case, which is tremendously important from a public and consumer perspective. As such they claim that an order should be given for fees amounting to 20% of the overall sum of compensation.

62. The criteria for the determination of compensation for the representative plaintiffs are set forth in section 22 of the Class Actions law, which states:

Compensation for the representative plaintiff

22. (a) If the Court decided all or part of a class action in favor of all or part of the group, including by way of approving a compromise, then it shall order compensation to be paid to the representative plaintiff,

taking into account considerations said in subsection (b), unless it concluded – for special reasons that shall be recorded – that that

is not justified under the circumstances of the case.

(b) When it sets the amount of compensation the Court shall, inter alia, take these considerations into account:

(1) the effort exerted and the risks assumed by the

representative plaintiff by bringing and conducting the class action, especially if the relief requested in the action is declaratory relief;

(2) the benefit which the class action yielded for members of the group;

(3) the degree of public importance of the class action.

(1) adjudge compensation to the petitioner or representative plaintiff, even if the class action was not approved or if the

class action was not decided in favor of the group, as the

case may be, taking the considerations said in subsection (b) into account;

(2) adjudge compensation to an organization that participated in hearings of the class action under the provisions of section 15, if it found that to be justified by the trouble taken and the contribution made by its said participation in the hearings.

Section 23 of the Law established criteria for the ruling of the legal fees of the representative attorney, as follows

23. (a) The Court shall set the representative attorney's legal fees for conducting the class action, including the petition for certification; the representative attorney shall not accept legal fees in excess of the sum determined by the Court as aforesaid.

(b) When it sets the representative attorney's legal fees under subsection (a), the Court shall, inter alia, take the following considerations into account:

(1) the benefit which the class action yielded for members of the group;

(2) the complexity of the proceeding, the trouble taken by the representative attorney and the risk he assumed by bringing and conducting the class action, as well as the expenses he incurred for that purpose;

(3) the degree of public importance of the class action;

(4) the manner in which the representative attorney conducted the proceeding;

(5) the gap between the relief sought in the petition for approval and the relief adjudged by the Court in the class action….".

The criteria for determining compensation and legal fees are essentially similar and reflect the desire to incentivize the filing of class actions (on the importance of this consideration see Moshe Telgam, "The Class Action – Considerations for the Determination of Fees and Compensation" Shaarei Mishpat 4, p. 227 (5768). All the same, it should be noted that an overincentive in this context could encourage the filing of trivial suits or "inflated" suits with no justification, given that those filing these suits would be primarily interested in the compensation and legal fees that they could expect to receive (on the negative influence of trivial suits and the attendant concern of a weakening of the standing of the class action, see CA 1509/04 Danush v Chrysler Corporation [30] para. 15). An additional, and important criteria for the determination of legal fees, reflected in s. 23 of the Law cited above, is the existence of a commensurate relationship between the legal fees and the effort invested in the suit and the benefit it produced. The Law further adds and prescribes in this context a number of criteria intended to guide the conduct of the attorney of the representative plaintiff' so as to create a positive incentive for conducting the suit efficiently and fairly (see CA 9134/05 Adv. Eliezer Levit v. Kav Of Zafon, Cooperative Association for Services Ltd [31] para. 12 (hereinafter – Levit), regarding s. 23 of the Law. And see also AAA 2395/07 Accadia Software Systems Ltd v. State of Israel – Director of Tax and Stamp Duty [32] para. 20 (hereinafter – Accadia); CA 7094/09 Borozovsky Conveyancing Ltd v. Ichurn Itur Veshlita Ltd [33] paras 11- 14). As evidenced by the wording of ss. 22 and 23 of the Law, the list of considerations enumerated is not exhaustive and is intended to outline "general guidelines which attest to the general intention of the law and the objectives it seeks to realize" (see Levitt, para. 12). That said, in general the criteria enumerated in the law may be divided into three principal categories: considerations of expenses, considerations of yield for the group represented, and considerations of public guidance (see Klement, at pp. 158 – 162).

63. A central question to be considered in determining the rate of compensation and the legal fees is whether the filing of the class action was necessary in order to merit the particular remedy (Levit [31] para. 14). The case before us is a classic example of a case which would not have been decided had it not been for the class action. In determining the compensation the court gave consideration to this central consideration as well as to the other pertinent considerations, indicating that the task of differentiating between the representative plaintiffs was done for the main part by the Consumer Council, and in dwelling on the importance of creating incentives for the filing of suits for the Consumer Council as well. The Court further dwelt on the fact that this case made an important contribution to the group and the public and addressed the protracted time period during which the suit was conducted. Regarding the legal fees to be awarded to the representative attorneys the Court addressed the immense amount of work that they had invested, the tremendous benefit bestowed by the suit itself, its importance for the group and for the public as a whole, and the complexity of the issues raised in the file. At the same time, the Court stressed the gap between the remedies demanded and what was ultimately granted, noting that the suit had not always been conducted in the best and most efficient manner"

The rule that the appellate forum does not interfere in the rate of legal fees awarded by the trial forum applies to and is implemented with respect to the rates of legal fees and compensation awarded in class actions, other than in cases where one of the sums awarded is legally flawed or where the decision of the trial forum is otherwise fundamentally flawed in a manner that warrants intervention (see Accadia [32] para. 28, Analyst [7] at p. 263). The policy of non-intervention in sums awarded as legal fees and compensation by the trial forum is even more appropriate where it concerns considerations pertinent to the manner in which the proceeding was conducted. In the case at hand, the Lower Court examined all of the relevant considerations and balanced between them as required. Accordingly, had we not reached the conclusion that the sum of compensation to be imposed on Tnuva should be significantly reduced, we would not have intervened in the sums of compensation and legal fee that it awarded. However, since we set the sum of compensation at NIS 38,500,000 instead of NIS 55,000,000 awarded by the Lower Court I think that this also warrants a reduction in the sum of compensation that Tnuva has to pay to the representative plaintiffs and the legal fees to be paid to their attorneys. I therefore propose that we set the sum of compensation for the Raabi heirs at the sum of NIS 300,000, the compensation for the Israeli Consumer Society at NIS 550,000 and the rate of legal fees for the representative attorneys at NIS 1,500,000. In order to remove all doubt, it is clarified that the sums specified above, like the sum of compensation awarded, are according to their value on the day of the decision of the Lower Court (7 October 2008).

Final Word

For all of the reasons set forth above I propose to my colleagues to partially allow Tnuva’s appeal with respect to the rate of the compensation (CA 10085/08) and its appeal regarding the compensation for the representative plaintiffs and the fees of their attorney (CA 7607/09). I further propose to my colleagues to dismiss the counter appeal of the representative plaintiffs in CA 10085/08 and their appeal against the decision in CA 6339/09)

Under the circumstances and bearing in mind that these appeals raised questions of principle that were fleshed out for the first time since the enactment of the Class Actions Law, I would propose to my colleagues not to make any order for the costs of the appeal proceeding

Justice

Justice I. Amit

I concur with the comprehensive and thorough judgment of my colleague Justice Hayut. My colleague concluded that compensation for infringement of autonomy should only be awarded to those group members who experienced various negative feelings upon becoming aware that they had drunk milk containing silicon. My colleague's approach is consistent with the view that I expressed in CA 4576/08 Ben Zvi v. Prof. His [ 17] paras. 25 – 29, according to which an infringement of autonomy is now included within the framework of non-pecuniary damage. An infringement of autonomy means negating the victim's freedom of choice by failing to disclose a substantive detail, but the infringement of autonomy is expressed by negative feelings such as anger, frustration, insult, revulsion,shock etc.

Justice

Justice E. Vogelman

I concur with the comprehensive judgment of my colleague, Justice E. Hayut. I am a partner to my colleague's conclusion that the objective approach to the assessment of compensation for infringement of autonomy should not be accepted and that accordingly, where proved that some of the members of the group remained indifferent to the infringement of autonomy, there are no grounds for awarding compensation for that head of damage.

Justice

said in subsection (b) into

account.

Full opinion:

Tnuva Central Cooperative v. Raabi Estate.pdf

Link to original Hebrew text of decision on official ISC website:

http://elyon1.court.gov.il/files/08/850/100/v17/08100850.v17.pdf

Atia v. Rosenbaum

Case/docket number:

C.A. 176/53

Date Decided:

Friday, September 24, 1954

Decision Type:

Appellate

Topics:

Employment

Breach of statutory duty

Basic Law: Human Dignity and Liberty

Fault

Negligence

Abstract:

The plaintiff was employed by the defendant to work an electrically-driven wool-teasing machine. On January 17, 1951 the plaintiff was cleaning the machine when his hand got caught and, before it could be released, was seriously injured. The plaintiff sued the defendant for damages for negligence and breach of the statutory duty to fence securely every dangerous part of any machinery or to provide the other safety measures set out in s. 18(1) of the Factories Ordinance, 1946.1⁾

The Court of first instance, in dismissing the claim, held that there had been no breach of statutory duty because the employer had put the necessary fence on the machine and although there might be greater protection for the worker by use of a morticed lock, in fact no such lock was in use or available in Israel nor was it used to a great extent outside Israel.

Held, allowing the appeal, that the duty to secure the safety of the employee was absolute, and that this duty was not discharged by employing a method by which the safety of the employee was in fact not secured although such method was the one generally employed.

The appellant was awarded IL.15,000.- as damages for the injuries received.

1⁾ The text of this section is set out infra p. 441.

Voting Justices:

Berinson, Zvi

Primary Author

majority opinion

Goitein, David

majority opinion

Landau, Moshe

majority opinion

Full text of the opinion:

C.A. 176/53

MORDECHAI ATIA

MOSHE ROSENBAUM

In the Supreme Court sitting as a Court of Civil Appeal

[September 24, 1954]

Before Goitein J., Landau J., and Berinson J.

Tort - Factories Ordinance, 1946, s. 18(1) - Breach of statutory duty - Dangerous machinery - Failure to fence - Injury to employee - Liability of employer - Assessment of damages - Expectation of life - Loss of future earnings - Pain and suffering.

The appellant was awarded IL.15,000.- as damages for the injuries received.

Israel cases referred to:

(1) C.A. 70/52 Yehoshua Grossman and Egged Ltd. v. Henry Roth (1952), 6 P.D. 1242.

(2) C.A. 62/53 Yehoshua Daum and Egged Ltd. v. Nissim Aharonof and Others (1954), 8 P.D. 128.

English cases referred to:

(3) Dennistoun v. Charles E. Greenhill Ltd.; [1944] 2 All E.R. 434.

(4) Davies v Thomas Owen and Company, Ltd.; [1919] 2 K.B. 39.

(5) Pugh v. Manchester Dry Docks Company, Ltd.; [1954] 1 All E.R. 600.

(6) Carroll v. Andrew Barclay and Sons, Ltd.; [1948] 2 All E.R. 386.

(7) Sutherland v. Executors of James Mills, Ltd.; [1938] 1 All E.R. 283.

(8) Harris v. Bright's Asphalt Contractors, Ltd.; [1953] 1 All E.R. 395.

(9) Roach v. Yates; [1937] 3 All E.R. 442.

(10) Rowley v. The London and North Western Railway Company; (1873), 29 L.T. 180.

(11) The "Swynfleet"; (1947), 81 Lloyd's List Law Reports 116.

Katz for the appellant.

Rotenstreich for the respondent.

BERINSON J. giving the judgment of the court. The appellant was employed as a labourer by the respondent, the owner of a wool factory for a period of about two months. During this time he was engaged in various tasks, including the operation of a wool-teasing machine.

On January 7, 1951, the appellant was temporarily engaged in operating the machine in question. He started this work at 4 p.m. and at 8 p.m. he put his left hand into the machine while cleaning it. His hand was caught in one of the wheels of the machine and was severely injured.

The appellant sued his employer under the Civil Wrongs Ordinance for damages in respect of the physical injury suffered by him, basing his claim upon two causes of action:

(a) breach of the statutory duty imposed upon the employer by sections 10(1)1⁾ and 18(1) of the Factories Ordinance, 1946 relating to the illumination and fencing of dangerous machines in places of work:

(b) negligence.

The learned judge held that not only had the plaintiff failed to establish even one of the causes of action upon which he relied, but that it was his own negligence that had caused the accident. He therefore dismissed the claim. The appellant appealed to this court. Before us his counsel confined his submissions to one point alone, namely, the breach by the respondent of his statutory duty to fence the machine operated by the appellant - a duty imposed upon him by section 18(1) of the Factories Ordinance, 1946 (hereinafter called "the Ordinance"). That section provides as follows:

"Every dangerous part of any machinery, other than prime movers and transmission machinery, shall be securely fenced unless it is in such a position or of such construction as to be as safe to every person employed or working on the premises as it would be if securely fenced:

Provided that, in so far as the safety of a dangerous part of any machinery cannot by reason of the nature of the operation be secured by means of a fixed guard, the requirements of this subsection shall be deemed to have been complied with if a device is provided which automatically prevents the operator from coming into contact with that part."

Before dealing with the accident itself, it is desirable that we have a clear picture of the machine involved in the accident and the way in which it works. We adopt the description of the learned judge in the court below who said:

"I held an inspection in loco on two occasions. I examined the machine and found it to be composed of the following parts: 1) a table which oscillates while the machine is being operated; 2) a wooden cylinder at the end of the table; 3) a metal rod; (Note: there are in fact two metal rods, one above the other). 4) a cog wheel; 5) a guard above the cog-wheel.

The method of operating the machine is as follows: the workman stands in front of the table and places the wool upon it. The wool is then conveyed towards him (by the oscillating table) from under the wooden cylinder, it enters the metal rod and is conveyed to the cog-wheel. The metal pivot is protected by a metal guard. The cog-wheel remains clean, but the wool accumulates under the metal rod and must be extracted from time to time with the help of a device called by the workmen a "hook".

The machine is operated by electric power, the starter switch being situated close to it. To stop the machine completely, however, one operates another switch. situated about three meters from the machine. Even when the electric current is cut off, the machine continues to work - that is to say, the table still oscillates and the wheel, the rod and the cylinder continue to revolve for some seconds."

This is the description given by the judge, to which must be added two important details which also emerge from the evidence:

a) the table moves at a relatively slower speed than the cogwheel, which oscillates at a great speed. When the electric current is cut off, the various parts of the machine continue to move under their own power, but the table - which is a slow-moving object - comes to a stop before the cog-wheel which moves at a higher speed. A person unaware of these facts may therefore fall into error and think that when the table stops moving the wheel also stops. In fact however, the cog-wheel continues to revolve at a high speed for some time after the table has ceased to oscillate.

b) The workman operating the machine stands facing it in front of the moving table. and in that position his hands - even when stretched straight out - do not reach the metal rods and also, therefore, do not reach the cog-wheel, which is even further away from them.

How did the accident occur? The appellant was the only workman at the machine which stood in a room by itself. There was no eye-witness to the accident nor to what preceded it. The appellant stated in his evidence that on the day of the accident, at about 8 o'clock in the evening, the wool accumulated in the machine, and new material could not be served to it but kept flying back towards him. He therefore cut off the electric current by operating the two switches. and when the machine had stopped altogether he put in his left hand in order to clean away the wool. He did not see then that the cog-wheel was still turning since it was full of wool. and this wheel drew his hand inwards. The appellant added that the metal guard over the rods was not in position and that "had the guard been in position then, the wool would not have blown towards me and I would have been able to see the wheel". Under cross examination, however, he said that he could not remember if the guard was there at that time.

The learned judge repeats the story of the appellant in his judgment, his only comment relating to the question of the metal guard. He says that he prefers the version of the respondent that the guard was in its place on the day of the accident, such version being supported by the clear evidence of the respondent and the works manager whose evidence on this point was unshaken.

The remaining details in the appellant's story of the occurrence are not only uncontradicted by the other witnesses, but are in fact supported in the main by the witnesses Pessah Cohen and Simha Sverdlik. These witnesses, who are also workmen in the factory, were attracted to the scene by the cries of the appellant immediately after the accident, and it is they who dismantled the machine and removed the injured hand of the appellant. Moreover during one of the visits of the learned judge to the factory Sverdlik demonstrated the position in which he found the appellant after the accident and this demonstration coincided with the appellant's story. From all this it must be assumed that the learned judge accepted this portion of the appellant's evidence.

The findings of the learned judge that the machine operated by the appellant is dangerous and that the metal rods were guarded on the day of the occurrence were not disputed before us. The real dispute, however, related to the question whether the guard conformed with the requirements of the law. The learned judge reached the conclusion that the respondent had discharged his duty by providing "reasonable means to make that portion of the machine safe". Counsel for the respondent, of course, supports this view of the matter while counsel for the appellant, in arguing against this finding, submits that reasonable means are not sufficient. Section 18(1) of the Ordinance requires, that the dangerous part of the machinery be securely fenced" or, in certain circumstances, that alternative means be taken to provide the same measure of safety. If, by reason of the nature of the operation, the safety of a dangerous part of the machinery cannot be secured by means of a fixed guard, it is necessary to provide what is called an interlocking guard. This device automatically prevents the operator of the machine from coming into contact with the dangerous part while it is in motion since the lifting of the guard in itself brings the machine to a standstill.

The English courts1⁾, on the basis of a similar provision in the English statutes requiring safety in the operation of dangerous machinery, have held repeatedly over a period of decades that the duty of fencing machines securely is an absolute duty in the sense that the safety to be provided by the fencing must be absolute. In other words, the fencing must provide the workers who come into contact with the machine with an absolute guarantee that they will not be injured by it. The factory owner, therefore, does not discharge this duty even if he fences the dangerous machine in accordance with the best and most modern system known at the time if, in fact, the machine is not guarded thereby as the law requires (see Dennistoun v. Charles E. Greenhill Ltd. (3)). In the same way the factory owner does not discharge his duty if he does not provide the safety required for his workmen because to do so is technically impossible or commercially unfeasible. It has accordingly been held by the English courts that in cases such as these there is no alternative but to withdraw the machine from use. (Davies v. Thomas Owen and Company Ltd. (4), and Pugh v. Manchester Dry Docks Company, Ltd. (5).)

In the case before us evidence was given by two labour inspectors who are responsible for ensuring compliance with the provisions of the Ordinance. They both stated that the guard over the metal rod is inadequate because it is possible to raise it while the machine is working without thereby stopping the machine. Both these experts stated, therefore, that there can be no absolute protection for the operator of this machine unless by means of an interlocking guard (by the raising of which the operation of the machine is stopped automatically, while it is impossible to set the machine in motion unless the guard is in position) although they had not demanded up to that time that such a guard be provided. The learned judge, however, did not accept these opinions but upon the evidence of the defendant and an expert engineer called Avni, who gave evidence on the defendant's behalf, he reached the conclusion that in providing the guard as it was, the defendant had taken reasonable steps to discharge his statutory duty. The defendant, who is very experienced in his profession, stated in evidence that he had visited many factories of the same kind in the country and that in not a single one had he seen an interlocking guard. He also said that "the guard must be free and flexible so that it can be raised with ease" - in other words, that in view of the nature of the work it is impossible to use a guard that is absolutely rigid. The engineer Avni also confirmed that the guard in the present case must be flexible, so that it can be raised in order to enable the wool to pass in accordance with the thickness of the material and that it is therefore impracticable to operate this machine with a morticed fence. He also stated that he had not seen such a fence on machines of this kind either in this country or elsewhere, and that only recently he had seen a modern machine of this type made in Belgium, and that even on that machine there had been no interlocking guard. On the basis of this evidence the judge concluded that the metal guard constituted reasonable protection, sufficient to satisfy the requirements of section 18(1) of the Ordinance, and that there is no necessity in this case for an interlocking guard in terms of the proviso to that section.

It seems to us for more than one reason that the learned judge erred in his conclusion.

In the first place it is clear that the metal guard does not allow for the machine to be "securely fenced". It moves up and down according to the amount of material which enters the machine, and sometimes it rises to such an extent as to enable the operator of the machine to put in his hand and reach the point between the two metal rods which revolve at a high speed (see the evidence of the labour inspector Stein and of the defendant). In other words, the guard does not constitute a reliable and fixed partition which would prevent a workman from coming into contact with the dangerous parts of the machine, and as long as this is so the requirement that the machine should be securely fenced has not been fulfilled (see, for example, the remarks of Lord Porter in Carroll v. Andrew Barclay & Sons Ltd. (6) at pp. 390-1). Moreover, when the metal guard is lowered it covers the metal rod and protects the workman from the cog wheel, but when it is raised - and there is no difficulty or impediment in raising it at any time - it exposes both of them, and there is then nothing to prevent the workman from coming in contact with them. This arrangement does not fulfil the requirements of section 20 of the Ordinance which provides, inter alia, that all fencing or other safeguards provided in pursuance of that Part, namely Part IV of the Ordinance, shall be constantly maintained and kept in position while the parts required to be fenced or safeguarded are in motion or in use, save in certain exceptional circumstances which are not relevant to the present case. In the case before us, as we have seen, it is possible to raise the guard with ease and expose the dangerous parts even when they are in motion, and we know from the story of the appellant that his hand was drawn towards the cog wheel while it was still in motion.

In the second place, it is clear from the evidence of the respondent and the engineer Avni - which was accepted and relied upon by the learned judge - that because of the nature of the machine it is impossible to secure the safety of the workman from the metal rods. Their evidence was that the guard must be flexible and free, so as to be raised and lowered in accordance with the thickness of the layer of wool entering the machine. In this case, therefore, the proviso to section 18(1) of the Ordinance applies, in terms of which a device is to be provided which automatically prevents the operator from coming into contact with the dangerous part of the machine, viz., a device called an interlocking guard. There is no doubt that it is a matter of great, if not insuperable, difficulty to fix an interlocking guard to this type of machine. As we have already seen, however, there is no solution other than to fulfil the statutory obligation or to cease to use the machine. The fact that this machine has been used as it is in the respondent's factory and in other factories for a considerable time without any accident having occurred, and that the labour inspector did not demand an interlocking guard on this type of machine, is immaterial. See Sutherland v. Executors of James Mills, Ltd. (7).

This brings us to the second question, namely, whether the appellant was negligent, and if it was his negligence which caused the accident. The learned judge found that the appellant well knew from the directions and instructions which he had received from the respondent and the Works Manager that the machine was to be cleaned by means of a hook, and not by hand, and that the appellant's negligence consisted in acting against this directive. The learned judge found additional negligence on the part of the appellant in his standing at the side of the machine instead of facing it - as he was obliged to do - and in his introducing his hand under the metal rod, although this part of the machine is always free of wool. Had there been some foundation in the evidence for the findings of fact upon which the judge based his conclusion of negligence we could not have interfered with that conclusion. However, after having examined and re-examined the evidence in its entirety, we have been unable to discover any basis for the findings of the learned judge. We shall deal with them separately.

(a) The appellant acted against the directions and instructions which he received. In connection with this the respondent stated in evidence: "When the appellant started to work, I showed him how to clean the machine and I explained to him that the electric current must be stopped before the cleaning and that he must not touch any part of the machine as long as it is in motion... I told him that when the machine is already working he must only use the hook in order to clean it and must not use his hands...... The worker who operates this machine is the one who must clean it and he is not to rely on any one else to do it". And the Works Manager stated in evidence: "When it is desired to clean the machine it must be turned off. It is possible to remove the wool both with the hook and also by hand where there are no cogs... I told the plaintiff that it was forbidden to introduce the hand while the machine was in motion.. ."

And what did the appellant do? He first turned off the electric current with both switches, and when it seemed to him that the machine was no longer in motion he started to clean it by hand. This was in accordance with the instructions given to him and not contrary to them. The appellant did not know that the cog wheel continues to move for some little time after the current is turned off, and there was no evidence that instructions were given to him not to approach the machine for some time after the current had been turned off.

(b) The appellant stood at the side of the machine at a time when he should have stood facing it. It is true that the appellant stood at the side of the machine while he was cleaning it, and not facing it, but according to all the evidence he was not obliged to stand facing the machine at that time. It is only while the machine is in motion and the workman is operating it or cleaning it with a hook, that he is obliged to stand facing it. When, however, he has to clean it by hand after it has ceased to operate, he is obliged to stand to one side, otherwise his hand cannot reach the machine at all.

(c) The appellant introduced his hand underneath the metal rod, although that part of the machine is always clear of wool. In point of fact the appellant did not introduce his hand into that portion of the machine. The eye-witnesses, Pessah Cohen and Simha Sverdlik, who helped to extract the appellant's hand from the machine immediately after the accident, stated clearly that "the hand was caught between the big cylinder and the cogs" and that "he held his hand above the cylinders between the drum (that is to say, the cog wheel) and the upper cylinder (that is to say, the rod)..."

It is clear, therefore, that there is no proof of negligence on the part of the appellant which caused the accident. The accident was caused in fact by the breach of the statutory duty imposed upon the appellant relating to the fencing of the machine.

The plaintiff, in his Statement of Claim, claimed damages in an inclusive sum of I.L. 17,000.- Of this amount I.L. 500.- were claimed as special damages for loss of past wages, that is to say, from the date of the accident, January 7, 1951, until the date of the institution of action, July 1, 1952, less the amount received by him until then, and general damages in an amount of I.L. 16,500.-.

In the course of argument before the District Court counsel for the plaintiff amended this account and argued that on the basis of the evidence led by him his client was entitled to damages for loss of wages until that date (April 1, 1953) in an amount of I.L. 1,534.-. In this court counsel for the appellant again amended the account for damages and in his written argument filed in this court on June 10, 1954, claimed an amount of approximately I.L. 4,000.-. He based his claim for this sum on his client's total inability to work during the whole period, and he argued that this amount should be awarded to his client in full as the actual loss which he had sustained for the period which had already passed, as special damages.

It is clear that this contention is erroneous. Special damages must be proved in a trial as the actual loss or expense sustained by the plaintiff until the date of his claim or, at the latest, until the date upon which the case is heard. All other loss, expense, or damages which are anticipated in the future form a portion of the general damages.

The learned judge dealt with the question of damages only to meet the eventuality of an appeal, and he expressed the opinion that the loss of past wages should be assessed in the amount of I.L. 500.-and that the claim for general damages in the amount of I.L. 16,500.-should be dismissed for lack of proof.

We do not think it would be right in this case to vary the amount awarded by the learned judge in respect of damages for loss of past wages - down to the date of the institution of the action - in the sum of IL. 500.-, since this is the sum which was claimed by the plaintiff in his Statement of Claim, and he did not claim that damages under this head should be calculated until the date of the hearing of the case.

We turn now to the question of general damages. The plaintiff in his Statement of Claim did not claim the general damages claimed in the amount of I.L. 16,500.- under the two heads of damage of which they are composed, namely, loss of wages or profits in the future, and pain and suffering. Only in the course of argument in the District Court was it stated by counsel for the plaintiff that, in accordance with the accepted standard in the courts of this country in such matters, it was in his opinion proper to fix the amount of damages for pain and suffering caused to the plaintiff at I.L. 5.000.-and damages for loss of wages from the date of the institution of action until the end of the plaintiff's life in the amount of I.L. 11,500.-as was done in the case of Grossman & Egged Ltd. v. Henry Roth (1) and the case of Daum & Egged Ltd. v. Aharonof (2).

As far as damages for pain and suffering are concerned it seems to us that the damage in this case is less serious than in that of Grossman, in which the damages awarded were fixed at I.L. 5,000.-and in that of Daum, in which the greater part of the sum of nine thousand two hundred and thirty pounds was awarded. In Gross man's case the left hand of the injured man was amputated completely leaving only a stub the length of which was 16 cm. In the case of Daum the victim suffered severe injuries to his head and remained with a deep hollow in his forehead. After an operation and lying in hospital for twenty-six days, a further period of five months elapsed before he started any work at all. He lost his sense of taste and his sense of smell, and at times even his sight was affected. The doctors were also of opinion that it was possible he would become epileptic as a result of the accident. It is true that in the case before us the appellant lay in hospital on more than one occasion and underwent four operations in the course of nine months, and that after all this he remained with a permanent disability in his hand. The hand itself, however, was not amputated, although it has remained patently deformed. Having regard to all the circumstances of the case it seems to us that an amount of I.L. 4,000.-is a reasonable sum of damages under this head.

It remains to consider the measure of damages to be awarded for loss of ability to work in the future. There is no rigid rule to be applied to this matter and the court will assess these damages to the best of its judgment having regard to all the circumstances and the factors affecting the case before it. As a general rule the court must assess "how much the injured man would have earned but for his disability and how much he is likely to earn with his disability" during the rest of his life, and must determine the damages upon the basis of the difference between these two amounts. See Grossman's case (1).

It follows that the learned judge was correct in saying that it was for the plaintiff to prove his age and his prospects of living in order to estimate thereby his expectation of life. We are not however, in agreement with the conclusion of the learned judge that the plaintiff's prospects of life were not proved.

It is true that these two elements, namely, the age of the plaintiff and the length of life which he could be expected to live were not mentioned in his Statement of Claim. The plaintiff stated in evidence, however, that he is twenty one years of age and that he completed his army service with medical category "A" about three months before the accident. Counsel for the defendant did not object to this evidence at the time nor did he bring any evidence to contradict it. In these circumstances there was nothing to prevent the learned judge from accepting the age of the appellant and his state of health in general, as facts which had been proved.

What, however, is the appellant's expectation of life for the purpose of assessing general damages? No positive evidence on this point was adduced, but in his argument before the lower court, counsel for the plaintiff relied upon the statistical tables published in Bingham's book on Claims in Vehicle Cases, second edition, p. 372, and on the Israel Statistical Monthly, from which it appears that the average expectation of life of a normal man of twenty one years of age in England and in Israel is about 45 years. The learned judge, however, apparently following an obiter dictum of Cheshin J. in Grossman's case (1), paid no attention to all this and did not even mention it in his judgment. In our opinion once the judge had seen the plaintiff in the witness box and his age and state of health were known to him, there was no reason not to estimate the expectation of life of the plaintiff - upon the basis of his general knowledge of the average and usual length of life of the inhabitants of this country. It has been an accepted practice in the courts of England in recent times to estimate the expectation of life of a plaintiff upon the basis of their general knowledge and experience without any additional positive evidence. (See Harris v. Bright's Asphalt Contractors Ltd. (8), and Roach v. Yates (9).)

That is also the law in the United States, as appears from Sherman and Redfield on Negligence, Revised Edition (1941), vol. 4, p. 1972, in which the following two cases are cited:

"Where the plaintiff was personally present held that the jury might judge her life expectancy without any other evidence on the subject."

"Where the evidence discloses the age and health of the deceased, it is competent for the jury to estimate his probable duration of life without the assistance of mortality tables".

After all, every case of the possible expectation of life of a particular person is in the realm of conjecture, even after consideration of tables of life and mortality, and evidence of experts regarding them. In the absence of special circumstances pointing to the necessity of departing from the general rule in respect of any particular person, the expectation of life of an ordinary man must be assessed according to the average that is proved in the case or which is determined by the court upon the basis of its own knowledge and personal experience.

"If there are special considerations such as these, the party who relies upon them to reduce the period of life must prove that they exist." See Rowley v. The London & North Western Railway Company (10), at p. 184.

In the present case the respondent has not established the necessity of departing from the general rule in the case of the appellant. It seems to us, therefore, that it would be right to fix his future expectation of life at 40 years.

As far as the wages of the appellant at the time of the accident - and thereafter - are concerned, it has been proved that his daily wage at the time of the accident was I.L. 1.659.- and that the daily wage of a healthy workman of the type of the appellant at the time of the institution of action in July, 1952, had risen to I.L. 4.333. When this evidence was heard in January 1953, the daily wage was I.L. 4.854. As is known, wages in general have continued to rise, regularly and continuously, but since we must take into account a length of life of 40 years which the appellant may expect from July, 1952, and that there may be in the course of that time both rises and falls in the wages which can by no means be anticipated, it seems to us that we are entitled to assume, on the basis of the position of today, that were it not for the appellant's disability he would in the course of the whole period mentioned earn an average of I.L. 5.- per day, together with the rises and increments which he would receive as a result of expert knowledge and progress in his work which would increase with time.

In view of the judgment in the case of The "Swynfleet" (11), it is clear that in fixing the estimated wage which would be earned by an injured man for the rest of his life were it not for the accident, we are not entitled to disregard the general changes which operate in the meantime on the wages of workmen of the same type as the injured man. We must take them into account as the basis of our assessment in place of the actual wage earned by the injured man at the time of the accident. In that case the damages payable to the family of two workmen in a French ship who lost their lives when the ship sank as a result of a collision with the British ship "Swynfleet" in December 1939, fell to be considered. By reason of the second World War the matter came to trial only in 1947, and a number of major changes in the wage of shipworkers of the type of the two deceased persons (and also in the rate of exchange between the French franc and the pound sterling) had taken place in the meanwhile.

The court held that in assessing the damages payable to the families of the victims the wage which the victims would have earned had they remained alive until the hearing of the case was to be taken into account. In so holding the court based itself upon the principle that damages must replace what the deceased would have given his family had he remained alive and continued to support them. The same principle applies in the case of bodily injury in which case, too, the damages must compensate the injured man as far as possible for the anticipated loss which was caused to him by his injury. Since we know today, more than three and a half years after the occurrence, what has happened in the meantime in regard to wages generally, we must make use of this knowledge and not be content with considering the state of affairs that existed at the time of the accident as if nothing had happened since.

It is more difficult to assess what the appellant is likely to earn, with his disability, for the remaining portion of his life. More particularly is this so since up to the date upon which he gave evidence he had not yet succeeded in obtaining any kind of work, despite continuous efforts to do so, nor has it been proved what his prospects of work are in the future. In the absence of any other criterion, we may derive assistance from the evidence of the doctors who stated that the appellant - as a result of the accident - suffered at least a thirty-five per cent disability in his capacity to engage in physical labour, and take this finding as a measure of his loss of wages. On the basis of I.L. 5.- per diem and an average of 300 working days per annum for a period of forty years, the loss - at the rate of 35 per cent of this sum - amounts to I.L. 21,000.-. Taking into account that the appellant will receive his damages in one lump sum instead of in weekly payments, and also having regard to the other factors and occurrences which may operate to reduce his income (sickness, unemployment, and other expected and unexpected eventualities), we fix the sum of damages under this head at half the estimated loss, namely, the sum of I.L. 10,500.-.

In conclusion there remains the argument of the respondent that in view of the provisions of section 62 of the Civil Wrongs Ordinance, 1944, the appellant is precluded from bringing his present claim for damages since he has received damages for a year and a half under the Workmen's Compensation Ordinance. We see no substance in this submission.

Section 62 of the Civil Wrongs Ordinance provides as follows:

"Notwithstanding anything contained in the Workmen's Compensation Ordinance or any enactment as to workmen's compensation in force in Palestine for the time being, no workman (which term, for the purpose of this section, shall be deemed to include his dependants) shall, by reason of the happening of any event, recover from his employer both compensation under the provisions of this Ordinance and compensation under the provisions of the Workmen's Compensation Ordinance or such other enactment for any injury or damage caused by such event.

For the purposes of this section, the expression 'dependents' has the same meaning as it has in section 2(1) of the Workmen's Compensation Ordinance."

It is not disputed that the appellant received from the respondent and his insurance company various sums amounting to I.L. 647.- which were paid to him regularly from February, 1951, until June, 1952. These sums however were not payments of damages under the Workmen's Compensation Ordinance, and in the receipts signed by the appellant (which were submitted to the court) it is merely said that the amounts in question were paid "in respect of damages" without stating whether they were paid under the Workmen's Compensation Ordinance or The Civil Wrongs Ordinance. It was also not proved in evidence that the injured man knew and agreed to receive this money as damages under the Workmen's Compensation Ordinance.

The result is that we allow the appeal, set aside the judgment of the District Court, and award to the appellant an amount of damages of fifteen thousand pounds as follows:

For loss of past wages I.L. 500.-

For pain and suffering I.L. 4000.-

For loss of wages in the future I.L. 10500.-

Total I.L. 15000.-

We also award costs against the respondent both in this court and in the District Court together with an inclusive amount of I.L. 200-. as counsel's fees in both courts.

Appeal allowed, and damages awarded to the appellant in the sum of I.L. 15,000.-.

Judgment given on September 24, 1954.

1⁾ The text of this section is set out infra p. 441.

1⁾ Factories Ordinance 1946, s. 10(1):

Lighting 10(1) Effective provision shall be made for securing and maintaining sufficient and suitable lighting, whether natural or artificial, in every part of a factory in which persons are working or passing.

1⁾ The law in England has since been changed.

Full opinion:

Atia v. Rosenbaum.pdf

Hammer v. Amit

Case/docket number:

CA 1326/07

Date Decided:

Monday, May 28, 2012

Decision Type:

Appellate

Topics:

Administrative Law

Judicial review

Constitutional Law

Family Law

Parenthood

Breach of statutory duty

Exemptions from liability

Abstract:

This opinion is a result of cases joined together in order for the Court to resolve the general questions regarding the cause of action known as “wrongful birth”. This issue arises when a person born with a congenital disability claims that careful conduct by petitions – usually medical professionals who treated the pregnant mother – would have entirely prevented that person’s birth. Two distinct causes of action might be triggered by the negligent conduct: a claim by the parents and the claim by the child. These claims were recognized 25 years ago in the Supreme Court’s decision in CA 518/82 Zeitzov v. Katz (“Zeitzov decision”). The child’s claim is termed “wrongful life”, and thus is distinguished from the parent’s claim, termed “wrongful birth”. All five justices who sat on the Zeitzov panel found that there is no bar to recognizing the parents’ claim – the “wrongful birth” claim – as a subset of the tort of negligence and according to the general principles of tort law. The dispute, even back then, revolved around the issue of recognizing a claim by the child. In a majority ruling, the Court recognized the child’s claim of “wrongful life”. Still, the four justices of the majority were split on the reasons for recognizing the “wrongful life” cause of action and therefore were also split on the question of quantifying damages. This fundamental question was left unresolved there. As a result, in the years since the decision, real difficulties have arisen in applying the principle rule about recognizing a child’s claim of “wrongful life”. In the absence of binding precedent, the Zeitzov decision was implemented inconsistently. In light of these difficulties and in light of the need to resolve additional related issues, we joined the discussion.

The Supreme Court, in an expanded panel of seven justices (authored by Deputy President E. Rivlin) ruled that:

The child’s claim of “wrongful birth” can no longer be recognized. Each of the two different modes of reasoning that support the “wrongful life” as presented by the Court in Zeitzov hold significant legal challenges that go both to the element of damage and the element of causation, making it difficult to recognize this cause of action under the tort of negligence. Deputy President Ben-Porat’s approach inevitably leads to finding that there are situations where it would have been preferable for one not to have been born at all. This finding cannot be based on any legal foundation and should not be based on any morals or values. In the absence of such findings, the element of damage in a wrongful life claim cannot be proven. President Barak’s position in Zeitzov is also problematic as there is no causal link between the breach and the damage of life with a disability. But beyond these legal difficulties, there is a moral difficulty in the view that the life of one born with a disability can be considered – in the eyes of the child itself – as “damage”. The finding that it is better for a certain person not to have been born at all carries the impermissible implication that life has no intrinsic value, that is not reduced – and certainly not eliminated – due to a disability. This view is a necessary and important part of our recognition and belief in the sanctity of life, human value and dignity, and the rights of people with disability to dignity and equality. This position is reflected in the jurisprudence of courts in common law countries as well.

That said, there is neither law nor principle preventing the recognition of the parents’ cause of action for “wrongful birth” – a cause of action whose recognition is not in dispute. On this issue there is no place to do away with the ruling in Zeitzov.

Alongside the general recognition of the parents’ claim of wrongful birth, the Court found it appropriate to address three issues arising from this claim. These were not discussed in Zeitzov in depth and it is time for this Court to establish clear precedent about them. These issues concern the matter of proving causation, quantifying damages, and damage, specifically for infringement of autonomy.

Ruling on these issues ultimately led to a significant expansion of the “wrongful birth” cause of action of parents, who may be compensated for expenses incurred in raising the child and providing for its needs throughout the child’s life. In this manner, the Court (here) realizes the worthy objective at the basis of the Zeitzov decision – to compensate as fully as possible for the medical and rehabilitative needs and the care of a child born with a disability, but to do so through the parents’ wrongful birth claim.

Proving causation: insofar as parents wish to bring a cause of action for “wrongful birth”, they must prove the existence of a causal connection. To prove this causal link between the breach of duty of care and the different damages caused by the disability, they must show, as the first stage, that had the committee for pregnancy terminations possessed all relevant medical information (information that was not provided to the parents because of the negligent conduct) it would have permitted the parents to terminate the pregnancy. At the second stage, and only if the answer to the first question is in the affirmative (otherwise the causal link is broken anyway), the parents must show that but for the breach of duty of care, they would in fact have approached the committee for pregnancy terminations for permission.

Because of the difficulties the second stage causes, significant weight should be given to the first question in terms of causal link – the question whether the committee for pregnancy terminations would have permitted termination in a particular case. In addition it is appropriate that the decision by the committee for pregnancy terminations would serve as a rebuttable presumption regarding the parents’ position on termination. Further, general factors, such as allegiance to a particular religion group,do not suffice to rebutt the presumption that if the committee had permitted the termination then the parents would have approached it with a request. These factors may be relevant, but since they might reflect a single aspect among the entirety of the woman’s individual circumstances, much caution must be taken when drawing any conclusions based on that aspect. Therefore, for instance, it is insufficient that the parents’ religion may forbid them from terminating a pregnancy; the court must be persuaded that the mother would have actually obeyed the religious prohibition. Finally, it must be emphasized that, when it is proven that the committee for pregnany terminations would have permitted a termination, the parents' failure to prove that they would have chosen to terminate the pregnancy does not negate their possible claim for damages due to the violation of their autonomy, that is, their right to make such an important decision about their lives in an informed manner. For this damage, they are entitled to separate compensation.

The issue of damage and quantifying compensation: the parents are entitled to compensation from the defendant for the additional expenses required to fulfill their child’s medical needs and provide the child with care, and when, because of the disability, the child continues to depend on them beyond childhood, they are entitled to compensation for expenses they incure for the rest of the child’s life. This includes ordinary maintenance expenses, at least to the extent that there the child has limited income potential and there are no special circumstances that deny this right. When a child is expected to have an income despite the disability, the expected income is to be deducted, that is, the appropriate rate of the average wages must be deducted from the compensation to the parents.

General damages: in cases of wrongful birth the mental and psychological harm continues throughout the parents’ (plaintiffs) lives. This damage is different and separate from the harm to autonomy, which is a one-time harm that occurs at the moment where choice is denied them. The ongoing and excruciating mental harm therefore warrants a significant level of compensation.

Violation of autonomy: the question of the link in the parents' suit between the causes of actions for wrongful birth and violation of autonomy is that in some cases where the harm to the parents for denying their right to autonomy – to decide whether to continue a pregnancy or to terminate it – can be distinguished from other harms and where violation of autonomy is an additional, substantial harm that goes to the core of the right, the violation of autonomy must be separately compensated (in addition to their right to claim compensation for any other direct damage caused to the parents). As for the extent of the compensation – the compensation must be individual, considering the concrete violation and its circumstances. That said, it has already been found that since this is an estimate of general damage, courts would make this estimate based on the circumstances and judges’ life experiences. As a general rule, the extent of the compensation for violation of autonomy must be directly proportional to how material the missing information was and how the violated interest was to the core of the right and how much it implicated that right. Where the court was persuaded that the plaintiff’s autonomy had been violated in a way that reaches the core of that right and on a material aspect, it must grant appropriate compensation that reflects the full severity of the violation.

The Matza Commission recommended that the legislature “authorize the courts to include in their decisions instructions regarding the use of the financial compensation, as much as the court may see fit to do so in order to ensure the child’s needs are met. Additionally, we recommend legislation stating that the compensation designed to guarantee the needs of the child would not be considered property of the parents in case of bankruptcy, nor would it become part of their estate or be available for any garnishment or enclosure of any kind.” These recommendations are wise and reasonable, not just for this cause of action, but more broadly as well. We hope that the legislature will answer this call, and that until then courts develop the appropriate mechanisms with the tools at their disposal.

The outcome: in terms of abolishing the child’s cause of action, it will not apply to pending cases where the parents’ suit was not brought. Justice Rubinstein, in concurrence, believes that the outcome of this decision should be stayed for a year, and Justice Naor points out that there is no place to determine, through a transitional provision in the matter at hand, the fate of a child’s claim that has not yet been brought.

Justice Rubinstein believes that we are replacing a theoretically and practically difficult system with one that has no theoretical challenges but gives rise to practical difficulties. However, at the end of the day, he joins in principle the opinion of the Deputy President, while pointing out the difficulties and calling upon the legislature to pronounce upon the issue.

Voting Justices:

Primary Author

majority opinion

http://elyon1.court.gov.il/files/07/260/013/p34/07013260.p34.pdf

Author

concurrence

Grunis, Asher

majority opinion

Naor, Miriam

Author

concurrence

Arbel, Edna

Author

concurrence

Joubran, Salim

majority opinion

Rubinstein, Elyakim

Author

concurrence

Full text of the opinion:

CA 1326/07

and counter appeal CA 572/08

CA 8776/08 CA 2600/09 CA 2896/09 CA 3856/09 CA 3828/10

Appellant in CA 1326/07 (Respondent in the counter appeal):

Lior Hammer

Appellant in CA 572/08: The State of Israel

Appellant in CA 8776/08: A (a minor)

Appellant in CA 2600/09 and Respondent in CA 2896/09:

Maccabi Healthcare Services

Appellants in CA 3856/09:	1. Eran Sidi
2. Tsipora Sidi
3. Yigal Sidi

Appellant in CA 3828/10 Clalit Health Services v.

Respondents in CA 1326/07 (Appellants in the counter appeal):

1. Professor Ami Amit

2. Mor Institute for Medical

Information Ltd.

3. Clalit Health Services

Respondent in CA 572/08: A (a minor)

Respondents in CA 8776/08:	1. Victoria Sharai
2. Alex Walpert
3. Maccabi Healthcare Services
4. Dr. Yivgenia Mazor
5. Kolmedic Ltd.
6. Dr. Yosef Bracha

Respondents in CA 2600/09 and Appellants in CA 2896/09	1. Noam Sabagian
2. Tsiona Sabagian
3. Hayim Sabagian

Respondents in CA 3856/09: 1. The Sick Fund of the Histadrut haClalit

2. Dr. David Kampf

Respondents in CA 3828/10:	1. Chen Na'ava
2. Chen Eli
3. The estate of Chen Ziv Or z"l

The Supreme Court sitting as a Civil Appeals Court

CA 1326/07 and counter appeal from the judgment of the Haifa District Court of 25 December 2006 in CC 745/02, given by the Honorable Judge

B. Gillor

CA 572/08 from the judgment of the Haifa District Court of 2 December 2007 in CC 259/02, given by the Honorable Judge B. Gillor

CA 8776/08 from the judgment of the Be'er Sheva District Court of 31 August 2008 in CC 3344/04, given by the Honorable Judge S. Dovrat

CA 2600/09 and CA 2896/09 from the judgment of the Jerusalem District Court of 29 January 2009 in CC 8208/06, given by the Honorable Judge

Y. Adiel

CA 3856/09 from the judgment of the Jerusalem District Court of 2 April 2009 in CC 1338/97, given by the Honorable Judge A. Habash

CA 3828/10 from the judgment of the Jerusalem District Court of 11 April 2010 in CC 8459/06, given by the Honorable Judge I. Inbar.

Before President D. Beinisch (emeritus), President A. Grunis, Deputy President E. Rivlin, Justice M. Naor, Justice E. Arbel, Justice E. Rubinstein & Justice S. Joubran

For Petitioner in CA 1326/07: Carmi Bustanai, adv.;

Shimrit Cohen-Daum, adv.

For Respondent 1 in

CA 1326/07 and counter appellant: Chaim Zelichov, adv.; Ofir Ben Moshe, adv.

For Respondents 2-3 in CA 1326/07

And counter appellants: Ilan Uziel, adv.

For Appellant in CA 572/08: Orit Sohn, adv.; Michal Sharvit, adv.

For Respondent in CA 572/08: Meiron Cain, adv.; Akram Mehajne, adv. For Appellant in CA 8776/08: Eli Lotan, adv.; Dalia Lotan, adv.

For Respondents 3-6 in CA 8776/08, Appellant in CA 2600/09 and Respondent in CA 2896/09, Respondents in CA 3856/09 and

Appellant in CA 3828/10: Yaakov Avimor, adv.

For Respondents in CA 2600/09 and Appellants in CA 2896/09

and Appellants in CA 3856/09: Amos Givon, adv.; Itai Givon, adv. For Respondents in CA 3828/10: Anna Rife-Liganza, adv.

For Amicus Curiae: Eli Zohar, adv; Inbal Zohar, adv.; Meirav Sagi, adv.

For the Israel Bar Association: Asaf Posner, adv; Eti Libman, adv.;

Avishai Feldman, adv.

JUDGMENT

Deputy President E. Rivlin: Background

1.ThehearingofthebeforeuswasconsolidatedfordecisionthequestionstheissueknownasacauseofforTheariseswhereaiswithsomeitisthatbydefendants–usuallypersonnelwhohadtheasapatient–wouldhisTwoseparatecausesofactionarisethenegligentconduct: parents' causeof action,andthecauseof action thechild The

child's cause of action is customarily called "wrongful life", in order to differentiate it from the parents' cause of action, which is called "wrongful birth".

2.Thetheoffor"wrongfuland"wrongfulwastwentyfiveagointheoftheCourtinCA518/82Zeitsov v. Katz,40(2)IsrSC85(1986)ZeitsovInthatwhichwashandeddownbyapaneloffiveitwasheld,thatisnothingpreventingrecognitionoftheparents'causeofaction–"wrongfulofaction –inofthetortandinaccordancewithregularTheeventhen, around the question the of the cause of action.

The Court, per the majority of Justices on the panel, recognized the cause of action of the child – the "wrongful life" cause of action. However, the four majority Justices disagreed regarding the theoretical reasoning for recognizing the "wrongful life" cause of action, and as a result, also regarding the question how the extent of the damage should be measured. That decisive question remained answerless in that case.

3.DeputyM.D.Levinconcurring,heldthatthecauseofactionshouldbeonlyintherare"initcanbeheldthatitwouldhavebeenbetterforacertainpersontohaveborn. Atitwillbeasocietalthatitisaofconsensusitwouldhavebeenbetterforacertainnottohavebeenbornthantohavebeenbornwithsevereatp.97).Inthosetoherthebirthof thechildisthatwas causedtoofthatinmonetary itwas is"he isliableforbeingshouldprovidehimthroughwhichtheofthecanbelessenedtotheboundaryofthepossible"(Zeitsov,p.100).Ben- Porat, DP clarifiedthatherisnotforatobebetweenachildwithandaborn"buttoexhausttheinorderthathefunctionandininferiorThissolution,sheleadsto"thetakingintoofthefactthathavingbeenborn(evenifagainsthisbestisachildbeforeuswho isentitledto athatis worth evenif onlywithinthe of his at p. 100).

4.(thenJustice)A.Barak,inwhoseopinionJustice)S.Levin,alsodeterminedthatcauseactionfor"wrongfullife"shouldberecognized.However,theuponwhichhispositionisisandcaninfluencescopeofcasesintheofaction"wrongfulandthewayisAtofthisviewaccordingto"thedutycareofthedoctorhimtotakereasonablecautionarysothatthewillnothaveadefect.Itisthusalsotherightthatnotbeturnhislifealifeofdefect.Theminordoeshaveanyrighttoalackofalife.Thewhichthelawisnottheinhavingalife,butrathertheinterestinlifewithoutdefect.Thus,thewhichtheisliableforisthecausingoflife,orlackofalife.Thedamagewhichthedoctorisliableforisthecausingofdefectedlife… the doctor is liable for causing defected life, and that is

formulated by comparing the defected life to life with no defect" (Zeitsov, at p. 117). According to that approach, the child's cause of action will be recognized also in cases in which the disability is not exceptionally severe, and does not necessarily lead to the conclusion that it would have been better for the child not to have been born. Estimation of the damage, according to this approach, is not calculated according to the difference between the disabled life and a lack of life (as per the approach of Ben- Porat, DP), but rather according to the difference between the disabled life and life without disability. Although had the tort not been committed the damaged party would not be alive, and certainly would not live a life with no disability, according to the position of President Barak, the uniqueness of the issue allows estimating the compensation in comparison to life without disability, in the framework of flexible interpretation that is adapted to the principle of restitutio in integrum.

Justice E. Goldberg, dissenting, determined that the existence of a cause of action for the child against the doctor, due to whose negligence the child was born disabled, cannot be recognized at all in circumstances where without the negligence the child would not have been born at all. Preferring the pre-creation nihil over life, even in rare cases – thus determined Justice Goldberg – is impossible.

6.Althoughin theZeitsov casethecase of aninfantdueto"wrongfullife",fromitundecided.Asainthethatpassedsincethewashandedaroseintheruleofthecauseofactionforofthesefromtheexistenceof twotheofthecauseofandthewayiscalculated,andfromtheveryofcauseof Thus,thecourtstointer aliawhatapersonwithhowextentofthatshouldbewhetherslight(oronlyseverecanacauseofactionforaninfant.However,withoutstare decisistheZeitsov rulingwasnotinafashion.Duetoandtothetoalsorelatedwedecidedtotheofthecasesbeforeus,andtoorderbeforeanexpandedpanelofsevenjustices.IntheofD.of292011,wediscussedquestions ofthat decision:

Does a cause of action exist and what is its legal basis? In light of the time that has passed since the Zeitsov ruling was handed down and/or the continual difficulty in implementing it, should it be altered, or should one of the approaches expressed in the Zeitsov ruling be preferred over the other?

Assuming that a cause of action exists: should the parents' action (wrongful birth) or the child's action (wrongful life) be recognized, and in which cases will each of the causes of action arise?

The principles of calculation of compensation in both actions: in the parents' action: comparison between a healthy child and a child with defects, or another standard? In the child's action: comparison between no life and a life with defects? A comparison between a life with defects and a healthy life?

Proving a causational link – in the parents' action (proof that they would have terminated the pregnancy had they known of the expected defect). In the child's action – is his death better than his life?

Is violation of autonomy – as a cause of action in the parents' action – an additional cause of action, or an alternative to the cause of action for wrongful birth?

It was further held in that decision that the questions of principle shall be decided first in the framework of a partial judgment, after which the individual hearing in each of the cases would continue, to the extent that would still be necessary. Thus, we shall relate in this decision to the questions of principle only and to the arguments regarding those issues. The decisions in the various cases shall be heard separately and not before this panel, and we are not determining anything regarding the liability of any of the defendants in the cases before us.

The Parties' Arguments

7.Thecounseloftheinthecasesbeforeussupportedrecognitionofthecauseoffor"wrongfullife",totheofPresidentBarakinZeitsov Itwasthatofthisisitunnecessarythebetweenlifeandnolife,andoflifeInaddition,arguethatapproachadvancescertaintyandintheasitnotawhichisinherentlyvague,adefectandadefect;andevenisincomparisontoaiscalculatedbyathatisintortforbodilywhichisacceptedbytheItisthecomparisonsuchthatofthementitleatoandothersdoentitleapersontoisnotappropriateeither,asitbetweenofconsiderationsandsupportorderingfortheinvolvedindisability,evenifitisaThecounselevennotethattotheiritispossibletoprovideafullfortheofthechildintheoftheaction,theoftheparentsistotheperiodwhichthechildisuponhisItisthatfromthestandpoint,itisappropriate to the of action of thechild when thedoctorevenifisinthelinkbetweentheandthefromtheThethatnon-recognitionoftheactionwouldquasi-immunitythetodoctorswhoactedandthatthereisimproperinthatwithdefectispreferable tono life, when itisraisedbyadoctorwho performstests the purpose ofwhich isto allow in case ofa defect.

The counsel of the defendants in the various cases, on the other hand, support annulment of the child's action for "wrongful life". According to their position, President Barak's approach in the Zeitsov case is at odds with fundamental principles of tort law, whereas the approach of Deputy President Ben-Porat is impractical, because the court has no real tools with which to compare between a situation of life

with disability and a situation of no life. In addition, the very decision that there are situations in which it would have been better for a person not to have been born since he has a defect contains a problematic societal-moral statement which contradicts fundamental values of society regarding human dignity and the sanctity of life. In any case, the defendants are of the opinion that if the cause of action for "wrongful life" is recognized, the approach of the Deputy President should be preferred, and differentiation should be made, between "severe" defects regarding which it can be said prima facie that it would be better for a person had he not been born and more "minor" defects which do not establish a cause of action, according to the extent of the person's independence of functioning and his ability to be of benefit to himself and others, to be integrated into society and to live a life that entails satisfaction, meaning, and enjoyment. It is argued that an additional possibility is to make such a differentiation on the basis of criteria used by the pregnancy termination committees when deciding upon authorization to perform an abortion at the viability stage. Moreover, it is argued that the parents' cause of action should not be recognized either, as the expenses they bear in caring for their child constitute mitigation of damage, and where the party who suffered the direct damage – the child – has no cause of action, nor do the parties who mitigate the damage have a cause of action. The conclusion, according to the defendants' approach, is that only the parents' action for violation of autonomy should be recognized.

The Israeli Medical Association and the Israel Bar Association also appeared in the proceedings, with the status of amicus curiae.

The medical association extensively discussed the existence of a trend which it calls the aspiration to give birth to "the perfect child." According to its stance, the statement that it would be better for a person not to have been born leads to an intolerant attitude toward disabled persons, and as such considers them as having an inferiority due to which their birth should be prevented in advance. Thus, the medical association is of the opinion that the approach of Deputy President Ben-Porat in the Zeitsov case should be adopted, whilst determining clear criteria which would limit the use of the cause of action for "wrongful birth" (or "wrongful life") to the most difficult and severe cases, as per its definition. These criteria, proposed the medical association, can be based upon Health Ministry instructions to the multi-district pregnancy termination committees. The medical association further points out the sentiment of doctors in the field of obstetrics and gynecology, as well as that of those serving in the pregnancy termination committees, according to which the concern regarding a law suit is likely to lead to an increase in medical tests and to "superfluous" medical procedures or abortions.

The Israel Bar Association is of the opinion that the causes of action for "wrongful birth" and "wrongful life" should be recognized. It is further of the opinion that the practical difference between the various stances that recognize actions for "wrongful life" in principle is smaller than it first appears. Thus, because even according to the position of President Barak the child-claimant must prove, in the framework of the element of causal link, that the defect is so severe that the pregnancy termination committee would have authorized an abortion due to it; and because, on the practical plane, there is no essential difference between the two approaches regarding compensation. The Israel Bar adds that to its understanding, the caselaw on the question of wrongful birth does not have an influence on the number

of abortions that will be performed or upon the scope of tests during pregnancy, as it is the parents' desire for a healthy child that leads to these results, not the question of provision of retrospective compensation. Furthermore, the Israel Bar Association argues that public policy regarding the question of performing abortion should be determined in the framework of the law applying to it, and not in the framework of tort law. On the merits, the Israel Bar Association supports the position expressed by President Barak in the Zeitsov case. Decision of the question whether it would be preferable for a person not to have been born, it is argued, is a difficult one, which should be avoided and which is likely to lead to caselaw that is not uniform. The Israel Bar Association further argues that refraining from recognition of the child's cause of action is likely to leave him with no compensation if his parents make unenlightened use of the compensation granted them, or if he is put up for adoption after birth.

Last, note that the Attorney General notified us that the Minister of Justice ordered the establishment of a public commission, at his request, headed by the Honorable Deputy President (emeritus) E. Mazza (hereinafter: the Mazza Commission), in order to formulate his stance regarding the existence of a cause of action due to wrongful birth and the question of the appropriate boundaries of such a cause of action. The findings of the Mazza Commission were submitted to the Court on 19 March 2012, in the framework of "the Report of the Public Commission on the Subject of 'Wrongful Birth'" (hereinafter: the Commission Report). However, the Attorney General did not express his stance regarding the questions put up for decision before us. Thus, we refrained from viewing the findings of the report themselves as part of the parties' arguments, as they lack the status in law of the stance of the Attorney General.

The operative findings of the commission did not serve as part of the pleadings before us; nonetheless, it is worth noting that the Commission Report is the fruit of circumspective, serious and thorough work; sitting in the commission were the best of experts, many witnesses were heard, position papers from various sources were submitted, a survey of all the relevant issues was presented, and all was examined thoroughly and meticulously. We read the report and found that in certain respects, the commission went in the direction of the findings we reached. In light of that, we shall refer below to the Commission Report to the extent that it is relevant to the cases at hand.

12.consideringtheoftheaspectsofissue,wehavereachedtheinthelegalrealityofourtwentyfiveyearstheZeitsov rulingwashandeddown,thecauseofaction–thecauseofactionfor"wrongful – can no longer berecognized.

There are substantial legal difficulties, regarding both the element of damage and the element of causal link, which make difficult the recognition of this cause of action in the framework of the tort of negligence. But above and beyond these legal difficulties, there is moral, substantive difficulty in the view that the life of a person who was born with disability can be considered – in the eyes of the infant himself – as "damage". Recognizing this difficulty, we in effect continue according to the moral view outlined by President Barak in the Zeitsov ruling. Furthermore, as detailed below, we wish to realize the proper purpose at the foundations of the Zeitsov ruling –

granting compensation, as fully as possible, to fulfill the needs of the disabled child; however, to do so via the cause of action of the parents, which does not raise those difficulties.

The Difficulties in Recognizing the Cause of Action for "Wrongful Life"

13.Asnotedabove,attheoftheZeitsov ruling,whichthecauseofactionforlife",aretwoandseparateAccordingtobothapproaches,aofactionfor"wrongfullife"isbaseduponthetortofnegligence.Theelementofnegligenceisinby notin of theonthepriortoorduringthe(orconcernofadefectinthefetuswhichisgoingtobeborn,orbynottheoftheinfantinwhetherregardingexistenceofconcernofadefectorregardingtheneedfor,oradditionaltestscanorruleexistenceofconcern"(theCommission Report, at

p. 38). Both approaches assume that this element has been established. However, each of the approaches raises logical or legal difficulties regarding the existence of one or more or the other elements of the tort of negligence: damage or causal link.

The Difficulties regarding the Element of Damage

14.TheintheofDeputyBen-Poratraisessubstantivethe element of damage. Accordingtotheofisdefinedinthecauseofaction,astheornolife(theofthechildnotandwith(theofthetoofthechildisthedamagetodefinitionrequiresjudicialofthequestionthereareinwhichithaveforanottobeenandthusrequiresquestionsfoundinofphilosophy,morals and religion, regarding the of existence, asopposedto withtheseisanissueforfromthestandpointthe(theCommission Report,at39).Andindeed,President(thenJustice)A.Barakout inhis theZeitsov ruling,as follows:

This approach [of Deputy President Ben-Porat – E.R.]… once again raises the question whether the Court is able to determine that in certain conditions the lack of a life is preferable to a life of suffering. Do our worldview, our approach regarding life and our lack of understanding of non-existence, allow us, as judges, to determine that there are indeed situations, even if they be rare, in which it is preferable not to live than to live a life of suffering? What is the meaning of such "preference"? When the life expectancy of a person is shortened, we assess this suffering of his. This assessment is difficult, but it is possible, as we are able to assess the meaning of life; but how can we assess the meaning of the lack of life? … When we compensate for death or for shortening of life expectancy, we do not compare the state of life to the state of death, and we do not determine

the preference of one over the other, as we do not have the tools to do so. All we do is recognize the right to continue living – even if in suffering, and even if with defect… thus, how can we assess lack of life? According to which rational standards can a reasonable person determine that even in the most extreme case, lack of life is preferable to life with defect? (Zeitsov, at p. 116; emphasis added).

15.Indeed,fromthenormativeitappearsthatitisnotfortheCourttoawhosuffersfromacertainofdisabilitywouldbeifhehadnotborn.theCourtinno wayhasthetoolstoreachaasthelacksnatureofandsuchcourse,isnottobe("nohasyetfromthere"–saidtheCourt–"noonehasyetfromthereinordertotellwhatthelackofalsothebyRonenPerryolohaImZoTviotNezikinbeginb'Avla'33(3)M507,545-546andreferencesinnote177PerryFromtheaswell,itisbetterthatthediscussionnotbebycourts.Asaccordingtothe of Deputy Ben-Porat, to onlyinrarecases,andinfantmostapproachrequiresdecisionthequestionwhatthoseseveredefectshowever,lackingaforsuchtheisthatcourtisnotsocialthat canrulingsonquestions" Commission Report,at p. 39).

16.Itshouldthatinsuchacasetheisnotquantifyingthebutratherifanydamageoccurredall.Indeed,generallycaselawisflexibleregardingprovingofofthereinherentprobativewhichdonotdependupontheparty.Soitisprovingfuturelossese.g.:CA10064/02"Migdal" Chevra l'Bituach Ltd. V. Abu Hana,60(3)IsrSC13,par.7-9Abu Hana)).flexibilityshouldbewithpurespeculation.Intheus,theisnotonlyintheofthedamage,buta–whetherthereis, oris not, Thus notes Perryin this context:

I agree that difficulties of calculation and assessment… need not deter the courts from determining liability; however, a differentiation should be made between cases in which the existence of damage is obvious but it is difficult to assess its scope, and cases in which the question of the existence of damage cannot even be decided. Non-monetary damages are damages that most of us have experienced, directly or indirectly. Our acquaintance with various situations of non-monetary interests allows us to know when a change for the worse in the situation of such an interest takes place. The question of the existence of damage is not unsolvable. The only question, of course, is the question of quantification – but in light of the fact that from the conceptual standpoint this problem arises only after the question of liability has already been decided, it cannot justify (a priori) negation of that liability. The situation under present discussion is different. Non-existence is a situation with which nobody is familiar, and

thus comparing it to a situation of existence is always impossible. Without a relational plane to which the present situation of the plaintiff can be compared, we cannot determine if damage has been caused or not. The problem is not merely a problem of quantification" (Perry, at p. 547).

17.ThestateintheUnitedtheofdefining thenature of a of life":

The argument that the child was in some meaningful sense harmed by being born and would have been better off not being born suggests that there is a perspective, apart from our life and world, from which one can stand and say that he finds nonexistence preferable to existence (Goldberg v. Ruskin (1986), 113 Ill. 2d 482).

It was further written that:

Whether it is better never to have been born at all than to have been born with even gross deficiencies is a mystery more properly to be left to the philosophers and the theologians. Surely the law can assert no competence to resolve the issue, particularly in view of the very nearly uniform high value which the law and mankind has placed on human life, rather than its absence ( Becker v. Schwartz (1978), 46 N.Y.2d 401, 386 N.E.2d 807).

18.Lackingthecapabilitytothequestionifandistoadisabledlife,theisthetheofapproachesontheNota bene: itisnotaofapproaches;ifitwere,itbetobetweenthembyaCourtruling.Astheare itis to anycriteriondecidinganditistoaextentuponfeelingandworldview.Thus,foronecanwhatthelifeclearlytotheofenjoymentandapersonoutofhistofillhiswithvalue;topersonalqualityhisofhisandthesurroundinghissubjectivetoalive;histoandbeawareofthewondersofandability.Aquestionisthosebemeasured–fromtheofthechild,whodoesnotknowanyrealityfromtheonewhichhewasborn,ortheviewpointahealthyperson.aretoacannotbeT.Orrwellinin 5587/97 The Attorney General v. A, 51(4) 830, 858 (1997):

… we must refrain from adjudicating regarding the quality of life of [the child] in comparison to a regular child his age. We must focus upon examination of the well being of [the child] from his own viewpoint. When dealing with a child who suffers from defects from birth – even severe defects, like in the case before us – his life, with its disability – is the "whole" which that child enjoys. From the standpoint of [the child], another way of life was never a matter of consideration. The quality of

life is that quality which is possible in light of the severe defects he suffered. That, from his standpoint, is everything. Such a life is not worthy of less protection than the life of a child who was born and developed normally.

Even if it were possible to point out situations in which it is clearly preferable for a person not to have been born – and, as aforementioned, we lack that ability – there is real difficulty in defining and demarcating those situations in a way that would allow prediction.

Deputy President Ben-Porat proposed in Zeitsov to solve this difficulty through examination of the question if it would have been better for a person not to have been born through the lens of "the reasonable person"; in other words: whether the reasonable person would be of the opinion that the life of the damaged party isn't worth living. However, without any knowledge regarding the quality of the alternative to life with disability, nor is it possible to find assistance in a standard of reasonableness in order to find a proper answer. Furthermore, the ability to get enjoyment and value out of life despite disability is also subjective, and one can assume that it varies from person to person. Indeed, at times use is made of the term "not worth living" regarding life with severe disability; however, that is merely a phrase intended to indicate the existence of great difficulty, and in no way whatsoever can it be derived from it that the situation of nonexistence is truly preferable.

Nor does the proposal to rely upon criteria of the pregnancy termination committees in order to demarcate the type of cases in which the "wrongful life" cause of action would be recognized provide a real solution to the question whether and when nonexistence is preferable to existence. The considerations which guide the pregnancy termination committees are not limited to the question if being born or not being born serves the welfare of the fetus; the committees also consider, in the framework of the entire balance, the welfare of the parents and their desire to terminate the pregnancy. Authorizing an abortion in a given situation does not necessarily inform of a widespread societal view according to which in such a case it is better not to be born. The authorization is based, at least partially, upon the societal view regarding the pregnant woman's right to autonomy, her dignity and privacy, and the scope of the right to have an abortion. The scope of the right to terminate the pregnancy is not, therefore, comprised of the interests of the fetus alone. For that reason, and as I shall yet clarify, non-recognition of the child's action does not create legal disharmony in relation to the recognition of the right to have an abortion in certain situations.

21.AninDeputyapproachexistenceofthenotional duty of care thechild,whichisprovideandcorrecttohisastoanabortion.Indeed,thereisnoadutyofcareapersonwhohasnotbeenborn(asisdoneinofmedicalrecognitionofadutyofcareina"wrongfullife"requiresofaprotectednottobebornincertainThisbeonthetoanabortion,as(andtheanddoesadutytowardthefetus. Andindeed,theopinionof

Justice Goldberg in Zeitsov was based upon the view that a right not to be born does not exist.

In conclusion, the approach of Deputy President Ben-Porat requires determining, in certain cases, that there are situations in which it would have been preferable for a person not to have been born. That determination cannot be established from the legal standpoint, and it is not proper to establish it from the substantive-moral standpoint. Lacking such a determination, it is not possible to prove the element of damage in the wrongful life cause of action (and see also: Bilha Kahane "Pitsui begin Kitsur Tochelet Chayim 've'haShanim ha'Avudot' baTviot b'Ila shel Holada b'Avla" Mishpatim al Atar D 1, 4 (5772)).

The Difficulties Regarding the Element of Causal Link

22.TheofPresidentA.BarakinZeitsov theintoabetweenlifewithdisabilityandnon-existence.Barakabasisforof"wrongfullife"ofaction.Accordingtohistheelementshoulddefinedas"defectedlife",inwithwithoutdefect.inthisasolutionisprovidedfortheinthedamageinthetortandavoidstheneedtotheinit(thatis:whetherandwhenitcanbesaiditwouldbebetterforaninfantnottohavebeenbroughttheotherareno regardingthe of causallink.

The difficulty in determining a causal link between the negligence and the damage of a life with disability stems from the uncontroversial fact that it is not the negligence of the doctor which caused the damage of "defected life" (as per the definition of President Barak). Indeed, it is not the doctor who caused the disability of the infant, as even without the negligence, the infant could not have entered the world any other way than with his disability. In other words: proper medical care could not have led to prevention of the disability, and the possibility of that particular child being born without disability does not even exist. Deputy President Ben-Porat discussed this in Zeitsov, stating that:

There was no possibility that the minor would enter the world whole and healthy. Determination of damage, by the vary nature of damage, requires comparison between the situation of the claimant without the tort, and the situation after it. The only interpretation of this rule in our case is, to my best understanding, the comparison between nonexistence (without the negligence) and defected existence (as a result of the negligence). Charging the harmer on the basis of a comparison with a healthy child means punishment on foundations of an imaginary reality… The solution which my colleague supports seems to me to be impossible from the legal standpoint, and with all due respect – also unjust (Zeitsov, at p. 105; emphasis added).

The approach of President Barak thus deviates from the fundamental principle of the law of compensation regarding restitutio in integrum (and see the criticism by Perry in his aforementioned article, at pp. 559-560). Note that President Barak was

aware of these difficulties, but wished to find a solution which would allow appropriate compensation for the children and their parents.

24.Thelegalarenottobe"overcome".Fromofjustice,ofthelackofcausallinkbetweenthenegligenceandtheonlydamagewhichcanbebetweenwithdisabilityandwithnoisthatdidnottotheparty;inacasewouldbeanFromthatthereisalsonoplaceforthethat"oneoftheweightyreasonsfordoctorsotherinthecaseathand,isthereasonisatortfeasor,acrossfromhimthereisaninfantwithadefect–asevereone–andinthatiscalledforthetwo,theofjusticetendstowardthetheinfant,wholivewithhisdisability…itbesaidthatthesituationistoawhoincarwithandandaninnocentwhoatlastescapedawithaCanitbesaidthatthe'mens rea'ofahastydriverwho,onlybychance,didconcludedrivingafatal is fromthedriverwhomthe drivingconcludedinaresult?"T57-58(1997)).Thistypeofalthoughitbevalidfroman(andinfactistheofisnotvalidthetortlawlawdoesnotduetonegligent conduct,butratherduetocausing damage negligentlySoitisofjustice,andsoitisfromtheofdeterrence.itbesaidthattheresultsofdefendant'sconductwithversusnonexistence)aredamage;andwheretheonlydamagethatcanbeshown(lifewithdisabilitylifewithnowasnotby –it is not or just to upon the defendant.

Note also, that the path from recognition of the child's action for wrongful life directed against the doctor, to recognition of the child's action against the parents who begat him, is a short one; and no approach is interested in advancing that.

Annulling the "Wrongful Life" Cause of Action – The Moral Aspect

Recognition of the cause of action for "wrongful life" is faulty not only due to legal difficulties, but also due to difficulties regarding principles and values.

Definition of life itself – even if it is life with disability – as damage, and the determination that it would have been better for a certain person not to even have been born, contain an unacceptable violation of the view that life has inherent value, that does not diminish, and certainly does not disappear, due to the existence of a defect or the existence of a disability (see, e.g.: Roee Gilber "haTsorech baHachra'ot Kashot baTviot shel Chayim b'Avla veHolada b'Avla: He'arot v'Hearot b'Ikvot T.A. (Mechozi Haifa) 259/02 A v. The State of Israel" MOZNEI MISHPAT 7 441, 466-467 (2010)). This view is an important and necessary part of our belief and recognition of the sanctity of life, the value of the individual and his dignity, and the right of people with disabilities to dignity and equality.

26.SinceZeitsov wasdownfiveyearsago,thesereceivedBasicLaw:DignityandLibertyinArticle1,thetowhichthebasicoftheindividualinareupontherecognitionof the value of the individual and the sanctity of his life.TherecognitiontheseisbasedonuniversalvaluesandvaluesoftheStateofasaJewishstatethattheoflife.Theisborninimage.Havingbeenborn,hisdignityandthesanctityofhislifearetobeHisisbetheastheyHislifeispriceless,bethethey Life is a value– for all.

This moral-legal view is expressed well in the Equality of Rights for People with Disabilities Law, 5758-1998, which determines as a "basic principle" in section 1 that:

The rights of people with disability and the commitment of society in Israel to those rights are based upon the recognition of the principle of equality, the recognition of the value of the individual who was created in [God's] image and on the principle of the dignity of every person.

Section 2 of the law determines that its objective is:

…to protect the dignity and liberty of a person with disabilities, and to entrench his right to equal and active participation in society in all areas of life, as well as to provide an appropriate solution for his special needs in a way which will enable him to live his life with maximal independence, privacy and dignity, whilst realizing his full ability.

According to our societal view, in the framework of our moral belief, and pursuant to our legal principles, the definition of the life of a person with disabilities as "damage" is not appropriate, is not moral and is not possible. It substantively violates the principle of the sanctity of life. Quantification of the damage of a person with disability – in comparison to the possibility that he would not have been born at all or in comparison to a person with no disability – is itself a violation of the value of his life and of the presumption, which is not to be negated, that the value of the lives of people with disabilities is absolute, and not relative.

28.Indeed,thecostofof"wrongfulofactionissosevere,thatinFrance,inwhichCourdeCassationrecognizedcauseofactionforlife,itwasofdisabledwhichthatandthatitrelatestoinferiorevento(asaresultofthatinter alia,lawinwasSee:GilSigalhaMa'arechet–alHoladaveKol(vol.4)10,12SigalPerry,pp.524-525;M.Duguet,Wrongful Life: The Recent French Cour de Cassation Decisions 9 J. HealthLaw 139 (2002)).

This position of principle is also expressed in the caselaw of the courts in the various United States. Thus, for example, it was determined in the aforementioned Bruggeman case:

It has long been a fundamental principle of our law that human life is precious. Whether the person is in perfect health, in ill health, or has or does not have impairments or disabilities, the person's life is valuable, precious, and worthy of protection. A legal right not to be born – to be dead, rather than to be alive with deformities – is a theory completely contradictory to our law (718 P.2d at 642).

So it is there, and so it is here in Israel as well.

In Berman v. Allan, 80 N.J. 421, 404 A. 2d 8 (N.J. 1979) it was written that:

No man is perfect. Each of us suffers from some ailments or defects, whether major or minor, which make impossible participation in all the activities the world has to offer. But our lives are not thereby rendered less precious than those of others whose defects are less pervasive or less severe.

For the same reasons themselves, the Court in Canada refrained from recognizing the "wrongful life" cause of action, clarifying that this view is common to all of the Common Law systems, excepting a small number of states in the United States:

It is Unlikely that Canadian courts will entertain wrongful life claims in the near future. There are many technical and policy objections to them and this has led to a rejection of these claims in all common law jurisdictions other than a few American states… There is a risk that the recognition of a wrongful life claim will devalue the sanctity of life in general and the plaintiff’s life in particular. A finding of liability may be interpreted as a finding that the plaintiff’s life is a legally recognized loss and that he would be better off dead (Osborne, supra, at 141).

It is thus no wonder that the result we have reached unanimously, regarding the need to annul the "wrongful life" cause of action, was reached also by the majority of the members of the Mazza Commission, who determined that "the recognition of the cause of action is at odds with the fundamental values of our law" (the Commission Report, at p. 38). This result is also in line with the current law in the great majority of the Common Law states, as clarified below.

Comparative Law

The difficulties I have discussed led the great majority of the various legal systems not to recognize a cause of action for "wrongful life". The great majority of courts in the states of the United States do not recognize the cause of action for "wrongful life" (see, e.g.: Phillips v. United States, 508 F. Supp. 537 (D.S.C. 1980) (applying South Carolina law); Elliott v. Brown, 361 So. 2d 546, 548 (Ala. 1978); Walker ex rel. Pizano v. Mart, 790 P.2d 735, 740 (Ariz. 1990); Lininger v. Eisenbaum, 764 P.2d 1202, 1210 (Colo. 1988); Garrison v. Medical Center of Delaware, Inc. , 571 A.2d 786 (Del. 1989); Kush v. Lloyd, 616 So. 2d 415, 423 (Fla. 1992); Spires v. Kim, 416

S.E.2d 780, 781 - 82 (Ga. Ct. App. 1992); Blake v. Cruz, 108 Idaho 253, 698

P.2d 315 (Idaho 1984); Clark v. Children’s Memorial Hospital, 955 N.E.2d 1065, 1084 (Ill. 2011); Siemieniec v. Lutheran General Hospital, 117 Ill. 2d

230, 251, 512 N.E.2d 691, 702 (Ill. 1987); Cowe v. Forum Group, Inc., 575

N.E.2d 630, 635 (Ind. 1991); Bruggeman v. Schimke, 718 P.2d 635 (Kan.

1986); Kassama v. Magat, 792 A.2d 1102, 1123 (Md. 2002); Viccaro v.

Milunsky, 406 Mass. 777, 783, 551 N.E.2d 8, 12 (Mass. 1990); Taylor v.

Kurapati, 236 Mich. App. 315, 336 - 37, 600 N.W.2d 670, 682 (Mich. 1999);

Eisbrenner v. Stanley, 106 Mich. App. 357, 366, 308 N.W.2d 209, 213 (Mich.

1981); Miller v. Du Hart, 637 S.W.2d 183, 187 (Mo. App. 1982); Smith v.

Cote, 128 N.H. 231, 252, 513 A.2d 341, 355 (N.H. 1986); Becker v. Schwartz,

46 N.Y.2d 401, 386 N.E.2d 807 (N.Y. 1978); Azzolino v. Dingfelder, 315

N.C. 103, 337 S.E.2d 528 (N.C. 1985); Hester v. Dwivedi, 733 N.E.2d 1161,

1165 (Ohio 2000); Ellis v. Sherman, 512 Pa. 14, 20, 515 A.2d 1327, 1339 - 30

(Pa. 1986); Nelson v. Krusen, 678 S.W.2d 918 (Tex. 1984); James G. v.

Caserta, 332 S.E.2d 872, 880 (W. Va. 1985); Dumer v. St. Michael's

Hospital, 69 Wis. 2d 766, 233 N.W.2d 372 (Wis. 1975); Beardsley v.

Wierdsma, 650 P.2d 288, 290 (Wyo. 1982).

31.ThereasoningusedasabasisincaselawistoThus,foritwasthatcourthasnostandardaccordingtowhichitthatithavepreferableforanottobeenborn,thatincaseadoeshavetherighttobeborne.g.:Elliot v. Brown, 361 So. 2d546, 548 (Ala. 1978)).The lackof therightnottobeborn, itis does not contradictthe of a to have an abortion:

[A] legal right not to be born is alien to the public policy of this State to protect and preserve human life. The right of women in certain cases to have abortions does not alter the policy ( Elliot, 361 So. 2d at 548).

An additional reason, that is also used by the courts in the various states, is that there is no real possibility of quantifying the compensation for "wrongful life", as that would require determining the relative value of the situation of nonexistence – a situation regarding which there is no information (see: Siemieniec, 512 N.E.2d at 697). The courts in the United States also discussed the difficulty in determining criteria for differentiation between cases where the severity of a person's disability leads to a situation in which it would have been preferable for him not to have been born, and cases where the disability is not that severe (see, e.g.: Siemieniec, 512 N.E.2d at 699).

Three states alone in the United States have judicially recognized the cause of action for "wrongful life": California (see: Turpin v. Sortini, 31 Cal. 3d 220, 643 P.2d 954, 182 Cal. Rptr. 337 (Cal. 1982) ; Curlender v. Bio-Science Laboratories, 106 Cal. App. 3d 811, 165 Cal. Rptr. 447 (Cal. 2d Dist. 1980)); Washington (Harbeson v. Parke-Davis, Inc., 98 Wash. 2d 460, 656 P.2d 483 (Wash. 1983)); and New Jersey (Procanik v. Cillo, 97 N.J. 339, 478 A.2d 755 (N.J. 1984)). In this caselaw no answer is found for the difficulties in recognizing the "wrongful life" cause of action. In fact, most of the reasoning at the basis of the judgments that recognized the "wrongful life" cause of action regards the desire to assist, by way of charging compensation, people

who need it due to their disability, at least where it is possible to locate a person who acted negligently. Thus, for example, the court declared expressly in Procanik:

Our decision to allow the recovery of extraordinary medical expenses is not premised on the concept that non-life is preferable to an impaired life, but is predicated on the needs of the living. We seek only to respond to the call of the living for help in bearing the burden of their affliction (478 A.2d at 763).

It is obvious that we cannot use such reasoning to recognize a cause of action in tort law. It might be taken into consideration, and should be taken into consideration, in determining the amount of compensation after the tort has been recognized.

A similar approach, which characterizes most of the courts in the United States, was taken by other Common Law states. In McKay v. Essex Area Health Authority [1982] 1 QB 1166, it was determined in England that lacking express legislation determining otherwise, Common Law does not recognize a cause of action for "wrongful life" (in England such a statute was enacted; the case revolved around a girl born before the statute entered effect). Influenced by this case, and for reasons similar to those detailed above, the cause of action for "wrongful life" was rejected in Canada as well (see e.g.: Bovingdon v. Hergott, 2008 ONCA 2, 290 D.L.R. (4th) 126; Phillip

H. Osborne, Essentials of Canadian Law: The Law of Torts 140-141 (2000)) and in Australia (Harriton v. Stephens (2006) HCA 15). In the latter case, the Supreme Court of Australia rejected the action of a child for wrongful life, ruling that the damage cannot be assessed by comparing life with a defect to no life whatsoever (see also: Waller v. James (2006) HCA 16).

In Germany the Federal Constitutional Court ruled that the cause of action for "wrongful life" should not be recognized ( BVerfGE 88, 203 (269)), as it contradicts the constitutional principle of human dignity, entrenched in Article 1 of the German basic law. Germany of today, having internalized the horrors of the past, has recognized in its constitution and the caselaw of its courts the duty to sanctify human life.

The Supreme Court of Australia also reached a similar conclusion (OGH (25.5.1999) JB1 1999, 593). In France as well, as a result of caselaw that recognized the cause of action of the child, the law was amended in 2002, determining that a person cannot claim that his very birth caused him damage. The law allows the child's action only if the doctor's conduct directly caused his disability or worsened it (for a circumspective survey of the comparative law and of caselaw of additional states, see: Perry, at pp. 518 -525; the Commission Report, at pp. 32-38; Sigal, at p. 12).

The understanding that an independent cause of action for "wrongful life" should not be recognized is thus shared by many legal systems. There is, then, a sort of "global consensus", common to the various legal systems, regarding negation of the cause of action for "wrongful life" (at very least without legislation that determines otherwise). It seems that a judge, who

sees himself (inter alia) as part of this global legal system, and who takes part in his writing in the "global chain novel", to paraphrase the well known metaphor of Ronald Dworkin ((RONALD DWORKIN, LAW'S EMPIRE 228-29 (1998)), will place before his eyes the existence of the existing consensus regarding a certain legal issue:

[Global judicial cooperation] can also serve as a restraint imposed upon domestic courts, preventing them from exceeding the borders of the general consensus about what the "novel" should tell... referral to foreign law is similar to Dworkin's metaphor of a chain novel. When a judge considers himself part of the system - for that matter the global legal system - he will tend to avoid a significant departure from the global consensus (Eliezer Rivlin, Thoughts on Referral to Foreign Law, Global Chain-Novel, and Novelty, 21 Fla. J. Int'l L. 1, 15 (2009).

Indeed, a global consensus does not oblige a court in our legal system, and in fitting cases, there might be a good reason to deviate from it; however, there is no doubt that it should be given appropriate weight, while relating to the reasons and reasoning that led to its creation, and examining whether it should be adopted in the framework of the Israeli legal system as well. In the issue before us, we should not deviate from the global consensus. The Israeli legal system sanctifies human life, and blocks any detraction from the value of life. The life of a person, any person, is better than his death.

Thus, our conclusion is that the child's cause of action for "wrongful life" can no longer be recognized. However, from the practical standpoint, as clarified below, a significant expansion of the cause of action at the disposal of the parents of the infant due to "wrongful birth" – a cause of action the recognition of which is not controversial – will allow granting the parents compensation that will cover the costs of raising him and all of his needs even after he grows up, and for the entire period of his life expectancy.

The Parents' Cause of Action – an Action for "Wrongful Birth"

Recognition of the action for wrongful birth – the parents' action – does not raise the same problems of law and principle involved in recognition of the child's action. On that issue there was full agreement between all the Justices on the panel in Zeitsov. Thus wrote President (then Justice) Barak in that case (at p. 113):

"Indeed, recognition of the liability of the doctor toward the parents is in line with the regular rules of negligence law… between the doctor and the parents (who belong to the type of people who are cared for by the doctor) there is proximity, and the doctor has a notional duty of care. On this issue, there is no importance to the differentiation between a situation in which a doctor was negligent and without the negligence the minor would have been born healthy, and a situation in which had it not been for the negligence the minor would not have been born at all. In both

cases, we are dealing with the damage of parents and the deviation of doctors from the proper level of care. In the proper balancing between the interests of the various parties, the monetary burden of the medical negligence should be cast upon the creator of the risk and his insurer. It is to be hoped that in this way a proper level of health can be ensured. There is no justification for granting immunity to doctors who have caused damage by their negligence… parents have a right to plan their family, and in that framework it is appropriate for the attending doctor to take proper cautionary measures toward them and inform them of the risks involved in conception, pregnancy, abortion, and birth.

A necessary element in formulating liability through the tort of negligence is the element of damage. The existence of this element does not, in and of itself, raise any special problem in the context of the parents' action…

We too are of the opinion that the parents' cause of action for wrongful birth is in line with the regular definition of the tort of negligence, and does not raise any real difficulty regarding the issue of restitutio in integrum. Indeed, in the context under discussion this cause of action raises difficulties regarding the element of causal link. In addition – and President Barak discussed this Zeitsov – "questions might arise regarding the heads of damages for which compensation is given (i.e., whether compensation is given for the expenses and pain and suffering involved in the raising of a child), and regarding the calculation of the compensation ( i.e., should the benefit stemming from raising the child be set off from the loss)" (id, at p. 113). These difficulties cannot negate the recognition of the parents' cause of action, and in any case, they will be fully worked through below.

From the standpoint of morality and principle as well, the parents' claim does not raise the same difficulty that arises regarding the infant's action. In the parents' action, the life of the child itself is not defined as damage. The damage is manifest in the additional monetary implications and the psychological implications which the parents are forced to bear, due to the negligence. Accepting the parents' claim does not mean that the child's life has no worth, or that it would be better for him himself had he not been born; its meaning is that the parents were denied the possibility of choosing not to raise a child with disability, with all the difficulty that entails. There is a real difference between relating to a living and breathing child, with a personality, desires and feelings – as someone whose life is worthless, to the point that it would be better for him had he not been born, an attitude which we are not willing to accept; and relating to the right of the parents, as they were, prior to the negligent act, to choose whether to continue the pregnancy or to have a legal and permitted abortion, at the stage when their child was a fetus, devoid of independent life. Therefore, there is no contradiction between my approach regarding the inherent value of life and the recognition of the right of the parents to choose not to bring into the world a child with disability of a severity that legally allows having an abortion.

When examining the parents' aforementioned right to choose, the entirety of the considerations must be taken into account, including their right to build their lives as they choose (within the law) and the considerable difficulties on the psychological, practical and even economical planes involved in raising a child with disability. Nota bene: that is not decisive in the moral issues that are external to the tort issue, which deal mainly with the question when and to what extent the parents' choice to do everything in order to avoid raising a child with disability is legitimate, from the moral standpoint. It suffices to say that this choice is composed of many factors, which do not necessarily include a worldview according to which the life of a child with disability is not a life worth living; it is a legal choice, which is at the disposal of the parents and is denied them due to an act of negligence.

Indeed, naturally the point of view of the parents usually changes after the birth of their child. Naturally, once their child has been born, his parents love him. The disability only intensifies the love. Nonetheless, they are often capable – and the court too is capable – of separating their present love for their child from their sincere statement that if they would have been given the choice in advance, before their child was born and became a person, they would have chosen not to bring into the world a child with disability like his.

Finally, note that we found no basis in the argument raised before us, according to which the parents do not have a cause of action as sufferers of direct damage, but only as mitigators of the child's damage. In CA 754/05 Levy v. Mercaz Refui Sha'arei Tsedek (yet unpublished, 5 June 2007)(hereinafter: Levy) we discussed the nature of the differentiation between a sufferer of primary damage and a sufferer of secondary damage:

"Classification of damage sufferers as primary or secondary is the result of the attempt to identify the character of the causal link between the damage caused them and the tortious conduct. The primary damage sufferer is the party whose injury – physical or property – is the direct result of the tort; the sufferer of secondary damage is the party injured as a result of the injury caused to another party" (id, at par. 22 of the judgment).

According to that standard, the parents' damage, which establishes a cause of action for them due to "wrongful birth", puts them in the position of primary damage sufferers. The injury to them, both on the monetary plane (derived from their duty to care for the special needs of the child) and on the non-monetary plane, is a direct injury, due to the very fact that their child was born due to the negligence. The tortious conduct led directly to the damage of the parents. Not only was the negligent act committed directly toward the parents; the injury to them was also a direct injury. The injury does not derive from the disability of the child – as that disability was not even caused by the negligence; the injury stems from the costs that they bear and from the pain and suffering that they experience. The birth of the child was accompanied with an economic and psychological injury to the parents. This injury is in fact the realization of the risk at the outset, which makes the

conduct of the damager tortious. If in the Levy case the mother was on the borderline between being a sufferer of primary damage and the sufferer of secondary damage, in the case under discussion the border is crossed, and it can be clearly said that there is a direct injury (and see, also: Asaf Posner "haIm Yoter hu Tamid Yoter? Hebetim Ma'asi'im laMachloket baSugiat haHolada b'Avla", at note 6 (to be published in the S. Levin Volume)).

The conclusion is that there is no or hurdle of law or principle preventing recognition of the parents' cause of action for wrongful birth, and regarding that issue we should not stray from the rule determined in Zeitsov. Twenty five years after the Zeitsov ruling was handed down, we are making more flexible the worthy purpose which stands at its base, and allowing a solution to the great majority of the medical, rehabilitation, and assistance needs of the child, but we do so in the framework of his parents' action for wrongful birth.

Alongside the theoretical recognition of the parents' cause of action due to wrongful birth, I see fit to discuss three issues that arise regarding the implementation of that cause of action. They were not discussed extensively in Zeitsov, and the time has come for a clear rule to be determined regarding them by this Court – these issues regard the question of proving the causal link, assessment of damage, and the head of damages of injury to autonomy.

