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).

C.A. 7/ 64

 

       

FRIEDA SHOR

v.

STATE OF ISRAEL AND ANOTHER

 

 

In the Supreme Court sitting as a Court of Civil Appeal

[June 21, 1964]

Before Silberg J., Witkon J. and Halevi J.

 

 

 

Torts - vicarious liability - res judicata.

 

 

                In April 1957, the appellant sued a police sergeant for damages for physical injuries he had caused her. That action was dismissed at first instance on the ground of lack of evidence, and the Court of Appeal refused to interfere with this decision. The appellant then began an action against the respondents as the employers of the sergeant, claiming vicarious liability, in respect of the same alleged injuries. An application by the respondents to dismiss the action in limine as res judicata was granted: hence this appeal.

               

Held. (1) The rule that a judgment as between A and B will not be res judicata as between A and C is subject to an exception that where B was an employee directly responsible for the tortious act and C was vicariously liable therefor.

 

(2) The fact that an employee is held liable in tort will not bar the employer from denying that liability, if the latter was not party to the first trial, whereas if the employee is found to be free of liability. that will enure to the benefit of the employer even if not a party. The reason is that the employee's direct liability is the basis for the derivative liability of the employer and not the reverse. Accordingly the two claims are identical although the parties differ. If there is no direct liability on the part of the employee, there can be no derivative (vicarious) liability on the part of the employer.

 

 

Israel cases referred to:

 

(1)        C.A. 126/51, Shlomo Felman v Yachieh Shahav (1952) 6 P.D. 313.

(2)   C.A. 143/51, 55/52, Mayor, Members of the Council and Residents of Ramat Gan and Others v Pardess Yanai Co. Pty. Ltd. (1956) 10 P.D. 1804.

3. C.A. 49/63, Abraham Zucker v Yeshayahu Leibovitz (1964) 18 P.D. (1) 337.          
4. C.A. 155/50, 159/50, David Rahamim Mizrahi v Yaacov Rahamim (1951) 5P.D. 540
5. C.A. 534/59, Escher Cohen v Naomi Cohen (1960) 14 P.D. 1415.

(6)   C.A. 395/60, Roma Amrani v Attorney-General and National Insurance Institution (1961) 15 P.D. 594.

(7)        C.A 286/62, Shlomo Ma'aravi v Shlomo and Regina Eltars (1963) 17 P.D. 1350.

 

American cases referred to:

 

(8)        Portland Gold Mining Co. v Stratton's Independence, 158 F. 63 (1907).

(9)   Albert S. Bigelow v Old Dominion Copper Mining & Smelting Co., 225 U.S. 111 (1912).

(10) Prichard v Nelson et al., 55 F. Sup. 506 (1942).

(11) King v Stuart Motor Co., 52 F. Sup. 727 (1943).

(12) Weekly v Pennsylvania Rly. Co., 104 F. Sup. 899 (1952).

 

The petitioner appeared in person.

 

Dr. M. Eltes, Deputy State Attorney and Mrs. P. Albeck, Principal Assistant to the State Attorney for the respondents.

 

SILBERG J.               The only question before us in this appeal is whether the judgment given by the Jerusalem District Court in C.C. 61/57 constitutes res juditaca regarding the action commenced by the present appellant in C.C. 211/63.

 

2. The few necessary material facts are:

 

(a) In April 1957 the plaintiff filed a claim against Mr. Shmuel Steinfeld, a police sergeant, for the sum of approximately IL 3,200 as tort damages for bodily injury.

 

(b) The District Court dismissed the claim, holding that the appellant had not proved her claim. The court said per Judge Gollan the following:

 

"The court which heard the plaintiff testify is not of the opinion that the plaintiff is a liar. A liar is a person who presents facts which do not exist in reality according to the best of his knowledge and who knowingly gives other details of the fact and intentionally changes it, in order to mislead the listener. The court is not of the opinion that the plaintiff belongs to that type of person. But, in the light of the evidence of Dr. Baumatz and Dr. Schlossberg, and of the plaintiff herself, on appearing in court both as plaintiff and as witness and her behaviour, the court is of the opinion that it would not be justifiable to rely on her testimony alone to find against the defendant in this case. Although the court received the impression that the defendant's denial that he touched the plaintiff in any way is exaggerated, we have insufficient proof in law of the fact that it was the defendant who caused the plaintiff to break her arm and of the damage which she claims from him."

 

(c) The appellant appealed against judgment to the Supreme Court in C.A. 35/58 (unpublished) and her appeal was dismissed. The Court said:

 

"We do not think that we can as appeal judges interfere with the learned judge's assessment of the appellant's testimony, based as it is, at least partially, on the impression that she made in the witness box. It follows that the principal proof falls away and therefore her claim has to fail, as the judge decided."

 

(d) Afterwards the appellant submitted a new claim in C.C. 211/63 in the Jerusalem District Court for the same injurious act, but this time the defendants were the State of Israel and the Inspector-General of Police, the cause of action was the vicarious liability of the employers of Sergeant Steinfeld, and the amount claimed was IL 30,000. The defendants applied by way of motion, asking for the claim to be struck out in limine under rule 21a of the Civil Procedure Rules, 1938, on the ground that the judgment mentioned in (a) above constitutes res judicata in respect of the second claim. The court accepted the argument and struck out the claim in limine, and against that the appellant now appeals.

 

3. The arguments of the appellant are principally two:

 

(a) The learned judge disregarded the rule decided in Felman v. Shahav (1), which she claims, is that any judgment which does not determine a positive finding, does not constitute res judicata in respect of a new claim. All which the court decided there in File 61/51 was that the appellant had not proved her claim, that is to say, it "found" that it could not make "a finding", and obviously there is nothing here to constitute res judicata.

 

(b) The judgment which was given in the previous case does not constitute res judicata in respect of the second claim, since the parties in the first case are not identical with those in the second, hence the application in the new case has not yet been decided.

 

4. As to the first argument, the learned appellant erred and did not really understand what was said in Felman (1). There the Supreme Court distinguished between a plea of real res judicata based on article 1837 of the Mejelle, and a plea of "estoppel by matter of record" based on the Common Law. When a defendant in the second case relies on the fact that the same question has already been dealt with and decided in the previous case between the same parties and pleads the Common Law estoppel, the plea will not be heard unless the determination of the question ended with a positive finding and not in "I did not find anything". But when the plea is that a real decision has already been given on the same application, now brought once again in the second case, then there is no practical difference at all whether the application was previously dismissed because of a positive finding of the judge, or whether it was dismissed because it was not proven. Article 1837 of the Mejelle does not recognise this distinction. The outcome, therefore, is that the principal question before us is the accuracy or inaccuracy of the second argument of the appellant. For should we hold the two claims identical, that will obviously serve as a complete answer, to the first argument as well.

 

5. And as to the second argument, it is true that the rule is that no judgment given in a case between A and B constitutes res judicata in respect of a claim between A and C. But "one cannot learn anything from generalities", because there is no rule which does not have its exception (other, perhaps, than this rule itself). And the exception to the above rule is when B was an employee directly responsible for the injurious act, and C is vicariously liable for that act. Here the law is as follows: if B is found liable, the judgment is not res judicata in respect also of C, but if he is not found liable, then the non-liability also constitutes res judicata in respect of a subsequent claim made against C, the employer. Preliminary support for that is found in the judgment of Sussman J. in Ramat Gan v. Pardes Yanai (2) at 1813, which was cited by the learned District Court judge and which reads as follows:

 

"When we say that the above rule of 'reciprocity' directs us to reject the plea of res judicata, it did not escape us that sometimes a party can enjoy the fruits of a previous case, and if the opposite were decided, then the judgment would not concern him. What is involved are cases in which a person's liability is only derived from that of another, such as the responsibility of an employer for the act of his employee. The employee's liability in a claim for damages will not prevent the employer from denying the responsibility of the employee, where the employer was not a party in the first case, whilst exoneration of the employee in the case will also clear the employer from liability, even if he was not a party."

 

            The ratio of this exception is patent. The direct responsibility of the employee is the basic foundation of the derivative responsibility of the employer: without an agent there is no principal. Hence there exists here identity between the two claims, although the names of the parties differ.

           

            But why does the idea not operate equally when the employee is found liable in the first case: The answer is, in my opinion, practical and simple. If the employer is made liable, without any new judgment, on the basis of the employee's liability as found in the previous judgment, the door will be opened to collusion and fraud. The employee will connive with the injured plaintiff, be found liable and divide with the plaintiff the spoil obtained from the claim against the employer. This apprehension naturally does not exist when the employee is not found liable. Thus we return to the basic idea, that when the ground gives way (the claim against the employee) the supercumbent building also collapses (the claim against the employer).

           

            This special exception was recently confirmed by Sussman J., Landau J. and Halevi J. in Zucker v. Leibovitz (3). It has also been adopted in American case law, where in a series of decisions it has been held that the general principle that a person cannot take advantage of a judgment by way of estoppel unless he would be involved in the judgment, if the opposite had occurred, but subject to several exceptions, one of which is that in claims for damages, when the defendant's responsibility necessarily depends on the guilt of another who is the immediate tortfeasor, and in the previous claim against the latter for the same act, it was held that he is not guilty, then the defendant can derive benefit from that judgment as estoppel. although he would not have been involved, if the opposite had occurred: Portland Gold Mining Co. v. Stratton's Independence (8).