Proving the Causal Link

A central difficulty inherent in the wrongful birth cause of action relates to the element of causal link between the tortious act (the doctor's negligence) and the alleged damage (that stems from the child's disability). Indeed, as any tort action, the parents' action also requires proof of a causal link, and it has already been ruled on that matter that "the task of deciding the question of the existence of a causal link between the breach of the disclosure duty of the doctor and the damage manifest in wrongful birth – is not at all easy. It requires the court to try to search the souls of the parents and to determine what their position would have been regarding the question of continuing the pregnancy had they been exposed to all of the information they needed (Hendel, J. in CA 9936/07 Ben David v. Entebbi (yet unpublished, 22 February 2011)).

In the cases under discussion, it is clear that the infant's disability is a birth defect that was not caused as a result of the doctor's act or as a result of his omission. In such circumstances it must be proven in the framework of proving the element of causal link, that had it not been for the negligence, the parents of the infant would have chosen to terminate the pregnancy by having an abortion, and thus would have refrained from bringing him into the world. Against that backdrop, a number of practical, moral and theoretical questions arise: how will the parents prove in such actions the element of causal link, in other words, that had it not been for the negligence they would have chosen to terminate the pregnancy? Is it appropriate, in light of the psychological and moral difficulties which examining the parents on the witness stand raises, to waive the requirement of proving causal link in cases for wrongful birth completely? Is the court permitted to rely upon group considerations

as a basis for deciding the question of causal link? These questions will be examined below.

In order to prove the causal link between the negligence and the various types of damage stemming from the child's defect, it must be shown, in the first stage, that if all of the relevant medical information (information which was not brought to the knowledge of the parents due to the negligence) would have been before the pregnancy termination committee, the committee would have permitted the parents to terminate the pregnancy. In the second stage, and only if the answer to the first question is positive (as otherwise, in any case the causal link is broken), the parents must show that if it weren't for the negligence, they indeed would have applied to the pregnancy termination committee for permission (Mr. Posner, in his aforementioned article, calls stages "hurdles": "the objective hurdle" requires proof that the pregnancy termination committee would have approved the termination of the pregnancy; and "the subjective hurdle" requires showing that if it weren't for the negligence, the woman would have decided to terminate the pregnancy).

Proof of the parents' entitlement to terminate the pregnancy pursuant to a decision of the pregnancy termination committee relies on clear criteria, entrenched in statute and in Health Ministry guidelines. Performing artificial abortions in Israel is arranged in sections 312-321 of the Penal Law, 5737-1977 (hereinafter: the Penal Law). Pursuant to the provisions of that law, performing an abortion ("termination of pregnancy") is conditional upon the informed consent of the woman and permission from the pregnancy termination committee. The makeup of the committee and the causes for granting permission are generally set out in sections 315-316 of the Penal Law. For our purposes the cause determined in section 316(a)(3) of the law, regarding an infant that is "liable to have a bodily or psychological defect," is important. To this general provision we must add the guidelines of the Health Ministry, which detail how the committee is to employ its discretion, according to the stage which the pregnancy has reached. On this issue, an important criterion is the question of the fetus' reaching the "viability stage", set at the age of 24 full weeks. Whereas the "regular" committee hears applications for termination at the beginning of a pregnancy, over this age of pregnancy, a "multi-district committee", as defined in Health Ministry circular 76/94 of 28 December 1994, hears the application for termination of pregnancy. Health Ministry circular 23/07 of 19 December 2007 is intended to arrange the issue of termination of pregnancy at the viability stage, and determines on that issue a detailed hierarchy of disabilities, ranked according to their influence on functioning (slight, medium, and severe disabilities). The circular determines a clear relationship between the type of disability, the risk that it will occur, and the stage of pregnancy.

The criteria that guide the committees serve, de facto, to demarcate the boundaries of the wrongful birth cause of action, as this cause of action does not arise

due to lack of causal link – where the disability is not of the type that would lead to the granting of permission to perform an abortion. Furthermore, there is a logical- statistical fit – which is an appropriate one – between the considerations that the committees take into account in their decisions, and the considerations that guide the parents when they wish to receive permission to terminate a pregnancy. In light of that, it is appropriate that the pregnancy termination committee decision serves also as

a sort of refutable presumption regarding the parents' stance about terminating the pregnancy.

That presumption may help in solving a part of the difficulties that arise from the second stage needed in order to prove the causal link. As stated above, the parents must prove that if it hadn't been for the negligence (that is to say, if the full relevant medical information had been before them), they would have chosen to terminate the pregnancy. It is uncontroversial that requiring the parents to prove that they would have terminated the pregnancy, by examining them on the witness stand after their child has come into the world, raises considerable difficulties.

46.Thefirstfromtheveryneedtoahypothetical factualchain:wouldifthewouldhaveknownabouttheyindeedappliedtofortotheiftheyhaveapplied–wouldthehavetheirAndifitwouldhavethe–wouldtheThisnotonlyfortheneedtoquestionsariseseverydayincases.fortheKadosh rulingtheinthecausaltestsinoftheconsentcauseofaction,totheneedtoassesanevent(CA1303/09 Kadosh v. Beit haCholim Bikur Cholimpar.ofopinion5MarchKadosh"Theaccepted–thuswaswritteninanothercase–"arenotappropriateforcasesinwhichtheassesshowagivenwouldhaveactedifthehadprovidedhiminadvance with the information the and in a (CA4384/90Vaturi v. Beit haCholim Laniado,51(2)IsrSC171,191 (1997)).

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These difficulties raised by the implementation of the subjective test for examining the existence of causal link are infinitely intensified when dealing with the

parents' claim for wrongful birth. The assumption that "it isn't human" to expect that a patient "testify and reliably present" how he would have acted had he known the facts necessary for decision as they really were, is reinforced in the context under discussion and emphasizes the psychological difficulty that parents are forced to deal with. Indeed, in addition to the regular difficulty inherent in such testimony, the parents are also forced to explain how their testimony on the witness stand, that they would have chosen to terminate the pregnancy in case of a defect like the one that occurred, is in line with their love for their child, once he has been born. In this context, the argument has been made that where the court accepts the parents' factual version, according to which they would have aborted the fetus, a moral problem is also created, and a rift is liable to be caused between the parent and the child. That, however, is not so.

Indeed, the moral dilemma involved in investigating the parents on the witness stand reflects, in full force, the complexity of the cause of action for wrongful birth. The question of causal link is examined ex ante, and examines what the parents would have decided at the time of the pregnancy had they been supplied with the full relevant data; however their testimony is given ex post, after their child has already been born (this dilemma also arises regarding the damage question, and shall be discussed in that context below). Mr. A. Posner answers this dilemma, in the framework of a dissenting opinion in the commission, as follows: "a completely correct answer is that when the question of termination of pregnancy (or the question whether to get pregnant) was under discussion, the infant did not exist, at all (in case the question was whether to get pregnant), or in his present form, the form of a living person. A parent is not required to tell his child 'I am sorry that you are alive' or 'I don't love you'; it is sufficient that he persuade that when the pregnancy was in its early stages, or the fetus not yet a known person, the mother would have terminated the pregnancy" (Commission Report, at p. 105). There is no better concretization of parental sentiment than the words which came from the heart in one testimony before the district court (in CC (Be'er Sheva District Court) 3344/04 R. W. v. Maccabi Sherutei Briut (unpublished, 21 August 2008)). The testimony – of a woman raising her handicapped son – was that she would not have hesitated to terminate the pregnancy had she known of the existence of any defect, on the basis of the difficulties she experiences in the daily confrontation with the difficulties of her previous child, who suffered from cerebral palsy. Despite her unwavering position regarding getting an abortion, the mother testified: "I love R. very much, he contributes an enormous amount to the family, he is our light, he is our sun… I do not say he constitutes damage to the family, but if I would have gotten an abortion, in another year the same R. would have been born, but with a hand, and then he would have contributed to the family in the same way but he would not suffer from all the problems that a handicapped child has… we now are crazy about him, he is everything for us, that is clear…" (id, par. 4 of the judgment).

An additional difficulty arises on the practical level. It is argued that proving the causal link element might be more difficult for certain groups of claimants than for other such groups. The courts have concluded, more than once, that certain parents would have chosen not to have an abortion, even if they would have had all the needed information. The courts so ruled, finding assistance in data on issues such as lifestyle and religious belief; existence of fertility problems and difficulty in conceiving in the past; as well as the age of the mother and her obstetric history.

According to this argument, for example, an ultra-orthodox mother, whose first pregnancy was achieved in excruciating fertility treatments at a relatively late age, is likely to have a more difficult time proving that she would have an abortion had she been aware of the existence of a risk that the child would be born with a defect, in comparison to a secular young mother with a number of children whose pregnancy was spontaneously achieved. Moreover, the use of such data led to the argument – which was sounded in the hearing before us as well – that the requirement of proving that had it not been for the negligence the parents would have chosen to terminate the pregnancy, harms parents who are willing to bear the difficulty of raising a child with disability and rewards the very parents who are not willing to bear that difficulty (a similar argument is also raised in the legal literature in the United States, and see: Wendy F. Hensel, The Disabling Impact of Wrongful Birth and Wrongful Life Actions, 40 Harv. C.R.-C.L. L. Rev. 141, 172 (2005); it is further claimed that parents who due to their religious beliefs would not have an abortion are thus discriminated against.

As a result of these difficulties, in a number of judgments of the first instance the opinion was expressed that the requirement of proof that the parents would have chosen to have an abortion can be completely waived, and replaced with a legal presumption. Thus, for example, Judge M. Drori ruled in CC (Jerusalem District Court) 3198/01 A. v. The Jerusalem Municipality (unpublished, 12 May 2008) that:

prima facie, such an a-priori presumption stands in contradiction to one of the foundations of tort law, that the conduct of the defendant or defendants was the sine qua non of the damage… thus, for example, if it is positively proven that the damaged party would have been born with the defect even if there hadn't been any negligence, prima facie, it should not be said that the negligence is the reason for the damage, and the defendants should not be charged for it…

However, in my opinion, there is great and important public benefit in adopting the approach of Judge Benyamini [regarding waiving the requirement of proof that the parents would have had an abortion – E.R.]. Not only do we prevent the need for the parents' testimony, with their retroactive vacillations, but Judge Benyamini's approach entails equality between all pregnant women, regardless of religion, race or belief.

… is compensation for a secular Jewish woman certain, but all the other women must explain what the range of beliefs is in the religion to which each of them belongs, and whether or not they would have had an abortion?! Is there a need, in each particular case, to focus upon the details of that religion, on the approaches and nuances in it, and to determine whether according to that religion abortion would have been permitted in the circumstances of that defect, and after that, will there be a need to categorize the claimant mother in the relevant subgroup in that religion and to determine whether she would have had an abortion, according to what is customary in that subgroup of that religion?!" (id, par. 285-286 of the judgment).

And see the judgment of Judge A. Benyamini: CC (Tel-Aviv District Court) 1226/99 A.L. v. Yaniv (unpublished, 29 March 2005).

Despite the difficulties described above, the requirement of proving the existence of a causal link between the negligence and the damage cannot be waived (this conclusion was reached both by the majority and by the minority opinions in the Mazza Commission – see p. 47 and 98, respectively). A solution like that proposed above is not possible in the framework of existing tort law. It is, de facto, the forfeiting of proof of one of the elements of the tort of negligence, as without proving that if it had not been for the negligence the parents would have chosen to have an abortion, it is not possible to prove causal link between the negligence and the birth of the child. Waiving proof of the causal link element in actions of this type would lead to casting liability upon parties who may not have actually caused the damage, and to entitlement of plaintiffs with compensation for damage which was not caused them by a tort. Not only is such a result at odds with tort law and its objectives; in addition, it does not do justice, in that term's basic meaning, with the parties in the suit. In the American legal system as well the mother is required to prove that had it not been for the negligence, she would have had an abortion (see, e.g.: Dumer v. St. Michael’s Hospital, 69 Wis. 2d 766, 776, 233 N.W.2d 372, 377 (Wis. 1975); Alan J. Belsky, Injury as a Matter of Law: Is this the Answer to the Wrongful Life Dilemma? 22 U. Balt. L. Rev. 185 (1993)), despite the potential that the parents' testimony on the issue may harm the welfare of the child )Keel v. Banach, 624 So. 2d 1022, 1026 (Ala. 1993)(.

Thus, to the extent that the parents are interested in suing on the basis of the cause of action of "wrongful birth", they must prove the causal link element of that cause of action. The refutable presumption, based upon the decision of the authorized committee, will assist in overcoming these difficulties.

Despite the fact that the proof of the causal link element cannot be waived, there is difficulty in dealing with the details of the religious beliefs of the parents, as well as in dealing with other group-based considerations. In any event, attempting to retrospectively determine how the parents would have chosen to act inherently involves a great extent of uncertainty. The various indications in which courts find assistance – including data such as a religious lifestyle, age, obstetric history and performance of additional tests in the framework of private medicine, are merely general indications, which, practically, rely to a significant extent upon group data. Categorizing the parents in one of these groups or another is plagued with a significant extent of speculation. In cases in which the court must rely upon general, group data, there is no choice but to choose a certain level of abstraction, and courts often determine working assumptions which assist in dealing with the inherent uncertainty (and see, in the context of calculation of compensation: Eliezer Rivlin and Guy Shani "Tfisa Ashira shel Ikaron Hashavat haMatzav le'Kadmuto baTorat haPitsui'im haNeziki'im" Mishpat v'Asakim 10 499 (2009)). Furthermore, group data are not always evidence of the tendencies of the individual. Even in routine times – but especially in times of crisis – the individual is likely to stray from group dictates and conventions, especially when they are group conventions. In fact, the individual's original position might be more complex and multifaceted than can be assessed according to his belonging to one group or another. Thus, significant weight should be given to the first question that was presented regarding causal link – the question

whether the pregnancy termination committee would have approved an abortion in a given case.

As mentioned above, the decision of the pregnancy termination committee should serve as a sort of refutable presumption regarding the parents' stance about having an abortion. In general, where an abortion is permissible according to the societal convention, as expressed in the criteria which guide the pregnancy termination committee, as said, it can be assumed, as a factual assumption, that typically, the individuals in society would also plan their actions in a similar fashion. Nonetheless, it should be emphasized that this is a factual, not a normative, assumption; in no way can it determine that refraining from having an abortion, in circumstances in which the pregnancy termination committee would have allowed an abortion, is unreasonable or undesired conduct. Its meaning is merely that from the practical standpoint, it should be assumed that typically, the individuals in society usually act, at least proximately, in a way that fits the criteria that guide the pregnancy termination committees.

It should also be emphasized that the presumption according to which, in circumstances where the pregnancy termination committee would allow an abortion the parents would also have submitted an appropriate application to the relevant committee, can not be refuted exclusively through general data, i.e.. regarding membership in a certain religious sector. Such data is at times likely to be relevant, but since it represents a single aspect of all the individual data regarding the woman, great caution should be employed in making conclusions upon it. Thus, it should be remembered that the question to be decided is not what is the stance of the religion to which plaintiffs belong regarding having an abortion in the circumstances of the case, but rather how the particular claimants standing before the court would have acted. As mentioned above, the individual himself is likely to stray from group dictates or conventions, especially when the conventions are group conventions; and relating to him, factually and normatively, as an individual whose choice is not predestined, is inevitable. Thus, it is not sufficient that the parents' religion prohibits them from having an abortion to determine the result; in order for that datum to be relevant for decision, the court must be persuaded that the mother would have obeyed that prohibition de facto. Of course, it is not impossible that having an abortion in certain circumstances would be permitted within the various religious beliefs, and often there are various approaches in the different religions regarding the circumstances which justify having an abortion (on this issue see, e.g.: CC (Jerusalem District Court) 3130/09 A.K.V. v. Sherutei Briut Klalit (unpublished, 28 November 2011); CC (Jerusalem District Court) 9134/07 Alsayad v. The State of Israel (unpublished, 17 February 2011)).

In fact, even today the courts of first instance do not rely exclusively upon data such as religious affiliation, and more significant weight is given to the individual data of the case (see e.g.: CA 7852/10 Tidona v. Kupat Cholim Leumit shel ha'Histadrut ha'Ovdim (unpublished, 15 March 2012); CC (Haifa District Court) 1014/05 Zidan v. The State of Israel (unpublished, 24 December 2011); CC (Central District Court 5193-11/07 S.M.S. v. Malach par. 5(d)(99)(unpublished, 14 September 2010); CA (Haifa District Court) 10492/97 Aftabi v. Sherutei Briut Clalit (unpublished, 30 September 2001)).

Finally, it should be emphasized that where it has been proven that the pregnancy termination committee would have allowed an abortion, even if the parents could not prove that they themselves would have chosen to terminate the abortion, that does not derogate from their ability to sue for the damage caused to them due to the violation of their autonomy, and in other words: their right to make such a significant decision in their lives in an enlightened fashion. For that damage they are entitled to separate compensation, and I shall discuss that extensively below.

The Question of Damage and Calculating Compensation

Having passed the hurdle of the causal link, it must be further determined, in the framework of the parents' action, what damage entitles them to compensation. The question that needs to be considered is whether the parents are entitled to compensation only for the additional expenses they must bear for the medical care and assistance for their child – and at a certain point living expenses (hereinafter: the Additional Expenses), or should they also be compensated for the expenses involved in raising their child, including those which they would have borne had the child been born healthy. These expenses, which a healthy child requires in any case (hereinafter: the Regular Expenses), are considered the "base cost" (or "base layer", in the words of commission member Asaf Posner, adv), as opposed to the Additional Expenses which stem from the child's disability.

56.Itisinatortaction,compensationisgivenonlyforthebytheandisnottheexpenseswhichwouldhavebeenborneevenifthewouldnotoccurred.Thus,forexample,whenaninfantisinjuredto(and birth), the for the of aidThecourtreduces,theofhoursneededtotakecareofthetheofhoursneededtoforachild,andisgivenfortheresultinginotheronlyfortheadditionalapersonwhoiswoundedinanandneedsa vehiclein ordertoget around, will receive only theadditionthatisfromhisinotherthethetheanditsandofacarandits(andtheexamplesintheCommission Report –thePosner opinion, at p. 115).

It would have been possible to think that the implementation of the restitutio in integrum test in the parents' action for wrongful birth would determine that had the negligence not occurred, the child would never have been born, so the parents would not have had to bear any expenses whatsoever for raising the child. Making the parents' situation as it would have been had the negligence not occurred according to the regular rules requires, prima facie, compensating them both for the regular expenses involved in raising a child and for the special expenses caused to them due to the child's disability. The "Additional Expenses", according to those principles, also include the regular living expenses.

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regular expenses involved in raising a healthy child, during the period before he reaches adult age; they should be compensated only for the additional, special expenses, which they bear due to the birth defect. Indeed, had the negligence not have occurred, the child would never have been born; however, there are good reasons not to charge the negligent damager to pay all of the expenses of raising the child. These reasons reflect the complexity of the cause of action under discussion, and emphasize the theoretical and practical difficulties inherent in this cause of action, with which the courts of various instances have dealt over the years. What are these reasons?

Casting liability upon the defendant who caused the damage, as detailed above, is done from an ex ante point of view, and under the assumption that if the parents had been given a choice in advance, before their child was born, they would have preferred, under the particular circumstances, not to bring a child with that disability into the world; however, examination of the damage caused to the parents cannot be performed whilst ignoring the change which has occurred in the passage from liability to damage – the change manifest in the birth of the child. Examination of the damage must thus be done from an ex post point of view, which takes into consideration the fact of the child's existence, which is not considered, and must not be considered, in and of itself, to be damage. In retrospect, after the disabled child has been born, his very birth is not considered to be damage in his parents' eyes. The feeling of love which the parents feel toward their child also exists when the child is born with disability. Those feelings also exist if, had they been given a full choice at the outset, the parents would have chosen not to bring the child into the world. After he has entered the world, his parents want him and enjoy the intangible advantages stemming from his very birth and his upbringing. The Mazza Commission described this well in its report: "Indeed", it was noted, "the disabled life of the child itself does not constitute damage to the infant, and his parents as well, after he has entered the world, are not considered injured due to his very existence; however, as needs have been created which involve special expenses, the party without whose negligence these special costs would not have been created should bear them" (id, at p. 60).

The American Court described this in Marciniak v. Lundborg, albeit in a different context (of raising a healthy child whose parents did not want to be born), but from the viewpoint of the child, whose parents are suing for compensation for his birth. The following is applicable also to the need to compensate the parents for the Additional Expenses:

Defendants next argue that "awarding damages to the parents may cause psychological harm to the child when, at a later date, it learns of its parents' action for its wrongful birth thereby creating an 'emotional bastard.'" Again, we do not agree. The parents' suit for recovery of child rearing costs is in no reasonable sense a signal to the child that the parents consider the child an unwanted burden. The suit is for costs of raising the child, not to rid themselves of an unwanted child. They obviously want to keep the child. The love, affection, and emotional support any child needs they are prepared to give. But the love, affection, and emotional support they are prepared to give do not bring with them the economic means that are also necessary to feed, clothe, educate and otherwise raise the child. That is what this suit is about and we trust the child in the future will be

well able to distinguish the two. Relieving the family of the economic costs of raising the child may well add to the emotional well-being of the entire family, including this child, rather than bring damage to it (Marciniak v. Lundborg, 153 Wis. 2d 59, 67, 450 N.W.2d 243, 246

(Wis. 1990)).

Of course, that cannot detract from the severity of the difficulties which the parents of disabled children experience or the suffering which is the destiny of parents who themselves experience the suffering of the child; for these damages – to the extent they are proven – the parents will be compensated separately, in the framework of the head of damages for pain and suffering. At the same time, the point of departure for the assessment of the parents' damage is that the life of the child – after he has been born – is not, in any way whatsoever, damage for which compensation should be made, and that this is how the parents also see it. Thus, the regular expenses which the parents bear for raising the child – are not damage. The damage is thus manifest in the Additional Expenses – the additional costs stemming from the negligence of the damaging defendant, and it is only natural that the parents receive compensation for them.

Here the special and extraordinary force of the action for wrongful birth is revealed: the inherent dissonance between the negligence in providing the information necessary to make a decision whether to bring the child into the world and the character of the damage, which is caused after the child has already entered the world, when his very life is not considered damage.

Nota bene: the same conclusion, according to which the defendant is charged with the Additional Expenses, can also be reached from another perspective, which is actually the other side of the same coin: in principle, the positive results of the birth of the child must also be expressed, and as a practical issue, the way this is done in the framework of the doctrine of compensation is quantification of all of the intangible benefits stemming from the birth of the child and his upbringing, and discounting them from the compensation to which the parents are entitled. A general estimation of these benefits will approximately equal the regular expenses involved in raising a child. Discounting the regular expenses involved in raising the child from the total of all the expenses involved in raising him leads to those very Additional Expenses, which stem from the child's disability (to which the non-monetary damage must be added).

This concludes the discussion of compensation for the parents for the period before the child reaches adulthood.

60.theafterchildhisshouldbegrantedfortheiroftheirchild,asunlikecase,hisdependenceuponthemcontinuestodisabilityduringthisaswell,andinfact,for the entire period of his life expectancy.Inofforthesedamages,thereispreventingtakingintoaccountlengthofperiodofhiswhere,tohischildcontinuestobedependentuponhisparentsasanadult,especiallyduetofactthatthereisnoabouttheparents'intocareforneedsoftheirchildrenwhoareuponthatdutyis

even manifest in law, in sections 4-5 of the Family Law Amendment Law (Support), 5719-1959. It is uncontroversial that had there been no negligence, the parents would not have to bear the expenses of support for their child after he reaches adulthood.

During the period of his adulthood, had it not been for his disability, the child would be expected to earn his living. To the extent that the disability detracts from his earning ability, his parents have the duty to sustain him and to supplement what he lacks. In other words: during the child's adulthood, his parents bear both the special expenses due to his disability and his regular living expenses, which he himself would have borne, were it not for his disability.

Where the child is expected to earn money despite his disability, the amount of his expected earning – in other words, the relevant part of the average salary in the economy – must be subtracted from the compensation granted to his parents. We have already ruled that it should be assumed that a healthy minor, when reaching adulthood, would earn the average salary in the economy, and that this salary would be used for his sustenance, in other words: his living expenses and welfare. From the practical standpoint, the parents should be compensated for the period of the child's adulthood, for all the "Additional Expenses", which, in said period, are the regular living expenses and the special medical and assistance expenses. Only if the infant is expected to earn a certain percentage of the average salary is there a need to subtract this percentage from the compensation. De facto, in the usual case, in which the injured child continues to be in his parents' house or in the community, the compensation paid to his parents will not be different than the amount of compensation which would be paid to him himself if he had a cause of action, in the framework of which he would sue for earning losses.

This will be demonstrated numerically:

Let us assume that the average salary in the economy is 10,000. Due to his disability, the child's earning ability is reduced by 50%, in other words, a loss of 5,000 has been caused him, and this amount would be paid to him if he had a cause of action of his own. Let us assume, in addition, that he is also entitled to additional medical and assistance expenses (in comparison to a healthy child) of 15,000. In total, the compensation he would receive in his own suit would be 20,000. Seeing as the child does not have a cause of action, and the cause of action is that of the parents, they are entitled, in the usual case, to compensation for all the additional expenses, that is: 15,000 for medical and assistance expenses, and in addition, the child's regular living expenses, which they have to bear due to the detraction from the child's earning ability, in other words: an additional 5,000. In total, the amount that the parents will receive is identical to the amount that the child would receive if he had a cause of action.

It should however be remembered that the compensation is always individual; there thus might be situations in which the compensation changes; for example, when dealing with a child who is expected to live in an institution, which certainly might influence his living expenses.

For the sake of comparison: in most of the cases from states in the United States, the parents were granted compensation only for the Additional Expenses that

they must bear in order to care for their child which are due to his disability, and they were not compensated for the regular expenses involved in raising a child:

Although the question of damages has presented a difficult and troublesome problem to those courts which have considered wrongful birth claims, we align ourselves with the majority of jurisdictions which have limited the parents' recovery of damages to the extraordinary expenses - medical, hospital, institutional, educational and otherwise - which are necessary to properly manage and treat the congenital or genetic disorder. Siemieniec v. Lutheran Gen. Hosp., 117 Ill. 2d 230, 260, 512

N.E.2d 691, 706 (Ill. 1987).

Another case clarified (emphasis added):

Indeed, the central policy of all tort law is to place a person in a position nearly equivalent to what would have existed had the defendants' conduct not breached a duty owed to plaintiffs, thereby causing injury. In the context of wrongful birth, this means the situation that would have existed had the child actually been born in the state of health parents were led to believe would occur. Damaged are not gauged against the state of affairs that would have existed had the child never been born, because parents always assume the costs of healthy children born to them, even if unplanned. This policy can be fulfilled here only by allowing recovery of all future extraordinary expanses [the child] will incur. Kush v. Lloyd, 616 So. 2d 415, 424 (Fla, 1992).

The decisions of the American courts were based upon various reasons, including those detailed above. Thus, for example, it was held that if, in principle, the parents were entitled to compensation for all of the expenses of raising their child, as had it not been for the negligence he would never have entered the world and his parents would not be required to bear any expenses for him, the intangible benefits involved in the birth and raising of a child, including a child with disabilities, must be set off from that compensation. It was held that those benefits equal, at very least, the regular expenses involved in raising a child (Ramey v. Fassoulas, 414 So. 2d 198, 200-01 (Fla. App. 3d Dist. 1982)). It was further determined that casting the regular expenses involved in raising a child upon a third party is not proportionate to the fault of the negligent party and is contradictory to the idea that the primary and predominant duty to care for the needs of the child, whether wanted or not, is that of the parents (see: Rieck v. Medical Protective Co., 64 Wis. 2d 514, 518-19, 219 N.W.2d 242, 244-45 (Wis. 1974); Ramey, at p. 200). Last, it has been emphasized that in their decision to bring a child into the world, the parents necessarily agree, of their own volition, to bear the regular expenses of his upbringing, and thus it cannot be said that these expenses were caused by negligence (Clark v. Children’s Mem. Hosp., 955 N.E.2d 1065, 1083 (Ill. 2011)). On the other hand, a minority of US state courts charged expenses for all of the expenses of raising a child born due to the defendant's negligence, as had it not been for the negligence, the child would not have been born at all (Robak v. United States, 658 F.2d 471, 479 (7th Cir. 1981)(.

64.InEnglandaswellthecourtstendnottoforfullexpensesoftheandtheisforthe

additional expenses. The English judgment in Parkinson v. St. James and Seacroft University Hospital NHS Trust explained:

A disabled child needs extra care and extra expenditure. He is deemed, on this analysis, to bring as much pleasure and as many advantages as does a normal healthy child. Frankly, in many cases, of which this may be one, this is much less likely. The additional stresses and strains can have seriously adverse effects upon the whole family, and not infrequently lead, as here, to the break up the parents' relationship and detriment to the other children. But we all know of cases where the whole family has been enriched by the presence of a disabled member and would not have things any other way. This analysis treats a disabled child as having exactly the same worth as a non-disabled child. It affords him the same dignity and status. It simply acknowledges that he costs more. (Parkinson v. St. James and Seacroft University Hospital NHS Trust [2001] EWCA Civ 530).

Similarly, the courts in Canada follow the English system, and the compensation is granted only for the additional expenses stemming from his upbringing (Zhang v. Kan, [2003] B.C.J. 164, 2003 BCSC 5 (Can); Dean Stretton, The Birth Torts: Damages for Wrongful Birth and Wrongful Life, 10 Deakin L.R. 319, 324 - 25, (2005)).

65.Thisaccordingtowhichtheparentsshouldbeonlyforadditionalexpenses–wasalsobytheofoftheMazza CommissionItwasinCommission Report inthisthat"theofforthewehavedecidedtoisthatthewhonegligentlythebirthachildexpressedrealhandicapwhowouldnotbeenbornhaditnotbeenforthishasthedutytobearthemonetaryin providing the special needs of the infant which stem from his disability added–E.R.).Asthepeoplewhoareresponsibleforfortheinfantandcareofhisneedshisandtheybeartheofthiscostde factotheoftheparentstoandreceivetocoverneedsoftheinfantduetohisfromthepartyforshouldbe(id, p. 60).

However, as noted, "the Additional Expenses" in the usual cases also increase during the child's period of adulthood, such that they include his regular living expenses, which his parents must bear. Whereas the child lacks earning capability, the "Additional Expenses" thus include, in the usual cases, the living expenses as well, which, lacking evidence showing otherwise, equal the average salary in the economy.

To sum up: a party who, by his negligence, caused the birth of a child with disability, who would not have come into the world had it not been for that negligence, has the duty to bear the additional expenses involved in raising the child, expenses which stem from his negligence, which reflect the child's special needs due to his disability, in accordance with the circumstances of each given case and for the entire period of the child's life expectancy. This compensation shall include all the additional expenses needed in the particular case, including: medical expenses, third

party assistance, rehabilitation expenses, education expenses including ancillary expenses, housing expenses and mobility expenses. During the child's adulthood, and for the entire period of his life expectancy, his parents shall be entitled to compensation for his regular living expenses as well, to the extent that he lacks earning ability and there are no special circumstances negating that entitlement.

Note, incidentally, that a different question arises where the cause of action is for "wrongful pregnancy" (or "wrongful conception"), where the parents wished to avoid bringing children into the world at all, even healthy children, and due to negligence in medical care that choice was denied them (see, e.g., CC (Jerusalem District Court) 1315/97 A. v. Kupat Cholim shel haHistadrut haKlalit shel haOvdim b'Yisrael, IsrDC 5763(2) 309 (2004); CC (Haifa Magistrates Court) 4503/06 A. v. the State of Israel (unpublished, 4 March 2012)). Discussion of actions such as these and the scope of compensatable damage is not necessary for our purposes, and I shall leave it for when it arises. Note, however, that in other legal systems in cases in which a disabled child is born as a result of wrongful pregnancy as well, compensation has been granted only for the Additional Expenses (see e.g. in England, the aforementioned Parkinson case). This result is correct a forteriori in our case, in which the pregnancy in and of itself was wanted, but the parents wanted a healthy child. In any case, as mentioned above, there is no need in the circumstances of these cases to express an opinion on the question what the proper compensation is in the case of unwanted pregnancy in our legal system.

Non Pecuniary Damage

Customarily, psychological damage sued for in an action for wrongful birth is categorized as "pure" psychological damage, lacking physical damage to the claimants. This classification is not devoid of doubts (compare, e.g. the enlightening judgment of Baroness Hale in the Parkinson case). In any event, the psychological damage in the case before us is ancillary to pecuniary damage, so it in any case does not stand alone.

Even if the psychological damage caused to the claimants before us is categorized as pure damage, the entitlement to compensation for pure psychological damage which is not ancillary to relevant physical injury (see: Eliezer Rivlin "Pitsui'im begin Nezek lo Muchashi u'begin Nezek lo Mamoni – Megamot Harchava" The Shamgar Volume – Part C 32 (2003)), was already recognized in CA 243/83 Jerusalem Municipality v. Gordon, 39(1) IsrSC 113 (1985), where negligence liability was determined for pure psychological damage caused to the party directly damaged; later, the status of "quasi-directly" damaged parties was recognized as equal to that of directly damaged parties (the Levy ruling). In that case, compensation was granted to parents suffering psychological damage due to the death of fetuses due to negligence; similarly, the entitlement of partners to compensation for psychological damage caused them due to the woman's unnecessary abortion caused by medical negligence was recognized (CA 398/99 Kupat haCholim shel haHistadrut haKlalit v. Dayan, 55(1) 765 (1999)).

In cases of wrongful birth the psychological damage continues for the lifetimes of the parents (the claimants). It is not single-event damage. It is not damage that is caused over a short period. The parents must care for the child for the

rest of their lives. They are vulnerable to his suffering, and are entrusted with his welfare. They accompany his pain, his suffering day and night, and these become their pain and suffering. They direct their lifestyle in a way that will allow them to fulfill their responsibility for the child. Their life changes, at times completely. Activities that once seemed natural and easy to do become unbearably difficult. The need to care for the future of the child, with all their might, keeps them awake at night and drains their resources. This is continuous damage. It is different and separate from the violation of autonomy which is a single-event violation which takes place at the moment when the choice was denied them. The continuous and severe psychological damage thus requires large and significant compensation.

Violation of Autonomy

The final question which requires our decision is the question of the relationship between the cause of action for wrongful birth and the cause of action for violation of autonomy, in the framework of the parents' action.

In Kadosh we extensively discussed the importance of the right to autonomy and the individual's right to sue for compensation due to violation of that right. It was again clarified that the right to autonomy is "the right of every individual to decide about his acts and desires according to his choices, and to act according to those choices" (the Da'aka ruling, at p. 570); this is a persons right "to write his life story" (the Abu Hana ruling, at p. 48). It was emphasized in Kadosh that "the individual's autonomy stands at the heart of human dignity. It is a right that constitutes a fundamental value in the Israeli legal system, and 'constitutes one of the central manifestations of the constitutional right of every person in Israel to dignity, entrenched in Basic Law: Human Dignity and Liberty' (the Da'aka ruling, at p. 571; HCJ 4330/93 Ganem v. Va'ad Mechoz Tel Aviv shel Lishkat Orchei haDin, 50(4) IsrSC 221, 233-234 (1996))"(par. 31 of my opinion).

Demarcation of the boundaries of the entitlement to compensation for violation of autonomy is carried out through demarcation of the violation which leads to entitlement to compensation:

"Only a violation in the heart of the right to choose, in "the 'inner penumbra' of the human right sanctifying autonomy (as stated in the Bruria Tsvi ruling) and on a substantial matter, will entitle the claimant to significant compensation. An example of such a violation can be found, as noted above, in medical care, "located in the inner penumbra of this right of every person to control his life", as "it might have a direct influence, and at times an irreversible one, both on his lifestyle and on his quality of life" (the Da'aka ruling, at p. 532). An additional example is a violation of a person's ability to weave his life story (the Abu Hana ruling). A demarcated definition of the injury that leads to entitlement to compensation will help the courts entrench the status of the right to autonomy, but whilst charging compensation only in the fitting cases "(the Kadosh ruling, at par. 39 of my opinion).

72.Violationofisaheadofdamagesintheoftheofpar38ofopinion;seealso72oftheopinionofAmit, J.).Of

course, in an action for wrongful birth as well the violation of autonomy is likely to serve as compensatable damage. The question arises, what the relationship is between the head of damages of violation of autonomy and the other heads of damages in the parents' action.

In Kadosh I wrote that compensation for violation of autonomy is not granted to the damaged party "for the very violation of his constitutional right abstractly and in principle", but for "real result-based damage" caused him (in the words of the article of Yifat Biton "Ke'evim b'Eizor haKavod" Mishpat u'Mimshal 9 137, 145-146 (2005)(hereinafter: Biton)). These damages, which can be identified as "violation of feelings", include the feelings regarding "violation of dignity, psychological suffering, humiliation, shame, sorrow and insult, frustration, undermining of trust in others, undermining of one's view of oneself, and injury to the self assessment of the individual or his ability for self realization, both as an individual and as part of a group, and more (Biton, at p. 184). In order for damage for violation of autonomy to stand on its own –

Compensation for violation of autonomy can be sued for, even lacking other damage; in other cases it is possible to sue for such compensation in addition to or aggregation with bodily damage that has been caused, including in addition and aggregation to other non-pecuniary damage, in a situation of two separate kinds of damage. This is not novel, as the tortfeasor must compensate for all the damage he caused, and if he caused more than one kind of damage, he shall compensate for that which he caused. In that sense it is a factual and not a legal question" (Kadosh, par. 45 of my opinion).

This view derives from the recognition of violation of autonomy (to the extent that it is in the penumbra of the right and regards a substantial issue) as reflecting real and true damage. Such damage might come separately and differentiated from other damages, both pecuniary and non-pecuniary, because refraining from charging compensation for it would deviate from the principle of restitutio in integrum (and see also the opinion of the commission – the Commission Report, at p. 62). Of course, not in every case is there separation between the damage from violation of autonomy and other damage (for a survey of various possible cases in this context see: the Kadosh ruling, at par. 45 of my opinion). There might be overlapping between them. However, where separation is possible, and the violation of autonomy is an additional substantial violation in the penumbra of the right, negating additional compensation for it is like revoking the injured party's entitlement to compensation for any other head of damages (and see also the Commission Report, in which it was emphasized (on p. 62) that "the proposed arrangement cannot violate the rights of the parents to sue for compensation for the violation of their autonomous right to chose to continue or terminate the pregnancy, or their right to sue for compensation also for any other direct damage caused them, or some of them"; emphasis added). On this issue, compare the ruling that determines that if there is an action by dependants and an action by the estate, side by side, compensation should not be made only according to the sum in the claim for a greater amount, as the caselaw determined in the past; it must be examined whether there is a zone of overlap between the two actions, regarding which compensation should be made only once. If there is damage beyond the zone of overlap, then refraining from compensation for each of those damages will

lead to under-compensation (see: CA 4641/06 Menorah Chevra le'Bituach Ltd. V. Karkabi (19 December 2007); CA 2739/06 Dubitsky v Razkalla (1 June 2008)).

Regarding the amount of compensation: like Justice E. Hayut, I too am of the opinion that compensation for the violation of autonomy should not be standard, but should rather be individual, taking into consideration the concrete violation and its circumstances (see: CA 10085/08 Tnuva Merkaz Shitufi l'Shivuk Totseret Chakla'it b'Yisrael v. the estate of Rabi, par. 40 of the judgment of Justice E. Hayut (yet unpublished, 4 December 2011)). Nonetheless, it has already been clarified that "since we are dealing with assessment of intangible damage, the courts will assess on the basis of the circumstances of the case and their life experience. In general it can be determined that to the extent that the information that was not relayed is more important, and to the extent that the harmed interest is closer to the penumbra of the right and affects it more significantly, so shall the compensation for the violation of autonomy increase (see on this issue the standards proposed by Justice Strasberg- Cohen in the Da'aka ruling for assessing the intangible damage that was caused to a person whose right to autonomy was violated during medical treatment, including: the type of information denied to the patient; the scope, quality and special importance of the information that was not relayed to the patient, as opposed to the information that was relayed to him; the patient's stance about and way of relating to the relaying of the medical information regarding him; and the result of the treatment that was carried out… (id, at pp. 619-621))" (the Kadosh ruling, par. 42 of my judgment).

In those cases in which the court is persuaded that a violation of the claimant's autonomy has occurred – one that touches upon the penumbra of the right, and on an important issue – it should grant fitting compensation that reflects the full severity of the violation (id, at par. 48 of my judgment. And see also CA 9187/02 Weinstein v. Bergman (yet unpublished, 16 June 2005); CA 9936/07 Ben David v. Antebi (yet unpublished, 22 February 2011)).

Practical Considerations

74.Theintheoftheofactionfor"wrongfullife",itwasinnopartinfluencedbytoprovideaproperfortheneedsofabornwithdefects,asaofinhisduringpregnancy.weightgiventothisinparties'anditdidnotmissourIndeed,areoftheopinionthattheofaction "wrongfullife"beintheofthetortofduetoandwithinourandduetothehurdleofprovingtheofortheofthecausallink.weareofopinionatrueforthelargeoftheofthecanbeintheofhiscauseofaction for birth".

75.Asabove,areentitledtofortheexpensesneededtotheandassistanceneedsoftheirchild,and tothetheir continues tobeupon duetohiswhenhetheyarealsotoforexpensestheybearinforhimduringperiodandfortheentireperiodoflifeexpectancy. Thisincludeshisregularexpenses,tothethathedoes

not cover them due to his disability, and lacking circumstances that negate said entitlement. Inter alia, a sufficient legal solution can also be found for the concern that the parents will pass away without ensuring that they make fitting arrangements for fulfillment of their disabled child's needs, in the framework of sections 56-57 of the Inheritance Law, 5725-1965, which regard maintenance payments from the estate. They determine as follows:

If the bestower of inheritance is survived by a partner, children or parents, and they need maintenance, they are entitled to maintenance from the estate pursuant to the provisions of this law, whether in inheritance by law or inheritance by will.

57.(a) The rightto is –

(1) …

(2) For the children of the bestower of inheritance – until the age of 18, for a disabled child – the entire period of his disability, for a child who is mentally ill – as long as he is mentally ill, and for a child with mental retardation – as per the meaning in the Welfare Law (Care for the Retarded), 5729-1969 [emphasis added – E.R.].

Thus, a broad solution is provided for the needs of the child due to his disability. Naturally, like in other cases arranged by tort law, the question of the ensuring of proper use of the compensation money might arise. This question is not unique to wrongful birth cases. De facto, there are various situations in which the needs of the child will not be sufficiently fulfilled via the tort action that his parents submit, but this result is unavoidable. Difficulty in ensuring the proper use of compensation that a person receives, even if he is an independent adult, exists due to the very fact that usually compensation is granted in advance and in one amount. In compensation law every injured party is presumed to plan his conduct in such a way that the compensation will offer him a proper and continuous solution for mitigating his damage in the future.

The Mazza Commission proposed that the legislature "authorize the court to include in its judgment instructions regarding the use of the compensation money, to the extent that the court sees fit to do so, in order to ensure the fulfillment of the needs of the infant. It is also proposed to determine in statute that the compensation intended to ensure the fulfillment of the needs of the infant shall not be considered part of the parents' property in a situation of bankruptcy; shall not be part of their estate; and shall not be the subject of lien, mortgage or assignment of right in any way" (the Commission Report, at p. 62). These proposals are very wise, not only for this cause of action, but also in a more general scope. I hope that the legislature will indeed heed the call, and that until then, the courts will develop the fitting mechanisms with the tools at their disposal.

Conclusion

76.Forthereasonsabove,wehavefoundthatcauseforanactionbychildfor"wrongfullife"shouldnolongertheoftheparents'causeofactionfor"wrongfulInthelattercauseofactionisnotbyofthechildwasbornwith,tothecauseofactionasper

President Barak's stance in the Zeitsov ruling. Nonetheless, it should be remembered that in practice, the requirement of causal link leads to a certain demarcation of the cause of action, as in the framework of both actions it must be proven that the disability would have led to a termination of pregnancy permitted by law.

77.ofthecauseactionfor"wrongfulisnotpossiblebytheruleslaw,anditevenstandsintoofthetheofsanctityoflife,protectiondignityandoftherightsofpeopletodignityandequality.Nonetheless,asolutionbefortheoftheofthechildduetointheofparents'cause ofaction.

Our task is not complete: in the framework of this decision of principle, from the outset we did not deal with the question of the specific liability of any of the defendants in the cases before us. These questions shall be decided by other panels, separately in each case.

President (emeritus) D. Beinisch:

I concur with the comprehensive judgment of my colleague the Deputy President E. Rivlin. The issue before us is one of the most difficult and complex ones, from the standpoints of law and values, and the moral and societal standpoints. This Court confronted this issue in the important judgment in CA 518/82 Zeitsov v. Katz, 40(2) IsrSC 85 (1986)(hereinafter: Zeitsov), and my colleague discussed it extensively. In that judgment the Court recognized the existence of a cause of action for a child that was born with a disability that was not diagnosed due to negligence in discovering the defect before conception or birth. It is important to note that the positions of the Justices of the majority in Zeitsov were of course not intended to detract from the status or rights of persons with disabilities; and in their various stances, nor did they detract from the view that recognizes the value of human life, which has always been a sacred value in Israeli law. The judgment in that case is an attempt to find a practical legal solution that might allow granting compensation to children and their parents, who must confront disabilities that at times involve great suffering and considerable monetary expenses. However, the two approaches that were adopted by the majority in Zeitsov raise a number of difficulties, which my colleague the Deputy President discussed in his judgment. The approach of Deputy President M. Ben-Porat in the Zeitsov case raises difficulty regarding the way damage is defined, and the approach of Justice (former title) A. Barak raises difficulty regarding the definition of the causal link between the negligence and the damage. Thus, after more than 25 years since the judgment in the Zetisov case was given, it can be said that its creative attempt to develop the causes of tort action has not yet reached fruition, and conceivably caselaw development of tort law on this issue will be possible in the future. I have been persuaded that at this time, that judgment does not provide a fitting solution for the difficulty involved in recognizing the cause of action of a child claiming that his birth (or his birth with a defect) is the damage that was caused to him. And indeed, the cases before us – with the variety of questions that arise in them – demonstrate more than anything else the difficulty involved in recognizing the cause of action for "wrongful life".

According to our societal views and values, every person – be his disabilities as they may – was born in [God's] image, and his life has value in and of itself, which must be honored. According to our moral view, it cannot be said that it would have been better for a person had he not been born. In legal garb, the meaning of this view is that the argument that a person's very life is damage that was caused to him cannot be recognized. The following words from the Mazza Commission Report on this issue are fitting:

The view that recognizes the value of the individual as a human being, and the sanctity of life as a value in and of itself, was assimilated into our law as part of an all inclusive moral view. The fundamental principles and values of our system constitute a source of inspiration for the interpretation of concepts that have "open and flexible membranes"; and "damage", as per its definition in the Civil Wrongs Ordinance, as detailed above, is one of the concepts that should be interpreted according to those principles and values. In other words: the question of recognition or non-recognition of the very birth of a disabled person as "damage" should be decided while taking into account legal policy considerations, according to which the competing values and interests are examined; and determining the balancing point between the private interests and the general public interest shall be influenced by the fundamental views of the legal system and in light of moral considerations. Our stance is that taking into account of those considerations leads to the conclusion that the position that sees "damage" in the very birth of a disabled person should not be recognized (see the report of the Public Commission on the subject of "Wrongful Birth", at p. 46).

Note further that I have been persuaded by the position of my colleague the Deputy President that recognition of the cause of action of the parents for "wrongful birth" will allow granting compensation that fulfills a significant part, and possibly most, of the child's needs; it may be appropriate to broaden the solutions by alternative arrangements as recommended by the public commission, but that issue must be examined outside the framework of this judgment.

Thus, I concur with the judgment of my colleague the Deputy President, which seems, at the present time, to provide a consistent answer, found with the framework of accepted tort law, to the questions that arose before us, and even presents practical solutions to difficulties that arise in actions of this type. Nonetheless, this judgment too does not constitute the end of the discussion, and it appears that even if additional creativity is called for in developing causes of action regarding lack of early discovery of defects in a fetus, the time is not yet ripe for that. Furthermore, the questions that will arise in the parents' actions for wrongful birth, part of which were hinted at by my colleague in his judgment, will certainly engage the courts again in the future.

President A. Grunis:

I concur in the judgment of my colleague, Deputy President E. Rivlin.

Justice M. Naor:

1.IconcurinoftheDeputyPresident

E. Rivlin.

Regarding the transitional provision and par. 16 of the opinion of my colleague Justice E. Rubinstein: in my opinion we should not decide, in the framework of the transitional provision in the case before us, the question what the fate should be of an action of an infant which has not yet been submitted, regarding which the limitations period has, prima facie, expired. The correct parties regarding that question are not before us. We shall cross the bridges when we reach them.

Justice E. Arbel

1.The of DeputyPresidentE.Rivlin isain theissue thetortofbirth,whichittwoseparatecausesofaction,causeofofthe"wrongfulandthecauseofofparents,"wrongfulbirth".dealsquestionsofcentral,ofwhichthefromthelife"ofraisingtheoftheofversusalifeofandaoflifeaofdeath.Hereinitsquestionwhetherweasjudgescanwhethertherearerareastheybe,inwhichitisbettertolivethanitistoliveaofsuffering,orinthewordsofBarak,adefectedlife.Mytheofpublicthatdonotsupport"wrongfullife"causeofaction,andtheinvariousIconcurinopinioninoftheseconsiderations,causeofactionfor"wrongfullife"shouldnotbeBeyondtheintheframeworkofthisofthethatdefiningthelifeoftheevenifitisasalifewhichwouldpreferably–forinfant–neverhaveoccurredissanctity of and dignity.

I join my colleague's determination that the need to provide a solution to the medical, rehabilitation and assistance needs of the child can be found in the framework of his parents' action for "wrongful birth", which does not raise the difficulties of law and principle involved in recognizing the child's cause of action. The parents are the parties that are directly injured by the fact that their child was born due to negligence. His birth necessarily bears injury to the parents. I agree with my colleague's conclusion that in this case the parents have the right to choose not to bring into the world a child with disability, via legal abortion permissible by law. This determination can be made without entering into the moral questions involved in the parents' choice to refrain from raising a child with disability.

3.Iwas notsurehow todecidethe issueof proof ofthecausallinkina "wrongfulaction.Intoprovetheacausalinsuchacauseofitbethatwouldhavetopregnancyhadthefactsthedefectthefetusbeenknown.Thisissuenoitfurtherthatitnotforthewouldhavechosentothepregnancy.Theasithasalreadyariseninthepast,iswhetherofsuchproofshouldnotbewaived.colleaguealsoagreesthe standingonthewitnessstandandtestifyingthattheywouldhavechosentothepregnancy,iftheyhadtheraisesThereisinprovingandawherewitha whenthey already theresult.AlthoughthisisnotuniquetobirthIamofthethatthethatsuchtheirCan a truly looking whetherhe would have abortedthe isnowlivingandchildheisraising?Canapersonwhathewouldhavedonehadhefoundout,whenthechildwasstillafetus,aboutthefetus’sinactionsfor"wrongfultheisintensified,asdiscussedfortwoadditionalreasons.First,themoralbywhothattheywouldhavechosentoabortchildthatisnowlivingandloved,isathatharmeventhechildifheistotheatpointoranotherinlife.intheofpublicpolicyduetotheconcernthataofsuchproofwouldburdencertainofwhichthereisathattheydonottohaveduetothethatwouldharmparentsareto a child.

I examined whether it would not be correct to adopt the approach according to which proof of causal link should be waived (CC (Jerusalem District Court) 3198/01

A. v. the Jerusalem Municipality (unpublished, 12 May 2008), Judge Drori; CC (Tel Aviv District Court) 1226/99 A.L. v. Yaniv (unpublished, 29 March 2005), Judge Benyamini). Indeed, this approach constitutes a certain deviation from the regular path of tort law. Nonetheless, in my opinion this approach is likely to be legitimate and fitting for the subject matter at hand, due to considerations of public policy and in light of the uniqueness and complexity of this cause of action. Thus, for example, the complexity of the "wrongful birth" cause of action served the Deputy President in determining that the defendants should be charged to pay the disabled child’s additional expenses only, and not all the expenses of raising him. In addition, I find it doubtful that such a requirement would advance the discovery of the truth, and whether it can advance justice in a specific case, due to the noted difficulty in proving what the parent would have done had he known of the defect his fetus suffers from, whereas it is doubtful if he himself knows clearly how he would have acted. However, I ultimately decided to concur in the opinion of my colleague, both due to the desire to walk along the path of tort law, and due to my colleague's softening of the requirement in two ways: first, in determining that by proving the position of the pregnancy-termination committee to allow an abortion in the certain case, a refutable presumption arises regarding the parents' stance about having an abortion; and second, in determining that refuting this presumption shall not be done merely

through general information such as sectorial or religious affiliation. I add that in my opinion, courts hearing "wrongful birth" cases must act on this issue in a very cautious and sensitive fashion, giving weight to the individual, who is not necessarily obligated by the general positions of the sector to which he belongs; the courts must also act with a certain flexibility, to the extent possible, in implementing this requirement in the framework of a proof of the causal link. We are dealing with negligence law, which should be adapted to the ever changing and difficult reality of life.

As aforementioned, I concur in the judgment of the Deputy President.

Justice S. Joubran:

I concur in the circumspective and enlightening judgment of my colleague, Deputy President E. Rivlin.

Justice E. Rubinstein

The issue before us touches upon philosophical questions regarding human existence, possibly similar to the house of Shamai and the house of Hillel, who disputed "for two and a half years" the question whether "it is better for a person not to have been created than to have been created" (Babylonian Talmud, Eruvin 13b); questions which are philosophically difficult, legally difficult, and difficult from a human standpoint. In the annals of the sages a decision was reached: "counted and decided: it is easier for a person not to have been created than to have been created; now that he has been created, he must examine his deeds. And there are those who

say: he must reckon his deeds" (id; and see Rashi, id; Mesilat Yesharim (Rabbi Moshe Chaim Luzzato (Italy-Holland-Eretz Yisrael, the 18th century) chapter 3); the thrust of this is that having been created, he must search for good and expunge evil, with constant self examination. The subject underdiscussion is more limited than the existential question posed above, which relates to the life of any person, and it relates to a person who entered the world with severe defects; it is fundamentally a situation in which the parents declare that had they known ex ante what the condition of their infant would be they would have refrained from continuing the pregnancy, and society confirms (via the provisions of section 316 of the Penal Code, 5737-1977) that this is a legitimate choice. Nonetheless, questions from the world of values, philosophy, morals and religion arise, integrated with questions the results of which are financial – such that the legal decision makes (or might make) a moral choice as well; thus the agony in making it.

In this context, it is my opinion that a different description of human existence actually characterizes this judgment. The verse "and G-d made man" (Genesis 2:7) is interpreted in the Talmud as follows: "woe is me because of my creator, woe is me because of my evil inclination" (Babylonian Talmud, Brachot 61a): approving the "wrongful life" cause of action raises complex theoretical legal difficulties, which my colleague the Deputy President (following what is accepted in other countries) wishes to avoid, and thus his decision. This is also the approach of the majority of the "Public Commission on the Subject of Wrongful Birth" (hereinafter the Mazza Commission) in the important and enlightening report it wrote (the minority opinion is also

important), which in my opinion has a special role in our decision. On the other hand, annulment of the cause of action, as proposed by my colleague, even if that comes alongside an expanded cause of action for "wrongful birth", is not simple, primarily on the practical level. Expansion of the cause of action for wrongful birth in order to provide a solution for the practical difficulties, or some of them, as can be seen in the opinion of my colleague the Deputy President, is also liable to raise various legal difficulties, some of which I shall touch upon below.

3.Regardingforon the legal plane,inthetheinthecauseoftoadditional(theexpensesthethethattheraisingofachild),althoughregularalsobeabletobecausallylinkedtotheact(see56-57),mycolleaguetheDeputynotesthat"theresultsofthebirthofthechildmustalsobe(par.weagainfindtheofexistence,wewishedtoavoiddoing.Furthermore,inordertoreacharesultwhichis,intheofthecase,just (toextentcolleagueiswillingtoparentsoftheinfantfortheirexpenses the entire period of [the infant's] life expectancy"(par.60,–eventhoughfromthepracticallawstandpoint,itthattoitistheactiontofortheirsupportoftheinfant,itcouldhavebeentotheoftheirlifetotheintheMazza Commissionthatcanbebasedupontheparentspennytheirinordertoensureofthe needs ofthe infant their p. 64).

4.Thatisalsothecaseregardingidentificationlivingexpenses(the"regularexpenses")oftheinfantwhenhehasanadult,asaverage salary in the economy (inthecaseoflossofearningability)–agenerallyexpectedapersonwhowasbyaact, not ofthe expenses aparty bears in tosupport(althoughinMazza Commission wasalsoofthisopinion,p.61).Incontext,itisdoubtfulineyesiftheforsupportpursuantto4oftheLawLaw(Support),(towhichDeputyinpar.ortosectionofInheritanceLaw,5725-1965(towhichheinpar.75)issalaryinthe(forsupportratesCA4480/93A. v. B.,48(3)IsrSC461;PY(AL),5725-1965(part2,37-38).IIamnot,heaven forbid,sayingthatantheintheseissuesshouldbetaken.oppositeisthecase–theofwhichattheof theofmytheDeputyPresident(aswellastheopinionintheMazza CommissionareIacceptthemaswell;however,thearisingfromadaptationoftheparents'causeofactionfor"wrongfultorealityincauseofaction"wrongfullife"should not be ignored.

5.On the practical plane, myinter aliaquestionitcanbeensuredthattheparents' tothebirthcause

of action will indeed ensure the future of the infant (see par. 75). These questions are difficult to solve, as what will be done, for example, when the parents are irresponsible, or big spenders, and leave the infant with nothing by spending all the money. I shall say at the outset, that in my opinion there is a sufficient legal basis for determining arrangements that will safeguard this interest; in addition, because if the parents' entitlement stems from various duties that the law casts upon them (see, e.g., par. 60 of the opinion of the Deputy President) it is not unreasonable to connect the compensation and these duties (in this context as well the majority opinion in the Mazza Commission proposed unique arrangements, see p. 62). An additional significant difficulty, at least on the level of principle, relates to an infant who has no parents to sue on his behalf (an issue which the majority opinion in the Mazza Commission discussed on p. 60), or when the parents themselves go bankrupt, etc.

6.InotherthetheoftheDeputydespitetheittoensurefutureoftheinfanthisparents'action,–despitetheofcourse–leadtointhewhotodaywouldbeentitledtowillbewithnothing;yetistheandthefromitareexpenses(evenifwefromusingtheofLetusthatJusticesoftheinZeitsov (CA518/82Zeitsov v. Katz,40(2)IsrSC85)wereawareofthevariousinthepresented,yettheytoawhich,ifitensuresthecausedas a result of the negligent care by the doctor,aspertheofthisintortwillbeforseepar.42oftheminorityintheMazza CommissionbyMr.Posner.

In this context, the position of (then) Justice Barak in Zeitsov proposes a compensation mechanism which is clear and relatively simple to implement, which avoids entering into complex ethical dilemmas (see also A. AZAR & A. NURENBERG, RASHLANUT REFU'IT (MEDICAL MALPRACTICE)(2nd ed., 5760) 287); however, as noted above, it entails legal difficulties (see Deputy President Ben-Porat in Zeitsov, at

p. 105; see also R. Perry "L'hiyot o lo L'hiyot: ha'Im Zo haShe'elah? Tviot Nezikin begin 'Chayim b'Avla' keTa'ut Konseptualit"(To Live or Not to Live – Is that the Question – Tort Actions by Reason of Wrongful Life as a Conceptual Mistake) 33 MISHPATIM (5763) 507, 559-560; A. Shapira, "haZchut lo leHivaled bePgam" (The Right to be Born with a Defect) in DILEMMOT B'ETIKA REFU'IT (DILEMMAS IN MEDICAL ETHICS) (R. Cohen-Almagor ed., 5762) 235, 248). I will not deny that I was taken by the thought of proposing that we continue down that paved path, as per Justice Barak, with certain amendments and despite its theoretical difficulties, until the subject is fully arranged [in legislation]. As long as the subject has not received a full arrangement, we replace a construct with theoretical difficulties but practical validity, with a construct which does not have such theoretical difficulties, but raises practical questions, as mentioned above. The Justices that heard Zeitsov a bit more than a quarter of a century ago knew that they face a difficult mission; but they wished to practically assist those whose fate was bitter, where negligence had occurred, even if the very creation of a fetus with defects was not at the hands of the doctor but by "the dealer of life to all living creatures" (in the words of the hymn for Rosh haShana and Yom Kippur).

8.thecreatedtheinZeitsov,thelackofinofthecourts,inter alia regardingthebetweentheopinionsofDeputyPresidentBen-PoratandBarakinZeitsov –requiresandanditisnotfornoreasonthatwedealing,inwithalargeofcasesthatAsearlyas this noted:

"a district court judge hearing an action like this stands before a number of possibilities… in each of the cases he will not deviate from the provisions of sec. 20(b) of Basic Law: Adjudication, which determines that 'a ruling of the Supreme Court obligates every court, except the Supreme Court'" (CA 913/91 Azoulai v. The State of Israel (unpublished) par. 3 – Justice Maltz; see also CA 119/05 Amin v. The State of Israel (unpublished))."

A generation has passed since the Zeitsov ruling was handed down, and as the members of the Mazza Commission noted: "the lack of decision, as aforementioned, has left the legal arena wide open" (p. 17); this situation, in which the fate of an action depends upon the decision of the judge – it may not be superfluous to note, the random judge – before whom the case is heard "according to his opinions and worldview" (in the words of the commission on p. 17), is hard to accept. Complaints against it were also heard from attorneys who deal in the field during the hearing before us (on 31 January 2012); and I will not refrain from mentioning here that the opinions supporting confirmation of the stance of Judge Barak in Zeitsov were usually heard – before us and in the Mazza Commission – from lawyers who generally represent claimants. Indeed, the majority opinion in the Mazza Commission proposed "as a first and preferred possibility" (p. 60) to create, in legislation, a social arrangement that would ensure fulfillment of the needs of those born with defects that cause them functional disability, and of course there would be much blessing in such an arrangement; it further proposed, as an alternative, a legislative torts arrangement, and there is much positive about that as well. However, as a court that hears tort cases according to the existing law, I fear that there is no evading determination of a caselaw rule in tort law, despite the existing difficulties that accompany each of the alternatives, until legislation of one kind or another is passed. And I call upon a sensitive and conscientious Israeli legislature to reach it as soon as possible.

Ultimately, I saw fit to concur, in principle, in the well reasoned decision of my colleague the Deputy President, consisting, at this time, of the part regarding legal principles. I do so whilst pointing out the difficulties and calling upon the legislature to speak. It is an open-eyed decision, aware of the disadvantages and advantages of each of the alternatives, wishing – trying hard – to ensure that basing one's opinion on "the regular legal tort logic" (the purpose of which is also avoiding the type of difficulties in theory and in result found in the various opinions of Zeitsov) does not lead to a practical result which is not just. I go this way also because the stance of my colleague is in line with the opinion of the majority of the members of the Mazza Commission regarding annulment of the "wrongful life" cause of action, and with the caselaw of the courts of the Common Law states (as the commission surveyed in its report, and as my colleague surveyed in his opinion). The moral message that arises from my colleague's decision – both regarding the sanctity of life and regarding treatment of persons with disability – also supports adopting it. It is also in line (as presented briefly below) with what can possibly be defined as the position of Jewish

Law, our legal heritage. The position that arises from our decision is that we do not leave people with disability in the category of "it would be easier for him had he not been created"; we must honor their needs and attempt to fulfill them, without a label of societal rejection in the form of "it would be easier for him had he not been created", but rather while treating them as desirable human beings.

"Better than both is the one who has not yet been" (Ecclesiastes 4:3)

Recognizing the cause of action for "wrongful life" requires, as aforementioned, discussion of weighty moral questions, the answers to which might be able to be found "in the area of philosophy – morality – theology" (in an analogy to the words of Justice Goldberg in Zeitsov, p. 128). Indeed, in the literature of Jewish law we also find positions – based on a religious worldview – according to which for a very defected infant, whose life expectancy is most short, "it is better for him that he was born than had he not been born at all, as those who are born enter the next world" (see the IGROT MOSHE responsa (Rabbi Moshe Feinstein, Russia-USA, 20th century) Even HaEzer first part chapter 62); there is, however, among important religious authorities also broad and significant attention given (in the context of discussion of termination of pregnancy) to the life of suffering to which such an infant, and to a great extent those who closely surround him, are condemned:

"Is there need, sorrow, and pain, greater than that under discussion, which will be caused to the mother to whom such a creation is born, one who is all suffering and pain, and whose death is certain within a number of years, and the eyes of the parents see but their hands cannot relieve him? (and it is clear that if this child is taken to a special institution and the parents will not be given access until his death it makes no difference and does not detract from the aforementioned). Added to this are the tortuous and painful contortions of the child with the defect. Thus, if termination of the pregnancy is to be allowed according to Jewish Law due to great need and due to pain and suffering, it seems that this is the most classic case that should be allowed" (TSITS ELIEZER responsa (Rabbi Eliezer

Waldenberg, Israel, 20th century) part 13 chapter 102).

The reality of human existence also brings forth cases in which life is not short, but rather continues, without hope, for decades, with all the suffering involved, at times especially to the parents, as the child does not communicate. Indeed, many pens broke in Jewish law attempting to clarify these questions with a forward looking glance (particularly regarding abortions; see, for example, Rabbi E. Lichtenstein "Hapalot Malachutiot – Heibetei Halacha" (Artificial Abortion – Halakhic Aspects), 21 TCHUMIN (5761) 93). The majority opinion in the Mazza Commission included discussion of a number of known sources relating to the question whether life is worth living, for example the words of King Solomon "and I thought the dead, who have already died, more fortunate than the living, who are still alive" (Ecclesiastes 4:2), and the words of Jonah the prophet, who wished to die and said "it is better for me to die than to live" (Jonah 4:8), although, according to their opinion, "there is no doubt that these statements relate to moral and theological aspects only" (p. 65), and I already discussed above the differentiation between the philosophical question and the situations which are before us for decision. The question when "death shall be preferred to life" (Jeremiah 8:3), or when to "long for death but it does not come, and

dig for it more than for hidden treasures" (Job 3:21), is a question which has not been decided; however, life is "heritage from the Almighty on high" (id, 31:2; see M. Greenberg "Erech haChayim baMikra" (The Value of Life in the Bible) in KEDUSHAT HACHAYIM VACHERUF HANEFESH: KOVETS MA'AMARIM LEZICHRO SHEL SEGEN AMIR YEKUTIEL (THE SANCTITY OF LIFE AND MARTRYDOM – COLLECTION OF ARTICLES DEDICATED TO MEMORY OF LT. ARNON YEKUTIEL) (Y. Gafni & E. Ravitsky eds, 5753)

35). For example, there are those ill with debilitating disease whose life is not really a life, and who expect to be put out of their misery, and there are those who turn the depths of suffering into a lever for creative activity (see the enlightening and touching writings of Dr. Rachamim Melamed-Cohen, a person with ALS who creates like an ever swelling spring).

The stories of the Bible and additional stories appearing in later sources teach that life is not always preferable to nonexistence: thus, for example, the words of King Saul to his porter "draw your sword and thrust me through with it, so that these uncircumcised may not come and thrust me through, and abuse me" (1 Samuel 31:4); or the story of the woman who "grew very old" and said to one of the sages of the Mishna: "I have grown too old and from now on my life is that of disgrace, I do not taste food or drink and I wish to leave the world" (YALKUT SHIMONI Dvarim chap. 11 Remez 871). Note that these acts served halachic authorities in discussion of modern questions regarding lengthening and shortening life (see, respectively, Rabbi Y. Zilberstein "Matan Morphium le'Choleh Sofani haSovel miChenek"(Giving Morphium to a Terminal Payment Suffering from Asphyxia) ASIA 15 (5757) 52; Rabbi Y. Zilberstein, in TZOHAR: KOVETS TORANI MERKAZI C (5758) 218). Then, as now, in Jewish law as in Western law, the considerations are well known, and the dilemmas are difficult.

12.itisstillappropriatetocomparingfilledwithtoaandlife,andasitbe,withaofnonexistence.Thatisthewhenwithathatisforof"theextentofthe"bottomline"ofistoamonetaryIn-depthoftheofdiscussing thosequestionscaninmyopinionbefoundinthewordsofthe 10a) King Hezekiah,whofromprocreatingbecauseforesawhiswouldbeevil(theevilMenashe).Inthetells"whatbusinessofyoursarehiddenoftheandofchoiceinsuchitwassaidthat"asoulisnothisproperty,propertyoftheLord,asitiswritten(Ezekiellivesare(theofthe(RabbiDavidbenthe16ofS18,6).ifJewishlawistothatincasesitispreferabletoavoidthatiswithhightoleadtoofdefectedthewordsofprophetaclearthepossibilityofdiscussingasituationoftoaofexistence,asasit

is, and their conclusion that law cannot be decided on the issue. I add that those words – regarding the hidden ways of the creator of the world – are used in religious philosophy in a completely different context as well, regarding ungraspable historical phenomena like the holocaust.

13.Thelegal of"wrongfulbirth"or"wrongfullife"has–ontheasopposedtothemoral-religious–inlaw(see,e.g.,S.Yelenik"Holadab'Avla–ZchuyotTviahBirth–RightsofActionS23(5761);Vidal,"Holada–PitsuiyeiNezikinHoladatUbarBirth

Compensation in Torts for Birth of Fetus with Defects), TCHUMIN 32 (5772) 222), and the problem of an action on the basis of the cause of action for "wrongful life" was raised: "according to the halacha there should be no action by the minor" – as opposed to his parents' action – "who was born due to a tort, neither against his parents nor against a doctor who gave his mother consultation or diagnosis when she was pregnant" (VIDAL, p. 231). However, the halachic sources referred to in these works may support the conclusion of Dr. Michael Wigoda:

"The truth should be said, that the classic sources of Jewish law do not deal with this issue" (thus, in his memorandum submitted to the Mazza Commission with the title "Reflections upon 'Wrongful Birth' in light of the Sources of Jewish law").

It can also be understood why: the formulation of tort actions like those before us is the fruit of the modern medical and legal age, in which what was previously in the realm of heavenly secrets and fate, can now be predicted and decoded by tools of medicine and genetics. That does not exempt modern [Jewish law] authorities from dealing with it.

Epilogue and Practical Comments

14.Thethatcolleaguetheexpansivelygoesalongwaytowardreasoned,andjustoftheandlegalbeforeus.However,incertainregards,thewhichthecourtscontinuetopavetothecasesthatbebroughtusisstilllong(andmyalsothat).TheintheMazza Commission withadditionalprovisionswhichshouldbeintortAttheofthem liesthewhichlies atofopinion:thatapartofthefortheparentsislinkedtotheburdensomeexpensesofensuringcareforhim,anditsistoallowthemtopaytheminawaythatwillcondition,tothepossible(anditbeabletobesaid,toallowthemtotheirduties theinfant).relationswithinthediscussedneedtothattheisusedfortheoftherelationstheandothers,thediscussedneedtothemoneyagainstthirdsuchcreditorsinbankruptcy(p.62).situationinwhichtheinfantdoesnothavewhowillsueinhisadditionalwhich of theMazza Commission discussed.

15.Thesemorethanquestionoftheannullingofthelifeofwhichiscentralinthis(partial)Indeed,atstagewearenottheconcretequestionsofofandthuswearealsonotitforthepurposeforwhichitisgiven. Thecourtscanfindthe

answer to these questions – at least to part of them – in the Mazza Commission report, and that circumspective legal document should be before the eyes of those hearing such cases. In may be, that the solution to them will resemble relocating the theoretical difficulties from the discussion of the cause of action to a discussion on translating the expanded cause of action into practice. However, the question of the cause of action is the one which is before us, and it is presumed that its translation into practice will find an appropriate solution in the future. The majority opinion in the Mazza Commission noted:

"The question is whether such an arrangement can be reached, to the extent that it is found appropriate, by judicial ruling as well, is a matter of the decision of the Supreme Court."

Although I am, as aforementioned, of the opinion that there should be a legislative arrangement of the entire issue, and I hope that the call to the legislature will fall on attentive ears, whether in a social scheme (which, in its entirety, would not be before us) or, at least, a legislative arrangement of a complete and detailed tort scheme; the courts have a duty to ensure that the annulment of the wrongful life cause of action prior to enactment of a circumspective scheme in legislation will not derogate from their primary duty – to do justice within the framework of the law. The path that has been determined passes through the parents; the courts have a duty to ensure, in every single case, that the benefit reaches the infant and is earmarked for the infant, and not for other purposes.

Transitional Provisions

16.Regardingtransitionalprovisionsbycolleagues,I amafraidthataistoininwhichnoactionwasbytheparents,underthethatinthefutureafterclarificationofthecondition)anactionwouldbebyinfant,theoftheZeitsov rulingtoofitanother,andrelying uponit.toaperiodofyearsforthat.provisionthesafeguardspendingcasesinactionswerenotbybutitdoesnotsafeguardhaveyetiftheyearparents expired(asopposedtothetwentyfiveyears),aclaimthatactionisbarredduetoberaised.ThatmayhaveanadditionalconsiderationinfavorofleaningtowardleavingZeitsov standingHowever,Iat least theofthisshallapply,tocasesinwhichanactionwastheforonefromthedateoftheUnfortunatelymyareinthusIonlyhopethatthefindawaytothehasbeenof(to they inthe of justice.

Final Comments

17.ThisjudgmentisgivenondayoftheoftheDeputyRivlin.Heisretiring36years–twicetheofHebrewwordChai [life]–onbenchofinstances,

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).

Full opinion:

Hammer v. Amit.pdf

Link to original Hebrew text of decision on official ISC website:

Stroul v. Attorney-General

Case/docket number:

CrimA 70/64

Date Decided:

Monday, June 22, 1964

Decision Type:

Appellate

Topics:

Breach of statutory duty

Stroul v. Attorney General.pdf

Fault

Negligence

Abstract:

The appellant, a qualified hospital laboratory technician, supplied blood for transfusion to a patient without making sure - by inspection of the label on the bottle containing the blood and carrying out certain prescribed tests - that the blood was compatible with that of the patient. The two were in fact not compatible and after being transfused with blood supplied the patient died. The appellant was convicted and sentenced in the Magistrate's Court and his appeal to the District Court failed. On appeal to the Supreme Court, two submissions in law were made: that the acts or omissions of the appellant were only of the nature of "acts of preparation" and the effective cause of the death were the acts and omissions of the hospital staff to whom the appellant had delivered the blood; that the appellant owed no duty of care to the patient since in the circumstances it was not to be assumed that the blood would be administered without examination by others of the hospital staff.

Held: First, the mere fact that others are negligent in carrying our their duties does not break the causal connection between a person's initial negligence and the ultimate result. Second, every person owes a duty of care to the eventual victim when he does an act which may endanger the life or health of another and he cannot plead in defence that he relied on the fact that others might or should later take steps to avoid the danger.

Voting Justices:

Cohn, Haim Herman

Primary Author

majority opinion

Olshan, Yitzhak

majority opinion

Landau, Moshe

Author

concurrence

Full text of the opinion:

Crim.A. 70/64

ARMAND STROUL

ATTORNEY-GENERAL

In the Supreme Court sitting as a Court of Criminal Appeal.

[June 22, 1964]

Before Olshan P., Landau J. and Cohn J.

Criminal law - administration of wrong blood type - causing death by negligence - causal connection - duty of care - Criminal Code Ordinance, 1936, secs. 218, 219(e) and 231.

Held (1) The mere fact that others are negligent in carrying our their duties does not break the causal connection between a person's initial negligence and the ultimate result.

(2) Every person owes a duty of care to the eventual victim when he does an act which may endanger the life or health of another and he cannot plead in defence that he relied on the fact that others might or should later take steps to avoid the danger,

Israel cases referred to:

(1) Cr.A. 180/61 - Baruch Alpert v. Attorney-General (1962) 16 P.D.1416.

(2) Cr.A. 11/52 - Joseph Menkes and Others v. Attorney-General and Counter-appeal (1958) 12 P.D. 1905.

English cases referred to:

(3) M'Alister (or Donoghue) v. Stevenson & Others (1932) A.C. 562.

S. Toussia-Cohen for the appellant.

G. Bach. Deputy State Attorney. for the respondent.

COHN J. The appellant was convicted in the Rehovot Magistrate's Court of a crime under section 218 of the Criminal Code Ordinance, 1936 (hereinafter called "the Ordinance") in that he caused, by want of precaution not amounting to culpable negligence, the death of Dr. Bela Granadi. The Tel Aviv-Jaffa District Court, sitting on appeal, confirmed the conviction, but gave the appellant leave to appeal again to this Court.

The relevant facts, no longer in dispute, are as follows:

(a) The appellant worked as a "qualified laboratory worker" in the blood bank in the "Assaf Harofeh" hospital in Tzrifin. His task was inter alia to supply the operating theater of the hospital, from the stock in the blood bank, the blood required for transfusion of patients. For this purpose a sample of the blood of a patient is given to him; and it is well known, and the appellant knew, that not all types of blood intermingle and that the danger of immediate death exists if a person with one type of blood is infused with one of the other types which do not mix with his blood. The appellant's duty as, therefore, to inspect first the patient's type of blood and mark it with red pencil on the order form sent to him; to take from the refrigerator bottles of blood of the type which suit the patient's blood type and afterwards to do three "cross-breeding" tests, each according to a different method - that is to say, cross-examination tests of blood mixture of the patient's blood with the blood taken from the refrigerator, so as to know and confirm that they really mix. When the time comes for the blood transfusion, the responsible nurse in the operating theater ends a messenger to the blood bank, who receives either from the appellant or another employee in the blood bank the bottles of blood intended for the patient concerned and which were put back, after all the said tests, into the refrigerator, marked with the patient's name and his blood type, and the order form attached to them.

(b) When on 19 December 1960 the appellant received a sample of the deceased's blood, he tested it and determined its type as required; afterwards he went to the refrigerator and took out bottles of blood from it, which stood in the place where, to the knowledge of the appellant, bottles of blood of the deceased's blood type stood. On these bottles the type of blood which they contain was marked. Had the appellant looked at them, he would have seen that the blood in one of the bottles was not of the deceased's blood type. The appellant relied, it seems, too much on the place where the bottles stood in the refrigerator, which was, as I have said, the place where the bottles of the suitable blood type stood, and he did not look at the labels of the bottles. Not only that, but he did not do the said "crossbreeding" test; he returned to the refrigerator the sample of the deceased's blood together with the bottles which he had taken from the refrigerator as aforesaid, marked as intended for the deceased, with the order form attached to them.

(c) On 20 December 1960, the day of the operation, a messenger from the operation theater came to the blood bank, and another employee in the blood bank went to the refrigerator, found the bottles for the deceased and handed them over to the messenger. Had she looked at the bottles, she would have discovered that the type of blood marked on one of them did not match the type of blood marked on the order form as the patient's blood type, but she also did not look.

(d) The messenger brought the bottles of blood to the operating theater, and when the person responsible in the theater at the time wanted to look at them and see if everything was as it should be, the doctor requested him to hand him the bottles of blood, and so he did; and the inspection was not done.

(e) The death of the deceased on the same day was caused by the transfusion of blood which was not of the type of the deceased's but of a different type which does not mix with it.

Before us Mr. Shlomo Toussia-Cohen, counsel for the appellant, tried to argue that although the appellant did not do all the "cross-breeding" tests which it was his duty to do as aforesaid, then at least he did some of them - or if he did not carry them out in the way that it was his duty to do, then at least he carried them out in a different way. At this stage we will not entertain such factual arguments, and we do not dispute the finding of the learned judge in the Magistrate's Court that the appellant did not do "cross-breeding" tests, not all of them or part of them (paragraph 19 of the judgment); and we agree with the evaluation of the learned judge that the appellant thereby was in breach of "an elementary obligation" imposed upon him. And furthermore, by writing the word "compatible" on the order form next to the serial numbers of the bottles of blood which he had prepared for the deceased, he created the wrong impression that he had actually carried out the required tests and found that the types of blood were compatible with one another.

Learned counsel for the defence raised two legal arguments: the first, that the acts or omissions of the appellant did not cause the death of the deceased, they were only within the "acts of preparation" of the acts or omissions of others who caused his death; and the second, that an offence of want of precaution is only committed when a duty of care is imposed on the accused in respect of the deceased, and here there was precisely no duty of care imposed on the appellant toward the deceased. I have not found any substance in these arguments.

As to the causal connection between the appellant's acts or omissions and the death of the deceased, it is sufficient for the prosecution to rely on the provisions of section 219(e) of the Ordinance which provides as follows:

"A person is deemed to have caused the death of another person although his act or omission is not the immediate or not the sole cause of death -

...

(e) if the act or omission would not have caused death unless it had been accompanied by an act or omission of the person killed or other persons."

Mr. Toussia-Cohen says what is involved are the acts or omissions of others which "accompanied" the appellant's acts or omissions - excluding acts or omissions of others which followed them. The word "accompanied", which the legislator used, indicates, according to this argument, the simultaneity in time of the said acts or omissions, as though they were all done or omitted simultaneously and not one after the other. Here, these were omissions by the rest of the hospital employees who were obliged, in his argument, to inspect whether the blood prepared by the appellant was really suitable for transfusion to the deceased, which occurred after the appellant's acts or omissions and not simultaneously with them; and therefore there is nothing in section 219(e) to constitute the appellant's act or omission as the cause of death by virtue of the law.

There are several answers to this argument: first, the legislator did not in using the word "accompany" adopt technical language at all; his purpose was to assume the existence of different acts and omissions, except for the accused's act or omission, which possibly also caused the victim's death; and it is irrelevant whether they came simultaneously or earlier or later - provided that all of them might have contributed to the death. Secondly, the pleader reveals a misunderstanding of the English language, if he thinks that this word means just to accompany simultaneously; in every dictionary, other meanings will be found in addition to that meaning, such as to supplement, to complete, to coexist, to be added to and not only simultaneously. And thirdly, and this to me is the main point: if you indeed say that the acts or omissions of the rest of the hospital employees did not "accompany" the appellant's acts or omissions in the meaning of this word in section 219(e), the result is not that only because of this are they regarded as the cause of death and not the appellant's act or omission. But the opposite is the case; if there had not been acts or omissions of others which accompanied, in the full meaning of that word in section 219(e), the appellant's act or action, then the appellant's act and omission remained the sole and immediate reason for the death, as stated in the beginning of the section. The mere fact alone that they were "accompanied" by acts or omissions of others as possible causes of the death, creates the problem which section 219(e) is meant to settle.

Accordingly the appellant's act or omission should be regarded as the cause of the death of the deceased, in spite of the possibilities (or even the certainty) that it was possible to avoid the disaster had the rest of the hospital employees subsequently examined the blood prepared by the appellant for that purpose and before the transfusion. Because the rest of the employees are not standing trial before us, I see no need to inquire whether any duty was imposed on them to carry out such additional tests; but as regards the second submission of law I will assume for the benefit of the appellant that he did in fact rely on additional tests being done as aforesaid.

The submission, it will be recalled, is that no duty of care was imposed on the appellant in respect of the deceased and therefore his lack of care gives no cause for his being criminally charged. This argument rests on the rule handed down in the House of Lords in Donoghue v. Stevenson (3), that a person owes a duty of care towards all those to whom a dangerous thing of his manufacture might reach and in the circumstances one may suppose that the dangerous thing will reach that person without further examinations or changes. From the affirmative one arrives at the negative, that if in the circumstances it may be supposed that the dangerous thing will undergo further examinations before reaching that person, then the manufacturer does not owe that person a duty of care.

With due respect to this rule, the cases are not identical. First, there a bottle of beer was involved, in which the remains of a snail which certainly would harm were found, whilst here a prophylactic was involved. Secondly, it was possible to discover the remains of the snail, whether in the bottle before it was emptied or in the glass into which the beer was poured; here the danger of the prophylactic was hidden and could only be discovered by laboratory tests. Thirdly, and this is the main point, there the beer was not prepared for some particular person, either the plaintiff in the case or a specific, known person; here the blood was prepared for the deceased only and had to be prepared according to his real needs. To whom, if not to the deceased, did the appellant owe the duty to prepare the blood with the required care?

Rather, I agree with the submission of Mr. Bach, speaking for the Attorney-General, that the whole question, to whom the appellant owed a duty of care, does not arise at all in view of section 231 of the Ordinance, which imposes a duty on every person doing an act that might endanger the life or health of another to do it with reasonable care; and the section prescribes, at the end that a person who did an act as aforesaid in violation of this duty is regarded as having caused the consequences which result from this omission to the life or health of any person. The appellant well knew how great the danger was to the patient's life if he received a transfusion of blood which did not mix with his own. The duty imposed on him, under section 231 was to prepare with reasonable care the blood for transfusion, that is to say, by taking all the steps and carrying out as aforesaid all the required and fixed tests in the matter. He violated this duty in that he did not take the steps and did not carry out those tests. He is criminally responsible for the consequence of his omissions, the death of the deceased, and it is immaterial that he relied or could have relied on the fact that others would later do the tests.

I am of the same opinion as the learned judges in the District Court, that as to the matter before us it is possible to draw an inference from the matter which was before this Court in Alpert (1). There, a doctor made a mistake in prescribing a medicine which, as prescribed, contained a quantity of poison sufficient to kill the patient. This prescription was directed to the chemist, and there was a clear duty on the chemist to check it and verify that the doctor really did not err in prescribing a quantity of poison which, also according to the knowledge of the chemist, could kill a person. Nonetheless, the doctor was found criminally responsible in that he was in breach of the duty of reasonable care placed on him. And if the doctor there was responsible, the appellant before us a fortiori, because there the act of preparing the medicine was the chemist's, whilst here the act of preparing the blood is the appellant's and precisely his task and responsibility.

I would dismiss the appeal against conviction.

The appellant also appealed against the severity of sentence. The District Court did not see fit to interfere with the sentence, and there is no need to say that it would not have given leave to appeal for a second time to this Court with regard to the penalty. The learned judge in the Magistrate's Court sentenced the appellant to one year's imprisonment, of that six months actual and six months on suspended sentence, and in addition to a fine of IL 1,000. In giving sentence the learned judge says:

"Unfortunately the present is not a case of a mere inadvertent mistake, but an act of negligence done intentionally out of disregard for the elementary duties imposed on the accused.... The accused was capable of estimating the extent of danger to a person's life to be expected from his act ... and he was obliged... to pay respect to the essentiality of those means of care which medical science has prescribed in order to prevent danger to a person's life... .

It is true that although the act was committed at the end of 1960, the prosecution for some reason found it necessary to lay an indictment only close to the end of 1962, and this delay was an injustice to the accused. But the seriousness of the accused's act is so great that one cannot attribute to this delay a decisive role in fixing the penalty. although I do not disregard it."

The main argument of learned defense counsel before us was that since the accident three and a half years have elapsed, of which two passed waiting for trial and eighteen months during trial, and fear of the law hovered over the appellant for all this long period. This is a consideration which should properly be taken into account in mitigating the appellant's sentence; but since we are convinced that the learned judge also took this consideration into account in mitigating the appellant's sentence, that is no longer ground for our interference.

The appellant was fortunate that he was charged with an offence under section 218 and not with a felony under section 212 of the Ordinance; and in view of the serious consequence of the appellant's act and omission, the punishment imposed on him seems to be too light.

The appeal against sentence is also to be dismissed.

OLSHAN P. I concur.

LANDAU J. I concur.

As to the interpretation of section 219(e), I expressed the opinion in Menkes v. Attorney-General (2) that this section, with its five subsections, does not exhaust all the cases in which a person will be regarded as causing the death of another under sections of the criminal law which prescribe the criminal offences of causing death, among which is section 218. Section 219 was drafted on the basis of precedents in English case law, and its source is in section 262 of Steven's Digest of Criminal Law, prepared on the basis of the English case law (see 8th ed., p. 215). I have studied the English judgments mentioned by Steven as authority for his section 262(e), from which our section 219(e) is copied, and I have found that in all of them the accused's act or omission was "accompanied" by the victim's or a third person's act or omission in the narrow sense of the term, that is, the effect of two factors simultaneously and not one following the other. It seems to me that also according to this narrow chronological test, the case before us comes within section 219(e), since the appellant's negligence, expressed mainly in the failure to carry out the required tests, whilst noting "compatible", which is intended to testify that the tests were carried out, continued to have its damaging effect also when each of the other people, who could have avoided the accident, was negligent in fulfilling his duty, till the final stage in which the lethal blood was actually to be used. (Cf. Alpert (1) at pp. 1420-1421.)

Even if we use the flexible test outside section 219 which 1 suggested in Menkes (2): "if according to the facts the causal connection between the accused's act and the death is so strong that criminal responsibility for the death is to be imposed on the accused", there is no doubt that the requirements of this test were here fulfilled. Out of all the measures of care which should have been taken in order to prevent a disaster from transfusion of blood of an unsuitable type, the laboratory test which the appellant should have done was the basic and principal measure. Carrying out this test was entrusted to him and to him alone, in reliance on his special professional capability, and although others could have prevented the consequences of his gross negligence, none of them was obliged to do so by checking by some laboratory test, to do which was imposed on the appellant.

Appeal dismissed

Judgment given on June 22, 1964

Full opinion:

Solel Boneh Building and Infrastructure Ltd 2. Aryeh Insurance Company Ltd v. Estate of the late Ahmed Abed Alhamid deceased

Case/docket number:

LCA 8925/04

Date Decided:

Monday, February 27, 2006

Decision Type:

Appellate

Topics:

Contracts

Mistake

Courts

Retrospective Judgment

Abstract:

Facts: Ahmed Alhamid died in a work accident. His estate and dependents (the respondents) filed a claim against the appellants for compensation. During the proceedings, the respondents reached a settlement with the appellants, according to which the appellants would pay a sum of NIS 100,000 to the respondents. This settlement was given the force of a court judgment on 22 February 2004. Three weeks later, the Supreme Court gave its judgment in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter ([2004] IsrLR 101). In that judgment the Supreme Court held that if a person is injured as a result of a tort and his life expectancy is shortened (the ‘lost years’), he is entitled to compensation for the loss of earning capacity in those years. The estate is also entitled to compensation for this head of damage, if the life expectancy of the injured person is shortened and he dies during the tortious act or soon after it. This decision overruled Estate of Sharon Gavriel v. Gavriel, which had been given twenty years earlier, and in which it was held that compensation would not be awarded for the ‘lost years.’

Following the decision in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter, the respondents applied to the trial court to cancel the settlement and to amend their statement of claim. Their application was granted. The appellants’ appeal to the District Court was denied. The appellants applied for leave to appeal to the Supreme Court, and leave to appeal was granted.

The questions before the court were whether the ruling in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter should apply retrospectively to events that occurred before that ruling, and if so, whether the respondents were entitled to cancel the settlement because of the subsequent change in the law.

Held: (President Barak) As a rule, case law has both retrospective and prospective effect. There is no reason why the ruling in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter should not apply retrospectively.

(President Barak) The question whether the respondents may cancel the settlement because of the (retrospective) change in the law should be resolved with reference to the doctrine of mistake in the law of contracts. The respondents’ mistake, however, was only a mistake in the ‘profitability of the transaction.’ Such a mistake is not a ground for cancelling an agreement, and therefore the settlement could not be cancelled.

(Vice-President Cheshin) As a rule, case law has only prospective effect. Retrospective application of case law is the exception to the rule. The plaintiff has the burden of persuading the court that considerations of justice require the relevant case law to have retrospective application. In the present case, considerations of justice supported the retrospective application of Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter.

(Vice-President Cheshin) The respondents did not make any mistake in real time. The question whether the law would change was not one of the risks that the parties took into account when they made the settlement. Consequently there was no basis in the doctrine of mistake for cancelling the settlement.

Appeal allowed.

Voting Justices:

Barak, Aharon

Primary Author

majority opinion

Adiel, Yonatan

majority opinion

Cheshin, Mishael

Author

concurrence

Author

concurrence

Grunis, Asher

majority opinion

Solel Boneh Building and Infrastructure Ltd. v. Estate of Alhamid.pdf

Author

concurrence

Naor, Miriam

Author

concurrence

Full text of the opinion:

LCA 8925/04

1. Solel Boneh Building and Infrastructure Ltd

2. Aryeh Insurance Company Ltd

1. Estate of the late Ahmed Abed Alhamid deceased

2. Abed Alhamid Mudib

3. Hatam Mohammed Halef

4. Engineer Dov Yahalom

5. Noga Insurance Company Ltd

6. Farid Attallah

The Supreme Court sitting as the Court of Civil Appeals

[27 February 2006]

Before President A. Barak, Vice-President Emeritus M. Cheshin and
Justices D. Beinisch, E. Rivlin, A. Grunis, M. Naor, Y. Adiel

Appeal by leave of the judgment of the Haifa District Court (Justice B. Bar-Ziv) on 16 August 2004 in LCA 1494/04.

Appeal allowed.

Legislation cited:

Basic Law: Freedom of Occupation.

Basic Law: Human Dignity and Liberty.

Contracts (General Part) Law, 5737-1973, ss. 14(b), 14(d).

Interpretation Law, 5741-1981, ss. 1, 22.

Unjust Enrichment Law, 5739-1979, s. 2.

Israeli Supreme Court cases cited:

[1] CA 140/00 Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [2004] IsrSC 58(4) 486; [2004] IsrLR 101.

[2] CA 295/81 Estate of Sharon Gavriel v. Gavriel [1982] IsrSC 36(4) 533.