 

The Portland case, which was mentioned also in the above judgment of Sussman J., is the first case which summarises the law current in earlier American cases and was followed in later cases: Bigelow v. Old Dominion Copper Co. (9), cited in Prichard v. Nelson (10) at 510; cf. King v. Stuart Motor Co. (11) at 729-30; Weekly v. Pennsylvania R. Co. (12) at 900.

...

"If a defendant's responsibility is necessarily dependent upon the culpability of another, who was the immediate actor, and who, in an action against him by the same plaintiff for the same act, has been adjudged not culpable, the defendant may have the benefit of that judgment as an estoppel."

 

(30A Am. Jur., Judgments, para. 425; 52 Am. Jur., Torts, para. 129; cf. 50 C.J. Sec., para. 757, at p. 279.)

 

            I have restricted myself to the question which directly concerns the case before us. whether a judgment exonerating the employee serves as res judicata in an action against the employer; I have not touched upon other aspects of the question, such as how a condemnatory judgment is treated and how the concept of res judicata works between joint tortfeasors; the latter question was dealt with extensively by Halevi J. in Zucker (3). In English case law, to the best of my knowledge, there is no express decision regarding the question arising before us, although there is case law on the relationship of res judicata between joint tortfeasors.

           

            I have seen no need to enter into the remaining submissions of the appellant because they are without substance.

           

            In my opinion therefore the appeal is to be dismissed without costs.

           

HALEVI J..                In Zucker (3), we held in an "opposite" case (where the employer was first sued for vicarious liability for the wrongful act alleged against his employee and the plaintiff failed to prove the wrongful act) that the plaintiff was free to sue the employee for committing the act and to try and prove it, and the judgment given in favour of the employer does not constitute res judicata as regards the employee which bars the action against him. In the present case. however, in which the employee was first sued for a wrongful act attributed to him by the plaintiff (the appellant) and she failed to prove the act, we rule that the appellant is not at liberty to sue the employers (the respondents) for vicarious liability, and that the judgment in favour of the employee constitutes res judicata which bars the action against them. What is the reason for the difference in law between this case and its opposite?

 

            The reason is that the vicarious liability of the employer springs from the employee's liability, and the employee's liability does not spring from the employer's liability. This substantial difference has two consequences:

           

(a) American jurists and courts are united in the view that a judgment which, on the merits of the case, exonerates a person from a wrongful act attributed to him by the plaintiff, bars an action of the same plaintiff against another person, which is based exclusively on the vicarious liability of the second defendant for the wrongful act, for which the first defendant was acquitted. Although had the first defendant been held liable, the judgment would not be evidence, and needless to say res judicata, against the second defendant, because the judgment would be res inter alios acta and "one cannot render a person liable except in his presence". An act may, however, be done in favour of a person even when he is not present (Baba Metzia, 12b), and therefore the reciprocity rule may be departed from for reasons of "public order": interest rei publicae ut sit finis litium. The plaintiff has had his "day in court", and not having proved the wrong in his action against the direct actor, he is not to be permitted to try his luck again in an action against the person vicariously liable. Added to these principal considerations, there is the further consideration in most cases that it would not be justified to expose the first defendant. already exonerated in the plaintiff's claim, to a claim for indemnity on the part of the second defendant. in the event of the latter being condemned to pay damages to the plaintiff for the same wrongful act, of which the first defendant was cleared. For all of these reasons, we regard the rule, that a judgment which exculpates the immediate actor from a wrongful act, is res judicata for the person vicariously liable. a reasonable and just development of the Common law and we in fact adopt it.

 

            As to the "opposite" question. whether a judgment in favour of the person vicariously liable is also res judicata for the immediate actor, lawyers and the courts in the United States have not yet reached an unanimous view. At least one of the aforementioned considerations - exposing the first successful defendant to a claim for indemnity by the second defendant - does not generally apply to the "opposite" case. In Zucker (3), we left the question open for the time being.

           

(b) The specific Israeli case law (which in my opinion has no parallel at all in English and American judgments) that limits the action of "estoppel by res judicata" to "a positive finding", as distinct from "lack of finding". is important (or might be important) only in the "opposite" case and does not apply to the "direct" case dealt with here. I will explain,

 

            I shall not resort to article 18 37 of the Mejelle, because with all respect I join in the opinion of Landau J. in Mizrahi v. Rahamim (4), that this article "has become obsolete". But I actually come to the same conclusion as my learned colleague, Silberg J., on the basis of the Common law distinction between res judicata as a "bar" and res judicata as "collateral estoppel". See Freeman, Law of Judgments (5th ed.) Vol. II, paras. 546, 676; Restatement of Law of Judgments sec. 68, p. 293. The difference is, briefly and in so far as it concerns us here, that any judgment on the merits of the case in favour of a defendant, be "its findings" or "lack of findings" what they are, will "bar" every further action by the plaintiff against the detendant for the same cause of action, and will serve as a complete defence to the action. Furthermore, "collateral estoppel" is set up by the express or implicit decision of the judgment as to the facts in dispute between the parties; that decision will serve as "an estoppel" between the parties in any further case, no matter what the cause of action may be. An exception: a decision of a court under its "incidental" jurisdiction, under sec. 35 of the Courts Law, 1957, in a matter under the "exclusive jurisdiction of another court or tribunal": such decision is only valid "for the purposes of that matter" and cannot serve as "collateral estoppel"; Cohen v. Cohen (5); Restatement. para. 71 p. 326. Another exception is created by Israeli case law (Felman (1); Amrani v. Attorney-General (6): Ma'aravi v. Attorney General (7); Zucker (3) etc.). which limits the applicability of "collateral estoppel" to "a positive finding", as distinguished from "lack of a finding". This last distinction does not apply to "barring" operation of a judgment (or, in the case of a judgment in favour of the plaintiff as a "merger"), as appears, with difference in terminology only, from the observations of Silberg J. in Felman (1) at 324 and of Berinson J. in Amrani (6) at 599.

 

In the case before us, the judgment in favour of the employee acts as a "bar" in favour of the employer. The vicarious liability of the employer springs from the principal liability of the employee, and when there is no such principal liability there is no attached (vicarious) liability. No "finding" or "lack of finding" in the judgment, but the very exculpation of the employee of commission of the wrongful act against the plaintiff-appellant removes the ground from under the claim which is based on vicarious liability for the same wrongful act, and serves as a full defence to the respondents. Accordingly the appeal should be dismissed.

           

WITKON J                 I concur with the conclusion reached by my respected colleagues.

 

            Appeal dismissed.

            Judgment given on June 21, 1964.

CA 1617/04

1. Chim-Nir Flight Services Ltd.

2. Nissim Ben-Ezra

3. Yoav Ben-Zvi

4. Yosef Barel

5. Dov Grodman

6. Shlomo Haber

7. Avraham Werber

8. Ilan Sela

9. Aryeh Etzioni

10. Dov Peleg

11. Baruch Rothman

12. David Shavit

13. Yehoshua Shamrat

14. Gidon Shatil

v

The Tel Aviv Stock Exchange Ltd.

 

The Supreme Court sitting as the Court of Civil Appeals

[21 February 2007]

Before Deputy President E. Rivlin, Justices E. Arbel, D. Cheshin

 

Appeal of the decision of the Tel Aviv District Court handed down on December 22, 2003, in TA 2367/00 by Judge Dr. O. Modrik.

 

Legislation cited:

Securities Law, 5728-1968, s. 46

 

Israeli Supreme Court cases cited:

CA 4275/94 Tel Aviv Stock Exchange Ltd. v. A.T. Management of Torah Literature Database Ltd. [1997] IsrSC 50(5) 485.
CA 1094/95 Tel Aviv Stock Exchange Ltd. v. Chim-Nir Flight Services Ltd. [1997] IsrSC 55(1) 634.
CA 467/04 Yetach v. Mifal HaPayis (2005) (unreported).
HCJ 555/77 Babchuk v. Tel Aviv Stock Exchange [1978] IsrSC 32(2) 377.
CA 1326/91 Tel Aviv Stock Exchange Ltd. v. Marcus [1992] IsrSC 46(2) 441.
CA 6296/00 Kibbutz Malkiya v. State of Israel [2004] IsrSC 59(1) 16.
CA 145/80 Vaknin v. Beit Shemesh Local Council [1982] IsrSC 37(1) 13.
CA 2061/90 Marzeli v. State of Israel - the Ministry of Education and Culture  [1993] IsrSC 47(1) 802.
CA 5586/03 Freemont v. A. (2007) (unreported).
CA 10083/04 Gooder v. Modi’im Local Council (2005) (unreported).
 CA 2625/02 Nahum v. Dornbaum [2004] IsrSC 58(3) 386.
CA 10078/03 Shatil v. State of Israel (2007) (unreported).
CA 915/91 State of Israel v. Levy [1994] IsrSC 48(3) 45.
CA 243/83 Municipality of Jerusalem v. Gordon [1985] IsrSC 39(1) 113, 134-136.
CA 2906/01 Municipality of Haifa v. Menora Insurance Ltd. (2006) (unreported).
CA 1678/01 State of Israel v. Weiss [2004] IsrSC 58(5) 167.
CA 1068/05 Municipality of Jerusalem v. Maimoni (2006) (unreported).
HCJ 64/91 Khilef v. Israel Police [1993] IsrSC 47(5) 563.
CA 653/97 Baruch and Tzipora Center Ltd. v. Municipality of Tel Aviv-Jaffa [1999] IsrSC 53(5) 817.
CA 3889/00 Lerner v. State of Israel [2002] IsrSC 56(4) 304.
CA 862/80 Municipality of Netanya v. Zohar [1983] IsrSC 37(3) 757.
CA 1639/01 Kibbutz Maayan Tzvi v. Karishov [2004] IsrSC 58(5) 215.
CA 8526/96 State of Israel v. A. (2005) (unreported).
CA 429/82 State of Israel v. Suhan [1988] IsrSC 42(3) 733.
CA 196/90 Yirmiyahu Eini Construction Co. Ltd. v. Krayot Committee for Local Planning and Building [1993] IsrSC 47(2) 111.
CA 5604/94 Chemed v. State of Israel [2004] IsrSC 58(2) 498.
CA 3108/91 Rabie v. Veigel [1993] IsrSC 47(2) 497.
CA 6970/99 Abu Samara v. State of Israel [2002] IsrSC 56(6) 185.
CA 1081/00 Avnel Distribution Co. Ltd. v. State of Israel [2005] IsrSC 59(5) 193.
CA 4707/90 Mayorkas v. State of Israel –Ministry of Health (1991) (unreported).
CA 491/73 Gedolei Hacholeh Ltd. v. Machruz [1975] IsrSC 29(2) 31.
HCJ 5933/98 Israeli Documentary Filmmakers Forum v. President of the State [2000] IsrSC 54(3) 496.
HCJ 8850/02 Pastinger v. Minister of Justice [2004] IsrSC 58(2) 696.
CA 735/75 Roitman v. Aderet [1976] IsrSC 30(3) 75.
CA 732/80 Arens v. Beit El – Zichron Yaakov [1984] IsrSC 38(2) 645.
LCA 1565/95 S’char V’Sherutei Yam Ltd. v. Shalom Weinstein Co. Ltd. (2000) (unreported).
LCA 2422/00 Ariel Electrical Engineering Traffic Lights and Maintenance v. Municipality of Bat Yam [2002] IsrSC 56(4) 612.
MCApp 2236/06 Hamami v. Ohayon (2006) (unreported).
HCJ 731/86 Micro Daf v. Israel Electric Co. [1987] IsrSC 41(2) 463.
CA 294/91 Kehillat Yerushalayim Jewish Burial Society v. Kestenbaum [1992] IsrSC 46(2) 464.
CA 3414/93 On v. Diamond Exchange Enterprises (1965) Ltd. [1995] IsrSC 49(3) 196.
LCA 1784/98 Amidar v. Manada  [1999] IsrSC 53(4) 315.
CA 4980/01 Adv. Shalom Cohen (Official Receiver) v. Glam  [2004] IsrSC 58(5) 625.

 

For the appellants – A. Weinroth, O. Bar, D. Zimmerman

For the respondent – Y. Elhawi

 

JUDGMENT

 

Justice E. Arbel

In this appeal of the judgment of the Tel Aviv-Jaffa District Court (Judge Dr. O. Modrik), the Court is asked to rule that the respondent, the Tel Aviv Stock Exchange Ltd. (hereinafter: "the TASE"), is liable for the damages caused to the appellants as a result of the allegedly negligent decisions that it made during the process of the [first] appellant's share offering.

The facts

Appellant 1, Chim-Nir Flight Services Ltd. (hereinafter: “the Company”) is a public company founded in 1991 which provides aviation services. At the beginning of June 1994, the Company sought to offer its shares to the public on the TASE. It submitted a draft prospectus to the Israel Securities Authority and the TASE, in accordance with its obligations under s. 15 of the Securities Law, 5728-1968 (hereinafter: "the Securities Law"). The TASE and the Israel Securities Authority approved the draft in principle, and the Company planned to publish the prospectus on November 30, 1994. It is also relevant to mention that the Company claims that it was of material significance that the share offering be implemented by the end of 1995 in order to qualify for a particular tax benefit. Since the financial markets were in crisis at that time, the Company decided, in consultation with its advisors and the underwriters of the offering, to add a statement to the prospectus to the effect that within no less than one month, and no more than three months from the date on which the shares were listed for trading, the Company’s shareholders would offer to purchase sixty percent of the issued shares from the public at a minimum price proposed at the time of the offering (hereinafter: "the repurchase offer").  
The TASE objected to the inclusion of the repurchase offer in the prospectus, on the grounds that its implementation was liable to reduce the public’s holding of the Company’s shares to below the minimum level specified in reg. 73c of the TASE Regulations (hereinafter: "the Regulations") for public holdings in a new company seeking to list shares for trading on the TASE. This was in accordance with the provisions of s. 46(a)(2) of the Securities Law which states, inter alia, that the TASE may specify, in the Regulations, “the minimum ratio that will be held by the public immediately subsequent to the listing” (hereinafter: "the listing rules"). The TASE therefore decided not to approve publication of the prospectus as long as it contained the repurchase offer. The Company appealed this decision to the Tel Aviv-Jaffa District Court (MA 10/95), which granted the appeal. The court ordered that the inclusion of the repurchase offer in the Company’s prospectus be approved, providing that it stated that the offer would not be implemented until at least two months had elapsed from the date that the shares were listed for trading. The TASE appealed the judgment to this court (in CA 1094/95), which, at the request of the TASE, ordered a stay of execution of the District Court’s decision until a ruling on the appeal would be handed down.

As a result, in light of time constraints that the Company claims it faced, the Company decided to change the prospectus and omit the repurchase offer (hereinafter: "the amended prospectus"). The amended prospectus was approved and the Company’s offering was issued on June 8, 1995.

This court (Justices E. Goldberg, T. Or, and Y. Zamir) dismissed the appeal of the TASE, ruling that the TASE chose to include in its Regulations listing rules that applied at the time of listing the shares for trading, as distinct from rules that would also apply when the shares were being traded on the TASE (hereinafter: "maintenance rules"). Accordingly, it was determined that the phrase “immediately subsequent to the listing” should be interpreted to refer to the time at which the shares reach the purchasers. Therefore, in the absence of maintenance rules or a directive prohibiting the inclusion of a repurchase offer in the prospectus, it was found that the Company had complied with the listing rules. The court also ruled that, under the circumstances, the repurchase offer could not be regarded as detrimental to the regular and proper management of the TASE in any way, since it was based on logical reasoning. Concluding, the court ruled that the TASE had gone too far in its interpretation of the listing rules and that its decision not to approve publication of the prospectus which included the repurchase offer (hereinafter: "the decision of non-approval") did not have a sufficient factual basis. It found that the TASE had not showed foundation for its concern that the Company was attempting to bypass the listing rules through the repurchase offer, or that damage would indeed be caused to trading as a result of this offer (hereinafter: "the judgment in the previous proceeding").

Following the denial of the appeal, the TASE acted to amend the listing rules so that in cases in which a prospectus contains a notice regarding any kind of option or right which the interested party has regarding the offered shares, these shares will not be counted among the quota of shares being offered to the public. The amendment process lasted about two years, and about three years later the TASE added maintenance rules to the Regulations. These rules determined, inter alia, that a decrease in the public’s holdings to less than 7.5% of the issued capital would result in the delisting of the share from trade.

As a result of the judgment in the previous proceeding, the Company, together with thirteen of its shareholders (hereinafter: the appellants) filed suit against the TASE, claiming that as a result of its unreasonable decisions – which led to the deferral of the offering and the need to issue it without the repurchase offer – they had incurred damages amounting to NIS 17 million.

The judgment of the District Court

The lower court divided its deliberations into two questions: that of liability and that of damages. After hearing the parties’ arguments regarding the question of liability, it found that the TASE had not been negligent in making the decisions that led to the delay of the offering, i.e. the decision of non-approval and the decision to apply to the Supreme Court for stay of execution of the District Court’s judgment until after the ruling on the appeal (hereinafter: "the application for stay of execution").

First, the lower Court ruled that the judgment in the previous proceeding created an estoppel by record on two counts: first, because the TASE’s interpretation of the listing rules was incorrect; and secondly, because the decision of non-approval lacked necessary factual basis. Secondly, the lower court rejected the argument of the TASE that it is not liable for damages caused to the appellants as a result of the delay in the offering, since any such damages did in fact result from the court’s decision to grant the application for stay of execution. In this matter, the lower Court ruled that the TASE had not adequately considered the impact of the application for stay of execution on the Company, for the documents it submitted – the affidavit of the Director General of the TASE and the protocols from the Board of Directors’ meetings – did not indicate any discussion of this problem. The lower court also rejected the TASE’s claim that its request to expedite the hearing of the appeal should be viewed as a deliberate effort to minimize the damage caused to the Company, and determined that it had acted, first and foremost, in its own best interest. In light of the above, the District Court found that the TASE acted negligently, out of indifference to the potential damage that could be caused to the Company. As a result its actions should be viewed as the cause of damage resulting from the delay of the offering, if indeed such damage was caused. Thirdly, the lower Court ruled that under the circumstances, the Company’s decision to proceed with the offering without the repurchase offer and not to wait for the outcome of the appeal was justified, and therefore it in no way detracted from the validity of their claim.