[3] CFH 4011/04 Jerusalem Municipality v. Estate of Ettinger [2005] IsrSC 59(4) 8.

[4] HCJ 716/86 Moriah Spas Hotel, Dead Sea v. Tamar Neveh Zohar District Council [1987] IsrSC 41(2) 389.

[5] LCrimA 1127/93 State of Israel v. Klein [1994] IsrSC 48(3) 485.

[6] CA 6585/95 M.G.A.R. Computerized Collection Centre Ltd v. Nesher Municipality [1996] IsrSC 50(4) 206.

[7] HCJ 3648/97 Stamka v. Minister of Interior [1999] IsrSC 53(2) 728.

[8] RT 8390/01 Axelrod v. State of Israel (not yet reported).

[9] HCJ 221/86 Kanfi v. National Labour Court [1987] IsrSC 41(1) 469.

[10] CA 2000/97 Lindorn v. Karnit Road Accident Victims Compensation Fund [2001] IsrSC 55(1) 12.

[11] HCJ 680/88 Schnitzer v. Chief Military Censor [1988] IsrSC 42(4) 617; IsrSJ 9 77.

[12] HCJ 2722/92 Alamarin v. IDF Commander in Gaza Strip [1992] IsrSC 46(3) 693; [1992-4] IsrLR 1.

[13] CA 2622/01 Director of Land Appreciation Tax v. Levanon [2003] IsrSC 57(5) 309.

[14] HCJ 1113/99 Adalah Legal Centre for Arab Minority Rights in Israel v. Minister of Religious Affairs [2000] IsrSC 54(2) 164.

[15] CA 376/46 Rosenbaum v. Rosenbaum [1948] IsrSC 2 235.

[16] HCJ 9098/01 Ganis v. Ministry of Building and Housing [2005] IsrSC 59(4) 241; [2004] IsrLR 505.

[17] HCJ 19/56 Brandwin v. Governor of Ramla Prison [1956] IsrSC 10 617.

[18] LCA 2413/99 Gispan v. Chief Military Prosecutor [2000] IsrSC 54(4) 673.

[19] CA 180/99 Director of Purchase Tax v. Tempo Beer Industries Ltd [2003] IsrSC 57(3) 625.

[20] CA 3602/97 Income Tax Commission v. Shahar [2002] IsrSC 56(2) 297.

[21] CA 5/84 Yehezkel v. Eliyahu Insurance Co. Ltd [1991] IsrSC 45(3) 374.

[22] LCA 1287/92 Buskila v. Tzemah [1992] IsrSC 46(5) 159.

[23] AAA 1966/02 Majar Local Council v. Ibrahim [2003] IsrSC 57(3) 505.

[24] CA 110/86 Gevaram v. Heirs of the late Shalom Manjam [1988] IsrSC 42(2) 193.

[25] HCJ 6055/95 Tzemah v. Minister of Defence [1999] IsrSC 53(5) 241; [1998-9] IsrLR 635.

[26] HCJ 1715/97 Israel Investment Managers Association v. Minister of Finance [1997] IsrSC 51(4) 367.

[27] CA 2495/95 Ben-Lulu v. Atrash [1997] IsrSC 51(1) 577.

[28] CA 3203/91 Azoulay v. Azoulay (unreported).

[29] CA 4272/91 Barbie v. Barbie [1994] IsrSC 48(4) 689.

[30] CA 2444/90 Aroasty v. Kashi [1994] IsrSC 48(2) 513.

[31] CrimA 4912/91 Talmai v. State of Israel [1994] IsrSC 48(1) 581.

[32] CA 6821/93 United Mizrahi Bank Ltd v. Migdal Cooperative Village [1995] IsrSC 49(4) 221.

[33] HCJ 5843/97 Bar-Gur v. Minister of Defence [1998] IsrSC 52(2) 462.

[34] HCJ 6126/94 Szenes v. Broadcasting Authority [1999] IsrSC 53(3) 817; [1998-9] IsrLR 339.

[35] HCJ 4804/94 Station Film Ltd v. Film and Play Review Board [1996] IsrSC 50(5) 661; [1997] IsrLR 23.

[36] HCJ 606/93 Advancement Promotions and Publishing (1981) Ltd v. Broadcasting Authority [1994] IsrSC 48(2) 1.

[37] CFH 7325/95 Yediot Aharonot Ltd v. Kraus [1998] IsrSC 52(3) 1.

[38] LCA 6339/97 Roker v. Salomon [2001] IsrSC 55(1) 199.

[39] HCJ 57/67 Gross v. Income Tax Commissioner [1967] IsrSC 21(1) 558.

[40] HCJ 4157/98 Tzevet, Association of Retired IDF Servicemen v. Minister of Finance [2004] IsrSC 58(2) 769.

[41] CA 8972/00 Schlesinger v. Phoenix Insurance Company Ltd [2003] IsrSC 57(4) 817.

[42] CA 1761/02 Antiquities Authority v. Station Enterprises Ltd (not yet reported).

American cases cited:

[43] Kuhn v. Fairmont Coal Co., 215 U.S. 349 (1910).

[44] Great Northern Railway Co. v. Sunburst Oil & Refining Co., 287 U.S. 358 (1932).

[45] Linkletter v. Walker, 381 U.S. 618 (1965).

[46] Chevron Oil Co. v. Huson, 404 U.S. 97 (1971)

[47] United States v. Johnson, 457 U.S. 537 (1982).

[48] Griffith v. Kentucky, 479 U.S. 314 (1987).

[49] James B. Beam Distilling Co. v. Georgia, 501 U.S. 529 (1991).

[50] Harper v. Virginia Dept. of Taxation, 509 U.S. 86 (1993).

English cases cited:

[51] National Westminster Bank plc v. Spectrum Plus Ltd [2005] UKHL 41; [2005] 4 All ER 209.

European Court of Human Rights cases cited:

[52] Marckx v. Belgium (1979) 2 E.H.R.R. 330.

European Court of Justice cases cited:

[53] Defrenne v. Sabena [1976] E.C.R. 455.

[54] Deutsche Telekom A.G. v. Vick, Conze and Schroder [2000] I.R.L.R. 353.

Indian cases cited:

[55] Golak Nath v. State of Punjab [1967] 2 S.C.R. 762.

[56] India Cement Ltd v. State of Tamil Nadu [1990] 1 S.C.C. 12.

[57] Orissa Cement Ltd v. State of Orissa [1991] Supp. (1) S.C.C. 430.

Jewish law sources cited:

[58] Babylonian Talmud, Rosh HaShana 25b.

[59] Babylonian Talmud, Bava Batra 21a.

For the appellants — J. Asulin.

For respondents 1-3 — G. Tannous, R. Tannous.

For the fourth respondent — T. Tenzer.

For the fifth respondent — Z. Rapaport.

For the sixth respondent — D. Attallah.

JUDGMENT

President A. Barak

The Supreme Court decided that a person who is injured as a result of a tort and whose life expectancy is shortened is entitled to compensation for the loss of earning capacity in the years by which his working life expectancy was shortened. His estate is also entitled to compensation for this head of damage, if the life expectancy of the injured person is shortened and he dies during the tortious act or soon after it. This is the ‘lost years’ rule. It was decided in CA 140/00 Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. In that case the Supreme Court departed from a case law ruling that had been decided twenty years earlier in CA 295/81 Estate of Sharon Gavriel v. Gavriel [2]. When the judgment was given in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] there was a large number of claims concerning compensation for loss of earning capacity pending in various courts. What effect does the new ruling have on those cases? That is the general question that arises before us. The specific question is what effect does Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] have on a settlement concerning the quantum of damages between an injured person and several tortfeasors that was given the validity of a partial judgment, while the action continued with regard to the relationship between the tortfeasors inter se.

The facts and the proceedings

1. The deceased Ahmed Alhamid Mudib Abu Sahon was killed in a work accident. An action was filed with regard to his death by his estate and his dependents against the employer, the owner of the site where he worked and the insurers. In the course of the proceedings, the parties, at the recommendation of the court, reached a settlement. According to this, the plaintiffs would be paid a sum of NIS 100,000. The trial would continue with regard to division of the liability between the parties. On 22 February 2004, this settlement — which was called in the court’s decision a ‘procedural arrangement’ — was given the force of a court decision.

2. On 15 March 2004, judgment was given in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. The application for a further hearing was denied (CFH 4011/04 Jerusalem Municipality v. Estate of Ettinger [3]). In consequence, on 5 April 2004 the plaintiffs filed an application to cancel the procedural settlement and to amend the statement of claim. The defendants opposed this. The Magistrates Court (Justice I. Ganon) granted the application. He held that his decision (of 22 February 2004) amounted to a ‘procedural arrangement,’ and was not a ‘partial judgment.’ It was not proper or just to prevent the plaintiffs from cancelling the settlement. The defendants appealed to the District Court. The appeal was denied. It was held (per Justice B. Bar-Ziv) that the decision of the Magistrates Court amounted to a partial judgment. For reasons of justice — and according to case law — it was possible to repudiate this partial judgment. The defendants applied to this court for leave to appeal. We granted the defendants’ application and gave leave to appeal. In view of the importance of the questions that arise before us the panel was expanded.

The questions that require a decision

3. The appeal before us raises two main questions. First, does Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] apply prospectively only (from now onwards) or does it also have retrospective effect (changing the position in the past)? If Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] has no retrospective effect, it does not apply to the accident in this case, and therefore there is no argument that allows the agreement between the parties to be repudiated. But if Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] does have retrospective effect, the second question arises: this concerns the effect that Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] has on the agreement between the parties. Let us turn to consider the first question.

A. The temporal application of Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter

Time and law

4. Does the ruling in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] apply to tortious acts that took place before it was decided? Does it have retrospective effect? The answer to this question lies in the status of time in the law. Indeed, every legal norm applies not only in space but also in time. Against this background, we should consider a wide variety of problems in which time, at the heart of the law, is a common factor. One group of problems concerns laws that apply when the law changes at a certain point in time. These are the problems of intertemporal law (droit transitoire). Within this framework, the question of the retrospective, effective or prospective application of the new law plays a central role (see A. Rodger, ‘A Time For Every Thing Under The Law: Some Reflections On Retrospectivity,’ 121 L. Q. R. 57 (2005); R.H.S. Tur, ‘Time and Law,’ 22 Oxford J. L. Stud. 463 (2002); see also A. Barak, Legal Interpretation (vol. 2, 1993), at p. 609). This is the case with regard to the temporal application of new legislation; it is also the case with regard to the temporal application of new case law — whether this overrules previous case law or whether it determines a new case law ruling. In all of these, the question of the temporal application of the new norm arises. We shall focus on the solution to this question in a case where a new judicial ruling gives a new interpretation to a statute by overruling a previous interpretation. What is the temporal application of the new case law ruling? Does it apply both from this moment onward (prospectively) and also to earlier events (retrospectively)? Or does it perhaps apply only from this moment onward (purely prospectively)? If the latter, what is the law with regard to the case in which the new law is decided: does the new law apply to it (a kind of general prospectivity and a specific retrospectivity)? And does it apply also to all the other cases that are being litigated before the courts? This is not a new question in Israel. There is academic discussion of it in Israel (see G. Tedeschi, ‘Case Law for the Future,’ Essays in Law 25 (1978); E. Kaplan, ‘Prospective Application of Supreme Court Precedents,’ 9 Hebrew Univ. L. Rev. (Mishpatim) 221 (1979); A. Barak, Judicial Discretion (1987), at p. 417; E. Kaplan, ‘Future Application of Supreme Court Precedents,’ Avner Hai Shaki Book 125 (2005)). It arose in the past in several judgments, and several obiter statements have been made on this subject (see HCJ 716/86 Moriah Spas Hotel, Dead Sea v. Tamar Neveh Zohar District Council [4], at p. 392; LCrimA 1127/93 State of Israel v. Klein [5], at p. 504; CA 6585/95 M.G.A.R. Computerized Collection Centre Ltd v. Nesher Municipality [6], at p. 220; HCJ 3648/97 Stamka v. Minister of Interior [7]; RT 8390/01 Axelrod v. State of Israel [8]).

The premise: retrospective and prospective application

5. The fundamental premise is that a new judicial ruling acts both retrospectively and prospectively (see HCJ 221/86 Kanfi v. National Labour Court [9], at p. 480). Justice Holmes rightly said that ‘Judicial decisions have had retrospective operation for near a thousand years’ (in Kuhn v. Fairmont Coal Co. [43], at p. 372). This is the position with regard to the development of the law within the framework of the common law, and it is also the position where case law interprets a legislative provision (a constitution, statute, regulation), or fills a lacuna in it (for the distinction between these, see A. Barak, ‘The Different Kinds of Judicial Creation: Interpretation, Filling a Lacuna and Development of the Law,’ 39 HaPraklit 267 (1990); A. Barak, Selected Articles (H.H. Cohn and I. Zamir eds., vol. 1, 2000), at p. 755). There are three arguments that support this approach (see Barak, Judicial Discretion, at p. 421): a jurisprudential argument, a constitutional argument and a practical argument.

The jurisprudential argument

6. The jurisprudential argument is the following: since the court decides the law — whether within the framework of the common law or within the framework of interpreting legislation or filling a lacuna therein — it declares the law. It does not create it. When the court departs from a previous judgment, it is deciding that the erroneous judgment never was the law. The overruling judgment does not create new law. It declares what the law always was. This is the declarative theory of law. It was developed by Blackstone. His well known statement was that:

‘... if it be found that the former decision is manifestly absurd or unjust, it is declared, not that such a sentence was bad law, but that it was not law’ (1 Blackstone, Commentaries 71 (1769)).

The declarative theory of law leads to the conclusion that a judgment that overrules a previous judgment acts retrospectively. If the overruled judgment was never law, and the law was never as declared in the overruled judgment, this means that the judgment that overruled it acts temporally in a retroactive manner. An additional jurisprudential argument is this: when a change in case law is merely prospective and it does not act in favour of the parties in the trial (pure prospectivity), the new case law is an obiter dictum, and it is not binding at all.

The constitutional argument

7. The constitutional argument that supports the retrospective application of new case law is this: a central element in any democratic constitution is the separation of powers. According to this, the legislative branch enacts statutes, and the judicial branch decides disputes. In enacting a statute, the legislative branch is competent to determine its temporal application. This determination will usually be prospective, for constitutional and other considerations. If the judgment can also determine a prospective application of the case law ruling, it will be indistinguishable from legislation. This was well expressed by Lord Devlin, when he said that if new case law has only prospective application, then it —

‘... crosses the Rubicon that divides the judicial and the legislative powers. It turns judges into undisguised legislators’ (P. Devlin, ‘Judges and Lawmakers,’ 39 M. L. R. 1 (1976), at p. 11).

Preserving the proper separation between the legislative and judicial functions leads to a recognition that the application of legislation is only prospective, but the application of case law is otherwise. A merely prospective change in case law makes the judge into a legislator (M.D.A. Freeman, ‘Standards of Adjudication, Judicial Law, Making and Prospective Overruling,’ 26 Curr. L. P. 166 (1973), at p. 204). In addition to this constitutional consideration of the separation of powers, there is an additional constitutional consideration. As we shall see, various prospective approaches distinguish between the litigant who asked the court to overrule the previous case law, to whom the new case law ruling will apply retroactively, and other litigants, whose cases are being considered before the courts and have not yet been decided, to whom the new case law ruling will not apply. This creates a forbidden discrimination that violates the principle of equality. In America there is an additional constitutional consideration that operates against a merely prospective overruling of the previous case law, and this concerns the constitutional requirement that the courts may only decide ‘cases’ and ‘controversies.’ When the new case law is given only a purely prospective force, that new case law ruling does not decide the dispute before the court; it constitutes an advisory opinion with regard to that case, and it is therefore prohibited.

The practical argument

8. In addition to the jurisprudential and the constitutional arguments, it is possible to find support for the retrospective application of new case law in several practical arguments. First, it is argued that the ability to give only prospective validity to a new case law ruling that overrules its predecessor releases the judge from the constraints that limit his discretion as to whether to depart from a previous case law ruling or not. According to this approach, the retrospectivity of the case law ruling acts as a barrier against too great a departure from the previous law. When this barrier is removed, there is a fear that the proper framework may be undermined, and that there will be too many departures from previous case law rulings (see J. Stone, Social Dimensions of Law and Justice (1966), at p. 663; P. Mishkin, ‘Foreword: The High Court, The Great Writ, And The Due Process of Time and Law,’ 79 Harv. L. Rev. 56 (1965), at p. 70). Second, there are several systems of merely prospective changes in case law (see Barak, Judicial Discretion, at p. 420, and G. Calabresi, A Common Law for the Age of Statutes (1982), at p. 280). Choosing between these systems is complex. The litigants will usually not know which system the court will choose. As a result, the whole judicial process is undermined. Third, if we choose from among the different systems the one that advocates a purely prospective overruling of previous case law — according to which the new case law does not apply even to the litigant who was successful in his argument that the previous case law should be changed — this will reduce the motivation of litigants to argue that the case law should be changed, since in any case they will not benefit from the change. This is a negative consequence that will lead to stagnation in the development of case law (see R. Dworkin, Law’s Empire (1986), at p. 156). Fourth, often a mere prospective application of the new judicial ruling undermines public expectations of the judiciary. This leads to a loss of public confidence in the judiciary, which should be protected at all costs (see A. Barak, A Judge in a Democracy (2004), at p. 49).

Criticism of the jurisprudential argument

9. The jurisprudential argument is not convincing. Admittedly, often a judgment only declares the law and does not create it. Similarly, sometimes a previous judgment is absolutely wrong, and it should be overruled retroactively. All of this is correct sometimes, but not always. Sometime the new judgment does create new law, which is appropriate for its time and place. The previous law — which the new judgment overruled — was not absolutely wrong. It may be that it was correct and proper in its time, but now the time has come to change it. In these circumstances, there is no jurisprudential reason not to give the new case law ruling only a prospective application. Take a law that was interpreted in the past in a certain way, and now the court departs from that interpretation and adopts a new interpretation. This overruling is not always based on an original error in the first judgment. It is based on the current needs and values of society. Indeed, interpretation of statutes is dynamic (see A. Barak, Purposive Interpretation in Law (2003), at pp. 200, 412; see also R. Eskridge, Dynamic Statutory Interpretation (1994)). ‘Yet their words remain law’ (see F.A.R. Bennion, Statutory Interpretation: A Code (third edition, 1997), at p. 687). I discussed this in one case, where I said:

‘The statute integrates into the new reality. Thus an old statute speaks to modern man... Interpretation is an ever-changing process. Modern content should be given to the old language. Thus the disparity between the statute and life is reduced. Against this background it is correct to say, as Radbruch did, that the interpreter may understand the statute better than the creator of the statute, and that the statute is always wiser than its creator. This leads to the interpretive approach that is accepted in England, whereby statute should be given an updating interpretation... Indeed, the statute is a living creature. Its interpretation should be dynamic. It should be understood in a way that is consistent with and advantageous to modern reality’ (CA 2000/97 Lindorn v. Karnit Road Accident Victims Compensation Fund [10], at p. 32. See also HCJ 680/88 Schnitzer v. Chief Military Censor [11], at p. 629 {90}; HCJ 2722/92 Alamarin v. IDF Commander in Gaza Strip [12], at p. 705 {16-17}; CA 2622/01 Director of Land Appreciation Tax v. Levanon [13]).

The same is true of the interpretation of constitutions and Basic Laws. These are living documents. A modern meaning should be given to the values enshrined in them. A similar approach applies to the development of common law. Since its inception, it has undergone wide-ranging changes that have created new case law principles that are suited to the needs of the time and place. This was discussed by Lord Nicholls, who said:

‘... judges themselves have a legitimate law-making function. It is a function they have long exercised. In common law countries much of the basic law is still the common law. The common law is judge-made law. For centuries judges have been charged with the responsibility of keeping this law abreast of current social conditions and expectations. That is still the position. Continuing but limited development of the common law in this fashion is an integral part of the constitutional function of the judiciary. Had the judges not discharged this responsibility the common law would be the same now as it was in the reign of King Henry II’ (National Westminster Bank plc v. Spectrum Plus Ltd [51], at para. 32).

In situations where the change in the common law is intended to bridge a gap between the law and life, the old precedent is overruled not because it was originally wrong, but because it is unsuited to the new reality. The declarative theory does not give any proper answer to this situation. Naturally, it is always possible to say that changes sprout forth from the fertile soil of the common law, and that the judge brings out the potential latent in it from theory into practice. Even if this is the case, it involves judicial creation. Just as a new statute, which brings out from theory into practice what is latent in the constitution, constitutes a new creation, so too does a new judicial ruling that springs forth from the soil of the law constitute a new creation. Indeed, the declarative theory is incapable of explaining the entirety of judicial activity. It has passed its time. It is based on a fiction that should not be recognized (see Axelrod v. State of Israel [8], at para. 10). It is to be hoped that though we may have buried it, it will not rule us from its grave (in the words of Maitland on the forms of action: see F.W. Maitland, The Forms of Action of Common Law (1941), at p. 2).

Criticism of the constitutional argument

10. The constitutional argument against the merely prospective application of a judicial ruling is also not convincing. The reason for this is that in the course of deciding a dispute, the court is obliged to determine the law according to which the dispute will be decided. Sometimes this decision is merely a declaration of what already exists. Sometimes this decision creates a new law, whether within the framework of the common law or by means of interpretation or filling a lacuna in legislation. Creating this law constitutes ‘judicial legislation’ (see A. Barak, ‘Judicial Legislation,’ 13 Hebrew Univ. L. Rev. (Mishpatim) 25 (1983); Barak, Selected Articles, at p. 821). This is not ‘legislation’ in the institutional sense. That is solely within the jurisdiction of the legislature. This is ‘legislation’ in the functional sense, since it creates a norm that did not exist in the past. This functional legislation does not violate the principle of the separation of powers. Recognizing it does not blur the boundary between legislation (in its institutional sense) and the administration of justice. Giving only a prospective force to a new case law ruling is an expression of judicial creation. It involves no crossing of the Rubicon that divides legislation from the administration of justice (see the judgment of Justice Cardozo in Great Northern Railway Co. v. Sunburst Oil & Refining Co. [44], at p. 366). With regard to the argument that prospective application of a new case law ruling violates equality, this is true only if we do not adopt the system of the purely prospective change. With the purely prospective system, there is no violation of equality. And as for the other systems, even though they involve a violation of equality, we need to consider whether this violation is a proper one. Equality is not an absolute right. It can be violated for proper purposes by means of proportionate measures (see HCJ 1113/99 Adalah Legal Centre for Arab Minority Rights in Israel v. Minister of Religious Affairs [14]).

The decisive consideration — the practical consideration

11. I have therefore reached the conclusion that the jurisprudential and constitutional arguments are incapable of preventing the court from departing from its previous path in giving the new case law ruling retrospective application. Prospective application, in its various forms, is consistent with the jurisprudential and constitutional status of judicial activity (see P.J. Fitzgerald, Salmond on Jurisprudence (twelfth edition, 1966), at p. 127; K. Diplock, The Courts as Legislators (1965), at p. 17). Indeed, the decision as to whether the court should deprive its new case law ruling, in appropriate circumstances, of retrospective application will not be decided by jurisprudential or constitutional considerations. It will be decided by the proper balance between practical considerations. This was well expressed by Justice Cardozo, when he said that the question of the retrospectivity of a case law ruling —

‘… will be governed, not by metaphysical conceptions of the nature of judge-made law, nor by the fetich of some implacable tenet, such as that of the division of governmental powers, but by considerations of convenience, of utility, and of the deepest sentiments of justice’ (B.N. Cardozo, The Nature of The Judicial Process (1921), at p. 148).

We have mentioned several practical considerations that support the retrospective application of the new judicial case law ruling. What are the practical considerations that support the other approach, that it is possible to deny the retrospective application of a new case law ruling? Which considerations have the upper hand? Let us now turn to consider these questions.

12. Rejecting retrospective application and recognizing only prospective application (in one of its forms) is supported by several practical considerations: first, the need to reject the retrospective application of a new case law ruling arises usually when the court examines the previous case law rule and comes to the conclusion that it ought to overrule it. Notwithstanding, the court is concerned about the damage that overruling it will cause those persons and bodies who have relied on the previous case law rule, and who have regulated their relationships on the basis of this reliance. In such a situation, the court faces the following dilemma: either it must leave an undesirable case law rule as it stands because of the reliance interest, or it must change case law and determine a new and better case law rule in its place, even though this harms the reliance interest). The approach that a change in case law should not be retrospective and should act only prospectively extricates the judge from the dilemma in which he finds himself. It allows him to make a change to an erroneous case law rule and to establish a new case law rule in its place, without harming the reliance interest. Thus security and stability are maintained in addition to adapting the law to social change. We have before us a kind of ‘wonder remedy’ that allows both stability and progress (see Barak, Judicial Discretion, at p. 421, and R.J. Traynor, ‘Quo Vadis Prospective Overruling: A Question of Judicial Responsibility,’ 28 Hastings L. J. 533 (1977), at p. 542).

13. Second, the truth is that several systems of prospective application are recognized (see para. 8, supra). This multiplicity does not lead to complexity or confusion. Within a short time it can be determined in what conditions one prospective system will be adopted and when the court will adopt another system. The ‘supply’ of prospective systems is not large, and it is possible without difficulty to choose the appropriate law in this regard.

14. Third, a merely prospective application of a new case law ruling is consistent with the sense of justice. It allows a new and just ruling to be made, without harming the reliance interest. It averts the need to made a decision — such as the one that President Zamora made with regard to the question of precedents — that ‘between truth and stability — truth prevails’ (CA 376/46 Rosenbaum v. Rosenbaum [15], at p. 254). It makes it possible to achieve both ‘truth’ and ‘stability.’ Thereby it increases confidence in the judicial system. This confidence will be harmed if a proper change does not take place because of the reliance interest, or if the change does take place and harms the reliance interest.

15. The practical considerations lead to conflicting conclusions. How can we decide between or balance the conflicting considerations? It should be stated immediately that every legal system has decisions and balancing points of its own. This is a product of the strength of the jurisprudential and constitutional considerations in that legal system. The decision is also affected by the way in which the society understands the judicial role, and its willingness to examine realistic arrangements and practical balances. All of these vary from one legal system to another. They also vary over time within the framework of the same legal system. A good example of this can be found in American law. There the courts of the various states first recognized the prospective overruling of case law as long ago as the nineteenth century (see T.S. Currier, ‘Time and Change in Judge-Made Law: Prospective Overruling,’ 51 Va. L. Rev. 201 (1965)). If found recognition in the Federal courts in the 1960s and the beginning of the 1970s in the judgments in Linkletter v. Walker [45]; Chevron Oil Co. v. Huson [46]). Since the 1980s there has been a significant retreat in this sphere. Today the case law of the United States Supreme Court rejects a merely prospective application of new case law rulings (see United States v. Johnson [47]; Griffith v. Kentucky [48]; James B. Beam Distilling Co. v. Georgia [49]; R.H. Fallon and D.J. Meltzer, ‘New Law, Non-Retroactivity, and Constitutional Remedies,’ 104 Harv. L. Rev. 1731 (1991); Harper v. Virginia Dept. of Taxation [50]; J.E. Fisch, ‘Retroactivity and Legal Change: An Equilibrium Approach,’ 110 Harv. L. Rev. 1055 (1997); B.S. Shannon, ‘The Retroactive and Prospective Application of Judicial Decisions,’ 26 Harv. J. L. & Pub. Pol’y 811 (2003); M. Katz, ‘Plainly Not “Error”: Adjudicative Retroactivity on Direct Review,’ 25 Cardozo L. Rev. 1979 (2004)). The original American approach — the one that recognized the possibility of changing case law prospectively — is accepted in India (see Golak Nath v. State of Punjab [55]; India Cement Ltd v. State of Tamil Nadu [56]; Orissa Cement Ltd v. State of Orissa [57]). The original American approach has also been applied by the European Court of Justice in Luxembourg (see Defrenne v. Sabena [53]; Deutsche Telekom A.G. v. Vick, Conze and Schroder [54]), and the European Court of Human Rights in Strasbourg (see Marckx v. Belgium [52], at p. 353).

16. English law wavered for a long time over the question of the prospective application of new case law (for an analysis of the various positions, see the opinion of Lord Nicholls in National Westminster Bank plc v. Spectrum Plus Ltd [51]). In that case, which was decided only a few months ago, it was held, by a majority, that the question whether to adopt only a prospective overruling of previous case law was within the discretion of the court (ibid. [51], at para. 39). It was held that there might be circumstances in which the court would adopt this approach. Lord Nicholls wrote:

‘... there could be circumstances in this country where prospective overruling would be necessary to serve the underlying objective of the courts of this country: to administer justice fairly and in accordance with the law. There could be cases where a decision on an issue of law, whether common law or statute law, was unavoidable but the decision would have such gravely unfair and disruptive consequences for past transactions or happenings that this House would be compelled to depart from the normal principles relating to the retrospective and prospective effect of court decisions’ (ibid. [51], at para. 40).

In that case it was decided to give the new case law ruling retrospective application, since the conditions for prospective application only were not fulfilled.

17. What is the law in Israel? The fundamental premise is that a new judicial ruling applies both retrospectively and prospectively. Notwithstanding, I am of the opinion that there is nothing in principle that prevents us from recognizing the power of the Supreme Court to give its precedents merely prospective force. The declaratory theory of law has not acquired great strength in Israel; there is no constitutional obstacle that prevents recognizing this possibility. The legal community in Israel would not regard this as judicial activity that is inconsistent with the character of the judicial system. The possibility of adopting this approach was raised in several judgments (see para. 4, supra) and it seems to me that Israeli law is ready to absorb it. Therefore the question is not whether we should recognize this possibility in principle. The answer to this is yes. The question is on what conditions and in what circumstances should we adopt this approach. I shall now turn to examine this question.

Protection of the reliance interest

18. What supports the need to resort solely to a prospective overruling of old case law by a new judicial decision is the reliance interest of individuals and (private and government) bodies who have managed their affairs on the basis of the old judicial ruling. ‘The interest of reliance is like a golden thread that runs through Israeli law’ (HCJ 9098/01 Ganis v. Ministry of Building and Housing [16], at para. 19). Indeed, the reliance interest is one of the most protected interests in the law. This is the position in the sphere of administrative law (see D. Barak-Erez, ‘The Protection of Reliance in Administrative Law,’ 27 Hebrew Univ. L. Rev. (Mishpatim) 17 (1996)). The same is true of private law (see D. Friedman and N. Cohen, Contracts, at p. 151; G. Shalev, The Law of Contracts — General Part: Towards a Codification of Civil Law (2005), at p. 247; see also L.L. Fuller and W.R. Perdue, ‘The Reliance Interest in Contract Damages,’ 46 Yale L. J. 52 and 373 (1936-1937)). The rule of binding precedent is also based, in part, on the protection of the reliance interest (see Barak, Judicial Discretion, at p. 441). The outlook concerning a solely prospective application of a case law ruling that changes the previous law is also derived from the need to protect the reliance interest. Indeed, a retrospective change of the existing law may seriously harm someone who relied on it, to such an extent that it may prevent the change in the law. It follows that the examination of this issue should focus mainly on the reliance interest (see Stamka v. Minister of Interior [7], at p. 746; see also P.J. Stephens, ‘The New Retroactivity Doctrine: Equality, Reliance and Stare Decisis,’ 48 Syracuse L. Rev. 1515 (1998)). Therefore, if the issue is new and has never been decided in the past, it cannot be said that there is a reliance interest that is worthy of protection. The same is true if the old case law ruling did not in practice create any real reliance, or if the reliance was unreasonable, or if it should not be given any significant weight in view of the issue under discussion and the nature of that reliance. In all of these cases, and in others, we should not give much weight to the reliance factor, and there is a basis for applying the new case law ruling retrospectively (see W.V. Schaefer, ‘The Control of “Sunbursts”: Techniques of Prospective Overruling”, 42 N. Y. U. L. Rev. 631, (1967), at p. 638). Examples of this situation can be found in the following situations: the previous case law was not a decision of the Supreme Court; the previous case law was unclear, and it has been interpreted in different ways; the previous case law was accompanied by opposition and proposed changes; in several obiter statements judges have expressed reservations concerning the previous case law; the previous case law was not known to the parties; the parties relied on the old law but each took the risks that it might be changed (see: Note, ‘Prospective Overruling and Retroactive Application in the Federal Courts,’ 71 Yale L. J. 907 (1962)). In these situations and in many others, anyone who relies on the previous case law takes a risk and it is therefore possible to give the new case law retrospective validity. Indeed, in many cases the change in case law is not a surprise. It does not come — in the language of Lord Devlin — ‘out of a blue sky’ (Devlin, ‘Judges and Lawmakers,’ supra, at p. 10). Justice Cardozo rightly said that:

‘The picture of a bewildered litigant lured into a course of action by the false light of decision, only to meet ruin when the light is extinguished and the decision overruled, is for the most part a figment of excited brains’ (B.N. Cardozo, The Growth of The Law (1924), at p. 122).

See also Schaefer, ‘Precedent and Policy,’ 34 U. Chi. L. Rev. 3 (1966), at p. 15.

Indeed cases of reliance that justify giving only prospective force to a new case law ruling are, in the natural course of events, not many (see Traynor, ‘Quo Vadis Prospective Overruling: A Question of Judicial Responsibility,’ supra, at p. 542).

19. The existence of a reliance interest and a violation thereof are essential conditions for a merely prospective application of a new case law ruling. But they are not sufficient conditions. The court should go on to examine whether it may be possible to overcome the reliance problem without adopting a solely prospective application of the new case law. Indeed, the reliance interest is given broad protection by the law. In those cases where general laws protect the reliance interest, there is no basis for giving the interest any additional protection in the form of prospective application. An example of this is the doctrine of the de facto civil servant. According to this doctrine, when a civil servant has acted in a situation where he believed in good faith that he was acting by virtue of legislation that the court declared to be unconstitutional or unlawful, the acts that he carried out during the period of the illegality should be regarded as valid (see HCJ 19/56 Brandwin v. Governor of Ramla Prison [17], at p. 630). In this situation, validity will be given to the reliance interest by means of the doctrine of the de facto civil servant so that it is not necessary to declare the legislation invalid prospectively. We have before us an example of a broader approach, which concerns relative voidance (see LCA 2413/99 Gispan v. Chief Military Prosecutor [18], at p. 684; D. Barak-Erez, ‘Relative Voidance in Administrative Law: On the Price of Rights,’ Itzchak Zamir Book: On Law, Government and Society 283 (Y. Dotan and A. Bendor eds., 2005)). This doctrine distinguishes between a violation of the law and the relief for the violation. Within the framework of the relief, it is possible to take the principle of reliance into account.

20. Another example can be found in a case where tax was paid by virtue of legislation that was set aside because it was contrary to a Basic Law or to a statute. A restitution of the taxes that were collected naturally harms the reliance interest of the government body that collected the tax. Protection for this interest can be found in the argument that the government body is entitled to rely on the general protection given by the laws of unjust enrichment with regard to unfair restitution (s. 2 of the Unjust Enrichment Law, 5739-1979). To the extent that this protection is available to the government body, this is capable of solving the reliance problem, without it being necessary to determine that the decision concerning the unconstitutionality or the illegality of the tax does not act retrospectively. Indeed, the application of this protection to the restitution of tax payments varies from one legal system to another. In our legal system, no ruling has yet been made in this regard. It has been left undecided on several occasions and in this appeal we shall also not adopt any position on this issue (see CA 180/99 Director of Purchase Tax v. Tempo Beer Industries Ltd [19], at p. 644; CA 3602/97 Income Tax Commission v. Shahar [20], at p. 337).

21. In these examples and in many others, there is no basis for resorting to a solely prospective overruling of previous case law in order to protect the reliance interest, since other legal doctrines are capable of giving sufficient protection to this interest. Naturally, we should examine in each case whether the protection of the reliance interest, which these other doctrines provide, is comparable with the protection that the reliance interest would have been given by virtue of a solely prospective overruling of the previous case law. Sometimes the two are not interchangeable: sometimes the cost of resorting to general doctrines is so great — whether from the viewpoint of the parties concerned or from the viewpoint of the courts — that it is better to give the new case law solely prospective validity.

22. Finally, sometimes there will be a basis for giving retrospective validity to new case law even if this harms the reliance interest. It is well known that this interest does not have absolute force. It should be balanced against the values and the principles that conflict with it. Sometimes the court may think that the considerations that support a change of the law are of greater weight than the considerations that support the old law, and the damage that is caused to the reliance interest by the actual change (see CA 5/84 Yehezkel v. Eliyahu Insurance Co. Ltd [21], at p. 384; LCA 1287/92 Buskila v. Tzemah [22], at p. 172; AAA 1966/02 Majar Local Council v. Ibrahim [23]). Indeed, the determination of the question whether to give a new case law ruling solely prospective validity should take into account all of the considerations relevant to the case; the judge should balance these, by giving weight to the conflicting considerations, in the circumstances of the case before him. In all of this, the fundamental premise is the retrospective and prospective validity of the new case law.

The reliance interest and the law of torts

23. What weight should be given to the reliance interest when case law is changed in the field of the law of torts? In order to answer this question, we should examine each issue on its merits. We should examine to what extent the parties relied on the old case law, and to what extent this reliance is harmed by changing that law. The accepted view in legal literature is that, as a rule, reliance in the field of the law of torts is minimal. This was discussed by Justice Traynor, who said:

‘... neither the tortfeasor nor the victim nurses any reasonable expectations about injury that has yet to occur. When everyone’s daily life is prone to risk, it is hardly realistic to suppose that people are assiduously studying current rules of liability so that they may set out to hit or be hit advantageously’ (R.J. Traynor, ‘The Limits of Judicial Creativity,’ 29 Hastings L. J. 1025 (1978), at p. 1036; see also Traynor, ‘Quo Vadis Prospective Overruling: A Question of Judicial Responsibility,’ supra, at p. 545).

Notwithstanding, even in the field of the law of torts, there is a basis for taking the interest reliance into account. This is especially the case with regard to imposing new obligations that were not recognized in the past. It was precisely in the field of the law of torts that the courts in America first recognized the possibility of a merely prospective overruling of previous case law. They did this in the past in those cases in which the old law did not recognize liability in torts (such as the case law ruling that held that hospitals are immune from liability in tort), whereas the new law recognized liability (by cancelling the immunity). The courts decided that the new case law would only have prospective application, since the hospitals had not insured themselves in reliance on the old law (see Currier, ‘Time and Change in Judge-Made Law: Prospective Overruling,’ supra). Naturally, these considerations do not apply where there is insurance. As a rule, significant weight should not be given to an argument that the scope of the old case law ruling determined the amount of the insurance premiums (R. Keeton, Venturing to Do Justice (1969) 42). There are many different considerations according to which insurance premiums are determined, and the extent of liability under case law is only one of them. In any case, the power of insurance companies to ‘spread the loss’ among all of its insureds reduces their reliance interest. There may, of course, be exceptional cases in which the amount of the compensation has a decisive effect on the insurance, but this is not usually the case.

Should the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter be merely prospective?

24. Against the background of all the considerations that we have discussed, I am of the opinion that there is no real reason why we should not give Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] retrospective force. It will therefore apply both retrospectively and prospectively. It will apply to every tortious act that occurred before it and after it. This is the fundamental premise and there is no reason to depart from it in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. With regard to this case, the main reason underlying my approach is that a retrospective application of Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] will not harm the reliance interest to any great degree. Potential tortfeasors and injured parties did not rely on Estate of Sharon Gavriel v. Gavriel [2], which was overruled by Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1], in determining how they would conduct themselves. Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] did not impose new obligations; it only affected the quantum of damages, and here too its effect is not significant. Moreover, the liability of the tortfeasor is usually covered by insurance. Even if the insurance company relied in some way or another on Estate of Sharon Gavriel v. Gavriel [2] in determining the premium, it is capable of absorbing the additional payments for which it will be liable under Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. In his discussion of the weight of the reliance interest in the law of torts where there is insurance, Keeton says that the need to protect the reliance interest in this situation is small, since the harm to the reliance interest of a specific insurer or a specific insured is less serious. Keeton also says that as a rule it is difficult to determine the effect of a legal doctrine on the amount of the premium (see Keeton, Venturing to Do Justice, at p. 42). In any case, no figures were brought before us to show that this approach does not apply with regard to the ‘lost years.’ The burden in this regard lies with the party that argues for a merely prospective application of the new case law.

25. Moreover, Estate of Sharon Gavriel v. Gavriel [2] has passed its time. In England, Canada, Australia and the United States the approach that was expressed in Estate of Sharon Gavriel v. Gavriel [2] has not been accepted. In several countries express statutory provisions have been enacted in this regard (see Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1], at pp. 528 {143} et seq.). It has been criticized in case law (see the opinion of Justice H. Ariel in CA 110/86 Gevaram v. Heirs of the late Shalom Manjam [24], at p. 199). Criticism was also levelled at it in Israeli professional literature (see D. Katzir, Compensation for Personal Injury (fifth edition, 2003), at p. 381; A. Porat, ‘The Law of Torts,’ Israel Law Year Book 1991, 221 (A. Rosen-Zvi, 1991), at p. 250). In the draft civil codex, the Civil Law (2004), it was proposed that it should be abandoned (see section 544). Justice Rivlin in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] pointed to ‘a change in the legal climate,’ which led to the need to change Estate of Sharon Gavriel v. Gavriel [2] (see Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1], at p. 559 {177}). A change in this climate naturally affects the actual reliance, its strength and its reasonableness. Against this background, it would appear that the weight of the reliance interest of insurers on Estate of Sharon Gavriel v. Gavriel [2] does not justify giving only prospective force to Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. In any case, we do not have any reason to assume that the financial burden that Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] is likely to impose on insurance companies falls outside the scope of the professional risks for which insurance companies should be liable.

26. In so far as the retrospective operation of Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] harms the reliance interest, we should turn to the general laws that protect this interest, in order to find a remedy in them. Therefore we should allow parties in the trial court — who filed their written pleadings before the judgment in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] — to amend them as a result of that decision. We should also allow arguments in this matter to be raised in an appeal, as long as the judgment has not become final.

27. Before we conclude this topic, we would like to point out that our approach with regard to a merely prospective change is unrelated to and does not affect those cases in which it is held that a law is unconstitutional and it is also held that the unconstitutionality will come into effect at a future date (see HCJ 6055/95 Tzemah v. Minister of Defence [25], at p. 284 {687}; HCJ 1715/97 Israel Investment Managers Association v. Minister of Finance [26]; see also Y. Mersel, ‘Suspending a Declaration of Voidance,’ 9 Mishpat uMimshal (2006) 39). In all of these cases, the declaration that the provision of statute was void acted retrospectively. All that was decided was that the declaration concerning the retrospective voidance should be suspended temporarily. We therefore adopted an approach that applied the new case law rule retrospectively, by attaching a ‘time fuse’ that postpones the time when the declaration comes into effect. The considerations underlying this approach are fundamentally different from the considerations that we have discussed in our opinion.

B. The effect of Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter on the agreement between the parties

28. The estate and the dependents made an agreement with the tortfeasors that a certain amount of compensation would be paid to end the dispute between them. This agreement was given the force of a court decision. The agreement was made and was given judicial force before judgment was given in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. Now that case has come and changed the law of compensation retrospectively. According to the new law, it is possible that the estate and the dependents are entitled to additional compensation. Against this background, the question arises as to whether the estate and the dependents are entitled to repudiate the agreement, in view of the change in case law that was caused by Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. This is the second question before us in this appeal. The answer to this question should be found in the law of mistake in contracts. Admittedly, the agreement between the parties was enshrined in a judicial decision, but the law is that for the purpose of the rescission of such an agreement on the ground that it was tainted by a mistake, we should refer to the law of contracts (see CA 2495/95 Ben-Lulu v. Atrash [27]; CA 3203/91 Azoulay v. Azoulay [28]; CA 4272/91 Barbie v. Barbie [29], at p. 699). Thus the question is whether the estate and the dependents have a claim that they were mislead into thinking that the law in their case had been determined in Estate of Sharon Gavriel v. Gavriel [2] and therefore ‘the court may... cancel the contract, if it thinks that it is just to do so’ (s. 14(b) of the Contracts (General Part) Law, 5737-1973).

29. In our opinion, the answer is no. The mistake of the estate and the dependents related to ‘the profitability of the transaction’ and such a mistake does not empower the court to cancel the contract (s. 14(d) of the Contracts (General Part) Law). Indeed, each of the parties to the agreement took upon himself the risk that in view of ‘the change in the legal climate,’ there might be a change in the law of compensation in so far as the lost years are concerned. In such circumstances, there is no ‘operative’ mistake (see Friedman, ‘Contractual Risk and Mistake and Misrepresentation with regard to Profitability,’ 14 Tel-Aviv University Law Review (Iyyunei Mishpat) 459 (1989), at pp. 466-471). This was discussed by Justice Tz.E. Tal:

‘In settlements the parties take upon themselves the risk concerning the legal position. No party can be certain that he will win the case, and even if he wins, perhaps it will not be worth his time and costs, so he therefore makes a settlement. Moreover, the party making a settlement takes upon himself the risk that the law will change retroactively, and on the basis of this knowledge he settles’ (CA 2444/90 Aroasty v. Kashi [30], at p. 527).

In the same spirit, D. Friedman and N. Cohen said:

‘It is assumed that the parties to the settlement take upon themselves the risk of new case law, including that this may change the law retroactively’ (Friedman and Cohen, Contracts (volume 2, 1997), at p. 729).

Indeed, not only the estate and the dependents, but also the tortfeasors (and the insurance company that stands behind them) cannot repudiate the contract that they made because of a retroactive change in the law of compensation. Each of the parties took upon himself the risk that the new law may increase or reduce the compensation.

The appeal is allowed. The decision of the Magistrates Court (of 29 April 2004) and the judgment of the District Court are set aside.

Justice Y. Adiel

I agree with the opinion of President A. Barak.

Vice-President Emeritus M. Cheshin

I have read the opinion of my colleague President Barak, and it seems to me like a miniature that contains everything with unbelievable detail. My colleague presents the complex subject of ‘prospectivity-retrospectivity’ clearly and straightforwardly, and this presentation makes it easier for me to present a slightly different version from my colleague’s version, even though I agree with his final conclusion.

Opening remarks

2. My colleague says (in para. 5 of his opinion; see also para. 17) that in Israeli law ‘The fundamental premise is that a new judicial ruling acts both retrospectively and prospectively,’ and after examining and clarifying the issues on their merits, he comes to the conclusion that the new case law ruling that was determined in this matter ‘will... apply both retrospectively and prospectively. It will apply to every tortious act that occurred before it and after it. This is the fundamental premise and there is no basis for departing from it...’ (para. 24 of the opinion). With regard to these statements I would like to make two comments before I discuss the heart of the matter.

3. First, even though my colleague speaks of a new case law rule that acts ‘both retrospectively and prospectively,’ the real interpretation is that according to his understanding the new case law acts retrospectively. After all, no one disputes that according to all approaches a new case law ruling operates prospectively. My colleague wishes therefore to establish a presumption — albeit a rebuttable presumption — that a new norm which is determined in case law and overrules a norm that preceded it is valid retroactively; that it applies almost automatically to acts that were done in the period when the old norm that was overruled prevailed. In this matter I disagree with my colleague, since in my opinion a new norm that is determined in case law will apply to events that take place after it, whereas its applicability to events in the past will be the exception. The application of a new norm will therefore be prospective, and someone who wishes to apply it retrospectively — to past cases — will have the burden of proving that it is right and proper to apply that new norm to acts that were done when the previous norm prevailed and in reliance on its existence. Moreover, as I shall explain later on in my remarks below, my opinion is that determining a sweeping retrospective rule is inconsistent with the varied character of the law, and we know that when we are dealing with the retrospective application of a norm, civil law cannot be compared to criminal law, the law of contracts cannot be compared to the law of torts, and even one area of the law of torts cannot be compared to another area of it. Each area of the law should be examined separately, and the determination of a uniform rule will not be successful.

Second — and this is the main point — when President Barak says that ‘the fundamental premise’ is that a new case law ruling acts retrospectively and prospectively, my colleague is relying on the remarks of Vice-President Miriam Ben-Porat in HCJ 221/86 Kanfi v. National Labour Court [9], at p. 480). But to the best of my knowledge, case law has not until now considered in depth the question that is now before us — the question of the ‘prospectivity-retrospectivity’ of the case law rulings of the Supreme Court — and since the panel hearing this case is an expanded panel, I think that it is not right to determine a ‘fundamental premise’ for the voyage of inquiry and interpretation on which we are embarking. If this is true as a rule, it is certainly true in view of the fact that the common law has been influenced considerably, at its roots, by Blackstone’s theory that the courts do not create law but merely reveal it. As we know, there were reasons for this theory, and these reasons are not accepted by us today. See also the penetrating remarks of Prof. Tedeschi in his article ‘Case Law for the Future,’ which was published in his book Essays in Law (1978), at p. 25 (the article is also mentioned in the remarks of Vice-President Ben-Porat, in Kanfi v. National Labour Court [9]).

My opinion is therefore that we are starting without any premise, and what we write will form a first impression.

4. At the outset I should say that, subject to what we will write below, I agree with my colleague that jurisprudential arguments, a priori legal doctrines and constitutional arguments do not have the power to decide the matter. My colleague considered these arguments and I agree with his opinion in its entirety (see also the remarks of Benjamin Cardozo cited in para. 15 below). But the question that we are called upon to decide is not which considerations will not decide the matter but which considerations will decide the matter. My colleague is of the opinion that practical considerations should prevail, and I will address these. Notwithstanding, I will add, as we shall see below, that the concept of practical considerations assumes, self-evidently, basic principles of law, which are themselves also based, inter alia, on practical considerations.

The relevant question

5. The question that I intend to answer is this: the Supreme Court makes a case law ruling — as in our case — on an issue that is mainly found in the field of case law, i.e., an area that has not been regulated expressly in statute. Years later the court once again considers the same issue, and after considering the issue, it overrules the original case law ruling. What is the law that applies to events that occurred between the first case law ruling and the second one, which come before the courts for a decision after the second ruling? Does the law that prevailed at the time of the event — i.e., the first case law ruling — apply, or does the law provided in the new ruling apply? We should note, and we will discuss this further in our remarks below, that we have presented the question that is troubling us on a (relatively) low level of abstraction. We are not speaking in general of a case law ruling made by the court — as to whether it merely acts prospectively or whether it also acts retrospectively — but of a ‘common law’ ruling only. Indeed, we could lower the level of abstraction and restrict our remarks to the law of torts, but for reasons that will become clear in our remarks below, we prefer to consider the question in the way that we have presented it.

Past events and retrospective norms

6. Events in the past are different from those in the present (which immediately becomes the past) and those in the future. The past is frozen in time and cannot be changed. That is how things are in the physical world and this is how things are in the normative world. And if someone asks — what, then, is a retrospective norm? — we shall answer as follows: a retrospective norm is a norm that, once it comes into effect, means that we no longer judge the past in accordance with the norms that prevailed when the events occurred but in accordance with that norm. We discussed the past, norms that apply to the past and questions that concern these in CrimA 4912/91 Talmai v. State of Israel [31], at pp. 619-620, and this is what we said:

‘... We are unable to change the past (to the regret of some and to the relief of others). Acts that were done, were done; omissions that were committed, were committed; events that occurred, occurred; vows that were made, were made; vows that were broken, were broken. All of these are as if they froze on the spot and became stone, and what has been done cannot be undone. We are incapable of doing anything other than describing and recording things that have happened — or that have not happened — but we are unable to change them. The freedom of choice and selection remains only for the future, but as to the past the choice has already been made, and the choice and selection — as choice and selection — are no more.

This is the case in the physical world and it is also the case in the world of norms, in the world that we have created and that is the product of the human spirit. Norms that existed in the past — including principles and rules of law — cannot be changed retrospectively: what was, was, and what was not...

What then is a retrospective norm, and what is a law that acts retroactively? Do these not have the power to change the past, at least in the world of norms? … Our answer to the question is no. This is what we say: the meaning of a norm that is supposed to apply retroactively is this, that from the day on which the norm begins, and thereafter, we shall no longer judge cases from the past in accordance with the norms that originally applied to them but as that norm directs us… All norms are prospective, by their very definition; they look to the future. But some of them also look to the past with regard to their application in the future to acts or omissions in the past…’

Thus, as a premise for our deliberations, the past is like Lot’s wife, whom we cannot return to life. But this is not the case in the normative sphere: if we only wish it, we can change in the future our attitude to what happened in the past. But if this is what we want, we will need to explain why and wherefore we wish to ignore what actually happened in the past and the norms that applied at the time of the event, and to apply to the past, from now on, different norms from those that prevailed at the time of the event.

7. Every act, every omission, every transaction and everything else that has legal significance is done, or not done, within the framework of a certain legal system at a given time and place. The moment that those things come into the world certain rights and duties are formed and created. Those things are born into a certain legal system, the legal system that surrounds them, and it also gives them a certain character, a certain ‘status.’ That system of rights and duties is born, one might say, with a certain genetic-legal character. Physically that system cannot be changed. Normatively, in the future, it can be changed, and this is within our power. In CA 6821/93 United Mizrahi Bank Ltd v. Migdal Cooperative Village [32], I mentioned the statement that Parliament in Westminster can do everything apart from turn a woman into a man and a man into a woman, and I commented on that statement (ibid. [32], at p. 527):

‘This statement is, of course, imprecise. If the author’s intention is that Parliament does not have the power to make a man a woman and a woman a man — taking the words literally — then the remarks are certainly correct. But then they have no significance whatsoever, since in the same way Parliament does not have the power to move a pencil from one side of the table to the other. Parliament — as such — does not concern itself at all with physical actions, and it does not have the power to make physical changes in the world about us directly. Parliament only concerns itself with norms and normative activity, and it is in this field that it has power and authority. If the intention of the author is therefore that Parliament is “unable” — from a normative point of view — to make a woman a man and a man a woman, it is obvious that the statement is incorrect. In the wonderful world of norms — a world that cannot be perceived by the five senses but rules our lives — the Knesset “can make” a man a woman and a woman a man. It is a separate question whether those persons to whom the norms are supposed to apply will abide by them. That question, it need not be said, falls outside our jurisdiction.’

(See also HCJ 5843/97 Bar-Gur v. Minister of Defence [33], at p. 473). I went on to say in Ganis v. Ministry of Building and Housing [16], at para. 38 of my opinion:

‘And so, in the creation of norms in the world of norms, Parliament is all-powerful. Parliament does not have — nor did it ever have — a surgeon’s scalpel that can draw blood. But it had, has and always will have a normative surgeon’s scalpel.’

Indeed —

‘From the viewpoint of the legislation, in and of itself — or we might say, from a merely normative viewpoint — there is no difficulty in this. Just one stroke of the pen, and a statute that is enacted today carries itself into the past at the whim of the legislator. Such is the act of legislation’ (ibid. [16], at para. 29 of my opinion).

And as I went on to say (ibid.):

‘Therefore a kind of dichotomy arises: reality does not allow us to change events in the past, but from a normative point of view we find legislation that seeks to take control of events in the past that were originally governed by a different law.’

8. But as long as no change is made to a norm, the norm that prevails at the time when the event occurred is the norm according to which the event will be judged, and it will determine which rights and obligations were created and what is the reciprocal relationship between them. This is true of the law and it is also true of social customs, social ethics, human behaviour and interpersonal relationships between human beings. Every act and all conduct is judged according to its time and place. An ‘enlightened’ emperor is enlightened relative to his time and the times that preceded him. It cannot be otherwise. It would not be right to judge — favourably or unfavourably — persons in the past and acts in the past with the tools that we have today. ‘Jephtah in his generation is like Samuel in his generation’ (Babylonian Talmud, Rosh HaShana 25b [58]).

9. Everyone agrees without exception that the legal status of acts and omissions that have legal significance should be determined, first and foremost, in accordance with the law that prevailed at the time the act or the omission was committed. This consensus is also the source of the doctrine of acquired rights. In the words of s. 22 of the Interpretation Law, 5741-1981:

‘Qualifications to the power of cancellation

22. The cancellation of a law is not capable of —

(1) reviving something that was not valid at the time when the cancellation came into effect;

(2) affecting an earlier act of the law that is cancelled or something that was done thereunder;

(3) affecting a right or an obligation under the cancelled law and a sanction for an offence against it.

Here, then, is the principle of prospectivity: a new law is valid from the date of its commencement and thereafter, and it follows from this that when a later law repeals an earlier law, the repeal does not affect rights and obligations (in the broad sense of these concepts) that came into existence by virtue of the previous law. This is, of course, ‘if there is nothing in the matter under discussion or in its context that is inconsistent’ with this provision (s. 1 of the Interpretation Law), i.e., this rule will not apply where the new law itself says that it applies retroactively (on the self-evident assumption that the retroactive application was done lawfully).

This fundamental assumption, that the operation of a statute is prima facie prospective, gives expression to our intuitive feeling and the sense of fairness that is innate in us that this is how it should be. As we said in Talmai v. State of Israel [31], at p. 621:

‘The doctrine concerning “acquired rights” is an effective tool in the law, and usually it gives legal expression to the intuitive feeling of the expert jurist and the sense of fairness innate in us; moreover, all of these are consistent with public order and public security. A contract that is made and that is binding under the law that was in force when it was made will bind the parties to it even if the law, and with it the preliminary conditions for the making of a contract, is subsequently changed (subject to public policy); a tort that was done does not cease to be a tort merely because after the act that particular tort was repealed, and vice versa: an act that did not amount to a tort when it was done will not become a tort merely because after the event the legislature decided that such an act would constitute a ground for a tort; and so on and so forth.’

This is the situation with regard to rights and obligations that have arisen from within Israeli law. It is also the case with regard to rights and obligations that have arisen from within a legal system outside Israel, where that legal system is a legal system to which the rules of private international law that prevail in Israel refer. This is the case with regard to the existence, or the non-existence, of a right or an obligation, and this is the case with regard to the scope of a right or an obligation. This is the theory of acquired rights, even though this theory is capable of making us dizzy by its circular nature (Talmai v. State of Israel [31], at p. 622). We should also add this: a recognition of rights and liabilities under the law that prevailed at the time of the act or omission is not only required by common sense and logic, but this determination, and this alone, is capable of introducing security into practical life. This is how people acquire rights and this is how obligations are imposed on them. This is how people acquire immunity, etc..

10. This, therefore, is the first rule of legislation — the rule of prospectivity. A statute has, in principle, prospective application; its purpose is to create rights and liabilities for the future. And even though it is possible to give a statute retroactive application (subject to the general restrictions of the law), someone who argues this has been done has the burden of proving it.

All of this concerns legislation. What is the position with regard to case law?

A norm determined in case law

11. A long time has passed since we abandoned Blackstone’s theory that the courts merely ‘reveal’ law and do not ‘create’ law. We do not need to look far, for this can be seen in our case: in the earlier case of Estate of Sharon Gavriel v. Gavriel [2] the court created law, and this is also what happened in the later case of Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. This is true of every judgment of the Supreme Court, especially of judgments that knowingly and intentionally determine case law rules, whether they are rules that have a larger effect or rules that have a smaller effect. Case law in a judgment, whether it is an important case law ruling or not, whether it is mainly declaratory or it is mainly constitutive, is case law that is created on the date of giving the judgment. On that date the right of the litigant is created de facto. On that day the case law rule is made. In judgments and decisions made by the court, it creates law (‘judicial legislation’) and rights, and in principle there is no reason why I should distinguish between a system in which a statute repeals a statute and a system in which case law overrules case law. Just as when a new statute repeals an old statute the new law does not — prima facie — affect rights and obligations that were created by the old statute, so too when case law overrules case law the new case law does not — prima facie — affect rights and obligations that were created by the old case law. Subject to what we shall say below, there is no difference — prima facie — between statute and case law, whether it is from the viewpoint of practicalities, the viewpoint of justice, the viewpoint of social ethics or any other viewpoint. A norm is cancelled by a later norm, and the same logic that applies in the one case should also apply in the other case.

12. As in all the literature that has been written on the subject of retrospectivity, my colleague the president also raises the element of reliance (which is a close relative of the doctrine of acquired rights) as an element that support the principle of prospectivity. I agree with his remarks, provided that we realize that we are not speaking of a specific or an individual reliance, in a particular case, but of an element of ‘constructive’ reliance. We are speaking of a phenomenon of reliance that derives from an examination of the conduct of human beings; a reliance that originates in experience that is acquired in practical life; a reliance that is based upon the ordinary person and the ordinary case. This extralegal element underwent a process of crystallization, its essence was formulated into a legal rule, and from the time it was formulated the rule prevails and we no longer need to ask the question whether, in one specific case or another, the element of reliance actually occurred. In other words, the element of ‘constructive’ reliance led to the creation of a rule in the law, and it can be said — and this is what we do say — that today we have an institutional rule according to which the application of norms in the law — whether in statute or in case law — is prospective. The meaning of this is that a new statute or a new case law ruling does not purport to affect rights and liabilities that arise and were created by the law or case law that prevailed and existed before the new statute or case law; this, of course, is subject to the exception that we may decide and determine that in the circumstances of a certain case or a certain type of case, the application of a certain norm will be retroactive, and for what period of time it will apply retroactively.

13. To summarize this far, we can say the following: rights and obligations exist by virtue of the legal system; where the court decides a certain rule, rights and obligations, within the scope of that rule, exist by virtue of that rule. The case law that was decided is the law of the state — there is no other law of the state — and everyone is supposed to act accordingly. And if at a later date the court considers the ruling and overrules it, the new case law is valid from the date on which it was decided. The new case law ruling does not, prima facie, affect rights and obligations that were created by virtue of the old law. And if someone argues that the new case law acts retrospectively and that it can change or cancel rights or liabilities that were created and exist by virtue of the old case law, the person making that argument has the burden of justifying and explaining why and how the new case law is capable of cancelling rights and liabilities that were created and exist in accordance with the old law. See also and cf. A. Barak, Judicial Discretion (1987), at para. 283, the excellent article of Dr. E. Kaplan, ‘Prospective Application of Supreme Court Precedents,’ 9 Hebrew Univ. L. Rev. (Mishpatim) 221 (1979), and her revisiting of this article: ‘Future Application of Supreme Court Precedents,’ Avner Hai Shaki Book, 4 Mozenei Mishpat (Netanya Law Review) 125 (2005). I think that Dr Kaplan and I both travel along the same route, each of us in his or her own way.

14. Hitherto I have discussed one half of the picture. The other half, which is relevant to the current case, concerns the question of the application of a norm retrospectively. In so far as we are speaking of statute, the question of its retrospective application will be decided and determined by interpreting the statute and on the basis of the assumption that the statute satisfies the constitutional tests (in our legal system — satisfies the tests of the Basic Law: Human Dignity and Liberty and the Basic Law: Freedom of Occupation). Thus, if the statute is intended by the legislature to be retrospective, i.e., to change in the future rights and obligations that were created by the law that prevailed before the statute, and this designation arises from its interpretation in accordance with the accepted rules of interpretation, then such will be the case. The question that we are asking concerns the status of new case law that overrules previous case law. Can the new case law have retrospective effect? In other words, can case law in the future retroactively change rights that were acquired and obligations that were imposed under the previous law?

15. It is plain and simple that in the absence of any statute that tells us otherwise — and there is no statute in this regard — the question of the retrospective application of case law is also a question of case law. How then should we decide the matter? At this crossroads, we shall find it difficult to draw an analogy from ‘statute repeals statute’ to ‘case law overrules case law.’ The reason for this is that there are many different considerations that lead the legislature to enact or to grant retroactive application to a statute and these include considerations that by their very nature are foreign to the way in which a court works. In the words of R.J. Traynor, in his article ‘Quo Vadis Prospective Overruling: A Question of Judicial Responsibility,’ 28 Hastings L. J. 533 (1977), at pp. 537-538:

‘… In the legislative process there is neither beginning nor end. It is an endless free-wheeling experiment, without institutional restraints, that may have rational origins and procedures and goals or that may lack them…’

The legislature therefore has a broad horizon of considerations. The court is different. Its considerations are restricted to the world of the law, and they are mainly considerations of justice, reasonableness and utility.

In his book, The Nature of the Judicial Process (Yale University Press, 1921), Benjamin N. Cardozo addressed the question whether we should distinguish — for the purpose of prospectivity-retrospectivity — between case law that changes previous case law concerning the validity of statute (from a constitutional point of view), case law that changes previous case concerning the interpretation and scope of a statute and case law that changes previous case law concerning the interpretation or scope of a common law rule. He said in this regard (ibid., at pp. 148-149):

‘… Where the line of division will some day be located, I will make no attempt to say. I feel assured, however, that its location, wherever it shall be, will be governed, not by metaphysical conceptions of the nature of judge-made law, nor by the fetich of some implacable tenet, such as that of the division of Governmental powers, but by considerations of convenience, of utility, and of the deepest sentiments of justice.’

It follows that since the considerations of a legislator in applying a statute retrospectively are different from the considerations of a court in applying case law retrospectively, we will find it difficult to draw an analogy from statute to case law.

16. The main difficulty that stands in our way in applying case law retrospectively lies in those rights that have been acquired and those expectations that have arisen as a result of the previous case law — rights and expectations in the broad sense of these concepts — which the new case law wishes to cancel or restrict. At the time of the event, the law of the state was the original case law, and now we are seeking not to apply to the event that law of the state, but rather case law that was determined later and that overruled the previous case law. We should not take this injury lightly, since it is capable of completely changing legal relationships to the point of causing an injustice. As Lord Diplock said in a lecture in 1965 on the subject of ‘The Courts as Legislators’:

‘… judge-made law… is in theory retrospective. A precedent which reverses or modifies a previous precedent is applicable to all such cases which are tried subsequently even though they arise out of acts done before the new precedent was laid down. This is unjust, and because it is unjust it is itself a factor which makes the courts more hesitant than they would otherwise be to correct previous errors or to adapt an established rule of conduct to changed conditions. And yet the rule that a new precedent applies to acts done before it was laid down is not an essential feature of the judicial process. It is a consequence of a legal fiction that the courts merely expound the law as it has always been. The time has come, I suggest, to reflect whether we should discard this fiction’ (cited in Traynor, ‘Quo Vadis Prospective Overruling: A Question of Judicial Responsibility,’ supra, at p. 535, note 7).

See also the remarks of Lord Nicholls in National Westminster Bank plc v. Spectrum Plus Ltd [51].

17. The conclusion that inevitably follows is therefore that where case law ruling A prevails and subsequently case law ruling B overrules it, we need a substantial reason of great weight in order to agree to apply case law ruling B retrospectively to an event that occurred when case law ruling A was in force, i.e., to an event that occurred after case law ruling A and before case law ruling B. When we consider that the main purpose of the court is to do justice, we will realize automatically that the substantial reason of great weight that tells us to apply the new case law retrospectively also needs to be a reason that is based entirely on considerations of justice. Because if that reason is not entirely based on considerations of justice, it will not have the strength to overcome the premise that an event that occurred when a certain case law ruling was in force ought to have its legal character determined by that case law. This is what ought to happen, and this is how we ought to act. This justice that we should seek may be an individual, specific justice, between a plaintiff and a defendant, and it may be a justice that applies to a whole branch of law. The greater the requirements of justice, the greater the retrospectivity. But we must find justice, which is the force motivating the decision to apply the case law retrospectively.

18. We said at the beginning of our remarks (in para. 4) that we would only consider in this opinion of ours the type of case that is before us, i.e., a case law ruling that overrules a case law ruling in the field of case law (the Israeli version of common law). This is what we said, and for good reason. The reason for this is that this field of ‘case law overrules case law’ extends to various branches of the law and to very different types of cases. It is so wide in the areas that it applies that it would not be right and proper to speak of an all-embracing formula that is supposed to extend to all the different kinds of case. If we find an all-embracing formula of this kind, its wording will be so general and so diluted that we will be unable to make use of it as a tool for examining and considering cases. Indeed, the less the wording is fine-tuned, the greater the erosion of the mechanisms of scrutiny and wisdom.

19. We can find an analogy to our case in the subject of the freedom of expression. Freedom of expression, as we have said elsewhere (HCJ 6126/94 Szenes v. Broadcasting Authority [34], at p. 854 {384}), is not monolithic. It protects different kinds of interests, some of which are interests of great weight and some interests of little weight, and it would not be right and proper for us to give equal protection and equal treatment to all of these interests:

‘… the freedom of expression (like the freedom of creation) is not monolithic; it is a kind of federation, a federation of rights and interests. There are historical chronicles and there are speeches; there are commentaries and there is fiction and poetry; there is political comment and there is commercial advertising, there are marches and there are demonstrations, there are plays and there are films. Each of these methods of expression reflects a certain interest, and not all the interests are the same. Thus, for example, commercial advertising will not receive — and should not receive — the same protection as historical chronicles. It follows that instead of speaking of the freedom of expression in general, we ought to select carefully from the whole gamut of freedom of speech the aspect that is relevant. We are not talking of mere labels — fiction or historical chronicles, a poem or a demonstration. We should investigate to the very roots and do our very best in order to establish the nature of the interest that seeks protection — the essence and the substantial content of the right presented before the court.’

See also HCJ 4804/94 Station Film Ltd v. Film and Play Review Board [35], at p. 689 {57}; HCJ 606/93 Advancement Promotions and Publishing (1981) Ltd v. Broadcasting Authority [36], at p. 25; CFH 7325/95 Yediot Aharonot Ltd v. Kraus [37], at p. 78. Indeed, were we to regard the interest of freedom of expression as a monolithic interest, then we would be mixing together a large number of different ingredients. For everyone will agree — even the most ardent supporters of the freedom of expression — that political comment cannot be compared to commercial advertising.

20. Our case is like the case of freedom of expression, because the issue of ‘case law overrules case law’ is not monolithic and is not made of one material only. Thus, for example, the relevant considerations in a criminal proceeding are different from the relevant considerations in a civil proceeding, and any child will realize this. It is not at all surprising, therefore, that in the article of Richard H. Fallon and Daniel J. Meltzer, ‘New Law, Non-Retroactivity, and Constitutional Remedies,’ 104 Harv. L. Rev. 1731 (1991), the authors speak separately of the question of retroactivity in criminal cases, of limited immunity in constitutional torts cases and in proceedings to impose taxes. Moreover, they discuss separately the various approaches of the Supreme Court on the question of retroactivity in criminal cases in the time of Chief Justice Warren and in the time of Chief Justice Rehnquist (for the doctrine that prevailed in the time of Chief Justice Warren, see also: M. Cheshin, ‘Further on the Reassessment by the Income Tax Commissioner,’ Tax Quarterly, 1968, at p. 3). Moreover, civil law is also not monolithic. Thus, for example, the law of contracts is different from the law of torts, and the factor of reliance — as a factor that runs through the length and breadth of the law — is of prime importance in the law of contracts, whereas it is of secondary importance in the law of torts. Possibly we may even distinguish — in the field of torts — between torts involving property damage and those involving personal injury. The same is true with regard to the question whether in the sphere of ‘case law overrules case law’ the same rule should apply in a common law matter, i.e., in a matter than is not expressly regulated in statute; in a matter of declaring a certain statute to be unconstitutional and therefore void; and in a matter that concerns the interpretation and scope of a statute. All of these cases, and others too — so Benjamin Cardozo taught us (see para. 15, supra) — will be governed by the same basic considerations: justice, utility, etc., but when a specific case is brought before us in the field of ‘case law overrules case law,’ we have the burden of investigating the nature of the matter thoroughly. And we shall decide the law only after examining the specific force of the competing interests.

21. Moreover, as we have said above, case law that has been made becomes the law of the state, and therefore it is supposed to guide people in their actions. Even if it is later held that a case law decision in the past was made in error, that case law was still the law of the state until it was overruled. The Rabbis of the Talmud have already taught us that ‘an error, once made, has effect’ (Babylonian Talmud, Bava Batra 21a [59]). The same is true of a case law ruling that is made (case law A) and that the court later decides to overrule (case law B). This is what has happened in our case; the decision in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] has overruled the decision in Estate of Sharon Gavriel v. Gavriel [2]. The question that arises concerns the interim period, namely what is the law concerning those events that took place in the interim period, between case law A and case law B, which come before the court for consideration after case law B? (Actually, the question also arises with regard to events which occurred before case law A and which come before the court for consideration after case law B). The premise for our case is that in both the first case law ruling (in our case: Estate of Sharon Gavriel v. Gavriel [2]) and in the second case law ruling (Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]) the court created law — law that applies to the parties and that has normative application for everyone.

22. In so far as the new case law ruling is supposed to apply to events that occurred after it was given, we shall encounter no difficulty. But this is not the case when we seek to apply the new case law retrospectively to the interim period between the two case law rulings. An analysis of this scenario of ‘case law overrules case law’ against the background of the recognition and consensus that both the first case law ruling and the second case law ruling created law necessarily leads us to the conclusion that when the court considers whether the second case law ruling — a ruling that creates law — should apply retrospectively, it should take into account, among the considerations that oppose this, those considerations that conflict with the inclination of applying the new law retroactively. These opposing considerations may lead us to a conclusion that the new law should not be applied retroactively — whether in general, in a class of cases or in one specific case or another — and they may also go on to create qualifications and defences, whether these are qualifications and defences with normative effect that are required by the new rights, or they are qualifications and defences that are required by the general law. After all, during the interim period the first case law prevailed, and we shall find it difficult to accept that after a period of months or years — sometimes quite a long period — the first case law will be struck down, retroactively, without any attention being given to what happened in the interim period. The most important factor for our case here is, of course, the reliance element.

23. I should add in this context, with all due caution, that it is possible to argue that reliance in the context of our case here does not only concern a situation in which someone relies on the existing law (the first case law ruling) and changes his position; reliance also concerns the normal course of events and the reasonable expectation that notice will be given in advance of a change in the law, and that the individual as a rule benefits from certainty with regard to the law. See also Prof. A. Barak, ‘Judicial Legislation,’ 13 Hebrew Univ. L. Rev. (Mishpatim) 25 (1983), at p. 73. Even if a person does not change his position specifically by relying on the existing law, retrospective application of a law is capable of confusing and undermining the confidence of the individual in the system of government. We have known for a long time that a statute requires prior notice, and a change in the proceedings for enacting a statute should also require prior notice. See United Mizrahi Bank Ltd v. Migdal Cooperative Village [32], at pp. 533-534. As we have already said in our remarks above, the main factor in the struggle between stability and change is the principle of justice and fairness — mainly distributive justice — together with the factors of proper practice and utility.

When is retrospectivity appropriate?

24. It is plain and simple that in the absence of a statute that gives us directions pointing one way or another — and there is no statute in the Israeli legal system on this subject — the question of the retrospective application of a particular case law ruling is a question that should be determined by the relevant legal system, whether normatively or on an individual basis. The question is one of determining a rule and establishing the exceptions to it: what will be the rule and what will be the exceptions? Common law, for example, never questioned the retrospective application of new case law — this was the rule that it determined — especially as a result of the doctrine outlined by Blackstone, according to which the courts do not create law but only reveal it. At the same time, the courts in England were aware of the injustice that may be caused by applying a new case law ruling retrospectively, and they sought to remedy this defect by determining a balancing formula that takes into account any exception to the rule. See, for example, para. 40 of the opinion of Lord Nicholls in National Westminster Bank plc v. Spectrum Plus Ltd [51] (which is cited in para. 16 of the opinion of my colleague, the president).

25. My colleague President Barak refers to comparative law, and in his opinion he reviews a broad selection of case law in various countries. In National Westminster Bank plc v. Spectrum Plus Ltd [51] the justices of the House of Lords also referred extensively to comparative law and the various case law rulings that have been made in various countries, and it is possible to say that over the years these have been of all types and kinds. The selection is a wide one, and anyone who wishes to rely on comparative law may choose what he wants. See, for example, P.J. Stephens, ‘The New Retroactivity Doctrine: Equality, Reliance and Stare Decisis,’ 48 Syracuse L. Rev. 1515 (1998). There is much confusion, especially in the United States, and the literature on the subject is extensive and burdensome. It is difficult to avoid the impression that the course of case law in the United States — case law that changes direction from time to time — is affected mainly by the fundamental outlooks of the justices of the United States Supreme Court with regard to the role of the court in the system of government. See also and cf. J.E. Fisch, ‘Retroactivity and Legal Change: An Equilibrium Approach,’ 110 Harv. L. Rev. 1055 (1997). As for us, true to our approach we will say that where ‘case law overrules case law,’ the second case law ruling will apply prospectively, but the court, like the legislature, may apply it retrospectively while taking into account the distribution of justice between those who benefit and those who lose out under the later case law.

26. The first question is: what is the law concerning the plaintiff who won in the later case (case law B) and brought about the overruling of the original case law? In our opinion, the question concerning the distribution of justice between a plaintiff and a defendant should be asked also in the case of this plaintiff, just as it will be asked in the case of plaintiffs who will come after him and seek to benefit from the new case law. We should, however, add that we shall have difficulty in finding a case where that plaintiff will not be found worthy to benefit from the fruits of the new case law. First it should be said — and others have already said this — that if the plaintiff in the later case does not benefit from the application of the new case law to his case, when it is the case law that he himself brought about, we shall not find plaintiffs who bring about a change in case law that ought to be changed, and the public will be the loser. Second, justice demands that the new case law will apply to the person who brought about the change, and that he will benefit from his labours. But we should emphasize that where the interest of the defendant and the public interest outweigh the interest of the plaintiff, the new case law will not apply even to the plaintiff who brought about its creation. The effect of the case law ruling will be merely prospective — i.e., the case law will apply only to events that occur after it is given — and in the language of American jurists it will be said that the case law ruling is ‘purely prospective.’ It need not be said that if the defendant has a specific defence against the right that the court is establishing for the first time, he is entitled to raise that defence in exactly the same way that defendants in the future will be entitled to raise specific defence arguments against the new right that was established in the second judgment. All of the aforesaid concerns the plaintiff who brought about the change in case law. But what is the position with regard to others whose case is identical or very similar to the case of the person who brought about the change?

27. My answer to this question is that the ‘legal burden’ lies with this other plaintiff to persuade the court that the new case law ruling should be applied retrospectively, namely that it is right to change arrangements that were in force and systems of rights-obligations that were established before the new case law, and especially that it is just — in distributing justice between a plaintiff and a defendant — to apply the new case law retrospectively. Indeed, unlike my colleague, who is of the opinion that the new case law applies retrospectively unless the court decides otherwise — I am of the opinion that case law should not apply retrospectively unless the court decides otherwise. The burden of persuading the court that a case law ruling should be applied retrospectively rests with the plaintiff.

28. In this context I would like to ask a question of the supporters of retrospective application. Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] recognized — or perhaps we should say, created — a head of damage that previously had been denied by case law, and thereby it changed the substantive law of torts with regard to personal injury. We should emphasize that we are not speaking of a change of procedure but a change in substantive law. See Dicey and Morris, The Conflict of Laws (thirteenth edition, L. Collins ed., 2000), vol. 1, rule 17, at para. 7-034 et seq.. This gives rise to the question: let us suppose that our case did not concern the creation of a head of damage but the creation of a tort, i.e., the creation of a new cause of action whose existence the court rejected in previous case law. Would we decide to apply this case law retrospectively?

What is the law in Israel?

29. Since we have, until now, spoken at length, we can now speak briefly. My colleague the president is of the opinion that restrospectivity is the rule and non-retrospectivity is the exception. In his words (at para. 17 of his opinion):

‘The fundamental premise is that a new judicial ruling applies both retrospectively and prospectively. Notwithstanding, I am of the opinion that there is nothing in principle that prevents us from recognizing the power of the Supreme Court to give its precedents merely prospective force.’

My opinion is otherwise. Unlike my colleague, who assumes — as a premise — that new case law acts retrospectively unless there is a statement to the contrary, my assumption is that new case law acts prospectively unless there is a statement to the contrary. In other words, in my opinion prospective application is the rule, whereas retrospective application is the exception. Since this is the case, the premise is that new case law has prospective application, and therefore the onus lies with the person arguing that it should have retrospective application. This is how we should address the issue.

From general principles to the specific case

30. Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1], as case law that creates law and as case law that overrules case law, applies to events that will occur after it. Everyone agrees upon this. The relevant question is whether this case law should be applied retroactively, to events that occurred when Estate of Sharon Gavriel v. Gavriel [2] was valid. It would be true to say that the question is not an easy one for us. Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] reversed the ‘lost years’ rule as held in Estate of Sharon Gavriel v. Gavriel [2], and by doing so it created an earthquake in this specific field of the law of torts. A ‘minor revolution’ took place, in the language of President Yitzhak Kahan in Estate of Sharon Gavriel v. Gavriel [2] (at p. 570). Should Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] be applied retrospectively?

The question whether Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] should be recognized as having retrospective application or only prospective application will be determined by the conflict between the competing considerations, and in this regard I was especially impressed by the moral warmth that can be seen in the judgment of the court in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] — a judgment that was written by our colleague Justice Rivlin, with the agreement of President Barak, Vice-President Or and Justices Mazza and Dorner — and from the intensity with which Justice Rivlin spoke of the right of the injured party to receive justice, namely compensation for the lost years. Let us cite several passages from the opinion of Justice Rivlin in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]:

‘The compensation for the “lost years” is… capable of remedying the unequal state of affairs that was created as a result of the tortious act. It offers a solution to the injustice that is inherent in the denial of the right of compensation to someone who is not able to realize his earning capacity, because of a reduction of his life expectancy brought about by a tort, while at the same time compensation is awarded to someone whose inability to realize his earning capacity derives from his being injured by a tort. This results in it being cheaper to kill than to wound. It should be noted that we are not concerned with punishing the tortfeasor but with balancing the scales and refraining from an unjust reduction of the compensation merely because of the fact that in addition to the harm to the injured person’s earning capacity the tortfeasor also caused him a reduction of his life expectancy’ (ibid. [1], at para. 15).

‘Money cannot replace a damaged limb, the suffering involved in loss of a place of work, and it can certainly not replace years of life that have been lost. However, this alone cannot undermine the power of the courts to award compensation, in so far as this is necessary in order to bring the injured person as close as possible to the position he would have been in, had the damage not occurred… The compensation will not prevent the suffering, but it can make the suffering bearable’ (ibid. [1], at para. 18).

‘Indeed, if compensation for the “lost years” is not awarded, the result obtained from the provisions of s. 78 of the Ordinance, in cases where the deceased does not have, when he died, a claim for compensation, is, from the viewpoint of the dependants, harsh and unjust. Take the case of a person who had a working life expectancy of twenty years, and because of a tortious act his life expectancy is reduced to only two years. The vast majority of the potential earning years, which will not be realized because of the act of the tortfeasor, will not be given any expression in the award of compensation, and the dependants, even if they inherit what he was awarded in his claim, will be left with an empty shell, unless the injured person chose — and to put such a choice before him is inconsistent with criteria of justice and logic — not to file a claim for his damage’ (ibid. [1], at para. 29).

‘… the award of compensation for the loss of earning in the “lost years” corrects — admittedly not in the full sense of the word but in important senses — the major imbalance in the external balance that was caused by the wrongful act of the tortfeasor. The injured person has been deprived, by the wrongful act, of the ability to earn income and to make use of it for his needs and for those of his family. Awarding compensation addresses the need to take this into account, and ensures that the lack of balance caused by the tort will not remain unaddressed especially in cases where the result of the tortious act is particularly serious…

… the award of compensation for the “lost years” prevents the arbitrary results according to which compensation is not awarded for the loss of earnings to an injured person whose life expectancy is shortened, while compensation on this head of damage is awarded to an injured person in a permanent vegetative state, or to the estate for pain and suffering and reduction of life expectancy, all of which without any really adequate justification for the distinction… Perhaps most importantly of all, the awarding of the compensation for the “lost years” (to the living injured person) ensures that a situation will not arise in which, although the dependants have been deprived by the tortious act of the support of the injured person — support that they would have received had it not been for that act — this damage will remain unremedied’ (ibid. [1], at para. 70).

If justice is on the side of the plaintiff — or perhaps we should say, on the side of the injured person or his dependents — then justice appeared in its full glory in the opinion of Justice Rivlin in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1]. This justice, warm human justice, has great weight — maybe even decisive weight — when determining the question of retrospectivity. I have also taken into account the fact that our case concerns differences of opinion between an insurance company and a worker who was killed in the course of his employment, and the plaintiffs are the dependents of the deceased and his estate. In the distribution of justice between these two parties, who are not of equal force, and in view of the ability of the insurance company to spread the damage, the scales tip in favour of the injured person and those dependent upon him. There was a time — a long time ago — when counsel for a plaintiff was not allowed to mention — especially before a jury — that the defendant was insured and that the damages would be paid by the insurance company and not by the defendant personally. That time has passed, and we are in the present.

31. In summary, I agree with the conclusion of my colleague the president that the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] should be applied retrospectively, subject only to specific arguments — including arguments of reliance and other arguments — that defendants may raise in proceedings against them.

The agreement between the parties and the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter

32. On the basis of the assumption that Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] applies to their case — and this is indeed what we are deciding — the defendants raise a defence argument that relies on an agreement that was made between them and the plaintiffs and that was given the force of a court decision. The rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] was made on 15 March 2004, but a short time before that the parties made a settlement according to which the defendants would pay the plaintiffs a sum of NIS 100,000 in settlement of the claim. On 22 February 2004 — approximately three weeks before the rule was made in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] — this agreement was given the force of a court decision. The question is therefore whether this agreement, which was given the force of a court decision, stands in the way of the plaintiffs and denies them their (retrospective) right. My colleague, President Barak, is of the opinion that the agreement is a barrier to the plaintiffs’ claim, and I agree with his conclusion. But my method is different from his method.

33. In my colleague’s opinion, the question should be decided in accordance with the provisions of s. 14(b) of the Contracts (General Part) Law, 5733-1973, which provide and tell us the following:

‘Mistake

14. (a) …

(b) If someone entered into a contract as a result of a mistake, and it may be assumed that had it not been for the mistake he would not have entered into the contract and the other party did not know or should not have known this, the court may, upon an application of the party that made the mistake, cancel the contract, if it thinks that it would be just to do so; if it does this, the court may hold the party that made the mistake liable for compensation for the damage that was caused to the other party as a result of making the contract.’

This provision of statute concerns a ‘mistake,’ and the relevant question is whether the plaintiffs did indeed fall victim to an operative ‘mistake’ when they signed the settlement. Personally, I find it difficult to see any ‘mistake’ to which the plaintiffs allegedly fell victim.

34. There is no doubt that when it was made the agreement was not tainted by any mistake. But the case law rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1], as my colleague says, should be regarded as case law that changed the law of compensation retroactively — in our case, at least to the date of making the agreement — and if this is so, the plaintiffs should be regarded as having fallen victim to a mistake when they made the agreement: the plaintiffs thought that the rule in Estate of Sharon Gavriel v. Gavriel [2] applied to them, whereas it was in fact the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] that applied to the case (as we found out shortly afterwards). I do not accept this line of reasoning. The mistake of which s. 14(b) of the Contracts (General Part) Law speaks is a mistake that is contemporaneous with the time of making the agreement. In other words, the concept of ‘mistake’ in a contract, by its very nature, applies on the date of making the contract. We do not find any mistake of this kind. And if it is argued that the retroactive application of the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] made an agreement that was originally untainted by any mistake (‘in real time,’ as the saying goes) into an agreement that is supposedly tainted by a mistake, it seems to me that we are stretching the concept of ‘mistake’ to the point of bursting, such that its whole content will be spilled. See LCA 6339/97 Roker v. Salomon [38], at p. 253. In a paraphrase of remarks that were written in Roker v. Salomon [38], at p. 254, we can say the following: the concept of mistake is built on the essence of ‘mistake,’ and around that essence there are events and cases that are attracted to its centre of gravity. The essential meaning is what will determine the scope of the concept. The D.N.A. is what will decide it. Introducing an objective element into this concept of mistake will completely undermine the arrangements (see and cf. D. Friedman and N. Cohen, Contracts (vol. 2), at p. 727, para. 14.57).

35. With regard to the present case, we shall say this: there is no doubt that the plaintiffs did not make a ‘mistake’ when the agreement was made — in the fundamental and accepted meaning of the concept of ‘mistake’ — and I have not found any justification for imputing any mistake to them after the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] came into existence, by distorting the language. This is the case even if we adopt the retrospective perspective. But according to our approach, there was certainly no mistake in the agreement, since the retroactive force of the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] was given to it by the court, and not automatically by the general law. And if there was no mistake in the agreement, there is therefore no basis for applying the provisions of s. 14(b) of the Contracts (General Part) Law.

36. I think that the remarks of Justice Tzvi Tal in Aroasty v. Kashi [30] are in agreement with our remarks. At pages 522 et seq. of the judgment, Justice Tal addresses the question of the retrospective application of case law that interprets a law and the issue of a ‘mistake of law’ as a defect in a contract (according to the provisions of s. 14(d) of the Contracts (General Part) Law)), and in his summary of the matter he determines (at p. 524) that ‘a later interpretation of a “statute,” which changes its meaning from what a party to a contract originally thought, cannot be considered a “mistake of law”.’ Later on (at p. 525) Justice Tal goes on to say that —

‘It is difficult to entertain the idea that it is possible to open a matter that has been concluded, such as a contract that has already been performed, with a claim that one of the parties made a mistake of law, as a result of new case law, maybe years later, that changed the previous law.’

37. I should also point out that had the element of mistake existed in the settlement in our case — and in my opinion, as aforesaid, the agreement was not tainted by any mistake — I would have been disposed to consider seriously the plaintiffs’ application — an application based on the provisions of s. 14(b) of the Contracts (General Part) Law — to cancel the settlement ‘for reasons of justice.’ Indeed, were we to agree that the agreement was tainted by a mistake, then the question would have arisen as to whether the plaintiffs’ mistake was an operative mistake, i.e., a mistake that makes a contract defective, or whether it was only a mistake in the ‘profitability of the transaction’ (in accordance with s. 14(d) of the Contracts (General Part) Law, and in such a case there would be no grounds for cancellation of the contract. My colleague the president is of the opinion that the mistake in our case was a mistake in the ‘profitability of the transaction,’ and I find this conclusion problematic.

38. The parties before us made a settlement between themselves, and we agree of course — how could we do otherwise? — that a settlement tells us that the two parties to the settlement made reciprocal concessions with regard to the chance of being entitled to more than what the settlement gave them, something that is commonly known as ‘risk management.’ See D. Friedman, ‘Contractual Risk and Mistake and Misrepresentation with regard to Profitability,’ 14 Tel-Aviv University Law Review (Iyyunei Mishpat) 459 (1989), at p. 469; Friedman and Cohen, Contracts, supra, at p. 736; HCJ 57/67 Gross v. Income Tax Commissioner [39], at pp. 559-560 (per Justice Silberg). The question is simply what chance did the parties to the settlement give up and what risk did they take upon themselves? This question also contains the answer to the question: what is a ‘mistake in profitability?’ We accept the definition of Friedman and Cohen that ‘a mistake in profitability… is a mistake with regard to a risk that the party took upon himself, whether expressly or according to the correct interpretation of the contract or in view of the understanding that we have of contracts of this kind’ (Friedman, ‘Contractual Risk and Mistake and Misrepresentation with regard to Profitability,’ supra, at p. 466; Friedman and Cohen, Contracts, supra, at p. 727). With regard to this risk that a party ‘took upon himself,’ Friedman goes on to tell us (ibid.) that:

‘… We do not necessarily mean that the party took this risk upon himself willingly and knowingly. Sometimes this is indeed the case, but in other cases the law attributes to him the taking of the risk under discussion. In other words, in view of the approach that we have to the nature of contracts and in view of our understanding of the ordinary risks involved therein, we assume (unless it is determined otherwise) that a party took on a certain risk even if he was not actually aware of this.’

The question in a settlement is, therefore, which fact, legal rule or possible development in the future was in dispute between the parties (Friedman and Cohen, Contracts, at p. 736). A settlement is an act of risk management, but ‘the question is always what was the risk that was minimized and what were the assumptions underlying that settlement’ (Friedman, ‘Contractual Risk and Mistake and Misrepresentation with regard to Profitability,’ supra, at p. 470). Thus, a mistake is a mistake in the ‘profitability of the transaction’ — it is not an operative mistake — if it falls within the scope of the risk that each party took upon itself. By contrast, a mistake that falls outside the scope of the risk will not be a mistake in the ‘profitability of the transaction.’ In the language of Friedman (ibid., at p. 466):

‘… There is no basis for the claim of mistake with regard to a risk that a party took upon himself within the framework of a contract (it is possible, if one wishes, to call this mistake a “mistake of profitability”), but there is a basis for a claim of mistake with regard to a matter that was not included within the scope of the risk that the party took upon himself.’

And as Friedman and Cohen say on the subject of settlements (Contracts, at p. 737):

‘… Where a settlement is based upon a fundamental mistake, on a point that was not in dispute and with regard to which the parties did not compromise, the settlement may, like any other agreement, be rescinded provided that the conditions for this are satisfied. Even if the settlement was given the force of a judgment, the settlement and the judgment that is based on it may be cancelled because of a mistake… A settlement is admittedly a case of risk management, but the question is always what is the risk that was minimized and what were the basic assumptions that served as a basis for that settlement.’

39. In our case we can say that when the settlement was made — in ‘real time’ — the question of the ‘lost years’ was far removed from the areas of risk that the parties took upon themselves or from the hopes that the parties entertained. Indeed, like in any settlement of a pecuniary nature, the parties settled with regard to the amount of the compensation that the employer should pay the worker, but the question of the ‘lost years,’ as a question in itself, was very remote from their thinking. We should assume — this is what any reasonable understanding tells us — that when calculating the compensation the parties were mindful of the rule in Estate of Sharon Gavriel v. Gavriel [2], and they made this case law ruling the basis for the negotiations between them.