Subsequently, the District Court examined for the existence of the basis for the tort of negligence, and determined that the TASE owed the Company a conceptual duty of care.  In the framework of this ruling, the lower court addressed the question of the existence of a “relationship of proximity” between the parties and found that, under the circumstances, such a relationship existed. This finding was based on the purpose of the Securities Law and the nature of the powers exercised by the TASE in this case. The lower Court also examined the status of the TASE as an administrative authority, and ruled that in this case the TASE had not exercised its discretion in a manner that justified limitation of its liability for negligence according to customary law. Indeed, according to the judgment in the previous proceeding, the TASE exercised its authority within the framework of specific existing rules. The District Court further ruled that in light of the TASE’s expert knowledge of the financial market, it could have predicted that the deferral of the offering would have definite financial implications for the Company. It therefore bore a concrete duty of care regarding some of the damages sought. These findings notwithstanding, the Court noted that it was not proven that the TASE could have predicted that its decisions would lead to a change in the structure of the offering and a reduced capacity to issue a dividend to the Company’s shareholders.

The District Court also rejected the TASE’s argument that since it acted with the full agreement and consent of the Israel Securities Authority -  the administrative body which oversees it -  it could not be deemed negligent. The court found that even though the procedures relating to the District Court judgment were executed in complete coordination with the Authority, it was not proven that the decisions to appeal and stay the execution were made in consultation with the Authority, and certainly not at its instruction.

Regarding the basis of negligence, the District Court found that both the decision of non-approval and the application for stay of execution were reasonable under the circumstances. Regarding the decision of non-approval, the court ruled that notwithstanding the determination in the previous proceeding that this decision was erroneous, it should not be inferred that it was also negligent. In order to judge the reasonableness of the decision, the court examined the decision-making process and found that it was based on the exercise of professional discretion, in consultation with the relevant professional bodies, including the Israel Securities Authority. Therefore, under the circumstances, there was no negligence in reaching this decision. The court emphasized that at the time the decision was made, the TASE had no precedent in this kind of matter to guide its decision-making. Therefore, to examine the reasonableness of its decision in light of the judgment in the previous proceeding is an exercise in the wisdom of hindsight. Regarding the factual basis that underlay the decision, the Court found that basing the decision of non-approval on concerns that the Company would circumvent the listing rules and that this circumvention would have a negative impact on trading, did not constitute a breach of the standard of reasonableness in the particular field of expertise. In light of the above, the court ruled that there was no negligence in the decision of non-approval.
Regarding the application for stay of execution, the District Court ruled that the failure of the TASE to consider the damages to the Company caused by its application for stay of execution was not sufficient to establish a breach of its duty of care vis-à-vis the Company. Rather, the question of how the TASE would have exercised its discretion had it taken these damages into account must be examined as well. In this regard, the court found that the TASE’s decision was based on reasons that it considered extremely important, foremost of which was the prevention of damage to share trading, which was also recognized in the court's decision to order the stay of execution.  Therefore, it was determined that even if the TASE had taken the damage to the Company into account, it is reasonable to assume that the consideration of preventing harm to the investor community would nevertheless have convinced it to apply for the stay of execution. The court added that the evidentiary material before it did not show that the Company approached the TASE with a request to refrain from delaying the execution, and it did not inform the TASE of the damage that this could potentially entail. The court therefore ruled:

'You could say that since at the time that the application was filed the TASE had reasonable and serious grounds for its application and since Chim Nir voiced no protest regarding the damage it expected to sustain – the very existence of the application cannot be viewed as a breach of the proper standard of care. Or you could say that the TASE’s failure to consider Chim-Nir’s interest was ‘redeemed’ by the Supreme Court’s consideration of the conflicting interests and its decision to grant the application' (at pp. 31-32 of the judgment).

The Appellants’ Claims

The appellants’ claims center on the lower court’s ruling regarding the reasonableness of the TASE’s decisions. First, they contend that the lower court erred in its ruling that the TASE did not breach its duty of care in its decision of non-approval. They claim that the TASE’s interpretation of the listing rules is not erroneous, but rather that it oversteps the bounds of reasonableness. The appellants base this claim on a number of determinations in the judgment of the previous proceeding, including the determination that the TASE interpreted the existing rules in a manner that deviated from their purpose and that it presented an inconsistent position before the court. Moreover, the appellants claim that the very fact that the TASE reached its decision without sufficient factual basis automatically renders it unreasonable. The appellants further argue that in accordance with the judgment in the previous proceeding, there were grounds to decide that the TASE bears an increased duty of care due to the fact that it is a monopoly.
Secondly, according to the appellants, the determination of the District Court that the TASE did not take the foreseeable damages to the Company into account and thus acted negligently in its application for stay of execution is sufficient to establish a breach of its duty of care vis-à-vis the Company. They claim that the court erred when it proceeded to examine what the TASE would have decided had it acted properly: it should have left this inquiry for the second part of the deliberations, in which the question of the causal connection was to be considered. Moreover, the appellants claim that the lower court’s determination regarding the reasonableness of the decision is inherently flawed. They claim that since it has been established that the TASE did not fully take into account the relevant considerations – in this case, the potential damages to the Company – the decision cannot be reasonable. In any case, the appellants claim that had the TASE properly considered the relative cost of the damages, it would have concluded that it should not request the stay of execution. The appellants support this claim with the testimony of the Director General of the TASE to the effect that he did not anticipate that approval of the Company’s offering would cause great harm, and with the fact that the TASE took its time in formulating the maintenance rules.

The appellants add that no significance should be attached to the fact that the Supreme Court granted the application for stay of execution, since the arguments that were raised were later found to be flawed upon in-depth deliberation. Moreover, they claim that the lower court erred in its determination that they did not inform the TASE of the damages that they were likely to incur. They say that they outlined these damages in the application for stay of execution, and they were even mentioned in the District Court’s decision on the application. Furthermore, according to the District Court’s own ruling, most of the damages were foreseeable by the TASE.

The appellants add that the lower Court erred when it determined that a concrete duty of care does not apply with regard to some of the heads of damages claimed. They maintain that since the court divided the proceedings into the questions of liability and damage, it ought to have examined the actual forseeability of each of the heads of damage in the second stage, after the parties presented evidence on this matter. The appellants claim that it was obvious that the delay of the offering would have ramifications determined by the fluctuations of the market. The appellants also add that the District Court’s judgment in the previous proceeding created an estoppel by record in this matter, since it established that the repurchase offer could have a positive effect on the public’s holdings. In any case, the appellants argue that changing the structure of the offering was a form of damage control and that the TASE bears the burden of proof in actions such as these.

Finally, the appellants maintain that the lower court did not address the claim that they have a right to compensation also by virtue of the administrative wrong that the TASE perpetrated, and this warrants the remand of the case to the District Court to complete deliberations upon this issue.

The Respondent’s Claims

The TASE concurs with most of the determinations of the lower court and maintains that its judgment should be upheld. Moreover, the TASE claims that policy considerations, foremost of which is the importance of the smooth operation of the financial market, necessitates its protection from the pressures of actions and demands by issuing companies. Therefore, it advocates the establishment of a principle whereby the TASE will not be liable for damages caused as a result of its regulatory decisions when it acts in good faith and in accordance with the position of the Israel Securities Authority.
Regarding all aspects of the decision of non-approval, the TASE claims that the process that led to the decision was thorough, serious and based on the opinions of experts in the field. The TASE emphasizes that it did everything in its power to ensure that the decision was correct and reasonable – internal consultations were conducted on several levels; external legal counsel was sought; and even the advice and consent of its overseeing authority – the Israel Securities Authority – was obtained. In addition, the respondent claims that the fact that this issue that had never previously been addressed and that there were no precedents to guide its decision, should be taken into account. Therefore, the respondent claims that even if it were found that its final decision was erroneous, it is nevertheless not a case of negligence. The TASE adds that the decision of non-approval was inherently reasonable, in light of the purpose that underlies the rules of public holdings – the avoidance of a small market for shares that will increase the risk of various kinds of trade manipulations. It maintains that this purpose justifies an interpretation that applies the rules regarding the percentage of the shares that must be publicly held throughout the period of share trading in a manner that will prevent the listing rules from being circumvented. Moreover, the TASE claims that the wording of the listing rules is not unequivocal, and that it can support its proposed interpretation.

Moreover, the TASE maintains that in the judgment in the previous proceeding, the tortious significance of the decision of non-approval was not addressed at all and therefore nothing can be learned from it. The TASE adds that the finding in the judgment regarding the lack of a factual basis for the decision of non-approval relates to the possibility that the Company was attempting to bypass the listing rules. It claims that since it did not base its decision on this possibility, it has no implications for the reasonableness of the decision. Finally, the TASE maintains that the appellants’ claims regarding this matter should be dismissed out of hand, since they themselves conceded during the proceedings in the District Court and in the summations submitted to it, that the decision of non-approval was reasonable.

Regarding the appellants’ claims in relation to the application for stay of execution, the TASE maintains that this is an illegitimate extension of claims, since these matters were not mentioned in the pleadings filed with the District Court. Therefore, it claims that the lower court erred when it ruled on them even though no relevant evidence was submitted. Nevertheless, the TASE agrees with the Court’s final decision that under the circumstances it was not negligent in the application for stay of execution.