But now the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] has appeared. The rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] is not merely ‘another rule’ in the law of compensation. This is not an ordinary rule, a rule of the kind that we encounter every day. This is a rule that brought into the world a new head of compensation. It is a creation ex nihilo, or perhaps we should say, a creation ex negativo. It is like a case law ruling that creates a new cause of action in torts that never existed when the settlement was made (and what is more — a cause of action whose existence was expressly rejected in case law). This is expressed in the remarks of Justice Rivlin in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1], when he said (in para. 70 of his opinion) that following the rule in Estate of Sharon Gavriel v. Gavriel [2], as the years passed, we expected that legislation would change the case law ruling, but we waited in vain and the legislature failed to step forward and enact legislation. Indeed, in our opinion Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] did cause a minor revolution in the field of the law of compensation in torts. Had Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] been the prevailing case law at the time the settlement was made, then if they had assumed that Estate of Sharon Gavriel v. Gavriel [2] was actually the prevailing case law the parties to the settlement would have made an operative mistake. Their mistake would not merely have been a mistake in ‘the profitability of the transaction,’ since the question of the ‘lost years’ would have been beyond the scope of the concessions that were made and the reciprocal risks that the parties took upon themselves. The plaintiffs did not take into account in their considerations the possibility that the decision in Estate of Sharon Gavriel v. Gavriel [2] would be overruled. In the settlement they did not ‘waive’ the possibility of a change in the law, and it is not just that we should attribute to them a waiver of a chance that the law would be changed.

40. As we have said in our remarks above, Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] is, in our opinion, like a case law ruling that created a new cause of action, and, what is more, a cause of action whose existence was rejected in the past. Just as in the latter case — had it occurred — the question of the existence of that cause of action would have fallen, so it may be assumed in the ordinary case, outside the scope of the risks and chances, so too in our case. Thus, the principle of justice that led us to apply the decision in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] retrospectively is the very same principle of justice that tells us to recognize a ‘mistake’ — in so far as there was one — as an operative mistake, as a mistake that is not merely ‘a mistake of profitability,’ as a mistake that undermines a transaction and cancels a settlement. But in our opinion, as aforesaid, there was no mistake in the settlement. The doctrine of ‘mistake’ is too limited to include a set of facts that did not include a real mistake in ‘real time,’ and for this reason I agree, albeit with some regret, with the conclusion of my colleague the president that the settlement brought an end to the claim of the plaintiffs, who are the respondents before us.

Summary

41. I agree that the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] ought, in principle, to apply retrospectively, but it is subject to defence arguments that a defendant may raise in the specific circumstances of his case. As I said at the beginning of my opinion, I agree with my colleague the president that the appeal should be allowed and the judgment of the trial court should be set aside.

Justice E. Rivlin

I have read the illuminating opinions of both my colleague President A. Barak and my colleague Vice-President M. Cheshin. I agree with the result that my colleagues have reached that the appeal should be allowed and the judgment of the trial court should be set aside. With regard to the fundamental disagreements between my colleagues, which concern the method of reaching the result, my opinion is in accordance with the opinion of the president, for his reasons.

Justice A. Grunis

I agree with the opinion of my colleague, President A. Barak.

Justice D. Beinisch

My colleagues, President Barak and Vice-President Cheshin, have spoken extensively on the question of the temporal application of new case law and in their opinions the question of prospectivity and retrospectivity has been presented in all its multi-faceted complexity. I agree with their opinion concerning the result, according to which the appeal should be allowed and the judgment of the trial court should be set aside. With regard to the fundamental dispute I will add only a few words with regard to my position.

There is no dispute between my colleagues that the application of new case law can be retrospective. The vice-president is of course correct when he says that the real and only question is the question of the retrospective application of new case law, since there is always prospective application. My colleagues also agree that the application of legislation of the Knesset, which is usually prospective unless it contains a statement to the contrary, cannot be compared to the application of case law, which is the ‘common law’ in our legal system. The disagreement revolves around the question of what is the fundamental premise: what is the rule and what is the exception?

In this disagreement, I agree with the opinion of President Barak that ‘The fundamental premise is that a new judicial ruling acts both retrospectively and prospectively.’ The different approaches were presented by my colleagues, as aforesaid, comprehensively and fluently and to attempt to add to them would be merely to detract. In his opinion, the president defined the ‘practical consideration’ as the decisive consideration for his conclusion and he gave his reasons for this. Indeed, in my opinion too the practical consideration outweighs the other considerations and touches upon the heart of the judicial role and the essence of judicial creation.

Let us mention once again the consensus in our legal system that the Supreme Court does not lightly depart from its precedents. New case law is created against a background of new circumstances, and as a rule these are not commonplace in our judicial work. New case law is made when the court is persuaded that the previous case law was erroneous or when its time has passed because circumstances have changed. The need for new case law arises when the law needs to be brought in line with reality, whether this is social reality, practical reality or legal reality. Only then is case law likely to change and thereby develop the law.

A change in case law requires a balancing of the existing position and the extent to which it corresponds with reality against the extent of the harm to legal stability and its consequences. When the judge reaches the point of decision and comes to the conclusion that the legal reality should be changed, from that point onward he will have great difficulty in making a decision that only has prospective application. In the course of applying the law on a daily basis, it will be a very complex if not impossibly difficult task to continue to make judicial decisions that are based on the case law ruling that has been overruled, or to contend with the need to examine the validity of the new case law ruling on a case by case basis. This difficulty is resolved when the rule is that new case law will apply retrospectively.

This conclusion does not ignore all the situations and difficulties that may arise. It does not ignore the existence of circumstances in which decisive weight should be given to the need to respect rights and obligations that were crystallized in the past and to refrain from a serious injury to protected interests. The aforesaid conclusion does not require us to ignore differences between different branches of public and private law that may justify special treatment, as Vice-President Cheshin has said in his opinion. The approach that recognizes the retrospectivity of new case law as a rule determines a fundamental position but it does not compel us to ignore exceptional circumstances in which new case law should not be applied retrospectively because of the extent of the injury to acquired rights or a protected reliance interest. The decision when to restrict new case law and to give it prospective application only, or suspended retrospectivity, is a decision that depends upon the circumstances and the context. The proper balancing point in each specific case will usually be decided from the viewpoint of and in accordance with the new case law, and restrictions will also determined on the basis of the new case law. Cases in which we are required to limit the application of the case law and to make it merely prospective will be examined by means of legal doctrines that run the length and the breadth of the legal system and through all of its branches, and this was discussed by President Barak when he presented a non-exhaustive list of possible solutions in difficult cases.

By way of generalization it is therefore possible to say that when the court has crossed the ‘stability barrier’ presented by existing case law and sees a need to make a new case law ruling that is appropriate to the time and the social and normative reality that prevails when it is made, there is a need for consistency in deciding cases in accordance with case law as it stands at the time of giving judgment, while adapting it to the specific solutions that are provided in exceptional cases, in order to prevent damage and harm that are disproportionate according to the fundamental principles of the legal system.

I therefore agree with the opinion of President Barak.

Justice M. Naor

1. In my opinion, in the circumstances of the case before us there is a settlement between the plaintiffs and the defendants, and this was given the force of a judgment on 22 February 2004 (although this judgment was called a ‘decision’). The proceeding between the plaintiffs and the defendants therefore ended before the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] was made. This is sufficient in order to determine that there was no basis for allowing the plaintiffs to repudiate their consent to the settlement in these circumstances (see Ben-Lulu v. Atrash [27]; HCJ 4157/98 Tzevet, Association of Retired IDF Servicemen v. Minister of Finance [40], at pp. 790-791; CA 8972/00 Schlesinger v. Phoenix Insurance Company Ltd [41], at p. 843). Therefore, because of the principle of finality, the question of the retroactive application of new case law does not arise at all in this case, just as it does not arise with regard to other cases that already ended in a settlement or a final judgment before the decision in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] was made.

2. The question of the retroactive application of judgments that change case law in general, and the judgment in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] in particular, is an important question. The disagreement of opinion between my colleague President Barak and my colleague Vice-President Cheshin is ultimately a question of what is the rule and what is the exception. Neither my colleague the president nor my colleague the vice-president recommend making an absolute rule that allows no exceptions (cf. the judgment given very recently with an expanded panel in CA 1761/02 Antiquities Authority v. Station Enterprises Ltd [42]). Since in my opinion a discussion of this issue is not required for the decision in this case, I shall limit myself to addressing the question of the retrospective or prospective application only with regard to the decision in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1].

3. In this matter, I am of the opinion, like all my colleagues, that the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] should be applied retroactively to cases that are pending in the judicial system. The decision in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] did not come into the world from nowhere and its spirit hovered over legal proceedings for a long time before it was made. Many parties sought to amend statements of claim and to argue that they are entitled to compensation for the lost years before the decision in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] was made. Many cases, in all the courts, waited for the litigation in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] to end, and it is not right that the Ettinger estate should be the only one that benefits from the change in case law. Moreover, as my colleague Vice-President Cheshin said, the rule in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] is of great force, and it was very just that my colleague Justice Rivlin called in his opinion in Estate of Ettinger v. Company for the Reconstruction and Development of the Jewish Quarter [1] for compensation to be awarded for the ‘lost years.’

4. I therefore agree that the appeal should be allowed, the judgments of the Magistrates Court and the District Court should be set aside, and the judgment (called a ‘decision’) of 22 February 2004 should be reinstated.

Appeal allowed.

29 Shevat 5766.

27 February 2006.

Full opinion:

Link to original Hebrew text of decision on official ISC website:

http://elyon1.court.gov.il/files/04/250/089/A04/04089250.a04.pdf

Ports and Railways Authority v. Zim Integrated Shipping Services, Ltd.

Case/docket number:

CA 4530/91

Date Decided:

Tuesday, October 10, 2000

Decision Type:

Appellate

Topics:

Abstract:

Facts: The present case raises the question of liability for damage caused during the course of pilotage of a ship. A ship and a dock were damaged during the course of the pilotage of a ship in the dock. The owner of the Ship, Zim Integrated Shipping Services, Ltd. repaired the damage that was caused to the Ship, and demanded that the Ports and Railways Authority reimburse it for the cost of the repair. The owner based the demand on the negligence of the Ports and Railways Authority and the negligence of the pilot for whose actions it was claimed the Ports and Railways Authority bore vicarious liability. The two central questions that were addressed were: do the owners of a ship have a cause of action against the employer of a pilot who caused damage to a ship in the course of piloting in the area of a port? And, if so, how is the liability to be distributed between the owners of the ship and the pilot’s employer if the damage was caused by the joint fault of the pilot and the ship’s crew. The District Court imposed two thirds of the liability for the damage on the pilot, and the remaining third on the captain. The court, based on vicarious liability attributed the liability of the pilot to the Ports and Railways Authority and the liability of the captain to Zim. The practical ramification of this distribution is that Zim’s suit against the Ports and Railways Authority was successful only in part and the Ports and Railways Authority was required to pay Zim two thirds of the cost of repair of the ship. The Ports and Railways Authority appealed this decision.

Held: The Court partially allowed the respondent’s appeal. The court determined that the Ports and Railways Authority alone is liable to Zim by way of vicarious liability for the pilot’s negligence. However, the pilot, were he to be sued to compensate Zim for the damage caused to the Ship, would only be obligated, given the contributory negligence of the captain, for half the damage. Therefore, the Ports and Railways Authority is only obligated to compensate Zim for half of the damage. The appellants were ordered to pay the respondent’s fees in the sum of NIS 30,000.

Voting Justices:

Zamir, Itzchak

Primary Author

majority opinion

majority opinion

majority opinion

majority opinion

majority opinion

Full text of the opinion:

CA 4530/91

Ports and Railways Authority

Zim Integrated Shipping Services, Ltd.

The Supreme Court sitting as the Court of Civil Appeals

[October 10th, 2000]

Before Vice-President S. Levin, Justices T. Or, E. Mazza, M. Cheshin, I. Zamir

Appeal on the Judgment of the Haifa District Court (Justice T. Strassberg-Cohen) on September 1, 1991 in CC 1195/86.

Legislation cited:

Torts Caused by Ships in Pilotage Ordinance 1939 ss. 1, 2.

Torts Ordinance [New Version], ss. 2, 11, 13, 13(A) (2) (B), 14, 35, 36, 84(A), 84(B).

Ports Ordinance [New Version] 5731-1971, ss. 13, 53.

Shipping (Sailors) Law 5733-1973, ss.1, 36.

Import and Export Ordinance [New Version] 5731-1971, s. 1.

Addition to the Law Extending the Emergency Regulations (Supervision of Sailing Vessels) (Consolidated Version) 5733-1973, r. 29.

Magella

Ports and Railways Authority Law, 5721-1961, s. 24(A).

Regulations Cited:

Haifa Port Regulations [January 7, 1933].

Ports Regulations 5731-1971, rr. 1, 37, 47, 47(a), 69, ch. 6.

Ports Regulations (Pilotage of Vessels in the Ports) 5724-1964.

Ports Regulations (Pilot Licensing) 5724-1964.

Addendum to the Ports Regulations (Prevention of Collisions in the Sea) 5737-1977.

Prevention of Contamination of Sea Water with Oil (Implementation of the Treaty) Regulations 5747-1987, r. 1.

Shipping (Sailors) Regulations 5736-1976, rr. 22(A), 23.

Israeli Supreme Court cases cited:

CA 804/80 Sidaar Tanker Corporation v. Eilat-Ashkelon Pipeline Company Ltd., IsrSC 39(1) 393.
CA 542/73 Cargo Ships “El Yam” Ltd. v. Ports Authority IsrSC 30(1) 173.
CA 502/78 State of Israel v. Nisim IsrSC 35(4) 748.
CA 360/80 Michon LeMateh Ltd. v. Karnit-Fund for Compensation of Victims of Road Accidents IsrSC 35(2) 383.
CA 22/75 Edri v. Azizian IsrSc 30(1) 701.
FH 38/75 Cargo Ships “El Yam” Ltd. v. the Ports Authority IsrSC 30(2) 645.
CA 817/81 Ports Authority in Israel v. Zeno (unreported).
CA 469/64 Shiphart and Eskorant Genelsheft, A Ross and Kwo v. the Ports Authority in Israel IsrSC 19 (2) 207.
CA 582/71 National Insurance Institute v. the Ports Authority IsrSC 27(1)650.
CA 85/60 Water Works Company Ltd. v. Segel IsrSC 14 1939.
CA 197/58 Eylon v. Yadi IsrSC 12 1459.
CA 54/64 Peretz v. Keren Kayemeth LeIsrael Ltd. IsrSC 18(3) 387.
FH 15/88 Melekh v. Kurhauser IsrSC 44(2)89.
CA 1170/91 B’chor v. Yehiel IsrSC 48(3) 207.
CA 145/80 Waknin v. Bet Shemesh Local Council IsrSC 37 (1) 113.
CA 243/83 Jerusalem Municipality v. Gordon IsrSC 39(1) 113.

Israeli District Court cases cited:

CC (Haifa) 786/87 Zim v. Ports Authority (unreported).

American cases cited:

United States v. Port of Portland, 147 F. 865 (1906).
City of Long Beach v. American President Lines, 223 F.2d 853 (9th Cir., 1955).
National Development Company v. City of Long Beach, 187 F.Supp. 109 (1960); 70 Am.Jur. 2d sec. 443 (1987)).

English cases cited:

Workington Harbour and Dock Board v. Towerfield (Owners) [1950] 2 All. E. R. 414
The Esso Bernicia [1989] 1 All E.R. 37, 58-60

Australian cases cited:

Oceanic Crest Shipping Co. v. Pilbara Harbour Services Pty. Ltd. 160 C.L.R. 626

Israeli books cited:

[24] Barak, Vicarious Liability in Tort Law (1964)

Israeli articles cited:

[25] G. Tedeschi ‘Employer Immunity and the Liability of the Employee’, Mishpatim 13 (1983) 81.

[26] Englard ‘Half a Jubilee to the Civil Torts Ordinance – Problems and Trends’ Mishpatim 5 (1973-1974) 564.

[27] D. Freedman ‘The Law of Property and the Law of Fault’ The Sussman Book (1984) 241.

[28] Gilad ‘Forty Years of Israeli Law – Chapters in Tort Law’ Mishpatim 19 (1980) 647.

[29] D. Mor ‘Liability for Defective Products – Policy Considerations’ Iyunei Mishpat 6 (1978).

[30] Y. Bahat (Buchhalter) ‘Dual Vicarious Liability for the Acts of an Employee – As of When?’ Iyunei Mishpat 4 (1975) 478.

Foreign books cited:

R.P.A. Douglas, G.K. Geen, The Law of Harbours and Pilotage (London, 4th ed., 1993).
A.L. Parks, E.V. Cattell, The Law of Tug, Tow and Pilotage (London, 3rd ed., 1994).
G. Gilmore, C.L. Black, The Law of Admiralty (New York, 2nd ed., 1975).
C. Hill, Maritime Law (London, 4th ed., 1995).
G.K. Geen, R.P.A. Douglas, The Law of Pilotage (London, 2nd ed., 1983).
T.J. Schoenbaum, Admiralty and Maritime Law (Minnesota, 2nd ed., 1994).
R.G. Marsden, On Collisions at Sea (London, 12th ed., S. Gault and others (eds.), 1998).

Foreign articles cited:

G.C. Stephenson “A Pilot is a Pilot: Compulsory Pilots – Vessel Owner’s Responsibilities for Intervention and Personal Injury” 70 Tulane L. Rev. (1995-1996) 633.

Other:

70 Am. Jur. 2d (Rochester and San Francisco, 1987).

For the appellant—Ilan Orli.

For the respondent—Shlomo Freedman.

JUDGMENT

Justice I. Zamir

The Questions

1. This appeal raises two fundamental questions as to the law which applies to pilotage of ships within the area of a port:

[a] Do the owners of a ship have a cause of action against the employer of a pilot (in fact, against the Ports and Railways Authority) who caused damage to a ship in the course of piloting within the area of a port?

[b] Assuming the answer is in the affirmative, how is the liability to be distributed among the owners of the ship and the pilot’s employer, if the damage was caused by the joint fault of the ship’s crew and the pilot.

The questions stem primarily from the Torts Caused by Ships in Pilotage Ordinance 1939 (hereinafter: “the Pilotage Ordinance”). And this is the language of the ordinance in its entirety, as it was originally (in its translation to Hebrew) and as it remained without amendment (even without a new version in Hebrew) from that day until today.

“An ordinance that imposes liability on a vessel’s owners and captains for damage caused as a result of pilotage in the ocean.

1. This ordinance shall be titled Torts Caused by Vessels in Pilotage Ordinance 1939.

2. Irrespective of what is said in any Ottoman law or any other law or ordinance, the owners or captain of any vessel in pilotage, whether the pilotage is compulsory or otherwise, will be liable for any loss or damage caused by the vessel or by an error in the navigation of the vessel.”

The Occurrence of the Damage

2. The damage in this case occurred to the ship Yaffo (hereinafter – “the Ship”) at the Ashdod Port (hereinafter – “the Port”) on September 8, 1979. That day the Ship entered the port carrying security equipment. Due to the type of cargo, the Ship had to be turned (in an elliptical motion) and tied to the dock with its bow pointing to the exit. This maneuver took place, as is customary, with the help of a pilot employed by the Ports and Railways Authority (hereinafter – “the Ports Authority” or “the Authority”). The pilot was assisted by two of the Authority’s tugboats, which stayed close to the bow and stern of the Ship. He boarded the Ship prior to its entry into the Port, and gave orders to the two tugboats and the Ship’s crew. The captain, together with the pilot, was on the navigation bridge of the Ship, and supervised the execution of the orders that the pilot gave to the Ship’s crew.

As the Ship approached the dock it became necessary to brake its advance. The braking was achieved by activating the motors against the direction of the sail. The speed of braking was determined by the pilot, in accordance with the distance of the Ship from the dock. Reports as to the distance were sent to the pilot from two sources: the one source, the workers of the Ports Authority, some of whom waited for the Ship on the dock and some of whom drove the tugboats; the second source, the Ship’s captain, based on reporting that he received from the first officer of the Ship who was at the bow of the Ship.

At a certain stage in the maneuver the pilot ordered a speeding up of the braking speed. Half a minute after that the pilot changed the order, and ordered a reduction in the speed of the braking. Suddenly the pilot received a report that the location of the Ship was at a distance of only 5 meters from the dock. This distance did not fit the Ship’s speed of advancement. Therefore, the pilot attempted to execute an emergency braking of the Ship. But this braking also did not succeed in stopping the Ship on time. The bow of the Ship collided with the dock. As a result of this collision the Ship and the dock were damaged.

The owner of the Ship, Zim Integrated Shipping Services, Ltd. (hereinafter – “Zim”), repaired the damage that was caused to the Ship, and subsequently demanded that the Ports Authority reimburse it for the cost of the repair. The reason for the demand was the negligence of the Authority and the negligence of the pilot for whose actions the Authority bears vicarious liability. After the Authority denied the request, Zim filed suit in the Haifa District Court (in 1986).

The Proceedings in the District Court

3. The Ports Authority defended itself from the suit with various claims. For the purpose of this appeal, it will suffice to mention four of the claims. First, the Ports Authority claimed that there was no negligence on the part of the pilot, as the insufficient braking speed was determined by the pilot on the basis of an erroneous report supplied by the first officer of the Ship as to the distance of the Ship from the dock. Second, in addition to the negligence of the first officer, the collision was caused by the negligence of the captain, who blindly adopted the guidance of the pilot to reduce the braking speed, and did not fulfill his duty to employ independent discretion when authorizing such an instruction. In this situation, according to the Authority’s claim, the relatively large contribution to the damage on the part of the first officer and the captain severed the causal link between the negligence of the pilot and the damage. Third, even if there was negligence on the part of the pilot, the vicarious liability for this negligence is placed on Zim, which was assisted by the pilot for the maneuver, and in this framework supervised (via the captain) his actions. Fourth, the law in Israel imposes strict liability on a ship’s owner for the damage caused to a ship or by a ship during the course of pilotage, whether the responsibility for the damage is placed on the ship or the ship’s crew or whether the responsibility is placed on another party. The source for this law, the Ports Authority explained, is to be found in the Pilotage Ordinance. See paragraph 1 supra.

4. Evidence as to the details of the event was brought before the District Court. After examining the evidence, the Court (Justice Strassberg-Cohen) decided to dismiss both the factual claims and the legal claims of the Ports Authority which countered its fundamental liability for the damage.

In the factual realm, the court found that the pilot played a part in causing the collision. It established that the pilot did not have a good reason to reduce the braking speed immediately after he decided, in light of the nearing of the Ship to the dock, to increase the braking speed. The pilot enabled the Ship to move at a faster speed than the speed that was necessitated by the distance of the Ship from the dock, and thereby contributed to its late stopping. The claim, that sees the pilot as one who only assists or advises the Ship’s crew, was also dismissed. The court ruled that during the course of the maneuver the pilot gave the Ship’s crew orders, and not advice, as to the speed of the Ship.

Despite these determinations, the District Court did not attribute full fault for the damage to the pilot. It attributed a portion of the fault to the Ship’s captain. According to the judgment, the captain’s fault stems from the fact that he refrained from intervening in an order that was given by the pilot to reduce the braking speed. The captain received a report as to the real distance of the Ship from the dock, both from the first officer of the Ship and from the people on shore. Therefore, he was capable, on the basis of the knowledge and qualifications that he had acquired, to deduce from these reports that the speed of advance that the pilot ordered is too high and may end in a collision. He even was capable of translating this conclusion to a practical result, as the necessary status within the ship of orders given by the pilot does not take the reins of command over the ship out of the captain’s hands, which includes the ability to fix or cancel a mistaken command which is directed from the pilot to the ship’s crew.

After weighing the pilot’s fault against the captain’s fault, the District Court decided to impose two thirds of the liability for the damage on the pilot, and the remaining third on the captain. The court translated this liability to the vicarious liability of the employers of the pilot and of the captain, and accordingly attributed the liability of the pilot to the Ports Authority and the liability of the captain to Zim. The practical ramification of this distribution is that Zim’s suit against the Ports Authority was successful only in part, such that the Ports Authority was required to pay Zim only two thirds of the cost of repair of the Ship.

5. To reach this result the District Court had to overcome another claim of the Ports Authority. This is the claim which attributes liability for the entire damage to Zim, not based on the regular principles of Tort Law, but by power of a special law, which is expressed in the Pilotage Ordinance, according to which the owners of a ship bear liability for any damage that is caused in the course of the pilotage of the ship. See supra paragraph 1. The court accepted the Authority’s claim that the liability of a ship owner according to the Pilotage Ordinance is strict, but dismissed the claim that such strict liability prevents the suit of the owners against those who damaged the ship. It explained this by the fact that strict liability according to the Pilotage Ordinance adds a cause of action, but does not detract from existing causes of action. It was intended to make it easier for one who suffered damage from a ship during the course of pilotage, and to enable him to defray his full damages from the ship, without having to get into the distribution of liability between the ship’s crew and the pilot. However, at the same time, all the other causes of action which emerge in the framework of the general law due to the occurrence of the damage continue to exist, whether to the benefit of the injured party against the tortfeasor, or whether to the benefit of the one tortfeasor against other tortfeasors. On the basis of this determination the Court concluded that the Pilotage Ordinance does not detract from the right to sue which Zim has vis-à-vis the Ports Authority for the damage caused to the Ship. This right, said the District Court, is founded in the general principles of Tort Law, as they were established in the Torts Ordinance [New Version], and the Pilotage Ordinance does not gnaw away at this right at all.

The Appeal

6. The Ports Authority is appealing the judgment. In the original appeal it challenged the determinations of the District Court on all fronts, both the factual front and the legal front. Later, in the course of hearing the appeal, the dispute was narrowed. The Ports Authority agreed to withdraw its reservations against the factual findings included in the judgment. It also agreed with Zim, in order to simplify the proceedings, that the negligent conduct of the pilot and the captain was equal.

7. After removing the factual obstacles from the pathway of the appeal, only the legal claims of the Ports Authority against the judgment of the District Court remained. The claims are concentrated on these issues: first, the Pilotage Ordinance; second, the status of a pilot who is on a ship. These issues, although they differ from one another, are tied to one another. The Ports Authority does not accept the construction that the District Court gave to the Pilotage Ordinance, primarily because it disagrees as to the way in which the District Court conceived of the relationship between the owner of the ship, the captain and the pilot. It does not agree with the approach of the District Court, which sees the primary purpose of the Pilotage Ordinance to alleviate matters for a third party who suffers damage from a ship in pilotage, but rather is of the view that the primary purpose of the ordinance is to encourage the captain of a ship to intervene in mistaken decisions of a pilot and thereby to lessen the dangers posed by pilotage. The duty placed on the captain to supervise the pilot, stems, in the opinion of the Ports Authority, from the division of roles between the two, in the framework of which the pilot advises the captain, and the captain alone carries command responsibility. According to the Authority’s claim, recognition of the existence of a cause of action in favor of a ship, outside of the Pilotage Ordinance, will undermine the duty of supervision placed on the captain.

This and more. According to the Authority’s claim, to the extent that it is a matter of the tort of negligence (from which the District Court drew the liability of the Ports Authority vis-à-vis the Ship), it is not even necessary to go as far as the Pilotage Ordinance in order to deny the liability of the pilot toward the ship owner. Since the tort of negligence is based on the existence of a duty of care, and in consideration of the hierarchical distribution of roles between the captain and the pilot, it is not proper to impose on the pilot a duty of care toward the ship owner. Such a duty will not encourage the captain to prevent damage during the course of pilotage and will erode discipline on the ship, in the face of foreseeable conflicts over authority between the pilot and the captain.

The Ports Authority claims, alternatively, that even if a duty of care was imposed on the pilot toward the ship owner, such a duty would not have the power to justify the result reached by the District Court. This is so, first, because vicarious liability for negligence of the pilot during the course of the pilotage is imposed on the ship owner and not on the employer of the pilot; second, since the increased duty of care of the captain increases his degree of liability, as compared with the degree of liability of the pilot, to the point of severing the causal connection between the negligence of the pilot and the damage; third, because the increased duty of care of the captain, must, at the very least, increase the liability of the captain, and impose the majority of the damages on him and not the pilot.

8. Given the importance of a determination on these claims, which in part are coming up in this Court for the first time, the judges on the original panel considering the appeal decided to continue the proceedings before an expanded panel of judges.

9. The cornerstone in the appeal of the Ports Authority is the claim as to the status of the pilot in the relationship between the ship owner, the captain and the pilot. This claim may also have ramifications as to the construction of the Pilotage Ordinance. Therefore, we will clarify it first. For this purpose it is appropriate to first clarify the essence of pilotage and the law that applies to it.

Pilotage

10. Pilotage was intended to assist in the movement of vessels in narrow, closed, or winding waterways. Vessels may end up in such a path in the course of sailing (for example in straits, a channel or river) and is bound to find itself in such a path at the beginning of its sail or at its conclusion, when it sets sail from the port or is about to anchor in it. In fact, pilotage in a port is more common than pilotage in other places. In many countries, including Israel, pilotage only takes place in a port. This being the case, we will limit ourselves to pilotage in a port.

The area of a port poses before a vessel, especially a large vessel, dangers unlike those in sailing in open waters: breaking waves, shoals, palisades, wharfs, other vessels, shallow waters, low tide, and more. The success of the maneuver which is executed in these conditions is very much dependent on recognizing the territorial and weather conditions particular to one port or another. As a result, the permanent crew of a vessel does not have sufficient knowledge and ability to cope with the particular dangers of a given port. In many cases, the permanent crew is also lacking sufficient knowledge as to the work patterns and rules of behavior particular to a port. Therefore, the permanent crew requires help from a skilled agent, who has proficiency in the facts that are particular to the port. Ostensibly, such assistance can be given to vessels as it is given to aircraft, via the transmission of data and guidance from ashore. However, in fact, this method is not sufficient for successful pilotage of vessels. Unlike with aircraft, which is done entirely by the crew members, navigating a ship in a port is often done with the integration of people from within the ship and outside of it: the ship’s crew; operators of tugboats which are harnessed to the ship and which lead it within the port; people on shore who assist in tying the ship and undoing the tie; and more. The need to coordinate between all these entities, which requires special knowledge and training, with the ground conditions particular to the port and the requirement for maximum precision of the movement in it, does not enable making do with remote control of the ship. The safety of the pilotage requires direct and close guidance and supervision. That is the role of the pilot. The pilot who is generally a captain, who has undergone training in pilotage, is expert in data that is particular to the port. He stays on the ship from the moment of entry to the area of the port until it is anchored at the dock, and later from the beginning of the sail until leaving the borders of the port. During the course of the pilotage he checks the location and speed of the ship relative to other objects in the area of the port, stationary and mobile, and guides the ship’s crew, those in the tugboat and those on shore, accordingly, as to the alignment, timing, and speed of the ship. As to the essence of the pilotage and the roles of the pilot see further in CA 804/80 Sidaar Tanker Corporation v. Eilat-Ashkelon Pipeline Company Ltd., [1] at 410-417.

11. Pilotage duties and the status of the pilot are regulated in various countries by an extensive system of statutory law, including special laws. See, for example, in England, the Pilotage Act 1987. On the other hand, in Israel, there are no more than a few statutory provisions in these matters: the Pilotage Ordinance, which deals with liability for damage caused during pilotage, and two sections of the Ports Ordinance [New Version] 5731-1971, which establish a duty of licensing of pilots (section 13) and offenses of pilots (section 53). The rest of the matters which relate to pilotage were left to regulations. The first topic which was regulated in the regulations, still in the Mandate period, was the duty to be assisted by pilotage services in the area of the port. See the Haifa Port Regulations (January 7, 1933). The regulations have been improved from time to time and were applied to additional matters. Today, the sixth chapter of the Ports Regulations 5731-1971 is dedicated to pilotage. This chapter includes provisions as to competence of pilots, licensing of pilots, the duty of pilotage and clearing the way for a ship in pilotage. These provisions, like the rest of the provisions in the Ports Regulations, apply only in the realm of the Haifa Port, the Ashdod Port, and the Eilat Port. See the definition of “port” in regulation 1 of the Ports Regulations. The pilotage in other ports is regulated, to date, in previous regulations: Ports Regulations (Pilotage of Vessels in the Ports) 5724-1964, and Ports Regulations (Pilot Licensing) 5724-1964. See further, as to all the ports, regulation 29 to the Addendum to the Ports Regulations (Prevention of Collisions in the Sea) 5737-1977.

The arrangement that was established in the law and the regulations as to the duty of pilotage and the status of the pilot generated criticism. The criticism pointed to the fact that the arrangement is outdated and does not coordinate with the developments that have occurred in the field of maritime, that it leaves important questions without an answer and that as a result of the deficiencies in the legislation there is occasionally a lack of accord between law and practice.

The criticism led to the establishment of two committees for examining the law of pilotage in Israel. The first committee was appointed by the Minister of Transportation in the mid eighties and presented a report in 1990. It found deficiencies in the legislation which relates to pilotage, and recommended a series of amendments in various areas, including on the question of liability for damages in the course of pilotage. It was of the view, in contrast to the existing situation, that it would be proper to establish primary arrangements as to pilotage in primary legislation. But the recommendations of the committee were not implemented.

In 1994 the Minister of Transportation appointed a second committee to re-examine the same matter. This committee also found various topics requiring amendment, including liability of the pilot for damages in the course of pilotage. However, even though the committee’s recommendations were submitted to the Minister already in 1994, to date there has still not been a decision made in the Ministry of Transportation to adopt them.

The recommendations of the two committees were formulated after thorough and comprehensive work, including comparison of the laws in other countries. They point in a clear and convincing manner to the need to change the outdated law, which has gone almost entirely unchanged for decades, and to adapt it to the situation on the ground that has developed steadily. Freezing the law weighs down the activity in the ports and also, as the present case proves, determinations in conflicts which stem from pilotage.

The present case, which raises the question of liability for damage caused during the course of pilotage, exemplifies the need for change in the legislation. This question should have been answered in the framework of the Pilotage Ordinance from 1939 which deals, as its name indicates, with “torts caused by ships in pilotage”. However, in fact, the answer provided in the Ordinance to this question is partial and opaque. The shortcomings of the Pilotage Ordinance were described in the report of the two committees which examined the issue of pilotage. But despite the recommendations of those committees the Ordinance has not, to date, been amended. If the recommendations had fallen on attentive ears, it probably would have simplified and shortened the proceedings in the present case. However, as the recommendations have not been addressed, and the Pilotage Ordinance has been left unchanged, the court has been left with the task of clarifying what the Ordinance states and filling in what the Ordinance has left lacking as to liability for damage caused during the course of pilotage.

A preliminary question to this end, which has no answer in the legislation, relates to the essence of the relationship between the pilot and the captain of a ship.

Pilot and Captain

12. Pilotage places the captain of a ship in an unusual situation. The captain is the commander of the ship. His authority to give orders on the ship gives him responsibility for every act and omission on the ship. This responsibility assumes that the captain has the knowledge and ability in all areas of operation of the ship. Therefore, he can supervise what occurs on the ship, guide the ship’s crew and prevent errors by any person operating the ship.

This presumption is corrupted in the case of pilotage. The need for the services of an external pilot stems from the inability of the ship’s crew, including the captain, to pilot the ship independently. As a result, a difficulty is created in subordinating the pilot to the command of the captain: since the pilot is more expert and more qualified than the captain in pilotage, whether and when is it to be required of the pilot to comply with commands given by the captain as relates to pilotage? Whether and when is it to be expected that the captain interfere in orders given by the pilot relating to pilotage?

These questions have been dealt with more than once by courts overseas. Generally, they have avoided the extreme position which imposes responsibility for the pilotage only on the pilot or only on the captain, and have defined the relationship between the captain and the pilot as a relationship of cooperation and reciprocity. In this type of relationship, the authority and responsibility for pilotage is divided between the captain and the pilot. However, the authority and responsibility for pilotage are not equally divided. The authority of the captain, and as a consequence his responsibility, need to take into consideration the priority that the pilot has in terms of the expertise that is required for pilotage. Therefore, the authority and responsibility of the captain must be limited to unusual circumstances. So too, the authority and responsibility of the pilot, while justified in terms of the expertise required for pilotage, must take into account the special status of the captain as the commander of the ship. As the commander of the ship the captain has close familiarity with the ship’s crew and the ship’s systems, and it gives him information the pilot does not have as to the technical and human abilities and limitations of the ship, which may influence executing the pilotage. Therefore the authority and responsibility of the pilot is to be limited to circumstances which do not jeopardize the command status of the captain and do not ignore the special knowledge and experience he has regarding the ship. The right integration of the various considerations leaves the pilot a wide range of discretion in piloting the ship, and with that preserves the captain’s ability to intervene in this discretion in unusual cases, in which the behavior or decision of the pilot appear to the captain to be dangerous or especially erroneous. In any case, even if the captain decides not to interfere in a decision made by the pilot, he still must alertly follow the pilot’s functioning, and pass on to him any information necessary to ensure that the ship’s crew fulfills the pilot’s orders and draw the pilot’s attention to any mistake in pilotage. This was the approach of the courts in England and the United States already in the 19th century, and this is also the accepted approach in various countries in case law and legislation, until today.

(See R.P.A. Douglas & G.K.Geen, The Law of Harbours and Pilotage (London, 4th ed., 1993) 199-220[31]; A.L. Parks & E. V. Cattell, The Law of Tug, Tow and Pilotage (London, 3rd ed., 1994)[32] 1008-1010; G. Gilmore & C.L. Black The Law of Admiralty (New York, 2nd ed., 1975) [33] 597-598; C. Hill Maritime Law (London, 4th ed., 1995) [34] 512; G.C. Stephenson ‘A Pilot is a Pilot: Compulsory Pilots - Vessel Owner’s Responsibilities for Intervention and Personal Injury’ [38] 633, 635-636.)

13. The right reserved to the captain to intervene in decisions of the pilot must be used with great restraint and care. There are two reasons for this. The first reason is the proficiency of the pilot. For this reason the captain must exercise extra caution before deciding to give preference to his opinion over the opinion of the pilot, all the more so when he seeks to take the piloting reins from the pilot and pilot the ship himself. The second reason lies in the confusion that contradictory commands sow among the ship’s crew. A central condition for the success of the operation of the ship, including pilotage, is the certainty of the ship’s crew as to the source authorized to give commands on the ship. Interference by the captain in the pilot’s orders may sabotage this certainty.

With that, in extreme cases, the captain’s right to intervene not only justifies his intervention but may also demand such intervention, and imposes liability on the captain for failure to intervene.

14. Is the formula for the relationship between a captain and a pilot similar in Israel to the accepted formula in other countries? The District Court, after examining the law and hearing evidence answered this question in the affirmative and stated as follows:

“Pilotage is placed – both by law and in fact – in the hands of the pilot, the port person, and his status is not the status of an advisor alone. His orders are commands which the ship’s people follow while it is in pilotage. Despite this, this status does not neutralize the status and responsibility of the captain. The captain does not let the reins of command of the ship out of his hands, and he has in his power and in the knowledge he is favored with, enough to enable him to intervene when necessary.”

The Ports Authority, the appellant, does not accept this determination. In its view, the pilot does not have practical authority on the ship, and only has the status of advisor to the captain. It claims that this is the law not only in Israel but also outside of Israel.

But the Ports Authority errs as to the law outside of Israel. In many countries, in particular in common law countries, which serve as a central source of inspiration for pilotage law in Israel, the captain and the pilot divide between them authority and responsibility for pilotage. The Ports Authority relies, inter alia, on a report (from 1911) of a committee that was appointed in England in order to examine the subject of pilotage. One of the recommendations of the committee was that the law define the legal relationship between the captain and the pilot in a manner that will increase the authority of the captain. However, in contrast to the impression that the Ports Authority is creating, this recommendation was not accepted by the English legislature and was not implemented, not in the Pilotage Law of 1913 (that was legislated pursuant to the committee’s recommendations) and not in later incarnations of this law. (See Douglas and Green, paragraph 12 supra, [31] at pp. 162, 201-203). Moreover, even the committee in England did not seek to reach the situation the Ports Authority is headed toward, meaning expropriating control of the pilotage of the ship from the pilot. All that was recommended was to increase the (parallel) control of the captain over the pilotage, with the goal of encouraging him to intervene in the pilotage. (See G.K. Geen & R.P.A. Douglas, The Law of Pilotage (London, 2nd ed., 1983) [31] at 81).

Does the law in Israel deviate from the accepted approach throughout the world? The Ports Authority hangs on to two provisions in the Ports Regulations 5731-1971, which show, in its view, that in Israel the pilot is no more than an advisor to the captain. The first provision is in sub-regulation 47(a). The sub-regulation established the duty of pilotage in the port:

“A captain will not bring a vessel into the port and will not remove a vessel from the port, and will not tie mooring gear or detach it and will not execute any other maneuver with a vessel in the port, unless there is a pilot on the vessel with whom he is consulting.”

The Ports Authority emphasizes “consulting”. In its view, that is the essence of the relationship between the captain and the pilot.

The second provision is found in regulation 69. This regulation defines the duties of the captain during mooring at the port:

“A captain of a vessel will prevent any damage that may be caused to the dock or to any other structure in the port as a consequence of pilotage, mooring, or fettering of a vessel, or during loading or unloading.”

According to the claim of the Ports Authority imposing the duty to prevent damage during pilotage on the captain alone, and not on the pilot as well, means that the pilot is not in charge of pilotage, but only assists the captain with advice.

I believe that the Ports Authority has gone too far in the conclusions it draws from the two regulations. These regulations were not meant to regulate the relationship between the captain and the pilot. They deal with matters which have no connection to this relationship: the duty of a ship to be assisted by a pilot (regulation 47) and the duty of care of a captain toward the port (regulation 69). Therefore, it is not proper to build castles on these regulations regarding the relationship between the captain and the pilot. It is to be presumed that the formulator of the regulations, if indeed he wanted to establish anything as to this question would reveal his intention in a more detailed and explicit manner. In any event, the conclusions of the Ports Authority are not even necessitated by the regulations themselves. Sub-regulation 47(a) which deals with the advice that the captain receives from a pilot does not rule out the possibility that this advice has binding status on the ship. Indeed, there is nothing preventing the advice of the pilot having the character of a command, as long as the captain has decided not to make use of his (rare) authority to give a contradictory command. As Justice Berinson explained in CA 542/73 Cargo Ships “El Yam” Ltd. v. Ports Authority [2] at 178:

“In theory, even when a ship is in pilotage the pilot is merely the advisor of the captain and the final responsibility for piloting the ship does not fall out of the captain’s hands. In fact, during the normal course of events, he need not do more than listen to the ‘advice’ of the pilot and fulfill it.”

Justice Netanyahu said similar things in the Eilat – Ashkelon Pipeline case [1] at 406-407:

“He [the pilot] does not replace the captain but only advises him, although taking into consideration the proficiency unique to him, this is advice that is to be taken, but the captain remains responsible, and in unique and exceptional cases is entitled to act in contradiction of the advice.”

Even regulation 69 which requires the captain to prevent damage to the port’s structures, does not state that the pilot does not bear a similar duty. The duty of a pilot to prevent such damage does not require a legislated provision, as in Israel the pilot is a port employee, and thus is required to act with care with his employer’s property.

Moreover, as opposed to the regulations presented by the Ports Authority as a sign that the pilot does not have authority in pilotage of a ship, a series of laws and regulations can be pointed to which specifically support the status of the pilot as the holder of authority on the ship. Thus, for example, when the legislator had to, on a number of occasions, define the term “shipmaster”; he took care to exclude the pilot from the definition (which focuses on control or command of a vessel). See section 1of the Shipping (Sailors) Law 5733-1973; Section 1 of the Import and Export Ordinance [New Version] 5739-1979; section 1 of the Addition to the Law Extending the Emergency Regulations (Supervision of Sailing Vessels) (Consolidated Version) 5733-1973; regulation 1 of the Ports Regulations 5731-1971; regulation 1 of the Prevention of Contamination of Sea Water with Oil (Implementation of the Treaty) Regulations, 5747-1987. If the Ports Authority is correct in the claim that in any event the pilot does not have status to issue commands on a ship, why did the legislator find it necessary to exclude the pilot from the definition of a commander of a vessel? Additional proof against the Ports Authority is found in the Shipping (Sailors) Regulations 5736-1976. Regulation 22(a) of these regulations requires that one who serves as a shipmaster of a vessel will have certain certification. But regulation 23 establishes an exception to this. It says: “regulation 22(a) will not apply to the service of a pilot certified for vessels, when the vessel is required, by any law, including foreign law, to make use of his service, and the pilot has responsibility for navigating the vessel”. This is a clear statement, which attributes to the pilot, at least if it is compulsory for him to be on the ship, responsibility for pilotage.

15. Since the text of the legislation does not support the approach of the Ports Authority as to the status of the pilot, the question is to be asked whether there is a substantive reason which supports this approach. The Ports Authority presents two such reasons. First, it claims, recognition of the authority and responsibility of the pilot weakens the willingness of the captain to take precautionary measures during the pilotage and thereby increases the danger posed by the pilotage. I do not accept this claim. As has already been said, the authority and responsibility of the pilot do not come at the expense of the authority and responsibility of the captain, but only complement it. The captain, even when he brings a pilot aboard the ship, does not absolve himself of any duty of care which generally applies to the shipmaster of a ship, including the duty to monitor orders coming from the pilot and the duty to examine the degree of accord of the orders with the reality on the ground. The captain who is assisted by a pilot also does not absolve himself of the duty to intervene in a particularly dangerous or clearly erroneous decision of the pilot. Indeed, recognition of the authority and responsibility of the pilot may discourage the captain from intervening in borderline cases, when he is not convinced of the error of the pilot. But, such discouragement is intended and welcome, in light of the professional advantage of the pilot over the captain in all that relates to pilotage. See paragraph 12 supra.

The second reason is the fear of creating dual authority over the ship. Dual authority brings on contradictory commands, and contradictory commands destroy the certainty and discipline on the ship. However, the solution that the Ports Authority provides to prevent splitting the authority, meaning, denying the pilot’s authority, is not the only solution to be considered. Another possible solution is limiting the (residual) authority of the captain. Such limitation prevents contradictory commands during the routine course of pilotage, and at the same time ensures the intervention of the captain in exceptional cases, when the proximity or magnitude of the danger justifies the price entailed in contradictory commands. This solution is preferable to the solution of the Ports Authority, as it gives weight to the proficiency of the pilot and enables gleaning from it the maximum benefit during the normal course of events.

16. In conclusion, in Israel, as in other countries, the pilot, in particular if his services are imposed on the ship, is not just an advisor to the captain. He carries operational authority as to pilotage. The orders he gives obligate the ship’s crew. Excluding exceptional cases, they also obligate the captain. This being the case, the pilot bears responsibility for pilotage. This responsibility obligates him to execute the pilotage with care. The responsibility of the pilot does not stand alone. Alongside it there is the responsibility of the captain. This responsibility stems from the roles placed on the captain during the course of pilotage: to assist the pilot, to ensure that his orders are implemented, and to intervene in his decisions if they display special danger. The captain also must fulfill these roles with care.

17. The roles that are imposed during the course of pilotage, on the pilot on the one hand and the captain on the other hand, and in any case distribution of responsibility which is derived from these roles, do not necessarily match the degree of liability of the captain and the pilot for damage caused as a consequence of pilotage. In the area of pilotage, the translation of authority and responsibility to liability in torts is not simple, as the distribution of liability in torts involves additional considerations, which are not tied to the division of roles among those causing the damage. It would have been possible, in order to understand the significance of these considerations to hold a separate hearing on the question of the relative liability of the pilot and the captain. However the Pilotage Ordinance, which is a central source in Israel for establishing liability as a consequence of pilotage, does not take that route. It regulates the liability of the captain together with the liability of the ship owner, and imposes on both of them equal degrees of liability. The reason for this is rooted, it appears, in the vicarious liability of the ship owner for the actions of the captain. Since the liability is routed, in the end, to the ship owner, it is preferable to examine the distribution of liability from the perspective of the relationship between the pilot and the ship owner. We will now turn to that question.

Pilot and Ship Owner

18. The ship owner, as distinguished from the captain, is not on the ship at the time of pilotage, and does not have the necessary proficiency to execute the pilotage. Therefore, according to the general law, it is not possible to hold the ship owner personally liable for torts which occur during the course of the pilotage. On the other hand, the ship owner is the captain’s employer, and therefore has vicarious liability for torts that the captain carries out during the course of his employment. See section 13 of the Torts Ordinance [New Version]. See also section 36 Shipping (Sailors) Law 5733-1973. However, does the ship owner also have vicarious liability for torts carried out by the pilot?

Vicarious liability, according to the Torts Ordinance, is conditioned on the existence of an employment relationship or agency relationship between the tortfeasor and the one on whom liability is being imposed. See sections 13-14 of the Ordinance; CA 502/78 State of Israel v. Nisim [3] at 753-754. Does such a relationship exist between the ship owner and the pilot? When this question is examined against the background of the Torts Ordinance, we find the Ordinance relates differently to the two types of pilots: on the one hand, a pilot whose services the ship owner, himself or via the captain, uses on his own initiative or by his own free will (hereinafter – “voluntary pilot”); and on the other hand a pilot whose services the ship owner is required to use, and has no control over the choice of the pilot (hereinafter – “compulsory pilot”). The difference in relating to the two types of pilots is expressed in section 13(a)(2)(b) of the ordinance which absolves “one who was forced by law to use the services of a person the choice of whom is not given to him” from liability for the act or omission of that person. The language of the section is clearly limited to a compulsory worker and this includes a compulsory pilot, and does not encompass a voluntary pilot. The legislative history of the section points to the fact that its purpose was to apply the common law rule that absolves ship owners from vicarious liability for a compulsory pilot, in Israel. (See G. Tedeschi ‘Employer Immunity and the Liability of the Employee’, [25] at 94-96). Indeed, today, such immunity, which stems from the common law, is given to ship owners in the United States. (See Parks & Cattell [32](supra paragraph 12) at pp. 1023-1025; Gilmore & Black [33] (supra paragraph 12), at p. 520; 70 Am. Jur. 2d sec. 443 (1987) [39]).

Were section 13(a)(2)(b) of the Torts Ordinance to stand alone, it would, in accordance with a construction based on its text and purpose, be sufficient to almost entirely preclude the attribution of vicarious liability to ship owners for acts and omissions of pilots. This is so, because pilotage in Israel is primarily carried out based on a duty imposed in regulation 47 of the Ports Regulations 5731-1971 and the identity of the pilot is determined by the Ports Authority, the pilot’s employer. However, section 13(a)(2)(b) is not the only piece of legislation which deals with vicarious liability of a ship owner for the pilot. Another piece of legislation on the same matter is the Pilotage Ordinance. The Pilotage Ordinance obligates the ship owner (together with the captain) to pay for damage caused during the course of the pilotage of the Ship, even if the pilotage was compulsory. This obligation appears in section 2 of the Ordinance, which says as follows:

“Despite all that is said in any Ottoman law, or in any other law or ordinance, the owners or the captain of any ship in pilotage, whether the pilotage is by compulsion or whether in another way, will be responsible for all loss or damage caused by the ship or by an error in driving the ship.”

This provision, according to its opening text, establishes an exception to the regular law that should have applied to the liability of the ship owner for damages caused in pilotage. It also places vicarious liability on the ship owner for a tort caused by a compulsory pilot, although the regular tort law does not recognize such responsibility. Moreover, in 1939, when the Pilotage Ordinance was passed, the liability it placed on the ship owner and the captain was an innovation, not only for a compulsory pilot, but also for a voluntary pilot. The explanation for this was that, until 1947, which is the year of commencement of the Torts Ordinance, tort law (which was based on the Magella) did not recognize the principle of vicarious liability, and as a result vicarious liability could not be attributed to the ship owner even for a tort of a voluntary pilot. Imposing such vicarious liability required a special law, and the Pilotage Ordinance in fact created this law, without distinguishing between a compulsory pilot and a voluntary pilot, “regardless of what is said in any Ottoman law or any other law or any other ordinance.” This intention of the Pilotage Ordinance also emerges clearly from the explanatory notes to the proposed ordinance (Palestine Gazette 867 (16) p. 146) which state as follows:

“The ordinance was passed in order to also apply to cases where the guidance [meaning pilotage] is not compulsory, as in Palestine (the Land of Israel) the principle of ‘transferring responsibility to another’ according to which the ship owner or its captain is responsible for the act of the guide [pilot] is not recognized as there is not an explicit law to this end here.”

In the continuation of the explanatory notes it is stated that the ordinance is based on section 15 of the English Pilotage Law of 1913, which was in force at the time. And so, this section as well, according to its text as well as its legislative history, imposes vicarious liability for acts and omissions of a compulsory pilot on a ship owner: prior to the legislation of the article (in the year 1913) it was not possible to attribute to the ship owner anything other than vicarious liability for torts of a voluntary pilot, and the owners were immune from liability for the torts of a compulsory pilot. This immunity caused significant difficulties, and weighed heavily upon both the execution of the pilotage and managing legal proceedings related to pilotage. Due to these difficulties various countries agreed in 1910, in the Brussels International Convention for the Unification of Certain Rules with Respect to Collision of Vessels (of 1910) to rescind this immunity (article 5 of the treaty). A year later a national committee in England decided to adopt the approach of the treaty and change the pilotage law in England accordingly. This recommendation was adopted in section 15(1) of the Pilotage Law of 1913, which came into force in 1918. In accordance with the recommendation of the committee, the amendment of the law did not have the intention of imposing on the ship owner personal liability for the damage caused in pilotage, but only to rescind the immunity that owners had from vicarious liability for a compulsory pilot. The text of the amendment clearly reflects this intent, as it only equalizes, as to owner liability, compulsory pilotage to non-compulsory pilotage.

“... the owner or master of a vessel navigating under circumstances in which pilotage is compulsory shall be answerable for any loss or damage caused by the vessel or by any fault of the navigation of the vessel in the same manner as he would if pilotage were not compulsory.”

Indeed this is also how the courts in England, including the House of Lords, understood section 15(1) of the law from the year 1913. (See Workington Harbour and Dock Board v. Towerfield (Owners) [1950] 2 All. E. R. 414 at 433-432 (hereinafter: “Towerfield ”)[21]; The Esso Bernicia [1989] [22] at 58-60; a similar approach was taken by the Supreme Court of Australia, when it interpreted the relevant local law, which is phrased (with minor changes which are not substantive) like section 15(1) of the English law. (See Oceanic Crest Shipping Co. v. Pilbara Harbour Services Pty. Ltd. [23] at 644-645, 684-685).

Since the Mandatory Pilotage Ordinance was based, as the proposed ordinance shows us, on section 15(1) of the English law, there is an additional reason to see in this ordinance, as the courts in England saw in section 15(1), a source for vicarious liability of a ship owner for the tort of a pilot, even where he is a compulsory pilot. This conclusion has two glaring consequences. The first consequence is that the liability of the ship owner is conditioned upon the existence of liability on the part of the pilot. This consequence stems from the essence of vicarious liability, which does not form until after the personal liability of the employee or the agent has formed. [See CA 360/80 Michon LeMateh Ltd. v. Karnit-Fund for Compensation of Victims of Road Accidents [4] at 387; A. Barak, Vicarious Liability in Tort Law (1964)[24] 71.] The second consequence is that the liability of the ship owner does not cancel and does not reduce the liability of the pilot toward the injured party, but is only added to it. This consequence stems from section 11 of the Torts Ordinance, according to which the tortfeasor and the one bearing vicarious liability for the tortfeasor are seen as two who “are jointly liable for the same act as joint tortfeasors and can be sued for it jointly or severally.” (See CA 22/75 Edri v. Azizian [5] at 707-709; CA 502/78 [3](supra) at p. 761).

19. It can be said that the Pilotage Ordinance imposes on the ship owner vicarious liability for the tort of a compulsory pilot, even if the pilot is considered for this purpose a compulsory employee of the ship owner. If this is so, the Pilotage Ordinance, being a specific law, establishes an exception to the provision in section 13(a)(2)(b) of the Torts Ordinance, which is a general law. It is also possible to say that the vicarious liability of the ship owner for the tort of the pilot, by authority of the Pilotage Ordinance, is liability for the tort of an agent as opposed to an employee. If so, such liability is consistent with the provision in section 14 of the Torts Ordinance, which establishes vicarious liability of a principal for the tort of an agent, and does not exclude a compulsory agent from the rule. It appears that it is preferable, from among the two possibilities, to regard the pilot, for the purpose of the vicarious liability of the ship owner, as the agent of the ship owner and not the employee of the ship owner.

The El Yam Ruling

20. In opposition to the conclusion which stems from that which is said above that the Pilotage Ordinance imposes on the ship owner vicarious liability for the tort of the pilot, there is the judgment of this court in CA 542/73 Cargo Ships “El Yam” Ltd. v. The Ports Authority [6] (hereinafter – “El Yam”). In the El Yam case the Supreme Court dismissed the approach as to the vicarious liability of the ship owner, and ruled that the Pilotage Ordinance imposes on the ship owner absolute (personal) liability for any damage caused in pilotage. In that case the ship owner was sued to compensate the Ports Authority and the insurer of the Authority for damage that the ship caused during pilotage to a barge which belonged to the Authority. The ship owner sent a third party notice to the pilot as the cause of the damage, and to the Ports Authority as the employer of the pilot. The District Court, and following it the Supreme Court, presumed that the barge was not damaged due to the negligence of the ship’s owner, the captain or the pilot. Without fault on which to base the cause of action for the suit it was necessary, ostensibly, to dismiss the suit. However, despite this, the court allowed the suit. It saw in the Pilotage Ordinance a source for the liability of the ship owner even without fault on the part of the ship’s crew or the pilot. Justice Witkon, who wrote the main opinion, was aware of the fact that it is not necessary to interpret the Pilotage Ordinance in this way. He presented and analyzed (at pp. 175-177) the history of the Ordinance as well as the different interpretation that the parallel provision in England received, according to which there is no more in the law than attribution of vicarious liability. He even noted (at p. 177) that “I would therefore say that until now I would tend to accept the claim of the ship owner that the liability is not absolute but only vicarious”. However, this interim conclusion did not remain the final conclusion of the judgment. It was decided on the basis of another rationale which supports the opposing interpretation that Justice Witkon chose to prefer “not without hesitation”. And what is the rationale? That the phrasing of the Pilotage Ordinance (“responsible for any loss or damage”) is very similar to another statutory provision in England that regulates the liability for damages that a ship causes to the structures of the port: section 74 of the Harbours, Docks and Piers Clauses Act, 1847. That provision was interpreted in English case law as imposing on the ship owner strict liability for the damages to the port, even without fault. Lacking a hint in the language of the Pilotage Ordinance to the distinction between the liability established in it and the liability established in the English law of 1847, Justice Witkon preferred to compare the Ordinance to the English law, and to also see the Ordinance as imposing strict liability that does not require fault. Justices Berinson and Kister agreed with Justice Witkon. Justice Berinson admitted (at pp. 178-179) that the result of the judgment is “unusual” and may “occasionally bring about strange results”. He also was willing to presume that this result does not reflect the original intent of the legislator of the Pilotage Ordinance. Despite all this he decided to join the interpretation of Justice Witkon, for its accord with the language of the Ordinance, and taking into account the fact that it does not lead to a complete absurdity.

The ship’s owner, who was held liable for the damage caused to the barge, petitioned for a further hearing on the judgment. President Agranat denied the petition: FH 38/75 Cargo Ships “El Yam” Ltd. v. the Ports Authority [7]. He too was of the opinion that the interpretation that was given in the judgment to the Pilotage Ordinance is anchored in the text of the ordinance and was justified given the background of the English law from the year 1847.

It is worth noting that the historical tie and the textual similarity between the Pilotage Ordinance and section 15 of the English pilotage law from the year 1913 do not enable the reconciliation of the judgment in the El Yam case and English case law, which interpreted section 15 only as a source of vicarious liability. (See paragraph 18 supra). Indeed, Justice Witkon related (at p. 178) to the Pilotage Ordinance and to section 15 in one breath, and his determination as to the similarity to the English law from the year 1847 is applicable to the Pilotage Ordinance and section 15 equally. It turns out, therefore, that the judgment in the El Yam case also challenges the interpretation that was given by the House of Lords in England to section 15 of the English pilotage law.

Criticism of the Ruling

21. The ruling that was made in the El Yam case generated criticism. The criticism also came from this court: CA 804/80 Sidaar Tanker Corporation v. Eilat-Ashkelon Pipeline Company Ltd. [1] (hereinafter: “Eilat-Ashkelon Pipeline Company”). A company that held the rights to run the oil port in Ashkelon sued the owners and the operator of a ship for damage caused by the ship, with a pilot on board, to the port’s structures. This suit relied, inter alia, on the cause of action that was recognized in the El Yam case, meaning, the personal and strict liability of the ship owners in pilotage according to the Pilotage Ordinance. Use of this cause of action raised the question of the defenses which defendants have against such a suit. Since this question arose following the ruling in the El Yam case, which brought the law of strict liability of ship owners into the world, the Supreme Court considered it appropriate to precede and clarify this ruling. It did so as it had doubts as to the correctness of the ruling. In light of these doubts the panel of justices was expanded, and the parties, to which the Attorney General was joined, were invited to argue before the expanded panel on the question whether this ruling was to be deviated from. However, by the time the moment of decision on this question arrived, the original parties approached the Court and informed it that they were willing, for the purpose of resolving the appeal, to view the ruling in the El Yam case as binding. The Court adopted this agreement, and presumed as well, for the purpose of that case, that the ruling stands as is. On the basis of this presumption the court ruled that the strict liability does not deny the ship owner the defenses which are available to any person causing damage according to the Torts Ordinance. However, the court did not make do with this. It considered it appropriate, beyond that which was necessary, to point to the difficulties that the ruling in the El Yam case raises. Justice Netanyahu presented a number of queries as to the ruling, both in term of the substantive perspective and the historical perspective, and summarized (at p. 405) as follows:

“All these are questions of rationale, and all that I can answer is just this, that the text of the ordinance appeared to the judges who ruled in said CA 542/73 [2] so clear and unequivocal such that they preferred its literal interpretation as imposing a strict liability in light of the English case law as to section 74, although, as the hon. Justice Berinson has shown. . . this brings about strange results. . . this ruling prefers the literal interpretation not only over the historical interpretation but also over the interpretation according to the legislative aim.”

See also her words continued at p. 422-423.

Justice Barak also did not spare criticism from the ruling in the El Yam case. He noted (at p. 427) that the result that emerges

“is surprising, as generally in the shipping world the principle is followed according to which the liability (at least in a collision between ships) is based on fault, and only in exceptional cases (such as damage to public ports) is this deviated from. . . The Supreme Court was aware of the fact that its approach may ‘occasionally lead to strange results’ . . . and contain some confusion but considered itself compelled to reach this result, as ‘when the text itself is sufficiently clear, we can do no more than apply the law as is and allow the Israeli legislator to straighten things out if and to the extent that they are not pleased with it. . . For myself I am of the opinion that it is not to be said that the text is clear, if it does not fulfill a goal that was made clear to the interpreter.”

Later Justice Barak explained the unreasonableness in the distinction that the ruling in the El Yam case creates between a ship which does damage during the course of pilotage and a ship that does damage outside of the course of pilotage. He added:

“Indeed, the interpretation of the Supreme Court in CA 542/73 [2] is a difficult one. . . It is to be hoped that a way will be found to repair the situation, whether by way of changing case law or by way of legislation. Of the two, the latter is preferable, which can take account of special situations that require special regulation.”

This call, inasmuch as it was directed at the legislature, did not bear fruit. See supra paragraph 11. To date, there has not been before this court a good opportunity to re-examine the continued validity of the ruling in the El Yam case. This being so, this ruling is still valid. From time to time it created difficulties before the courts, but in all cases the case law has managed, in one way or another, to overcome the strict liability and, in addition, impose liability on one who is not the ship owner, while leaving the ruling intact. See CA 817/81 Ports Authority in Israel v. Zeno [7](hereinafter – “Zeno”): the strict liability according to the Ordinance does not prevent the owners of the ship from suing the Ports Authority and the Pilot for participation in the compensation that the owners were obligated to pay the third party that suffered damage from the ship; CC(Haifa) 786/87 Zim v. Ports Authority [17]: the strict liability according to the Ordinance does not rule out a suit by the ship owner against the pilot and his employer for damage that was caused to the ship in pilotage as a result of the negligence of the pilot. In the judgment the subject of this appeal as well, the District Court was able to bypass the ruling in the El Yam case: it saw in strict liability, which is imposed according to the ruling in the framework of the Pilotage Ordinance, an additional but not exclusive cause of action that the damage gives rise to. On the basis of this determination the District Court saw nothing to prevent the injured party (in this case the Ship) basing its suit against the tortfeasor (in this case the pilot and his employer) on a general tort in accordance with the Torts Ordinance (in this case the tort of negligence). See paragraph 5 supra.

22. In theory, the rationale of the District Court in this case, if it is correct, makes the need to examine the ruling in the El Yam case superfluous in this instance as well. However, Zim, the respondent in this appeal, while it supports the rationale of the District Court, does not miss out on the opportunity that has been created to examine the ruling. It claims that this court, as opposed to the District Court, has a better rationale for reaching the same conclusion that was reached by the District Court. How so? While the District Court was compelled to give deference to the ruling in the El Yam case, and therefore was forced to give a limiting interpretation, in a manner that does not block causes of action outside of the Pilotage Ordinance; on the other hand, this court does not have to pave its way between the challenges created by the ruling, but can eliminate the ruling from the road. This, according to Zim’s claim, is how the Court should rule. If this would occur, and the liability of the ship owner and the captain according to the Pilotage Ordinance will be as it was meant to be, vicarious liability for the pilot, it will no longer be necessary to invest efforts in order to bypass strict liability. The road to a suit by a ship owner against the pilot will then be paved and simple, like in any torts lawsuit of an employer or principal against an employee or an agent that caused damage.

A Change in the Ruling

23. Indeed, in my view, it would be appropriate for this court to take the path suggested by Zim. The ruling in the El Yam case was made some time ago. Already then the court noted that the path of historical construction of the Pilotage Ordinance, which apparently reflects the legislator’s intent, leads to a different ruling, meaning, that the responsibility imposed according to this ordinance on the owners and the captain of the Ship is not strict liability but vicarious liability for the pilot. Despite this the court preferred a literal interpretation which led it to impose strict liability. The court was aware that strict liability is “an unusual result” and that it may “at times lead to strange results”. And the court even presented these results explicitly. However, as the Court said, in the words of Justice Berinson (p. 179) “if the legislator chose to use a text whose literal translation is strict liability, and it is not entirely absurd, I am of the opinion that we must give it force.” See supra paragraph 20.

Ten years later, in the Eilat Ashkelon Pipeline Company case, the Supreme Court was willing to re-examine the validity of the ruling in El Yam. The panel of the court was even expanded for this purpose. In the end, the court did not examine the ruling as the parties expressed their willingness to accept the ruling as binding law. Despite this, the court did not refrain from sharp criticism of the ruling, and even recommended amending the law. See supra paragraph 21. Since then more than fifteen years have passed and the law has remained as it was.

Two government committees were appointed by the Minister of Transportation to examine the law in this matter: the first submitted a report in 1990; the second – in 1994. The two committees recommended changing the existing law regarding the damage caused during the course of pilotage. The recommendations of both committees have remained as unturned stones until today. See supra paragraph 11.

This time as well the court decided to expand the panel in the appeal. Indeed, the time has come to deal head-on with the criticism that has been voiced against the ruling in the El Yam case, including by this Court, and to examine this law at its core. Indeed, for just such a situation as this, the legislator exempted the Supreme Court from the principle of binding precedent.

24. The essence of the criticism that has been voiced against the ruling in the El Yam case relates to the results that stem from the ruling. Already in the El Yam case Justice Berinson said that this ruling may lead to strange results. That would be an understatement. The ruling leads to inappropriate results. Here, for example, are a number of results that stem from the strict liability that was imposed in the El Yam case on the owners and the captain of the ship for any damage caused by the ship during the course of pilotage.

First, strict liability such as this creates a dissonance between the law in Israel and the law in the rest of the world. It is an established rule in the maritime law of other countries, that liability for damage in which a ship is involved (apart from damage to port structures) is determined by the fault principle. (See Gilmore & Black (supra paragraph 12) [33] at p. 486; T.J Schoenbaum Admiralty and Maritime Law (Minnesota, 2nd ed., 1994) [36] at 714; Marsden, On Collisions at Sea (London, 12th ed., by S. Gault, 1997) [37] at 61-62).

Second, strict liability creates a distortion within the law in Israel. It is more severe, without good reason, specifically with the owners and the captain of a ship that is in pilotage. As for a ship that is not in pilotage, the law for the owners and captain is equal, in principle, to the law for any tortfeasor, whose liability is limited to the damage caused as a result of personal fault (in the category of negligence or in another category). Indeed, liability in torts generally requires fault. (See I. Englard ‘Half a Jubilee to the Civil Torts Ordinance – Problems and Trends’ [26] at 572; D. Freedman ‘The Law of Property and the Law of Fault’ [27] at 241.) What is the justification for deviating from this principle specifically when the ship is piloting its way in the port with the assistance of an external pilot? In order to answer this question it is necessary to turn to the considerations which normally justify liability without fault in torts: creating an unusual risk; a special need for deterrence; possibility of distributing damage using insurance; insufficient economic capacity of the person at fault for causing the damage; and the like. (See I. Gilad ‘Forty Years of Israeli Law – Chapters in Tort Law’ [28] at 649-650; D. Mor ‘Liability for Defective Products – Policy Considerations’ [29] at 78). However, these considerations cannot support distinguishing between a ship in pilotage and a ship in another situation. The pilotage does not create an unusual risk, but in fact reduces the risk that arises from the ship’s presence in the area of the port. The pilotage also does not change the situation in terms of insurance, as the circle of those potentially suffering damage from a ship in pilotage is similar to such a circle from a ship that is not in pilotage. Considerations of prevention and deterrence also do not justify relinquishing the fault requirement: the level of care of the pilot, which is a central tier in the safety of pilotage, will not increase as a result of imposing strict liability on the owners and the captain. On the other hand, the level of care of the captain during the course of pilotage which is expressed in the level of his supervision over the functioning of the pilot, will not be reduced if there is imposed on him (and on the ship owner) only vicarious liability for the pilot’s actions. Such vicarious liability provides sufficient security as well for the payment of compensation, as it frees the person suffering the damage from the dependence on the economic capacity of the pilot. Therefore, deterrence and collection needs also do not justify imposing strict liability on the owners and the captain.

Third, strict liability is not justified even according to the English law which the court relied on in the El Yam case. Indeed section 74 of the English law of 1847 imposes on the owners of a ship strict liability for any damage to a port’s structures. See supra paragraph 20. However, this unusual liability was established by the English law in order to provide special protection to the port which serves the public. Therefore, even if we presume that it is appropriate to adopt such liability in Israel, despite the absence of a law equivalent to the English law of 1847, the liability should have been limited to the circumstances in which it applies in England, meaning, the damage that the ship caused to a structure in the port. But the court in Israel broadened the strict liability to any type of damage caused by a ship in pilotage in any location.

This is only a partial list of inappropriate results which stem from the ruling in El Yam. (See further in the El Yam case, pp. 178-179, and the Eilat Ashkelon Pipeline Company case, at pp. 405, 427, 444).

25. These results are not a decree from above. They are not even a decree from the legislator. The legislator of the Mandate period, as stated, did not intend to impose strict liability in the Pilotage Ordinance, but rather, as in the parallel English law of 1913, to impose vicarious liability. See supra paragraph 18. The court in El Yam also admitted this. However, it preferred to rule in accordance with a literal interpretation, as though the text of the Ordinance left it no choice.

This is surprising. As already in those days, years ago, the court was not enslaved to literal interpretation. Generally, it avoided to the best of its ability a literal interpretation when such interpretation led it to a substantively inferior result. In particular when the text of the law was not unambiguous. And here, the text of the Pilotage Ordinance on the question of strict liability is not unambiguous: the Ordinance does not explicitly state that it imposes strict liability. See the version of the Ordinance supra paragraph 1. Even the English source, from which the court drew the strict liability, is not unambiguous. It is true, as the court noted that the House of Lords interpreted section 74 of the English law of 1847, which uses language similar to the language of the Pilotage Ordinance, in such a way that creates strict liability. See the Towerfield case, supra paragraph 18. However, even the House of Lords did not adhere to this interpretation. In the same judgment it interpreted the same language, this time in section 15 of the Pilotage Law of 1913, in a manner that creates vicarious liability and not strict liability. (See Ibid.) The House of Lords proved thereby that the language tolerates vicarious liability or strict liability in equal measure. What, if so, led the court in the El Yam case to specifically impose strict liability? It is possible that the reason is that in the El Yam case no fault was proven on the part of the pilot, the captain or the owners of the ship that caused the damage. See paragraph 20 supra. In such a situation, in which there was no fault on which to hang the damage, vicarious liability was not sufficient to compensate the person suffering the damage. It is possible, therefore, that the desire to compensate the injured party is what influenced the court in the El Yam case, in a conscious or unconscious manner, to choose the path of strict liability.

However, whether or not this is the case, the ruling in the El Yam case has been perceived as a sweeping law that imposes strict liability on the ship owner and the captain in general, even when there is fault, including when there is fault on the part of the pilot. (See Eilat Ashkelon Pipeline Company case and the Zeno case, supra paragraph 21.) This broad conception is the source of the problem. And what is the solution to the problem?

26. As is known, over the years a change has occurred in the interpretive policy of the Court. The keystone of construction, for some time now, is not literal construction but purposive construction. Meaning, to the extent allowed by the text of the law, the Court strives to interpret the law in such a manner that will advance the purpose of the law. The purpose of the law is to establish a good and logical rule, according to the matter under consideration, which will integrate with the broader network of legal rules and social values. It is also proper to interpret the Pilotage Ordinance accordingly.

If so, then what is the proper interpretation of the Pilotage Ordinance? The history of this ordinance teaches us clearly that the intent of the Ordinance, as was the intent of the parallel English law from 1913, was to impose liability for the fault of the pilot on the owners and the captain of the ship as vicarious liability. This and no more. There is nothing in the history of the English law or the Pilotage Ordinance which justifies imposing strict liability on the owners and the captain even in the absence of fault. See paragraph 18 supra. Moreover, the strict liability is also not justified from other aspects. It is not justified from the aspect of the purpose of the Ordinance, it leads to strange, if not inappropriate, results, and it is not consistent with the accepted rules as to liability for damage in similar contexts. See paragraph 24 supra. Therefore, there is no reason to say that the Pilotage Ordinance imposes strict liability on the owners or the captain for damage caused in the course of pilotage. It imposes vicarious liability on them and that is all.

However, it is to be asked whether this conclusion is consistent with the language of the Pilotage Ordinance which imposes dual liability: first, liability “for any loss or damage caused by the vessel” (hereinafter – “the first paragraph”); second, liability for “any loss or damage caused . . . by an error in the navigation of the vessel” (hereinafter – the “second paragraph”)? The second paragraph speaks explicitly of damage caused as a result of fault, while the first paragraph speaks in broad language of any damage, and not necessarily damage caused as a result of fault. Is it to be concluded from this that there is also a difference in the law as to the liability imposed on the owners and the captain, between damage caused as a result of fault in driving the ship (in which case vicarious liability is imposed) and damage caused without such fault (in which case strict liability is imposed)? The answer is negative, as the history of the Ordinance is one, as is the purpose and they lead to one clear conclusion: that the intent of the Ordinance is to impose only vicarious liability. However, if this is so, what is the explanation and what is the reason for the existence of two paragraphs one next to the other? The answer is that the dual language of the Pilotage Ordinance was copied from the dual language of the parallel law in England, meaning section 15 of the English Pilotage Law of 1913. And here, the courts in England, which interpreted the liability according to section 15 of the Pilotage Law as vicarious liability only, applied this interpretation not only to the second paragraph in this section (“for any loss or damage caused. . . by any fault of the navigation of the vessel”) which parallels the second paragraph in the Pilotage Ordinance, but also to the first paragraph in the section (“for any loss or damage caused by the vessel”), which parallels the first paragraph in the Pilotage Ordinance. See the language of the section and the interpretation of the section supra paragraph 18. Meaning, the dual language, as it was interpreted by the courts in England, is none other than a matter of format, which was intended to clarify or generalize, and not a matter of substance, and in any event it was not meant to distinguish between strict liability in one paragraph and vicarious liability in the second paragraph. Such is the law in England. There is no basis to presume that the legislator of the Mandate period, who copied the language from England, intended a different interpretation. Therefore, this is also the law in Israel. The conclusion is that absent personal liability for the damage on the part of the pilot or on the part of another person on the ship’s crew, there also is not vicarious liability of the owners or the captain of the ship and the Pilotage Ordinance does not impose any other liability on them.

It is worth noting that this conclusion is consistent with the judgment handed down by this court ten years before the ruling was made in the El Yam case: CA 469/64 Shiphart and Eskorant Genelsheft, A Ross and Kwo v. the Ports Authority in Israel [8] at 216-217.

27. This being so, in conclusion, the Pilotage Ordinance, according to its original intention at the time and according to its correct meaning today, does not impose on the owners and on the captain of the Ship strict liability, as was ruled many years ago in the El Yam case, but only vicarious liability. And it is one and the same whether, as in the language of the Ordinance, the damage was caused “by the vessel or by an error in the navigation of the vessel”. This is the law from here on in.

This being so, what is the inherent benefit in the Pilotage Ordinance? When the Pilotage Ordinance was passed, in 1939, it not only contained benefit it contained innovation. The innovation, which was copied from the English law, was in the very idea of vicarious liability, which was absorbed as a general principle in the Land of Israel only eight years later, with the coming into force of the Torts Ordinance in 1947. However, since then, of course, this innovation has dissipated. What, then, is left today of the Pilotage Ordinance.

The Pilotage Ordinance still has benefit. As according to section 13(a)(2)(b) of the Torts Ordinance, vicarious liability is not imposed on an employer “who was forced by law to use the services of a person the choice of whom is not given to him.” While the Pilotage Ordinance also imposes on the ship owner vicarious liability for damage caused by a compulsory pilot.

28. Subsequent to all of this, what is the result that emerges from this ruling in the case before us? In the case before us it is agreed that the pilot was negligent. Zim can sue the pilot for his negligence. For this purpose the Torts Ordinance is sufficient, and there is no need for the Pilotage Ordinance. However, Zim, of course, does not make do with the personal liability of the pilot. It wishes to impose liability on the Ports Authority as well, by force of the vicarious liability of the Authority for the pilot. This being so, the question arises whether the Ports Authority can defend itself from Zim’s lawsuit, with the claim that Zim itself bears vicarious liability for the negligence of the pilot. At this stage, therefore, the question of the vicarious liability of Zim for the negligence of the pilot according to section 2 of the Pilotage Ordinance, enters the picture.

But, prior to examining the question of the vicarious liability of Zim for the negligence of the pilot, it is appropriate to clarify the question of the relationship between the pilot and the Ports Authority. Does this relationship produce vicarious liability of the Ports Authority for the negligence of the pilot?

The Pilot and the Ports Authority

29. All agree that the pilot, when he was navigating the Ship, was an employee of the Ports Authority: he was bound to it by an employment contract, was integrated in its operations, received a salary and benefit from it, executed the pilotage with equipment supplied by it, and so on as to signs indicating an employment relationship. The status of the pilot as an employee of the Ports Authority even received recognition in the Ports Regulations 1971: they define (in regulation 37) the representative of the Ports Authority as an “employer” of the pilot in the ports of which the Authority is in charge. However, the existence of an employment relationship, in the standard sense, is not a sufficient condition, nor a necessary condition, for the existence of vicarious liability according to section 13 of the Torts Ordinance. In order for vicarious liability to exist, it is necessary that the tortfeasor be an “employee” of the liable one, in the unique sense attributed to this term in the ordinance. This sense requires, in accordance with the definition in section 2 of the ordinance, “complete control” of the employer as to the manner in which the employee conducts the work for him. As to the complete control test see, for example, CA 582/71 National Insurance Institute v. the Ports Authority [9] at 654-656; CA 502/78 State of Israel v. Nisim [3] 758-759. The Ports Authority claims that according to this test it does not bear vicarious liability for the pilot. And why? Because the pilot is subject, when he is executing the pilotage, to the control of the captain, as to the manner of execution, and in any case the Ports Authority, as the permanent employer of the pilot, does not have “complete control” of the execution of the pilotage. The Ports Authority supports this claim with references from other legal systems, which refused to recognize vicarious liability of the authority in charge of the port for the torts of a pilot, even where he was compulsory.

As did the Ports Authority, I too will discuss this claim in two stages. In the first stage I will examine the result that arises from the Torts Ordinance. After that I will examine the well-known impact of comparative law on this result.

30. As stated, the Ports Authority claims that it does not have “complete control” of the pilot, as is required by the Torts Ordinance, in order to formulate vicarious liability of an employer for an employee. I do not accept this claim. Let us presume, for the purposes of this discussion, that the captain has no authority over pilotage, and that the pilot controls the pilotage exclusively. In this situation is vicarious liability imposed on the Ports Authority for the damage that the pilot caused during pilotage? According to the logic of the Authority, the answer must be in the negative, as the authority does not have control, not even partial control, of the decisions the pilot makes during pilotage. Indeed, the Authority is entitled, and at times even must, draw conclusions against a pilot who shows lack of care, including ceasing to employ him or filing a complaint against him to the Pilot Licensing Committee, which was established in accordance with the sixth chapter of the Ports Regulations 5731-1971. However, it does not have authority to intervene in the professional discretion of the pilot during pilotage. Does this mean that it does not have “complete control” over the pilot as required for the purpose of vicarious liability? Certainly not. Countless judgments have imposed vicarious liability on employers for torts of professional employees such as, for example, vicarious liability of medical institutions for torts of doctors. What, if then is the proper test for the existence of complete control for the purpose of vicarious liability of an employer for an employee?

“The complete control of the manner of execution is expressed in the fact that the employer determines the organizational and technical framework in which the employee will work . . . the employee is not free to perform the work he is given as he wishes. He must perform it in the organizational and technical manner which is established by the employer. It is true, the employer is not permitted to interfere in the professional discretion of the employee, and is not permitted to instruct him as to how to use the tools and materials which are at his disposal, but he still is permitted to tell him which tools and materials to use” (A. Barak Vicarious Liability in Tort Law (1964) [24] 131. See also at pp. 132-135, 167).

See also CA 85/60 Water Works Company Ltd. v. Segel [10] at 1949; CA 502/78 [3] (paragraph 29 supra) at pp. 758-759.

According to this test, it is clear that the Ports Authority must bear vicarious liability for the pilot.

However, in addition to the vicarious liability of the Ports Authority for the pilot, by force of the status of the Authority as an employer, there is also, by force of the Pilotage Ordinance, vicarious liability of Zim for the pilot. Does the vicarious liability of Zim cancel out the vicarious liability of the Ports Authority? It would have been proper to examine this question seriously if the vicarious liability of Zim had also stemmed from employer status. In this situation it is to be asked whether it is proper to have vicarious liability of a permanent employer and of a temporary employer, simultaneously, for the tort of one employee. (As to this question see on the one hand, CA 197/58 Eylon v. Yadi [11], at 1460-1461; CA 54/64 Peretz v. Keren Kayemeth LeIsrael Ltd. [12] at 392; on the other hand see CA 502/78 [3] (paragraph 29 supra), at p. 761. See also Barak, (supra), at pp. 137-138, 152; Y. Bahat (Buchhalter) ‘Dual Vicarious Liability for the Acts of an Employee – As of When?’ [30]) However, in my view, vicarious liability of the ship owner for the pilot based on the Pilotage Ordinance does not stem from an employment relationship but from an agency relationship, see supra paragraph 19. Vicarious liability of a principal for an agent, as distinguished from vicarious liability of an employer for an employee, is not conditioned upon control by the principal of the agent, but in the substitution of the principal with the agent, and it does not impinge on the complete control that the Ports Authority, as the permanent employer of the pilot, has over the work of the pilot. Therefore, Zim’s vicarious liability does not prevent the vicarious liability of the Authority. Compare CA 502/78 [3] (supra paragraph 29) at p. 761.

31. The Ports Authority also seeks to release itself of vicarious liability for the negligence of the pilot on the basis of the law in other common law countries. Indeed, England, Canada, New-Zealand and Australia do not recognize vicarious liability of the entity in charge of the port for damage caused by the pilot. However, the law in these countries has grown against the background of special legal arrangements, different from the arrangements practiced in Israel. Inter alia, the body in charge of the port in these countries is not authorized in pilotage, but pilotage is the independent business of the pilot, while in Israel, as has been established in section 24(a) of the Ports and Railways Authority Act, “The Authority is permitted to work, whether on its own or via others, in any service provided at the port,” and the pilotage services are included in this. Detailed comparison among the legal arrangements common in those countries and the legal arrangements common in Israel would require a long and detailed discussion, and I do not see fit to lengthen and complicate matters further, when they are already complex and exhausting. Therefore, I will say only this, the different background to the laws that apply in the matter at hand, in Israel on the one hand and in other countries on the other, very much weakens the weight that is to be given to comparative law. I will say further that there are also common law countries that recognize vicarious liability of the entity in charge of the port for the damage caused by the pilot. (See, as to the United States, United States v. Port of Portland, 147 F. 865 (1906)[18]; City of Long Beach v. American President Lines, 223 F.2d 853 (9th Cir., 1955)[19]; National Development Company v. City of Long Beach, 187 F.Supp. 109 (1960)[20]; 70 Am.Jur. 2d sec. 443 (1987) [39]). Therefore, comparative law cannot change the conclusion that the Ports Authority bears vicarious liability for the pilot.

However, since Zim also bears vicarious liability for the pilot, the question arises as to the distribution of liability between the pilot, the Ports Authority and Zim. In order to answer that question we will now examine the relationship between the ship owner and the Ports Authority.

The Ship Owner and the Ports Authority

32. The joining of the ship owner and the Ports Authority in vicarious liability for the pilot means that each one of them carries liability together with the pilot. As a result, one who was injured by the pilot can sue the pilot, the ship owner, and the Authority, whether jointly or severally. See Torts Ordinance section 11 and section 84(a). (See also CA 22/75 Edri v. Azizian [5] at 709-710; FH 15/88 Melekh v. Kurhauser [13] at 103.)

The joint liability of the pilot, the ship owner and the Ports Authority frees the party suffering damage from dealing with distribution of liability between the three responsible parties. Distribution of liability between the three only comes up in the internal relationships between them. Generally, from a practical standpoint, there is importance to the distribution of liability between these two: the ship owner and the Ports Authority. What, if so, is the distribution of liability between these two? Like in any case of joint tortfeasors, here too the court must, according to section 84(b) of the Torts Ordinance, ensure distribution of liability “according to justice and integrity, taking into account the degree of responsibility of the person for the damage.” This section, as it has been understood in the case law, requires that the distribution be done on the basis of moral blame of each of those responsible in a proportional manner. See, for example, CA 1170/91 B’chor v. Yehiel [14] at 218. What, then, is the relation between the moral blame of the ship owner, who bears vicarious liability for the pilot and the moral blame of the Ports Authority which also bears vicarious liability for the pilot?

It is difficult to attribute moral blame for one who bears vicarious liability and therefore it is also difficult to distribute the liability on the basis of moral blame between two who bear vicarious liability for the same person. Thus, there is a temptation to distribute the liability between them equally. However, the question is, will equal distribution of liability between the Ports Authority and the ship owner achieve, in the words of section 84(b) of the Torts Ordinance, justice and integrity, taking into account the degree of responsibility of each of them for the damage.

33. There is a difference in the essence of the vicarious liability of the Ports Authority and the ship owner. The vicarious liability of the Ports Authority is the regular employer-employee vicarious liability. It is based on reasons which generally justify vicarious liability: distribution of the damage, ability to supervise the employee, the benefitting of the employer from the employee’s work, and more. On the other hand, the vicarious liability of the ship owner for the pilot is special vicarious liability: it does not stem from an employment relationship; it also does not stem from a common agency relationship; it stems from a temporary relationship which has been imposed on the ship owner by law. See supra paragraphs 18-19. Indeed, for these reasons the common law released ship owners from vicarious liability for a compulsory pilot, and for these reasons ship owners in the United States enjoy such a release until today. See supra paragraph 18. Why, therefore, did the English legislator (in 1913) and following it the legislator in the Land of Israel (in 1939), cancel the release from vicarious liability which the common law gave to ship owners in compulsory pilotage? The English legislator adopted the recommendations of the national committee (from 1911) which was established following the Brussels International Convention for the Unification of Certain Rules with Respect to Collision of Vessels (of 1910). Therefore, we can learn about the considerations of the English legislator from the considerations of the committee and the treaty. These considerations, as emerges from the legal literature were two:

[a] The legislator sought to make it easier for a third party, who suffered damage from a pilot, to be compensated for the damage. As the pilots in England operated (until 1987) as independent contractors, and the Port Authority was not responsible for their actions, it was important for the person suffering damage that liability for the damage be imposed on the ship owner. However, a lawsuit against the ship owner was liable to encounter difficulties, based on the need to point to the fault of the ship owner or the captain. In many cases the ship owner would defend himself against such a lawsuit by redirecting the fault onto the pilot; the pilot would redirect the fault to the captain; and the person suffering damage would have difficulty determining where the fault lay, and was even likely to leave the proceedings empty-handed. Therefore the law came and established that the person suffering damage was entitled to sue the ship owner, by way of vicarious liability, for compensation of damage caused by the fault of the pilot. See Douglas and Green (paragraph 12 supra) [31] at p. 199.

[b] The legislator sought to increase the safety of pilotage. Prior to amending the law, the captain did not have a good incentive to follow the course of the pilotage and supervise the pilot’s work, as there was no concern that the captain or the ship owner would be held liable for damage that the pilot was at fault for. The opposite: it was specifically the involvement of the captain in pilotage that would expose him (and the ship owner) to liability for such damage. However, it is clear that the involvement of the captain in pilotage advances the safety of the pilotage. See G.K. Geen & R.P.A. Douglas the Law of Pilotage (London, 2nd ed., 1983) [35] at 81.

In light of the historical background of the Pilotage Ordinance, it is appropriate to say that these two considerations were the considerations that were also at the basis of the vicarious liability of the ship owner (and of the captain) for a pilot in Israel.

But these considerations which are sufficient to impose on the ship owner liability toward the person suffering damage for damage caused by the pilot, should not necessarily determine the distribution of liability for damage between the ship owner and the Ports Authority. As, in terms of the person suffering damage, after he is ensured that he will be able to receive the compensation he is entitled to from the ship owner, it is not his concern whether and how the ship owner shares liability with the Ports Authority. For the purpose of distribution of liability between the ship owner and the Ports Authority for damage caused by the pilot, it is to be remembered that according to the regular rules of the Torts Ordinance, the ship owner did not need to bear any liability for damage caused by compulsory pilotage; the liability imposed on the ship owner by the Pilotage Ordinance does not come to exempt the Ports Authority from liability, but to benefit the person suffering damage; as in general there is no substantive reason to exempt the Ports Authority from the vicarious liability imposed on it as with any employer, or to reduce the liability imposed on it, for damage caused by its employee, meaning, by the pilot.

Even in terms of the safety of the pilotage, there is no reason to determine, in the relationship between the ship owner and the Ports Authority that the ship owner needs to bear part of the damage caused by the pilot. In any case, as has already been stated, the captain must supervise the pilot, and if he is negligent in his supervision he bears direct liability for the damage, and the ship owner bears vicarious liability, according to the degree of responsibility of the captain. See supra paragraphs 14-16.

What if then is the conclusion as to the distribution of liability between the Ports Authority and the ship owner in light of section 84(b) of the Torts Ordinance, which establishes that the court will determine the distribution according to justice and integrity taking into consideration the degree of responsibility for the damage? The conclusion is that in general the responsibility for the damage caused by the pilot will be imposed, in the relationship between the Ports Authority and the ship owner, fully on the Ports Authority.

This is generally the case, but not necessarily always so. The question as to what is required based on justice and integrity taking into consideration the degree of responsibility for the damage is also dependent on the circumstances of the case. Therefore, the possibility is not to be ruled out that in special circumstances the court will have a special reason to deviate from the rule, and to impose on the ship owner some of the responsibility for the damage that was caused by the pilot.

34. In the case before us Zim sued the Ports Authority for damage caused to Zim itself. To the extent that the damage was caused by the fault of the pilot, Zim can sue the Ports Authority, which bears vicarious liability for the pilot, for compensation of Zim for this damage. In theory, the Ports Authority can go back to Zim, which also bears vicarious liability for the pilot in accordance with the Pilotage Ordinance, and demand distribution of liability for the damage that was caused by the pilot between the Ports Authority and Zim. However, as said, in the relationship between the Ports Authority and Zim, the liability for the damage caused by the pilot is generally imposed on the Ports Authority only. Therefore, and absent a special reason to impose some of the liability on Zim, the Ports Authority cannot build on the claim that Zim also bears vicarious liability for the pilot, in order to reduce some of the compensation that it is liable for in light of its vicarious liability for the pilot.

Under these circumstances the Ports Authority is left with only two claims against Zim: the first, that the damage to the Ship was not caused by the negligence of the pilot; and the second, that the damage to the Ship, even if it was caused as a result of the negligence of the pilot, was also caused by the negligence of the captain, and therefore the compensation that the Ports Authority must pay Zim is to be reduced according to the proportion of the negligence of the captain.

The Negligence of the Pilot and the Captain

35. The District Court determined that the Ship was damaged as a result of the joint negligence of the pilot and the captain. The court attributed two-thirds of the damage to the pilot and one third to the captain. See supra paragraph 4. In the framework of the appeal hearing the Ports Authority and Zim agreed that the captain and the pilot were equally negligent, and that the negligent conduct of the captain and the pilot is what caused the Ship to hit the dock. See paragraph 6 supra. This is sufficient to determine that two of the elements of the tort of negligence in accordance with section 35 of the Torts Ordinance were fulfilled regarding the captain and the pilot: “negligent conduct” and “damage”. However, this still is not sufficient to impose personal liability in negligence on the captain and the pilot. In order for joint negligent conduct that caused damage to lead to joint liability in negligence, it is necessary according to section 35 of the Torts Ordinance, that the two people whose conduct was negligent have a duty of care toward the person suffering the damage. Did the negligent conduct of the captain and the pilot breach a duty of care of each of them toward Zim.

The central pillar of the duty of care, as stated in section 36 of the Torts Ordinance, is foreseeability. The ability to foresee brings with it, generally, a duty to foresee. In order to deviate from this rule, special considerations of legal policy must exist against imposition of the duty. See, for example, CA 145/80 Waknin v. Bet Shemesh Local Council [15]; CA 243/83 Jerusalem Municipality v. Gordon [16].

In the case before us the Ship collided with the dock as a result of the speed of braking which was not coordinated with the distance of the Ship from the dock. The District Court determined, as a factual matter, that the captain and pilot could have known, and perhaps even knew in fact, what the distance was, what the speed was, and what was the foreseeable result of an error in coordinating the speed with the distance. See supra paragraph 4. Zim never challenged this determination. As said, the Ports Authority also now reconciles itself to this result. See paragraph 6 supra. Therefore, there is no reason not to affirm it. The consequence is that the captain and the pilot were able to foresee the occurrence of the damage. This concludes the factual portion of the negligence.

The District Court further determined that the captain and the pilot were not only able to foresee the occurrence of the damage but also should have foreseen its occurrence and taken precautionary measures to prevent it. The Ports Authority claims that the District Court erred when it applied such a duty to the pilot. See supra paragraph 7. However, as we have already stated, the Authority is mistaken: the law in Israel, as in the rest of the world, is that a pilot is responsible for pilotage along with the captain. See supra paragraphs 14-16.

The conclusion is that the joint negligent conduct of the captain and the pilot violated a joint duty of care of the captain and pilot, and this breach is what brought about the collision of the Ship with the dock. Absent contrary considerations, it is to be said that the joint duty of care is distributed equally between the captain and the pilot. Meaning, in light of the fact that the negligent conduct was equal and there was a single damage, the (personal) liability of the captain and the pilot for the negligence is also equal.

The Result

36. The result is that the Ports Authority alone is liable to Zim by vicarious liability for the pilot’s negligence. However, the pilot, were he to be sued to compensate Zim for the damage that was caused to the Ship, would be obligated, in light of the contributory negligence of the captain, for only half the damage. The same applies to the Ports Authority.

Accordingly, the appeal is to be partially affirmed in the sense that the Ports Authority must pay Zim for only half of the damage and not two thirds as the District Court ruled.

Orders to pay expenses and attorneys fees in the District Court will remain in force as ordered by the District Court.

Since adjustment of the amount of compensation stems from the parties’ agreement as to the degree of negligence that each party is liable for, while on the fundamental realm the claims of the Ports Authority were dismissed, the Authority must pay Zim’s court costs in this appeal in the total sum of NIS 30,000.

Vice-President S. Levin

I agree.

Justice T. Or

I agree.

Justice E. Mazza

I agree.

Justice M. Cheshin

I agree.

Decided as per the decision of Justice I. Zamir.

11 Tishrei 5761

October 10, 2000

Full opinion:

Ports and Railways Authority v. Zim Integrated Shipping Services, Ltd..pdf

Link to original Hebrew text of decision on official ISC website:

http://elyon1.court.gov.il/files/91/300/045/I02/91045300.i02.pdf

Ettinger Estate v. Jewish Quarter Company

Case/docket number:

CA 140/00

Date Decided:

Monday, March 15, 2004

Decision Type:

Appellate

Topics:

Negligence

Abstract:

Facts: The late Michael Ettinger died after falling into an unfenced pit at an archaeological site located near a playground in the Old City of Jerusalem. He was twelve years old. The appellants, his estate and family, sued the respondents for compensation in the District Court. The main issue considered in the Supreme Court on appeal was whether the estate was entitled to compensation for loss of the deceased’s earning capacity in the ‘lost years’ — the years of working life that the deceased lost because he died as a result of the respondents’ negligence. This issue had been considered more than twenty years earlier, in Estate of Sharon Gavriel v. Gavriel, where the majority held that legislation was required to allow an award of compensation for loss of earning capacity in the ‘lost years.’ But no legislation to this effect had been enacted in the interim.

A second issue that was considered in the appeal was whether the respondents should have been found liable to pay punitive damages.

Held: The time had come to reconsider the issue of compensation for loss of earning capacity in the ‘lost years.’ The Supreme Court held that:

Where a person suffers a reduction of life expectancy as a result of a tortious act, he is entitled to compensation for the loss of earning capacity in the ‘lost years.’

Where a person dies as a result of a tortious act, his claim to compensation for the loss of earning capacity in the ‘lost years’ passes to his estate. If the deceased has dependants who are awarded compensation for loss of support in the ‘lost years,’ this compensation is deducted from the compensation payable to the estate for loss of the deceased’s earning capacity in the ‘lost years,’ to prevent double liability being imposed on the tortfeasor.

The Supreme Court left undecided the question of whether Israeli courts have the power to award punitive damages, since the facts of this case did not warrant an award of punitive damages in any case.

Voting Justices:

Ettinger Estate v. Jewish Quarter Company.pdf

Primary Author

majority opinion

majority opinion

majority opinion

majority opinion

majority opinion

Full text of the opinion:

CA 140/00

CA 550/01

1. Estate of the late Michael Ettinger deceased

2. Chaya Ettinger

3. Yosef Ettinger

4. Yael Ettinger

1. Company for the Reconstruction and Development of the Jewish Quarter

2. Jerusalem Fund

3. Jerusalem Municipality

4. Reuven Shalom

5. Yitzhak Feitliss

6. Mordechai Borochov

The Supreme Court sitting as the Court of Civil Appeal

[15 March 2004]

Before President A. Barak, Vice-President T. Or and Justices E. Mazza, D. Dorner, E. Rivlin

Appeal on the judgment of the Jerusalem District Court (Justice Y. Adiel) on 18 November 1999 in CC 4/95.

A second issue that was considered in the appeal was whether the respondents should have been found liable to pay punitive damages.

Held: The time had come to reconsider the issue of compensation for loss of earning capacity in the ‘lost years.’ The Supreme Court held that:

Where a person suffers a reduction of life expectancy as a result of a tortious act, he is entitled to compensation for the loss of earning capacity in the ‘lost years.’

Appeal allowed in part.

Legislation cited:

Basic Law: Human Dignity and Liberty.

Enforcement Law, 5727-1967, s. 12.

Liability for Defective Products Law, 5740-1980.

Patents Law, 5627-1967, s. 183.

Penal Law, 5737-1977, ss. 304, 309(5).

Road Accident Victims Compensation Law, 5735-1975, ss. 4, 6.

Road Accident Victims Compensation (Calculation of Compensation for Non-Pecuniary Loss) Regulations, 5736-1976, r. 4.

Road Accident Victims Compensation (Periodic Payments) Regulations, 5738-1978, r. 3.

Torts Ordinance [New Version], ss. 19, 19(a), 19(b), 19(d), 76, 78, 78-81, 79, 80, 81(1).

Israeli Supreme Court cases cited:

[1] CA 295/81, Estate of Sharon Gavriel v. Gavriel [1982] IsrSC 36(4) 533.

[2] CA 22/49 Levy v. Mosaf [1950] IsrSC 4 558.

[3] CA 357/80, Naim v. Barda [1982] IsrSC 36(3) 762.

[4] FH 29/83, Sahar Insurance Co. Ltd v. Cahanka [1985] IsrSC 39(1), 833.

[5] CA 95/55 Salomon v. Adler [1955] IsrSC 9 1905.

[6] CA 116/81 Estate of Aharon Knafo v. Arnon Tussia-Cohen [1982] IsrSC 36(4) 580.

[7] CA 248/86 Estate of Lily Hananshwili v. Rotem Insurance Co. Ltd [1991] IsrSC 45(2) 529.

[8] CA 642/89 Estate of Meir Schneider v. Haifa Municipality [2002] IsrSC 56(1) 470.

[9] CA 4022/98 The Technion, Israel Technological Institute v. Twister, Takdin (SC) 99(2) 255.

[10] CA 110/86 Gevaram v. Heirs of the late Shalom Manjam [1988] IsrSC 42(2) 193.

[11] HCJ 693/91 Efrat v. Director of the Population Register at the Ministry of Interior [1993] IsrSC 47(1) 749.

[12] CA 2939/92 General Federation Medical Fund v. Rachman [1995] IsrSC 49(2) 369.

[13] CA 70/52 Grossman v. Roth [1952] IsrSC 6 1242.

[14] CA 79/65 Israel Steel Enterprises Ltd v. Malca [1965] IsrSC 19(2) 266.

[15] CA 5794/94 Ararat Insurance Co. Ltd v. Ben-Shevach [1997] IsrSC 51(3) 489

[16] CA 44/76 Atta Textile Co. Ltd v. Schwartz [1976] IsrSC 30(3) 785.

[17] CFH 7794/98 Ravid v. Clifford [2003] IsrSC 57(4) 721.

[18] CA 30/80 State of Israel v. Asher [1981] IsrSC 35(4) 788.

[19] CA 722/86 Youness v. Israel Car Insurance Pool [1989] IsrSC 43(3) 875.

[20] CA 541/63 Reches v. Hertzberg [1964] IsrSC 18(2) 120.

[21] CA 773/81 Estate of Robert Freilich v. State of Israel [1982] IsrSC 36(4) 816.

[22] CA 237/80 Barsheshet v. Hashash [1982] 36(1) 281.

[23] CA 141/89 Mahmoud v. Shamir Insurance Co. Ltd, Takdin (SC) 91(3) 1329.

[24] CA 384/74 Estate of David Azoulay v. Vulcan Casting Enterprises Ltd [1976] IsrSC 30(1) 374.

[25] CA 2376/93 Estate of Michal Kedar v. HaSneh Insurance Co. [1995] IsrSC 49(1) 594.

[26] CA 148/53 Penetz and Egged Operative Group Ltd v. Feldman [1955] IsrSC 9(3) 1711.

[27] CA 482/89 Estate of Sarah Abir v. Ferber [1993] IsrSC 47(3) 107.

[28] CA 506/82 Sontag v. Estate of David Mendelsohn [1986] IsrSC 40(3) 113.

[29] CA 64/89 Gabbai v. Lausanne [1994] IsrSC 48(4) 673.

[30] CA 206/87 General Federation Medical Fund v. Estate of Dr Meir Edison [1991] IsrSC 45(3) 72.

[31] FH 24/81 Honovitz v. Cohen [1984] IsrSC 38(1) 413.

[32] CA 32/60 Felixberg v. General Manager of the Railway [1960] IsrSC 14 1629.

[33] CA 778/83 Estate of Sarah Saidi v. Poor [1986] IsrSC 40(4) 628.

[34] CA 489/79 Eliyahu Insurance Co. Ltd v. Estate of Violet Tzaig [1981] IsrSC 35(2) 123.

[35] CA 5/84 Yehezkel v. Eliyahu Insurance Co. Ltd [1991] IsrSC 45(3) 374.

[36] CA 471/93 Estate of David Hyams v. Hyams, Takdin (SC) 97(2) 969.

[37] CA 1503/94 Israeli Phoenix Insurance Co. Ltd v. Estate of Baruch Berman, Takdin (SC) 96(2) 796.

[38] CA 154/70 Bida v. Rubin [1971] IsrSC 25(2) 43.

[39] CA 682/69 Hamudot v. Shapira [1970] IsrSC 24(1) 686.

[40] CA 501/84 Migdal Insurance Co. Ltd v. Miron [1988] IsrSC 42(2) 89.

[41] CA 610/75 Rotem v. Nof [1978] IsrSC 32(1) 799.

[42] CA 1299/92 Estate of Aliza Mor v. Rom [1996] IsrSC 50(1) 697.

[43] CA 541/88 Protection of Nature Society v. Estate of Ora Forman [1992] IsrSC 46(1) 133.

[44] CA 204/85 State of Israel v. Mizrahi [1988] IsrSC 42(2) 113.

[45] CA 587/87 Malca v. Aktin [1990] IsrSC 44(4) 168.

[46] CA 311/85 Efraimov v. Gabbai [1988] IsrSC 42(3) 191.

[47] CA 634/88 Attiya v. Zaguri [1991] IsrSC 45(1) 99.

[48] CA 209/53 Weizman v. Zucker [1954] IsrSC 8 1428.

[49] CA 685/79 Atrash v. Maalof [1982] IsrSC 36(1) 626.

[50] CA 335/59 Reichani v. Tzidki [1961] IsrSC 15 159.

[51] CA 326/88 Zimmerman v. Gavrielov [1992] IsrSC 46(1) 353.

[52] CA 142/89 Gamliel v. Oshiot Insurance Co. Ltd, Takdin (SC) 90(3) 683.

[53] CA 1977/97 Barzani v. Bezeq, the Israel Telecommunication Corp. Ltd [2001] IsrSC 55(4) 584.

[54] LCrimA 2976/01 Assaf v. State of Israel [2002] 56(3) 418.

[55] CA 216/54 Schneider v. Glick [1955] IsrSC 9 1331.

[56] CA 81/55 Kochavi v. Becker [1957] IsrSC 225.

[57] CA 277/55 Rabinowitz v. Sela [1958] IsrSC 12 1261.

[58] CA 30/72 Friedman v. Segal [1973] IsrSC 27(2) 225.

[59] CA 670/79 HaAretz Newspaper Publishing Ltd v. Mizrahi [1987] IsrSC 41(2) 169.

[60] CA 711/72 Meir v. Governors of the Jewish Agency for Israel [1974] IsrSC 28(1) 393.

[61] CA 3654/97 Kartin v. Ateret Securities (2000) Ltd [1999] IsrSC 53(3) 385.

[62] CA 372/65 Dehan v. Francis [1965] IsrSC 19(4) 192.

[63] CA 15/66 Shinar v. Hassan [1966] IsrSC 20(2) 455.

[64] CA 283/89 Municipality of Haifa v. Moskowitz [1993] IsrSC 47(2) 718.

[65] CA 235/78 Hornstein v. Ohavi [1979] IsrSC 33(1) 346.

[66] CA 184/80 Eigler v. HaMagen [1981] IsrSC 35(3) 815.

[67] CA 2801/96 El-Al Israel Airlines Ltd v. Yifrach [2001] IsrSC 55(1) 817.

[68] CA 675/82 Asadi v. Cohen, IsrSC 38(4) 449.

[69] CA 180/88 Ozeri v. Sarufi, Takdin (SC) 90(3) 606.

[70] CA 3843/90 Ohayon v. State of Israel, Ministry of Defence, Takdin (SC) 93(3) 428.

[71] CA 286/55 Wolfovitz v. Fisher [1957] IsrSC 11(1) 379.

[72] CA 402/75 Estate of Yisrael Mashiach v. Rosenblum [1976] IsrSC 30(3) 97.

[73] CA 2517/93 A v. Katahin, Takdin (SC) 94(2) 335.

[74] CA 6978/96 Amar v. General Federation Medical Fund [2001] IsrSC 55(1) 920.

[75] CA 2055/99 A v. Israel Chief Rabbinate, Takdin (SC) 2001(2) 240.

[76] CA 163/99 Estate of Diav Mizawi v. Dori Engineering Works Co. Ltd, Takdin (SC) 2000(1) 187.

[77] CA 5938/97 Peleg v. Tardiman, Takdin (SC) 2000(1) 187.

Israeli District Court cases cited:

[78] CC (TA) 1549/96 Levy v. Hadassah Medical Organization, Dinim (DC) 32(1) 622.

[79] CC (Hf) 1581/94 Hattib v. State of Israel, Dinim (DC) 32(7) 163.

American cases cited:

[80] Doe v. United States, 737 F. Supp. 155 (1990).

[81] Prairie Creek Coal Mining Co. v. Kittrell, 153 S.W. 89, 94 (1912).

[82] Littman v. Bell Telephone Co. of Pennsylvania, 315 Fa. 370, 172 A. 687 (1934).

[83] In re Joint Eastern & Southern District Asbestos Litigation, 726 F. Supp. 426 (1989).

[84] United States v. Carroll Towing Co., 159 F. 2d 169 (1947).

[85] Mclaughlin v. Chicago, Milwaukee, St. Paul & Pacific Ry. Co., 143 N. W. 2d 32 (1966).

[86] Morrison v. State, 516 P. 2d 402 (1973).

[87] Borcherding v. Eklund, 55 N.W.2d 643 (1952).

[88] Crecelius v. Gamble-Skogmo, Inc., 13 N.W. 2d 627 (1944).

[89] Burke v. United States, 605 F. Supp. 981 (1985).

[90] Fein v. Permanente Medical Group, 695 P.2d 665 (1985).

[91] Sea-Land Services, Inc. v. Gaudet, 414 U.S. 573 (1974).

[92] Ehlinger v. State, 237 N.W.2d 784 (1976).

[93] Hughes v. Chicago, R.I. & P. Ry. Co., 129 N.W. 956 (1911).

[94] Olivier v. Houghton County St. Ry., 101 N. W. 530 (1904).

[95] Hindmarsh v. Sulpho Saline Bath Co., 187 N.A. 806 (1922).

[96] Balmer v. Dilley, 502 P. 2d 456 (1972).

[97] Runyon v. District of Columbia, 463 F. 2d 1319 (1972).

[98] Weaver v. Ford Motor Co., 382 F. Supp. 1068 (1974).

[99] Hope v. Seahorse, Inc., 651 F. Supp. 976 (1986).

[100] Murray v. Philadelphia Transp. Co., 58 A. 2d 323 (1948).

[101] Ferne v. Chadderton, 69 A. 2d 104 (1949).

[102] Greene v. Texeira, 505 P. 2d 1169 (1973).

[103] Prunty v. Schwantes, 162 N. W. 2d 34 (1968).

[104] Sanderson v. Steve Snyder Enterprises, Inc., 491 A. 2d 389 (1985).

[105] B.M.W. of North America Inc., v. Gore, 116 S. Ct. 1589 (1996).

Australian cases cited:

[106] Skelton v. Collins, 115 C.L.R. 94 (1996).

[107] Sharman v. Evans (1977) 138 C.L.R. 563.

[108] Rose v. Motor Vehicle Insurance Trust (1974) 48 A.L.J.R. 352.

[109] Fitch v. Hyde-Cates, 150 C.L.R. 482.

[110] Uren v. John Fairfax & Sons Pty Ltd (1966) 117 C.L.R. 118.

[111] Lamb v. Cotogno (1987) 74 ALR 188.

Canadian cases cited:

[112] Andrews v. Grand & Toy Alberta Ltd. [1978] 2 S.C.R. 229.

[113] The Queen in right of Ontario v. Jennings [1966] 57 D.L.R. 2d 644.

[114] Sigouin (Guardian in litem of) v. Wong (1992) 10 C.C.L.T. 2d 236.

[115] Dube v. Penlon Ltd. (1994) 21 C.C.L.T. 2d 268.

[116] Toneguzzo-Norvell v. Burnaby Hospital (1994) 1 S.C.R. 114.

[117] Semenoff v. Kokan (1991) 84 D.L.R. (4th) 76.

[118] Duncan (Estate of) v. Baddeley (2000) A.B.C.A. 277.

[119] Brown v. University of Alberta Hospital (1997) 145 D.L.R. 4th 63; [1997] 4 W.W.R. 645 (Alta. Q.B.).

[120] Granger v. Ottawa General Hospital (1996) 7 O.T.C. 81; (1996), 63 ACWS (3d) 1278, [1996] OJ No. 2129 (Ont. Gen. Div.).

[121] Duncan (Estate of) v. Baddeley (1997) 196 A.R. 161.

[122] Marchand v. Public General Hospital of Chatham (2000), 51 O.R. (3d) 97 (C.A.).

[123] Saint John Regional Hospital v. Comeau (2001) MBCA 113.

[124] Balkos v. Cook (1991) 75 O.R. 593.

[125] Rayner v. Knickle (1991) 88 Nfld. & P.E.I.R 214.

[126] Woollard v. Coles, 85 A.C.W.S. (3d) 564 (1998).

[127] Galand Estate v. Stewart (1992) 135 A.R. 129.

[128] Brooks (Estate of) v. Stefura (1998) 2000 ABCA 276.

[129] Vorvis v. Insurance Corp. of British Columbia (1989) 1 S.C.R. 1085.

[130] Muir v. Alberta (1996) 132 D.L.R. (4th) 695.

[131] Hill v. Church of Scientology of Toronto [1995] 2 S.C.R. 1130.

[132] Coughlin v. Kuntz (1989) 42 B.C.L.R. (2d) 108.

English cases cited:

[133] Pope v. D. Murphy & Son Ltd [1961] 1 Q.B. 222.

[134] Oliver v. Ashman [1962] 2 Q.B. 210; [1961] 3 All ER 323.

[135] Pickett v. British Rail Engineering Ltd [1980] A.C. 136; [1979] 1 All ER 774.

[136] Lim Poh Choo v. Camden & Islington Area Health Authority [1980] A.C. 174.

[137] Croke v. Wiseman [1981] 3 All ER 852.

[138] Phillips v. London & South Western Railway Co. [1879] 5 Q.B.D. 78.

[139] Roach v. Yates [1938] 1 K.B. 256.

[140] Harris v. Brights Asphalt Contractors Ltd [1953] 1 Q.B. 617.

[141] Wise v. Kaye [1962] 1 Q.B. 638; [1962] 1 All ER 257.

[142] McCann v. Sheppard [1973] 1 W.L.R. 540; [1973] 2 All ER 881.

[143] Harris v. Empress Motors Ltd [1983] 3 All ER 561; [1984] 1 W.L.R. 212.

[144] Phipps v. Brooks Dry Cleaning Services Ltd [1996] P.I.Q.R. Q100; 140 SJ LB 173.

[145] Connolly v. Camden & Islington Area Health Authority [1981] 3 All ER 250.

[146] Adsett v. West [1983] 2 All ER 985.

[147] Gammell v. Wilson [1982] A.C. 27; [1981] 1 All ER 578.

[148] White v. London Transport Executive [1982] Q.B. 489; [1982] 1 All ER 410.

[149] Sullivan v. West Yorkshire Passenger Transport Executive [1985] 2 All ER 134.

[150] Kandalla v. British European Airways Corp. [1981] Q.B. 158; [1980] 1 All ER 341.

[151] Khodaparast v. Shad [2000] 1 W.L.R 618; [2000] 1 All ER 545.

[152] Kuddus v. Chief Constable of Leicestershire Constabulary [2001] 3 All ER 193.

[153] Cassell & Co. Ltd v. Broome [1972] A.C. 1027; [1972] 1 All ER 801.

[154] Loudon v. Ryder [1953] 2 Q.B. 202; [1953] 1 All ER 741.

[155] Rookes v. Barnard [1964] A.C. 1129; [1964] 1 All ER 367.

[156] A.B. v. South West Water Services Ltd [1993] Q.B. 507; [1993] 1 All ER 609.

[157] Australian Consolidated Press v. Uren [1969] 1 A.C. 590; [1967] 3 All E.R. 523.

[158] A. v. Bottrill [2002] 3 W.L.R. 1406.

[159] Heil v. Rankin [2000] 2 W.L.R. 1173; [2000] 3 All ER 138.

Irish cases cited:

[160] Doherty v. Bowaters Irish Wool Board Ltd [1968] I.R. 277.

[161] Conley v. Strain [1988] I.R. 628.

[162] Conway v. INTO [1991] 2 I.R. 305.

New Zealand cases cited:

[163] Taylor v. Beere [1982] 1 N.Z.L.R. 81.

South African cases cited:

[164] Goldie v. City Council of Johannesburg, 1948 (2) S.A. 913 (W.).

[165] Lockhat's Estate v. North British and Mercantile Insurance Co. Ltd (1959) 3 S.A. 295 (A.)).

For the appellants — Y. Neeman, B. Katzman.

For respondents 1-3 — Carmeli Arnon & Co.

For respondents 4-5 — M. Kaplinsky.

For respondent 6: Adv. Tz. Noach.

JUDGMENT

Justice E. Rivlin

Introduction

1. The main issue that requires a determination in the distressing case before us concerns the right of a person, who is injured as a result of a tort and whose life expectancy is shortened, to compensation for the loss of his earning capacity in the ‘lost years,’ i.e., those years by which his working life expectancy was reduced as a result of his death. This very question was considered by this court in CA 295/81 Estate of Sharon Gavriel v. Gavriel [1]. The majority opinion in that case (President Y. Kahan, Vice-President M. Shamgar and Justice M. Bejski) held that in Israeli law the injured person is not entitled to compensation for this head of damage. The minority (Justices A. Barak and S. Levin) were of the opinion the court should recognize the right of an injured person to compensation.

Approximately twenty years have passed since the judgment in Estate of Sharon Estate v. Gavriel [1] was given, and the issue of the ‘lost years’ has come before us once again.

Background

2. The late Michael Ettinger (hereafter — the deceased), who was born in 1976, was playing with a friend of the same age at a playground, close to his home, in the Jewish Quarter of the Old City of Jerusalem. He fell into the ‘Nea Archaeological Site,’ an unfenced pit, which has a concrete floor at the bottom, that was situated nearby (hereafter — the accident). The deceased suffered injuries to his head and was taken to hospital, where he died the next day. He was only twelve years old.

The appellants in CA 140/00 — the estate, parents and sister of the deceased — filed an action in the District Court, in which they argued that the estate should be awarded compensation for the lost earning years of the deceased. The appellants also asked that the respondents be found liable for punitive damages, in view of the conviction of respondents 1, 4, 5 and 6 in a criminal trial that was brought against them, on a charge of negligently causing the death of the deceased (an offence under ss. 304 and 309(5) of the Penal Law, 5737-1977). The appellants also asked that they should be awarded damages for the non-pecuniary damage of the reduction of the deceased’s lifespan.

According to a procedural arrangement reached between the parties, which was given the force of a court decision, the factual basis that was determined in the judgment in the criminal trial was submitted to the trial court, and it was submitted to us also. Within the framework of that arrangement, it was agreed also that the respondents waive any contention of contributory negligence on the part of the deceased or negligence on the part of his parents.

3. The Jerusalem District Court (his honour Justice Y. Adiel) held that the rule in Estate of Sharon Gavriel v. Gavriel [1], which as aforesaid does not recognize the entitlement of an injured person to compensation for the loss of earning capacity in the ‘lost years,’ is still valid today, after the enactment of the Basic Law: Human Dignity and Liberty. Therefore the District Court dismissed the claim on this head of damage. The court also held that there was no basis for awarding punitive damages in this case. Nonetheless, in view of the fifty-nine years by which the life expectancy of the deceased was shortened, the District Court awarded compensation in favour of the estate for non-pecuniary damage, in an amount of NIS 350,000, with interest from the date on which the deceased died.

4. The two appeals before us are directed against the judgment of the District Court. CA 140/00 is directed against the decision of the trial court on the issue of the ‘lost years’ and the punitive damages. The appellants argue that the changes that have taken place in Israeli law, since the rule in Estate of Sharon Gavriel v. Gavriel [1] was decided — including the enactment of the Basic Law: Human Dignity and Liberty — justify a re-examination of that decision. Earning capacity — so the appellants claim — falls within the constitutional property right, and an infringement of this right, by way of a reduction of life expectancy, requires, in their opinion, an award of compensation. According to the appellants, recognition of a right to compensation for the lost earning years is consistent with the remedial purpose that underlies the law of torts, and is consistent with considerations of justice, in that it can prevent a situation in which wrongfully causing death leads to lesser financial consequences that causing personal injury. Such compensation is also required, in the appellants’ opinion, in view of policy considerations that require an effective deterrent. The appellants also point to the fact that the rule in Estate of Sharon Gavriel v. Gavriel [1] addressed the provisions of the Road Accident Victims Compensation Law, 5735-1975 (hereafter — the Compensation Law), whereas here we are dealing with a claim under the Torts Ordinance [New Version] (hereafter — the Ordinance or the Torts Ordinance). According to them, the two are not the same in so far as the justification for compensation for the loss of earning capacity in the ‘lost years’ is concerned.

The appellants complain, as aforesaid, also about the decision of the trial court not to find the respondents liable for the payment of punitive damages. In this matter they argue that the conduct of the respondents, as expressed in the criminal judgment against them, indicates apathy, indifference and blatant contempt for human life. This conduct led to a tragic result. Therefore, the appellants are of the opinion that the respondents should be found liable for the payment of punitive damages.

The respondents, for their part, are of the opinion that no intervention is required in the District Court decision not to award the appellants compensation for the loss of the deceased’s earning capacity in the ‘lost years.’ According to them, there is no justification for departing from the rule determined in Estate of Sharon Gavriel v. Gavriel [1], and in essence they relied on the reasons given there. The respondents also claim that no intervention is required in the decision of the District Court not to award the appellants punitive damages. In this respect, the respondents argue that it is doubtful whether the court, under the provisions of Israeli law, has jurisdiction to award punitive damages, and that in any event in their case there was no element of intention or deliberateness, which is a condition for awarding such damages.

In the counter-appeal, the respondents argue that the court was excessive in the amount that it awarded for the non-pecuniary damage arising from the reduction of the deceased’s life expectancy. In their opinion, the amount that was awarded for this head of damage is inconsistent with the abundant case law, and in this case, so they claim, the fixed tariff in the Compensation Law should be used, for the non-pecuniary damage, as the criterion for awarding compensation.

5. An additional dispute between the parties broke out within the framework of the enforcement of the judgment given by the trial court, and it concerns the question of what is the date as of which the amount awarded for the reduction of life expectancy should be calculated. The Chief Enforcement Officer applied, in this regard, to the District Court, by virtue of his power under section 12 of the Enforcement Law, with a request for clarification. The District Court clarified that the amount that was awarded was calculated and determined as of the date of the judgment. The appellants in CA 550/01 object to this decision, and they also claim that the amount that was awarded for the reduction of life expectancy is too little, does not reflect the damage caused and is inconsistent with prevailing case law.

The appellants also complain, within the framework of CA 550/01, that the District Court did not award the estate compensation for pain and suffering. The honourable registrar of this court, Justice B. Okun, granted the appellants an extension of the time for filing the appeal in this matter.

6. We will consider the questions in the appeals before us in the following order. First we will consider the fundamental question concerning the right to compensation for the loss of earning capacity in the ‘lost years,’ and the specific question concerning the entitlement of the deceased’s estate to compensation for this head of damage. Next we will consider whether there were grounds, in the circumstances of this case, to award the appellants punitive damages. Finally we will decide the other arguments raised before us. In the final analysis, we will recommend that the appeal in CA 140/00 should be allowed, in so far as the question of the ‘lost years’ is concerned, and that there are no reasons for intervention in the other determinations of the trial court.

The issue of the ‘lost years’

Presentation of the issue

7. The awarding of compensation in the law of torts has the primary purpose of placing the injured person in the position he would have been in had it not been for the wrongful act, in so far as it is possible to do this by means of a pecuniary payment (CA 22/49 Levy v. Mosaf [2], at p. 564; CA 357/80, Naim v. Barda [3], at p. 772; A. Barak, ‘Assessing compensation in personal injury: the law of torts as it is and as it should be,’ 9 Tel-Aviv University Law Review (Iyyunei Mishpat) 243 (1983)). The compensation for the loss of earning capacity is also intended to achieve this purpose. This compensation — which belongs to the category of pecuniary heads of damage — takes into account the harm to the earning capacity of the injured person as a result of the wrong that was done to him. Therefore, if a person suffers personal injury as a result of a tortious act, and he is no longer able to continue working as before, the court will award him compensation for the loss of earning capacity. The amount of the compensation will be determined in accordance with the capitalized value of the difference between the potential earning capacity of the injured person, had the damage not occurred, and his actual earning capacity after his injury (see FH 29/83, Sahar Insurance Co. Ltd v. Cahanka [4], at p. 836).

The loss of earning capacity is examined, of course, also by taking into account the working life expectancy of the injured person. ‘Indeed, it is well-known that when formulating a “compensation equation,” for the purpose of the loss of earning capacity in the future, the length of the period for which the calculation is made is one of the main elements’ (D. Katzir, Compensation for Personal Injury (fourth edition, 1998), at p. 241). But the question is — and this is the main focus of the appeal before us — does the reduction of the working life expectancy of the injured person, as a result of a tortious act, have any effect on the compensation that will be awarded for the head of loss of earning capacity?

The question before us therefore concerns those cases in which the life expectancy of the injured person is shortened, as a result of the tortious act, to less than the retirement age that he would have had if it had not been for that act. Sometimes the reduction of life expectancy is partial, i.e., the injured person does not die shortly after the accident, but he is expected to live a shorter period of time as a result of the accident. In other cases, the reduction of the life expectancy is total, meaning that the injured person dies in the accident or shortly thereafter, with the result that he is unable to file a claim for his damage. Whichever is the case, the question arises as to whether the injured person (whose life expectancy was partially reduced and who files a claim when he is still alive) or his estate (when the injured person dies before filing a claim) is entitled to compensation for the loss of earning capacity in the ‘lost years’ — those years in which he was expected to earn from his labour, had his life not been shortened by the wrong. This question was left undecided in CA 95/55 Salomon v. Adler [5], at p. 1912, and it was decided by a majority, as aforesaid, in the decision of the Supreme Court in Estate of Sharon Gavriel v. Gavriel [1]. We will first focus on the ruling that was decided in that case.

The ruling in Estate of Sharon Gavriel v. Gavriel

8. The late Sharon Gavriel was killed in a road accident, when she was approximately eight years old. Her estate filed a claim under the Compensation Law, inter alia for the loss of earning capacity.

The majority opinion in that case was that whether the case involves an injured person who is alive and whose life expectancy has been shortened, or the estate of an injured person who has died, the court should not recognize damage, nor award compensation, for the loss of earning capacity during the ‘lost years.’ President Y. Kahan, who wrote the leading majority opinion, said that an award of compensation for this head of damage meant a ‘minor revolution’ in the law of torts, and it was of significant economic consequences. President Kahan recognized that denying compensation to an injured person who is living for the ‘lost years’ may lead to an unjust result from the viewpoint of dependants, where at the time of death of the injured person he would not be entitled to compensation (either because he had been awarded compensation or because he received it in another way). This was because the provisions of s. 78 of the Torts Ordinance make the awarding of compensation to dependants conditional upon the injured person being entitled to compensation, when he passed away. However, President Kahan was of the opinion that there were no grounds for resolving this injustice by awarding compensation for the ‘lost years,’ since this, in itself, leads to other injustices that are even more serious. Consequently President Kahan held that the issue should be left to the legislature.

President Kahan further held that regarding earning capacity in the ‘lost years’ as an asset was ‘artificial,’ and so too was the reasoning making the award of the compensation conditional upon the injured person being unable to accumulate wealth and to make use of it as he sees fit. In President Kahan’s view, the ‘idea that a child who is killed in an accident suffers damage by being deprived of the possibility of working and earning throughout the whole period of a normal working life divorces the terms ‘pecuniary damage’ and ‘loss of an asset’ from their normal meaning and gives them an unrealistic meaning.’ President Kahan further thought that there were no grounds for extending the circle of supported persons beyond those persons specified by the legislator (namely the dependants), and he warned against a double payment to the estate and to the dependants and against a situation in which the compensation would fall into the hands of persons who suffered no damage, as an unjustified windfall. In summarizing his remarks, President Kahan said that ‘it is possible that the compensation for the head of damage of loss of life expectancy should be increased, and in this way expression should be given to the feeling of outrage against a situation in which, when the injury results in the death of the injured person, often the compensation does not at all reflect the seriousness of the injury.’ He further said that ‘it is possible that we should award, under the head of damage of pain and suffering, compensation for an injured person who is alive, for the suffering he endures as a result of his not being able to receive income and to make use of it as he sees fit.’

Vice-President M. Shamgar and Justice M. Bejski. each in his own words, joined with the opinion of President Y. Kahan.

9. The opinion of Justice A. Barak, with which Justice S. Levin agreed, was different. Justice Barak thought that the court should recognize an entitlement to compensation under a head of damage of ‘the lost years’ — both in a claim of a living injured person and in a claim of the estate. Earning power, he said, is an asset that belongs to its owner, and a reduction in the working life expectancy of the living injured person amounted to an injury to this asset — an injury that ought to give rise to an entitlement to compensation. In this regard, Justice Barak thought, it makes no difference, nor is it the concern of the tortfeasor, whether the injured person can enjoy the compensation money or not. Even an injured person who as a result of a tort is in a permanent vegetative state — he emphasized — cannot enjoy any of the material benefits of this world, but he is entitled, according to case law, to compensation for loss of earnings. Policy considerations also, he held, support a conclusion that the loss of earnings of a living injured person in the ‘lost years’ should be recognized as damage that is compensatable. In this regard Justice Barak mentioned the case of dependants and persons who are supported without being dependants for whom the award of compensation for the ‘lost years’ will ensure that they are supported.

With regard to the estate, Justice Barak held that recognition of the right of the living injured person to compensation for the ‘lost years’ also leads, under prevailing law, to the recognition of the right of the estate to compensation under this head of damage. Moreover, the award of compensation to the estate for the ‘lost years’ means supporting various persons who are ‘dependants.’ The concern that the tortfeasor may be found liable to pay twice can be allayed — so Justice Barak held — by subtracting the amounts paid to dependants for loss of support from the compensation to the estate.

10. Since then, the issue of the ‘lost years’ has not been considered in this court on its merits, but the courts have relied on Estate of Sharon Gavriel v. Gavriel [1] in several cases (see, for example, CA 116/81 Estate of Aharon Knafo v. Arnon Tussia Cohen [6]; CA 248/86 Estate of Lily Hananshwili v. Rotem Insurance Co. Ltd [7]; CA 642/89 Estate of Meir Schneider v. Haifa Municipality [8]; CA 4022/98 The Technion, Israel Technological Institute v. Twister [9] (in this judgment the question of compensation did not arise with regard to the lost years of earnings, but with regard to other heads of damage in the ‘lost years’); see also CA 110/86 Gevaram v. Heirs of the late Shalom Manjam [10], at p. 199, in which Justice H. Ariel mentioned the rule in Estate of Sharon Gavriel v. Gavriel [1], and said that in that case he tended towards the minority view). It seems to me that the passage of time, the new trends in awarding compensation in Israeli law and the changes that have occurred in other legal systems all justify a re-examination of the rule that was decided in Estate of Sharon Gavriel v. Gavriel [1] by a majority of three judges to two. Indeed, the ‘book of judicial case law is open, and new chapters are written in it all the time. These are built on the past, reflect the present and form a basis for the future. Movement is unceasing. Change is perpetual’ (HCJ 693/91 Efrat v. Director of the Population Register at the Ministry of Interior [11], at p. 796).

Let us turn, therefore, to examine the reasons and the arguments that have been made — both for and against — with regard to the awarding of compensation for the loss of earning capacity in the ‘lost years,’ and let us begin with the claim of a living injured person.

Compensation for the ‘lost years’ of earning: claim of a living injured person

11. The opinion of Justice Barak in Estate of Sharon Gavriel v. Gavriel [1] was based both on ‘technical’ considerations — looking at the issue from the viewpoint of the injured person — and ‘policy’ considerations — mainly concerning persons supported by, and dependent on, the injured person. We too will follow this path that Justice Barak delineated.

The viewpoint of the injured person

Restitutio in integrum

12. It is not unusual that the life expectancy of a person, who is injured as a result of a tortious act, is shortened to less than the retirement age that he would have anticipated had the damage not occurred. In the past, medicine had difficulty in providing a diagnosis, with the degree of proof required in a civil trial, to the effect that the life expectancy of an injured person was shortened as a result of the accident. Consequently, compensation was awarded according to the normal life expectancy of the injured person. The significance of this is that, in practice, compensation was awarded also for the loss of earning capacity in the ‘lost years,’ although this was not for substantive reasons of principle but rather for reasons that were mainly technical and evidential.

The tools that are today at the disposal of scientists and doctors led to a significant change in this regard, and they often make it possible to prove, on a balance of probabilities, that the life expectancy of the injured person — and consequently also his working life expectancy — has been reduced (see J.G. Fleming, ‘The Lost Years: A Problem in the Computation and Distribution of Damages,’ 50 Cal. L. Rev. 598 (1962), at pp. 598-600). The result, somewhat paradoxically, is that in legal systems where compensation is awarded for loss of earnings according to working life expectancy after the accident (i.e., when the ‘lost years’ are not recognized), scientific advancement, and with it the possibility of proving a reduction of life expectancy, has reduced the amount of the damages awarded for the head of loss of earnings. In other words, in those legal systems that do not recognize a right to compensation for the lost years of earning, the proof of a reduction of life expectancy reduces the compensation for loss of earnings. The profits that the injured person could have made in the years of life that have been lost are not claimable in these legal systems. So we find that there are cases in which the tables are turned and it is actually the injured person who argues for a long life expectancy, whereas the tortfeasor argues for a significant reduction of life expectancy (see, for example, CA 2939/92 General Federation Medical Fund v. Rachman [12]; CA 4022/98 The Technion, Israel Technological Institute v. Twister [9]). Is this strange result consistent with the rules of awarding compensation in the law of torts? As will be seen, the answer to this is no.

13. There is no need to dwell upon the potential harm to the interests of the injured person and his way of life, as a result of a reduction of his life expectancy, and upon the suffering involved in a person knowing that he has lost years of his life expectancy that he would have had if he had not been injured by the tort. We are dealing with another potential outcome of the reduction of life expectancy, namely the harm to the earning capacity of the injured person in the ‘lost years.’

The remedial purpose underlying the awarding of damages in the law of torts is, as aforesaid, the removal of damage and compensation for it, in order to return the injured person, in so far as possible, to the position in which he would have been had he not been injured by the tort (see A. Barak, ‘Assessing compensation in personal injury: the law of torts as it is and as it should be,’ supra, at pp. 249-251). The awarding of compensation can be compared to a balance — an external balance and an internal balance. On one pan of the external balance lies a weight marked ‘before,’ which examines what the position of the injured person would be had the accident not occurred. On the other pan of the external balance lies a weight marked ‘after,’ which examines the position of the injured person in consequence of the accident. The compensation serves a single purpose — to balance the scales. To this end, one must also take into account the internal balance that are factors in the ‘after’ pan of the external balance. On one pan of the internal balance lies a weight marked ‘loss.’ One must examine the losses of the injured person as a result of the accident. On the other pan lies a weight marked ‘gain.’ One must examine the advantages and gains that the injured person has received — if any — as a result of the accident. Weighing the loss and the gain that were caused to the injured person as a result of the accident gives a complete picture of the injured person’s position after the accident, and allows this to be weighed against what the position of the injured person would have been had the accident not occurred. Only then is it possible to award the injured person an amount of damages that will correct the imbalance caused as a result of the accident. It is not for nothing that the English word ‘compensation’ comes from the Latin word compensatio, whose basic meaning is a ‘joint weighing’ of one thing against another.

14. From this ‘remedial’ outlook in the laws of compensation we derive the rule that where a person suffers damage as a result of a tort, and this is expressed in a loss of his earning capacity in comparison to the capacity he would have had if it had not been for the tort, the injured person has a right to compensation. The assessment of the compensation is made in accordance with the difference between the earning capacity of the injured person without the tortious act (if the tortious act had not occurred) and his earning capacity as a result of that act (CA 70/52 Grossman v. Roth [13], at p. 1251; CA 79/65 Israel Steel Enterprises Ltd v. Malca [14], at p. 270). We must therefore examine the difference between the earning capacity that the injured person had before the accident and the earning capacity that remains after the accident, taking into account his disability (see CA 5794/94 Ararat Insurance Co. Ltd v. Ben-Shevach [15]). This leads to the question: what difference is there between an injured person, who suffers an injury that deprives him of his earning capacity in its entirety, and an injured person whose life expectancy has been shortened and whose earning capacity in the ‘lost years’ has been lost? Both of these have lost their earning capacity, and they therefore claim pecuniary compensation that will place them — in so far as possible — in the position they would have been in had it not been for the tortious act. Had it not been for the accident, both the one and the other could have earned a certain amount that would have been used by them and their family members, but as a result of the accident they no longer have this possibility.

It appears, therefore, that in so far as ‘returning the injured person to his original position’ is concerned — from a study of the external balance — it is difficult to find a real reason that justifies a different attitude towards an injured person who lost his earning capacity but whose life expectancy remained as before, as compare with an injured person whose life expectancy has been shortened. With regard to the latter we should also examine the amount that he could have earned had the accident not occurred — i.e., the earning capacity that he would have had if it had not been for the accident, taking into account the life expectancy that he anticipated shortly before it occurred — and we should compare this amount with the amount that he is able to earn after the accident, taking into account the earning capacity and life expectancy that remain. The difference expresses the reduction in earning potential of the injured person as a result of the accident. The reason for this is that it is not possible to speak of earning capacity while ignoring the earning period. This was discussed by D. Katzir:

‘Awarding compensation, within the framework of “pecuniary damage” for loss of earning capacity, ought to reflect the full difference in the earning capacity of the injured person before the injury as compared with his earning capacity after it; this earning capacity, in the view of Justice Barak, constitutes an “asset that belongs to its owner”…, which entitles him to compensation in the event that he is injured. It is well-known that this capacity is a function of the length of the period in which it will find expression… no significant difference should be recognized between full loss of earning capacity resulting from the injury, and the full loss of certain years in which this capacity will not find expression. Just as in the first case the injured person is entitled to full compensation, so too is he entitled, in principle, to full compensation in the second case’ (Katzir, Compensation for Personal Injury, supra, at pp. 269-270).

It should be noted that the risks that the injured person faces, including the risk of a reduction of life expectancy, are taken into account in the compensation — negatively — only in so far as concerns the question of risks that would that he faced even before the accident. Where these risks are a function of the accident, there is no basis for deducting them from the compensation to which he is entitled. This is an ‘absolute rule’ that underlies the idea of returning the injured person to his original position. The outcome is that in awarding the compensation for loss of earning capacity, the life expectancy of the injured person before the accident should be taken into account.

15. A similar approach has been expressed also in the rulings of courts in other countries. For example, in Skelton v. Collins [106], the High Court of Australia held that:

‘… what is to be compensated for is the destruction or diminution of something having a monetary equivalent… I cannot see that damages that flow from the destruction or diminution of his capacity [to earn money] are any the less when the period during which the capacity might have been exercised is curtailed because the tort cut short his expected span of life’ (at p. 129).ב

In one case in the United States, the court considered the distressing case of a child who, when he was five years old, was infected with the AIDS virus as a result of an infected blood transfusion. His claim under the Federal Tort Claims Act was accepted, and the Federal Court awarded him compensation for the loss of earning capacity in the years of life that he could have anticipated, had it not been for the accident, after deducting from this amount the living expenses that he required in the ‘lost years.’ The court wrote in that case, with regard to awarding the compensation for the loss of earning capacity in the lost years of life:

‘Using a postinjury rather than a preinjury work life expectancy to calculate lost earning capacity would violate fundamental principles of the law governing damages and would produce an absurd and unjust result... the measure of damages for lost earning capacity is the amount by which the plaintiff's ability to generate earnings has been diminished as a result of the defendant's negligence. It should make no difference whether that diminution takes the form of a reduction in the salary the plaintiff is able to command or a decrease in the number of years the plaintiff is able to work. In either case the net result is that the ability to generate earnings is lessened because of the defendant’s negligence. Depriving a plaintiff of the right to recover for that portion of his loss attributable to a shortened work life expectancy would frustrate the objective of making the plaintiff whole. Moreover, it would permit the tortfeasor to benefit from the consequences of his own wrongful act at the expense of the innocent victim. Such a result would be inconsistent with both law and logic. Indeed, the weight of authority is that loss of earning capacity should be measured over the course of the work life expectancy the plaintiff would have had if no injury had been sustained’ (Doe v. United States (1990) [80]).ו

Similarly in England Justice Streatfield criticized the approach whereby the defendant may argue against the injured person, whose life expectancy has been shortened, that the latter has a right to compensation, for loss of earnings, only for the years that the defendant has left him:

‘If that indeed is the law, then I respectfully suggest that it would be very unjust, because, after all, the object of damages, as I understand them, is to do the best they can to compensate a man who has been injured, for what he has lost. What he has lost... is not only the ability to earn X Pounds a year, but the ability to earn it over that period of time that he might reasonably expect it’ (Pope v. D. Murphy & Son Ltd [133]).נ

16. It follows that the basic principle of the law of torts, according to which the compensation awarded should make the damage good and return the injured person, in so far as possible, to the position he would have been in had it not been for the tortious act, supports the awarding of compensation to the living injured person for the loss of earning capacity in the ‘lost years.’ This is because the loss of earnings is spread over units of time whose length is the length of the working life expectancy that the injured person had before the accident. The compensation for the ‘lost years’ is therefore capable of remedying the unequal state of affairs that was created as a result of the tortious act. It offers a solution to the injustice that is inherent in the denial of the right of compensation to someone who is not able to realize his earning capacity, because of a reduction of his life expectancy brought about by a tort, while at the same time compensation is awarded to someone whose inability to realize his earning capacity derives from his being injured by a tort. This results in it being cheaper to kill than to wound. It should be noted that we are not concerned with punishing the tortfeasor but with studying the balance and refraining from an unjust reduction of the compensation merely because of the fact that in addition to the harm to the injured person’s earning capacity the tortfeasor also caused him a reduction of his life expectancy.

In this spirit it has been held in the United States for many years that the loss of earning capacity of the injured person should be assessed according to the life expectancy that he anticipated before the injury, based upon an approach that there is no reason to reduce the pecuniary liability of the tortfeasor merely because of the extreme seriousness of the consequences of his acts (see Prairie Creek Coal Mining Co. v. Kittrell [81]; Littman v. Bell Telephone Co. of Pennsylvania [82]; Comment: The Measure of Damages for a Shortened Life, 22 U. Chi. L. Rev. 505 (1955), at p. 506. Especially apposite in this regard are the remarks of Judge Weinstein in In re Joint Eastern & Southern District Asbestos Litigation [83], at p. 428:

‘Calculating damages for lost earning capacity based on the victim’s pre-injury life expectancy has been criticized as overcompensating the plaintiff, because no deductions are made for his or her living expenses between the time of projected actual death and the time death probably would have occurred had there been no injury. It has been viewed, however, as the “lesser of two evils.” The alternative method of awarding damages based on the victim’s shortened life expectancy would, in effect, reward the defendant for having successfully injured the plaintiff so severely as to curtail his or her life span, and would under-compensate plaintiff’s dependents for the loss of support during those lost years’ (at p. 428).

We can already point out, and we will dwell on this below, that the difficulty inherent in over-compensation, which is raised at the beginning of Judge Weinstein’s remarks, is solved in most legal systems by means of a deduction of the living expenses that were required by the injured person in the ‘lost years’ from the amount of compensation.

17. It is accepted that the law of torts has another purpose, which sits alongside the purpose of doing justice, and that is to provide an effective deterrent (see CA 44/76 Atta Textile Co. Ltd v. Schwartz [16]; see also CFH 7794/98 Ravid v. Clifford [17]). The law of torts is regarded by many as a tool for furthering the goal of channelling the collective social benefit (for a general discussion, see I. Gilead, ‘On the scope of the effective deterrent in the law of torts,’ 22 Mishpatim 437 (1993)). This is achieved, inter alia, by creating a legal system that makes the tortfeasor act carefully by internalizing the consequences that follow from his actions. For this purpose, it is desirable that the tortfeasor should indeed pay for all the damage that he caused by the tort. The tortfeasor should pay, at least, the amount of the loss (L) in the Hand formula (see R.A. Posner, Economic Analysis of Law (fourth edition, 1992), at p. 176; for calculating the Hand formula, see United States v. Carroll Towing Co. (1947) [84]). Indeed, imposing compensation in an amount that exceeds the damage or an amount less than the damage is likely to lead to undesirable results. This was discussed by Polinsky and Shavell, who pointed out that in the system of liability for negligence, which relies on the Hand formula, it is important that the compensation is equivalent to the damage:

‘Under the negligence rule, if damages equal harm, potential injurers will be led to comply with the negligence standard… and thus to take appropriate precautions. If a precaution costing $50,000 would prevent a harm of $100,000, the threat of having to pay damages of $100,000 for not taking the precaution would induce a party to spend $50,000 on the precaution. However, if damages are less than harm, the negligence standard might not be met and underdeterrence would result. In the example, if damages are only $40,000 (even though harm is $100,000), the party would not be led to take the precaution costing $50,000’ (A.M. Polinsky & S. Shavell, ‘Punitive Damages: An Economic Analysis,’ 111 Harv. L. Rev. 869 (1998), at p. 882).

It follows from the aforesaid that if the tortfeasor is likely to pay compensation that is less than the damage caused, his deterrent is defective, and because of this he is likely to continue his undesirable activity, or to refrain from adopting precautions whose cost is less than the damage (see A. Porat, ‘Collective Responsibility in the Law of Torts,’ 23 Mishpatim 311 (1994)). This can undermine the goal of effective deterrent. In our case, denying compensation for the ‘lost years’ can create a situation in which, despite the serious damage caused as a result of the tortfeasor’s act, he will be exempt from the obligation to pay compensation for a significant part of the damage. There is no doubt that where the working life expectancy of the injured person is shortened, the damage of loss of earning capacity extends also to the ‘lost years.’ Leaving this damage without compensation means impairing the general deterrent.

Consider, by way of example, two tortious scenarios: in the first scenario, the tortfeasor causes the injured person, by means of a tort, a serious physical handicap, which deprives the injured person of any ability to work and earn money, even if his life expectancy is not shortened. In the second scenario, the tortfeasor, by means of a tortious act, causes, in addition to the serious physical handicap, also a reduction of the life expectancy of the injured person, and consequently to the injured person being unable to work and earn money. In so far as the loss of earning capacity is concerned, there is no substantive difference between the damage that the tortfeasor caused in the first scenario and the damage that the tortfeasor caused in the second scenario (on the assumption that the injured person is the same). In the two cases, the amount of the damage is the amount that the injured person expected to earn throughout the years of his working life that he would have had if it had not been for the accident (for the methods of calculating this amount, see, for example, CA 30/80 State of Israel v. Asher [18]; CA 722/86 Youness v. Israel Car Insurance Pool [19]). However, according to the approach that denies the right to compensation for the loss of earning capacity in the ‘lost years,’ there is likely to be a significant difference between the two scenarios, from the viewpoint of the amount of compensation for this damage; the tortfeasor in the second scenario will not be held liable for the full amount of damage that he caused by means of the tort, and therefore we cannot expect him to consider the consequences of his torts before he acts. The deterrent effect is, consequently, defective. But awarding compensation to the injured person for the loss of his earning capacity in the ‘lost years’ (while taking into account the expenses that the injured person is ‘saved’ during those years) will result in a full internalization of the costs arising from the tortfeasor’s acts.

It should be noted that the economic consideration that we have been discussing cannot decide the question before us. It can only add an extra dimension to the argument that denying compensation for the ‘lost years’ is problematic, in view of the guiding principles in the doctrine of compensation and in view of the accepted goals that the law of torts is intended to achieve.

Is it really true that ‘without life there is no loss of capacity’?

18. There are those who believe that in view of the fact that the injured person will not be alive during the ‘lost years,’ there is neither a need nor a justification for compensating him for loss of earning capacity in those years. According to this approach, ‘it is not earning capacity that the injured person has lost, but he has lost life itself, and without life there is no loss of capacity’ (see Oliver v. Ashman [134]; for a discussion of this argument see Estate of Sharon Gavriel v. Gavriel [1], at p. 548). This argument cannot be accepted. Alongside the loss of years, the injured person also lost the capacity to obtain income during those ‘lost years.’ We should remember that the law of torts does not purport — since it does not have the power needed to do this — to return the injured to his actual original position. ‘No money in the world can compensate for the suffering of the body and soul, the loss of opportunities to have a family, or the loss of the pleasures of a normal life. However, since what has been taken has been taken, and what has been lost has been lost, and it is not possible to return the injured person to his original position, and the compensation must be expressed in money, the money ought somehow to answer the question’ (see CA 541/63 Reches v. Hertzberg [20], at p. 126). ‘Returning the injured person to his original position’ — so it was written — ‘is not possible in the sense that the pain that has been suffered cannot be erased and the life expectancy that was reduced cannot be extended. But this does not prevent returning the injured person to his original position in a certain sense’ (A. Barak, The Law of Torts — General Principles of Torts (second edition, 1976, G. Tedeschi ed.), at p. 574). Indeed, the very nature of tortious compensation — especially when we are speaking of compensation for personal injury, and even more so when we are speaking of compensation for future damage — means that the compensation has something fictitious, speculative and artificial about it. Money cannot replace a damaged limb, the suffering involved in loss of a place of work, and it can certainly not replace years of life that have been lost. However, this alone cannot undermine the power of the courts to award compensation, in so far as this is necessary in order to bring the injured person as close as possible to the position he would have been in, had the damage not occurred. ‘Compensation will not bring the injured person back to life, but it will provide a pecuniary valuation of the pecuniary value of the loss’ (Estate of Sharon Gavriel v. Gavriel [1], at p. 551). The compensation will not prevent the suffering, but it can make the suffering bearable.

19. An injured person, who on account of a tortious act lost his life or had his life expectancy reduced, is entitled — and there is no dispute as to this in our legal system — to compensation for the non-pecuniary damage inherent in the loss or the reduction of life expectancy (see CA 773/81 Estate of Robert Freilich v. State of Israel [21]). Depriving the injured person of years of life — the ‘lost years’ — is considered, therefore, to be non-pecuniary damage that is compensatable. But this loss leads to another loss — the loss of income that would have accrued to the injured person from his work in those ‘lost years.’ According to this outlook, the injured person has lost an ‘asset,’ namely his work capacity, which was expected to bring him income. This was discussed by Justice Dickson of the Canadian Supreme Court, who said:

‘It is not loss of earnings but, rather, loss of earning capacity for which compensation must be made… A capital asset has been lost: what was its value?’ (Andrews v. Grand & Toy Alberta Ltd. [112], at p. 251).

This was repeated in the leading judgment of the House of Lords in Pickett v. British Rail Engineering Ltd [135], in which Lord Wilberforce criticized the approach that denied entitlement to compensation for the ‘lost years’ in this language:

‘Does it not ignore the fact that a particular man, in good health, and sound earning, has in these two things an asset of present value quite separate and distinct from the expectation of life which every man possessed?’ (at p. 149).

Indeed, when we are speaking of the damage of the loss of earning capacity, we are not speaking of a series of future losses, but of an immediate loss, here and now (see S.M. Waddams, The Law of Damages (loose-leaf edition), Toronto, Canada Law Book, 2003, at § 3.710). This was held in England (Pickett v. British Rail Engineering [135]), in Canada (Andrews v. Grand & Toy Alberta Ltd. [112]; The Queen in right of Ontario v. Jennings [113]), in Australia (see Skelton v. Collins [106]) and in the United States (for the approach accepted there, see Mclaughlin v. Chicago, Milwaukee, St. Paul & Pacific Ry. Co., (1966) [85]).

20. In this respect, we should reconsider the theoretical and practical distinction between compensation for loss of earnings and compensation for loss of earning capacity. If we are speaking of compensation for loss of earnings, then the only question is what would the injured person have earned in practice, had it not been for the accident. Thus, for example, a person who is a qualified engineer, who does not work but cares for his children, is not entitled, according to this approach, to compensation for the head of loss of earnings. This is not the case according to the outlook that regards earning capacity as a valuable asset, which, if taken away from its owner, is compensatable damage. According to this approach, the compensation is given after taking into account what the injured person could have earned, had it not been for the injury. Thus, for example, a woman who is a qualified lawyer, is entitled to compensation in accordance with this qualification, even if at the time of the accident she did not work as a lawyer nor even intended to work as such (J. Cassels, Remedies: The Law of Damages (2000), at p. 125).

It should be noted that in Israeli law (as well as in other legal systems) the distinction between loss of earnings and loss of earning capacity is not always observed, and it appears that case law moves on both tracks at the same time, or perhaps it is more correct to say — on a middle track (see also Katzir, Compensation for Personal Injury, supra, at pp. 257-258). Thus, for example, the willingness to award compensation to a child for loss of earnings reflects an approach that recognizes loss of earning capacity as compensatable damage. Moreover, in one case Justice Y. Shilo expressed the opinion that:

‘The tortfeasor must [therefore] compensate a person for a reduction in working capacity as a result of a wound, for which he is responsible, and it makes no difference whether the reduction in work capacity leads in the future to a reduction in income or not. The damage that requires compensation is the damage to the person’s capacity to work for remuneration, according to the scope determined at the time of giving the judgment, and the arguments of the tortfeasor that the injured person in any event does not make use of this capacity nor will he do so in the future will not be heard’ (CA 237/80 Barsheshet v. Hashash [22], at p. 296).

Justice Barak, on the other hand, preferred the ‘tangible’ approach, according to which:

‘The value of the earnings that the injured person would have made in the future had it not been for the accident is determined in accordance with the personal details of the injured person, taking into account his desires and intentions. The test is not according to theoretical earnings, which he was likely to earn if he had used all of his abilities. The test is according to tangible earnings, which he was likely to earn by using his abilities in practice. It follows that if for any reason the injured person does not make use of his ability in the present or in the future, there is no injury to his capacity, since this capacity is not utilized in practice’ (ibid., at p. 300).

Therefore Justice Barak held that ‘for compensation of loss of earning capacity one must point to the existence of a possibility, which is not merely hypothetical, that the injured person would have had earnings in the future, had it not been for the accident, and that the accident harmed these earnings’ (ibid., at p. 307).

It appears that the proper approach is the one delineated by Justice Barak. According to this approach, the harm to earning potential is, indeed, compensatable damage, provided that there exists a possibility, which is not negligible or completely speculative, that this potential would have been realized. But in any case, there is no dispute that the earning potential is an asset that belongs to its owner. The earning potential, in this sense, reflects the ‘economic horizon’ of the injured person, and the compensation for loss of earning capacity in the ‘lost years’ is intended to compensate the injured person for the reduction of this horizon (see In re Joint Eastern & Southern District Asbestos Litigation [83], at p. 427). The assessment of the loss is another question.

21. As an additional remark on this subject, the statement of Lord Justice Pearce in Oliver v. Ashman [134], that ‘what is lost is an expectation, not the thing itself’ seems to me problematic. Whenever we speak of loss of earning capacity, we are speaking of the loss of an expectation. The loss of capacity means a loss of the expectation or possibility of realizing the capacity, and this, in fact, is ‘the thing itself.’ Similarly, the approach shown by Lord Justice Pearce, ibid., that one cannot speak of loss of earnings when a person died early, because ‘he is no longer there to earn them, since he had died before they could be earned’ seems to me problematic. Even a person who is paralyzed in his four limbs but remains alive is not ‘there’ in order to earn income, since he was injured before he could earn it. The same is true of any person whose earning capacity is impaired. Indeed, it is not life or death that determine the issue, but the capacity to earn income. In this respect another question arises, namely whether the fact that the injured person cannot enjoy the compensation during the lost period can deny his right to receive it. This question will be considered now.

Is it really true that when there is no benefit from the compensation there is no compensation?

22. Depriving the injured person of years of life, which harms his ability to earn, is, therefore, an impairment of his earning capacity, which is an asset that belongs to its owner. Should this injury be left without compensation, merely because the injured person cannot, because of his anticipated death, enjoy the compensation? The answer to this is no.

In Oliver v. Ashman [134] Justice Wilmer wrote the following:

Another approach in this matter was stated by Justice Barak in Estate of Sharon Gavriel v. Gavriel [1]:

‘It is true that the injured person who is living will not himself be alive during the lost years and will not be able to use the income that he will receive, but this is of no significance, since the question is not what use the injured person will make of his money in the future but what use has he been prevented from making. As a result of the tortious act, the injured person’s ability to do what he wishes with his income has been impaired… the pecuniary compensation cannot return to the injured person life itself, but it can return to him the pecuniary value of his earning capacity that was impaired’ (Estate of Sharon Gavriel v. Gavriel [1], at p. 548).

23. Admittedly, the assumption is that the injured person will not be fortunate enough to live during the ‘lost years,’ and therefore he cannot enjoy the compensation money for the loss of income in those years. But this is of no significance. Just as we compensate the injured person or his estate for the non-pecuniary damage involved in the reduction or loss of life expectancy, and just as we compensate the injured person who is in a permanent vegetative state or who lost in some other way the ability to derive enjoyment from the compensation money (see Naim v. Barda [3], at pp. 783-784; Barak, ‘Assessing compensation in personal injury: the law of torts as it is and as it should be,’ supra, at p. 259; see also CA 141/89 Mahmoud v. Shamir Insurance Co. Ltd [23]; Lim Poh Choo v. Camden & Islington Area Health Authority (1980) [136]), so too we should not refrain from awarding compensation to an injured person who is alive for the lost years of earning:

‘For the purpose of determining the “compensatable damage” — as distinct from determining the amount of the compensation — it is not important, nor does it concern the tortfeasor, whether the injured person can enjoy the money that he received or not… just as an injured person who is in a permanent vegetative state cannot realize his income in the lost years, so too the injured person who is alive; and like the injured person who is in a permanent vegetative state he is entitled, notwithstanding, to compensation for loss of earnings in these “lost years.” Moreover, even if the injured person who is alive cannot use his income “during the lost years,” he can make use of his income for the “lost years,” in order to ensure that after his death the purposes that are important to him will continue as they would have continued if he had continued to live and work’ (Estate of Sharon Gavriel v. Gavriel [1], at p. 550).

Take the case of someone aged 50, who works for his living and is expected to continue to do so until the age of 65. This person is reduced to a permanent vegetative state as a result of a tortious act, and his doctors predict his life expectancy to be two years, during which he will remain in the permanent vegetative state and will not open his eyes. According to the prevailing law, this person will be entitled to compensation for the two years during which he will lie in hospital, unconscious, but he will not have a right to compensation for the thirteen years of earning that he would have had but will no longer have. This result is devoid of justice and logic.

The remarks of S.M. Waddams in his book The Law of Damages, supra, are apposite here:

‘Many would say instinctively that a person cannot be said to suffer a financial loss during a period when the person will not be alive to enjoy the use of any compensation that might be awarded for lost earnings. However, this view would lead also to the denial of recovery in the case of a plaintiff rendered permanently unconscious for of such a person it can also be said that the person will not be able to enjoy the use of compensation’ (at § 6.800).

In Croke v. Wiseman [137], Justice Shaw brought an example which, even though it is not identical to our case, serves to emphasize the claim that the question of the injured person’s capacity to enjoy the compensation money is irrelevant to the actual entitlement to the compensation: a very wealthy person whose leg was amputated in an accident will not derive any profit or benefit from the compensation money that his existing resources cannot provide him. But the fact that the compensation money does not give him anything does not deny him of the actual right of receiving it (ibid., at p. 863).

24. Moreover, even if the heirs benefit from the compensation rather than the injured person, this is not a matter for the law of torts to concern itself with. It is merely a consequence of the laws of inheritance. In any event, there is no difference, in this respect, between the compensation for the loss of earnings in the ‘lost years’ and any other compensation to which the injured person is entitled and which passes to his heirs when the injured person passes away (Estate of Sharon Gavriel v. Gavriel [1], at p. 552). Thus, for example, in a case where the injured person was caused pain and suffering as a result of the tortious act, he is entitled to compensation for pain and suffering, and when he dies this right passes to the estate (see, for example, CA 384/74 Estate of David Azoulay v. Vulcan Casting Enterprises Ltd [24], where the injured person was severely burnt in a work accident and suffered extreme pain for four days before he died, and the court awarded his estate compensation for pain and suffering and a reduction of his life expectancy; see also CA 2376/93 Estate of Michal Kedar v. HaSneh Insurance Co. [25]; and cf. s. 4 of the Compensation Law and r. 4 of the Road Accident Victims Compensation (Calculation of Compensation for Non-Pecuniary Loss) Regulations, 5736-1976). It follows therefore that the estate does not obtain a ‘windfall.’ This was discussed by Waddams in The Law of Torts, supra:

‘… it can be said that this kind of windfall is an inevitable consequence of the survival of actions legislation. Once the old rule is abandoned and it is accepted that a personal action survives, it inevitably follows that a deceased’s estate will receive what some might describe as a windfall. Indeed the real cause of the enrichment is not even the legislation but the very concept of inheritance of wealth’ (at § 6.860).

25. Therefore our conclusion is that the assumption that the injured person will not be alive in order to enjoy the compensation money for the ‘lost years’ cannot undermine the actual right to compensation. The compensation reflects the loss of the injured person’s capacity to earn money and to do with his income what he wishes, and the tragic fact of the injured person’s untimely death does not negate this loss.

It is appropriate to end this part of the judgment by citing the remarks of Lord Wilberforce, who expressed the other approach, according to which the lack of capacity to enjoy the lost profits denies the right to compensation, in language that puts into clearer perspective the difficulty of that approach:

‘Nothing is of value except to a man who is there to spend or save it. The plaintiff will not be there when these earnings hypothetically accrue: so they have no value to him’ (Pickett v. British Rail Engineering (1980) [135].

The determination is forceful, but problematic.

The dependants’ perspective

26. Another question of great importance, which we have already hinted at above, concerns the dependants of the injured person whose life expectancy has been shortened. Indeed, hitherto we have considered the question of compensating an injured person who is living for loss of his earning capacity in the ‘lost years’ mainly in the light of the remedial purpose of the law of torts. The considerations that we discussed derive from a desire to improve the injured person’s position and to remove the damage — in so far as this is possible by means of pecuniary relief. These considerations seek to return the injured person to his original position. They are based on an outlook that recognizes the right to compensation for that loss, despite the particular dimension of objectivity inherent in this damage, i.e., the compensation is given to the injured person for the damage of losing the capacity to derive income in the ‘lost years’ even if he himself is not expected to live during those years and to enjoy the compensation. But these considerations — the ‘technical’ considerations in the words of Justice Barak in his opinion in Estate of Sharon Gavriel v. Gavriel [1] — do not stand alone. Alongside them are additional considerations — which are social in essence (policy considerations). These found expression in Estate of Sharon Gavriel v. Gavriel (1), both in the minority opinion and in the majority opinion, and they have guided case law in other countries. We are concerned here with the need to provide a proper solution for the dependants of the deceased injured person, who find themselves, in certain cases, helpless — without support and without compensation.

27. Before we enter into this question in detail, we should first outline, in brief, the statutory framework with regard to the effect of the death of an injured person on liability in torts. When a person who was injured by a tort dies, a right of claim may accrue both to the estate and to his dependants. With regard to the estate, the Torts Ordinance tells us that when a person dies, all the causes of action arising from torts that were available to the deceased continue to be available to his estate (s. 19(a) of the Ordinance). In other words, the rights that a deceased injured person had to sue the tortfeasor, both for pecuniary loss and for non-pecuniary loss, survive if they have not been exhausted, and pass to his heirs (see CA 148/53 Penetz and Egged Operative Group Ltd v. Feldman [26], at pp. 1716-1717). It should be noted that in England a different approach was originally accepted, according to which personal claims for a tort did not survive the death of the injured person or of the tortfeasor, even if the death of the injured person was caused by the tortious act (actio personalis moritur cum persona). This approach sustained criticism from every direction, until in 1934 the law was changed by the enactment of the Law Reform (Miscellaneous Provisions) Act 1934, which provided for the ‘inheritance’ of rights and debts as aforesaid by the estate (a similar development began in Canada in the province of Ontario in 1886, within the framework of The Revised Statute respecting Trustees and Executors and the Administration of Estates).

Section 19 of the Ordinance further provides that where the act or omission that created the cause of action is also what led to the death of the injured person, ‘the compensation that can be recovered by the estate shall be calculated without taking into account the loss or profit caused to the estate as a result of the death…’ (s. 19(b)). The logic underlying this provision is that the claim is not that of the heirs, but of the deceased. An exception to this is funeral expenses, which may be paid (end of s. 19(b)). It is further provided in s. 19 of the Ordinance that the rights granted to the estate are not intended to add to the rights granted to the dependants of the deceased nor to derogate from them (s. 19(d)).

28. The dependants of the injured person have an additional — independent — claim, where the tortious act led to the death of the injured person (see ss. 78-81 of the Ordinance, which provide an arrangement similar to the English law, the Fatal Accident Act, 1846, and subsequently the Fatal Accident Act, 1976). The dependants, who are the spouse, parents and children of the deceased, are entitled to compensation for the pecuniary loss that they suffered as a result of his death (ss. 79 and 80 of the Ordinance; CA 482/89 Estate of Sarah Abir v. Ferber [27], at p. 109; CA 506/82 Sontag v. Estate of David Mendelsohn [28]). The tortfeasor must compensate the dependants of the deceased for the loss of the economic support to which they had an expectation, had the deceased remained alive (CA 64/89 Gabbai v. Lausanne [29]). It should be noted that not all damage caused to the dependants is compensatable, but only the pecuniary damage involved in the loss of pecuniary support deriving from their family dependence on the deceased (CA 206/87 General Federation Medical Fund v. Estate of Dr Meir Edison [30], at pp. 79-80; FH 24/81 Honovitz v. Cohen [31], at p. 420). The amount of this damage is usually determined by means of the parts method, which expresses an accepted factual presumption (CA 32/60 Felixberg v. General Manager of the Railway [32]). The court discussed the principles that apply with regard to a claim of dependants in Ararat Insurance Co. Ltd v. Ben-Shevach [15]:

‘In a claim made by dependants, the loss of support that will be awarded to them is also derived from the earning capacity of the injured person (the deceased). They are entitled to the loss caused to them as a result of the death of the deceased, who supported them, namely their share in the family “pie” from which they would have benefited, if the deceased had not died. In order to determine this loss, we must determine what would have been the earning capacity of the deceased if he had not died as a result of the accident. Just as in the case where the plaintiff is harmed as a result of being injured in an accident he should be awarded the pecuniary damage caused to him as a result of the accident, including the loss of earning capacity (s. 76 of the Torts Ordinance [New Version]), so too the dependants are also entitled to the “pecuniary loss that they actually suffered or will actually suffer in the future,” as stated in s. 80 of the Ordinance’ (ibid., at p. 494).

29. Section 78 of the Ordinance provides a qualification that the right of the dependants to compensation arises only where the tort caused the death of the person upon whom they were dependent, and that person was entitled, at that time, to compensation. This means that although the right of the dependants to receive compensation from the tortfeasor is an independent right, distinct from the right of the deceased, it is still conditional upon the fact that, had he not died, the deceased would have himself had the right, within the framework of a claim against the tortfeasor, to compensation for his damage (Gabbai v. Lausanne [29]). Only when the injured person died before realizing his right to receive compensation for his damage is the way paved for the dependants to make a claim (the law in England and many other countries is similar; see, for example, Pickett v. British Rail Engineering [135]).

This is the root of the problem, as described by Justice Barak, in Estate of Sharon Gavriel v. Gavriel [1]:

‘The accepted approach is that the right of the dependants is conditional upon the fact that upon the death of the injured person (“at that time”) he is entitled to compensation for the tort that was done to him. Therefore, if the injured person realized his right during his lifetime, whether by means of a judgment or by means of a waiver or in another way, he no longer has at the time of his death any right to compensation, and consequently the right of the dependants does not come into being… it follows that if the injured person who is living does not receive compensation, within the framework of his own claim, for loss of earnings in the “lost years,” this will seriously harm his dependants. Indeed, according to this approach, the sole hope of the dependants is — and how macabre this hope is — that the living injured person does not file a claim during his lifetime, or if he files a claim, that he will “succeed” in dying before his claim is tried’ (ibid., at p. 553).

Indeed, if compensation for the ‘lost years’ is not awarded, the result obtained from the provisions of s. 78 of the Ordinance, in cases where the deceased does not have, when he died, a claim for compensation, is, from the viewpoint of the dependants, harsh and unjust. Take the case of a person who had a working life expectancy of twenty years, and because of a tortious act his life expectancy is reduced to only two years. The vast majority of the potential earning years, which will not be realized because of the act of the tortfeasor, will not be given any expression in the award of compensation, and the dependants, even if they inherit what he was awarded in his claim, will be left with an empty shell, unless the injured person chose — and to put such a choice before him is inconsistent with criteria of justice and logic — not to file a claim for his damage.

We should remember that the injured person frequently needs the compensation money as early as possible, in order to alleviate his pain and to provide for his needs and those of his family that arise from the damage of the accident. The choice of the injured person to file a claim for his damage should not harm, from a global perspective, his interests and those of his dependants.

30. It appears that the main logic underlying the denial of the possibility of compensation to the dependants, in cases where the injured person realized his right to compensation, is the fear of double compensation. But this fear arises only where the injured person himself has been compensated for loss of earnings in the ‘lost years,’ since this is the ‘area of conflict’ between the rights of the dependants and the rights of the injured person. If this is so, the source and logic of s. 78 of the Ordinance lie in a legal reality where compensation is awarded to the living injured person according to the full working life expectancy that he had before the accident. This is exactly what Fleming discusses:

‘With few exceptions… this conflict has generally been resolved by subjecting the interests of the [dependants] to the risk of extinction by a prior recovery of the deceased, in the assumed prospect of double liability. This fear would be warranted, however, only if the award to the decedent included compensation for his loss of earnings during the period by which his life has been curtailed, for this segment alone corresponds with the expectancy of support to which his dependants may lay claim in a wrongful death action’ (Fleming, ‘The Lost Years: A Problem in the Computation and Distribution of Damages,’ supra, at pp. 598-599).

See also In re Joint Eastern & Southern District Asbestos Litigation, at p. 429.

31. The conclusion is that the provisions of s. 78 of the Ordinance in our law of torts are inconsistent unless compensation is awarded to the living injured person for the ‘lost years.’ Here it should be emphasized, parenthetically, that this is not the only place where one can find, in the Israeli law of torts, ‘footprints’ of an award of compensation for the ‘lost years.’ Below we will discuss additional footprints when we consider Estate of Lily Hananshwili v. Rotem Insurance Co. Ltd [7]. I would now like to address an additional provision in the arrangement for periodic payments prescribed in the Compensation Law with regard to claims being considered within the framework of that law. Section 6 of the Compensation Law authorizes the Minister of Justice to enact in regulations the ‘power of the court to decide that the compensation for loss of earning capacity and continuing expenses, in whole or in part, shall be paid in periodic payments…’ and also ‘the right of dependants of an injured person who died after he was awarded periodic payments.’ Indeed, the power of the court to award periodic payments for the heads of loss of earning power and continuing expenses was regulated in the Road Accident Victims Compensation (Periodic Payments) Regulations, 5738-1978. Regulation 3 provides:

‘Right of dependants

3. (a) If an injured person dies after he has been awarded periodic payments, dependants who were completely or partially supported by him before his death shall be paid a pension in the following percentages of the amount awarded, provided that the total of all the pensions does not exceed the amount awarded:

…’

Thus we see that where someone is injured in a road accident and his life expectancy is shortened, the court may award him compensation by way of a periodic payment, and in such a case the aforesaid r. 3 ensures that after the death of the injured person pensions are also paid to his dependants. This duty to pay the dependants of an injured person who died is not subject to discretion, and it arises whether the injured person died as a result of the accident or not. The sole requirement stipulated in the regulation is that the injured person passed away after he was awarded periodic payments. This regulation, in the context, constitutes a partial solution to the problem of the ‘lost years,’ and it can be said that ‘we can see from it a legislative trend that dependants of a living injured person will be entitled to compensation upon his death, notwithstanding the fact that before he died the injured person won damages of his own’ (Justice Barak in Estate of Sharon Gavriel v. Gavriel [1], at p. 556). Indeed, there are some who believe that the best way to ensure, on the one hand, the freedom of the injured person to do with his money as he sees fit, and, on the other hand, the support of the dependants, is to determine some mechanism of periodic payments, whereby starting from the date of the injured person’s death, the payments will be transferred to the dependants (see, for example, P. Cane & D. Harris, ‘Legislation,’ 46 The Modern L. Rev. 478 (1983), at p. 481).

It should be noted that the interest of dependants of an injured person in a road accident, who died before he realized his cause of action, is not subject to the provisions of s. 6 of the Compensation Law, and it is regulated within the framework of s. 78 of the Ordinance (with regard to the power to award periodic payments for dependants of the deceased who has not been awarded a pension, see CA 778/83 Estate of Sarah Saidi v. Poor [33]; for a general discussion, see also D. Moore, ‘Periodic Payments to Victims of Road Accidents,’ 6 Tel-Aviv University Law Review (Iyyunei Mishpat) 645 (1978)).

32. Let us return, then, to the provisions of s. 78 of the Ordinance. The anomaly that is created as a result of the provisions of this section, as described above, is not only the law in Israel, but it underlies the uncertainty of the courts in England on the question of compensation for the ‘lost years.’ In the past, the courts there adopted an approach whereby the amount of compensation was determined in accordance with the lifespan that the injured person anticipated before he was injured in the accident (see Phillips v. London & South Western Railway Co. [138]; Roach v. Yates [139]). Several judgments that dealt with this in the middle of the twentieth century presented different approaches to the subject (see Pope v. D. Murphy & Son Ltd [133], according to which compensation should be awarded for loss of earning capacity according to the life expectancy before the accident, and, by contrast, Harris v. Brights Asphalt Contractors Ltd [1953] 1 Q.B. 617, in which the view expressed was that compensation should not be awarded for the ‘lost years’). In 1962 the approach that denies entitlement to compensation for the ‘lost years’ became established; it found expression in the judgment of the House of Lords in Oliver v. Ashman [134]. In the words of Lord Justice Wilmer:

‘For what has been lost by the person assumed to be dead is the opportunity to enjoy what he would have earned, whether by spending it or saving it. Earnings themselves strike me as being of no significance without reference to the way in which they are used. To inquire what would have been the value to a person in the position of this plaintiff of any earnings which he might have made after the date when ex hypothesi he will be dead strikes me as a hopeless task’ (at p. 240).

The ruling in Oliver v. Ashman [134] was adopted also in other cases (see Wise v. Kaye [141]), but it was strongly criticized, especially in view of its serious consequences from the viewpoint of dependants, whose right to claim for loss of support arose only where at the time of the injured person’s death he had a right of claim against the tortfeasor (see D. Howarth, Textbook on Tort (Butterworths, 1995), at p. 613). The difficult result arising from the ruling in Oliver v. Ashman [134] is that the injured person, who is living and who files an action in torts, is unable to recover for the loss of future earnings, even though if he had not fallen victim to the tortious act, he would, it may be assumed, have earned a sum of money which he would have used for various purposes, including the support of his family. At the same time, the filing of the claim by the living injured person raises an insuperable barrier preventing the family members from suing, independently, for the damage they have suffered, i.e., the loss of support. In this sense, a dead injured person is better than a live one. This result brings with it severe consequences from a social viewpoint. A tangible example of this was seen in McCann v. Sheppard [142], where a young man aged 24 was injured in a road accident, and he filed a claim for compensation in consequence. While the action was pending, the injured person married and fathered a child. In the judgment, he was awarded compensation in an amount of £15,000 for loss of earnings in the future. The defendant filed an appeal on the amount of the compensation, but then the injured person died as a result of taking an overdose of painkillers. In view of the fact that the injured person had died, the court of appeal ordered the compensation to be reduced, on the head of loss of earnings, to a sum of only £400. Thus the widow and the son were left without support.

The criticism of the ruling in Oliver v. Ashman [134] did not escape the attention of the Law Commission, which convened in order to suggest possible ways of correcting the state of affairs. In brief, the Commission recommended the following three possible solutions: (1) changing the ruling in Oliver v. Ashman [134] by means of legislation and awarding compensation for the ‘lost years,’ while deducting the expenses that the injured person would have incurred for his subsistence during those years; (2) recognizing the right of the dependants to compensation-support even if the injured person received compensation during his lifetime; (3) filing the claim of the dependants and the claim of the injured person simultaneously, and payment of a certain sum into court, which will be paid to the dependants after the death of the injured person. The Commission recommended the first solution, saying that notwithstanding the existence of a possibility that the injured person would make use of all the compensation monies and would not leave anything for the dependants, it should not be assumed that many injured parties will indeed do this, and in any event, so the Commission thought, the balance of advantages and disadvantages tips the scales in favour of this solution, which can be implemented most simply and is the closest in principle to the manner in which tortious compensation is awarded — i.e., paying it to the injured person himself (for an analysis of the considerations for and against each of the solutions, see Report on Personal Injury Litigation — Assessment of Damages, Law Com. 56, at pp. 17-24; see also the remarks of Justice Barak in Estate of Sharon Gavriel v. Gavriel [1], at p. 553, and the remarks of President Kahan, ibid., at p. 571).

Albeit, the Commission’s recommendation did not find expression in legislation, but in 1980 the first solution was adopted by the House of Lords, in Pickett v. British Rail Engineering [135]. That case concerned a person who contracted cancer as a result of exposure to asbestos, and his life expectancy was shortened to approximately one year only. He died after the judgment of the trial court was given in a claim that he filed, but before the appeal was heard. His widow continued the proceeding, which reached the House of Lords. The House of Lords overturned Oliver v. Ashman [134] and recognized the head of loss of earnings in the ‘lost years.’ This was both for the legal reason that the plaintiff, whose life expectancy was shortened, suffered immediate damage of loss of earning capacity, and for the social reason that the dependants should not be left without compensation. From then until now, the ruling in this matter has not changed, and the courts in England award the living injured person compensation for the years in which he could have worked and earned money had his life expectancy not been shortened by a tort (it should be noted that the Supreme Court of Canada had already ruled in 1978 that it was not prepared to adopt the rule in Oliver v. Ashman [134] (see Andrews v. Grand & Toy Alberta Ltd. [112]; the same was held by the High Court of Australia, in 1966: see Skelton v. Collins [106]).

33. In the United States the difficulty inherent in the two sides of the question has also been recognized. On the one hand, a legal system which does not recognize a head of the ‘lost years’ and which denies the right of the dependants to file a claim for their damage leads to a result in which the tortfeasor benefits from the fact that he shortened the life expectancy of the injured person. On the other hand, a legal system in which compensation is awarded for the lost years of earnings and the personal claim of the injured person does not create a barrier to a claim by the dependants means that the tortfeasor will be liable for a double payment. So what is the solution? Most of the States have accepted the approach that in the personal claim of the injured person for loss of earning capacity, the working life expectancy that he had prior to the accident is taken into account (see, for example, In re Joint Eastern & Southern District Asbestos Litigation [83], at p. 429; Morrison v. State [86], at p. 406; Borcherding v. Eklund [87] at p. 650; Crecelius v. Gamble-Skogmo, Inc. [88]; Burke v. United States [89]; Fein v. Permanente Medical Group [90]; Doe v. United States [80]). The United States Supreme Court discussed the rule prevailing in this matter in the United States in the following manner:

‘Under the prevailing American rule, a tort victim suing for damages for permanent injuries is permitted to base his recovery “on his prospective earnings for the balance of his life expectancy at the time of his injury undiminished by any shortening of that expectancy as a result of the injury”.’ (Sea-Land Services, Inc. v. Gaudet [91] at p. 594).

In order to prevent double compensation, in those countries they do not allow a claim for wrongful death in cases where the injured person has realized his personal claim, or the claim for wrongful death is set off against the amount paid in the personal claim (see In re Joint Eastern & Southern District Asbestos Litigation [83], at p. 430; Fleming, ‘The Lost Years: A Problem in the Computation and Distribution of Damages,’ supra, at p. 614).

However, in several judgments the courts in the United States held that in a personal claim of the injured person, the amount of the compensation for loss of earning capacity should be determined according to the life expectancy that he has after the accident (see Ehlinger v. State [92] at p. 792; Hughes v. Chicago, R.I. & P. Ry. Co., 129 N.W. 956 (1911)). But this position does not stand alone, because in those places where this was held, it appears that they have adopted the opinion that the personal claim of the injured person cannot prevent the possibility of filing an action for wrongful death after the death of the injured person (see In re Joint Eastern & Southern District Asbestos Litigation [83], at p. 430; Doe v. United States [80]).

It follows from all of the above that even in the United States, both according to the majority opinion and according to the minority opinion, the dependants are not left, as a rule, without support. The harm to the injured person’s income in the ‘lost years’ finds expression in the award of compensation, whether this is done in the personal claim of the living injured person, or whether it is done in a claim within the framework of the wrongful death laws.

34. In Estate of Sharon Gavriel v. Gavriel [1], President Y. Kahan, who wrote the leading majority opinion, was aware of the difficulty that we have discussed, from the viewpoint of the dependants, and he pointed out that ‘such a situation can cause injustice.’ Similar remarks were made by the other majority judges, Justice Bejski (ibid., at pp. 578-579) and Vice-President Shamgar (ibid., at pp. 576-577). But this problem, so the majority opinion judges thought, should be remedied by way of a change in legislation, and not by awarding compensation for the ‘lost years,’ since the latter involved miscarriages of justice of its own.

But the legislator tarries. Although more than twenty years have passed since the judgment was given in Estate of Sharon Gavriel v. Gavriel [1], the injustice remains as it was. It should be noted that there are, admittedly, legal systems in which the awarding of compensation to the living injured person, for loss of his earning capacity in the ‘lost years,’ is done pursuant to an express statutory provision. This is the case, for example, in Scotland. The Damages (Scotland) Act provides, in s. 9, that in assessing the damages of the living injured person it should be assumed that his life expectancy is at it was before the damage occurred. But such an express statutory provision is not essential. In many countries, it is case law that has recognized the damage arising from the loss of earning capacity in the ‘lost years’ as compensatable damage. This, as we have seen, is how the law has developed in England (see Pickett v. British Rail Engineering Ltd [135]; M.A. Jones, Torts (eighth edition, 2002) at pp. 682-683). This is also the case in most States in the United States (see Sea-Land Services, Inc. v. Gaudet [91], at p. 594, and the discussion supra), and in Canada, where the courts have recognized the entitlement of the living injured person to compensation for the ‘lost years’ (see Andrews v. Grand & Toy Alberta Ltd. [112]; The Queen in right of Ontario v. Jennings [113]; Sigouin (Guardian in litem of) v. Wong [114]; Dube v. Penlon Ltd. [115]). The courts in Australia have followed a similar path (see Skelton v. Collins [106]; F. Trindade & P. Cane, The Law of Torts in Australia (third edition, 2001) at p. 519), and so has case law in New Zealand (see S. Todd et al., The Law of Torts in New Zealand (1991) at p. 881) and in Ireland (see Doherty v. Bowaters Irish Wool Board Ltd [160]; Conley v. Strain [161]).

In other countries, case law has pursued a different path. Thus, for example, in South Africa, the right to compensation for the head of damage for the ‘lost years’ has been recognized (see Goldie v. City Council of Johannesburg [164]), but it was held afterwards that for the purpose of compensation for the loss of earning capacity, the life expectancy remaining to the injured person after the accident was what should be examined (see Lockhat's Estate v. North British and Mercantile Insurance Co. Ltd [165]).

35. It can be seen that, even though there is no unanimity on the issue of the ‘lost years,’ it is possible to say that in many countries case law has recognized the entitlement of the living injured person to compensation for the ‘lost years of earning.’ A change in legislation is therefore not essential. The award of compensation for the loss of earning capacity in the ‘lost years’ will find a strong basis in the principles of compensation that have been accepted in Israel, as in other legal systems, for many years. The need to realize the goal of returning the injured person to his original position and the need to solve the difficulties arising from the current legal position justify a change in the prevailing case law on this issue. As for the injustices and difficulties involved, allegedly, in awarding compensation for the loss of earning capacity in the ‘lost years,’ these, as we have already said and as we shall explain below, can be solved.

Deduction of expenses

36. One of the objections raised against awarding compensation for the loss of earning capacity in the ‘lost years’ is that, alongside the income that the plaintiff was deprived of in those years, he has ‘saved’ himself the expenses that he would have incurred in those years. It is indeed true — so it is claimed — that the plaintiff would have had earnings as a result of his work in those years, but at the same time he would also have had expenses. Both the former and the latter have been lost as a result of the tortious act (for a discussion of this claim, see, inter alia, Fleming, ‘The Lost Years: A Problem in the Computation and Distribution of Damages,’ supra, at p. 603; In re Joint Eastern & Southern District Asbestos Litigation [83], at p. 428).

This objection relates to the internal balance by which the compensation is assessed. This balance considers the loss and the gain resulting from the accident. Indeed, compensating the injured person in an amount that reflects his entire earnings in the ‘lost years’ means overcompensation, since it ignores the fact that in order to produce this income, the deceased would have needed to use various amounts for his subsistence. These amounts will no longer be incurred after the death, unlike, for example, in a case where the accident causes disability and not death, when the injured person must incur expenses to continue to live during the period of his disability (see R.A. Posner, Economic Analysis of Law (third edition, 1986), at p. 182). This was discussed by the Supreme Court of Canada:

‘There can be no capacity to earn without a life. The maintenance of that life requires expenditure for personal living expenses. Hence the earnings which the award represents are conditional on personal living expenses having been incurred. It follows that such expenses may appropriately be deducted from the award. Against this, it is argued that if [the plaintiff] had been born a millionaire, her personal living expenses during the “lost years” would have been met from other sources. But this does not negate the fact that in order to earn income one must live and incur the attendant expenses’ (Toneguzzo-Norvell v. Burnaby Hospital [116]).