The TASE further objects to the lower court’s determination that the principle whereby it cannot be held liable for damage that was caused -  so it alleges -  as a result of a judicial order, is not applicable in this case. It argues that since it acted in good faith, in order to uphold its immediate material interest and to exercise its rights under law, a deviation from the principle that “a judicial order cannot cause damage” is unjustified. The TASE also claims that the District Court was inherently mistaken when it determined that it had not considered the damage that would be caused to the Company as a result of the application for stay of execution, for several reasons: first, the testimony of the Chief Executive of the TASE revealed that the possible damages to the Company had indeed been considered in making the decision; secondly, the TASE acted on its own initiative to expedite the hearing of the appeal in order to enable  the Company to issue its offering at such time as it was still apparently eligible for tax benefits; thirdly, in making the decision the TASE was concerned about significant harm to trading, and this concern was expressed in its amendment of the rules within a relatively short space of time, in order to address the problem.

The TASE further adds that the appellants’ suit for compensation based on administrative negligence should be dismissed, since this claim first arose only during the appeal and, in any case, it is insufficiently specific.

Deliberations

The TASE is a private corporation which is charged with the management of the main arena for trading securities in the State of Israel. The structure of the TASE, as well as its powers, are prescribed by the Securities Law and it is subject to the oversight of the Israel Securities Authority. Whereas the Israel Securities Authority is primarily entrusted with the examination of the disclosures of companies issuing shares based on a prospectus, the TASE deals primarily with questions regarding the ongoing trading of securities, such as the distribution of securities among the public (Joseph Gross, Securities Law and the Stock Exchange, at p. 163 (1973)). The Securities Law provides that the establishment of a stock exchange requires a license, it defines the structure of the TASE’s board of directors, and it lays down guidelines for its powers, to be determined in the Regulations. The TASE Regulations establish the rules for the proper and fair management of the TASE, which include the listing rules alongside other rules, with the primary purpose of protecting the regularity of securities trading (Moty Yamin & Amir Wasserman Corporations and Securities 16 (2006), hereinafter: Yamin Wasserman).
In light of these characteristics, even though the TASE is a private corporation, it has already been ruled that when it exercises the power granted to it by law, it should be viewed as an administrative authority operating in accordance with the principles of administrative law (see for example: CA 4275/94 Tel Aviv Stock Exchange Ltd. v. A.T. Management of Torah Literature Database Ltd. [1], at pp. 507-512; CA 1094/95 Tel Aviv Stock Exchange Ltd. v. Chim-Nir Flight Services Ltd. [2] at p. 647; Ronen Adini Securities Law 97 (2004) (hereinafter: Adini)). Indeed, under the principles established by legal precedent, the TASE should be viewed as a hybrid body. Its purpose is a public purpose – to conduct the trading of securities; its powers are defined by law; it maintains a monopoly in its field and it provides a public service (see for example: CA 467/04 Yetach v. Mifal HaPayis [3] paras. 16-19 of my judgment; Assaf Harel Hybrid Bodies 37-52 (2008) (hereinafter: Harel)). Accordingly, the courts have examined the TASE’s decisions through the prism of the principles of administrative law, such as the principle of reasonableness, compliance with the principles of natural justice, etc. (HCJ 555/77 Babchuk v. Tel Aviv Stock Exchange [4] at p. 377; Tel Aviv Stock Exchange Ltd. v. A.T. Management of Torah Literature Database Ltd. [1], at pp. 511-516). At the same time, the activities of the TASE are subject to judicial review. The courts tend to exercise caution in their judicial review of its decisions, in consideration of its professional discretion, insofar as it is exercised in matters regarding which it has special expertise (CA 1326/91 Tel Aviv Stock Exchange Ltd. v. Marcus [5], at pp. 447-452). 

The tort of negligence

At the heart of this appeal lies an examination of the liability of the TASE regarding the tort of negligence, pursuant to the provisions of ss. 35 and 36 of the Civil Wrongs Ordinance [New Version]. In order to establish liability under this tort, the claimant must prove the existence of its basic components: a duty of care, negligence and damage caused a result thereof (see for example: CA 6296/00 Kibbutz Malkiya v. State of Israel [6] at p. 20). The District Court’s judgment addressed only the question of liability – and in that context only the duty of care and negligence – and therefore, this appeal does not address the question of damage. At the outset I note that the question at the center of this proceeding is that of negligence. It is on this that the parties have focused most of their arguments, relegating the arguments regarding the duty of care to the sidelines. Nevertheless, I will discuss the basic components of the tort in order.

Duty of care

The question of when a duty of care between a tortfeasor and an injured party will be recognized has aroused extensive debate in the decisions of this Court. In a nutshell, the prevalent approach in our judicial rulings recognizes two stages in establishing the existence of a duty of care. At the first stage, the existence of a conceptual duty of care is examined, based on the question of whether the tortfeasor, as a reasonable person, should have foreseen the occurrence of the damage. The assumption here is that damage that is foreseeable in physical-technical terms is also foreseeable in normative terms, unless considerations of judicial policy counteract the recognition of this duty. At the second stage, the existence of a concrete duty of care is examined, in view of the particular circumstances of the case relating to the particular tortfeasor and the particular injured party (see for example: CA 145/80 Vaknin v. Beit Shemesh Local Council [7], at p. 13; CA 2061/90 Marzeli v. State of Israel - Ministry of Education and Culture, [8], at p. 802. See also from recent years: CA 5586/03 Freemont v. A. [9], para. 8 of my judgment). According to another approach expressed in judicial rulings, there is no distinction between the conceptual and concrete duty of care, but rather the entire question should be examined as a whole (see for example: CA 10083/04 Gooder v. Modi’im Local Council [10], per Justice Rivlin, at para. 7; CA 2625/02 Nahum v. Dornbaum [11], at p. 386, 408; CA 10078/03 Shatil v. State of Israel [12], per  Justice Levy, at paras. 15-17, 30-31). This approach found expression in the judgment in CA 915/91 State of Israel v. Levy [13], at p. 45, where it was determined that a duty of care will be recognized when two basic conditions are met: first, the condition of “adjacency” or “proximity”; secondly, a judicial conclusion that it is just, reasonable and fair that a duty of care be imposed. The first basic condition involves an examination of the connection between the damager and the injured party – which could be a legal or physical connection, connection by virtue of dependence, etc. – which creates the duty of care. In relation to the second basic condition, various aspects of judicial policy are considered (State of Israel v. Levy [13], at pp. 33-70; see also Nahum v. Dornbaum [11], at pp. 408-409).

Without delving deeply into the difference between these two approaches and also without resolving the question of which one is to be preferred, it would appear that in practice, despite their different points of departure – the first approach is perceived as extending the boundaries of the tort of negligence and the second as narrowing them – similar policy considerations are examined in both approaches, in light of which the boundaries of the duty of care are determined (regarding the relationship between the approaches, see for example: Israel Gilad “On ‘Working Premises,’ Judicial Intuition, and Rationalism in Establishing the Limits of Liability in Negligence” Mishpatim 26 at pp. 295, 304-305 (5758), hereinafter: Gilad “On Working Premises”). These include general considerations which relate to imposing a duty of care upon a person – the desire to deter negligent conduct and to compensate the injured party on the one hand, as opposed to concerns for over-deterrence and overloading the courts on the other (see for example: Gilad “On Working Premises,” at pp. 296-297; Nahum v. Dornbaum [11], at p. 409). Similarly, policy considerations relating to the particular character of the damager, in our case an administrative authority, are also examined, as will be described below.

This was summarized succinctly by my colleague, (then) Justice Rivlin, in his judgment in Nahum v. Dornbaum [11]:

'The application of the tort of negligence is, inter alia, a consequence of setting the limits of the duty of care. These limits tend to distinguish those cases in which a person was negligent and in light of policy considerations it is appropriate to impose liability for his actions upon him, from those cases where the damager was indeed negligent, but policy considerations lead the court to conclude that it is not appropriate to impose liability on him' (p. 408).

The TASE’s duty of care

As stated above, it is accepted that the activities of the TASE are examined by the same criteria as those of an administrative authority. Therefore, in determining whether the TASE owed a duty of care to the Company, which sought to list shares for trading, we must refer to judicial rulings that have dealt with the duty of care borne by administrative authorities, just as the lower court did in its deliberations. In principle, administrative authorities, like any other person or corporation, are subject to liability in torts for their activities and they do not enjoy any specific or absolute immunity from suits on grounds of negligence (Israel Gilad, “The Liability of Public Authorities and Public Servants in Torts (Part One)” Mishpat U’Minhal 2 at p. 339, 393 (5755); Yoav Dotan “The Tortious Liability of a Public Servant Exercising Powers of Discretion” Mishpatim 15 at pp. 245, 246-250 (5746) (hereinafter: Dotan); CA 243/83 Municipality of Jerusalem v. Gordon [14], at pp. 134-136; CA 2906/01 Municipality of Haifa v. Menora Insurance Ltd. [15], at para. 18; Vaknin v. Beit Shemesh Local Council [7], at pp. 124-127). The unique characteristics of the authority, insofar as they find expression in the circumstances of the case before the court, are significant in the context of the policy considerations that limit and define the extent of the duty of care, as noted above. In Shatil v. State of Israel [12], Justice Levy mentioned some of the considerations relevant to the State’s liability in tort, which are applicable to our case:

'On the one hand, recognition of the State’s mission to promote the welfare of its citizens, the desire to prevent the abuse of the immense power that is placed in its hands, and the desire to encourage it to make informed decisions, are all considered.  On the other hand, the concern that government officials will become over-cautious and their ability to act in accordance with considerations relevant to the matter will be impaired is taken into account…; harm to bodies other than this particular damager...; the acceptance that there are certain general risks to which a citizen is exposed in modern society as a result of government activities…; the concern that government activities will be slowed down…, and the concern that governmental bodies, and the legal system that must examine their activities, will be overburdened….    This list is, of course, not closed' (ibid. para. 31).