37. We cannot, therefore, ignore the question of the living expenses. But this factor cannot affect the fundamental question of the entitlement to compensation, and its only effect is with regard to the quantum. In other words, the solution to the aforesaid difficulty lies in the realm of calculation; the court, when determining the quantum of damages, must deduct from the total income that the injured person would have accrued if he had worked in the ‘lost years’ those expenses that he would have incurred for his subsistence. This is the internal balance. It does not affect the actual entitlement to compensation but only the method of calculating it. This calculation is merely a normal consequence of our well-established rules, such as, for example, with regard to the claim of the dependants. The rule is that in calculating the loss of the dependants as a result of the death of the deceased, one must also take into account the pecuniary benefit that they received, if any, as a result of his death. This is the ‘deduction rule,’ which holds that the material benefits arising from the deceased’s death must be set off against the damage that the dependants suffered (Estate of Michal Kedar v. HaSneh Insurance Co. [25]). Albeit, this rule has been subject to criticism. This was expressed by Justice H.H. Cohn, in sarcastic terms:

‘At long last they [the mourners] have achieved a significant saving in that the deceased no longer eats breakfast, lunch or supper, nor does she any longer drink wine or spirits, tea or coffee. What is more, she no longer needs clothes or shoes, cosmetics or jewellery. These are real gains, and who knows whether in the account of the life of a well-groomed and indulgent woman these do not greatly exceed the pecuniary loss caused by her death…’ (Eliyahu Insurance Co. Ltd v. Estate of Violet Tzaig [34], at pp. 139-140).

Justice Tz. Tal, in the minority, returned in Estate of Michal Kedar v. HaSneh Insurance Co. [25] to the criticism of the deduction rule, in so far as it concerns the deduction of the compensation due to the heir of the deceased (in a claim by the estate) from the compensation payable to him as a person dependent on the deceased’s livelihood. The criticism there was directed at the deduction rule itself. In my opinion, it should have been directed against the erroneous manner in which the deduction rule was implemented, namely by exempting, in certain circumstances, the tortfeasor from his liability to pay the total damage and by limiting his liability to the ‘largest’ head of damage.

In any event, notwithstanding the feeling of discomfort arising from the calculation of the pecuniary saving arising from the death of the injured person, the deduction rule, which is founded on s. 80 of the Torts Ordinance and on the principle of returning the injured person to his original position, remains valid (see also CA 5/84 Yehezkel v. Eliyahu Insurance Co. Ltd [35]; CA 471/93 Estate of David Hyams v. Hyams [36]; CA 1503/94 Israeli Phoenix Insurance Co. Ltd v. Estate of Baruch Berman [37]). The provisions of the law that set out the limits of the deduction — such as s. 81(1) of the Ordinance, which provides that amounts that the dependants received or are entitled to receive upon the death of the deceased under an insurance contract shall not be deducted — have been interpreted narrowly on several occasions by case law (see CA 154/70 Bida v. Rubin [38]; CA 682/69 Hamudot v. Shapira [39]). It need not be said that the ‘saving’ and the ‘benefit’ discussed within the context of the deduction rule are entirely in the financial sphere, since in the emotional sphere the death of the injured person only causes his relations suffering.

Following this approach, case law has held, inter alia, that from the compensation given to the dependants we should deduct the amount of non-pecuniary compensation that they received by virtue of their being the heirs of the deceased, and that this deduction is not contrary to the provisions of s. 19(d) of the Torts Ordinance (CA 206/87 General Federation Medical Fund v. Estate of Dr Meir Edison [30]). It is from this approach also that we derive the position that the needs of the deceased — needs that were ‘saved’ when he died — should be deducted from the family funds. As Justice Barak said, within the framework of the ‘balance of profit and loss’ caused to the injured person on the death of the person who supported him: ‘We should take into account, on the one hand, the damage caused to the dependants as a result of the loss of the efforts of the mother and spouse… and on the other hand, the lack of expenses that were incurred in the past for his subsistence and needs. This lack is a saving caused to the dependants as a direct result of the death, and it should be taken into account…’ (Eliyahu Insurance Co. Ltd v. Estate of Violet Tzaig [34]). Therefore the court, when awarding the dependants compensation for the loss of support, is obliged to assess, in the first stage, the amount of income that the deceased would have set aside for the purpose of supporting those dependent on him, while taking into account, in so far as is necessary, special expenses that he would have incurred out of his income; and in the second stage, the court must calculate — by means of the parts method — the size of the deceased’s share in the family income (see Katzir, Compensation for Personal Injury, supra, at p. 782).

38. It follows that the idea whereby in calculating the loss of income after the death of the injured person one should deduct the financial saving accruing as a result of his passing away is not a new one in Israel, and it should be applied also with regard to the award of compensation for the loss of earning capacity in the ‘lost years.’ This is indeed what case law has held in the various legal systems. In England, the House of Lords held, in Pickett v. British Rail Engineering [135] that the loss of earning capacity in the ‘lost years’ is, albeit, damage that may be claimed by the living injured person, but the court must deduct from the compensation the sum that reflects the estimated expenses that the plaintiff would have incurred for his subsistence, had he lived during the ‘lost years’ (see also Harris v. Empress Motors Ltd [143]). Usually the English courts deduct 50%, unless special circumstances justifying a different calculation are proved, such as that the plaintiff could have saved a significant amount (see, for example, Phipps v. Brooks Dry Cleaning Services Ltd [144]).

Moreover, the English courts have often held that in cases where the plaintiff does not have dependants, and there is no expectation that he will have any of these — for example, because of his young age at the time of the accident — the amount of the compensation for the lost years may amount to zero. Giving compensation in such cases, so it has been said, would be too speculative (see opinions for and against this view, in Croke v. Wiseman [137]; Connolly v. Camden & Islington Area Health Authority [145]; Adsett v. West [146]; Gammell v. Wilson [147]. We will return to this issue.

39. In Ireland, too, the right of the living injured person to compensation for the ‘lost years’ has been recognized, and the court takes into account in the compensation the amount of the anticipated expenses of the injured person for his subsistence (see Doherty v. Bowaters Irish Wool Board Ltd [160]). There is similar case law in Australia (Skelton v. Collins [106]), Canada (Semenoff v. Kokan [117]; Toneguzzo-Norvell v. Burnaby Hospital [116]) and other countries.

A different note, that there is no basis for deducting from the income the amount that reflects the expenses saved in the lost years, has been heard at times in American case law (see Olivier v. Houghton County St. Ry. [94]; In re Joint Eastern & Southern District Asbestos Litigation [83], at p. 531). The reasoning behind this approach is that it is no concern of the defendant how the plaintiff uses his income. But this reasoning does not stand up to closer inspection, since the purpose of the compensation is to reflect the damage of the injured person — no more and no less — and it is clear that in the context we are discussing, the real economic damage that is caused to the injured person reflects a difference between his expected income in the ‘lost years’ and the expenses that he would need for his subsistence in those years (see Fleming, ‘The Lost Years: A Problem in the Computation and Distribution of Damages,’ supra, at p. 603).

40. In Israel, in Estate of Sharon Estate v. Gavriel [1] Justice Barak adopted the approach, which as aforesaid is accepted in most of the countries that have considered the question of the ‘lost years,’ that in assessing the damage of the plaintiff on this head, we should take into account the fact that in these years he will ‘save’ the expenses that he would have incurred had he been alive. The compensation for this head of damage should be calculated, so he proposed, as the difference between the income that he lost and the expenses that he saved. However, Justice Barak emphasized that this cannot deny the right of the injured person to the actual receipt of the compensation (Estate of Sharon Estate v. Gavriel [1], at p. 551). I too am of the opinion that, according to our accepted principles, there is no alternative to including, in the calculation of the compensation, the expenses that the injured part would have incurred had he remained alive during the ‘lost years.’ This principle leads us to the following question: what is the method that we should adopt in calculating the expenses that should be deducted for the purpose of determining the amount of compensation for the loss of earning capacity in the ‘lost years’?

Methods of calculating the expenses

Possible methods

41. In England, Canada and other countries where it is customary to award compensation for the ‘lost years,’ various methods have been adopted for the calculation of the expenses that should be deducted for the purpose of determining the amount of the compensation (see C.L. Brown, ‘Duncan v. Baddeley: Reconciling the “Lost Years” Deduction with Fatal Accident Cases,’ 35 Alberta L. Rev. 1108 (1997); Duncan (Estate of) v. Baddeley [118]; Harris v. Empress Motors Ltd [143]; C. Bruce, ‘The “Lost Years” Deduction,’ The Expert Witness Newsletter, Economica Ltd. (Spring 1997, vol. 2, no. 1)). The deduction percentage varies widely between approximately 30% or even less (see, for example, Brown v. University of Alberta Hospital [119]) and approximately 70% (see, for example, Granger v. Ottawa General Hospital [120]).

42. One method of calculation that was suggested (and rejected) in Canada is the ‘Basic Needs Approach.’ This approach is based on a criterion of basic needs, which is unconnected with the income level of the injured person. According to this approach, wherever compensation is awarded for the ‘lost years,’ an amount shall be deducted from the compensation to reflect the expenses that a person incurs for his basic needs, by taking into account details such as the question of whether he was married or not, the size of the family, etc.. This approach was criticized, inter alia, on the grounds that it does not provide a true assessment of the expenses that a particular person, with a particular level of income, would incur (see Brown, ‘Duncan v. Baddeley: Reconciling the “Lost Years” Deduction with Fatal Accident Cases,’ supra; Duncan (Estate of) v. Baddeley [118]).

43. Another approach for calculating the expenses that should be deducted in order to assess the compensation for the ‘lost years’ is the ‘Standard of Living Approach.’ This approach, apparently, is the most accepted in England and Canada. According to this approach, the potential standard of living of the injured person should be taken into account, with regard to his earning capacity. This approach was reflected in the case law of the House of Lords in Gammell v. Wilson [147]:

‘The loss to the estate is what the deceased would have been likely to have available to save, spend or distribute after meeting the cost of his living at a standard which his job and career prospects at time of death would suggest he was reasonably likely to achieve.’

Similar remarks were expressed by the Court of Appeal in England, in Harris v. Empress Motors Ltd [143], while delineating the principles underlying the Standard of Living Approach:

‘(1) The ingredients that go to make up “living expenses” are the same whether the victim be young or old, single or married, with or without dependants. (2) The sum to be deducted as living expenses is the proportion of the victim’s net earnings that he spends to maintain himself at the standard of life appropriate to his case. (3) Any sums expended to maintain or benefit others do not form part of the victim’s living expenses and are not to be deducted from the net earnings’ (at p. 228).

See also White v. London Transport Executive [148], in which the court said that:

‘In the cost of maintaining himself I include the cost of his housing, heating, food, clothing, necessary travelling and insurances and things of that kind…’ (at p. 499).

In Semenoff v. Kokan [117] the court in the Canadian province of British Columbia adopted the calculation method used in Harris v. Empress Motors Ltd [143]. So did the court of appeal in the province of Alberta, in the decisions in Duncan (Estate of) v. Baddeley [121] in 1997 and Duncan (Estate of) v. Baddeley [118] in 2000). See also the judgment of the Supreme Court of Canada in Toneguzzo-Norvell v. Burnaby Hospital [116].

44. A third possible approach to the calculation of the subsistence expenses of the injured person is the ‘Savings Approach.’ This approach assumes that the amount of income that a person has left, after he lays out the expenses needed to preserve his lifestyle, is the amount that would have been saved by him (see Brown, ‘Duncan v. Baddeley: Reconciling the “Lost Years” Deduction with Fatal Accident Cases,’ supra; Granger v. Ottawa General Hospital [120]; Marchand v. Public General Hospital of Chatham [122]; see also Australian case law in Sharman v. Evans [107] at pp. 579-583; see also Sullivan v. West Yorkshire Passenger Transport Executive [149]). This approach has received criticism, on the grounds that it is not consistent with the purpose that underlies the award of compensation for the ‘lost years,’ namely giving the plaintiff the possibility of ensuring the future of the dependants (Trindade & Cane, The Law of Torts in Australia, supra, at p. 519); it has also been claimed that this approach takes into account irrelevant factors (how the injured person would have chosen to use his money), and it does not examine the question of the deduction of expenses from the correct viewpoint — that of the injured person — but from the viewpoint of the heirs, namely what they can expect to receive in the inheritance (see Duncan (Estate of) v. Baddeley [118]).

The proposed approach

45. What is the method of calculating the expenses that should be adopted in our legal system? The Basic Needs Approach and the Savings Approach were rejected, as aforesaid, by most courts and scholars, and with good reason. These approaches suffer, as we have set out above, from significant defects. The ‘Standard of Living Approach’ is, from an objective point of view, a more suitable approach, but it too suffers from a major defect, which lies in its great vagueness. It would seem, therefore, that at least in those cases where it is possible to know or to estimate the family position of the injured person in the ‘lost years,’ we ought to adopt the method of calculation that is well established in our legal system, namely the ‘parts’ method, in the absence of particular circumstances that justify following another path. It is possible to ‘know’ when the family position of the injured person has already been established on the date of the judgment; it is possible to ‘estimate’ where it has not yet been established but can be forecast. The ‘parts’ method applies, where there is no evidence to the contrary, a working assumption — a factual presumption based on experience of life and the life style of the average family. The significance of applying this approach is that after assessing the potential income of the injured person, we should add it to the family income (‘the joint kitty’) and then, out of the total income, allocate one part as a general fixed expense of the family, and divide the remainder equally between the family members, in such a way that one part is attributed to each person. The part of the person injured by the tortious act should be deducted from his income, and thereby the amount of the compensation is reached (see Felixberg v. General Manager of the Railway [32], at p. 1638).

46. This approach has several advantages: first, it achieves the purpose of the deduction. When the parts method is used in calculating the damage of the dependants, it produces a figure for the amount that the deceased injured person would have spent on his own subsistence. This amount reflects the ‘saving’ — in material terms — that is a consequence of the death of the injured person (Eliyahu Insurance Co. Ltd v. Estate of Violet Tzaig [34]; CA 501/84 Migdal Insurance Co. Ltd v. Miron [40]). We are concerned with this amount — the amount of the material ‘saving’ arising from the death of the deceased — also when we are dealing with the issue of the ‘lost years.’ This is therefore a good reason for using the ‘parts’ method even for calculating the compensation in our case. Second, the ‘parts’ method is a convenient, effective and equal approach:

‘Certainly the “parts” method also is not exact and does not distinguish between the expenses incurred for the subsistence of the various family members that are only equal in theory; it also cannot be said that the additional “part” is equal in amount in all families and in all situations; the main advantage of the method is that it makes the method of calculation simple and leaves the court and the litigants a calculating tool that makes it easier for them to determine the pecuniary loss caused to the dependants; and this should not be considered of small importance, for a calculation by means of a formula makes the court’s work easier and helps litigants to reach a compromise in suitable cases; indeed, it was held in Felixberg v. General Manager of the Railway [32] that where there are no special circumstances in the case that require adopting a different approach, it is best for the court to adopt the “parts” method, “so that one plaintiff will not be awarded a large amount and another plaintiff a small amount, merely because of the approaches of different judges” (CA 610/75 Rotem v. Nof [41]).’

When we compare this approach, with its advantages, to others, and take into account the fact that the courts in Israel are accustomed to apply it in tort cases, its preferability to the other vague approaches that we reviewed above is clear (see also CA 1299/92 Estate of Aliza Mor v. Rom [42], at p. 702). Third, this approach takes into account both the number of persons in the family and its economic status in view of the total level of income (see Estate of Sarah Abir v. Ferber [27]; Gabbai v. Lausanne [29]; CA 541/88 Protection of Nature Society v. Estate of Ora Forman [43], at p. 142). The factors are of importance in so far as calculating the ‘saving’ resulting from the death of the injured person is concerned. Fourth, following the ‘parts’ approach also in the context of the ‘lost years’ leads to coherence and harmony in the method of calculating compensation in Israeli law, and it takes into account one of the main reasons — maybe the most important reason of all — for awarding compensation for the ‘lost years,’ namely ensuring support for the dependants. Adopting this approach brings the amount of the compensation for the ‘lost years’ closer to the amount that the dependants would have received in an independent claim for loss of support, and thus it reaches a proper result (see Waddams, The Law of Damages, supra, at § 3.920). Fifth, this approach, according to accepted case law, is not the final word, and it applies as a default method where the litigants do not show any circumstances that justify another calculation (Felixberg v. General Manager of the Railway [32], at p. 1637; Rotem v. Nof [41]; CA 204/85 State of Israel v. Mizrahi [44]; CA 587/87 Malca v. Aktin [45]). This is therefore a convenient method of calculating the compensation, and it is possible to depart from it where necessary and to use a different method of calculation that is consistent with the circumstances and the evidence presented in court.

47. Hitherto we have proposed the ‘parts’ method as a means of assessing the amount that should be deducted from the amount of compensation for the ‘lost years.’ Notwithstanding, the use of this method requires two adjustments: first, there is a difference between the award of compensation to dependants, for loss of support, and the award of compensation to a living injured person, for the ‘lost years.’ Whereas in the first case — awarding compensation to dependants — the amount that the injured person would have saved should not be included in the support compensation, since the dependants would not be benefiting from him as dependants, in the second case this amount should be part of the compensation, and there is no justification for deducting it. Indeed, when speaking of compensation for the living injured person for the ‘lost years,’ we should deduct from the amount of compensation the ‘subsistence part’ of the deceased (the amount that would have been needed for his subsistence), but we should leave as part of the compensation both the amount of the support and also the amount of the saving. Therefore, it appears that we ought to adapt the ‘parts’ method so that in the absence of circumstances indicating the contrary, a certain amount that represents the share of the injured person’s part that he would have devoted to savings should be excluded from the deduction. In other words, from the amount of the earnings we should deduct not the whole part, but only some of it, which reflects the subsistence expenses but not the savings. This division could be determined in two ways: one, dividing the injured person’s part into two, with one half reflecting the amount of savings (half as a suitable average amount) and the other, adding an additional ‘conceptual’ part to the accepted number of parts and deducting it. This second method, which increases by one part the number of parts, for the purpose of locating the ‘subsistence part’ that will be deducted from the amount of the compensation, has the advantage that, like the ‘ordinary’ parts method, it constitutes a proportional approach, based on life experience, all of which when there is no evidence to the contrary.

Second, we have already hinted above that the ‘parts’ method is appropriate mainly in those cases where it is possible to know or to estimate what the family status of the injured person would have been, had it not been for the accident, in the ‘lost years.’ This knowledge, or estimate, allows us to make the calculation according to the number of persons in the family. However, when this figure is not obtainable — for example, where it is clear that the plaintiff will not have dependants because of a very short life expectancy or a persistent comatose state — a difficulty is likely to arise in applying this method of calculation. In such a case, we can resort to several other methods: it is possible, for example, to estimate the injured person’s ‘conceptual’ family position in the ‘lost years’ on the basis of statistical figures, and to make the calculation according to the ‘parts’ method described above (see and cf. Semenoff v. Kokan [117], where the court assumed that the injured person, who was a bachelor, could have had two children). Another method is to assume that we are dealing with an injured person without dependants, and to deduct larger expenses from the compensation. In such a case, the amount that will be attributed to personal living expenses, and to savings, will be increased (see Waddams, The Law of Damages, supra, at § 3.930). We will add to this in our discussion concerning compensation for the ‘lost years’ of a child.

Compensation for the ‘lost years’ of a child

48. Although the awarding of compensation for the ‘lost years’ is designed, inter alia, to realize the social goal of protecting dependants, still there is no guarantee that the injured person will make use of the compensation money on their behalf. There is a concern that the injured person will enjoy the compensation money, in full, during the lifespan that remains, or will devote it to other purposes until there remains nothing for the dependants (this concern was regarded by the Law Commission, apparently rightly, as quite remote). Moreover, the right of the injured person to compensation is not denied where he has no dependants at all, or where his current dependants are not those persons who would have been likely to be his dependants when he passes away, had it not been for the damage that he suffered (M.A. Jones, Torts, supra, at p. 682).

A striking example of a situation of this kind can be seen in accidents where the injured person is a young child. When this is the case, the significance of one of the main reasons for awarding damages for the ‘lost years’ — namely the consideration of preventing injustice to the dependants — is reduced. Lord Denning wrote a minority opinion in a certain case that where the life expectancy of an infant is shortened as a result of an accident, awarding compensation for loss of earnings is absurd, since the compensation will go to his parents, or, if these are not alive, to another relation (Croke v. Wiseman [137]). It should be noted that, according to Lord Denning’s approach, compensation should not be awarded for loss of earnings, either in the years of life or in the ‘lost years,’ also for a child who suffers, as a result of the accident, serious brain damage (ibid.). English case law has continued to discuss, in additional cases, the great difficulty that may arise when attempting to determine the nature of the future earning potential of a child, or to estimate the amount that he would have spent on his subsistence had it not been for the accident.

49. Notwithstanding these difficulties, English case law has not denied the actual right to compensation in such cases for the head of damage of the ‘lost years.’ Even in Croke v. Wiseman [137], the majority opinion expressed reservations as to Lord Denning’s fundamental position that in so far as a small child is concerned, there is no basis for compensation for the head of damage of loss of earnings. Notwithstanding, on several occasions the courts in England have held that the amount of compensation for the loss of earnings of a child in the ‘lost years’ may be very modest, or even nil, because of the speculative nature of awarding them. In Gammell v. Wilson [147], the court held as follows:

‘In the case of a young child, the lost years of earning capacity will ordinarily be so distant that assessment is mere speculation. No estimate being possible, no award, not even a “conventional” award, should ordinarily be made.’

Notwithstanding, in Gammell v. Wilson [147], the court recognized exceptions to this rule, as for example where the career of a young television star is interrupted. In Connolly v. Camden & Islington Area Health Authority [145], it was held that the award of compensation, when dealing with a child, stands or falls by the possibility of proving it:

‘It is difficult enough in the case of a teenager or middle aged person to prove something for the lost years. It is more difficult for a child but I can envisage, with respect, far more examples than the Shirley Temple case or that of a television star. I can envisage the only son of a father who owns a prosperous business. I can envisage the son who is born to a father who is able to leave the estate to the son. I can envisage a number of situations where the court can look at something and find there are lost years to be compensated for… but what I hold and hold clearly is that Pickett and Gammell… give this little boy a head of claim for lost years, but on the material before me I am going to state… not that there is no claim but that there is a claim which I assess at nil.’

See also Adsett v. West [146]; Harris v. Empress Motors Ltd [143]. Indeed, the speculation may find expression in the question of the extent of the ‘savings’ that the child would have accumulated, as well as in the question of the identity of his dependants at the relevant times. But the speculation is a constraint that the tortious claim must address — not by means of abandoning the principle, but by an appropriate choice of the manner of applying it. Thus, for example, it is possible to suggest, in the claim of the minor, that increased expenses should be deducted from the compensation in the absence of dependants, and this method should be preferred over the more speculative assumption concerning the (future) existence and number of dependants, by deducting the part of the injured person.

50. In practice, the difficulty of assessing the damage for the loss of earnings, in the case of an injured person who is a child, is not unique to the issue of the ‘lost years.’ Many times, when a child is injured as a result of a negligent act, this can harm his future earning capacity or the possibility of finding a place in the work market. The court is required to award him compensation on the basis of assumptions and estimates, and the degree to which these are based on reality may vary from case to case. Indeed, in the case of a child, a difficulty may arise in measuring the extent of the loss of earnings, since often details are lacking with regard to the earning potential of the injured person, and the court finds itself in the dark. ‘… Determining the loss of the future earnings of a minor, who has not yet actually entered into the work market, is always a guess, which is greater the younger the minor is’ (Justice Y. Malz, in CA 311/85 Efraimov v. Gabbai [46], at p. 194). Frequently, at the time of the injury, and also at the time of the trial, the injured minor has not yet chosen his profession, has not yet begun a course of professional training, and the difficulty of estimating what the future holds for him is obvious (see the remarks of Justice T. Or in CA 634/88 Attiya v. Zaguri [47], at p. 101). Nonetheless, this difficulty cannot, as a rule, prevent the actual award of compensation for the harm to earning potential, which is an asset that belongs to its owner. ‘The special difficulty in estimating the compensation for a child at this age should not completely prevent a determination in some amount’ (CA 209/53 Weizman v. Zucker [48]; Naim v. Barda [3], at p. 786; see also Croke v. Wiseman [137]). The court is not intimidated from attempting to determine amounts that will reflect, to some degree or other, the damage caused to the injured person, and this has on several occasions been done by determining a global amount (CA 685/79 Atrash v. Maalof [49], at p. 630; CA 335/59 Reichani v. Tzidki [50]; CA 326/88 Zimmerman v. Gavrielov [51], at p. 360) or by relying on the amount of the average salary in the economy (CA 142/89 Gamliel v. Oshiot Insurance Co. Ltd [52]).

It would appear that similar considerations should also guide the award of compensation in cases where we are concerned with the loss of earnings in the ‘lost years’ of a child. In Estate of Sharon Gavriel v. Gavriel [1], at pp. 557-558, Justice Barak expressed the opinion that:

‘We should not establish a legal principle to the effect that the compensation to which a young child is entitled is always minimal or even nothing. No hard and fast rules should be determined in this respect. Everything depends upon the circumstances of each individual case, i.e., on the factual basis that is presented before the court considering the matter, and they may be cases in which the compensation will be significant (see: Rose v. Motor Vehicle Insurance Trust [108]) (Estate of Sharon Gavriel v. Gavriel [1], at pp. 557-558).

Thus, the mere fact that the injured person is a minor should not, in principle, affect the question of the entitlement to compensation, even though it is possible that it will have significance in determining the amount of the compensation. The plaintiff who is a minor will be entitled to claim compensation and this right remains unassailable even where the assessment of the compensation is very modest.

Interim summary: the claim of the living injured person

51. The various legal systems have directed their attention to the issue of the ‘lost years.’ Different approaches have adopted by the different systems, but it can certainly be said that in many countries — some of which have common principles with the Israeli legal system in this context — the head of damage of the ‘lost years’ is recognized as damage for which the living injured person can sue. This is the case in England, Canada, Australia, Ireland, Scotland, New Zealand and the United States. A similar approach should also be adopted by us, in so far as the claim of the living injured person is concerned. Thereby we will be giving expression to the basic principles of the law of compensation, both for the goals that the law of torts seeks to realize, and also for the social purpose that involves ensuring the status of the dependants.

Should the law also be applied in this way with regard to a claim of the estate?

Compensation for the ‘lost years:’ claim of the estate

52. We have hitherto examined the entitlement of the living injured person, whose life expectancy has been reduced, to compensation for the loss of his earning capacity in the ‘lost years.’ Let us now consider the other question, which concerns the right of the estate to claim this head of damage, where the life expectancy of the injured person was shortened to such a degree that he did not manage to claim his damage. We have discussed how the rights of action of the deceased injured person against the tortfeasor — both for pecuniary loss and for non-pecuniary loss — ‘survive’ his death and pass to his estate. Prima facie, no question arises therefore with regard to the existence of a right of action of the estate for the damage of the loss of earning capacity in the ‘lost years.’ Notwithstanding, some of the countries that have recognized the entitlement of the living injured person to compensation for this head of damage, have not recognized a similar right of the estate.

53. In England, the court originally held that the provisions of the law did not allow a distinction between the claim of the living injured person and the claim of the estate. Consequently, once it had been established in Pickett v. British Rail Engineering Ltd [135] that the living injured person, whose life expectancy has been shortened by a tortious act, had a right to compensation for the loss of earning capacity in the ‘lost years,’ the courts applied the rule also with regard to claims of an estate (see Gammell v. Wilson [147]; Kandalla v. British European Airways Corp. [150]). The courts in England were not always comfortable with this result, and they emphasized that the difficulty that was created as a result of the ruling in Oliver v. Ashman [134], and which was overturned in Pickett v. British Rail Engineering Ltd [135], does not exist when the injured person himself did not file a claim in his lifetime. This is the case because in such a case the estate’s claim and the dependants’ claim do not exclude one another; in other words, the dependants have an independent claim for loss of support. As Justice Griffiths said in Kandalla v. British European Airways Corp. [150]:

‘The same dilemma does not arise in a case such as the present where the wage earner has been killed in the accident and claims are brought both under the Law Reform Act for damages on behalf of the estate and under the Fatal Accidents Acts, for both actions can run concurrently. Justice can be done to the parents by an award under the Fatal Accidents Acts and any sums for the “lost years” awarded under the Law Reform Act which exceed the value of the Fatal Accidents Act damages will be a pure windfall for the parents’ (at pp. 168-169).

A change of legislation in England put an end to the possibility of the estates of deceased injured persons making a claim for the ‘lost years’ (see the Administration of Justice Act 1982, s. 4, following the recommendations of the Law Commission and the Pearson Royal Commission). The main reason for this legislative change was the desire to prevent a situation of a windfall for the dependants, as occurred, allegedly, in Gammell v. Wilson [147].

54. This approach of the English legislature has not escaped criticism, which has been expressed, inter alia, on the grounds that this is not the only case in which the relatives of the injured person enjoy a ‘windfall’ of this kind, and denying compensation for this reason, only for the head of damage of the ‘lost years,’ is somewhat arbitrary. Consider, for example, the compensation awarded to the estate for the pain and suffering of the deceased before he died, or the pecuniary benefit of the relatives of the injured person who is in a permanent vegetative state and who is entitled in his lifetime to compensation for the loss of earning capacity.

Another criticism that has been made in England with regard to the provisions of s. 4 of the Administration of Justice Act 1982 is that the right of claim of the estate for the ‘lost years’ has been denied, in accordance with this provision, also in cases where the dependants do not have a right of claim for loss of support. This, for example, is the case where the earning capacity of the injured person is reduced by a tortious act, but the injured person died before trial for a reason unconnected with the tort. The dependants remain, in this situation, without support and without compensation (see Cane & Harris, ‘Legislation,’ supra).

A similar process to the one that took place in England can also be seen in Australia. At first the court there held that in the absence of legislation providing otherwise, the right of the injured person to sue for the loss of earning capacity in the ‘lost years’ passes to the estate (see Fitch v. Hyde-Cates [109]). However, this ruling was overturned by the legislature in most states and territories (see Fleming, The Law of Torts (seventh edition, 1987) at p. 640, and also Trindade & Cane, The Law of Torts in Australia, supra, at pp. 548-549). In Scotland also the legislator has denied the right of claim by the estate for the loss of the deceased’s earnings after his death (see Damages (Scotland) Act 1976, s. 2).

55. In Canada, there is no uniform response to the question of the ‘survivability’ of a claim for the loss of earnings. As a rule, when the death of a person is caused by a tort, the estate has a claim for the loss of earnings in the period that preceded the death. However, this is not necessarily the case with regard to the loss of earning capacity in the ‘lost years.’ In the province of Saskatchewan the legislature provided, expressly, that the damage of loss of income after the death of the injured person is not claimable under the Survival of Actions Act (see s. 6(2)(b) of the Act). This was also provided by the legislature of the province of British Columbia (see the Estate Administration Act [RSBC 1996], s. 59(3)(c)). The reason underlying these provisions of statute is the desire to prevent compensation on two parallel tracks — the claim of the estate and the claim of dependants, which would mean a windfall for the estate (Cassels, Remedies: The Law of Damages, supra, at p. 192).

A similar approach has been adopted by case law in other provinces, such as New Brunswick (see Saint John Regional Hospital v. Comeau [123]), the province of Ontario (see Balkos v. Cook [261)) and the province of Prince Edward Island (see Rayner v. Knickle [125]). However, in the province of Manitoba, the court recognized in one case a claim of an estate for the loss of earning capacity in the ‘lost years’ (see Woollard v. Coles [126]).

56. An interesting development on this issue occurred in the province of Alberta in Canada, where case law recognized the claim of an estate for compensation for the lost years of earnings. Duncan (Estate of) v. Baddeley [121], which led to much discussion, considered the claim of the estate of a sixteen year old boy who was killed in a road accident, without leaving any dependants. The court held that:

‘… in Alberta a claim for loss of future earnings does survive the death of the victim. And, with two important qualifications, that claim should be assessed as would any claim for loss of future earnings.’

The court in Alberta held, therefore, that the claim for compensation for the loss of earning capacity ‘survives’ the death of the injured person. In giving its reasons for this conclusion, the court said, inter alia, that just as the estate is entitled to compensation for an asset that was destroyed in the accident in which the deceased lost his life (for example, a watch that the deceased wore on his wrist), so should compensation be awarded to the estate for the asset included in the loss of earning capacity. The court also was of the opinion that there is no justification for distinguishing between an injured person who has ‘succeeded’ in remaining alive until the date when the judgment is given, and an injured part who died a day before judgment was given, where in the first case the entitlement to compensation for the ‘lost years’ has been established, and the relatives are entitled to inherit the compensation money after the death of the injured person, while in the second case, the tortfeasor who has made death imminent or who has been able to delay the proceedings is not required to pay compensation. The two qualifications to which the court alludes in the aforesaid citation concern the deduction of the living expenses and income tax — during the reduction of the life expectancy — from the amount of the compensation (for further discussion of the judgment, see, for example, C.L. Brown, ‘Duncan v. Baddeley: Reconciling the “Lost Years” Deduction with Fatal Accident Cases,’ supra; for similar case law, also in the province of Alberta, see Galand Estate v. Stewart [127]; Brooks (Estate of) v. Stefura [128].

57. But in Alberta too the law in this respect was changed, when in the year 2000 the legislature accepted the recommendations of the Alberta Law Reform Institute, which were published in 1998 (Report no. 76), and amended the Survival of Actions Act in such a way that the estate cannot recover for:

‘damages in relation to future earnings, including damages for loss of earning capacity, ability to earn or chance of future earnings’ (s. 5(2)(c))

It should be noted that the Alberta Law Reform Institute reached its conclusion on the basis of a process of thought involving six stages: first, the basis for the payment of compensation for the loss of a chance of future earnings is compensation for the injured person; second, payment of money cannot compensate someone who has died, and loss of the deceased’s chance of future earnings does not cause the estate any loss. Therefore, payment of compensation for loss of a chance of future earnings does not compensation anyone; third, justice does not require a payment of money for loss of a chance of future earnings for any purpose other than compensation; fourth, doing justice to the family members, whom the deceased left behind, is done most directly and effectively by means of an action of the dependants, and justice does not require this by way of an action of an estate for loss of a chance of future earnings; fifth, the chance of future earnings is not an asset that can be bequeathed; sixth, the valuation for a loss of a chance of future earnings is difficult and requires ‘gazing into a crystal ball.’

58. The path delineated by the Alberta Law Reform Institute is not without difficulties. We will not elaborate on this, but at the same time we will not remain silent on this issue, especially in view of the fact that the Institute’s arguments reflect the position of those who deny the compensation, and we should point to several counterarguments that challenge this position. The compensation for the loss of earning capacity is, indeed, compensation for damage that is caused, in the nature of things, to the injured person. We have already discussed how the earning potential is an ‘asset’ that belongs to a person, whose financial value is estimated according to the ‘value of the output that he is likely to produce while he is alive, i.e., according to the value of the earnings receivable from making use of the skill’ (Barak, ‘Assessing compensation in personal injury: the law of torts as it is and as it should be,’ supra, at p. 257). The harm to this potential gives rise to an entitlement to compensation, and as stated the fact that the injured person will not be alive in the ‘lost years’ does not negate this entitlement. With regard to the estate, it should be remembered that had the injured person realized his earning potential, it is certainly possible that his estate would have been larger. In this sense, it can be said that the death of the injured person caused a loss to the estate (see In re Joint Eastern & Southern District Asbestos Litigation [83], at p. 428).

The following can also be said: most of the arguments of the Alberta Law Reform Institute are not inconsistent, in my opinion, with the recognition, which has been widespread in Canada for many years, of the right of the living injured person to compensation for the ‘lost years.’ Thus, for example, the Institute thought that there was no basis for awarding compensation when the injured person himself is not able to enjoy it. But we have seen that even with regard to the living injured person the assumption is that he will not be alive in those years, and in any event he too will not be able to enjoy the compensation attributed to the lost period. Admittedly, from a practical viewpoint the living injured person can make use of all the amount of the compensation during the years of life that he has left, since in general (although not always) the compensation is awarded by means of a capitalized lump sum payment. But this cannot affect the nature of the compensation, which is compensation that is given for the lost years of life, and therefore from a theoretical point of view, the aforesaid argument concerning the inability of the injured person to enjoy the compensation for the ‘lost years’ is valid to a large extent also with regard to the living injured person. As has been explained above, this argument cannot withhold the compensation from the living injured person — this has also been held in Canada — and the report of the Institute contains no convincing reason why it should result in denying the compensation to the estate. And if we are making a comparison with the case of the living injured person, it is fitting to cite the remarks of the Albertan court in Duncan (Estate of) v. Baddeley [121]:

‘When the injured person survives until judgment, he is given substantial damages. The fact that he dies the day after judgment does not reduce the damages, nor remove his beneficiaries’ right to inherit them. Indeed the very reason for the damages is the accurate foresight that he would die young…

Why should the tortfeasor escape scot-free if the plaintiff dies the day before judgment is pronounced? Worse still, why should the tortfeasor who has made death imminent escape scot-free if he manages to drag out the litigation long enough that he produces the very death in question, before judgment?

In my view, the issues here transcend questions of social utility or inheritance. They involve justice.’

With regard to the dependants, albeit where we are speaking of a claim by an estate, and the injured person himself did not file a claim when he was alive, the dependants have an independent claim for loss of support, so that awarding compensation for the ‘lost years’ does not serve the purpose of protecting their interest. However, it should be remembered that the estate stands in the stead of the injured person himself, and its right derives from the right of the injured person; therefore, recognition of the right of the living injured person to compensation for the ‘lost years’ necessitates, in the absence of a statutory provision to the contrary, a recognition of this right in the claim of the estate. Moreover, as aforesaid, it is difficult to find a material difference — in so far as the estate receiving a ‘windfall’ is concerned — between a right of claim for loss of earning capacity in the ‘lost years’ and a right of claim for other damage caused to the injured person, such as the non-pecuniary damage of pain and suffering and loss of life expectancy, with regard to which it is accepted in our legal system that the estate has a right of claim (see Estate of David Azoulay v. Vulcan Casting Enterprises Ltd [24], at p. 560). The ‘survivability’ of both one and the other is not intended to compensate the dependants — for this purpose they have a separate right of claim — but to have the estate include the wealth reflected in the deceased rights of claim, as s. 19 of the Ordinance directs. It appears that it is in fact the compensation for loss of earning capacity — which as aforesaid is an asset that belongs to its owner — that is more suitable for being bequeathed than the compensation for pain and suffering, which is of a special ‘personal’ character. In any event, it is clear that had the injured person been alive, filed a claim and obtained a judgment in his favour, and then died as a result of an external factor, whether tortious or not, the compensation that he would have been awarded would constitute a part of his estate, and no-one would regard this as a ‘windfall’ more than any other asset of the deceased that passes to his heirs. The enrichment of the heirs is a result of two things: first, the legal rule that provides that a claim of the injured person survives after his death, if he has not exhausted it; and second, the concept of the inheritance of wealth, which has been accepted since time immemorial in human society. The head of damage concerning the loss of earning capacity is, from this viewpoint, not at all unique. And as for the claim that the difficulty is double compensation, below it will be explained that the amount to which the dependants are entitled in their independent claim should be set off against the amount that is receivable by the estate.

Finally, even the argument raised by the Alberta Law Reform Institute with regard to the difficulty in estimating the damage does not necessarily lead to the conclusion that one should deny, absolutely and in every case, the right of the estate to compensation. This argument is correct in many cases where compensation is awarded for future damage — ‘the doctrine of compensation is a doctrine of uncertainty’ (CA 237/80 Barsheshet v. Hashash [22]). This is especially correct when we are dealing with a loss of future earning capacity. ‘The courts have pointed out many times the difficulty in determining and calculating the loss of the injured person’s future earning capacity. This is an attempt to estimate and determine facts where there is no certainty, and facts, guesses and estimates combine together. The main thing is that anything that today is considered expected may turn out, when times and circumstances change, as a totally unreliable way of estimating loss of earning capacity’ (per Justice T. Or in Youness v. Israel Car Insurance Pool [19]). Indeed, whether we are dealing with the loss of earning capacity in general or the loss of earning capacity in the ‘lost years’ — the art of calculating the compensation is a difficult one, and can be compared to gazing into a crystal ball. But this is not sufficient to deny the actual right to the compensation, even though, as we have already seen, in English law, in some cases where the compensation is too speculative it has been held that the amount of compensation is low or even nothing. So we see that the right to compensation is one thing, and the assessment of the compensation quite another.

59. This is the situation in Canada. In Ireland, the rights of claim of the deceased pass to the estate, subject to several exceptions. The exceptions to the passing of the right do not include a right of claim for loss of earning capacity in the ‘lost years’ (see Civil Liability Act 1961, s. 7; The Law Reform Commission, Report on Personal Injuries: Periodic Payments and Structured Settlements (1996)). In South Africa, on the other hand, the possibility of the estate filing a claim for loss of earning capacity in the ‘lost years’ was denied in Lockhat's Estate v. North British and Mercantile Insurance Co. Ltd [165].

60. In the United States, the legal position on this issue is complex, and is deeply rooted in the legal system there. There are States that recognize both an independent claim of certain family members for the damage that they suffered as a result of the deceased’s death (a wrongful death action), and also a claim of the estate (or of another lawful representative) for the deceased’s causes of action that ‘survived’ his death (survival statute). Among those States, some recognize the possibility of including in the surviving claim the head of damage of loss of the deceased’s future income. The meaning of this recognition is what leads to a fear of double compensation: both compensation of the family members in a wrongful death action for that part of the deceased’s future income that would have been devoted to their support, and also compensation for loss of future income of the deceased within the framework of the survival action (see Hindmarsh v. Sulpho Saline Bath Co. [95], at p. 808). But at the same time, this recognition, according to those States, is capable of preventing a tortfeasor who by his act brought about the death of the injured person from having to pay out a windfall (see James O. Pearson Jr., ‘Recovery, In Action for Benefit of Decedent's Estate in Jurisdiction Which Has Both Wrongful Death and Survival Statutes, of Value of Earnings Decedent Would Have Made After Death’ 76 A.L.R. 3d 125 (1977)). Since the living injured person is entitled to claim compensation for the loss of his income during his normal (unreduced) life expectancy, and since the survival laws are intended to preserve the cause of actions of the deceased injured person, it follows that, according to the case law of some courts in the United States, the survival claim for loss of income that the deceased would have had if he had lived a normal life expectancy should be recognized (see Balmer v. Dilley [96] at p. 458).

Thus, for example, in the District of Columbia, the case was considered where a man died by drowning, when his car fell from a bridge as a result of a road accident. The court held, in that case, that there was nothing to prevent recovering under both laws, since:

‘loss to the estate is represented by that part of the deceased’s net probable future earnings that probably would have been utilized by the deceased to enlarge his estate, whereas loss to the spouse and next of kin is represented by the loss of a source of maintenance for such things as food, clothing, shelter, educational expenses, and the like’ (Runyon v. District of Columbia [97] at p. 1323).

In the State of Pennsylvania it was held, in the case of a five year old girl who was killed in a road accident, that her estate:

‘… is entitled to the present value of the decedent’s prospective earnings for the period of her work-life expectancy after reaching the age of twenty-one, less her anticipated maintenance expenses, plus recovery for her pain and suffering’ (Weaver v. Ford Motor Co. [98], at p. 1077).

This is also the law in the State of Texas (Hope v. Seahorse, Inc. [99], at p. 990) and in the State of Washington (Balmer v. Dilley [96], at pp. 458-459); for a review and additional references, see Pearson’s article, supra.

The courts that awarded damages to the estate for loss of earnings in the ‘lost years’ were of the opinion, in general, that the living expenses that the injured person would have needed if he had lived, as well as the expenses that he would have incurred for the support of others, should be deducted from the amount of the income that would have accrued to the injured person in those years. The purpose of this, so it was held, was to prevent a windfall to the estate of the payment of double compensation to the dependants (see Pearson’s article, supra, and also Murray v. Philadelphia Transp. Co. [100], at p. 325; Ferne v. Chadderton [101], at pp. 107-108).

61. By contrast, there are States in the United States in which the two claim tracks do admittedly exist, but in a claim under the survival statute it is not possible to claim compensation for the loss of the deceased’s future income. This is the case, for example, in the States of Hawaii, Kansas, Massachusetts, Missouri, Maryland, Wisconsin and other States (see, inter alia, Greene v. Texeira [102], at pp. 1172-1173; Prunty v. Schwantes, 162 N. W. 2d 34, 37-38 (1968); Eric W. Gunderson, ‘Personal Injury Damages Under the Maryland Survival Statute: Advocating Damage Recovery for a Decedent’s Future Lost Earning,’ 29 U. Balt. L. Rev. 97 (1999)).

There are also States in the United States where there only exist statutes of a nature of a survival statute. This is the case, for example, in Connecticut, Georgia, Florida, Mississippi and Tennessee. In these States also it has on several occasions been held that the head of damage of the loss of income capacity may be included in the claim (see, for example, Sanderson v. Steve Snyder Enterprises, Inc. [104], at p. 397).

62. Returning to Israel, s. 19(a) of the Torts Ordinance provides, as we have already seen, that causes of action in torts that a person who died could have brought or could have had brought against him continue to remain valid for or against the estate of that person. It seems, therefore, that in Israeli law the existing law is clear; it is that no distinction should be made between the personal claim of the living injured person and the claim of the estate of the deceased injured person. Therefore, once we have determined that we should recognize a right of the living injured person to a claim for the loss of earning capacity in the ‘lost years,’ we must automatically, in the absence of a statutory provision to the contrary, recognize also the right of the estate to the same cause of action. Indeed, ‘if we recognize the right of the living injured person, whose life expectancy has been reduced, to receive compensation in his lifetime for the ‘lost years,’ it is very difficult, on a “technical” level, not to recognize the right of the estate’ (Estate of Sharon Gavriel v. Gavriel [1], at p. 560). This is the case with regard to the non-pecuniary loss involved in the loss of years of life (within the framework of the head of damage of loss of life expectancy), and it should also be the case with regard to the pecuniary loss involved in the same damage. ‘In both cases, we are concerned with compensation for the years of “non-life;” in both cases we are concerned with compensation for loss, which will occur after the death of the injured person, and in both cases we are concerned with objective loss and not with compensation for the subjective feeling of the injured person in his lifetime about his death’ (ibid.). This approach, according to which the same law applies to the estate as to the living injured person, is accepted, in practice, by everyone, and in England it led, as aforesaid, to the recognition, in case law, of compensation for the ‘lost years’ also in the claim of the estate (until the law was changed in this regard; see mainly Gammell v. Wilson [147]).

63. Our conclusion is, therefore, that once we have determined that we should recognize the right of the living injured person to compensation for loss of his earning capacity in the ‘lost years,’ we also should recognize a similar right of his estate. This is the ‘Gordian knot’ that ties the law applying to the estate to the law applying to the living injured person, which Justice Barak also discussed in Estate of Sharon Gavriel v. Gavriel [1], and this knot — whether it is desirable law or not — cannot be untied without a change in legislation.

We shall now seek to address two additional matters, which are connected with the question of the entitlement of the estate to compensation for the loss of the deceased’s earnings in the ‘lost years.’ The first concerns the ruling in Estate of Lily Hananshwili v. Rotem Insurance Co. Ltd [7], and the second concerns the question of the fear that the tortfeasor will be found liable for double compensation.

The Hananshwili ruling

64. In Estate of Lily Hananshwili v. Rotem Insurance Co. Ltd [7], a person was injured in a road accident. As a result of the accident, he suffered a 28% permanent disability, and his earning capacity was reduced. Before he filed a claim for his damage, he had the misfortune to be injured in another road accident, in which he lost his life. His widow and children filed a claim, as heirs and as dependants, against the insurance companies liable for the damage in the accidents, and the question arose as to who was liable for the loss of the 28% of the injured person’s earning capacity during the period from the date of the second accident until the end of the injured person’s life expectancy. The Supreme Court held that the second accident denied the injured person the possibility of suing the first tortfeasor for compensation, for the loss of the earning capacity in the aforesaid period. Therefore, it was held that the second tortfeasor was liable to compensate the estate for this damage. In the words of Justice Netanyahu:

‘The second tortfeasor takes the injured person as he is, for better or for worse. He found the injured person who had been injured in the first accident and his work capacity was reduced (in our case by 28%). He brought the injured person to a situation where he had a 100% loss of work capacity. He is not liable to compensate the dependants for loss of support to the extent that it was caused by the first accident. Therefore his liability will not be in an amount of 100% but in an amount of 72%. But he also found an injured person with a right of claim against the first tortfeasor for a loss of future earnings in an amount of 28%, which occurred and accumulated also in the interim period. This right of claim was lost to the estate as a result of the deceased’s death. He must compensate the estate for this loss’ (ibid., at p. 551).

We have already pointed to the ‘footprints’ of compensation awards for the ‘lost years’ in out legal system. Here you have additional footprints. Admittedly, the court pointed out that in view of the rule in Estate of Sharon Gavriel v. Gavriel [1] the first tortfeasor was not liable to compensate the estate for the loss of the injured person’s earning capacity after his death (ibid.). However, the court saw fit to find the second tortfeasor, who caused the injured person’s death, liable for compensation for loss of work capacity, notwithstanding the regrettable fact that the injured person would not be alive in that period of lost earnings. The court did this on the basis of the ‘claimable damage’ inherent in the loss of the possibility of filing a claim against the first tortfeasor, but this cannot change the fact that in practice compensation was awarded here for the loss of earning capacity in the years of non-life (in an amount of 28% of the expected income of the deceased in those years; this amount was added to the compensation that was awarded to the dependents for loss of support). The connection — and the possible conflict — between the judgment in Estate of Sharon Gavriel v. Gavriel [1] and the judgment in Estate of Lily Hananshwili v. Rotem Insurance Co. Ltd [7] was discussed by Prof. A. Porat in the following terms:

‘The inability of a person to claim compensation for the “lost years,” either from the first tortfeasor or from the second tortfeasor, derives from the ruling of the Supreme Court [in Estate of Sharon Gavriel v. Gavriel] which is based on the approach that in the “lost years” the injured person did not suffer any damage of a reduction in his earning capacity! In the absence of damage, there is no compensation. In Hananshwili the Supreme Court resorted to this very approach, in order to explain the unambiguous inability of the estate to claim any compensation from the first tortfeasor, for harm to the earning capacity relating to the interim period, which is none other than the “lost years.”

If this is the case, then the injured person in Hananshwili lost his cause of action against the first tortfeasor primarily for the reason that after the death there is no longer any damage as a result of a reduction in the earning capacity. Granting any compensation to the injured person for loss of earning capacity relating to the “lost years” will give him overcompensation in excess of his damage…

[The Hananshwili ruling] may, possibly, raise an additional question mark to the ones already raised as to the correctness of the “lost years” rule’ (A. Porat, ‘Law of Torts,’ Israel Law Annual 222 (1991), at pp. 255-256.

Note that in Estate of Lily Hananshwili v. Rotem Insurance Co. Ltd [7] the Supreme Court awarded the estate compensation as aforesaid, even though it was incapable of benefiting the injured person — who was no longer alive — but only his dependants and heirs.

The fear of double payment

65. One of the main arguments raised against awarding compensation to the estate for the ‘lost years’ is that doing so will cause injustice to the defendant, who will be required to pay twice — once in the dependants’ claim for the damage of loss of support and a second time in the claim of the estate for loss of earnings in the ‘lost years.’ Such a danger does not exist in the claim of the living injured person, since in this case there is no claim of the dependants. However, where the deceased has not exhausted his claim in his lifetime, the defendants’ claim is not barred, and it may stand alongside the claim of the estate. This is what leads to the fear that the tortfeasor may be found liable to make a double payment.

In practice, there are several different scenarios of the relationship between the dependants’ claim and the estate’s claim, and consequently of the way in which the amount of compensation payable to the estate for the ‘lost years’ should be calculated. We will seek to show that in all these scenarios, there is no real danger of imposing a liability for overcompensation on the tortfeasor.

66. The first scenario, which is the most common, is the one where the heirs are also the persons who were dependent on the deceased for their livelihood. In such a case, which as aforesaid is the usual one, there is no fear of double compensation. This is because of the deduction rule, which directs us to deduct from the claim of the dependents the benefit that they received from the estate, including the compensation for the ‘lost years.’

Notwithstanding, it should be noted that occasionally, where the heirs are also the dependants, the fear of double compensation is solved in another way, namely not by means of the deduction rule. This group of scenarios includes several possibilities: first, it is possible that the dependants-heirs do not have any dependants’ claim. This will be the case where the deceased died as a result of another tortfeasor and also where he died not as a result of a tortious act. In these two cases, the death was not caused by the tort that was done by the tortfeasor who harmed the deceased’s earning capacity, i.e., the source of the dependants’ livelihood; in any event the claim of dependants does not arise and in any event there is no fear of double compensation. In the absence of a dependants’ claim there is no basis for reducing the value of the estate’s claim, not even conceptually. Another scenario that belongs to this groups of cases is where there is a dependants’ claim, and the dependants are the heirs, but they are not able to recover from the estate, because it is not solvent. In such a case, there is no practical application of the deduction rule, since in practice the dependants have not received, in their capacity as heirs, any benefit from the death of the deceased. Prima facie, this is the situation where the fear of double payment arises from the tortfeasor’s point of view. In practice, this fear will be realized rarely, since an estate that is bankrupt is, usually, the estate of someone who in his lifetime was unable to support the dependants with his own efforts, and this will naturally be taken into account in their claim.

67. Another scenario that requires consideration is the case where the heirs are not the people who were dependent on the deceased for their livelihood. This scenario, as aforesaid, is not the usual one, but here too we can solve the problem of the double compensation. It appears that the proper way of doing this, within the framework of the existing system, is to deduct from the estate’s claim the amount that the injured person would have spent on his dependants. The logic for this lies in the assumption that the injured person would have devoted this amount to the support of his dependants, whereas his heirs are no longer required to do this, since the dependants’ claim will be directed against the tortfeasor. This was well described by Justice Barak in Estate of Sharon Gavriel v. Gavriel [1]:

‘This solution is based on the distinction… between the right to compensation and the assessment of the compensation. According to this approach, the right of the estate to compensation is like the right of the living injured person to compensation, since “the estate is compared to a polished mirror,” which reflects the right of the injured person itself, but just because the actual right is identical does not mean that the amount of the compensation is identical. Just as when assessing the damage to the living injured person we must take into account the expenses that the living injured person spent on himself, and that were saved in the years of “non-life”… so too in assessing the damage to the estate we should take these expenses into account, as well as expenses that the injured person would have spent on his dependants and which he will no longer be required to pay, since the liability to compensate for them has been imposed on the tortfeasor… according to this approach, the tortfeasor will no longer pay double compensation, since the amount of the compensation that will be awarded to the estate will not include the amount that will be awarded to the dependants (ibid., at p. 564, and see the references cited there, at pp. 565-568).

A similar solution was adopted in several Australian judgments. This, for example, was held by Justice Taylor in the leading judgment in Skelton v. Collins (1966) 115 C.L.R. 94:

‘As to the possibility of the duplication of damages I observe that if an injured person has, himself, recovered damages no further action will lie for the benefit of his dependants in the event of his subsequent death whilst in the case where an action is brought, not by the injured person himself but, upon his death, by his legal personal representative for the benefit of his estate, the damages would be assessed having regard to the gain, if any, which would have accrued to the deceased from his future probable earnings after taking into account the expenditure which he would have incurred, if he had survived, in maintaining himself and his dependants, if any’ (at p. 114).

This solution to the problem of double payment is not in conflict with the provisions of statute. As Justice Barak held, in Estate of Sharon Gavriel v. Gavriel [1], the approach whereby the amounts of support devoted to the dependants are deducted from the estate’s claim can also be resolved with the rather vague provision of s. 19(b) of the Torts Ordinance, which states that ‘if a cause of action continues to exist as aforesaid in favour of the estate of the deceased, and the act or the omission that created the cause of action led to his death, the compensation that can be recovered by the estate shall be calculated without taking into account the loss or profit caused to the estate as a result of the death…’. This provision, so Justice Barak elucidated, concerns the loss or profit of the estate, whereas we are dealing with the loss or profit of the injured person before his death. When the dependants have an independent cause of action against the tortfeasor, for loss of support, the deceased is no longer required, prior to his death, to pay this expense (ibid., at p. 566).

Moreover, s. 19(d) of the Ordinance, which provides that ‘the rights given under this Ordinance to the estate of the deceased are intended to add to the rights given to the dependants of the deceased under this Ordinance or any other legislation and not to detract from them,’ concerns, according to well-established case law, the actual right to compensation, and not the amount of the compensation (ibid., see also General Federation Medical Fund v. Estate of Dr Meir Edison [30], at p. 80; Estate of Michal Kedar v. HaSneh Insurance Co. [25], at pp. 606-607). Therefore, even the provisions of this section do not preclude the possibility of adopting the solution set out above in our legal system.

68. It should be noted that the approach that the problem of double compensation should be solved by means of deducting the claim of the dependants from the claim of the estate has received criticism. The main criticism arises from the fact that in the claim of the living injured person the claim of the dependants is not deducted — we should remember that one of the main reasons underlying the awarding of compensation for the ‘lost years’ is to ensure the dependants’ interests — and there is no reason, so the criticism goes, to have different compensation principles for the claim of the estate (see Waddams, The Law of Damages, at § 12.220). The response to this claim is that the compensation principles are indeed different. The calculation of the damage arising from the lost years of earnings is made in the same way — both for the claim of the living injured person and for the claim of the estate. However, when awarding the compensation, the court should — here as in other cases — take into account the question of the double compensation and the savings accruing to the estate from the very existence of the dependants’ claim that is directed at the tortfeasor. The significance is that where compensation has already been given for the same damage, the court will not award additional compensation. This is only done in order to realize the rule of returning the injured person to his original position.

From all of the above it transpires that even the argument about the fear of double payment by the tortfeasor cannot change the conclusion that we have reached, whereby according to the existing law a right of claim by the estate for loss of earning capacity of the deceased in the ‘lost years’ should be recognized.

In calculating the compensation for the estate, an amount reflecting the expenses that the deceased would have incurred for his livelihood ‘in the lost years’ should be deducted (see also, in this regard, what we said above in respect of the compensation for the living injured person), as well as — in appropriate cases — an amount reflecting the expenses that he would have incurred for his dependants. An additional outcome of this compensation system is that, in the final analysis, the additional amount that the tortfeasor is required to pay — over and beyond what he would have been liable to pay in any case if the head of the ‘lost years’ had not been recognized — is quite modest. We are speaking of an amount that reflects the savings that the injured person would have accumulated in the ‘lost years.’

69. It should be emphasized that the solution proposed for our legal system to the difficulty inherent in the double compensation is not the only possible solution. As we have said, this difficulty has constituted a main stumbling block for making the tortfeasor liable, in a claim of the estate, to pay compensation for the lost years of earnings. Various countries have indeed denied the estate the possibility of claiming this head of damage. Thus, in those countries, the fear of double payment was averted. We discussed above the theoretical and practical difficulties inherent in that solution. In any event, it cannot be implemented in Israel without a change of legislation. But in my opinion, if the legislature is called upon to make a major change in the compensation system, this is not the change that I think it ought to choose. It appears that there would be an advantage to a change in exactly the opposite direction, namely the cancellation of the claim of the dependants and enriching the claim of the estate. This solution was proposed by Professor Waddams. In his opinion, the independent claim of the dependants that derives from the loss of the deceased’s earning capacity should be cancelled, and only one claim should be allowed — the claim of the estate — for these losses also. According to this approach, the compensation that will be paid for loss of earning capacity will be identical, whether the injured person remains disabled or whether he is killed in the tortious act, and whether he has dependants or not. As Professor Waddams explains, the solution is not new, and it was already suggested in England in the nineteenth century. This solution is attractive, inter alia because it removes the stain associated with the outcome that the law of torts is more lenient to the tortfeasor who kills that to the tortfeasor who wounds, and because it negates the fear of double compensation arising from double claims (see Waddams, The Law of Damages, at § 6.760). Notwithstanding, this solution also has a difficulty, and in any event it cannot be implemented in the legal system practised in Israel. The difficulty lies mainly in the need to refer the claim of the dependants for their damage to the estate, and the need to ensure that they will recover from the estate, even if it is insolvent and if the deceased disinherited them in his will. It follows that adopting this arrangement in full requires legislation. We therefore return to the compensation arrangement that has been delineated above, which brings the claim of the estate, within the limits of the existing system, to optimal results.

The lost years: summary

70. Approximately twenty years have passed since judgment was given in Estate of Sharon Gavriel v. Gavriel [1]. The change in legislation that was desired has failed to come, but a change in the legal climate has indeed occurred. It appears that the time has come to recognize in our legal system the head of damage of loss of earning capacity in the ‘lost years.’

A survey of the arguments made against the awarding of compensation for the ‘lost years’ shows that in practice these arguments fall under two main objections: the first is that the death of the injured person removes the foundation for awarding the compensation — ‘where there is no life, there is no loss of capacity’ or ‘where there is no enjoyment of the compensation, there is no compensation.’ The second is that there is a difficulty in assessing the damage and protecting the interest of the tortfeasor not to pay double compensation. The first main objection raises the question of the external balance — had it not been for the accident, the injured person would have earned a certain amount, and now, as a result of the accident, he cannot earn that amount. Does the awarding of compensation balance the scales? The second main objection concerns the internal balance. The accident gives rise — on the material plane — to gains and losses. Can both of these be taken into account in calculating the compensation?

My answer to both questions is yes. With regard to the first main argument, I believe that the award of compensation for the loss of earning in the ‘lost years’ corrects — admittedly not in the full sense of the word but in important senses — the major imbalance in the external balance that was caused by the wrongful act of the tortfeasor. The injured person has been deprived, by the wrongful act, of the ability to earn income and to make use of it for his needs and for those of his family. Awarding compensation addresses the need to take this into account, and ensures that the lack of balance caused by the tort will not remain unaddressed especially in cases where the result of the tortious act is particularly serious. Awarding compensation reflects the approach that as a result of the tortious act, the injured person is deprived of an asset — his earning potential — that he would have had if it had not been for the tortious act. The dispute revolves, in practice, around the question of the number of units of time in which this damage should be recognized. However, the time element is also a significant part of the ‘after’ pan in the external balance, since had it not been for the tort, the earning capacity would be expected to continue throughout the working life expectancy of the injured person. In other words, there can be no dispute as to what are the units of time in which the injured person would have continued to earn, had it not been for the tortious act, and what are the units of time in which he will in practice be able to earn as a result of this act.

Moreover, the award of compensation for the ‘lost years’ prevents the arbitrary results according to which compensation is not awarded for the loss of earnings to an injured person whose life expectancy is shortened, while compensation on this head of damage is awarded to an injured person in a permanent vegetative state, or to the estate for pain and suffering and reduction of life expectancy, all of which without any really adequate justification for the distinction. We should emphasize that also with regard to the injured person in a permanent vegetative state, the loss of earning capacity extends over units of time in which his physical and financial welfare is diminished and he is unable to enjoy the compensation money. This is certainly also the case with regard to the deceased injured person, in so far as concerns the non-pecuniary damages recognized in our legal system. Notwithstanding, case law has held that balancing the scales requires awarding compensation in these cases, and a coherent approach requires also awarding compensation here for loss of earning capacity in the ‘lost years.’ Perhaps most importantly of all, the awarding of the compensation for the ‘lost years’ (to the living injured person) ensures that a situation will not arise in which, although the dependants have been deprived by the tortious act of the support of the injured person — support that they would have received had it not been for that act — this damage will remain unremedied.

The second main objection concerns, as aforesaid, the internal balance and the need to prevent a double payment. The courts are accustomed to deal with claims of this kind, which means that the awarding of compensation must be done while taking into account the pecuniary gain and loss that arise from the tortious act, and with safeguards to prevent double compensation. We discussed above the rules that should be applied in this regard. This is the sole significance of the second main objection, and it has no effect on the substantive question concerning the right to compensation.

71. What emerges from all of the aforesaid leads us to one clear conclusion, namely that we should recognize the entitlement of the injured person to compensation for the lost years of earnings. This applies both to the claim of the living injured person and to the claim of the estate. It cannot be denied that the issue of the ‘lost years’ can be solved in other ways. There is also no doubt that one of the strongest reasons for awarding damages to the living injured person for the ‘lost years,’ namely the reason that concerns ensuring the future of the dependants, does not apply to a claim of the estate, in view of the fact that s. 78 of the Ordinance does not prevent the dependants from filing a claim for loss of support. In a claim of an estate, like the one before us, in which the injured person who died was a young child, there are special difficulties, as we have set out above. There is no obstacle, of course, to the legislature changing the legal position, whether on the issue of the ‘lost years’ in general, or on the issue of the right of the estate to compensation for this head of damage. But I am of the opinion that until such a change, if any, is made, we should adopt the approach that has been accepted, as aforesaid, in many other legal systems, according to which the living injured person, or his estate, is entitled to compensation for the damage of loss of earning capacity in the ‘lost years.’ A proper assessment of the compensation will balance the undesirable consequences of the fundamental determination.

72. The result is that the appeal in CA 140/00, in so far as it concerns the question of the entitlement of the deceased’s estate to compensation for loss of the deceased’s earning capacity in the ‘lost years’ should be allowed. The case is therefore returned to the District Court, so that it may determine the amount of the compensation for this head of damage.

Now let us turn to the other questions that arose in the appeals before us.

Punitive damages

73. Section 76 of the Torts Ordinance provides, with regard to the compensation for carrying out a tortious wrong, as follows:

‘Compensation may be awarded on its own or in additional to, or instead of, an injunction; but if (1) the plaintiff suffered damage, compensation may be awarded only for that damage that is likely to result naturally in the normal course of things and that resulted directly from the tort of the defendant.’

It has already been said that the word ‘compensation,’ as it appears in the Torts Ordinance, tells us tortious relief is not declaratory or penal, but remedial, and it is intended to remove the damage and remedy it (CA 1977/97 Barzani v. Bezeq, the Israel Telecommunication Corp. Ltd [53]; Barak, ‘Assessing compensation in personal injury: the law of torts as it is and as it should be,’ supra). Indeed, as we have pointed out above, the purpose of compensation is to return the injured person, in so far as this is possible by means of a payment of money, to the same position he would have been in at the time of the tortious act, had there been no tortious act. This purpose is part of the fabric of the principle that a person is only liable for compensation for damage that he caused. This principle finds expression in making liability in torts conditional upon the existence of damage that the injured person suffered and upon a causal link between the tortious act and that damage.

74. Nonetheless, there are legal systems that recognize a relief of punitive, exemplary or vindictive damages, namely ‘damages that the tortfeasor must pay to the injured person in an amount that does not reflect an assessment of the damage that the tortfeasor caused to the injured person by the tort, but that intends to punish the tortfeasor for his dangerous conduct and thereby to express revulsion at it’ (A. Barak, Law of Torts — General Principles of Torts, supra, at p. 579). The punitive damages are distinguished from aggravated damages, which also take into account the seriousness of the tortfeasor’s conduct, but express ‘a genuine assessment of the damage caused [to the injured person], when this damage has been aggravated by the tortfeasor’s improper conduct’ (ibid. at p. 579; see also Khodaparast v. Shad [151]; Vorvis v. Insurance Corp. of British Columbia [129]; A. Beever, ‘The Structure of Aggravated and Exemplary Damages’ 23 Oxford J. L. Stud. 87 (2003)). The distinction between punitive damages and aggravated damages was described by Justice Kennedy as follows:

‘aggravated damage for conduct that shocks the plaintiff; exemplary (or punitive) damages for conduct which shocks the jury’ (Muir v. Alberta [130], at p. 714).

Punitive damages, therefore, do not rely upon a foundation of ‘remedy’ or ‘reparation.’ The rationale behind these is to punish and deter (see Hill v. Church of Scientology of Toronto [131], at p. 1208). On the essence of punitive damages, and the purpose underlying them, the House of Lords made the following remarks:

‘Exemplary damages or punitive damages, the terms are synonymous, stand apart from awards of compensatory damages. They are additional to an award which is intended to compensate a plaintiff fully for the loss he has suffered, both pecuniary and non-pecuniary. They are intended to punish and deter’ (Kuddus v. Chief Constable of Leicestershire Constabulary [152]).

75. The non-remedial nature of punitive damages constitutes a challenge for the classical clear-cut distinction between civil law — which focuses on compensation — and criminal law — which focuses on punishment. Civil law has always been regarded as seeking mainly to regulate relationships between individuals, and from this perspective punitive damages are classified as an anomaly. In this vein, concern has been expressed more than once that recognizing a power to award punitive damages introduces into civil law a function that is reserved for criminal law, while ‘compromising’ on the rules of evidence, the burden of proof and the rules of procedure that apply in criminal proceedings. Moreover, it has been claimed that awarding punitive damages imposes on the tortfeasor a risk of a ‘double sanction,’ where these are in addition to criminal sanctions. It has also been said that punitive damages are a windfall for the injured person, since they are intended to add to the remedial compensation that he has been awarded for his damage. Following this line of reasoning, it can be argued that even if it is justified to fine the tortfeasor, it does not necessarily follow that it is right that the injured person, rather than the State, should receive the sum (see Cassels, Remedies: The Law of Damages, supra, at p. 258; Beever, ‘The Structure of Aggravated and Exemplary Damages,’ supra; Cassell & Co. Ltd v. Broome [153]).

But contrary to all of the aforesaid there are significant reasons in favour of recognition of a power to award punitive damages, in those cases where the conduct of the tortfeasor is especially grave or it involved a serious infringement of constitutional rights. On a theoretical level it is argued that the distinction between civil law and criminal law is not so clear-cut, and these two branches spread out towards one another and intertwine, and it is even possible to distinguish a ‘grey area’ of ‘punitive civil law’ (see, for example, LCrimA 2976/01 Assaf v. State of Israel [54]; K. Mann, ‘Punitive criminal sanctions,’ 16 Tel-Aviv University Law Review (Iyyunei Mishpat) 243 (1991)). In the practical sphere, the added value inherent in awarding punitive damage has been emphasized especially in the deterrent effect and education against acts that should be censured, and in strengthening the protection of rights that deserve protection (see Conway v. INTO [162]). This is often the case in contexts or circumstances which the criminal trial cannot reach. Even the argument concerning the injured person receiving a windfall has been given a certain answer that ‘he can only profit from the windfall if the wind was blowing his way;’ in other words, the injured person who took the trouble to promote the public interest inherent in the awarding of punitive damages is the most appropriate person to receive them (see Cassell & Co. Ltd v. Broome [153]). It should also be noted that where a criminal proceeding also took place with regard to the tortious act, its outcome can be taken into account in the punitive damages (for these and other considerations, see also the detailed report of the Law Reform Commission in Ireland, which was published in the year 2000, with the title Report on Aggravated, Exemplary and Restitutionary Damages.

76. The economic analysis of the law of torts gives punitive damages an important role in promoting the purpose of effective deterrent. As we have stated within the framework of the discussion about the issue of the ‘lost years,’ it is customary to say that one should aim for compensation that reflects the damage that was caused. But an additional parameter affects the calculation, and this is the chance that no liability will be imposed at all for the tortious act. Indeed, not every tortious act leads to a claim in tort. Various factors play a part in this, including the costs of the claim or the injured person’s uncertainty as to whether his damage was caused by a tortious act or as to who the tortfeasor was. There are therefore some who think that punitive damages ought to be awarded, in cases where if this is not done, the deterrent will be defective because of the possibility that tortfeasors will evade liability. The amount of the punitive damages must, according to this approach, reflect the chance that the tortfeasor will not be found liable for his tort. Thus, for example, if there is a 25% chance that the tortfeasor will indeed be found liable for the damage that he caused, and the damage is in an amount of NIS 100,000, then the amount of the total compensation should be in an amount of NIS 400,000, of which NIS 100,000 are ‘remedial’ damages, and the remainder — NIS 300,000 — are ‘punitive’ damages (see A.M. Polinsky & S. Shavell, ‘Punitive Damages: An Economic Analysis,’ 111 Harv. L.Rev. 869, at p. 882).

77. The question of punitive damages is, therefore, a multifaceted one. In any event, in view of the unique nature of punitive damages, case law has usually treated them with reservations, or at least caution, even though it is possible to find, in the various legal systems, different approaches to the issue. Case law in England held, in the past, that the court may award punitive damages in any case of tort (Loudon v. Ryder [154]), but in 1964 the House of Lords, per Lord Justice Devlin, sought to limit punitive damages to certain cases only, on the grounds that such damages can lead to an overlap of the roles of civil and criminal law. Therefore Lord Devlin was of the opinion that punitive damages should not be awarded except where there is an express provision of statute and in two additional categories of cases: the first, cases where civil servants acted oppressively, arbitrarily or unconstitutionally, and the second, where the tortious act of the tortfeasor was planned by him with the purpose of procuring for him, the tortfeasor, a benefit in an amount exceeding the amount of the expected compensation. The purpose of the latter category is to deprive the defendant of the fruits of his tort, and to make it clear to him — and to others — that ‘tort does not pay’ (see Rookes v. Barnard [155]); this approach was expressed again by the House of Lords in Cassell & Co. Ltd v. Broome [153]). In one case it was held that the awarding of punitive damages should be reduced even further, so that punitive damages will be awarded only where the cause of action was recognized, for this purpose, before the judgment in Rookes v. Barnard [155] was given (see A.B. v. South West Water Services Ltd [1993] Q.B. 507; [1993] 1 All ER 609) but this restriction was rejected recently in Kuddus v. Chief Constable of Leicestershire Constabulary [152]. In Kuddus, as in many previous judgments, the judges were divided in their opinion as to whether punitive damages are an important tool in dealing with defective conduct of tortfeasors and infringement of the rights of injured persons (Lord Nicholls and Lord Hutton), or whether it was an anomaly that ought not to be recognized in the law of torts (Lord Scott). The Law Commission proposed that punitive damages should continue to be recognized, but their scope should be redefined, so that it would be possible to award them in any case of torts where the defendant ignored the rights of the plaintiff deliberately and outrageously (see UK Law Commission, Aggravated, Exemplary and Restitutionary Damages, Law Com. no. 247 (1997). The matter has not yet been dealt with in legislation (see W.V.H. Rogers, Winfield & Jolowicz on Tort (sixteenth edition, 2002) at p. 757).

78. The restrictions that were delineated in Rookes v. Barnard [155] were not adopted verbatim in countries such as Canada, Australia and New Zealand (see Vorvis v. Insurance Corp. of British Columbia [129]; Uren v. John Fairfax & Sons Pty Ltd [110] — a judgment that was upheld by the Privy Council in Australian Consolidated Press v. Uren [157]; Taylor v. Beere [163]; see also in Ireland, Conway v. INTO [162]). Notwithstanding, the courts there restricted the awarding of punitive damages to exceptional cases, especially those in which the conduct of the defendant is outrageous or deliberate to a degree that justifies his being penalized by means of finding him liable to pay the plaintiff a kind of ‘civil fine.’ The purpose of this is to give expression to the disgust of the court, and so that the tortfeasor and others may see and be afraid (see Hill v. Church of Scientology of Toronto [131], at p. 1208). A broader approach, with regard to punitive damages, is found in case law in the United States, from the viewpoint of the grounds for awarding them and from the viewpoint of the willingness to make use of them as a deterrent, as well as from the viewpoint of the size of the amounts awarded (see and cf. B.M.W. of North America Inc., v. Gore [105]).

It should be noted that an award of punitive damages focuses usually on torts involving intent, where the conduct of the tortfeasor deserves condemnation. Various legal systems have recognized the possibility of awarding punitive damages also in claims based on the tort of negligence, but the courts do this, as a rule, in limited and exceptional cases (see P.H. Osborne, The Law of Torts (Toronto, 2000) at p. 104; Trindade & Cane, The Law of Torts in Australia, supra, at p. 530; Lamb v. Cotogno [111]; Coughlin v. Kuntz [132]). The Privy Council recently held, in an appeal on the Court of Appeal in New Zealand, by a majority of three judges against two, that, in principle, punitive damages may be awarded also in cases of negligence that do not involve intent or awareness, provided that the basic condition of outrageous conduct exists. The majority opinion regarded the mental state of the tortfeasor as of great importance, in view of the approach that the purpose of damages of this kind is to punish, and not to express the dissatisfaction of the court at the conduct (A. v. Bottrill [158]; A. Phang & P.W. Lee, ‘Exemplary Damages — Two Commonwealth Cases,’ 62(1) C.L.J. 32 (2003)).

79. The courts in Israel have recognized the possibility of finding a tortfeasor liable for punitive damages. Already in CA 216/54 Schneider v. Glick [55], it was held that:

‘The attack of the appellant on the respondent was deliberate, not preceded by immediate provocation, and it was carried out with a savageness that was intended to shame the respondent in public. The court may take into account these special factors, such as the evil intent of the attacker and the shame that the victim suffered, in determining punitive damages… taking into account all of these factors, we find that the circumstances justified imposing a substantial amount as general damages…’ (ibid., at p. 1335).

Case law has repeatedly held that the courts in Israel have the power to award punitive damages (see CA 81/55 Kochavi v. Becker [56], at p. 234; CA 277/55 Rabinowitz v. Sela [57]; CA 30/72 Friedman v. Segal [58], at p. 237; CA 670/79 HaAretz Newspaper Publishing Ltd v. Mizrahi [59], at p. 205), even though this approach has been criticized (I. Englard, A. Barak, M. Cheshin, The Law of Torts — General Principles of Torts, second edition, G. Tedeschi ed. (1976), at pp. 583-584; see also the remarks of Justice Kister in CA 711/72 Meir v. Governors of the Jewish Agency for Israel [60]). There are those who think that we should consider the effect of the Basic Laws on this issue (CC (TA) 1549/96 Levy v. Hadassah Medical Organization [78]). In practice, the courts in Israel are not accustomed to award punitive damages, and they certainly do not do this frequently (CA 3654/97 Kartin v. Ateret Securities (2000) Ltd [61], at p. 406). It should be noted that Israeli law has express statutory provisions that specify, in certain contexts, an express power to award punitive damages (see for example s. 183 of the Patents Law, 5727-1967). The draft law of MK Nechama Ronen, in 2001, according to which a provision concerning punitive damages would be added to the Torts Ordinance, did not become legislation (draft Torts Ordinance [New Version] (Amendment — Punitive Damages) Law, 5762-2001). According to the draft law, the court might find the defendant liable for damages, in addition to the damages awarded under s. 76 of the Ordinance, ‘if it was held that the defendant acted in a way deserving of censure, and one of the following: (1) with the purpose of causing damage to another; (2) while deliberately and knowingly ignoring the rights or security of the other; (3) with gross negligence.’ It was also provided in the draft that by determining the proper quantum of punitive damages the court may consider, inter alia, the foreseeability — in theory and in practice — of the damage that was caused as a result of the acts or omissions of the defendant and the period of time during which the defendant carried out the acts or omissions that caused the plaintiff his damage.

80. In our case, the District Court was of the opinion that ‘the omissions for which the defendants who were convicted in the judgment were responsible are very serious omissions,’ but at the same time it emphasized that there are those who cast doubt upon the actual power to award punitive damages, and he said that, as a rule, ‘the courts only award punitive damages for torts that require intent or a deliberate act.’ It seems to me that we should not intervene in the conclusion of the trial court in this regard. The negligence of the respondents, as reflected in the judgment convicting them, is indeed shocking and led to a tragic outcome. Notwithstanding, it appears that even if the courts in our legal system have power to award punitive damages — and we are not required to decide this issue today — there is insufficient cause, in this case, to intervene in the decision of the District Court not to award the appellants punitive damages.

Reduction of life expectancy

81. In the category of non-pecuniary loss for personal injury are two main heads of damage, pain and suffering and reduction of life expectancy or loss of life expectancy. The head of damage of loss of life amenities is not recognized, in Israeli law, as an independent head of damage (see Weizman v. Zucker [48]; CA 372/65 Dehan v. Francis [62]; Estate of Robert Freilich v. State of Israel [21]; it should be noted that in England the head of damage of reduction of life expectancy has been rejected as an independent head of damage, by the Administration and Justice Act 1982, and now it falls within the scope of pain and suffering).

There are those who recoil from awarding compensation for non-pecuniary loss, because of the difficulty in estimating the amount thereof. It has already been said that in cases such as these ‘there is more speculation than calculation,’ since ‘how is it possible to assess, accurately or even approximately, in money or money’s worth, the pain and suffering or the anguish and humiliation of a person whose hand or leg has been amputated, or who walks around with anxiety in his heart because his days on earth are numbered’ (Grossman v. Roth [13], at p. 1254). It has also been written that this head of damage ‘will not be determined by weights and measures of logic but with morality and emotion,’ since ‘no money is equal to the loss of life nor will it compensate for deprivation of the pleasures of life’ (CA 15/66 Shinar v. Hassan [63], at pp. 460, 463; see also CA 283/89 Municipality of Haifa v. Moskowitz [64], at p. 732).

82. Nonetheless, the compensation for the head of damage of reduction or loss of life expectancy is firmly established in out legal system; even the somewhat paradoxical approach whereby compensation for this head of damage should be minimized precisely because of the difficulty in assessing its amount has become discredited. The need for measured compensation is not necessarily equivalent to a need for modest compensation. Indeed, in some legislation, the assessment of non-pecuniary loss is done on a universal rather than an individual basis (see the Road Accident Victims Compensation Law, 5735-1975; Road Accident Victims Compensation (Calculation of Compensation for Non-Pecuniary Loss) Regulations, 5736-1976; Liability for Defective Products Law, 5740-1980; CA 235/78 Hornstein v. Ohavi [65], at p. 349; CA 184/80 Eigler v. HaMagen [66]; CA 2801/96 El-Al Israel Airlines Ltd v. Yifrach [67]). This is the reverse side of the coin whose obverse is the strict liability arrangement that these statutes provide (see also CA 675/82 Asadi v. Cohen [68]). However, the maximum rate prescribed in the Compensation Law or in the strict liability statutes cannot constrain the court when it is awarding compensation for non-pecuniary loss of a plaintiff who was injured by a wrongful act under the Torts Ordinance (CA 180/88 Ozeri v. Sarufi [69]; CA 3843/90 Ohayon v. State of Israel, Ministry of Defence [70]). Indeed, when we are concerned with the general law of torts, ‘the law is based on focusing on the individual damage that occurred to the injured person, and for which the tortfeasor is responsible, and the need to return the injured person to his original position’ (Naim v. Barda [3], at p. 775). In so far as the head of damage of reduction or loss of life expectancy is concerned, an important factor is the length of the period of the ‘lost years,’ even though obviously one should not adopt a ‘mathematical’ calculation that determines a ‘rate’ for each year of life (see and cf. Shinar v. Hassan [63]; CA 286/55 Wolfovitz v. Fisher [71]; CA 402/75 Estate of Yisrael Mashiach v. Rosenblum [72]; Estate of David Azoulay v. Vulcan Casting Enterprises Ltd [24]).

83. Abandoning ‘modest’ compensation in favour of proper compensation is naturally expressed, in Israeli law as in other legal systems, in an increase in the amount of compensation for non-pecuniary heads of damage. This trend has found expression in case law (see, for example, CA 2517/93 A v. Katahin, Takdin [73]; CA 6978/96 Amar v. General Federation Medical Fund [74]; CA 2055/99 A v. Israel Chief Rabbinate [75]; E. Rivlin, ‘Compensation for Intangible Loss and Non-Pecuniary Loss — Broadening Trends,’ Shamgar Book, part 3, 51-62 (2003)). This trend received expression in England, where a comprehensive examination was made of this issue by the Law Commission, and in a report published in 1999 the Commission recommended that compensation for pain and suffering and loss of life amenities should be increased, where ‘serious personal injury’ is caused. Only a short time passed until, in 2000, the Court of Appeal in England was presented with this issue, in Heil v. Rankin [159]. The court adopted, in that case, most of the Commission’s recommendations, and stated that the principle concerning full — i.e., proper, reasonable and just — compensation applies both to pecuniary loss and non-pecuniary loss. Notwithstanding, the court emphasized that it did not intend to change the accepted principles underlying the assessment of loss, but only to propose revised guidelines that would give modern validity to the traditional principles concerning the purpose of awarding compensation. In practice, the court in England determined the range of the compensation for non-pecuniary personal injury, in severe cases, in amounts varying between £150,000 and £200,000.

The trend that we have discussed has not overlooked the awarding of compensation for reduction or loss of life expectancy. Case law has held for some time that compensation for this head of damage should be substantial, since it is concerned with the loss of something that is the most valuable thing of all (Estate of David Azoulay v. Vulcan Casting Enterprises Ltd [24]; Estate of Yisrael Mashiach v. Rosenblum [72]). Indeed, in several judgments given recently, compensation for a reduction of life expectancy has been awarded in larger amounts than those customary in the past (see The Technion, Israel Technological Institute v. Twister [9]; see also CA 163/99 Estate of Diav Mizawi v. Dori Engineering Works Co. Ltd [76]; CA 5938/97 Peleg v. Tardiman [77]; CC (Hf) 1581/94 Hattib v. State of Israel [79]).

The judgment of the District Court in our case is consistent with this trend, and the amount of compensation that was awarded for the head of damage of loss of the life expectancy — when the deceased passed away at twelve years of age and his life expectancy was reduced by 59 years — does not justify intervention in either direction. In this determination I have taken into account the fact that, according to our approach, compensation should be awarded to the estate for the loss of the deceased’s earning capacity in the ‘lost years.’

Therefore the counter-appeal should be dismissed, as well as the arguments raised in this regard in CA 550/01.

84. All the other arguments raised in CA 550/01 do not justify, in my opinion, intervention in the judgment of the District Court. I would like to say a few words on the appellants’ claim that the estate should be warded compensation for pain and suffering. In principle, the compensation for this head of damage is awarded, in Israeli law, according to the subjective-functional approach. The ruling that was given by the majority in Dehan v. Francis [62] is that compensation should not be awarded for pain and suffering, where the injured person was unconscious from the moment of the injury until the moment of death. In CA 773/81 Estate of Robert Freilich v. State of Israel [21] Justice Barak held that ‘the loss of consciousness is compensatable damage, since the loss of consciousness is comparable to a reduction in life expectancy, and the latter is compensatable. The compensation is not for the pain and suffering resulting from awareness of the damage but the loss of all life apart from the breath of life in the period of loss of consciousness.’ In our case, it was not proved that the deceased suffered pain and suffering from the accident, and even if we regard the time that passed from the accident to the death — in which apparently the deceased was unconscious — as falling within the scope of ‘reduction of life expectancy’, this addition is minimal and it cannot change the amount of the compensation for this head of damage.

Conclusion

85. In view of all of the aforesaid, I am of the opinion that the appeal in CA 140/00 should be allowed, in the sense that the case should be returned to the District Court for the purpose of determining the amount of compensation payable to the estate for loss of the deceased’s earning capacity in the ‘lost years.’ The appeal on the question of punitive damages, the counter-appeal against the amount of the compensation for reduction of life expectancy, and the appeal in CA 550/01 are denied.

The respondents shall pay the court expenses and the legal fees of the appellants in a sum of NIS 25,000.

President A. Barak

I agree.

Vice-President T. Or

I agree.

Justice E. Mazza

I agree.

Justice D. Dorner

I agree.

Appeal allowed in part. Counter-appeal denied.

22 Adar 5754.

15 March 2004.

Full opinion:

Link to original Hebrew text of decision on official ISC website:

http://elyon1.court.gov.il/files/00/400/001/P05/00001400.p05.pdf

Daaka v. Carmel Hospital

Case/docket number:

CA 2781/93

Date Decided:

Sunday, August 29, 1999

Decision Type:

Appellate

Topics:

Abstract:

Facts: Appellant was admitted to the hospital for an operation on her left leg, and she signed a consent form agreeing to the operation. Two days later, after being placed on the operating table and receiving sedatives in advance of undergoing anesthesia, she was asked to sign a consent form for a biopsy operation on her right shoulder. She did so, and the biopsy was performed and did not reveal malignancy. After being released from the hospital, her shoulder remained stiff. Appellant sued the hospital for negligence, claiming negligence in failing to receive her informed consent, in the decision to conduct the biopsy, and in the treatment she subsequently received. The trial judge dismissed the claim.

Held: The Court granted the appeal through a plurality opinion written by Justice Or, in which President Barak, Deputy President Levin, and Justices Cheshin, Strasberg-Cohen, and Englard concurred. Justice Or held that there was no negligence in the decision to perform the biopsy, they way it was performed, or in the post-operative treatment, but that the hospital was negligent in not receiving Appellant’s informed consent to the operation. There was no causal connection, however, between failure to obtain informed consent and the damage caused by the operation, because Appellant would almost certainly have agreed to the operation, had she been informed of its nature and risks. Appellant was not entitled to recover for her bodily damage, but she was entitled to recover for the violation of autonomy in not obtaining her informed consent, which is a separate head of damage in tort claims. Justice Strasberg-Cohen wrote separately to say that determining a causal connection in a hypothetical situation – e.g. whether Appellant would have agreed to the operation had her informed consent been sought – should be done through the evaluation of chances test, in which a patient may recover proportional damage if the chance that he or she would have agreed to the operation is more than negligible, even if it is not more 50%. Because there was a 50% chance that Appellant would not have consented to the operation, Appellant should be awarded half the physical damages, in addition to compensation for violation of autonomy. Justice Beinisch dissented, holding that Appellant would not have consented to the operation and that she was therefore entitled to full recovery for the bodily injury suffered. Awarding compensation for violation of autonomy should be reserved for rare cases which do not include this one.

Voting Justices:

Daaka v. Carmel Hospital.pdf

Author

dissent

Or, Theodor

Primary Author

majority opinion

Strasberg-Cohen, Tova

Author

concurrence

Barak, Aharon

Author

concurrence

Levin, Shlomo

majority opinion

Cheshin, Mishael

Author

concurrence

Englard, Izhak

majority opinion

Full text of the opinion:

CA 2781/93

Miassa Ali Daaka

1. Carmel Hospital, Haifa

2. Health Fund of General Association of Workers in Israel

The Supreme Court Sitting as the Court for Civil Appeals

[August 29, 1999]

Before President A. Barak, Deputy President S. Levin, and Justices T. Or, M. Cheshin, T. Strasberg-Cohen, D. Beinisch, I. Englard

Facts: Appellant was admitted to the hospital for an operation on her left leg, and she signed a consent form agreeing to the operation. Two days later, after being placed on the operating table and receiving sedatives in advance of undergoing anesthesia, she was asked to sign a consent form for a biopsy operation on her right shoulder. She did so, and the biopsy was performed and did not reveal malignancy. After being released from the hospital, her shoulder remained stiff. Appellant sued the hospital for negligence, claiming negligence in failing to receive her informed consent, in the decision to conduct the biopsy, and in the treatment she subsequently received. The trial judge dismissed the claim.

Held: The Court granted the appeal through a plurality opinion written by Justice Or, in which President Barak, Deputy President Levin, and Justices Cheshin, Strasberg-Cohen, and Englard concurred. Justice Or held that there was no negligence in the decision to perform the biopsy, they way it was performed, or in the post-operative treatment, but that the hospital was negligent in not receiving Appellant’s informed consent to the operation. There was no causal connection, however, between failure to obtain informed consent and the damage caused by the operation, because Appellant would almost certainly have agreed to the operation, had she been informed of its nature and risks. Appellant was not entitled to recover for her bodily damage, but she was entitled to recover for the violation of autonomy in not obtaining her informed consent, which is a separate head of damage in tort claims. Justice Strasberg-Cohen wrote separately to say that determining a causal connection in a hypothetical situation – e.g. whether Appellant would have agreed to the operation had her informed consent been sought – should be done through the evaluation of chances test, in which a patient may recover proportional damage if the chance that he or she would have agreed to the operation is more than negligible, even if it is not more 50%. Because there was a 50% chance that Appellant would not have consented to the operation, Appellant should be awarded half the physical damages, in addition to compensation for violation of autonomy. Justice Beinisch dissented, holding that Appellant would not have consented to the operation and that she was therefore entitled to full recovery for the bodily injury suffered. Awarding compensation for violation of autonomy should be reserved for rare cases which do not include this one.

Israeli Supreme Court Cases Cited:

[1] CA 3108/91 Reibe v. Veigel, IsrSC 47 (2) 441.

[2] CA 560/84 Nachman v. Histadrut Health Fund, IsrSC 40(2) 384.

[3] CA 4384/90 Vaturi v. Leniado Hospital, IsrSC 51 (2) 171.

[4] CA 470/87 Alturi v. State of Israel – Ministry of Health, IsrSC 47(4) 146.

[5] CA 58/82 Kantor v. Moseib, 39(3) 253.

[6] CA 5049/91 Histadrut Klalit Health Fund v. Rachman, IsrSC 49 (2) 369.

[7] CA 434/94 Berman (Minor) v. Moore Institution for Medical Information Ltd, IsrSC 51(4) 205.

[8] CA 6643/95 Cohen v. Histadrut Klalit Health Fund, IsrSC 53 (2) 680.

[9] FHC 7015/94 Attorney General v. Anonymous, IsrSC 50 (1) 48.

[10] HCJ 2481/91 Dayan v. Jerusalem District Commissioner, IsrSC 48(2) 456

[11] HCJ 693/91 Efrat v. Director of Population Registry of the Ministry of the Interior, IsrSC 47(1) 749.

[12] HCJ 7357/95 Baraki Peta Humphries (Israel) Ltd. v. State of Israel, IsrSC 50(2) 769.

[13] HCJ 4330/93 Ganem v. Tel-Aviv District Committee of the Bar Association Committee, IsrSC 50(4) 221.

[14] CA 5942/92 Anonymous v. Anonymous, IsrSC 48(3) 837.

[15] CA 1233/94 Cohen v. Attorney General (unreported).

[16] HCJ 50161/96 Horev v. Minister of Transportation, IsrSC 51(4) 1; [1997] IsrLR 149.

[17] CA 7155/96 Anonymous v. Attorney General, IsrSC 51(4) 160.

[18] LCA 1412/94 Ein Kerem Medical Association v. Gilad, IsrSC 49(2) 516.

[19] CA 4837/92 “Eliyahu” Insurance Company v. Borba, IsrSC 49(2) 257.

[20] CA 243/83 Jerusalem Municipality v Gordon, IsrSC 39(1) 113.

[21] CA 4500/90 Hershko v. Aurbach, IsrSC 49(1) 419.

[22] CA 558/84 Carmeli v. State of Israel, IsrSC 41(3) 757.

[23] CA 1730/92 Matzrava v. Matzrava (unreported).

[24] LCrim 6795/93 Agadi v. State of Israel, IsrSC 48(1) 705.

[25] CA 915/91 State of Israel v. Levi, IsrSC 48(3) 45.

[26] CA 50/91 Sabin v. Minister of Health, IsrSC 47(1) 27.

[27] CA2989/95 Korantz v. Sapir Medical Center “Meir” Hospital, IsrSC 51(4) 687.

[28] CA 429/82 State of Israel v. Sohan, IsrSC 42(3) 733.

[29] CA 283/89 Haifa Municipality v. Moskovitz,, IsrSC 47(2) 193.

[30] CA 37/86 Levi v. Sherman, IsrSC 44(4) 446.

[31] CA 2934/93 Soroka v. Hababu, IsrSC 50(1) 675.

[32] CA 414/66 Fishbein v. Douglas Victor Paul by Eastern Insurance Service, IsrSC 21(2) 453.

[33] CA 591/80 Chayu v. Ventura, IsrSC 38(4) 393.

[34] CA 437/73 Aik (minor) v. Dr. Rosemarin, IsrSC 29(2) 225.

[35] CA 145/80 Vaknin v. Beit Shemesh Local Council, IsrSC 37(1) 113.

[36] FH 24/81 Honovitz v. Cohen, IsrSC 38(1) 413.

[37] CA 20/80 Fleisher v. Laktush, IsrSC 36(3) 617.

[38] CA 410/83 Petrolgas Israeli Gas Company (1969) Ltd .v. Kassero IsrSC 40(1) 505.

[39] CA 231/84 Histadrut Health Fund v. Fatach IsrSC 42(3) 312.

[40] CA 679/82 Netanya Municipality v. Tzukim Hotel Ltd. (not published).

[41] CA 355/80 Nathan Anisivmov Ltd v. Tirat Bat Sheva Hotel Ltd, IsrSC 35(2) 800.

Israeli District Court Cases Cited:

[42] CC (B. Sheva) 88/84 Assa v. Histadrut Health Fund, 1987 DC 32(3).

United States Cases Cited:

[43] Rogers v. Whitaker (1992) 67 Aust. L.J. 47.

[44] Chappel v. Hart (1998) 72 Aust. L.J. Rep. 1344.

[45] Salis v. United States 522 F. Supp. 989 (1981).

[46] Kramer v. Lewisville Memorial Hosp. 858 S.W. 2d 397 (1993).

[47] Falcon v. Memorial Hosp. 462 N.W. 2d 44 (1990).

[48] Canterbury v. Spence 464 F. 2d 772 (1972).

[49] Hartke v. McKelway 707 F. 2d 1544 (1983).

[50] Sard v. Hardy 379 A. 2d 1014 (1977).

[51] Bernard v. Char 903 P. 2d 667 (1995).

[52] Memphis Community School Dist. v. Stachura 106 S. Ct. 2537 (1986).

[53] Schloendorff v. Society of New York Hospital 105 N.E. 92 (1914).

[54] Natanson v. Kline 350 P. 2d 1093 (1960).

[55] Cobbs v. Grant 502 P. 2d 1 (1972).

English Cases Cited:

[56] Smith v. Barking Havering & Brentwood Health Authority (1989) (Q.B. – unreported).

[57] Lachambre v. Nair [1989] 2 W.W.R. 749.

[58] Alexander v. Home Office [1988] 2 All E.R. 118 (C.A.).

[59] Chatterton v. Gerson [1981] 1 All E.R. 257 (Q.B).

[60] Bolitho v. City and Hackney Health Authority [1997] 3 W.L.R. 1151 (H.L.).

[61] Davies v. Taylor [1972] 3 All E.R. 836 (H.L.).

[62] Bolam v. Friern Hospital Management Committee (1957) 2 All E.R. 118 (Q.B.).

[63] Airedale NHS Trust v. Bland [1993] 1 All E.R. 821 (H.L.).

[64] St. George’s Healthcare NHS Trust v. S. [1998] 3 All E.R. 673 (C.A.).

[65] Sidaway v. Governors of Bethlem Royal Hospital [1985] A.C. 871.

Scottish Cases Cited:

[66] Goorkani v. Tayside Health Board [1991] S.L.T. 94.

Canadian Cases Cited:

[67] Reibl v. Hughes (1980) 114 D.L.R. (3^rd) 1.

[68] Arndt v. Smith (1995) 126 D.L.R. (4^th) 705.

[69] Arndt v. Smith (1997) 148 D.L.R (4^th) 48.

[70] Hopp v. Lepp (1980) 112 D.L.R. (3^rd) 67.

[71] Malette v. Shulman (1990) 67 D.L.R. (4^th) 321.

[72] Hollis v. Dow Corning Corp. (1995) 129 D.L.R. (4^th) 609.

Israeli Books Cited:

[73] D. Barak-Erez, Avlot Chukatiot [Constitutional Torts] (1994).

[74] I. Englard, Yesodot Haachraut Benezikin, Dinei Nezikin – Torat Hanezikin Haclallit [Foundations of Liability in Tort] in [The General Doctrine of Torts], (G. Tedeschi, ed. 2 ed. 1977).

[75] G. Shalev, Dinei Chozim [Contracts Law] (2nd Ed. 1995).

[76] 3 A. Barak, Parshanut Bimishpat [Interpretation in Law], Parshanut Chukatit [Constitutional Interpretation] (1994).

Israeli Articles Cited:

[77] A. Shapira, Haskama Mudaat Letipul Refui- Hadin Hamatzui Veharatzui [Informed Consent to Medical Treatment], 14 Iyunei Mishpat (1989) 225.

[78] R. Gavison, Esrim Shana Lehilchat Yardor – Hazechut Lehibacher ViLikachei Hahistoria [Right to be Elected], Gevurot LeShimon Agranat (Barak et al. ed 1987) 145.

[79] Y. Gilad, Al Hanachot Avoda, Intuitzia Shiputit Veratzionaliut Bekeviat Gidrei Achrayut BeRashlanut [Borders of Negligence], 26 Mishpatim (1995-1996) 295.

[80] A. Porat, Dinei Nezikin: Avlat Harashlanut alpi Pesikato shel Beit Hamishpat Haelyon Minekudat Mabat Theoretit [Tort of Negligence], Sefer Hashana Shel Hamishpat BeYisrael – 1997 (Rozen ed. 1997) 373.

[81] R. Shapira, Hamechdal Hahistabruti shel Dinei Haraayot – Chelek 1 – Bikorot Mesortiot [Omission in Evidence Law], 19 Iyunei Mishpat (1995) 205.

[82] A. Porat, Doctrinat Hanezek Haraayati: Hahatzdakot LeImutza Veyisuma Bematzavim Tipussim shel Ivadaut Begrimat Nezakim [Doctrine of Evidentiary Damage], 21 Iyunei Mishpat (1998) 191.

Foreign Books Cited:

[83] I. Englard, The Philosophy of Tort Law (1993).

[84] W.L. Prosser, W.P. Keeton On the Law of Torts (5th ed.,
W.P. Keeton et al. 1984).

[85] H. Street, M. Brazier, On Torts (9th ed., M. Brazier 1993).

[86] D. Giesen, International Medical Malpractice Law (1988).

[87] I. Kennedy, A. Grubb, Medical Law (2nd ed. 1994).

[88] R. Nelson-Jones, F. Burton, Medical Negligence Case Law (2nd ed. 1995).

[89] H. McGregor, On Damages (15th ed. 1988).

[90] M. Jones, Medical Negligence (2nd ed. 1996).

[91] M.J. Powers, N.H. Harris, Medical Negligence (2nd ed 1994).

[92] H.L.A. Hart, T. Honor, Causation in the Law (2nd ed. 1985).

[93] J. Katz, The Silent World of Doctor and Patient (1984).

Foreign Articles Cited:

[94] M.M. Shultz, From Informed Consent to Patient Choice: A New Protected Interest, 95 Yale L.J. 219 (1985-1986).

[95] P.H. Schuck, Rethinking Informed Consent, 103 Yale L.J. 900 (1993-1994).

[96] A.D. Twerski, N.B. Cohen, Informed Decision Making and The Law of Torts: The Myth of Justiciable Causation, U. Ill. L. Rev. 607 (1988).

[97] F. Carnerie, Crisis and Informed Consent: Analysis of a Law-Medicine Malocclusion, 12 Am. J. L. and Med. 55 (1986).

[98] D. Hermann, The Basis for the Right of Committed Patients to Refuse Psychotropic Medication, 22 HOSPLW 176 (1989).

[99] R.B. Dworkin Medical Law and Ethics in the Post-Autonomy Age, 68 Ind. L.J. 727 (1992-1993).

[100] R. Macklin, Symposium: Law and Psychiatry Part II: Some Problem in Gaining Informed Consent From Psychiatric Patients, 31 Emory L.J. 345 (1982).

[101] R. Crisp, Medical Negligence, Assault, Informed Consent, and Autonomy, 17 J. Law & Society 77 (1990).

[102] M.R. Flick, The Due Process of Dying, 79 Calif. L. Rev. 1121 (1991).

[103] W.S. Malone, Ruminations on Cause-In-Fact, 9 Stan. L. Rev. 60 (1956-1957).

[104] A. Porat, A. Stein, Liability for Uncertainty: Making Evidential Damage Actionable, 18 Cardozo L. Rev. 1891 (1996-1997).

[105] D. Manderson, Following Doctors’ Orders: Informed Consent in Australia, 62 Aust. L.J. 430 (1988).

[106] M.A. Somerville, Structuring the Issues in Informed Consent, 26 McGill L.J. 740 (1980-1981).

[107] J. Raz, Autonomy, Toleration, and the Harm Principle in Issues in Contemporary Legal Philosophy 313 (Gavison ed. 1987).

[108] J. Katz, Informed Consent – Must it Remain a Fairy Tale?, 10 J. Contemp. H.L. & Pol’y 69 (1994).

[109] C.J. Jones, Autonomy and Informed Consent in Medical Decisionmaking: Toward a New Self-Fulfilling Prophecy, 47 Washington & Lee L. Rev. 379 (1990).

[110] J. Keown Burying Bolam: Informed Consent Down Under, 53 Cambridge L.J. 16 (1994).

[111] D. Feldman, Secrecy, Dignity, or Autonomy? Views of Privacy as a Civil Liberty, 47 Cur. Leg. Prob. 41 (1994).

[112] M.A. Bobinski, Autonomy and Privacy: Protecting Patients from their Physicians, 55 U. of Pitt. L. Rev. 291 (1993-1994).

[113] N.P. Terry, Apologetic Tort Think: Autonomy and Information Torts, 38 St. Louis U. L.J. 189 (1993-1994).

Miscellaneous:

[114] Restatement 2d, Torts.

Appeal against judgment of the Nazareth District Court (Judge G. Ginat) of January 29, 1993 in CC 425/90.

The appeal was allowed in part by the majority, in accordance with the opinion of Justice T. Or

For Appellant – Akiva ben Chaim, Elad Cohen

For Respondents – Ricardo Weiss

JUDGMENT

Justice D. Beinisch

This is an appeal of the judgment of the District Court of Nazareth )Judge G. Ginat) in CF 425/90 of March 29, 1993, which rejected the appellant’s claim for damages for physical harm that she sustained as a result of the biopsy performed on her shoulder in the respondents’ hospital.

The Facts

1. Appellant is disabled, born in 1959, who since birth has suffered from a deformity in the sole of her left foot. Sometime during 1987, Appellant also began suffering from pains in her right shoulder. After symptomatic treatment failed to help, x-rays were done, followed by bone mapping, resulting in a diagnosis of “diffusive absorption.”

On January 5, 1988, Appellant was hospitalized in the “Carmel” hospital – Respondent 1 – for an operation on her left leg. Two days later, on January 7, 1988, Appellant was operated upon and a biopsy was performed on her right shoulder, because of a suspicion of a growth on the shoulder and the need for a clear diagnosis as to the cause of the diffuse absorption, which had shown up in the bone mapping. The change in the operation was apparently the result of the doctor’s decision, immediately before the operation, that the finding in the shoulder necessitated an operation that was more urgent than the operation in the leg.

On the day of hospitalization, Appellant was asked to sign a form recording her consent to an operation on her leg. Two days later, when she was actually on the operating table, having already received sedatives given to patients prior to being taken from the orthopedic ward to the operating theatre, she was asked to sign a consent form for an operation on her shoulder.

The operation did not reveal anything, and after five days of hospitalization, the appellant was released from the hospital and referred for continued treatment in the hospital’s outpatient clinic.

After the operation, Appellant’s shoulder remained stiff, and the parties agree that she has a disability of 35%. Similarly, it is not disputed that if not for the biopsy, presumably the shoulder would not have become stiff, except that the respondents maintain that the injury is rooted in the appellant’s unwillingness to move her shoulder.

On November 30, 1988, Appellant underwent the operation on her leg, and as a result there was a significant improvement in the condition of the leg. At the same time, she underwent manipulation on the shoulder to improve its mobility. On December 28, 1989, Appellant underwent additional manipulation, but to no avail; the shoulder remained stiff.

Appellant filed a claim against the respondents, demanding compensation for the physical harm to her shoulder caused by the operation. Her claim was exclusively based on the grounds of negligence. Appellant claimed that she had been totally unaware of the doctors’ intention to operate on her right shoulder, becoming aware of the fact only when coming out of the anesthetic. Appellant further claimed negligence in the medical treatment given to her, both regarding the actual decision to conduct a biopsy and regarding the treatment she received after the biopsy.

The Judgment of the Trial Court

2. The honorable Judge Ginat dismissed the claim of negligence in all its aspects.

Regarding the allegation of negligence in the execution of the biopsy, the judge ruled that even Appellant’s expert, whose opinion was the basis of the claim, did not categorically state that there was no justification for conducting a biopsy on the basis of the findings that were before the doctors. In the trial judge’s view, this was sufficient grounds for dismissing the allegation of deviation from appropriate professional standards on the part of the treating doctors in their decision to conduct the biopsy.

Regarding Appellant’s claim that she never consented to the biopsy operation, the trial judge determined that already prior to her hospitalization, Appellant had been aware of the problem with her shoulder, and that nothing in the evidence substantiated her claim that she was shocked when finding out that her shoulder and not her leg had been operated upon. He further ruled that he had no doubt that at a certain stage during the admission procedure into the hospital, there had been a hitch in the sense that the appellant initially signed a consent form for the operation on her leg, and only at the last moment, just before the biopsy was conducted, was she asked to sign another consent form which included the correct description of the anticipated treatment. In the lower court’s view, the aforementioned hitch was insufficient to substantiate the claim that Appellant had not consented to the conduct of the biopsy:

In these circumstances there is no escaping the conclusion that there was no defect in the decision to conduct the biopsy. I am also of the opinion that the plaintiff consented to the treatment after being explained that it was the appropriate medical treatment…

In these circumstances, given the appellant’s total denial of having received any information regarding the anticipated treatment for her shoulder, and given my rejection of her denial, I am unwilling to hear an alternative factual allegation from her to the effect that she had received information on the matter but that it was incomplete.

The trial judge further stated that the sole grounds for the action relied upon by Appellant was negligence, and that such claim required proof of the causal connection between the negligence and the damage. Since Appellant had not proved that her shoulder was damaged as a result of breach of the obligation to supply her with information, her claim should be dismissed, even assuming, arguendo, that the appellant had not received complete information prior to the biopsy.

Regarding the allegation of negligence in the medical treatment after the operation, the trial judge ruled that there was no foundation for the appellant’s claim that different physiotherapeutic treatment would have prevented the damage to her shoulder. The trial judge did not totally endorse the doctors’ claim that conceivably a greater degree of effort on the appellant’s part would have prevented the damage to her shoulder. Nonetheless, he ruled that absent any claim regarding a defect in the execution of the biopsy, and having dismissed the claim regarding the nature of the physiotherapeutic treatment given to the appellant, it was not possible to establish negligence in the medical treatment, and such negligence could not be inferred from the actual occurrence of the damage itself.

3. In her appeal, Appellant claimed that even if the tort of battery was explicitly claimed in the complaint, the lower court was nonetheless mistaken in its failure to address it, given that the factual components of the tort of battery were fully described in the complaint.

On the merits of the issue, counsel for the appellant contended that the lower court erred in its rejection of Appellant’s claim that she had not consented to the operation. He argued that even if prior to the operation, the appellant had suffered from certain medical problems in her shoulder, this fact by itself did not contradict her claim that she was shocked upon finding out that her shoulder had been operated upon.

In summations, Appellant further claimed that respondents’ doctors had been negligent in their actual decision to perform the operation, which was allegedly performed without justification, and that they were negligent in the post surgical treatment. It was further claimed that respondents bear the burden of proving the absence of negligence, under the rule that “the thing speaks for itself” and that the court erred in its failure to apply that rule to the circumstances of the case.

During oral arguments in the appeal, Appellant focused on the question of the absence of consent to the operation on the shoulder. He claimed that in this case, the elements of the tort of battery had been proven, and that the respondents were therefore liable for damage caused to the appellant by the operation, even in the absence of proof of a causal connection regarding the full extent of damage sustained by Appellant. CA 3108/91 Reibl v. Veigel (hereinafter: “Reibl”) [1] (Shamgar, P). He further added that the case law trend to recognize medical treatment given without consent as constituting the tort of battery had been reinforced following the enactment of the Rights of the Patient Law, 1996 (hereinafter: Patient’s Rights Law).

Respondents countered by claiming that the appeal addresses issues of fact, not law, in which this court does not generally intervene.

Respondents further asked the Court to reject the claim regarding transferring the burden of proof, arguing that, in any event, they had satisfied this burden by proving that they had not been negligent in the treatment they gave to Appellant, both in the operation itself and the post surgical treatment.

4. We are satisfied that no negligence was proven on the respondents’ part regarding the decision to perform the operation on Appellant’s shoulder, nor in the treatment given to Appellant in order to overcome the invalidity caused by the operation, including both the physiotherapy and the additional operations. In this context, there are no grounds for interference with the findings and conclusions of the trial court, grounded in the testimony of the doctors, which it preferred over the medical expert opinion submitted by the appellant.

Nevertheless, the court’s conclusion and dismissal of the claim caused us considerable consternation, to the extent that it was based on the absence of the appellant’s consent to the operation or on her alternative claim that even if she had given consent, under the particular conditions in which it had been given, it could not be considered “informed consent.”

5. Before addressing the legal conclusions dictated by the proven facts, it is necessary to briefly describe the factual picture regarding the circumstances of the dispute over Appellant’s consent to the operation on her shoulder.

Appellant suffered from pains in her shoulder during the months preceding the operation. As indicated in the affidavit and examination of Dr. Sharvit, the treating orthopedist, and from notes appearing in the patient’s file in the Health Fund during the period preceding the operation, Appellant was sent for a number of tests, including a bone scan. The health file indicates that on November 27, 1987, in view of the scan findings, Dr. Sharvit recommended that the appellant be sent for a biopsy. Until the appellant’s actual hospitalization, no date was set for the recommended biopsy.

As described above, the appellant was hospitalized on January 5, 1988 for an operation on her leg, and she also signed a consent form for the operation. The hospital documents, the illness summary and treatment record, submitted as exhibits, indicated that Appellant had been admitted to the hospital for an elective operation on her leg. On January 7, 1988, the operation date, Dr. Antol – the surgeon who operated on Appellant – wrote the following:

It has become clear that she has been suffering from pains in her right shoulder for half a year; the shoulder was examined (bone scan, x-ray), which indicated Rt. Proximal Humerus Steolitic Lesion. The finding was explained to the patient who agreed to the conduct of a biopsy and at this stage to defer the Triple Arthrodesis.

This note was written by Dr. Antol, who testified that he had informed the appellant of the need for the operation on her shoulder on the morning of the operation, when she was lying on the operating table, after discovering that she had signed a consent form for the operation on her leg.

The trial judge ruled that despite the circumstances under which the information and explanation regarding the intended operation were given to the appellant, immediately before the operation, and not in the customary manner, in view of her existing knowledge of her medical history and previous treatment, she understood the nature of the intended operation. From the judge’s findings, it further emerges that had the consent form signed on the operating table been the sole evidence of the appellant’s consent, he would not have ruled that the appellant was aware of the anticipated operation. However, the consent that she gave must be considered against the background of the information she possessed prior to her hospitalization.

The trial court examined the question of liability from the perspective of the tort of negligence, according to claims raised by Appellant, because even during the trial at the District Court, the claim of lack of consent was one of the central claims made by the appellant’s attorney, and he did not raise the claim of battery.

The following questions therefore arise: If the judge was correct in ruling that the appellant gave her consent to the operation, could it be regarded as “informed consent?”; if not, what is the requisite conclusion with respect to the respondents’ liability in tort?

Negligence or Assault

6. The question is therefore whether medical treatment given without the explicit, intelligent consent of the patient, and without knowledge of all the facts regarding the odds and risks of the treatment, is included within the tort of battery. The question has perturbed many researchers and scholars dealing with torts and has also substantially occupied the courts.

Our case law ruled a long time ago that under particular circumstances, this kind of treatment constitutes the tort of battery:

The problem is whether the prospects and risks involved in the examination were explained to the plaintiff prior to his consent. If explained to him, then his consent is effective and binding and the doctors cannot be impugned with battery or any other tortious act by reason of having performed the examination. If the plaintiff did not receive a complete explanation of the risks, then his consent is meaningless and the examination will be regarded as an act of battery, constituting a tort.

CA 560/84 Nachman v. Histadrut Health Fund [2] at 387.

For this reason, according to this rule, compensation must be awarded for damage caused to a patient treated without his having properly consented to the treatment, even absent proof of the breach of the duty of care, and even absent proof of a causal connection between the failure to provide details as legally required and any damage sustained by the patient. See Reibl [1] 509-510.

Considerable reservation has been expressed regarding the resort to the tort of battery as a way of classifying medical treatment. Inter alia, there is uneasiness in imputing anti-social behavior, tainted by wantonness, to medical treatment that was intended entirely to help the other person:

It would appear that there are many for whom the use of the term “battery” in the context of medical treatment is both morally and intellectually repugnant. This is a term which is commonly understood as implying anti social behavior – hitting a person in the face, for example. Stigmatizing a doctor as “an attacker” by reason of medical treatment given to the patient creates discomfort, especially for those adopting judicial decisions. This explains their hesitation in regarding the criminal offense of battery, or the tort of battery as an appropriate tool for adjudicating cases in which medical treatment was provided without appropriate disclosure of information regarding risks and alternatives.

A. Shapira, Haskama Mudaat Letipul Refui – Hadin Hamatzui Veharatzui [77] at 231.

In his book, The Philosophy of Tort [83], Prof. Englard explains that the transition from use of the tort of battery to the doctrine of “informed consent,” based on medical negligence, is the result of the discomfort occasioned by imputing doctors with wanton anti-social behavior, when their sole intention was to assist the patient:

The retreat from the doctrine of battery has been explained by the discomfort of treating doctors, who genuinely care for the well-being of the patient, under a doctrine aimed at sanctioning anti social conduct, usually perpetrated with the worst kind of intentions. Courts were reluctant to stigmatize the physicians with the label of having committed battery, lumping them into the same category as murderers, robbers and bar-room trollers.

Id. at 162.

In her article, “From Informed Consent to Patient Choice: A New Protected Interest” [94], the author M.M. Shultz writes:

Discomfort with treating doctors under a doctrine aimed at antisocial conduct has prompted most jurisdictions to limit the battery action to those relatively unusual situations where a medical procedure has been carried out without any consent, rather than where the consent has merely been insufficiently informed. The modern allegation of battery typically arises when consent to a particular procedure is given and a different or additional procedure carried out.

Id. at 226.

In accordance with this approach, in most states with tort law resembling our own, use of the tort of battery for dealing with medical treatment given without “informed consent” has all but disappeared. Broadly speaking, it is generally accepted that the tort of battery is only resorted to when the patient received no information at all about the type of treatment proposed for him, or was not informed of an inevitable consequence of the treatment, or if the treatment actually provided was substantially different from the treatment of which the patient was informed. Needless to say, the tort of battery will be recognized when the consent was obtained by misrepresentation.

On the other hand, in cases of absence of “informed consent”, as opposed to the absence of any consent to medical treatment, the focus in the assessment of tortious liability has moved toward the tort of negligence. In this context, the scholar Prosser writes:

A rapidly growing form of medical malpractice litigation involves the doctrine of “informed consent”, which concerns the duty of the physician or surgeon to inform the patient of the risks involved in treatment or surgery. The earliest cases treated this as a matter of vitiating the consent, so that there was liability for battery. Beginning around 1960 however it began to be recognized that the matter was really one of the standard of professional conduct, and so negligence has now generally displaced battery as the basis for liability.

W.L. Prosser, W.P. Keeton, On the Law of Torts [84] at 189 -190.

The distinction between the absence of consent, in which the treatment may be considered as battery and the absence of “informed consent” which is included in the category of the tort of negligence, also ensures the conceptual distinction between “guilt” and “duty,” where failure to discharge a duty is substantively related to the tort of negligence.

In England, too, where the tort of battery is still used more extensively than in the United States and Canada, it was ruled that the patient’s signature on a consent form affirming that the nature of the operation was explained to the patient is not sufficient, unless he or she actually received a proper explanation of the treatment and its risks. The absence of an explanation regarding the risks of the treatment, as opposed to the absence of an explanation of the substance and nature of the treatment, does not vitiate the consent for purposes of battery, but it does constitute a breach of the doctor’s duty, imposing liability for negligence. See H. Street, M. Brazier, On Torts [85].

This distinction was addressed by Judge Laskin, in his judgment in the Canadian Supreme Court:

I can appreciate the temptation to say that the genuineness of consent to medical treatment depends on proper disclosure of the risks which it entails, but in my view, unless there has been misrepresentation or fraud to secure consent to the treatment, a failure to disclose the attendant risks, however serious, should go to negligence rather than to battery. Although such a failure relates to an informed choice of submitting to or refusing recommended and appropriate treatment, it arises as the breach of the anterior duty of due care, comparable to the legal obligation to the duty of care in carrying out the particular treatment to which the patient has consented. It is not a test of the validity of the consent.

Reibl v. Hughes (1980) [67] at 10-11.

It should be noted that the trend toward applying the tort of negligence to situations of medical treatment given without informed “consent” does not altogether obviate resort to battery in the context of medical treatment. This claim, however, is limited to special cases in which medical treatment was given in the total absence of consent to treatment on the patient’s part, or when the patient was not informed of its inevitable result.

The tort of negligence in place of battery in cases of a lack of “informed consent” to medical treatment has gradually become accepted in Israeli case law. In his judgment in CA 4384/40 Vaturi v. Leniado Hospital (hereinafter: Vaturi [3]), Justice Mazza dealt with the doctor’s duty to provide information to the patient regarding the medical treatment, within the framework of the duty of care which is one of the foundations of the tort of negligence:

The doctor’s duty to inform the patient of the information he or she has and its possible consequences derives from the general duty of care which the doctor and the hospital owe to the patient. It is based on our right to know about ourselves. This is an expression of the autonomy of the private will of every person, which expresses our human dignity. See CA 1412/94 Hadassa Medical Association Ein Kerem v. Gilad at 525 (Barak, J.). The doctor’s duty of disclosure is not absolute and does not always extend to all the details of the medical treatment. For example, there is no need to provide the patient with information regarding a remote risk attendant to receiving a vaccination that all people receive, and the necessity of which is not disputed. CA 470/87 Alturi v. State of Israel – Ministry of Health at 153. But where the choice of the medical path or the receipt of medical treatment involves substantial risks, the doctors are obliged (subject to certain exceptions) to provide the patient with the information reasonably required in order to reach an intelligent, informed decision whether or not to choose this particular treatment path, with its attendant risks. See Sid-away v. Bethlem Royal Hospital Governors at 655c (per Lord Scarman); the Koheri case, supra, at 171. This at all events is the most minimal parameter of the duty. Its fulfillment by doctors is intended to serve a practical purpose. It constitutes a part of the duty of care imposed upon the doctor in respect of the patient he is treating. If the duty is breached, and the patient suffers damage as a result, the breach may give the patient a right to indemnification based on negligence.

Vaturi [3] at 182 (emphasis added – D.B.).

In accordance with this evolving approach, and considering the particular circumstances of the case before us, my opinion is that the appellant’s case should be dealt with within the framework of the tort of negligence. Resort to the tort of battery for the provision of medical services should be left for those extreme cases in which the medical treatment was given against the patient’s will, or cases in which the treatment was substantially different from the treatment to which the patient agreed, or when the patient did not receive any information regarding the nature of the treatment or its inevitable consequence.

On the basis of this distinction, the case before us can be distinguished from the Reibl case [1], in which, during the course of the operation, the doctor decided to perform an operation that differed from what had been agreed upon in advance, without such a possibility even having been presented to the patient prior to that time, and without there being any urgency to the matter.

In Appellant’s case, the decision to perform the operation was taken by the doctors with the intention of reaching a clear diagnosis, and in order to verify the suspicion of a growth, in view of findings which were discovered in Appellant’s shoulder. According to the findings of the lower court, Appellant was aware of the need for this treatment, even though the evidence indicates that until she was brought into the operating ward, she did not think there would be a need to the perform an operation on her shoulder during the duration of this hospitalization.

Under these circumstances, it was necessary to clarify whether the manner in which the appellant was informed and the manner in which her consent was obtained indicate negligent conduct on the doctors’ part. This in fact is what the lower court did.

Duty of Care

7. Like the District Court, I too believe that the appellant’s case should be examined within the framework of negligence, but my conclusion differs to that of the trial judge. In my opinion, it was proven that the doctors of the hospital were negligent regarding the procedures that preceded the biopsy. Their negligence was expressed in the fact that, in the first place, they did not discharge their obligation to apprise the appellant of the need for a biopsy during the hospitalization in question. The appellant did not receive timely notice of the intention to postpone the operation on her leg, and it was only in the operating room that she received the pertinent details regarding the operation that she was to about to undergo, when she was already sedated and in a state that was inappropriate for making a decision.

For a patient’s consent to medical treatment to his or her body to be regarded as “informed consent,” the patient must receive appropriate information regarding his or her condition, the nature of the treatment recommended and its purpose, the risks and prospects entailed, and the reasonable alternatives to the treatment proposed. Having the patient sign a consent form is inadequate for the purpose of informed consent. On the nature of the patient’s signature on the consent form for an operation when the patient is in the operating theater or being brought to the theater, Giesen writes that:

It may be doubtful, indeed, whether such a single act of disclosure will ever suffice if made only shortly before the proposed treatment, such as on the very eve of an operation which has already been scheduled, and the information will undoubtedly come much too late when given to a patient already under sedation, or to a patient on his way to the operating theatre, or to a patient in the anteroom of the operating theatre. “A patient is entitled to have enough time and an environment to enable him or her carefully to consider his or her position.”

D. Giesen, International Medical Malpractice Law [86] at 393.

Today an entire chapter of the Patient’s Rights Law deals with “informed consent.” The law does not apply to our case because of the date in which it came into force, but it nonetheless indicates the legislative tendency. Section 3(b) of the law provides that “in order to obtain informed consent, the physician shall give the patient the medical information reasonably required by him in order to decide whether or not to consent to the treatment proposed …”; For this purpose, medical information includes: the nature of the procedure, its purpose, the benefit expected, its risks and prospects, and alternative treatments, all as specified in the law.

Appellant’s case does not require discussion of the question of the scope of the duty imposed on the doctor regarding receipt of the patient’s “informed consent.” As a rule, the question is not simple. Generally, where the operation or treatment is not intended to prevent immediate danger and can be postponed without aggravating the situation, enabling the patient to formulate a decision with the relevant information at his or her disposal, the duty of disclosure becomes broader. Naturally, the degree of risk entailed by the treatment is also relevant to the duty of disclosure, and clearly there are exceptions which exempt the doctor from giving full and detailed information in certain extraordinary cases. For example, emergency cases that require urgent treatment, or cases in which the expected danger is negligible when contrasted with the treatment’s benefit, or when the patient’s condition is such that the disclosure itself may be harmful to him or her. These exceptions now find statutory expression in the Patient’s Rights Law, but, as stated, they are not relevant to the case at hand. See CA 470/87 Alturi v. State of Israel-Ministry of Health [4].

The question of whether a duty of care should be established according to the criteria of the reasonable doctor or the expectations of the reasonable patient was deliberated extensively by courts in different countries, but it does not relate to this appeal. Standard hospital practice for orderly signing of a consent form for operation, after explanation of the prospects, risks and alternatives, expresses accepted law regarding “informed consent.” The duty of giving the information necessary to obtain informed consent to an operation is a duty imposed upon the doctor and owed to the patient; its violation constitutes a breach of the duty of care, and it therefore constitutes negligence. Hence, a doctor is obliged to provide the patient with the information reasonably necessary for the patient to adopt a decision regarding his or her consent or non-consent to an operation or medical treatment.

In our case, given that the doctors deviated from what was considered by Respondent 1 to be accepted practice, we need not examine the broad question concerning the scope of doctor’s duty to give information to the patient. The director of the Orthopedics department in Respondent 1 during the relevant period was Dr. Shweppe. He testified that prior to every operation, it was customary to assemble the entire medical staff and have them meet with the patient, to discuss the case and the anticipated treatment. Dr. Shweppe did not recall whether there had been such a consultation in the appellant’s case, but the trial judge saw no reason to assume any deviation from the practice in this particular case. [But in fact – trans.], absent any medical records, it was for the respondents to discharge the burden of showing that such a consultation was actually conducted. CA 58/82 Kantor v. Moseib [5] at 259; CA 5049/91 Histadrut Klalit Health Fund v. Rachman v. Rachman [6] at 376. The doctors were unable to recall whether there had been such a consultation. Appellant testified that such consultations had been conducted prior to her previous operations in the hospital, but not prior to the operation on her shoulder. Dr. Antol’s memorandum in the patient’s chart from the operation day, together with his court testimony on the matter, support the conclusion that the need for a shoulder operation became clear immediately prior to the operation itself, and that the appellant was informed of the need in the circumstances described above, without any prior consultation. Moreover, the operation itself involved inherent dangers, as demonstrated by the fact that the appellant was harmed, even if negligence was not proven regarding the actual performance of the operation and the post-surgical treatment given to Appellant. The existence of this kind of danger clearly explains the duty of complete disclosure to the patient prior to the treatment.

Under those circumstances, the doctors were duty bound to apprise the appellant of the nature and the gravity of their fear that a tumor had developed in her shoulder. They should have explained to her whether there was a real suspicion of a tumor. They should have apprised her of the operation’s importance and its urgency. They also should have explained to the appellant that there was a chance that the treatment would cause paralysis.

Having the appellant sign the consent form for the operation at such an advanced stage, as described above, is not accepted practice, and it certainly is not the practice which should be accepted and practiced by doctors for obtaining consent. The possibility intimated to her by the treating doctor in the Health Fund, two months before her hospitalization, that she might require a biopsy, does not constitute a full disclosure of information which is required for the patient in order to adopt a decision and give informed consent to the conduct of such an operation. See CC (PAPP) 88/84 Assa v. Histadrut Health Fund [42].

All of the above indicates that Appellant’s doctors violated their duty to fully apprise Appellant of the biopsy operation that she was about to undergo, and it was not proven that, under the circumstances, they were exempt from fulfilling their duty as stated. As such, it can be determined that Appellant’s doctors violated a duty which is part of the duty of care incumbent upon them as doctors providing medical treatment, and in so doing – they were negligent.

The Causal Connection to the Damage

8. The holding that respondents were negligent in the disclosure of information to the appellant and in the manner in which they obtained her consent to the operation compels an examination of the causal connection between respondents’ negligence and the damage caused. The trial judge rejected the appellant’s blanket claim that she had no advance knowledge of the shoulder operation and did not consent to it; accordingly, he was not prepared to address her alternative claim regarding the absence of complete information. Even so, the trial judge ruled that:

Even under the assumption (which I do not share) that the plaintiff did not receive complete information prior to the biopsy, I still have no evidence before me that the damage caused to the plaintiff’s shoulder resulted from the violation of Defendant 2’s obligation to provide all the relevant information to the plaintiff … I received no evidence that under these or any under conditions the plaintiff would not have consented to the performance of the biopsy. There was no proof of a causal connection between the damage that was caused and the doctors’ alleged violation of their duty.

The question is: What issue should be examined by the court when assessing the causal connection, in order to determine the existence of the tort of negligence in cases of absence of “informed consent?”

The question of the causal connection when the damage is not the result of negligent treatment but rather due to the absence of sufficient information for there to have been “informed consent” of the patient is a complex question. Having recognized that this kind of negligent behavior on the doctor’s part is a possible cause of damage, the question is therefore whether or not the patient would have willingly accepted the treatment proposed had the patient been fully informed.

Usually in this kind of negligence action, the patient wants compensation for the direct damage caused by the treatment. The damage in the case of absence of “informed consent” is not caused as a result of negligent treatment. It is rather the result of the bare fact of medical intervention, even if it was not done negligently. Under these circumstances, the causal connection is assessed on the basis of the degree of damage to the autonomous will of the patient and the negation of the patient’s capacity and ability to prevent the treatment given to him or her. In other words, there must be an assessment of the possibility that the patient would have prevented the treatment had he or she been given the information.

9. States that recognized the grounds of “informed consent” as the breach of a duty that creates the tort of negligence have deliberated the manner of proving the causal connection regarding the damage due to the necessity of retroactively assessing a hypothetical occurrence. See Arndt v. Smith (1995) [68] (in Canada); Salis v. United States (1981) [45] (in the United States).

In Israel, in a similar case in which the patient did not receive complete details regarding alternative treatments, Justice Mazza wrote the following:

The causal connection for our purposes does not require a holding in accordance with the accepted causality tests … these tests, which are intended to enable decisions in accordance with the probability indices, are not appropriate for cases in which the court must make a hypothetical assessment of the particular patient’s response had the doctors given him or her details in advance regarding the risks and prospects of a particular medical treatment.

Vaturi [3] at 191.

In that case, the court concluded that when proving the existence of a causal connection requires resolution of the theoretical question of “what would the patient have decided had he or she been given the complete information,” it is not enough to find that an analysis of the probabilities [i.e. more likely than not – ed.] has failed to show that the patient would have chosen not to receive the treatment. According to that approach, while there is no justification for awarding the injured party full compensation for damages absent sufficient proof of the causal connection, it would be wrong to deny any compensation just because the negligent action of the tortfeasor prevented the patient from proving that the negligence caused his or her damages. Accordingly, the holding in that judgment was that in such a case, an assessment is made of the chance that proper disclosure of the information would have caused the patient to refuse the treatment. The degree of damage owed by the tortfeasor will be determined in accordance with the assessment of the likelihood of refusal.

The proof of the causal connection to the damage in circumstances of failure to disclose details regarding medical treatment is complex and raises a number of problems. Legal scholars have disputed the question of whether to adopt the path of an assessment of likelihood in a case of a hypothetical question concerning “informed consent.” See Shultz’s article, supra [94] at 286-87 and Giesen’s book, supra [86] at 354-55, both of which endorse the view of assessment of likelihood.

As opposed to the approach of these scholars, the Court has a practical concern regarding the possibility of substantiating a claim in tort with the possibility of compensation, when the causal connection has not been proven at the level of proof normally accepted in a civil trial. The concern is that such a possibility will open the floodgates in other areas too, and thereby lead to a glut of claims and the imposition of an untenable burden on the medical system and on the legal system too. See Kramer v. Lewisville Memorial Hosp. (1993) [46] at 406; Falcon v. Memorial Hosp. at 64-68.

Personally, my view is that there must be a distinction between proof of negligence in regular negligence cases and proof of negligence when negligence consists of the failure to give informed consent to the treatment. Due to its special character, negligence in the latter category should be determined as a function of the degree of chance, and not in accordance with the balance of probability, provided that this rule is qualified and does not confer entitlement to compensation except in those cases in which it can be determined that there is a significant chance that the patient would not have consented to the treatment.

10. In the case before us, I gave considerable thought to the question of whether a causal connection had been proven between the negligence of the doctors and the hospital in receiving the appellant’s consent to the conduct of the examination and the damage that was caused to her. I also examined the possibility of resolving the question of the causal connection in accordance with the method mentioned above, of assessing the likelihood of refusal and not in accordance with the probability balance. After much consideration, I arrived at the conclusion that in present circumstances, I need not decide the question of whether the assessment of likelihood should be established as the proper test for the causal connection in cases of the absence of informed consent. My reason is that the respondents’ responsibility for Appellant’s damages was proven even in accordance with regular evidentiary tests of balance of probability.

As stated above, the test regarding the existence of a causal connection in a negligence claim occasioned by failure to receive informed consent is, whether the patient would have consented to the treatment had he or she been informed of all the relevant facts. This test is conducted according to the criterion of the reasonable patient under similar circumstances.

We use an objective test of the reasonable patient in order to try to establish the truth regarding the particular patient. Clearly, there is a tremendous practical difficulty in ascertaining the position of the patient at the relevant time, because the question arises only retroactively, at a time when the patient is suffering from the results of the treatment. In numerous judgments, the courts have noted that it is inhuman to expect a person suffering from treatment received to give credible testimony about what he or she would have done at the time of adopting the decision, had he or she been aware of all its possible consequences.

In any event, this difficulty was one of the central considerations that led courts in the United States and Canada to prefer the objective test, adapted to the circumstances, as the criterion for establishing the causal connection. See Canterbury v. Spense [48] at 791; Arndt v. Smith (1997) [69].

Accordingly, the courts that adopted this criterion also ruled that the injured patient’s testimony should not be accorded conclusive weight, even though it is relevant evidence which helps clarify the truth. See Hartke v. McKelway [49] at 1551; Sard v. Hardy [50] at 1026; Bernard v. Char [51] at 670.

In order to determine the probability of whether the patient would have refused the treatment, the court must consider the type of treatment received by the patient and its degree of urgency as opposed to its risks. Within these parameters, it ascertains the patient’s probable response according to the criterion of the reasonable patient in similar circumstances. According to this criterion, a causal connection can be established between the failure to disclose information in violation of the duty of caution and the damage actually caused by the treatment. This objective test does not obviate the need for an assessment relating to the particular patient who has come before the court. The court assesses the degree of damage to the patient’s ability to exercise judgment against the background of the conditions and the manner in which the patient received the information and the entirety of data and circumstances relating to the patient’s physical and mental condition. Against that background, the court makes a judicial assessment, estimating how the patient might have acted were it not for defendants’ violation of their duty. The Canadian court gave the following explanation of the objective test as it relates to the subjective circumstances of the injured patient:

I think it is the safer course on the issue of causation to consider objectively how far the balance in the risks of surgery or no surgery is in favour of undergoing surgery. The failure of proper disclosure pro and con becomes therefore very material. And so too are any special considerations affecting the particular patient.

...

The adoption of an objective standard does not mean that the issue of causation is completely in the hands of the surgeon. Merely because medical evidence establishes the reasonableness of a recommended operation does not mean that a reasonable person in the patient’s position would necessarily agree to it, if proper disclosure had been made of the risks attendant upon it, balanced by those against it. The patient’s particular situation and the degree to which the risks of surgery or no surgery are balanced would reduce the force, on an objective appraisal, of the surgeon’s recommendation.” Reibl [67] at 16 (Leskin, J.).

This test was cited approvingly by the Canadian Supreme Court in its a recent judgment. Arndt [69].

11. The lower court totally rejected the appellant’s account regarding her surprise upon discovering that it was her shoulder and not leg that was operated upon, because it assumed that her prior knowledge regarding the necessity of the operation sufficed to negate the defect in the manner of receiving her consent. Having said that, under the circumstances, the previous information was not sufficient to receive the required consent to the treatment given to her, and in the absence of any proof of prior consultation and transmission of information concerning the nature of the treatment and its attendant risks, it was for the court to ascertain how the appellant would have behaved had she received the necessary information under appropriate conditions.

I considered whether the appellant’s case should be returned to the lower court, in order for it to deal with the existence of the causal connection and to assess the probability of the appellant’s refusal to the operation, had she had all the information. However, I have reached the conclusion that on the basis of the evidence presented by the parties, and in consideration of all the facts before us, it can be determined that the causal connection between the non-disclosure and the damage has been proven.

Respondents did not adduce evidence to substantiate the alleged conclusion that the anticipated risk of the operation was negligible and did not necessitate prior notification to the appellant of its nature. Assuming that the appellant was treated professionally and not negligently, and that the treatment given after the operation was proper, the necessary conclusion is that the disability caused to the appellant was a risk that was endemic to the treatment given to her. In any event, having claimed that the risk of the treatment they gave was not negligent, the respondents bear the burden of proving that the operation was urgent, and that the anticipated danger to the appellant as a result of the operation itself was negligible to a degree that it would not have affected the appellant’s decision had she been informed of it.

As stated, such evidence was not submitted. In the special circumstances of this case, there is sufficient grounds for the assumption that a reasonable patient would have preferred to conduct an additional consultation with an expert regarding the need for the examination, in view of its endemic danger, given that the examination itself had previously been postponed, and in view of the fact that, as it became clear in retrospect, the operation was of doubtful necessity.

I am prepared to assume that in an ordinary case in which the examination was intended to ascertain whether a growth had developed, a reasonable patient would have adopted a different approach, especially if there was urgency in early discovery, and absent any alternative method of clarifying the matter.

However, the appellant’s case is a special one. She was hospitalized in order to rectify a deformity in her leg, which was the result of a birth defect. Under these circumstances, one may assume that as a woman who was disabled from birth, she would have been particularly wary of the endangering the functioning of her right arm, had she been aware of such a danger.

Furthermore, the concern leading to the operation was apparently, from the outset, not regarded as being of any particular urgency. The appellant waited for the operation for more than two months, and a date for the operation was not actually set until her hospitalization. In their affidavits for the District Court, which were found to be credible, Respondent 1’s doctors described the suspicion that led to the decision to perform a biopsy. Dr. Schweppy’s affidavit states that “we decided that the results of the rentogen and the bone scan indicated pathological problems, and that in order to obtain a totally clear picture, there was a need for a biopsy, because there was no definitive diagnosis.” The treating doctor, Sharvit, stated that “the findings provide concern of the existence of a growth … when I determined in the Lin clinic that there is a suspicion of growth of cartilage.”

These comments, viewed together with the other evidence, indicate that the decision to perform a biopsy was not based on an urgent need for an immediate diagnosis.

Considering the degree of negligence involved in the non-disclosure of the information, the way in which the appellant’s consent to the operation was obtained, and the particular circumstances of her case, it can be determined that if the appellant had been aware of all the relevant details regarding the nature of the examination and the risks involved, she would not have agreed to the examination at the date and in the manner that it was performed. For this reason, I conclude that there was proof of the causal connection between the non-disclosure of complete information and the damage caused to the appellant from the treatment she received.

12. After writing my judgment, I had the chance to review the comprehensive judgment of my colleague, Justice Or, and I will add my comments regarding its proposed method of compensation.

I wholeheartedly concur with the credo expressed by my colleague regarding the importance of the individual’s right to autonomy. I think that in principle there ought to be recognition of the possibility of compensation for the violation of that right, though not necessarily in the context of the doctrine of “informed consent.” It appears to be desirable to extend the right of separate compensation for violation of individual autonomy to cases in which a patient was denied the right to decide whether medical treatment would be administered. Still, in the context of non-disclosure of information regarding medical treatment, difficult questions arise when assessing the appropriateness of compensation for this kind of damage, independent of the treatment’s results.

13. The critique of the approach allowing compensation for violation of autonomy in the context of non-disclosure of information, irrespective of the consequences of the medical treatment, has two focuses. The first focus is analytic, concerning the essence of the doctrine of informed consent. The second focus concerns appropriate judicial policy.

Analytically, the doctrine of informed consent is based on the special status granted to the violation of individual autonomy, to the extent that under certain circumstances, such a violation is equivalent to medical negligence, in the sense that it entitles the victim to full compensation for all the consequences of the medical treatment.

When we chose the path of the tort of negligence, we ruled that in cases of failure to disclose information that is relevant and significant about the possible results of the treatment, the doctor’s breach of his or her duty to the patient consists of the fact of non-disclosure. The theory of negligence based on non-disclosure of sufficient information to the patient is based on a number of things, one of the most central being the violation of individual autonomy. Remedy for a violation of that kind will be protected even when it is not specified separately as an aspect of the damage. The various components of the “informed consent” doctrine were summed up as follows by the learned P.H. Shuck:

[I]nformed consent does not simply pursue the contract law goals of individual autonomy, efficiency, and anti-statism; it also advances two related ideas, fault and duty, that pervade and moralize tort law.

Rethinking Informed Consent [95] at 902.

According to supporters of the doctrine of “informed consent”, medical negligence in the disclosure of information justifies compensating the patient for the treatment’s consequences. The assumption is that in principle it is possible to prove the causal connection between the failure to give information and the treatment’s consequences. Legal literature indicates that as a rule, those favoring the compensatory approach for violation of individual autonomy in the context of non-disclosure of medical information are also of the view that in principle there is no recognition of the causal connection between negligence in the disclosure of information and the consequences of the treatment; from their perspective, compensation awarded for violation of autonomy is a substitute for the doctrine of informed consent. As such, it seems that the opinion stating that in the absence of informed consent, compensation can be granted for the violation of individual autonomy, regardless of the consequences of the medical treatment, is consistent with the view of those who dispute the doctrine of informed consent as a part of medical negligence. See Prof. Englard’s book [83] at 607; A.D. Twerski, N.B. Cohen, Informed Decision Making and The Law of Torts: The Myth of Justiciable Causation [96].

Needless to say, the most “blatant” cases of violation of autonomy in medical treatment (for example when the medical treatment is given without the patient having given any consent at all, or where there was absolutely no disclosure of the inevitable result of the treatment) are treated by tort law under the tort of battery. In these extreme cases of non-consent, compensation will be given for the damage in its entirety, even without proof of the causal connection.

The distinction between a blatant violation of autonomy, addressed via the tort of battery, and non-disclosure as a part of medical negligence was dealt with by the Australian Supreme Court in its judgment in Rogers v. Whitaker (1992) [43]. In that judgment, the court distinguished the right to autonomy which is protected by the tort of battery from negligence in giving information, which requires a balance between the duty of the treating doctor and the patient’s right to receive the relevant information:

The right of self-determination is an expression which is, perhaps, suitable to cases where the issue is whether a person has agreed to the general surgical procedure or treatment, but is of little assistance in the balancing process that is involved in the determination of whether there has been a breach of the duty of disclosure.

Id. at 52.

The Canadian Supreme Court recently criticized the view that gives the patients’ right to decide an independent and separate status from the subject of medical negligence being discussed here:

The suggestion that loss of choice as such merits compensation is related to the suggestion that failure to advise of risk of medical intervention negates the patient’s consent, making the physician’s intervention - tortious battery. This Court unanimously rejected this approach in Reibl v. Hughes.

Arndt [69] at 62 (McLachlin, J.).

In this context, one can also mention the judgment in Vaturi, which emphasizes the complex connection between the duty of the doctor giving medical treatment and patient autonomy. Id. at 181-82.

14. In terms of appropriate judicial policy, I think that when dealing with the question of “informed consent,” though my colleague’s approach is intended to enhance the right to individual autonomy, paradoxically, his approach weakens it. The fear is that this approach will lead to a limitation of the compensation given to the victim of a treatment administered without giving him or her information, and it may even encourage the courts to avoid dealing with the complex question of the causal connection between failure to receive “informed consent” of the patient and the results of the treatment he received. This possibility was raised by Cohen and Twersky in their article in support of the separate claim of damage for the violation of autonomy. Twersky & Cohen [96] at 648.

In considering whether to adopt an approach that makes do with compensation for violation of autonomy, I think that the fear of the victim’s compensation being limited to nominal compensation outweighs the benefit of enhancing the autonomy of the individual. On the other hand, full acceptance of my colleague’s approach allows compensation even in cases in which the treatment was successful and the patient satisfied, if it becomes clear that the patient was not initially presented with full details regarding the treatment. It is doubtful whether this result is desirable.

It should be noted that other legal systems similar to our own have not accepted the rule that compensation can be granted by reason of violation of autonomy in the context of non-disclosure of information, regardless of the results of the medical treatment. I was unable to find a single judgment in which the courts awarded compensation exclusively for violation of autonomy, as distinct from compensation awarded for damage caused as a result of the treatment.

It should be emphasized here that a distinction must be made between compensation for violation of autonomy and compensation for shock or mental trauma upon becoming aware of the grave consequences of unexpected treatment, a distinction made in both of the judgments cited in my colleague’s opinion. See Goorkani v. Tayside Health Board (1991) [66]; Smith v. Barking Havering & Brentwood Health Authority (1989) [56].

These judgments are in accordance with the English approach to liability in the absence of “informed consent.” As indicated above, the position of English law on the subject of “informed consent” differs from that of other common law countries, and English law has yet to confer it with the same scope as it has in the United States and Canada. See I. Kennedy, A Grubb, Medical Law [87] at 172-202; R. Nelson-Jones, F. Burton, Medical Negligence Case Law [88] at 102.

15. Furthermore, recognition of the violation of individual autonomy as an individual claim of damage, while commendable, is still in its “infancy,” and its definition and the way it will be formulated still need to be developed. While tort law grants compensation for non-pecuniary damage, the proposed claim of damage still lacks precise and clear criteria for its application. Moreover, I find it difficult to accept the analogy proposed by my colleague, namely compensation for violation of constitutional rights. For it is unclear whether the damage for a constitutional tort is evaluated according to the criteria of the tort of negligence. This is a complex question which merits a separate discussion. See D. Barak-Erez, Avlot Chukatiot [Constitutional Torts] [73] at 243 and subsequent text. See also Memphis Community School Dist. v. Stachura [57] at 2544 – 45.

16. To conclude: It seems that these problems necessitate particular caution when assessing the cases in which compensation may be made for violation of autonomy as an independent tort and whether it should be done in cases of negligent non-disclosure of medical information. We must decide when and according to which criteria the damage will be assessed. In principle, I think that the introduction of this new claim of damage should initially be assessed in the framework of cases in which there was a blatant violation of human dignity and individual autonomy, where that kind of violation constitutes the main focus of the damage. On the other hand, matters that can be classified as medical negligence should generally be assessed within the context of results of the treatment.

In any event, compensation for violation of individual autonomy should not be allowed to undermine the doctrine of informed consent. Accordingly, in my view, compensation for violation of autonomy should only be awarded in rare cases, which I have not deemed it appropriate to define at this stage.

17. In light of my conclusion, were my opinion to win a majority, I would propose that the appeal be accepted and the case returned to the District Court for it to hear evidence regarding the damage caused to the appellant, so that the court can assess the level of compensation for that damage.

Justice T. Or

1. Unfortunately, I cannot concur with the conclusion of my colleague, Justice Beinisch. I will clarify my position below.

2. I accept that the discussion in the district court proceeded on the assumption that the respondents or doctors in their employ were found to be tortuously liable for the tort of negligence and not the tort of assault. Negligence is therefore the only ground we must decide in this appeal.

Within this framework, those responsible for providing medical treatment are obliged to compensate the patient for all bodily damage sustained as a result of the breach of their duty to receive his or her full consent to treatment. In my view, those responsible for giving medical treatment must also compensate the patient for all non-pecuniary damage sustained as a result of the violation of the patient’s right to autonomy, if the medical treatment is administered to the patient without his or her informed consent. The first part of my opinion discusses the respondents’ obligation to compensate the appellant for her bodily damage. My conclusion, which I will explain shortly, is that there was no proof of the required causal connection between the failure to receive the appellant’s informed consent and the bodily damage that she sustained. In the second part of my judgment, I will discuss the obligation to compensate a patient – in our case, the appellant – for non-physical damage sustained due to the violation of patient autonomy in giving medical treatment without the patient’s informed consent. I will first deal with the factual background and then discuss the above-mentioned questions.

The Principle Facts and the Dispute

3. I accept the conclusion reached both my colleague, Justice Beinisch, and the District Court that there was no proof of negligence in the actual decision to perform a biopsy on the appellant’s shoulder, the manner in which the biopsy was performed, or the appellant’s post-operation treatment to address its consequences. These conclusions are well grounded in the District Court’s findings, which were based on evidence that it found reliable. As my colleague explained, there are no grounds for our intervention in these findings.

The claim against the respondents’ doctors therefore focuses on their failure to inform the appellant of the risks and the prospects of the biopsy (hereinafter: the biopsy), creating a situation in which the appellant cannot be regarded as having given her “informed consent” to the biopsy. Here, too, I concur with my colleague that this constituted negligence in the way the doctors who treated her received her consent to the biopsy. However, before doing so, I must stress that, under the circumstances, the biopsy was a medical necessity which any reasonable doctor would have performed.

4. The principle facts regarding the biopsy are as detailed below:

(a) As the trial court determined:

Around the middle of 1987, plaintiff began suffering from constant pain in the right shoulder, by day and by night. When systematic treatment was to no avail, rentogen photos were taken, followed by a bone-mapping. The latter test indicated ‘a diffuse absorption’ – which is a pathological finding. According to Dr. Eric Sharvit, the orthopedic specialist who treated the plaintiff in Defendant 2’s clinic: “I observed an irregularity in the diffuse absorption, cysts and unremitting pains; diffuse absorption is a pathological finding. No absorption can ever be normal. In mapping, the reason always shows up. It may be cancer, an undiagnosed fracture, or an infection. It may also be a growth…. There was something suspicious that required further clarification.

And further on:

According to Dr Eli Sharvit’s affidavit of April 22, 1991, he examined the plaintiff’s right shoulder on the dates September 8, 1987, October 20, 1987, and November 27, 1987. Sharvit stated that at the end of the examination of November 27, 1987, in the framework of the consultation group, and after everybody had seen her and examined her file, it was unanimously agreed that a biopsy was necessary (emphasis added – T.O.).

As Dr. Sharvit clarified in his testimony, “there was a concern about a destructive process which would be irreversible.” He went on to say that:

[T]here was no explanation for the absorption evidenced by the bone mapping, and a biopsy was therefore required in order to reach a clear diagnosis.

In addition to the above, the district court accepted Dr. Sharvit’s account of events in paragraph 8 of his affidavit:

In other words, I spoke with the plaintiff and, regarding her shoulder, I explained that she would have to have an operation in order to identify the problem, because the findings provided grounds for suspicion of a growth, and an operation was the only way of clarifying the matter. We had this conversation on October 20, 1997, when I determined that there was a suspected growth of cartilage.

The court also referred to the testimony of Dr. Schweppy, affirming it:

The head of the Orthopedic Department in Carmel Hospital at the time of plaintiff’s hospitalization of the plaintiff was Dr. Yitzhak Isadore Schweppy. Dr. Schweppy testified in court that the bone mapping indicated “an aggravated diffusive absorption near the humerus” and that the technician conducting the bone mapping had written (September 1, 1987) “Nature of absorption unclear. Recommend further examination.” According to Schweppy, “the photograph indicates a pathological finding and the mapping also shows these signs. The mapping states that there is no unequivocal finding. All of this, in my opinion, necessitates a biopsy.

In view of all this, and since appellant’s expert, Prof. Stein, did not explicitly contest the need for a biopsy, the court concluded that it was medically necessary to perform it, and there are no grounds for our intervention in this finding.

(c) Appellant maintained that she had never had problems with her shoulder, that she had never made any complaints in that regard, and that the entire issue of the biopsy came as a total surprise to her. Her version was rejected by the district court in view of the trust it placed in Dr. Sharvit. Relying on examinations performed on the appellant – a photograph of shoulder and mapping of shoulder – the court rightfully concluded that appellant had suffered from shoulder pains and that she was well aware of the “problem” she had with her shoulder.

(d) The court further noted that the appellant almost admitted to having been spoken to regarding the shoulder, prior to the biopsy. It was apparently referring to the following paragraph in her testimony, in which she said:

Prior to the anesthetic I asked why the operation was on the arm and not on the leg. After they performed the operation I asked them.

Para.12.

In this paragraph she had a slip of tongue, indicating that already prior to the operation she asked “why the operation was on the arm.” In other words, she was aware that they were about to operate upon her shoulder. Even so, she immediately “corrected” herself.

At all events, as stated, the entirety of the evidence indicates that the performance of the biopsy was required, as customary in similar cases, to rule out the serious suspicion of it being a cancerous growth.

5. In her judgment, Justice Beinisch explains why the conduct of the operating doctor should be regarded as negligent. I accept that regardless of appellant’s general awareness of the need for such an operation, the doctor failed to discharge his duty to explain to the appellant the importance of the operation and its necessity as opposed to its risks, in order to ensure that the appellant’s consent would indeed be “informed consent.” Prior to the operation there may indeed have been a period of time during which appellant knew that she was about to undergo a biopsy. Nonetheless, the circumstances in which her consent was obtained indicate that she did not give her informed consent. The appellant was initially summoned to the operating room for an operation on her leg. While she was in the operating room, immediately prior to the operation, it was clarified to her that they intended to perform a biopsy on her shoulder, without making the associated risks clear to her, as required. I therefore accept my colleague’s conclusion that there was negligence on the part of the treating doctors in their performance of the biopsy without giving the required explanation of its risks.

The district court determined that appellant had given her “informed consent” to the biopsy. It reached this conclusion in reliance, inter alia, on the conversation between Dr. Sharvit and appellant in October 1987, about two and a half months before the biopsy. However, the contents of that conversation do not substantiate the court’s conclusion. Even if we accept the court’s reliance on Dr. Sharvit’s testimony, his comments to the appellant regarding the need to perform a biopsy did not constitute an explanation of the risks and prospects of the biopsy as required from a doctor about to perform an operation on a patient. Dr Sharvit’s general comments to the appellant were made when she was already on the operating table, awaiting a different operation for which she had been prepared. Clearly, this could not satisfy the requirement of receiving informed consent, as explained by my colleague in her judgment.

So far, I have traversed a long way along the path leading to my colleague’s conclusions. Nonetheless, in one matter I cannot concur with her conclusion. I refer to the proof of the causal connection between the doctors’ negligence and the bodily damage suffered by the appellant as a result of the biopsy. I do not believe that there was proof of a causal connection between the doctors’ negligence and the bodily damage suffered by the appellant as a result of the biopsy. Consequently, my conclusion is that appellant is not entitled to compensation for this damage. On the other hand, it is my view that those responsible for the appellant’s treatment must compensate her for the violation of her right to dignity and autonomy, which flows from the doctors’ negligence. I will first discuss the question of the causal connection between negligence and the bodily damage.

Appellant’s Right to Compensation for Bodily Damage Caused As a Result of the Biopsy – the Causal Connection

6. Where a plaintiff bases a claim on the grounds of medical negligence, he or she bears the burden of proving, inter alia, a causal connection between the doctors’ negligence and the alleged damage, namely that the negligence caused the damage – that but for the negligence, there would have been no damage. This is the rule for all claims grounded in negligence, including claims in which the tort is imputed to the doctor for negligence in failing to discharge his or her duty of disclosure to the patient prior to receiving consent for treatment. See CA 4384/90 [3]; CA 4341/94 Berman (Minor) v. Moore Institute for Medical Information Ltd [7]; see also Shapira [77] at 236. Consequently, it was incumbent upon the appellant to prove that had she received the requisite explanation regarding the biopsy – the importance of the biopsy, compared to its risks – she would not have given her consent to its performance. Should it transpire, however, that even after such an explanation, the appellant would still have agreed to perform the biopsy, it can no longer be said that it was the doctor’s failure to receive her “informed consent” that actually caused the damage that occurred as a result of the biopsy. In other words, in such a case, one cannot say that it was the absence of such consent that caused the damage.

The question is: what would have happened had the appellant actually received all the requisite and relevant explanations regarding the operation and then been asked to give her consent to the biopsy? Upon receiving the information, would she have refused to undergo the biopsy, which would have prevented the damage caused to her by its performance? The answer is not clear:

There are considerable difficulties in responding to the hypothetical causal question of what would have happened if they had conducted themselves in accordance with the law. The response is necessarily dependent on guesses and conjecture, especially with respect to the question relating to hypothetical human responses.

I. Englard, Yesodot Haachraut Benezikin, Dinei Nezikin – Torat Hanezikin Haclallit [74] at 230-39.

The kind of matter being dealt with here poses a particular difficulty: determining whether a patient would have agreed to the operation had he or she possessed all the relevant facts prior to giving consent. In his book, The Philosophy of Tort Law, Englard deals with the question in all its complexity, especially in view of the fact that these cases are not normally decided exclusively by logical considerations. See Id, Informed Consent: The Problem of Autonomy and Compensation in [74] at 166-67; see also CA 4384/90 [3].

Considering the difficulty in answering that question, the Court’s response must be based on the evidence submitted and considerations of common sense and life experience.

7. The case before us also raises the issue of whether the answer to the question presented above should be given according to a subjective criterion, namely, how would the appellant before us have reacted, or alternatively, according to an objective criterion. In other words, how would a reasonable patient have conducted himself or herself in a similar situation. Another possibility is the mixed criterion: how would a reasonable patient in the appellant’s position have behaved.

Even though my tendency is towards the subjective criterion, with the objective criterion serving as an auxiliary tool in its application, we need not resolve the issue in this case. The reason is that in my view, under the circumstances of this case, both the subjective and the objective criterion lead to the same unavoidable conclusion. It may be presumed, with an extremely high degree of certainty, that the patient would have actually consented to the biopsy even if all the facts that were relevant for receiving her consent had been presented to her. In my view, the possibility or the chances that she would not have agreed to it are particularly low, if not altogether negligible.

8. In her testimony, Appellant did not address the question of whether she would have agreed to a biopsy had she received an explanation of its urgency, its dangers and its prospects. In court, she categorically denied any conversations with her doctors regarding her shoulder. She even denied ever having complained about pains in her shoulder. The court rightly rejected this testimony, considering the proven facts: Appellant had been asked to undergo examinations which included an x-ray of her shoulder as well as a bone mapping, and these were in fact conducted.

However, even though she denied that the subject of her shoulder and the need for the biopsy were raised at any stage, nothing prevented her from addressing the hypothetical question of her consent to a biopsy. Appellant was given the opportunity to explain whether or not she would have agreed and her reasons for either decision. Had she utilized the opportunity and explained her stance, the court would have subsequently examined the credibility of her position and reasons, as well as their reasonability. The appellant was silent on this point, even though her particular considerations for not assenting to a biopsy, if she had them, were known only to her.

And so, on this point, the district court correctly said that: “We have no evidence that in these or other circumstances, the plaintiff would not have agreed to the biopsy.”

9. The court cannot speak in the place of the appellant, who was silent on this matter in her testimony. What the court can do is examine the entire complex of circumstances, even without her testimony, and ask whether it indicates that the appellant, as a reasonable person, would have refused the biopsy, had she received an explanation of its need as opposed to its inherent risks. One must assess the likelihood that disclosure of the requisite information would have led the patient to oppose the performance of a biopsy. In deciding this question, the court must consider the type of treatment that the patient received and the degree of its urgency compared with the risks involved and assess the probable response of the patient according to the criterion of how a reasonable patient would have responded in similar circumstances.

This assessment must relate to the time at which the appellant’s agreement was required, in other words, prior to the biopsy, after being presented with all the relevant data and being asked to decide whether or not she agreed to the operation. Clearly, the answer cannot be based on wisdom after the fact, when it was already clear that the concern regarding a cancerous growth had evaporated and that she had been injured as a result of the operation.

10. The circumstances preceding the biopsy were as follows:

(a) Appellant had complained of severe pains in her shoulder, which lead to the conduct of various examinations. The examinations included an x-ray of her shoulder and bone mapping. These two examinations justified further clarifications, due to the possibility of there being a cancerous growth.

As evidenced by experts’ testimony, which the court relied upon, additional clarification was to have been conducted by way of a biopsy. In their examinations, the experts were not presented with any proposition to the effect that there were other means for conducting that clarification, means that would have posed less risk than a biopsy, which entailed surgical intervention. Nor was the court presented with any evidence from which it could deduce that a biopsy was not the only reasonable measure to confirm or negate the existence of a cancerous growth on the appellant’s shoulder. The circumstances as they were presented to the court indicated the clear necessity of the operation, and any person who cared about his or her health would have given consent, in the absence of extreme unusual circumstances that would have dissuaded the patient from consenting. There was no evidence of such circumstances in this case.

(b) All surgical interventions involve certain dangers. Unfortunately, one of those became reality in the appellant’s case. Even so, it is commonplace that the mere existence of an element of danger does not prevent operations or the performance of examinations which are medically necessary. It must be stressed that in our case, no evidence was submitted of any particular risks, beyond the ordinary risks attendant to any surgical intervention, which are involved in the performance of a biopsy. By itself, the fact that the appellant was injured as a result of the operation provides no indication about the nature of the risks that are part of the biopsy performed on the appellant.

(c) My colleague, Justice Beinisch, suggested that had appellant been apprised of the need for the biopsy as opposed to the risks entitled therein, then presumably, like any other any reasonable patient, she would have preferred to receive a second opinion regarding the need for the examination. I do not accept this presumption. As early as October 1987, it had been explained to the appellant that an operation would be necessary in order to examine the problem. Sec. A of Dr. Sharvit’s affidavit. Appellant denied that the meeting with Dr. Sharvit ever took place, and we heard nothing from her to indicate that she would have consulted with an additional expert had the need for a biopsy arisen. In this context, I will mention that Appellant had long been in the treatment of doctors in respondents’ orthopedic department, and she would naturally trust them. The same doctors had both recommended and performed other operations on the appellant without her having consulted an additional expert. Furthermore, in view of the proven need to perform a biopsy, it is reasonable to assume that any additional expert would have recommended the same examination. These facts help us understand the testimony of the respondents’ experts, upon which the district court saw fit to rely.

11. On the basis of these data, in my opinion, not only was there no proof that Appellant would not have agreed to the biopsy had she been presented with all the information necessary in order to receive her consent, but the circumstances indicate that she would actually have agreed to it. The examination was required in order to ascertain the existence of a serious risk to her health as a result of a cancerous growth, and Appellant had previously put her trust in the respondents’ doctors; these factors and all the other circumstances, too, point very clearly in this direction. Like any reasonable person, the appellant would have agreed to it.

Admittedly, despite the fact that at the end of November 1987, the medical team of the Orthopedic Department of the hospital determined that there was a need for a biopsy, it was not actually performed until January 7, 1988. Arguably, in view of the clarification required regarding the shoulder, it would have been appropriate to recommend the performance of the biopsy at an earlier date. The question as to why this didn’t happen was not clarified in the district court, because the witnesses were not fully examined on this matter. Even so, when the appellant was brought to undergo the leg operation, the doctors considered the biopsy operation urgent to a degree that gave it priority over the leg operation that the appellant required. This fact indicates a dimension of urgency in the performance of the biopsy.

12. My conclusion that there was no proof of a causal connection between breach of the duty to receive the informed consent of the appellant and the performance of the biopsy is based on considerations similar to those adopted by other courts in the past in rejecting similar claims for compensation for bodily damage in tort actions. I will cite two examples.

In Smith [56], an operation was performed on plaintiff’s spine. The operation involved a risk factor of a 25% chance that three of the plaintiff’s limbs would be paralyzed. Plaintiff was not informed of this risk prior to the operation, and as a result of the operation, she was indeed inflicted with paralysis in three limbs. She subsequently filed suit, demanding compensation for the bodily damage.

Based upon the doctors’ testimonies, the court ruled that the doctors were negligent in their failure to inform the patient of this risk. Even so, the action under this head of damage was rejected because it was determined that a causal connection between the omission of failing to inform about the risk of that damage and the damage that was actually caused had not been proven. The court noted that the evidence presented did not indicate any particular factors that might have influenced the plaintiff’s subjective position regarding the question of whether to receive the treatment or not. As for specific factors regarding the treatment, the court pointed out, inter alia, that failure to treat the patient within a short period of time would have left the plaintiff paralyzed in all the limbs of her body. Furthermore, the danger to which she would have been exposed if the operation had not succeeded would not have been more severe than the danger that she could have expected had she not undergone the operation. On the other hand, had the operation succeeded, it would have postponed the plaintiff’s disability for a significant period of time. The court therefore concluded “unhesitatingly” that there was a strong likelihood that the plaintiff would have agreed to undergo the operation even had she received full information and that it was “in the highest degree unlikely” that the plaintiff would have refused to undergo the operation. Consequently, the court rejected the plaintiff’s claim for compensation based on the bodily damage caused to her.

The court acted similarly in Goorkani [66]. In that case, a man was treated with a particular medicine for an eye disease from which he suffered. Treatment with this medicine for a period exceeding a few months, at the dosages being given to the plaintiff, involved a high risk of infertility. In spite of the ongoing nature of the treatment, which extended for over a year and a half, plaintiff was not informed of the danger. The treatment solved his problem of vision, but the risk of infertility materialized, culminating in a suit for damages compensation.

The court ruled that in failing to give the information, the doctors breached their duty of care to the plaintiff. Nonetheless, his claim for compensation for bodily damage was rejected in the absence of the causal connection between the breach and the stated damage. In its ruling, the court considered the fact that the treatment was given to the plaintiff during his studies, while he was working towards an engineering degree. At that time, his motivation to complete his studies was particularly strong. As such, the problems regarding his vision caused him severe anxiety and even led to emergency hospitalization for treatment of this problem. Considering the fact that at that time of his life, the plaintiff was also experiencing marital problems, the court’s view was that even had he been informed of the danger of infertility, the plaintiff would have taken that risk in order to save his vision. In other words, the path of action chosen by the plaintiff would not have changed, even had the doctors discharged their duty to give him all the relevant information. Plaintiff’s claim was therefore rejected under this head of damage, in the absence of a causal connection between the violation and the damage.

I did not cite these two examples in order to prove that that the conclusion in the two aforementioned cases regarding the absence of a causal connection was the necessary conclusion in those cases. I cited them only in order to illustrate that when negligence is proven regarding the failure to receive informed consent for the operation, the court will not be afraid to determine, on the basis of the facts of the case, that there was no causal connection between the negligence in not receiving informed consent to the operation and the bodily damage caused by the operation.

13. My conclusion is therefore that the appellant is not entitled to compensation for bodily damage caused to her as a result of the biopsy. In view of this result, I need not express my opinion as to what the result would have been, had it been possible to prove that the balance of probability indicated that Appellant would have refused to receive the treatment had she been aware of all the relevant facts. For example, had it been possible to determine that there was a 30% chance that she would have refused to undergo a biopsy, the question might have arisen as to whether to give monetary expression to the loss of that chance, as a result of the breach of the duty to receive the appellant’s informed consent to the biopsy. It has been argued that in such a case, the appellant should be entitled to compensation calculated as a function of the degree of probability that she would have refused to perform the biopsy. My colleague, Justice Strasberg-Cohen, adopted this position in her opinion in this case, similar to her position in CA 6643/95 Cohen v Histadrut Klalit Health Fund [8] (see also Justice Mazza’s opinion in CA 4384/190 [3]). In the example that I gave, this would mean that appellant would be entitled to compensation equivalent to 30% of the damage caused as a result of the biopsy.

In view of my conclusion regarding the causal connection, under the facts of this case, I will not express my opinion on the question, and it will remain open, pending deliberation and decision in an appropriate case.

14. This completes our discussion of whether or not Appellant is entitled to compensation for bodily damages, but it does not complete my judgment. The additional question requiring resolution is whether compensation should be awarded to the appellant for the non-bodily damage sustained by her due to the violation of her autonomy, deriving from the fact that an operation was performed on her body without her having given her informed consent. I will now examine this question.

Introduction – The Right to Autonomy

15. The point of departure for this discussion is the basic recognition that every person has a fundamental right to autonomy. Every individual has the right to decide his or her deeds and wishes in accordance with his or her choices, and to act in accordance with those choices. The right to autonomy is, in the language of that definition, “his or her independence, self-alliance and self contained ability to decide.” F. Carnelli, Crisis and Informed Consent: Analysis of a Law-Medicine Malocclusion [97], n.4 at 56. In a similar vein, Justice Cheshin stated that: “the law recognizes the autonomy of the individual to formulate his or her will as he or she considers appropriate, for his or her own ‘good’; it is the individual who decides his or her own ‘good’: his or her ‘good’ is his or her will, and his or her will is his or her ‘good.’ A person’s ‘will,’ whether explicit or implied, includes that person’s ‘good.’ A person’s ‘good’ is inseparable from his or her will.” FHC 7015/94 Attorney General v. Anonymous [9] at 95-96. 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 himself 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. See D. Herman, The Basis for the Right of Committed Patients to Refused Psycho-tropic Medication [98].

16. The individual’s right to autonomy is not expressed only in the narrow sense of the ability to choose. It also includes another –physical – dimension of the right to autonomy, relating to a person’s right to be left alone. HCJ 2481/93 Dayan v. Commander of Jerusalem District [10] at 470-72. The import of the right is, inter alia, that every person has freedom from unsolicited non-consensual interference with his of her body. Dworkin made this point when addressing this aspect of individual autonomy:

It is a physical concept rather than an intellectual one. If you touch me or eavesdrop on me, you have injured my autonomy by invading my space. If you actually do something to change my body, you have injured my autonomy by changing the very constitution of what I am.

R.B. Dworkin, Medical Law and Ethics in the Post-Autonomy Age [99] at 733.

17. The recognition of a person’s right to autonomy is a basic component of our legal system, as a legal system in a democratic state. R. Gavison, Esrim Shana Lehilchat Yardor – Hazechut Lehibacher Vilikachei Hahistoria [78]; HCJ 693/91 Efrat v. Commissioner of the Population Registry in the Ministry of Interior (Efrat) [11] at 770. It constitutes one of the central expressions of the constitutional right of every person in Israel to dignity, a right anchored in the Basic Law: Human Dignity and Liberty. Indeed, it has already been ruled that one of the expressions of right to dignity is “the freedom of choice of every person as an individual being” and that this reflects the conception that every person … is a world in himself or herself and an end unto himself or herself.” HCJ 7357/95 Baraki Petar and Humphries (Israel) Ltd. v. State of Israel, (hereinafter, Baraki Petar and Humphries [12] at 783-84) (Barak, P.). President Barak further noted that, “The autonomy of individual will is a basic value in our legal system. Today it is anchored in the constitutional protection of human dignity.” HCJ 4330/93 Ganem v. Tel Aviv District Committee of the Bar Association (Ganem) [13] at 233-34. In this context, President Shamgar gave the following explanation of human dignity:

Human dignity is reflected, inter alia, in the ability of a human being as such, to freely form his or her personality at his or her own free will, to express ambitions and to choose the means of realizing them, to make his or her own volitional choices, not to be subjected to arbitrary coercion, the right to fair treatment by any authority or any other individual, to benefit from the inherent equality of all human beings …

CA 59942/92 Anonymous v. Anonymous [14] at 42.

18. The right to autonomy is “a framework right.” 3 A. Barak, Parshanut Bimishpat [Interpretation in Law], Parshanut Chukatit [Constitutional Interpretation] [76] at 357-58. Accordingly, this right served as a basis for deriving numerous specific rights. For example, it was the basis of the right of every person to choose his or her family name (Efrat [11]); for the right of the criminally accused not to be present at trial against their will (Baraki Peta Humphries, supra [12]; it was accorded weight regarding the question of appointing a guardian for another person (CA 1233/94 Cohen v. Attorney General [15] paras. 4,5, (Strasberg-Cohen, J.)). It was the basis for the fundamental right of every person to freedom of movement in Israel. HC 5016/96 Horev v. Transportation Minister [16] at 59-60 {256-57} (Barak, P.). It was also the basis of a person’s right to choose his or her own attorney to represent the person in court. Ganem, supra [13]. It was also given significant weight regarding the question of whether and to what extent one can recognize the validity of the adoption of an adult person, based on the approach that “In our times, when ‘human dignity’ is a protected, constitutional right, we must give effect to the individual's desire to concretize his or her own personal being …” CA 7155/96 Anonymous v. Attorney General [17] at 175 (Beinisch, J).

19. A person’s right to dignity and autonomy are cardinally important in the context of medical treatment. Medical treatment is part of the inner core of a person’s right to control his or her life. The impact it may have on a person’s lifestyle and quality of life may be direct and often irreversible. Accordingly, the derivative of a person’s right to autonomy is the right to receive information regarding the medical treatment he or she receives in a hospital. LCA 1412/94 Hadassah Medical Association, Ein Kerem v. Gilad [18] at 525. In the same vein, it was held that a person may not be pressured, either directly or indirectly, into consenting to an operation on his or her body which he or she does not want by way of reducing the compensation to which he or she is entitled. CA 4837/92 “Eliyahu” Insurance Company v. Borba [19]. This expresses the conception that “a medical operation constitutes an assault on a person’s body, and a person must retain autonomy over his or her body to decide whether he or she desires such an assault or not.” Id. at 261. The patient is entitled to refuse treatment, even if its advantages exceed its disadvantages and its prospects outweigh its dangers. The central focus of the decision to perform medical treatment is primarily the patient’s rights as a person, especially his or her right to dignity and autonomy, and only to a lesser extent, the medical repercussions of his or her decision. See R. Macklin, Symposium: Law and Psychiatry, Part II: Some Problems in Gaining Informed Consent from Psychiatric Patients [100] at 349-50. See also Justice Mazza’s opinion in CA 4384/90 [3] at 181.

The right to autonomy is also the main foundation of the doctrine of informed consent under which, subject to certain exceptions which are not relevant here, no medical procedure can be performed on a person’s body unless his or her informed is given. CA 3108/91 [1] at 91. In this context, the rule is that “where the choice of a medical course or the receipt of medical treatment involves substantial risks, doctors are obliged (subject to exceptions) to provide the patient with the information that is reasonably necessary for him or her to reach a personal and informed decision as to whether or not to choose the particular medical treatment and to take the risks involved. CA 4384/90 [3] at 182 (Mazza, J.). The decision concerning medical treatment … “must be an individual decision which first and foremost takes into account the will and choices of the patient himself..” Id. Justice Dorner summarized this point well in CA 434/94 [7]:

The patient is not an object. The patient is a subject who bears the consequences of the risks and chances that the doctor takes when choosing the manner of treatment. As such, the patient has the basic right, flowing from the autonomy of the individual, to make an informed decision, i.e. with awareness of the relevant facts, whether to agree to medical treatment being proposed to him or her.

Id. at 212.

20. Parenthetically, it should be noted, in order to provide a complete picture, that in 1996, the Patient’s Rights Law was enacted. The purpose of the law is “to establish the rights of a person applying for, or receiving medical treatment and to protect his or her dignity and privacy.” Sec. 1. The law prescribes, inter alia, a detailed arrangement regulating the subject of the patient’s informed consent to medical treatment Sec 13-15. This law does not apply in our case, given that it was enacted after the biopsy was performed on the appellant.

Violation of Autonomy: A Remunerable Damage Under the Tort Ordinance [New Version]

21. Returning to the case before us. As I indicated above, under the circumstances of this case, the duty to receive appellant’s informed consent to the biopsy on her shoulder was not discharged. This was a violation of appellant’s basic right, as a human being, to dignity and autonomy. Does this fact confer the appellant with a right to compensation, even if the appellant suffered no bodily damage as a result of the failure to receive her informed consent?

The first question to be addressed in this matter is whether or not the damage involved in the harm to the patient’s dignity and autonomy is “damage” in the sense of the Tort Ordinance [New Version]. In my view, this question must be answered affirmatively. The term “damage” is defined in Section 2 of the Tort Ordinance [New Version]. The definition is broad, including “loss of life, loss of assets, comfort, bodily welfare or reputation, or detriment thereof, or any other similar loss or detriment.”

In the framework of this definition, protection is given to numerous intangible interests. As such, compensation is awarded for non-pecuniary damage, such as pain and suffering, which are part of the bodily damage caused to a victim. The breadth of the definition led to the ruling that any harm to bodily comfort, pain and suffering, even without physical expression, even if not accompanied by any bodily damage of any kind, may constitute remunerable damage in a tort action. CA 243/83 Jerusalem Municipality v. Gordon [20] at 139 (hereinafter - Gordon). In accordance with this approach, the Tort Ordinance [New Version] also protects “the victim’s interests in his or her life, comfort, and happiness.” Id. at 141. Accordingly, the Court ruled that a person harassed by reason of a criminal procedure that originated in the negligent adoption of a mistaken criminal procedure against him is entitled to compensation from the prosecuting authority for that damage. Id.

In a series of subsequent judgments, the Court trod a similar path, awarding damages for harming intangible interests of plaintiffs in tort actions. Hence, the Court ruled that the owner of a copyright is entitled to compensation for psychological damage and emotional distress caused by the violation of the right. CA 4500/90 Herschko v. Aurbach [21] at 432 (Levin, D.P.). This was also the ruling regarding damage to a person’s dignity and freedom occasioned by his coerced and illegal hospitalization in a mental health hospital. CA 558/84 Carmeli v. State of Israel (Carmeli) [22] at 772 (Netanyahu, J.). Similarly, the Court ruled that the suffering sustained by a woman whose husband divorced her under circumstances of duress constitutes compensable damage. CA 1730/92 Matzrava v. Matzrava [23], para. 9 (Goldberg, J.).

The same applies to the violation of a person’s dignity and sensibilities which constitute a fundamental head of damages in the tort of assault and in the tort of false imprisonment. See H. McGregor, On Damages at 1024, 1026.

Against this background, I think that the violation of human dignity and right to autonomy caused by the performance of a medical procedure on a person without his or her informed consent entitles him or her to compensatory damages under tort law. The illegal harm to a person’s sensibilities attendant to the failure to respect the basic right to shape his or her life according to his or her own will constitutes a detriment to that person’s welfare and falls within the aforementioned category of “damage.” It matters not whether we regard it as damage to “comfort” or “or any other similar loss or detriment” under the definition of the “damage” in section 2 of the Ordinance. We have dealt with the centrality of the right to autonomy in shaping the identity and fate of a person in the society in which we live. The right to autonomy is central to the formulation of a person’s identity and fate in our society. It is a crucial component of a person’s ability to live as an independent and thinking individual. The inevitable conclusion is that this right is an essential part of a person’s interest in “his or her life, comfort, and happiness” (Gordon [20] at 122), and its violation may entitle the individual to compensatory damages. As Crisp wrote:

One’s well-being is constituted partly by the very living of one’s life oneself, as opposed to having it led for one by others. The fear we have of paternalism does not arise merely from the thought that we know our own interests better than others, but from the high value we put on running our own lives.

R Crisp, Medical Negligence, Assault, Informed Consent and Autonomy, [101] at 82.

A person is not an object. Every legally competent person is entitled to have his or her wishes respected by society and its members, in all important matters relating to that individual, provided that he or she does not harm others. LCrim 6795/93 Agadi v. State of Israel [24] at 710. It derives from the recognition of a person’s intrinsic value and of the fact that all people are free. Violation of this fundamental right, other than by force of legal power or right, seriously vitiates individual welfare, constituting damages for which compensation can be awarded.

Violation of Autonomy, Violation of the Doctor’s Duty of Care to the Patient

22. Our affirmative answer to the question of whether the damage discussed entitles its victim to compensation under the Tort Ordinance [New Version] does not terminate the discussion. Where a claim is based on negligence, the victim’s right to compensation depends on whether the tortfeasor owes a duty of care to the victim to prevent that damage. Recognition of this obligation is a function of “considerations of legal policy.” Gordon [20] at 140. Gordon ruled that the tort of negligence also encompasses a duty of care for damage which is neither pecuniary nor bodily, caused to persons within the first circle of risk, in other words, the targets of the injurious activity. In this context, Justice Barak ruled that:

The tort of negligence should provide equal protection to both the victim’s interest in his or her body and money and his or her interest in life, comfort and happiness. Non-pecuniary damage should not be regarded as “parasitical,” only to be tolerated when ancillary to pecuniary damage. It should be recognized as independent damage, meriting compensation as such. Human dignity, a person’s reputation, comfort, and mental well-being are important to proper societal life and must receive the appropriate protection granted to all other pecuniary interests. A person’s body and property are no more important than his or her grief.

Gordon [20] at 142.

Application of these considerations in a case of the type at hand tips the scales in favor of recognizing a victim’s right to compensation for non-pecuniary damages. The tortfeasor – who was responsible for providing the treatment – is clearly capable of anticipating the damages that will ensue from the violation of the person’s basic right to autonomy should the person fail to receive the information necessary to decide whether or not to undergo the treatment. See CA 195/91 State of Israel v. Levy [25] at 65-66 (Shamgar, P).

The person responsible for providing treatment and his or her patient are connected by relations of “proximity” within the tort law meaning of the term. This term refers to the component of duty of care, and it relates to “a special connection of different kinds between the tortfeasor and the victim.” It serves as “a means of control and supervision over the borders of responsibility by delimiting the “circles of danger.” Y. Gilad, Al Hanachot Avoda, Intuitzia Shiputit Veratzionaliut beKeviat Gidrei Achrayut BeRashlanut [79] at 322. A particularly close and intimate connection exists between the patient and the person responsible for his treatment in view of the treatment’s potentially far-reaching implications for the patient’s life and welfare. Against this background it was ruled that the patient-doctor relationship is predicated on a relationship of trust which “is the basis of the patient’s readiness to place his or her life, health, and welfare in the doctor’s hands.” CA 50/91 Sabin v. Minister of Health [26] at 34 (Shamgar P.). The patient undergoing a medical procedure is in the primary circle of risk of suffering harm if, prior to that procedure, the patient does not receive all the relevant information. Recognition of the patient’s right to compensation will not create broad circles of obligations which we cannot anticipate in advance. Consequently, the proximity requirement derives from the consideration that “according to any consideration of legal policy, there is a (normative) duty to anticipate non-pecuniary damage to a person who happens to fall within the primary circle of danger. In other words the person who was the target of the injurious action.” Gordon [20] at 142.

Furthermore, the nature of the relationship between the patient and doctor is such that the doctor is in a better position to prevent these kinds of damages. It must be remembered: The doctor enjoys an absolute advantage in knowledge over the patient. As a rule, the patient lacks the tools that would enable him or her to make an independent assessment of the various matters relating to the treatment. The patient does not have the fundamental corpus of knowledge that would enables him or her to direct questions to the treating doctor about all aspects of the particular medical procedure being considered. In other words, the doctor responsible for the treatment is fully equipped to adopt all measures that are necessary to prevent the damage that may be incurred by the patient due to a failure to provide important information prior to the actual treatment. Recognition of the patient’s right to compensation for violation of his autonomy in a case where this duty was breached may also help contribute to the duty actually being fulfilled [in other cases – ed.]. It may be of assistance in preventing situations such as ours, in which the doctors ascribe minimal significance, if any, to the patient’s opinion regarding the medical procedure, which in their opinion should be performed on the patient’s body.

Rejection of Considerations Against Recognizing the Obligation to Compensate for the Violation of Autonomy

23. Are there any counter-considerations, tipping the scale against recognizing the obligation to compensate for violation of a patient’s autonomy?

a) One possible consideration concerns the fear of what is referred to as “defensive medicine.” By that I mean the practice of medicine focused on the doctor’s protection against potential liability as distinct from the focus on the patient’s welfare. See the detailed comment of my colleague, Justice Strasberg-Cohen, regarding this concern; CA 2989/95 Korantz v. Sapir Medical Center – “Meir” Hospital at 698-99; A. Porat, Dinei Nezikin: Avlat Harashlanut alpi Pesikato shel Beit Hamishpat Haelyon Minekudat Mabat Theoretit [Tort of Negligence], [80] at 37. In our case, this fear would be manifested by providing unnecessary, superfluous information to the patient with the intention of exempting the doctor from possible liability. But in fact, “flooding” the patient with unnecessary information can actually violate the patient’s autonomy to the extent that it prevents him or her from exercising effective and meaningful discretion before deciding whether to undergo the medical procedure.

In my opinion, however, this fear should not be accorded significant weight in our case. Irrespective of whether or not we recognize an obligation to compensate for violation of the patient’s right to autonomy, it is still the doctor’s duty to give the patient all essential information of importance for the patient’s decision whether or not to consent to a particular medical procedure. This is the derivate of the doctor’s general and concrete duty of care which he owes to the patient, and which today is anchored in the Patient’s Right Law.

Our case is not concerned with broadening the existing duty or creating an expanded duty to give the patient information. There are parameters that determine the scope of information that the doctor must give the patient, and we will not broaden them. The obligation to give the patient this information applies, and will continue to apply, only to information of which the patient must be aware in order to decide whether or not to agree to the treatment. The doctor’s failure to discharge his or her duty of disclosure to the patient violates the patient’s autonomy. The determination that such violation of autonomy creates an additional right to compensation in no way affects the nature or the scope of this duty. The scope and the nature of the information which the doctor must give to the patient continues to be a derivative of the patient’s right to decide, on the basis of all the relevant information, whether to agree to the treatment proposed. Even in the legal regime proposed, which recognizes the patient’s right to compensation for the mere fact of the violation of his or her autonomy, the patient would not be entitled to any compensation in a situation in which the doctor failed to give the patient information which was not important to the patient’s decision.