In addition, in relation to the authority’s actions, the nature of the power granted to it is also considered. In other words, are its powers merely supervisory, or does it control the events that caused the damage? The extent of the discretion exercised by the authority is considered as well (see for example: CA 1678/01 State of Israel v. Weiss [16], at pp. 181-182; CA 1068/05 Municipality of Jerusalem v. Maimoni [17], at paras. 19-22; State of Israel v. Levy [13], at pp. 76-80. For a discussion of the difficulties arising from exceptional discretion as occurred in the Levy case, see for example: Municipality of Haifa v. Menora Insurance Ltd. [15], at para. 41; Shatil v. State of Israel [12], per Justice Levy, at  paras.  23-24).

Bearing in mind all of the above, I decided to address the TASE’s claim that it should bear no tortious liability whenever it exercises its regulatory powers in good faith and in accordance with the policy of the Israel Securities Authority. In other words, acting in good faith and in accordance with the policy of the Israel Securities Authority grants it “quasi-immunity” against tortious liability. As noted above, a determination that the TASE will always be immune to negligence suits for certain kinds of activities does not conform to our own approach. Our approach involves examining the existence of the basic conditions of the tort of negligence in the circumstances of the case, while exercising extra caution if the case justifies it, rather than simply declaring that the authority has absolute immunity in some areas. In this respect, President Shamgar’s words in State of Israel v. Levy are particularly apt:

'The comparative model – which negates the duty of care – is unacceptable to me. The negation of a duty of care amounts to immunity. Once the duty is negated, the question of negligence does not even arise. From an  analytical perspective, negating the duty of care under the given circumstances means that the suit will be rejected' ([13], at p. 81. See also e.g. HCJ 64/91 Khilef v. Israel Police [18], at p. 563; CA 653/97 Baruch and Tzipora Center Ltd. v. Municipality of Tel Aviv-Jaffa [19], at p. 817; CA 3889/00 Lerner v. State of Israel [20], at p. 312).

Nevertheless, as will be explained below, I think that the question of whether the TASE acted in good faith and with the assent of the Israel Securities Authority must be examined when assessing the reasonableness of the actions of the TASE. In other words, it must be examined in order to determine whether the basic conditions of negligence exist, which is the central question in this appeal (on this issue, see for example: Ariel Porat, “Torts Law: Negligence in the Rulings of the Supreme Court from a Theoretical Perspective” Yearbook of Israeli Law 1996-1997 (Ariel Rosen-Zvi, ed., 1997)).

The lower court ruled, and I agree, that there exists a relationship of proximity or adjacency that in principle justifies the imposition of a conceptual duty of care on the TASE. Actually, the primary role of the TASE is to ensure proper and fair trading for the investor community in general. However, the duty of care that the TASE owes the investor community does not negate the existence of a similar duty towards companies whose securities are traded on it. The statutory powers granted to the TASE, which confer supervisory and controlling powers upon it with regard to these companies, must also be considered. In my opinion, these powers create proximity between the TASE and the companies, justifying the application of a conceptual duty of care. This court’s rulings have on numerous occasions addressed the question of the relationship between the tortious duty of care and the statutory powers of an authority. It has found that “not only does the existence of statutory powers not grant immunity or negate liability or duty, but rather the very fact that statutory powers exist serves as the foundation stone on which the conceptual duty of care is constructed” (Municipality of Jerusalem v. Gordon [14], at p. 134. See also: CA 862/80 Municipality of Netanya v. Zohar [21], at p.  766-767; CA 1639/01 Kibbutz Maayan Tzvi v. Karishov, [22], at pp.  215, 282-283; CA 8526/96 State of Israel v. A. [23], at paras. 32-33; Municipality of Jerusalem v. Maimoni [17], at paras. 21-22).

Thus, for example, it is indisputable that regarding a decision to terminate the trading of a share – a decision that the TASE is empowered to make under s. 46(a)(5) of the Securities Law – the TASE owes a duty to the company whose shares have been removed from trade. The same is true in our case. The powers of the TASE in determining the listing rules for share trading create a supervisory relationship, control and even proximity between it and the companies that seek to join it. Those powers generate the duty of care of the TASE toward the companies. The Director General of the TASE even said as much in his testimony before the District Court on October 10, 2002: “I think that our duty is to consider their interest [of the holders of the controlling interest of the issuing company – E.A.]… …Obviously this does not mean that we should or that someone does ignore the needs, problems or desires of the holders of the controlling interest” (at p. 95 of the transcripts, lines 14-23). Moreover, this court has previously addressed the impact of the TASE’s power to set the Listing Rules for companies whose shares are traded on it:

'The provisions of the regulations that deal with the listing of securities for trading on the TASE [establish] conditions for the listing of securities for trading. These conditions stipulate the ‘rights and obligations’ of the public in this regard… They determine the conditions for screening companies whose shares can be traded on the TASE. This affects the legal status of those companies. It also has an impact on their financial capabilities. It influences their ability to raise capital and finance various activities in this manner. It impacts on the business of those companies' (the Torah Literature Database case, at pp. 509-510).

Regarding the TASE’s claim that judicial policy considerations justify its exemption from the conceptual duty of care, I have found no reason to interfere with the lower court's ruling on this matter either. According to this ruling, which is based on this court’s judgment in the previous proceeding, the TASE was not exercising a regulatory power in this case, but rather, applying the provisions of regulations that it determined itself. This kind of application does not involve extensive considerations of policy in a manner that justifies negation of the duty of care. Similarly, I do not accept the TASE’s claim that the imposition of a duty of care vis-à-vis issuing companies will hinder its operations. This Court’s rulings have rejected these kinds of arguments time and again, in light of the fact that they are not generally founded on a factual basis that justifies the granting of immunity to the authority (see for example: CA 429/82 State of Israel v. Suhan [24], at p. 741; CA 196/90 Yirmiyahu Eini Construction Co. Ltd. v. Krayot Committee for Local Planning and Building [25], at p. 127; Shatil v. State of Israel [12], per Justice Levy, at para. 32). Nevertheless, I will state that due to the TASE’s role as the body regulating the activities of the financial market – which is by nature a speculative market – for the benefit of all investors, I believe that certain weight should be assigned to the concern that following a review of its activities from the a tort law perspective, the TASE will stop taking relevant considerations into account when making various decisions. The case at hand demonstrates that sometimes, the TASE’s duty to the wider investor community is incompatible with its duty to one particular company, and we must ensure that the TASE is able to exercise its powers with confidence for the benefit of all investors. Nevertheless, this concern does not justify blanket immunity from suits for damages. Rather it is indicative of the caution that the court must exercise when it imposes liability in tort on the TASE.

As a marginal point, I will add that I have decided not to address the appellants’ argument regarding the connection between the fact that the TASE is a “monopoly” and the extent of the duty of care imposed on it. In any case, I do that think that this argument has a basis in the judgment in the previous proceeding, as the appellants contend. 

Finally, in order to establish a conceptual duty of care, as well as a concrete one, we must examine the question of the damages that the TASE could have predicted might result from a negligent decision regarding approval of the listing of the shares for trade. In this regard, the lower court determined, as noted above, that the TASE, as a body which specializes in the financial markets, could have predicted that the delay of the offering would cause certain types of damage to the Company, such as the deferral of negotiability, a delay in benefit from the proceeds and the costs involved in producing a new prospectus. At the same time, the Court pointed out that it had not been proven that the TASE could have predicted that its decisions would lead to a change in the structure of the offering and a reduced capacity to issue dividends to the Company’s shareholders.

The question of the foreseeability of different types of damages is a complex one, but I do not think that a decision on this issue is necessary or possible in the context of this appeal. First, since the District Court’s judgment did not address the question of damage, a sufficient factual basis for each of the heads of damage claimed was not presented to it, and certainly not to us. Secondly, since we are dealing with damages that were allegedly caused to the appellants in the course of their activities in the financial markets, we must be extra cautious in issuing a ruling that imposes liability for these damages. Activities in the financial markets are speculative by nature, involving opportunities and risk for investors and issuing companies alike. In this light, there is a real conceptual difficulty in the “abstract” examination of various types of damages and the attempt to attribute these damages directly to the TASE. It must also be considered that the relevant period was a time of crisis in relation to investments in the financial markets (see for example: Adini, at pp. 91-95), and this intensified the uncertainty of financial market activities. These factors are particularly relevant when considering that in our case, two different decisions by the TASE are being examined – the decision of non-approval and the decision to apply for stay of execution – each of which required the TASE to foresee damages of different kinds. As the lower court stated:

         'I will mention that my conclusions intertwine different duties of care relating to different decisions. It is clear that the decision of non-approval per se did necessarily entail the delay of the offering. In any case, the damage caused by the delay of the offering should not be viewed as a component of the concrete duty of care that accompanies the decision of non-approval' (at p. 48 of the judgment, note 23).

   I must emphasize that I do not think that these difficulties in determining the limits of the duty of care and foreseeability will prevent the imposition of liability on the TASE for negligent activities in other cases. For example, it would seem that regarding damages that are not directly dependent on the financial markets, such as the cost of producing a new prospectus, it could be decided that a conceptual and concrete duty of care applies. However, I do not think that this is the case in which to examine that question – both in light of the fact that sufficient factual basis has not been presented before us, and in light of my determinations regarding the basis of negligence, which will be explained below.

In conclusion, therefore, I have found that a conceptual duty of care owed by the TASE to companies listing their shares for trading with it may indeed be recognized in principle. However, the question of the extent of this duty – in relation to damages and other kinds of activities – should be left open for further inquiry and consideration when a suitable case graces the chambers of this Court.

The basis of negligence

Having found that the TASE’s duty of care vis-à-vis the Company may be recognized in principle, even without a comprehensive definition of its extent, we must examine whether this duty of care was breached in the circumstances of the case. As I noted above, the element of negligence, which I will now address, is the central issue of the appeal before us.

In the framework of proving negligence, the question of whether the conduct of the damager was improper, deviating from the manner in which a reasonable person would act under those circumstances, is examined. To this end, an objective standard – i.e. the principle of reasonableness – is invoked to examine the concrete circumstances of the case (see for example: CA 5604/94 Chemed v. State of Israel [26] at pp. 507-508; Gilad "On Working Premises,” at pp. 298-299). In this context, it should be added that the actions of the TASE must be examined, first and foremost, in light of the data and information that it possessed at the time it made the various decisions, and not simply based on the judgment handed down by this court in the previous proceeding, several years after those decisions were made. In this respect, President Barak’s words in Chemed v. State of Israel [26]  are particularly apposite:

'The question is not how a reasonable person who is not faced with the particular circumstances of the case would behave; the question is how a reasonable person who finds himself in the damager’s situation would behave. When an examination of reasonableness of conduct is carried out, naturally after the events took place, the goal is to examine the reasonableness of the conduct at the time that it occurred, in accordance with what was known at that time. The examination should not be in light of post-factum knowledge' (ibid. at p. 507. See also: CA 3108/91 Rabie v. Veigel [27], at p. 513; CA 6970/99 Abu Samara v. State of Israel [28], at p. 189).

In order to examine the TASE’s conduct from the perspective of damages, we might invoke the principle of reasonableness that has been developed as the acid test for the activities of an authority in administrative law. As stated by President Barak in CA 1081/00 Avnel Distribution Co. Ltd. v. State of Israel [29], at p. 193:

'An unreasonable act on the administrative plane is likely to constitute a negligent act in private law. Sometimes these are two sides of the same coin…. For a breach of administrative law the administrative remedies will apply. For a breach of duty of care in torts, the civil remedies will apply, except that essentially contradictory remedies will not be given nor multiple compensation' (ibid., at pp. 203-204. See also: Municipality of Haifa v. Menora Insurance Ltd. [15], at para. 42).

Nevertheless, despite the interface between these two concepts of reasonableness, they are not absolutely identical, due to the different goals that underlie them and the different planes on which they are examined (see for example: Municipality of Haifa v. Menora Insurance Ltd. [15], at para. 42 and the references there). For example, without establishing hard and fast rules on the matter, despite the administrative perspective that the court tends to intervene in the authority’s decisions only when these deviate in an extreme manner from the bounds of reasonableness, it cannot be said that the imposition of tortious liability is reserved only for these extreme circumstances (see for example: Dotan, at pp. 279-281). The differing rationales that lie at the basis of judicial review on the administrative plane, and at the basis of judicial analysis on the civil plane, therefore result in differing degrees of judicial intervention.

In this case, we must examine two acts of the TASE which according to the appellants are responsible for the damage that was allegedly caused to them– the decision of non-approval and the decision to apply for stay of execution. I will state from the outset that I find no reason to interfere with the lower court’s conclusion that in the circumstances of the case, the appellants did not succeed in proving that the TASE was negligent in making these decisions. Below I will explain my reasoning in relation to each of the decisions in turn.

The decision of non-approval

The decision of non-approval was made, as mentioned, based on the provisions of s. 46(a)(2) of the Securities Law, which authorizes the TASE to lay down in its Regulations rules for the listing of shares for trading, including the number of shares that must be held by the public immediately after they are listed. The decision of non-approval was also made on the basis of reg. 73a of the Regulations, which provides that the ratio held by the public shall be no lower than that specified in the guidelines. In the judgment in the previous proceeding this Court ruled that the decision of non-approval was mistaken, but that this error does not suffice to establish that the TASE was negligent. Not every mistaken decision by a body exercising professional discretion – be it an administrative authority or otherwise – is automatically a negligent decision (see for example: CA 4707/90 Mayorkas v. State of Israel –Ministry of Health [30]). In this matter I accept the District Court’s distinction that when examining negligence, significant weight must be attributed to the decision-making process. In exceptional cases, where a decision appears to be obviously and absolutely mistaken, it may be determined that even a decision made according to proper procedure was negligent. However, in this case we are not dealing with a decision of this kind.

In our case, there is no dispute that prior to making the decision, the TASE consulted extensively with all the relevant parties – senior executives at the TASE, the TASE’s Committee for Listing of Securities, the TASE’s Board of Directors, its legal advisors, and the Israel Securities Authority. Like the District Court, I am of the opinion that the decision of non-approval was made following a thorough process of clarification and deliberation, with the participation of all the relevant professional bodies. Therefore, I find that no flaw in the decision-making process can be identified, and not even the appellants themselves have claimed such a flaw.

As mentioned above, the appellants argue that despite this process, the TASE’s decision was unreasonable. Indeed, according to the judgment in the previous proceeding, the TASE deviated from the accepted interpretation of the listing rules and made a decision with insufficient factual basis. The judgment in the previous proceeding – which is obviously the basis of the appellants’ claims – was centered on a different question from that which we seek to clarify in our case, i.e. the question of the TASE’s tortious liability. Therefore, even though the Court’s ruling in the previous proceeding is relevant, a situation whereby a decision on the question of damages is based on “the wisdom of hindsight” must be avoided. It is therefore incumbent upon us to focus on examining the discretion exercised by the TASE at the actual time. In the course of the decision-making process, according to the testimony of the Director General of the TASE and the documents provided, the TASE considered with due seriousness the damages that it thought would be caused to the investor community as a result of the publication of the prospectus as it was, and found that these justified its non-publication (see for example pp. 58, 63, 70, 77-78 of the transcripts of the hearing of October 21, 2002 and also appendices C-F of the TASE’s summation). Indeed, the primary function of the TASE is to ensure that trading is conducted in a proper and fair manner, for the benefit of all investors (see for example: Yamin Wasserman). At the same time, as I will discuss further below, among its considerations the TASE must take into account the impact that its decision will have on the company whose case it is addressing. In this case, in light of all that has been said about the proper conduct of the decision-making process, I am not of the opinion that there are grounds to rule that the discretion exercised by the TASE in “real time” was unreasonable.

I say this particularly in light of the fact that in the course of the decision-making process, the TASE consulted with the Israel Securities Authority, its supervisory authority. Now, I do not think that a position taken by the Israel Securities Authority binds the TASE to the extent of absolving it from all responsibility for the outcome of its decision. The TASE – just like any other authority exercising its powers – has a duty to exercise its discretion notwithstanding the supervising authority’s position (on this issue, see for example: Zamir, at pp. 862-863; Yirmiyahu Eini Construction Co. Ltd. v. Krayot Committee for Local Planning and Building [25], at pp. 132-133. Also cf: CA 491/73 Gedolei Hacholeh Ltd. v. Machruz [31], at pp. 37-38; Haim Levy, Moshe Smith and Marshall Sarnat The Stock Exchange and Investments in Securities pp. 118-119 (Marshall Sarnat and Joan Dilevsky, eds. 1999)). However, the consultation process, which none of the parties claimed was problematic, is generally an effective and appropriate step in the decision-making process (see also: HCJ 5933/98 Israeli Documentary Filmmakers Forum v. President of the State [32] at pp. 510-513; HCJ 8850/02 Pastinger v. Minister of Justice [33], at p. 705). The Israel Securities Authority’s position can constitute an indication of the reasonableness of the decision, as manifested in the opinion of the relevant expert bodies. In our case, the consent of the Israel Securities Authority shows that the decision made was seen as reasonable, correct and professional.

Another factor that I consider important in terms of the reasonableness of the TASE’s decision is the fact that its decision of non-approval was apparently the first time that the TASE had dealt with a purchase offer of the kind that the Company sought to include in its prospectus. However, I accept the lower court's determination, which was founded on the judgment of this court in the previous proceeding, that in making this decision the TASE exercised executive powers, as opposed to regulatory powers, as will be explained below. Nevertheless, even though the TASE exercised its discretion within existing regulations, it had no guidelines regarding the treatment of this repurchase offer. Moreover, it is indisputable that this matter lies at the very heart of the TASE’s operations, and it has the potential to impact both the investor community and the public’s trust in the TASE. Under these circumstances, I am of the opinion that “the tortious range of reasonableness” of the decision should be broader.

In my opinion, this factor also has an impact on the appellants’ claims regarding the making of the decision of non-approval in the absence of a sufficient factual basis. Indeed, in the judgment in the previous proceeding, this court ruled that the TASE’s decision lacked factual basis, and the District Court found that this ruling created an estoppel by record. I see no reason to interfere with this determination, but I also do not think that it affects what I said earlier regarding the reasonableness of the decision, for the following two reasons. First, I found there to be substance in the TASE’s claim that the ruling on the lack of factual basis was made as a marginal point, and it related to the possibility that the decision of non-approval was based on the concern that the repurchase offer was a scam and an attempt to bypass the listing rules. Secondly, in examining the reasonableness of the TASE’s activities from the perspective of torts, I am of the opinion that the extent of the discretion granted to the TASE must be considered also in light of the information required to create a basis for the decision. Thus, even though it is clear that an authority may not base a decision on a flimsy factual basis, there is a range within which an authority is entitled to decide what information is essential in order to make the decision (see for example: Yitzhak Zamir The Administrative Authority Vol. 2 at p. 737 (1996), hereinafter: Zamir). This is its professional expertise. In our case, I do not think that TASE deviated from this range of reasonableness, in light of the fact that the decision was based on professional considerations and information. Moreover, some of the information required for the decision was data related to the operation of the financial markets and the response of the investors to the Repurchase Offer – information which is particularly difficult to obtain in advance (see e.g.: Zamir at p. 758). Under these circumstances, I am of the opinion that basing the decision on a genuine concern for damage that could be caused as a result of the publication of the prospectus as it was, does not overstep the bounds of the tortious range of reasonableness.

In conclusion, for the above reasons, I find that there was no negligence in the TASE’s decision of non-approval.

The decision to apply for stay of execution

As noted above, a significant part of the damages claimed by the appellants is the result of the decision of the TASE to apply for stay of execution of the judgment handed down by the District Court – an application that was granted by this court. The lower court found that even though there was no impediment to examining the TASE’s liability for damages caused by the decision to stay the execution of the judgment, since it did not take into consideration the damages that could be caused to the Company as a result of the application, nevertheless, the TASE did not act negligently in its decision to apply for stay of execution. I accept this determination in principle, but I find that its application in this case is not simple.
As we know, the approach that a judgment or other judicial order could not be the basis for a tort was once dominant in Israeli law, and as such, a litigant acting by virtue thereof was considered to be acting in accordance with legal authority and was thus immune to law suits (see for example: CA 735/75 Roitman v. Aderet [34] at pp. 82-83. See also: Municipality of Jerusalem v. Gordon [14], at p. 144). However, it has been ruled in various cases over the years that the aforementioned immunity will not apply to one who initiated legal proceedings in a negligent manner (CA 732/80 Arens v. Beit El – Zichron Yaakov [35], at pp. 645, 656; Municipality of Jerusalem v. Gordon [14], at p. 145; LCA 1565/95 S’char V’Sherutei Yam Ltd. v. Shalom Weinstein Co. Ltd. [36]; LCA 2422/00 Ariel Electrical Engineering Traffic Lights and Maintenance v. Municipality of Bat Yam [37], at p. 618). Judicial precedent has interpreted the duty of care borne by the litigant in this context as a duty to act reasonably, fairly and in good faith, and most importantly to present the full factual picture required for a decision on the dispute before the court (S’char V’Sherutei Yam Ltd. v. Shalom Weinstein Co. Ltd. [36], per Justice Mazza, at para. 21, and per Justice Türkel, at para. 2).  Türkel’s judgment). It has also been ruled that the degree of good faith required of a party to a process is dependent on the character of the relevant process and the nature of the issue in dispute (MCApp 2236/06 Hamami v. Ohayon [38], at para. 10).
As noted above, the TASE is quasi-public body with professional expertise. As such, it is required to exercise discretion before deciding to file an application with the court to stay the execution of a judgment (on the issue of the duties imposed on these kinds of bodies, see for example: HCJ 731/86 Micro Daf v. Israel Electric Co. [39] at p. 499; CA 294/91 Kehillat Yerushalayim Jewish Burial Society v. Kestenbaum [40] at p. 491; CA 3414/93 On v. Diamond Exchange Enterprises (1965) Ltd. [41] at p. 196; LCA 1784/98 Amidar v. Manada [42] at pp. 335-336; Harel, at pp. 243-256). Within the bounds of this discretion, it must weigh the full gamut of considerations relevant to the matter, including the foreseeable damages to the other party that may result from the stay of execution, even if it cannot always know the full extent and details of the damage. I must stress that I am not of the opinion that the TASE bears a duty to take extraordinary measures to assess damages that are not claimed or presented before it. It must formulate an informed position as to whether the damage it will foreseeably incur outweighs the foreseeable damage to the opposing litigant, based on the information it possesses and its professional expertise, so that it may claim that the balance of convenience is tipped in its favor.

Indeed, one must be cautious in overburdening a litigant with obligations in regard to the initiation of proceedings, since this could violate the basic right of access to the courts (see for example: CA 4980/01 Adv. Shalom Cohen (Official Receiver) v. Glam [43] at p. 625; S’char V’Sherutei Yam Ltd. v. Shalom Weinstein Co. Ltd. [36], per Justice Strasberg-Cohen, at para. 5). Moreover, the litigant in our case represents the public interest of the investor community, which does not have the professional knowledge and expertise possessed by the TASE. On the other hand, I am aware of the difficulties involved in a proceeding during which the court is asked to provide temporary relief when the factual picture before it is not entirely clear and when this relief could violate on the rights of the other litigant (see for example: Dudi Schwartz Civil Procedure at pp. 91-93 (2007)). I am therefore of the opinion that the TASE must consider all the factors – including the damage that will be caused to the Company as a result of the stay of execution – before submitting an application, and it must do so on the basis of the information it possesses. This is based on the assumption that the opposing party will present its arguments in full and will provide the court with a detailed picture of the damages that will be caused to it since, in the nature of things, this information should be in its possession. 

To my mind, the TASE fulfilled its duty in this regard. First, in our case it was not claimed that the TASE breached its obligation to present the court with a full factual basis, or that it requested the stay of execution as a means of harming the Company or in a manner that abused its rights (Adv. Shalom Cohen (Official Receiver) v. Glam [43], at pp. 629-630; Dudi Schwartz “The Application of the Principle of Good Faith in Civil Procedure” Iyunei Mishpat 21 at pp. 295, 329-330 (1988)). On this point, I do not think that the appellants’ claim that the TASE presented misleading or erroneous arguments to the court should be accepted. Indeed, in the final analysis, the TASE’s arguments were rejected in the course of the appeal, but it was not determined – nor proven – that it concealed facts or that it deliberately attempted to mislead the court. As the lower court determined in the final section of its judgment, at the time when it submitted the application, the TASE had reasons which it considered to be highly significant and to justify the application for stay of execution. The foremost of these was concern for the damage that could be caused to the financial markets if companies were able to include in their prospectuses repurchase offers of the kind that the Company had inserted into its prospectus.  In this sense, it seems that the TASE exercised a right granted to it by law in order to protect interests that seemed important to it both at that time and later as well, as demonstrated by the amendment of the listing rules.

Secondly, I am unconvinced that the evidentiary material presented before the lower court shows clearly that the TASE acted out of indifference to the damages that would be caused to the Company as a result of the application. The lower court based its determination that the TASE did not consider the damages that would be caused to the Company primarily on the fact that it did not present satisfactory evidence of internal deliberations concerning these considerations. In my opinion, weight should be attached to the fact that the appellants’ claims regarding negligence in the application for stay of execution were made in a tentative fashion, as noted by the lower court as well (at p. 60 of the judgment). Under these circumstances, I think that the aforementioned lack of evidence does not tip the scales in favor of a ruling that the TASE was negligent in initiating the proceeding to stay execution. Moreover, the court noted that it is possible that the Company did not even notify the TASE of these foreseeable damages (at p. 61 of the judgment). In addition, my impression is that the TASE’s request to expedite the date of the appeal hearing attests to its awareness of the difficulty that the delay could cause the Company, as well as to its willingness to facilitate a speedy decision on the matter. It is possible that the request to expedite the hearing stemmed from the TASE’s own interests, but this does not negate the fact that the Company also benefited as a result. In conclusion, this court – after hearing the arguments of both sides – found that there were grounds to stay the execution of the judgment until a ruling was issued on the appeal. In my opinion, this lends credence to the determination that the decision to apply for stay of execution was reasonable at that time.

Therefore, I do not find that the TASE was negligent in its decision of non-approval or its decision to apply for stay of execution of the judgment.

 

Conclusion

In light of all of the above, even though I believe that a duty of care between the TASE and companies issuing their securities on it should be recognized in principle, I do not find that in the circumstances of this case the extent of this duty can be clearly defined. Similarly, I do not find that the appellants have succeeded in showing that the TASE’s decisions were negligent in a manner that would make it liable for the alleged damages that were caused to the Company as a result of the delay of the offering. I would further add that I have not seen fit to discuss the appellants’ claim for compensation by virtue of the tort of negligence, which was claimed in a general and unsubstantiated fashion.

Therefore, I propose that my colleagues dismiss the appeal and order the appellants to cover the court costs and the respondents' legal costs in the amount of NIS 40,000. Appellant 1 will pay NIS 20,000 and the remainder will be divided equally among appellants 2-14.

                                      

Deputy President E. Rivlin

I concur.

                                       

Justice D. Cheshin

I concur.

                                         

Decided as per the decision of Justice E. Arbel.

 

26 Sivan 5768

 29 June 2008

LCA 1272/05

Gad Carmi

v.

Daniel Sabag

 

 

The Supreme Court sitting as the Court of Civil Appeals

[2 December 2007]

Before Justices M. Naor, E. Arbel, E. Rubinstein

 

Application for leave to appeal the judgment of the Haifa District Court (Judges I. Amit, Y. Elron, Y. Willner) of 29 December 2004 in CA 2