Furthermore, in the current legal regime, doctors are liable for compensation of patients when there is a causal connection between the violation of the duty to receive the patient’s informed consent and the bodily damage caused to the patient. Usually the victim’s compensation award for the mere violation of the patient’s right to autonomy will be relatively small in relation to compensation for bodily damage. We should remember that we are not dealing with punitive or extraordinary damages but rather with compensation for harm to an intangible value, usually of restricted scope. See para. 27, infra. As such, we are not dealing with the broadening of potential professional liability to a degree which could trigger a real fear of widespread adoption of the practice of giving superfluous information to patients. In this context, Englard cites the following statement in his book: “Authoritarianism is deeply embedded in professional practices.” Supra [83] at 165. These comments, which largely reflect reality, tell us that as a matter of fact, we are still a far cry from the situation in which a patient’s autonomy will be violated by being provided with superfluous information. As such, I would not accord significant weight to this consideration.

b) Another risk mentioned in this connection is the danger of high administrative costs due to the court being flooded with claims. Amongst the other factors, there are objective difficulties in adjudicating this kind of tort action, which by definition is vague and intangible. See Porat [80] at 389.

The “flooding” claim has been raised on a number of occasions in the past, when the question deliberated was the existence of a duty of care on the part of the different administrative authorities. See e.g. CA 429/82 State of Israel v. Sohan [28] at 741 (Barak, J); Gordon, supra [20] at 125. Usually the Court has not accorded significant weight to this claim, and in my opinion, rightly so. Experience indicates that none of the cases in which the claim was raised actually triggered the flooding of which we had been warned, including with regard to the subject of compensation for non-pecuniary damage only. Absent, a firm, factual foundation for this claim, I would therefore avoid according any significant weight to this consideration. Furthermore, we must remember that we are dealing here with substantive law, which concerns the rights of individuals to compensation for a violation of one of their basic rights. Courts exist in order to do justice, and in the words of Justice Netanyahu, discussing periodic compensation payments:

The principle of the finality of a judgment, whether it protects a party against being unnecessarily disturbed or protects the court against being flooded with applications for repeated adjudication, is indeed an important matter, but it should not prevail over the primary consideration, which is doing justice between two parties. CA 283/89 Haifa Municipality v. Moskovitz [29] at 727 (emphasis added, T.O).

(c) It was further claimed that that there is no need to recognize a damageable right in cases of the kind before us, because in reality there are numerous patients who do not desire autonomy when receiving medical treatment. For various reasons rooted in the nature of the situation of treatment situation and the nature of the doctor-patient relationship, patients prefer to transfer responsibility for deciding their fate to the doctors treating them. See Englard, supra [83], at 163-65. Consequently, one cannot say that any damage was incurred by these patients due to the failure to disclose the risks and damages occasioned by the treatment they received.

I lack the tools required for an empirical examination of this proposition. I have serious doubts whether most patients voluntarily waive any significant involvement in the decision making process regarding treatment they are about to receive and have no interest in such involvement. Furthermore, compensation for damage awarded for the violation of the right to autonomy is individually based, taking into consideration the particular circumstances of the case. See para. 27, infra. Accordingly, there may be cases in which the evidence indicates that the patient’s right to autonomy was not violated, despite the failure to comply with the legal duty to receive the patient’s informed consent to medical treatment. For example, the patient’s particular subjective preferences may lead the court to conclude that there is no justification for granting the patient compensation for violation of that right. Nonetheless, from a conceptual perspective, this does not preclude recognition of statutory remedy for cases in which the evidence indicates a violation of the patient’s right to autonomy.

As such, I conclude the reasons for rejecting recognition of a duty to compensate for damages caused by the violation of autonomy do not convince me to change my conclusion that such duty should be recognized.

24. This conclusion is buttressed by an additional consideration. Normally, there is a contractual connection binding the patient, the doctor treating him or her, and the institution in which treatment is given. This contract includes an implicit condition whereby the treatment given to the patient will comply with required standards of expertise and reasonability. Providing treatment without receiving the patient’s informed consent to the treatment constitutes a breach of this duty and is therefore a breach of the contractual obligation owed to the patient. See CA 3786 Levi v. Sherman [30] at 462. That violation may entitle the patient to a remedy, inter alia, under section 13 of the Contract Law (Remedies for Breach of Contract), 1970, which provides that “where the breach of contract has caused other than pecuniary damage, the Court may award compensation for that damage at the rate it deems appropriate under the circumstances of the case.” Among other things, the provision entitles the victim of such a violation to compensation for “hurt, suffering, disappointment and emotional pain, and perhaps even for loss of pleasure.” G. Shalev, Dinei Chozim [Contracts Law] [75] at 586. These damages are essentially similar to damages sustained by the patient due to the violation of his or her autonomy. Recognition of a contractually based compensatory right by reason of those damages provides additional support for the conclusion that there should be recognition of a similar duty in the tort context. There is no rational reason for distinguishing between the grounds for a contractual action and the grounds for an action in tort, where both actions flow from the same set of relations.

Case Law Supporting Recognition of Right to Compensation for the Violation of Autonomy

25. In addition to the aforementioned considerations, I will add that over the last few years, the tendency in case law has been to recognize the patient’s right to compensation for damages incurred by reason of the violation of his or her dignity caused by the treating doctor’s failure to provide relevant information, even in situations where there was no proof of a causal connection between the bodily damage caused to the patient and the doctor’s violation of the duty.

In this context, I refer to Goorkani [66], mentioned above in another context. A man received treatment aimed at preventing blindness that was developing due to a sickness from which he was suffering. He was not informed that the treatment was liable to render him infertile. The court determined that there was no proof that the patient’s decision would have been different had he been informed of that risk. Even so, the court awarded compensation for the sum of 2,500 pounds sterling by reason of “the loss of self-esteem, shock and anger at the discovery of his infertility, together with the frustration and disruption which ignorance and sudden shock of discovery brought to the marital relationship.” Id. at 24-25 (emphasis added – T.O).

Similarly, in Smith [56], also referred to above, the court ruled that there was no proof of a causal connection between the paralysis suffered by plaintiff following her operation and the omission of failing to inform her, prior to the operation, of the 25% risk factor of disability. As stated, the [physical damages – ed.] claim was rejected, but the court still awarded plaintiff the sum of 3,000 pounds sterling for the mental shock she sustained upon becoming aware that she had incurred a severe disability, with no prior warning of the possibility of its occurrence. The court arrived at a similar result in Lachambra v. Nair (1989) [57], cited by Edward ([83], n.19 at 172). There, the court ruled that it was not proven – objectively or subjectively - that plaintiff would have not agreed to the performance of the proposed medical procedure, even had he been given all the relevant information. But despite the absence of proof that the tort had caused pecuniary damage, plaintiff was awarded compensation for the sum of $5000, in view of the breach of the patient’s right to receive all the relevant information prior to the medical treatment.

Summing up this point, these judgments evidence a trend which is in conformity with my own conclusion: recognition of the duty to compensate for the mere violation of a person’s autonomy.

26. This concludes my discussion of the patient’s right to compensation for violation of autonomy occasioned by the breach of the duty to receive his informed consent to medical treatment. My conclusion is that there should be recognition of a duty to compensate the patient for this violation. Indeed, if we take a serious attitude to the patient’s right to choose whether and what kind of medical treatment he or she is to receive, then our ruling should be that there is “a price” for the very fact that his or her dignity was harmed because medical treatment was performed on the patient’s body without receiving the patient’s informed consent. See M.R. Fluck, The Due Process of Dying [102] at 141. In her book, Barak-Erez made this point too, arguing that “if tort law purports to protect interests which the legal system considers important, then in accordance with contemporary thinking, the time has come to extend the protection of these laws to individual rights.” [73] at 157.

Violation of Autonomy in Addition to Bodily Damage Caused by Negligence in Medical Treatment

27. At this point. we must relate to the concern mentioned by my colleague, Justice Beinisch, that recognition of the patient’s right to compensation for the violation of his or her autonomy may paradoxically lead to “a limitation of the compensation given to the victim of a treatment, being content with nominal compensation…” in view of the danger that the courts will avoid “dealing with the complex question of the causal connection”.

These comments rest on the assumption, with which I concur, that as a matter of principle, violation of autonomy and bodily damage constitute two distinct torts, one being supplementary to another and not instead of the other. Compensation for violation of autonomy does not replace compensation for bodily damage. It is supplementary thereto, and attempts to place the injured party as near as possible to his or her original position by way of pecuniary compensation.

Indeed, there are numerous cases in which the claim for compensation occasioned by violation of autonomy will not be the main remedy requested, and the claim will focus on the patient’s right to compensation for bodily damage caused by reason of medical treatment performed without the his or her informed consent. In that framework, the examination required is not limited to ascertaining whether or not there was a breach of the duty to provide the patient with all information required to decide whether not to undergo the treatment. The parties and the court, too, must also decide upon the causal connection between the breach of the duty and the damage actually caused. Indeed, in numerous cases both the evidence and legal argumentation focus primarily on this last question. A question arises as to whether this situation provides cause for concern that the court will take the “easy” path. In other words, the court is liable to determine that there was no casual connection between the breach of the duty and damage caused, even in the absence of any substantive justification for its determination. It could choose this path of action in the knowledge that the patient also has a right to some compensation for violation of his autonomy.

I think that the question ought to be answered in the negative. In my opinion, trial judges deserve credit in the form of the assumption that they will not diminish the substantive rights of a patient to whom remunerable damage was caused as a result of receiving medical treatment without his informed consent. Nor should one forget that judgments in these matters are subject to appeal. Inadequate reasoning for the determination was that there no proof of casual connection between the violation of the duty and the damage that was caused will not stand up to judicial review. Neither is it amiss to mention that in the two English cases mentioned above, which determined that there was no casual connection between the violation of the duty and the actual damage, there was, inter alia, a ruling of compensation for the violation of autonomy and a detailed judicial discussion of the question of the casual connection. Neither of the judgments evidence any sign of an attempt to “avoid” dealing with this complicated question.

In sum, there does not appear to be any substantial foundation for my colleague’s concern. As such, my conclusion is that there ought to be recognition of the tort of violation of right to autonomy as an independent tort under which compensation is awarded to a patient, where there was a breach of the duty to provide him or her with necessary information.

The Extent of the Damage in the Violation to the Right to Autonomy – Generally and in Our Case

28. Having ruled that there is a duty to compensate for damages sustained as a result of violation of autonomy, I will now examine the question of proving the damage and its scope. Naturally, matters relating to the proof and the extent of damage are determined in accordance with the particular data in each individual case and the evidence submitted in court. The substantive criterion for generally determining the amount of compensation to which the victim is entitled is the criterion of restoring the situation to its original [ex ante – ed.] state. This criterion is an individual one. It requires an individual assessment of the gravity of the harm caused to the specific victim. See CA 2934/93 Soroka v. Hababu [31] at 692.

In cases of the kind under discussion, the damage is expressed primarily in the plaintiff’s psychological and emotional response to the fact that medical treatment was performed on the patient’s body without his or her informed consent and the fact that risks materialized of which the patient was not informed prior to agreeing to the treatment See Englard at 164. In assessing the amount of compensation for the damage, there is importance to the severity of the breach of the duty to receive the patient’s informed consent prior to performing the treatment. Failure to provide any manner of significant information concerning the procedure about to be performed is generally more serious than failure to provide part of the substantive information.

Similarly, the graver the danger of which the patient was not informed in terms of possible injury, and the greater the likelihood of it materializing, the more serious the violation of patient autonomy. In other words, there is a proportional relationship between the gravity of the decision from the patient’s perspective, the gravity attaching to a denial of his or her effective involvement in the decision-making process, and the gravity of the violation of the right to autonomy. Thus, to the extent that the potential damage is greater, so too, greater importance attaches to the duty of informing the patient of the potential danger, which in turn impacts on the severity of the violation of the duty and the actual damage caused to the patient by that omission.

Clearly, these guidelines are only general. By definition, the damage in this kind of case involves a predominantly subjective aspect, giving rise to inevitable difficulties in assessing it. Ultimately, the sum of compensation in each particular case, similar to compensation for other non-pecuniary damages, is a matter of judicial discretion, and it is thus determined by making an evaluation based on all the relevant circumstances and the impression of the court. The court must therefore adopt a balanced approach. It should give the appropriate weight to the fact that basic human rights were violated, which dictates an award of appropriate compensation as opposed to a symbolic compensation. On the other hand, considering the difficulties inherent in the procedure of accessing the damage, judicial restraint is required, and exaggerated compensation awards should be avoided/ See Alexander v Home Office [58] at 122, which adopted a similar approach.

Summing up this point, Barak-Erez’s comments are relevant, with the necessary changes, for assessing damage in the case of violation of an abstract constitutional right:

Compensation will be based on an assessment of the degree of offense to the individual’s sensibilities, against the background of the particular circumstances. In view of the essence of this kind of violation of rights, one cannot expect accurate proof of damage, as with the proof required for consequential damages, whether physical or economic. This kind of proof is not possible, given that there is no criterion for general, non-pathological feelings of insult and grief. Courts will have to make an assessment based on the circumstances and also based on the judges’ life experience. The compensation will not be symbolic. It will be based on the assumption the damage was caused….

On the other hand, one can not diverge from principles of tort by awarding compensation which is unrelated to the concrete violation and its circumstances. The sum of compensation cannot and should not reflect the universal value of the right … In the area of torts, compensation is determined according to the damage suffered by the plaintiff himself or herself, and not according to the value of his or her rights from the perspective of another person”.

[73] at 276-77.

Precision is required here. These comments were made in the context of a general thesis, advocating recognition of the citizen’s right to compensation when an authority illegally violates his constitutional right. The question is an important one, concerning judicial recognition of the existence of “constitutional torts,” but it does not arise in the case before us, and I need not express a position on the matter. Even so, the author dealt with the subject of compensation and assessment of the appropriate amount of compensation in the case of a violation of a constitutional right. Her comments are applicable mutatis mutandis to the case before us, in which we are required to determine the sum of compensation for negligence. Furthermore, they express the salient elements of my own views on the subject.

29. In the case before us no detailed evidence was submitted regarding the damage sustained by Appellant. The lack of evidence as such does not vitiate Appellant’s right to compensation for general damage of the violation of her autonomy. When dealing with general damage as opposed to pecuniary damage, the court may, in appropriate circumstances, award monetary compensation even absent specific and detailed proof of concrete damage.

This was the spirit of the Supreme Court ruling in Matzraba [23], mentioned above. That case concerned a woman’s action in tort against her ex-husband who had divorced her against her will, in contravention of section 181 of the Penal Law, 1977. Plaintiff adduced no evidence of the damage caused to her as a result of defendant’s act. Justice Goldberg ruled that nonetheless, there can be no doubt that the plaintiff suffered by reason of the coerced divorce. Justice Goldberg wrote that, in these circumstances:

Even absent proof of concrete damage sustained by plaintiff, the court should have ruled an estimated compensation for general damage that she no doubt suffered as a result of the respondent having severed the marital bond against her will. Para. 9 of the judgment.

Accordingly, Justice Goldberg accepted the plaintiff’s appeal to the extent that it related to the tort grounds on which her claim was based, and he assessed the general damage sustained by her due to her divorce at NIS 30,000.

Justice Netanyahu made a similar ruling in Carmeli [22], which dealt with a plaintiff’s forced hospitalization in an institution for the mentally disturbed. The plaintiff’s action was based on violation of a statutory duty. The judges disputed whether an action on that basis could be substantiated in circumstances in which there were specific defenses regarding the tort of unlawful confinement. The majority answered in the negative and did not even address the question of damage caused to the plaintiff. Justice Netanyahu, having answered in the affirmative, proceeded to address the question of damages. She ruled that even though pecuniary damage was not proven, “general damage was caused by the mere virtue of her [the plaintiff’s – T.O.] forced confinement in a hospital for the mentally disturbed, and such damage does not require proof.” Id. at 772. She therefore awarded an estimated sum of damages, fixing the amount at NIS 10,000 as of the judgment date (May 30, 1984).

The principle evidenced by these judgments is similarly applicable to our case. The judgments cited relate to the tort of breach of statutory duty. Like the tort of negligence that concerns us here, the element of damage is similarly a component of the tort of the breach of a statutory duty. Yet this did not preclude a compensatory award for the general damages caused by the tortuous act. This expresses the general principle whereby there is no need to prove general damage and its scope because the existence of damage and its scope derive from the very fact of the tortfeasor’s breach of his duty. In a similar vein, we can refer to the language of the Second Restatement of the Law of Torts [114], which states the following:

In many cases in which there can be recovery for general damages, there need be no proof of the extent of the harm, since the existence of the harm may be assumed and its extent is inferred as a matter of common knowledge from the existence of the injury as described.

Id. at note ‘a’ of sec. 912.

And in note (b) of section 912, similar comments are made regarding non-tangible damage, to the effect that:

In these cases the trier of fact can properly award substantial damages as compensation for harms that normally flow from the tortious injury even without specific proof of their existence, such as pain from a blow or humiliation from a scar. Evidence to prove that the harm is greater or less than that which ordinarily follows is admissible. The most that can be done is to note such factors as the intensity of the pain or humiliation, its actual or probable duration and the expectable consequences.

Considering these principles, I would award the appellant a certain compensation for the violation of her right to autonomy. I dealt above with the circumstances surrounding the appellant’s agreement, noting that they did not comply with the requirements of informed consent. Even if the appellant had general knowledge that they were going to perform a biopsy on her shoulder, the intention to perform the biopsy at the time and the place in which it was done was only made clear to the appellant immediately before the actual performance of the procedure, when she was in the operating room. This did not allow the appellant to exercise real discretion regarding the performance of that particular action on her body, and as such there was a violation of her basic right to control what would be done to her body. In view of the totality of circumstances in this matter and in the absence of any particular detailed evidence of the damage caused to the appellant as a result of that violation, I would award the compensation in the amount of NIS 15,000.

The Result

In view of all of the above, I would grant the appellant’s appeal, and in consideration of all that has been explained, I would rule that she receive compensation in the sum of NIS 15,000. Under the circumstances, I would order the respondents to pay appellant’s expenses in both courts in the sum of 10,000 NIS.

Justice T. Strasberg-Cohen

1. Should appellant be compensated for the respondents’ negligence in the receipt of informed consent for performing the operation on her shoulder? And if so – for which kind of damage? These are the questions to be decided.

My colleagues are divided on the matter. Justice Beinisch maintains that the appellant would not have agreed to the operation had her informed consent been requested, and that she should therefore be compensated for all the damage caused to her by the operation. On the other hand, Justice Or believes that the appellant would have agreed to the operation and is therefore not entitled to compensation for the injury. At the same time, he recognizes a new head of tort - violation of autonomy - and suggests that she be compensated only for that.

Unfortunately, on some of these issues I cannot concur with my colleagues, although our approaches do occasionally converge. In my discussion of the issues at hand, I will rely on the set of facts and its attendant conclusions as determined by my colleague, Justice Beinisch, and to which my colleague, Justice Or, agreed. The first assumption is that no medical negligence was involved in the decision to perform the operation, in the operation itself, or in the subsequent treatment. The second assumption is that the failure to receive the appellant’s informed consent provides grounds for a negligence-based action, and not an assault-based action. The third assumption is that the respondents were negligent by reason of their failure to receive appellant’s informed consent to the operation. What are the implications of this negligence? For the purpose of discussing this question, I briefly present the facts.

2. About one and a half months prior to the operation, the appellant was examined in the Health Fund and told of a suspicious finding on her shoulder requiring a biopsy. No appointment was made for this operation, which was supposed to be elective; the doctor did not indicate any urgency for it, and during the period that elapsed after the examination, nothing was done in preparation for the operation on the shoulder, and no date was set for it. On January 7, 1988, the appellant was hospitalized for an operation on her leg. During the two days following her arrival in hospital, all the arrangements required for her leg operation were made. Records show that no tests were conducted in relation to her shoulder, nor is there record of any consultation at the hospital regarding substituting the leg operation with an operation on the shoulder. While the appellant was in the operating room, prior to the operation on her leg, and after receiving tranquilizers and sedatives, she was asked to consent to an operation on her shoulder instead of on her leg, and such consent was forthcoming. Nothing in the evidence indicates that she received any explanation of why the operation on her leg was replaced by the operation on her shoulder; what was the urgency of the operation on the shoulder necessitating its performance then and there instead of the leg operation, and no less important - she was not informed of the risks involved in performing the shoulder operation. The shoulder was operated on, and the appellant was left with a “frozen” shoulder, suffering from disability.

The Case and its Problems

3. As my colleague, Justice Or, noted, the appellant was silent regarding whether or not she would have agreed to the operation had she been asked to give her informed consent since, according to her own testimony – which was rejected by the lower court – she had no idea that an operation was about to be performed on her shoulder. The lower court did not believe her, and there is no cause for intervention in that determination. Nonetheless, the question remains: what would she have done if her informed consent had been sought under the appropriate conditions, having received a full explanation of the risks and prospects of the medical action? Even had she testified on the matter, it is doubtful whether significant weight would have attached to her testimony, and even had she testified that she would not have consented, how much value could be ascribed to such testimony? (We will return to this below). At the same time, one can rely on the objective background facts connected to the case. It was recommended to the appellant that she undergo an operation on her shoulder about two months before it was performed. During this period, she did nothing to promote the performance of the operation. She was not told that the operation was urgent; she did not express her wish to perform an operation on her shoulder when she was told that she needed one; and she did not make an appointment for an operation on her shoulder. On the contrary, she set an appointment for an operation on her leg and preferred to have that operation performed rather than the shoulder operation. From a subjective perspective therefore, there is nothing to indicate that the appellant had prepared herself for a shoulder operation after it was recommended to her to do so, despite the passage of time.

An assessment of her behavior from the point of view of a reasonable patient also presents difficulties. How can one know what a reasonable patient would have decided absent any indication in the evidence as to the risks of the operation? Such risks were neither explained nor presented to her, and no medical evidence was presented to the court stating that there were absolutely no risks. One cannot learn anything from the subsequent consequences – the frozen shoulder –about the risk involved in performing the operation. Neither did the respondents enlighten the court as to whether it is rare or common for that risk to materialize or whether or not the patient should have been informed of its existence. Absent the elementary information that would have guided a reasonable patient in such circumstances, how does one determine what that reasonable patient would have decided? What do we have, apart from a disagreement between my colleagues over whether or not the appellant would have given her consent? Their dispute is not a legitimate difference of opinion between judges, which frequently leads to different conclusions. Rather, it is a different assessment of a hypothetical factual possibility, regarding the type of decision that might have been made by a patient in circumstances that never took place. Each of my colleagues laid out a series of grounds for their assessment. Each of them provided respectable explanations, but these do not enable a conclusion one way or the other. All they do is to indicate the existence of two feasible options.

How should we decide the law under these circumstances, and what are the questions requiring a response? If the need for the operation at that time and the risks involved had been explained to the appellant, would she have consented to it? Who should bear the burden of proof – the patient, that she would not have consented, or the doctors, that she would have consented? What degree of proof is required? Should the probability be over 50%? Should it be less? Do doctors bear the burden of proof because of their failure to obtain informed consent, irrespective of what the appellant would have done had her consent been duly sought? Should we impose the burden of proof on them because of the evidentiary damage caused to her in that they did not obtain her informed consent, such that she cannot prove what would have happened if … ? These questions and others hover over our case and have no single agreed-upon response, save that informed consent for treatment should be obtained from a patient and that from the patient in this case, no such informed consent was obtained.

“Informed Consent”

4. Today, it appears to be undisputed that a doctor must obtain informed consent from a patient for medical treatment in general, and for performing an operation on his or her body in particular. This rule is expressed in the literature. See e.g. Shultz, supra [94] at 220-23. See also Giesen [86] at 254-56; M. Jones, Medical Negligence [90] at 283; Shapira in his article [77]. In the case-law, see CA 560/84 [2]; CA 3108/91 [1]. In legislation, see e.g. Patient’s Rights Law, ch. Four, titled “Informed Consent to Medical Treatment”, secs.13-16; Mental Patients Treatment Law, 1991, sec. 4(a); Use of Hypnosis Law, 1984, sec. 5; Anatomy and Pathology Law, 1943, sec. 6A(b), and the various Public Health Regulations. In medical ethics, this rule is anchored in society’s basic concept of a person’s right to autonomy and sovereignty over his or her own body. The concept is also accepted in other legal systems. See Canadian Supreme Court judgments Hopp v. Lepp (1980) [70] at 70-71; Malette v. Shulman (1990) [71] at 336; Schloendorff v. Society of New York Hospital (1914) [53] at 93 (Cardozo, J.); in England: Chatterton v. Gerson (1981) [59]. I shall not expand on the issue, which my colleagues addressed at length in their opinions.

Causal Connection in a Hypothetical Occurrence

5. A distinction must be made between a causal connection in past factual-actual occurrences, on the one hand, and causal connections in past factual-hypothetical occurrences, on the other. In past hypothetical occurrences, we are not dealing with an actual occurrence but with something that never happened, the consequences of which – had the event occurred – would also be hypothetical. We encounter such an occurrence in the case of an omission, when the question is asked – what would have happened if the injuring party had not omitted performing his or her duty but rather fulfilled it. The law does not preclude dealing with questions involved in proving hypothetical facts. Proving a hypothetical fact is often required as one of the basics of liability, in order to determine the extent of the injury and to quantify compensation. Not all omissions are in the same class. See e.g. Bolitho v. City and Hackney Health Authority (1997) [60]. Sometimes there is no difficulty involved in determining what actually would have happened were it not for the negligent activity, and sometimes a negligent occurrence in the past teaches us nothing about another event that might have occurred or been prevented were it not for the omission. The possibility of drawing a conclusion regarding “what might have been,” based on a retrospective hypothetical test, is limited to certain cases which do not concern us. We will restrict our discussion to the omission of failing to obtain the patient’s informed consent.

6. Consider an action based on a breach of the duty of care intended to prevent injury of a particular kind: The injury actually occurs, and we do not know how the plaintiff would have behaved in a hypothetical eventuality in which the defendant actually discharged his or her duty. In certain cases, the courts would be ready to assume, in the plaintiff’s favor, that had the duty been discharged, the injury would have been prevented. This assumption is often based on experience, which serves as a yardstick for such assumptions. See R. Shapira, Hamechdal Hahistabruti shel Dinei Haraayot – Chelek 1 – Bikorot Mesortiot [81] at 234-37. On the other hand, when the action is based on negligence in obtaining informed consent, and proof is required of a causal connection between the doctor’s negligence and the injury to the patient, it has been argued that assumptions should not be made in the plaintiff’s favor, given our ignorance of what he or she would have decided; nor does experience teach us anything in this respect. See W.S. Malone, “Ruminations on Cause-in-Fact” [103] at 85-88.

7. Where there is negligence in obtaining informed consent, the doctor failed to act in conformity with his or her legal duty. The case therefore concerns a negligent omission, related to the hypothetical situation of having made a human decision which in fact was not made, due to the negligent omission that preceded it. We must therefore examine what would have happened were it not for that omission. For the purpose of this examination, we substitute actual negligent behavior with alternative hypothetical behavior, which is counterfactual. This question concerns the factual and legal causal connection between the negligent omission and the injury caused by performing the operation without obtaining informed consent. In other words, we assume a hypothetical situation in which it is assumed that the patient would have consented to treatment if his or her informed consent had been requested. If the assumption is that the patient would have given consent, then even if such consent were not sought, it may be stated that there is no causal connection between the doctor’s omission and the performance of the operation and consequent injury. On the other hand, if the counterfactual assumption is that the patient would not have consented to the operation, then applying that counterfactual assumption would mean that when the operation was performed without his or her consent, there is a causal connection between the doctor’s omission and the operation and consequent injury.

The question of what would have happened had the doctor fulfilled his or her duty has no clear answer, since the scenario is one in which the doctor did not provide the information, the patient did not receive it, and the patient did not make a decision based on the information. Examining the causal connection in this kind of case requires an assessment of expected conduct when the offense was committed and hindsight during the legal inquiry. This state of affairs is described in the book by Powers & Harris:

[The event – T.S.C.] was not a past fact – it lay in the future at the material time [i.e. when the tort was committed – T.S.C.].

…

[The event – T.S.C.] lay in the future at the date of commission of the tort, but cannot at the trial date be established as past or present facts because the circumstances make this impossible.

M.J. Powers, N.H. Harris, Medical Negligence [91] at 403-04.

8. The difficulties inherent in proving causal connection in cases involving vague, hypothetical and speculative aspects have been described by scholars and courts in Israel and other parts of the world. Hart & Honor wrote that:

The main structure of ... causal connection is plain enough, and there are many situations constantly recurring in ordinary life to which they have a clear application; yet it is also true that ... these have aspects which are vague or indeterminate; they involve the weighing of matters of degree, or the plausibility of hypothetical speculations, for which no exact criteria can be laid down. Hence their application, outside the safe area of simple examples, calls for judgment and is something over which judgments often differ ... Very often, in particular where an omission to take common precautions is asserted to be the cause of some disaster, a speculation as to what would have happened had the precaution been taken is involved. Though arguments one way or another over such hypothetical issues may certainly be rational and have more or less “weight”, there is a sense in which they cannot be conclusive.

H.L.A. Hart, T. Honor, Causation in the Law [92], at p. 62).

Reference to the difficulty raised by the proof of causal connection in a human hypothetical occurrence can be found, inter alia, in Englard’s article [74], pp. 229-30:

Significant difficulties are raised in replying to the hypothetical causal question: What would have happened had they acted in accordance with the law? The answer necessarily depends on estimates and guesses, especially when the question concerns hypothetical human responses.

The plaintiff generally bears the burden of proving his or her claim. As such, the plaintiff may find himself or herself in a problematic situation in which the evidentiary difficulties of presenting proof are liable to thwart the claim, even when it is substantial. Justice Mazza addressed this fundamental difficulty:

And if, indeed, [the plaintiffs, the deceased’s dependents – T.S.C.] are required to prove the existence of a causal connection … how can they do it? Who can testify, veritably from the mouth of the deceased, that had the doctors apprised her of the extent of the risk involved in continuing the pregnancy after her water had broken so early, she would have chosen to avoid taking the risk and demanded that the doctors immediately discontinue her pregnancy?

CA 4384/90 Vaturi [3] at 191.

Giesen also notes this:

It would make little sense if the plaintiff could “in theory” bring an action in damages for breach of the duty of disclosure but would, as a general rule, find his claim shipwrecked because he cannot prove how he would have reacted in the hypothetical event of having been informed about the risks.

Giesen [86] at 35.

9. These difficulties stem not only from the fact that the plaintiff must prove how he or she would have hypothetically responded to the omission of another person (the doctor) [– trans], but also from the inadequacy of the tools at his or her disposal for proving the same. Some say that the evidentiary weight of the plaintiff’s testimony in such cases is small, if not nil, since the plaintiff is on the witness stand testifying as to what he or she would have decided in a hypothetical situation that never took place. The plaintiff's reply does not establish a fact but itself consists of a hypothetical conjecture. The plaintiff testifies while suffering from an injury caused by the medical treatment. The plaintiff testifies in a proceeding in which he or she is claiming compensation for the injury suffered, knowing that success in the claim depends on his or her reply. Even if the plaintiff is naïve and believes retrospectively, while suffering from the consequences of the operation, that he or she would not have agreed to the operation, what weight should be attributed to this belief? The Canadian Supreme Court expressed this problem well:

[There is an – T.S.C.] inherent unreliability of the plaintiff’s self-serving assertion. It is not simply a question as to whether the plaintiff is believed. The plaintiff may be perfectly sincere in stating that in hindsight she believed that she would not have consented to the operation. This is not a statement of fact that, if accepted, concludes the matter. It is an opinion about what the plaintiff would have done in respect of a situation that did not occur. As such, the opinion may be honestly given without being accepted. In evaluating the opinion, the trier of fact must discount its probity not only by reason of its self-serving nature, but also by reason of the fact that it is likely to be colored by the trauma occasioned by the failed procedure.

Hollis v. Dow Corning Corp. (1995) [72] at 643 [emphasis added – T.S.C.].

Solutions Under the Rules of Evidence

10. In view of the above difficulties, the courts searched for various ways of coping with such situations. The solutions they adopted for the difficulties that arose – which were of various types – involved developing the rules of evidence. The laws of evidence in civil law are designed to serve the purpose of the substantive law, which is to find a just and fair solution – in the framework of the law – for providing relief to whomever is entitled thereto, and to withhold it from the non-entitled. The laws of evidence do not establish rigid, insurmountable rules; they establish flexible rules to serve the purpose they were designed to realize. These rules are established in legislation, and they are given effect in accordance with judicial interpretation, which is duty bound to find – within the framework of the law – an appropriate and just solution for every case.

The basic and widely used evidentiary rule in the civil law of our system, as in many others, is that the plaintiff bears the burden of proof, and the degree of proof is determined by the balance of probability, as in the ancient rule that “he who deigns to take must bring proof.” Accordingly, a plaintiff wins the suit if he or she proves more than a 50% probability, in which case the defendant bears complete liability or responsibility. Failure to bring that degree of proof means that the plaintiff loses the suit. Prima facie, the rule is effective, fair, rational, uniform, and applicable in all of civil law. However, there are many and varied situations in which it is either inappropriate or impossible to implement this rule. One of them, perhaps the most typical, is the situation in which the plaintiff bears the burden of proving, based on the balance of probability, how he or she would have behaved and what he or she would have decided, had he or she been given the information relevant for making a decision. Negligence in obtaining the patient’s informed consent illustrates this dilemma in full force.

What is the applicable evidentiary rule for proving the causal connection in a case like ours, and who bears the burden of proof? What degree of proof is required? To which legal test should we resort? The various possibilities include: requiring the plaintiff, who bears the burden of persuasion, to prove the causal connection by the balance of probability and subjecting the plaintiff to the full risk of failing to discharge the burden; transferring the burden of proof to the defendant, so that the defendant bears the burden according to the balance of probability rule and subjecting the defendant to the full risk of failing to discharge the burden; leaving the burden of proof on the plaintiff but reducing the degree of proof required; transferring the burden of proof to the defendant but reducing the degree of proof required; and assessing the chances that the hypothetical event would have occurred and awarding compensation proportionally, even if the degree of the proof provided by the plaintiff amounts to a probability of less than 50%.

The importance of adopting any particular test lies in the variant results obtained by each one. If a plaintiff is required to prove a causal connection, and the degree of proof is based on the balance of probability, if the plaintiff is unsuccessful, he or she loses the case. However, if the plaintiff discharges this burden by demonstrating a probability higher than 50%, the defendant bears full liability for the damage - a situation of “all or nothing.” On the other hand, if the doctor bears the burden of proof, according to the balance of probability test, the doctor must prove facts related to the spirit, mind and personality of the specific patient, or of a reasonable patient (see further below). If unsuccessful, the doctor bears liability for the entire injury. Both these results are harsh and unsatisfactory.

11. As in all cases, the case before us too requires us to start with an examination of whether one can apply the basic rule, under which the plaintiff bears the burden of proving the causal connection as one of the foundations of his or her action, requiring the degree of proof to be the balance of probability. For the rule is that “a judge’s primary function …. is to do his best to decide, based on the balance of probabilities (in civil law), between the conflicting versions ...” CA 414/66 Fishbein v. Douglas Victor Paul by Eastern Insurance Service [32] at 466. Only if it transpires that this rule does not resolve the particular problems of the case do we attempt to find a solution in alternative rules which will lead to a more appropriate and just result.

12. The road to formulating an appropriate and satisfactory solution for difficulties arising in the present issue is a hard one, requiring us to pay attention to various competing values and interests. See Justice Shamgar's comments in CA 3108/91 [1] at 507-08:

The laws governing this subject should be allowed to develop and to gradually crystallize within a normative, formulated system, by way of proceeding from case to case. To that end, we should take the following principal considerations into account: the changing nature of the science of medicine; the relevant competing values in the particular context, including the patient’s right to control over his or her own body, the shared desire of the doctor and the patient for the treatment to succeed (including the need to create an appropriate framework for the exercise of medical discretion) ...

The problems we mentioned and the evidentiary difficulties presented by this case are not unique. They occupied scholars and courts in other countries who also deliberated and searched for appropriate solutions. The various solutions they proposed included transferring the burden of proof, reducing the amount and degree of proof, dividing up the burden of proof, and using presumptions, the doctrine of evidentiary damage, and the test of evaluating chances.

13. The Federal Supreme Court in Germany considered the issue in a case in which full medical information was not provided to a patient. The court emphasized the evidentiary difficulties which thwart the claims of those who are unable to prove how they would have acted had they received the full relevant medical information. In searching for a solution for this difficulty, the court chose to diverge from the ordinary burdens of proof and to impose the burden of proving the absence of any causal connection on the defendant, who had breached his duty of care, such that the defendant would be subject to the risk of failing to discharge the evidentiary burden. The scholar Giesen gives the following description of the solution, as formulated by the Federal Supreme Court in Germany:

… in such cases the defendant in breach of his duty has to bear the risk that the causal link cannot be established with regard to the question of how the plaintiff would have reacted had the defendant properly discharged his legal duty of disclosure.

Cited in Giesen, supra [86] at 352.

The Swiss Federal court adopted a similar approach. Giesen [86] at 353.

The Canadian Supreme Court also adopted the solution of easing the plaintiff’s burden of proof and transferring it to the defendant. Hollis [72]. A woman filed an action for the emotional and physical injury she sustained due to the leakage of silicon implants in her body that had ruptured. The defendants were the manufacturer of the silicon implants and the doctors who operated on her. The court ruled that the woman was not required to prove that had the manufacturer included a warning in the pamphlet that came with the product that the implants might rupture while inside her body, then the doctor would have informed her accordingly. It was sufficient for her to prove that had she been aware of this risk, she would have chosen not to undergo the operation. Once the plaintiff proved this, the burden of proof was transferred to the manufacturer, who failed to discharge it. In another case, the Australian Supreme Court ruled that the plaintiff must prove that the doctor had breached his duty to provide relevant information about the risk involved in administering the medical treatment and that this risk actually materialized. Having proved this, a presumption was established of a factual causal connection between the negligence and the injury, which in turn transfers the burden of proof to the doctor who must prove that there was no causal connection. See the recent case of Chappel v. Hart (1998) [44].

Regarding relaxing the degree of proof needed to establish the factual causal connection that compels a response to a hypothetical question:

There is no doubt that, in establishing the factual causal connection requiring a response to a hypothetical question ... the courts might actually reduce the amount of proof required, contenting themselves with doubtful conjecture. They do this for considerations of legal policy.

Englard [74] at 230.

It should be noted that the author draws attention to the fact that the courts did not adopt this rule but continued to adhere to the principle of guilt, recoiling from ruling against a defendant whose liability had not been proven at greater than 50% probability.

14. Another solution for problems of evidentiary difficulties lies in the doctrine of evidentiary damage. A doctor’s negligence in receiving informed consent creates difficulties in proving the causal connection and denies the plaintiff the possibility of proving how and what he would have decided had he received the required information under the appropriate conditions. As such, his claim would seem to be doomed to failure. This negligence caused evidentiary damage to the plaintiff which, under the evidentiary damage doctrine, may lead to liability for the plaintiff’s injuries being placed on the doctor’s shoulders. In some cases, the defendant bears full liability for the plaintiff’s injuries, whereas in others, only relative liability is imposed. See A. Porat, A. Stein, “Liability for Uncertainty: Making Evidential Damage Actionable” and A. Porat, Doctrinat Hanezek Haraayati: Hahatzdakot LeImutza Veyisuma Bematzavim Tipussim shel Ivadaut Begrimat Nezakim [82].

15. Another solution referred to in case law and the literature is the risk evaluation test. This test involves an evaluation of the odds of a particular event occurring. The rate of compensation is then determined as a function of those odds. This test was applied by the House of Lords in England when it addressed the subject of causal connection for cases involving speculation and hypotheses. The court considered an appeal of ruling by the Court of Appeals (Davies v. Taylor (1972) [61]) concerning a widow claiming compensation after her husband’s death in an accident. The couple was separated, but she claimed that they had been planning to get back together and that his death prevented that.

The House of Lords applied the risk evaluation test, preferring it to the balance of probability test. I agree with the conceptual basis for this preference, and it seems applicable to a case such as ours. The House of Lords took the view that the requirement that facts be proven based on the balance of probability is intended to establish the truth of facts that occurred in the past, not hypothetical facts which never happened. It is not applicable with respect to a hypothetical fact that might have occurred at a future date after the tort was committed, but which did not actually occur. The balance of probability test is not suited for proof of this kind of fact, since there is no way of establishing any factual finding in that regard. We cannot decide the truth or falsity of hypothetical facts, because deciding whether there is truth in a factual claim means deciding whether or not the fact existed. That is not the case with respect to a hypothetical fact that did not occur, and that can never occur. When there is a reasonable expectation of an occurrence even though the chances of its occurrence are less than balanced [less likely than not – ed.], this chance must not be ignored – unless it is negligible; the chance must be evaluated, and compensation should be determined accordingly. In this context, Lord Reid (joined by Lord Simon, Viscount Dilhorne, Lord Morris, and Lord Cross) wrote the following:

No one can know what might have happened had [the husband] not been killed.

… But the value of the prospect, chance or probability of support can be estimated by taking all significant factors into account … The court … must do its best to evaluate all the chances, large or small, favorable or unfavorable.

… [W]e are not and could not be seeking a decision either that the wife would or that she would not have returned to her husband. You can prove that a past event happened, but you cannot prove that a future event will happen and I do not think that the law is so foolish as to suppose that you can. All that you can do is to evaluate the chance...

Id. at 838 (emphasis added – T.S.C.).

And further on:

[Thus], all that you can do is to evaluate the chance. Sometimes it is virtually 100 per cent, sometimes virtually nil. But often it is somewhere in between. And if it is somewhere in between I do not see much difference between a probability of 51 per cent and a probability of 49 per cent.

Id at 838 (per Lord Reid) (emphasis added – T.S.C.).

Referring to the Davies [61] judgment, scholars Powers & Harris wrote the following:

The House of Lords held that this approach [i.e., the balance of probability] was erroneous. Where the issue is whether a certain thing is or is not true, or whether a certain event did or did not happen, then the court must decide that issue one way or the other. If there is a balance of probability in favor of it having happened, then for legal purposes it is proved that it did happen. In the instant case, however, whether the widow would or would not have returned to her husband was not a past fact – it lay in the future at the material time (the time of the husband’s death). Therefore, the chance of reconciliation had to be evaluated ... It is clear ... that the principle of the evaluation of a chance applies ... where events ... lay in the future at the date of commission of the tort, but cannot at the trial date be established as past or present facts because the circumstances make this impossible ... [T]he death of the husband which gave rise to the cause of action itself prevented a reconciliation from ever occurring ...

Powers & Harris, supra [91] at 403-04.

The final ruling was that the plaintiff did not even discharge the burden under the easier test of evaluating the chances, having failed to show that there was a real chance - as distinct from a negligible chance - that she would have returned to her husband had he remained alive.

16. This Court made similar comments in CA 591/80, Chayu v. Ventura (hereinafter - Chayu [33]). Referring, by way of affirmation, to the House of Lords judgment, it adopted its test of evaluation of chances in an action for damages. It must be stressed, however, that the evaluation of chances rule was established by the House of Lords for proof of the causal connection as a component of liability in torts cases, while in the Chayu case, Justice Bach adopted it in order to prove the causal connection required for proof of damage - loss of income:

In this context a clear distinction must be made … In an ordinary civil case, when the court considers a factual claim regarding what happened in the past, the party bearing the onus of proof must prove his or her story to a degree of persuasion exceeding 50%. Otherwise the court will assume that the alleged fact never actually occurred, and will altogether ignore the argumentation relying on it….However, when the claim relates to the chances of a particular event occurring in the future, which in the nature of things cannot be proved with certainty, it is only reasonable that the court should evaluate this chance and give it expression in its ruling, even if it estimates its persuasive value at less than 50%.

Id. at 398-99.

17. Readiness to adopt the method of proof by evaluation of chances was also expressed in the Vaturi [3] ruling at 191:

Having proved damage, and assuming that they succeed in proving breach of duty, the court will be able to determine, by way of a judicial assessment, whether it was the breach of the duty which caused the damage, and to what extent; this means that it may also be possible to make a probability assessment which can serve as a basis for charging the defendants for only part of the liability…. (Mazza, J.) (my emphases – T.S.C.).

Justice Mazza explains his position as follows:

Causal connection for our purposes does not require a finding according to the accepted tests of causality. These tests are required for (full) attribution or (absolute) negation of the defendant’s liability for the plaintiff’s injury. In other words: according to these tests, there is no partial causal connection, and the question to be decided is whether or not a causal connection existed, a situation of “all or nothing” … These tests enable decisions based on the balance of probability test, but they are inappropriate for cases in which the court faces the need to make a hypothetical assessment about how a certain patient would have behaved if the doctors had advised him or her in advance of the risks and prospects inherent in a particular medical treatment.

Id. at 19 (my emphases – T.S.C.).

A similar approach was expressed in CA 437/73 Aik (minor) v. Dr. Rosmarine [34].

Justice Barak (as his title was then) left for further examination the question of applying the ordinary probability test to prove a hypothetical occurrence

I wish to leave the following question pending: whether the rule shouldn’t be that where proof of probability is not related to proving a fact but rather to proving a hypothetical occurrence, the regular balance of probability is not required.

CA 145/80 Vaknin v. Beit Shemesh Local Council [35] at 144.

Balance of Probability, Transferring Burden of Proof, Assessing Chances and the Differences Between Them.

18. The various solutions regarding the fundamental problem of proving causal connection in cases involving hypothetical assumptions illustrate the difficulty inherent in leaving such cases to the authority of the ordinary rules of proof based on the balance of probability.

In the nature of things, a human decision about whether or not to consent to medical treatment is a direct consequence of numerous influences and varied considerations: the type of operation which the patient must undergo; the degree of necessity of the operation or medical treatment; the attitude of the patient to the risk – fear and revulsion, indifference or sympathy; the gravity of the patient’s medical condition; the possibility of choosing another treatment, different in quality and in the risks involved; the degree of the patient’s trust in the doctor and in the information given to the patient by the doctor; the patient’s willingness to rely on the doctor, and other, similar considerations. It is impossible to determine which of the considerations is the principal focus in the decision-making process. The weight and importance of the considerations when making a decision are not constant; they may change according to the character and inclination of any person considering whether to consent to or to refuse the performance of an operation on his or her body. It is impossible to determine the weight and importance that may attach to the numerous considerations that inform a person’s decision to consent to or to refuse the operation (the question of whether the appropriate test for examining the considerations is objective, subjective or a combination thereof will be discussed later on).

19. When the plaintiff bears the burden of proof, the balance of probability test places the risk of failure of proof squarely on him or her. Failure to substantiate the plaintiff’s claim by proving that the balance of probability indicates the existence of a causal connection means that the action will be rejected outright. Success in proving the plaintiff’s claim based on the balance of probability means that the doctor will be fully liable for the injuries which are causally connected to the doctor’s failure to obtain the patient’s consent. “After all, there is no half-way causal connection.” Vaturi [3] at 191 (Mazza, J.). The same applies when the burden of proof is transferred to the defendant, who must discharge it based on the balance of probability test. The same disadvantages occasioned by placing the burden of proof on the plaintiff based on the balance of probability test await the defendant, when the burden of proof is transferred to him or her, according to the same test. This solution transfers the plaintiff’s difficulties to the doctor, who now confronts the same difficulties faced by the patient who attempted to prove his or her claim. Transferring the burden of proof to the defendant might therefore lead to accepting claims which would otherwise have been denied. In both cases, the situation is one of “all or nothing,” and the test of transferring the burden of proof in either direction is not appropriate for proving a hypothetical human occurrence which never occurred in reality.

20. It would appear that in a situation which precludes proof of the causal connection between hypothetical occurrence and injury, other than on the basis of conjecture regarding assumed human behavior which never actually occurred, neither the test of balance of probability on the one hand, nor transferring the burden of proof on the other, is satisfactory. These tests do not provide the judge with the best tools for adequately protecting and balancing all the relevant interests.

This is particularly true of the doctor-patient relationship. This relationship consists of a delicate, fragile web of special trust, requiring an assessment of which is the most appropriate rule for imposing liability on the doctor. The doctor should be neither under-deterred nor over-deterred. Under-deterrence might be a by-product of a test of proof based on balance of probability, in view of the inherent difficulties confronting the patient, rendering it almost impossible for him or her to prove the claim. The plaintiff’s failure to prove his or her claim due to evidentiary difficulties, even when the claim is justified and substantial, compromises appropriate protection of the patient’s right and the inculcation of the duty of care owed by the doctor to the patient. On the other hand, the doctor’s failure to prove his or her defense due to similar difficulties compromises the protection of the doctor’s right not to be held liable for damage that he or she did not cause. Furthermore, transferring the burden of proof to the doctor who is sued might cause over-deterrence which could jeopardize the doctor’s activities, leading the doctor to practice defensive medicine.

In my view, in cases where the determination concerning the causal connection is not a determination of facts but rather the choice between hypothetical possibilities of human behavior, the appropriate test is that of evaluating the chances, under which the chances of a hypothetical event occurring are evaluated; this is the appropriate test to be applied, as a matter of policy as well.

In view of its flexibility, the test of evaluating the chances enables the imposition of relative and partial liability, and it precludes a situation where the doctor either is released from all responsibility or bears full responsibility in a situation of uncertainty. It would appear, then, that the above complex of considerations leads to the conclusion that proving the causal connection according to the evaluation of chances is the most appropriate and balanced solution which can provide an appropriate response for special situations of uncertainty in cases of this sort.

The Evaluation of Chances Test in Various Fields of Law

21. The chances evaluation test and preferring it to the balance of probability test are not foreign to our legal system, having served us in a number of fields. Accordingly, where it is necessary to prove damage, proof according to the balance of probability is not required, and proof of a lesser degree is sufficient. See e.g. FH 24/81 Honovitz v. Cohen [36] at 420-21:

It is necessary to examine … the chances for the existence of reliance in the future, were it not for the accident. These chances cannot be established based on the balance of probability but on the extent of reasonability. Therefore, even a chance of less than fifty percent will be taken into account, provided it is not zero or speculative (see Davies v. Taylor (1974)).

See also CA 20/80 Fleisher v. Laktush [37] at 628-29 and CA 410/83 Petrolgas Israeli Gas Company (1969) Ltd .v. Kassero [38], where the Court stated:

The intention is not that the plaintiffs had to prove, at the level of persuasion required in a civil proceeding, that the deceased had already planned or prepared to return to his country of origin; it would have been sufficient for them to prove the existence of such a possibility, provided that there was a real chance and it was not just a hypothetical.

Id. at 514.

A similar approach was taken with respect to proving the loss of chances of a hypothetical [physical – ed.] recovery. Justice Levin (as his title was then) wrote:

It could be said that determining a risk is like determining a fact that occurred in the past, and in that respect, a finding can only be established on the basis of the balance of probability …. In my opinion, the process involved is not one of determining facts in the regular sense, where the tendency is to determine what did or did not actually happen; rather it is a process of assessing “what would have happened if….”

CA 231/84 Histadrut Health Fund v. Fatach [39] at 319.

The same rule applies to proving a causal connection between hypothetical occurrences in claims based on breach of contract, where the alleged damage is loss of an anticipated transaction. In this context, Justice Barak (as his title was then) wrote that “in principle, chances can be evaluated, and even a chance of less than fifty percent warrants compensation…” CA 679/82, Netanya Municipality v. Tzukim Hotel Ltd. [40], par.8. See also CA 355/80 Nathan Anisivmov Ltd v. Tirat Bat Sheva Hotel Ltd [41].

Evaluating Chances as the Basis for Liability and the Principle of Blame

22. Although the chances evaluation test serves as proof of damage, it has not made its mark with respect to proving liability. The primary reason for this apparently lies in the perception that proving causal connection as one of the foundations of liability, according to the balance of probability, involves the concept of blame, and settling for the lesser proof than the balance of probability opens the door to imposing liability where no blame exists: The problem was addressed by Englard in his book:

It appears that the local courts are not inclined to relax the demand for the regular degree of proof, even regarding hypothetical causality. This trend in the local rulings is commensurate with their general approach in the field of liability in torts, typified by full insistence on the concept of blame in torts.

[74] at 230.

It seems to me that an approach demanding that, in every case, the plaintiff must provide proof based on the balance of probability test is not sufficiently flexible, and it does not address the problematic aspects of these situations which justify such flexibility. The evidentiary difficulties of proof constitute obstacles for the plaintiff who created a situation in which we must deal with hypotheses concerning the patient’s possible response. As such they justify the adoption of rules that prevent the dismissal of a substantial claim just because of the balance of probability test. Addressing the issue of placing the burden of proof on the plaintiff:, the Canadian Supreme Court stated that:

To require [the plaintiff] to do so would be to ask her to prove a hypothetical situation relating to her doctor’s conduct, one, moreover, brought about by [the defendant’s] failure to perform its duty.

Hollis [72] at 638-39.

Even in our system, rules have been developed within the rules of evidence relaxing the causal principle of “all or nothing.” One of them is the transfer of the burden of proof. In this context, Justice Levin (as his title was then) wrote:

In a legal system that, for a case of partial injury, operates on the basis of the causal principle of “all or nothing,” there is occasionally no option other than to develop evidentiary rules which soften that principle by transferring the burden of proof in certain cases to the defendant, in order to prevent unjust results.

CA 231/84 [39] at 320.

Evaluating the Chances - in Practice

23. One cannot ignore the fact that the balance of probability test creates uniformity and relative certainty, and that it is not easy to evaluate chances. However, when evaluation is possible, or when we find ourselves in a “tie” situation in which the scales are balanced, the plaintiff will receive a proportional part of the compensation for the damage incurred by means of imposing partial and proportional liability on the defendant.

It will be claimed that recognition of a burden of proof that is less than the balance of probability entails the risk of flooding the courts with baseless claims. Our response would be that arguments of the “flooding risk” have often been brought to the court’s attention, meriting little, if any, weight, both because the reality was a far cry from the predictions and also because the courts have found ways of dealing with claims which should never have been submitted in the first place. Furthermore, in principle, the plaintiff should be required to prove that there is a real chance that if the doctor had not been negligent in obtaining informed consent, the plaintiff would not have consented to undergo the operation. An insubstantial and minimum chance is not sufficient (de minimis non curat lex) to entitle the plaintiff to proportional compensation. In adopting the evaluation of chances as a test for proof, we do not intend to abandon the principle of blame and to entitle the plaintiff to relief on the basis of any proven possibility, however remote. This extent of proof is intended to overcome the insurmountable difficulties in presenting proof but not to create a right to compensation out of thin air. The House of Lords said in this matter:

[O]n an application of the de minimis principle, speculative possibilities would be ignored... To my mind the issue, and the sole issue, is whether that chance or probability was substantial. If it was it must be evaluated. If it was a mere possibility it must be ignored. Many different words could be and have been used to indicate the dividing line. I can think of none better than “substantial” on the one hand, or “speculative” on the other. It must be left to the good sense of the tribunal to decide on broad lines, without regard to legal niceties, but on a consideration of all the facts in proper perspective.

Davies [61] at 838 (Lord Reid).

In such cases, so long as the chance... was substantial or fairly capable of valuation the court ought, I think, to set a value on it even though it was less – and possibly much less – than a 50 per cent chance.

Id. at 847 (Lord Cross of Chelsea).

See also Justice Bach’s comments in the Ventura case [33] at 399:

When the court is convinced that the injured party had a chance … and this chance had been withheld from him or her due to the defendants’ actions, it would be only just for the court to give expression to the frustration of this chance in its judgment, provided that it has been convinced that the chance in question is not negligible, remote, or speculative.

Application of the Chances Evaluation Test: Subjective, Objective or Combined

24. In adopting the chances evaluation test in order to prove causal connection in our case, we must fill it with content. The problem is how to determine the degree of probability that the appellant would have made a particular decision, had her informed consent been obtained. Three possible tests present themselves: the subjective test, the objective test, or a combined test consisting of both. The subjective test is accepted on the European continent and in New Zealand and England. Giesen [86] at 347; Bolam v. Frien Hospital Management Committee (1957) [62]; D. Manderson, Following Doctors’ Orders: Informed Consent in Australia [105]. This test examines how the specific patient would have responded and what the patient’s decision would have been, had he or she received complete information. The objective test, accepted in Canada and various part of the U.S. (Riebl [67]; Canterbury, [48]), examines how a reasonable patient would have responded and what his or her position would have been, had he or she received complete, full information. The combined test is also used in Canada, and it examines how a reasonable patient would have responded, in that specific patient’s circumstances, and what the patient’s position would have been in relation to the proposed treatment if he or she had been given full information. See Giesen [86] at 343; M.A. Somerville, Structuring the Issues in Informed Consent [106]. My colleagues, Justice Beinisch and Justice Or, described these tests, one emphasizing the subjective test and the other stressing the objective test. Personally, I think that the combined test is the most appropriate.

25. Each of the aforesaid tests employs a different method for protecting the relevant values and interests. The subjective test provides maximum protection of the patient’s interest in ownership of his or her body and ensures broader protection of the autonomy of the patient’s will. This test is lenient with the patient. The objective test provides less protection of these interests, since it is less concerned with the wishes of the specific patient, focusing rather on the wishes and considerations of a reasonable patient. This test is lenient with the doctor. The combined test strikes a balance between the other two. Choosing either of the first two tests affects the manner of enforcing the doctor’s duty of care in receiving informed consent. Choosing the objective test may signal to doctors in general that failure to give information of importance to a specific patient does not impose any liability and that they therefore may refrain from giving it. Choosing the subjective test forces doctors into the difficult position of having to consider the patient’s subjective characteristics, even where they are characteristics which would not reasonably have been considered and which are not typical of a reasonable patient. The objective test minimizes the need to cope with the problematic testimony of the plaintiff, even when it is not tendentious and is given in good faith. At the same time, it cannot be said that the possible response of the reasonable patient accurately reflects the possible response of a specific patient who is not necessarily the reasonable patient. These difficulties, and considerations similar to those listed above, tip the scales in favor of adopting the combined test; its subjective aspect ensures that weight is attached to the special circumstances of the patient, the patient’s character, concerns, ability to weigh the considerations specific to himself and herself, and the like, while its objective aspect ensures that liability is not imposed on doctors in situations in which refusal to accept treatment could be considered an unreasonable deviation.

Application of the Law in Our Case

26. It appears to me that in applying the combined test, it is difficult to reach a conclusion as to whether or not Appellant would have agreed to perform the operation on her shoulder. This is similarly true of any other test (objective or subjective), since we have no real information, and we have nothing to rely on apart from conjecture. To illustrate the dilemma, it is sufficient to review the arguments presented in the judgments of my colleagues, Justice Or and Justice Beinisch. Both of them examined the question of causal connection using the combined test and in practice applying the balance of probability rule, but they reached opposite conclusions. Personally, concerning our case, I think it neither possible nor appropriate to decide on the basis of the balance of probability, be it on the factual level, the legal level, or on the level of proper policy for the examination of such cases.

Regarding our case, I do not believe that the events of the past provide any indication as to what the appellant would have decided, if her informed consent had been sought, and if the relevant information had been given to her for the purpose of choosing whether to perform the operation, in circumstances appropriate for making a decision. The question of what the appellant’s decision would have been if the doctor had fulfilled his duty is a hypothetical assumption about human behavior that never occurred, and it requires formulating a decision based on various and varied considerations. The most that can be said is that appellant might have agreed to the operation, and by the same token that she might have refused. This being the case, it is appropriate to award the appellant compensation for half the damage caused to her as a result of the operation, in accordance with the chances evaluations test.

Compensation for Damage Due to Violation of the Right to Autonomy

27. Having concluded that appellant should be compensated for the bodily injury caused to her, a further question arises. Given that Appellant’s informed consent to perform the biopsy was not received, is she entitled to compensation under the tort of violation of the right of autonomy? And, assuming she is, should such compensation supplement the compensation for her bodily injury, replace it, or be awarded independently, and what is the appropriate rate of compensation for such damage?

In his opinion, my colleague, Justice Or, conducted an extensive analysis of the general elements of a person’s basic right to autonomy and specifically regarding a person’s sovereignty over his or her body in the context of consent to medical treatment. He concluded that violation of autonomy should be viewed as a separate head of damage and awarded compensation to appellant under that head. My colleague, Justice Beinisch, also considered the importance of this basic right but stated that the appellant is entitled to compensation for the full damage caused to her, and that she should not be awarded additional compensation under the head of violation of autonomy. Both of them provided extensive reasoning for their positions, and indeed the issue and its adjudication are far from simple. Having given the matter extensive consideration in all its relevant aspects, I concur with the position of my colleague, Justice Or, and I shall add a few comments of my own.

The Right to Autonomy and Informed Consent to Medical Treatment

28. The value of a person’s autonomy is among the primary and fundamental values in our legal system, as in other legal systems. The right to autonomy means that one is free to shape one’s will as one deems fit, to voluntarily and independently determine one’s lifestyle, to make decisions regarding actions and to have a certain degree of control over one’s fate. On the conceptual expressions of the term autonomy, see J. Raz, Autonomy, Toleration and the Harm Principle [107] at 314 and J. Katz, Informed Consent - Must it Remain a Fairy Tale? [108] at 83.

29. The right to autonomy is anchored in the recognition of a person’s value and dignity – values that are entrenched in the Basic Law: Human Dignity and Liberty. This is a “framework right” – in the language of President Barak – constituting, as a matter of fact, a flowing spring for the complex of various rights. Barak [76] at 357-361. The right to autonomy is also based on the right to privacy. Basic Law: Human Dignity and Liberty; Protection of Privacy Law, 1981. A patient’s right to freedom of decision with respect to his or her body, health, and receipt of medical treatment derives from the patient’s right to autonomy. See the Patient’s Rights Law, secs. 1 and 13. Some believe that by virtue of a person’s sovereignty over his or her body, that person has the right to object to an operation designed to save his or her life and to refuse treatment, even if doing so endangers the patient’s life. Airedale NHS Trust v. Bland (1993) [63] at 860, 889, in the judgment of the House of Lords.

This approach was recently affirmed in the Court of Appeals ruling in St. George’s Healthcare NHS Trust v. S (1998) [64] at 685-86. The case concerned a pregnant woman who refused to undergo a Caesarean operation, deciding to give birth naturally, despite her medical condition which created a risk to her fetus, all of which she was aware. At the hospital’s request, an order was given ex parte permitting the performance of the Caesarean operation without obtaining the woman’s consent. The operation was performed, and the woman filed a complaint in court against the decision permitting the performance of the operation on her body. The court ruled that performing the operation without her consent constituted assault, and that the declarative order issued previously could not serve as protection against a claim for damages.

The Rise of Autonomy and the Gradual Decline of the Traditional Approach

30. Consent to perform medical treatment is one of the outstanding situations which test the degree of protection provided by law for a patient’s autonomy. A person’s right to autonomy in receiving medical treatment has not always been taken for granted. The centrality of a person’s right to autonomy in making decisions concerning medical treatment, and the rejection of the traditional approach which gave preference to the doctor’s control of the patient’s body over the patient’s control of his or her own body, are concepts that have been emphasized anew over the past few decades. Informed consent to medical treatment has been recognized as a tort doctrine in the judgments of the Appeals Court of the State of California since 1957. C.J. Jones, Autonomy and Informed Consent in Medical Decisionmaking: Toward a New Self-Fulfilling Prophecy [109] at 388-89 and citations therein.

The historical perception, still adhered to by some today, is based on the principle that a person in need of medical treatment waives his or her will and autonomous status from the moment of requesting assistance from the doctor, placing his or her body and health in the doctor’s hands along with the authority to decide on the treatment to be given. According to this perception, the doctor has dominance over the patient’s body, and the doctor makes all the decisions. This approach derived, inter alia, from the gap in knowledge that separated the doctor from the patient, given that the doctor possesses the professional and scientific tools and skills to make the appropriate decision about the medical treatment required by the patient. On this point, Shultz says:

…the patient was seen as making only one key decision, to place herself in a given doctor’s care, thereby delegating all subsequent authority to the doctor. Such a model assumed that the patient lacked the technical ability to make medical decisions, and that expertise justified the doctor’s making decisions on the patient’s behalf.

Shultz [94] at 221.

31. The perception giving primacy to the doctors’ opinion received expression in the English judgment Bolam [62], which established that the criterion for violating the duty of care applicable to the doctor to give the patient information on his medical treatment was based on “medical judgment.” This principle was applied by a majority opinion of the House of Lords in Sidaway v. Governors of Bethlem Royal Hospital (1985) [65], with Lord Scarman dissenting. The majority ruled that the question of whether failure to inform a patient of the risks entailed in performing a treatment may be considered negligence by the treating doctor is governed by the principle established in Bolam [62], under which giving a patient medical information and determining the extent thereof is a matter within the scope of the doctors’ medical expertise. The principle established in the judgment and its progeny was the subject of extensive criticism. See J. Keown, Burying Bolam: Informed Consent Down Under [110] at 17. Lord Scarman’s dissenting opinion was adopted as the binding rule in the ruling of the Australian Supreme Court in Rogers [43] which rejected the Bolam principle [62]. According to this opinion, the criterion for examining the duty of care and the extent of the duty to disclose information will be established by the court according to the law’s perception of the doctor’s duties in this matter, paying attention to the patient’s right to sovereignty over his or her body, and not only according to a medical opinion concerning the custom and accepted practice in medicine at a given time. The Australian Supreme Court said:

…it would be illogical to hold that the amount of information to be provided by the medical practitioner can be determined from the perspective of the practitioner alone or, for that matter, of the medical profession.

Rogers [43] at 52.

This principle was also adopted in the judgment of the Federal Appeals Court in the District of Columbia in the case of Canterbury [48], which stated:

… we [cannot - T.S.C.] ignore the fact that to bind the disclosure obligation to medical usage is to arrogate the decision on revelation to the physician alone. Respect for the patient’s right of self-determination on particular therapy demands a standard set by law for physicians rather than one which physicians may or may not impose upon themselves.

Id. at 784.

This statement shows that in recent decades there has been a decline in the popularity of the traditional approach - based on a paternalistic attitude - in favor of the trend that focuses less on the treating doctor and more on the patient, who has been recognized as the central actor in formulating the decision on performing medical treatment on his or her body. However, changing the center of gravity and placing the patient at the focus of the decision making process is a slow procedure, to be done step-by-step.

32. The trend toward regarding the patient as the focus of medical activity originated in growing awareness of basic human rights and the need to protect them in all areas of life. This trend also stems from the transition to modern and developing practices of medicine. Medical information is available to all, and therapeutic alternatives are at the disposal of all patients. These products of modern medicine have also contributed to displacing the treating doctor from the position of exclusive advisor in the choice of appropriate medical treatment. This perception is apparently the assumption underlying the provisions of Section 7 of the Patient’s Rights Law, which establishes the patient’s right to a second medical opinion before deciding to undergo any medical treatment.

Preferring one method of treatment over another may involve various complex considerations which the patient weighs in accordance with his or her desires, stances, concerns or hopes. See Shultz [94] at 221-22. The prevalent contemporary view is that giving a patient medical information prior to performing a medical procedure on his or her body is no longer considered an activity within the exclusive expertise of the doctor, like the determination of diagnoses and prognoses, and accordingly, there is no justification for preferring the professional-medical viewpoint rather than the patient’s individual approach. The Australian Supreme expressed this view in Rogers [43]:

[N]o special medical skill is involved in disclosing the information, including the risk attending the proposed treatment. Rather, the skill is in communicating the relevant information to the patient in terms which are reasonably adequate for the purpose, having regard to the patient’s apprehended capacity to understand that information.

Id. at 52.

This was also Shultz’s view:

[T]he more intense and personal the consequences of a choice and the less direct or significant the impact of that choice upon others, the more compelling the claim to autonomy in the making of a given decision. Under this criterion, the case for respecting patient autonomy in decisions about health and bodily fate is very strong.

[94] at 220.

33. The duty of those treating to receive the informed consent of the patient for the medical treatment is primarily intended to protect the basic right of a person in need of medical treatment to autonomy over his or her body and will. See Justice Cardozo’s opinion in Schloendorff [53]; CA 3108/91 [1] at 507; LCA 1412/94 [18] at 525. The decision whether to receive a particular medical treatment, if at all, should be a balanced, voluntary, and independent decision of the person receiving the medical treatment.

[I]t is established that the principle of self-determination requires that respect must be given to the wishes of the patient ... the doctors responsible for his care must give effect to his wishes, even though they do not consider it to be in his best interests...

Airedale [63] at 866 (Lord Goff of Chieveley).

Information is Critical in Order to Reach an Autonomous Decision

34. The patient’s wishes to perform or refuse the treatment cannot be informed and intelligent unless they are based on the information necessary for making the decision in question. See Powers and Harris [91] at 322. Where the patient is not aware of the risks, prospects and implications of the treatment about to be undergone, the existence of alternative treatments, and the implications thereof, the patient’s wishes cannot be regarded as his or her own, nor can the choice to accept or refuse treatment be regarded as a real choice. See Canterbury [48] at 780. Accordingly, failure to give the patient information or giving the patient partial and incomplete information is tantamount to violating a person’s right to autonomy over his or her body, since it detracts from the patient’s ability to formulate an informed and intelligent decision about whether to accept the medical treatment.

The Doctor – Patient Relationship

35. The patient’s dependence on the doctor and their respective interests creates a great deal of dualism in the relationship. On the one hand, the doctor, whose goal is the patient’s health, frequently believes that he or she best knows which treatment should be given to the patient and how the patient’s illness can be cured. On the other hand, the patient might examine the same facts weighed by the doctor through a slightly different prism, in the framework of which he or she may consider a variety of subjective factors, including the quality of life he or she may expect following the success or failure of the treatment and similar considerations – which are not always taken into account by the doctor. In that situation, the patient’s right to autonomy in making the decision concerning medical treatment, as an expression of a person’s right to dignity, is a value worthy of protection. This means recognition of the patient’s independence and status as a participant in the decision making process. The following comments of D. Feldman give expression to this view:

The notion of autonomy is tied to that of dignity. In order to develop and exercise a capacity for self-determination, one needs to take oneself and others seriously as moral agents. One aspect of dignity is self-respect, which … includes respect for one’s own and other people’s moral rights…

D. Feldman, Secrecy, Dignity or Autonomy? Views of Privacy as a Civil Liberty [111] at 54.

The scholars Twerski & Cohen made similarly appropriate comments:

The right to participate in, and indeed, make important decisions concerning one’s health is a critical element of personal autonomy … The legal system should protect these rights and provide significant recompense for their invasion.

Twerski & Cohen, supra [96] at 609.

Recognition of the Right to Compensation Due to Violation of Autonomy: Framework of Doubts and Critical Arguments

36. The critical nature of the information and its centrality in the patient’s autonomous decision-making process requires us to consider whether the law protects the patient’s right to receive the information that is essential to his or her case, and to decide his or her fate with respect to the medical treatment, what that protection is, and whether the extent of the existing protection adequately satisfies the patient’s right to autonomy, including the right to receive information.

A review of the judgments rendered in various countries worldwide indicates that there is a real gap between judicial rhetoric which speaks in favor of the right to autonomy and its operative expression, which lacks effect:

…. judges have made impassioned pleas for patient self-determination, and then have undercut them by giving physicians considerable latitude to practice according to their own lights.

J. Katz, The Silent World of Doctor and Patient [93] at 49.

One of the obstacles to the recognition of the right to compensation due to violation of autonomy is that most courts in the various legal system consistently demand proof of a causal connection between breach of the duty to provide information regarding the risks of performing a medical procedure and the real damage caused by the medical treatment. The courts have consistently ruled that in order for the plaintiff-patient to succeed in a claim filed against a doctor for breach of the duty to give information and negligence in obtaining informed consent, the patient must prove that the risks involved in the treatment –about which the patient was not given information – actually materialized and caused him or her injury. See Canterbury [48] at 790.

U.S. courts have not recognized the duty to give medical information to the patient as independent grounds for compensation, based exclusively on the breach of the duty to give information, independent of the existence of real damage caused by the breach of the duty. In fact, the courts did not even recognize the breach of the duty as constituting a separate head of damage within the framework of negligence. Jones [109] at 394-95, 426.

In Israel as well, the violation of autonomy has not been recognized as constituting grounds for an action or a separate head of tort for which compensation is due. Should it be recognized as such? My colleague, Justice Or, answered the question in the affirmative, and I concur with his opinion.

37. The requirement of the existence of a causal connection between the breach of the duty to give medical information and to obtain informed consent and the real damage caused by the medical treatment has restricted the award of compensation to real, physical or mental, injury caused to the patient due to the medical treatment. This demand has been the subject of scathing criticism, to the effect that the demand for causal connection undermines the theoretical and conceptual justification of the requirement of informed consent to performing a medical procedure. This position found expression, inter alia, in the following statement:

… courts have tended to impose causation requirements that appear to conflict with the underlying theoretical justifications of the informed consent doctrine itself.

M.A. Bobinski, Autonomy and Privacy: Protecting Patients from their Physicians [112] at 343.

Violation of the right to obtain information occurs as soon as the doctor breaches his or her duty. It inheres in the tortious behavior as such. It therefore seems that the causal connection – constituting the basis for liability for negligence – is an integral element of the doctor’s breach of duty. To that effect, it is immaterial whether the negligence relates to the breach of duty or the violation of the autonomy. Consequently, on a practical level there is no justification for making the protection of the patient’s right to autonomy contingent upon proof of the causal connection between the breach of the duty and the actual damage caused by the medical treatment.

38. As mentioned above, there is no unanimity concerning recognition of entitlement to compensation due to violation of the right to autonomy where there is no causal connection with the actual injury caused by the failed medical treatment. According to those who believe that the right to compensation due to violation of autonomy should not be recognized, the information given to the patient concerning the risks involved in performing medical treatment contains technical details that are within the doctor’s field of expertise, and the patient does not have the appropriate tools, the required skills, or the knowledge to properly understand and appreciate such information. As proof, they point to many cases in which patients prefer that the doctor advising them on what medical treatment is best decide for them which procedure should be performed. Some even argue that a treating doctor convinced of the wisdom of the proposed method of treatment might present the information in a manner that leads the patient to adopt the proposed treatment which the doctor considers to be the most effective in the circumstances. This might make the consent superfluous since, in any case, it is not informed consent. See Jones [109] at 406.

These arguments represent a paternalistic approach, predicated on a perception of the patient’s inability to process and weigh information with which the patient is not conversant, patients’ fears about taking responsibility for their medical fate, and the doctor’s ability to maneuver the patient into following the doctor’s lead. These arguments contribute considerably to preserving the doctor’s superior status vis-à-vis the patient in the decision-making process. Indeed, there are certainly cases in which patients may be about to make a decision regarding medical treatment, without having properly understood the medical information, or they prefer that the doctor decide for them, or they make ostensibly autonomous decision based on latent persuasion made in good faith by the doctor. Nonetheless, I do not think that negating the recognition of the right to compensation due to violation of autonomy is the correct response to these arguments. The response should be to increase patients’ awareness of their right to decide autonomously and to emphasize the doctors’ ethical duties, such as their duty to explain the medical information in simple language that is clear to every particular patient in accordance with his or her circumstances. In this context, one may adopt a range of methods that will enable the patient to absorb and process the medical information given. See Natanson v. Kline (1960) [54] at 1106; Cobbs v. Grant (1972) [55] at 11; Jones [109] at 412-14.

39. Another difficulty, which should also be noted, is the one raised in her opinion by my colleague, Justice Beinisch. My colleague referred to the concern that the attempt to strengthen the right to autonomy will paradoxically lead to its weakening, since the courts might avoid confronting the need for the complex determination of the causal connection so essential for awarding compensation for bodily injury, instead remaining content with nominal compensation based on violation of autonomy. Personally, I do not think that this concern is sufficient to negate proper compensation under this head of damage, especially since compensation for violating autonomy – as explained below – should not replace compensation for bodily injury, but should be in addition thereto.

40. Summing up, recognition of the right to compensation due to violation of autonomy protects the interest of patient participation in the decision-making process in his or her case, as well as the patient’s independence as an entity possessing a will and not just as an object for the performance of a medical procedure. Protecting a person’s right to receive the relevant information about his or her case is vital to assuring the right to autonomy in making decisions about medical treatment. This is the basis for the doctor’s duty to obtain the patient’s informed consent concerning the patient’s treatment, and when this duty is breached, the patient deserves compensation for the violation of his or her personal autonomy.

Despite the existence of various grounds and considerations indicating the difficulties inherent in recognizing the right to compensation due to violation of autonomy, it appears that they can be appropriately dealt with and adequately resolved as indicated above, so that these arguments do not inveigh against the conclusion that the right to compensation for violation of autonomy should be recognized.

Compensation for Violation of the Right to Autonomy: Independent Grounds or Head of Damage?

41. What is the appropriate legal domain for the protection of a patient’s right to autonomy over his or her body?

A number of scholars have expressed the opinion that anchoring the protection of the right to autonomy under the damage head of violation of autonomy as part of the offense of negligence does injustice to the protection of the right to autonomy, maintaining that it is preferable to anchor the protection – if at all – as an independent cause for action which does not require the existence of a causal connection between the violation of autonomy and the actual injury as a condition for imposing liability. See N.P. Terry, Apologetic Tort Think: Autonomy and Information Torts [113] at 193-94; Bobinski [112]. These scholars maintain that with respect to negligence, the patient may succeed in his or her claim only if he or she proves that the doctor was negligent in obtaining the informed consent, according to tests prevailing in the context of the tort of negligence, which require the application of objective criteria that do not give a full answer to the patient’s right to autonomy. Despite that argument, I think that protection of the right to autonomy as part of the offense of negligence could constitute appropriate protection, since it takes into account the heavy burden imposed on the doctors to ensure the patient’s participation in all respects, on the one hand, and the patient’s interest in receiving full information concerning his or her case, on the other. Accordingly, it would appear that the legal domain of negligence – as a means for protecting the patient’s right to autonomy – could constitute an appropriate balance between the conflicting interests.

42. Indeed, it is possible to protect a person’s right to autonomy in general, and to receive medical information in particular, even within the framework of an action based on violation of a basic right of supreme importance, which is akin to a constitutional offense. The development of grounds for a claim based on violation and infringement of basic rights is a complex issue, just now emerging in the Israeli legal system. Recognition of the existence of constitutional grounds for a claim raises a spate of difficulties and questions which have not yet been clarified and discussed in court precedents and scholarly writings, such as which rights should be protected on constitutional grounds; what are the tests for protecting these rights; what are the appropriate remedies for violation of a constitutional right, and so on. At this stage, when these issues have yet to be discussed in depth, it seems appropriate to take another track suited to the solution of the problem confronting us. We can content ourselves with the determination that a person’s right to autonomy should be afforded protection in the legal domain of an independent head of tort separate from those known to constitute negligence. The decision on the weighty question of whether the right of autonomy should even be protected as an independent cause of action ought to be left for an appropriate occasion. See Barak [76] at 681.

Compensation for Physical Injury and for Violation of Autonomy: the Appropriate Relationship Between Them

43. What is the appropriate relationship between compensation granted under the various heads of tort recognized as part of the offense of negligence and compensation under the damages head of violation of the right to autonomy, where the imposition of the liability and the compensation are based on the doctor’s failure to obtain informed consent?

When the doctor’s negligence, constituting the basis for compensating the patient, is expressed by failure to obtain informed consent to perform the treatment, the question arises whether the compensation award for bodily injury is also compensation for violation of autonomy, meaning that by paying separate and cumulative compensation for violation of autonomy, one is, in practice, paying double compensation.

The fact is that there is only instance of negligent behavior constituting the basis for imposing liability on the doctor, consisting primarily of the doctor’s failure to receive informed consent prior to performing the medical procedure. This negligent behavior generates various types of damage, on different levels. The violation of the right to autonomy may find its expression on different levels, both in inherent and direct but intangible damage, which is a direct consequence of the actual violation of the right, and in indirect but tangible damage. Bodily injury may be caused because of the failure of the treatment, which would never have been performed on the patient if his or her consent had been sought and refused. Intangible damage may be the result of the failure to obtain informed consent, and denial of the patient’s right and ability to decide autonomously about what should be done with his or her body.

44. In my opinion, the head of tort concerning violation of autonomy should be viewed as an independent head of damage in all respects, to be added to the compensation due for bodily injury or other damage, and should not be considered a substitute. These are separate heads of damage, providing protection for different interests. Recognition of the right to compensation due to violation of the right to autonomy provides protection for the patent’s autonomous status in the decision-making process and his or her right to receive information for the purpose of formulating a position about the performance of a medical procedure. Twerski & Cohen [96] at 649. As a matter of principle, protecting these rights and interests should not be conditional upon providing compensation for the real harm caused by the medical treatment, which protects the interest of preservation of a person’s bodily integrity. Compensation for the bodily harm caused by failure of the treatment does not give expression to the intangible damage caused to the patient due to the violation of his or her right to autonomy. For that reason, the fact that two heads of tort are located under one roof does not mean that compensation therefore constitutes double compensation, since the interests protected by each head of tort are separate and different. The argument that bodily harm precludes compensation for damage caused by violation of autonomy does injustice to the appropriate protection for the specific interest inherent in each of the said heads of damage. Accordingly, from a principled-legal perspective, it appears to me that there is neither reason nor justification to cancel the one because of the other.

At the same time, there might certainly be reciprocity between the two heads of tort. In other words, the intensity of a person’s feelings due to violation of his or her right to autonomy might change, inter alia, in accordance with the result of the treatment performed on the patient’s body without obtaining informed consent, the extent of bodily harm caused, the importance of the information which was not given to the patient due to the doctor’s negligence, etc. For example, where the failure of the treatment caused bodily harm to the patient, the intangible injuries due to the violation of the right of autonomy might be regarded as grave. And vice versa: the success of the medical treatment – despite the fact that it was performed without obtaining informed consent – might appease the patient and calm him or her to such an extent that the damage caused is minimal (de minimis non curat lex).

Evaluating the Damage Due to Violation of Autonomy

45. What, then, is the extent of the damage and how should it be evaluated? What test should we use to evaluate the damage to a person’s autonomy? Should we adopt the perspective of the specific patient, and accordingly examine how he or she feels as a result of not having received the information (subjective test)? Or should we examine the damage caused by the violation of autonomy, as seen through the eyes of the reasonable patient (the objective test)? Or perhaps we should adopt another point of view, incorporating the objective elements while placing emphasis on the special and unique circumstances of the patient before us (the combined test)?

I will preface my remarks by saying that the combined test is the one I proposed as the most suitable for assessing the chances that the patient would have made a particular choice, had his or her informed consent been sought (supra paras. 24-25). The reasons I presented there are also appropriate in the current context. An expression of the combined test can be found in the following:

That [doctor-patient - T.S.C.] relationship also gives rise to a duty to provide information and advice. That duty takes its precise content, in terms of the nature and detail of information to be provided, from the needs, concerns and circumstances of the patient. A patient may have special needs or concerns which, if known to the doctor, will indicate that special or additional information is required…. In other cases, where, for example, no specific inquiry is made, the duty is to provide the information that would reasonably be required by a person in the position of the patient.

Rogers [43] at 54.

46. Evaluating an intangible injury raises numerous difficulties, and the effort to quantify it is particularly difficult. In applying the combined test in order to evaluate the harm caused by violation of autonomy, we must examine the injury caused while adopting the viewpoint of a reasonable patient, and we must also express the individual and autonomous aspects of the particular patient:

The measure of the non-pecuniary harm to be compensated depends, from the strictly tortious point of view, upon the extent to which an individual values his or her autonomy, taking into account his or her mental and emotional reaction to the violation.

Englard [83] at 164.

For the purpose of evaluating the injury, the court must assess the degree of the violation of the patient’s autonomy caused by the failure to give the patient the information that he or she should have been given. And note: the information which the doctor is obligated to give the patient is not all the information which the patient would like to receive, but only such information which, if omitted, would constitute negligence in obtaining informed consent. Accordingly, when the court evaluates the harm caused to the patient due to the violation of autonomy, it must examine the damage caused due to failure to provide the specific information which the doctor was duty bound to give to the patient.

47. The doctors’ duty to give the information is not uniform, and it does not cover all particulars of the information down to the remotest of risks. Vaturi [3] at 182. Failure to give information on particular and real risks which are not “far-fetched or fanciful” might also constitute negligence on the doctor’s part. Rogers [43] at 54. Accordingly, both the doctors and the courts must consider the extent and nature of the information that must be provided by the doctor, and they should address the special value of the information not provided, compared with the information provided (see the Patient’s Rights Law, sec. 13). The extent of the violation might be more severe if the patient believes that the information not provided could have altered his or her position regarding performance of the medical treatment. In this context, it is appropriate to take into account the patient’s position and attitude to the provision of the medical information concerning himself or herself. In many cases, the patient freely forfeits his or her own free will, leaving the decision-making solely to the doctor, and even asking not to be apprised of his or her medical condition.

… in the context of doctor-patient relationship, the latter’s genuine desire for full autonomy in the decision-making process is rather rudimentary. It is a well-known and widespread phenomenon that people are reluctant to assume full responsibility for their personal fate, especially in cases of difficult medical decisions… At present, the wish for autonomy in medical decision-making is far from being fully developed in the patient.

Englard [83] at 164-65.

Under this state of affairs – so the argument goes – protecting autonomy under the head of tort awarding compensation, where no harm was caused to the patient, is not appropriate.

If patients lack the consciousness of self-determination, why compensate them for its assumed loss? In the absence of harm, there is no place for compensatory rectification.

[83] at 165.

Indeed, there will be cases in which the patient will prefer not to receive the medical information and to leave the medical decision-making to the doctor, because of the patient’s fear of receiving information about his or her real medical condition and of making his or her own weighty decisions. Ostensibly, this approach is not commensurate with the perception of a person as an autonomous entity, although a person’s refusal to take responsibility for making an autonomous decision may also derive from the autonomy of his or her will. In any event, in order to evaluate the extent of the damage caused by violation of autonomy, it is necessary to take into account the position and wishes of the specific patient regarding receipt of the medical information, because if the patient is not interested in receiving the information and making an autonomous decision, there is no basis to the claim that this autonomy was violated.

48. Another consideration that might arise when evaluating the damage caused concerns the consequences of the treatment performed. I do not think it appropriate to make exhaustive observations on this issue, and each case should be considered on its merits, in accordance with its circumstances. Nonetheless, it would appear that the results of the treatment performed could be of significance when evaluating the damage caused by the violation of autonomy. For example, the fact that the medical treatment succeeded, despite the fact that it was provided without obtaining informed consent, might render the damage caused by the violation of autonomy theoretical or negligible (de minimis). On the other hand, where no informed consent was given, and the treatment failed and even caused bodily harm, the failure of the treatment may exacerbate the injury to the patient and to his sensibilities. In any event, the compensation is not intended exclusively as punitive or theoretical compensation.

The Burden on the Doctors – Is It Excessive?

49. Recognition of the right to compensation for damage caused due to violation of autonomy is not free of doubts and difficulties. It is clear that that recognizing the head of tort entitling a person to compensation due to violation of autonomy per se imposes a heavy burden on the treating doctors. Recognition of this head of damage might expose them to legal liability not only when they are negligent in obtaining informed consent and where there was bodily and other injury, but also in the case of successful medical treatment where they are nevertheless liable for intangible injury caused by the violation of the right. Indeed, the burden imposed on the doctors is a heavy one. At the same time, the power held in the doctors’ hands may have a significant –if not irreversible – impact on the patient’s life-style and health. Consequently, despite the doctors’ well-intended desire to benefit the patient, they should always keep the patient's wishes in mind.

50. At the same time, it is appropriate to state that fear of “defensive medicine” is not unfounded (CA. 2989/95 [27] at 698), and it is occasionally raised when doctors are exposed to a broadening of their legal liability. Indeed, the burden borne by the doctors is a heavy one, but the courts will presumably be able to distinguish between information whose delivery is vital, the non-delivery of which would have violated the patient’s autonomy, and information whose delivery is not vital, the non-delivery of which would not have violated the patient’s ability to make an informed, considered, and autonomous decision. Similarly, courts will presumably be able to distinguish between cases in which informed consent was obtained and cases in which it was not. Adopting this path, while paying attention to the conflicting interests and making a considered and cautious evaluation of the compensation awarded for the violation of autonomy in accordance with the merits of each case, guarantees the patient’s right to autonomy on the one hand, and provides protection for the doctors’ important work, on the other.

51. Furthermore, it must be remembered that recognizing this head of damage is only one stone in the mosaic, by which I mean placing the patient’s autonomy at the center of the medical treatment and anchoring the patient's status in the process of making medical decisions that concern him or her.

It is not enough for the law to say to doctors, “Disclose”, or … to say to patients, “Decide”. Rather, physicians must relinquish some of their power and patents must relinquish some of their vulnerability…. Patients and physicians must develop different attitudes toward each other … Patients clearly need to trust more in themselves – to trust their abilities to understand information, to ask the appropriate questions, and to make the “right” decisions. Patient self-trust does not come from trusting doctors less, but instead from doctors’ and others’ (including the law’s) trusting patients more.

Jones [109] at 425 (emphasis added – T.S.C.).

And Now to the Matter at Hand:

52. How does all of the aforesaid affect our case?

In the circumstances of this case, the doctor did not obtain the appellant’s informed consent for the treatment, nor was it proven that he gave her the medical information that was essential in this particular case; the operation was an elective one and was not the operation for which she had come to the hospital. Failure to give her the information under these circumstances, as stated above, amounted to negligence in obtaining informed consent. This negligence prevented the appellant from deciding, on an informed and considered basis, whether she was willing or unwilling to perform the biopsy on her shoulder. The voluntary and informed decision concerning the performance of the biopsy is one that ought to have been made autonomously by appellant. Accordingly, we can rule that this negligence violated the appellant’s right to autonomy over her own body. However it is insufficient to rule merely that there was a violation of the appellant’s autonomy, since that ruling is on the level of liability only, and we must further examine its concrete expressions in the circumstances of this case. This requires us to determine, through evaluation, the extent of damage caused to appellant due to this violation of her autonomy.

It was after the performance of the biopsy on her shoulder that the appellant became aware that it had been performed without her having received the relevant information and that the doctor had been negligent in obtaining her consent to the operation. The evidence presented does not indicate how she responded upon becoming aware of these facts. We do not know how important it was from her perspective – if at all – to make an autonomous decision about the performance of the procedure and what she would have decided had her informed consent been requested. She did not testify on these matters and categorically denied having even been aware that she was about to undergo such an operation. The trial judge rejected her testimony as unreliable, and there was nothing to do apart from awarding her an estimated compensation under this head of damage. In conclusion, I concur with the opinion of my colleague, Justice Or, concerning the right to compensation under the head of the tort of violation of autonomy and the amount stipulated by him as compensation. In my view, the compensation under this head of damage should be added to the compensation for half the sum of compensation for bodily injury to be awarded to the appellant due to performance of the operation without obtaining her informed consent, all as set forth in my opinion.

President A. Barak

I concur with the judgment of my colleague, Justice Or. As such, I am not required to decide the case before us on the basis of path proposed in the judgment of my colleague, Justice Strasberg-Cohen. Indeed, cases in which the casual connection cannot be resolved on the basis of the balance of probability present difficult problems in terms of deciding the applicable law. This was also the position of my colleague, Justice Beinisch, reflected in her comments on the subject. Personally, I do not need to decide the issue in the current case, and I leave it for further review when the time comes. The reason for this is that in view of the contents of the judgment of my colleague, Justice Or, it was proved in the present case that appellant would have agreed to the performance of the biopsy on her shoulder, if she had been duly advised and had given her “informed” consent.

Deputy President S. Levin

I concur with the ruling of my learned colleague, Justice Or.

Justice M. Cheshin

I concur with the ruling of my colleague, Justice Or. However, I must confess that in circumstances such as ours, I was attracted by the doctrine of evaluating the chances of the existence of a causal connection (as opposed to the doctrine of balance of probability), on which my colleague, Justice Strasberg-Cohen, based her opinion. “In circumstances such as ours” means in circumstances in which the injured person – the plaintiff – due (also) to the defendant’s actions and omissions, finds it difficult to prove a causal connection between the defendant’s actions and omissions and the injury incurred (by the plaintiff). Thus, for instance, one could argue that in circumstances such as ours – to which I confine my remarks – the justice of the principle of distributing and spreading the damage is preferable to the justice of the principle of “all or nothing.” This was also the case in the past when, in cases of contributory negligence, the principle of division of liability between the tortfeasor and victim replaced the principle of full exemption or full liability. It could therefore be argued that the same rule should apply in our case. The same rule is also applied regarding the division of liability between joint tortfeasors. Concededly, with respect to a causal connection between action or omission and damage caused, these two [aforementioned – ed.] cases are not identical to the case before us. Even so, it would seem that the underlying principle of distributing and spreading the damage should also find expression in circumstances such as ours. Since I concur with the opinion of my colleague, Justice Or, I have the good fortune of not having to decide the question. Its time will come.

Justice I. Englard

I concur with the judgment of my honorable colleague, Justice Or.

It was therefore decided by majority opinion in accordance with the opinion of Justice Or.

August 29, 1999.

Full opinion:

Migdal Insurance Company v. Abu-Hana

Case/docket number:

CA 10064/02

Date Decided:

Tuesday, September 27, 2005

Decision Type:

Appellate

Topics:

Abstract:

Facts: The respondent was injured in a road accident when she was five months old. The district court, in assessing her damages for loss of earning capacity, took into account the respondent’s ethnic origin and her socio-economic background. The proper method of calculating this head of damage is the focus of the dispute between the parties.

Held: Damages for an injured minor's loss of earning capacity should be computed according to the presumption that the minor would have earned the equivalent of the national average wage, regardless of sex, religion, ethnicity, etc.. This presumption can be rebutted only when there is evidence of considerable weight, showing that there is a high probability that the minor would have entered a certain profession in the future.

Voting Justices: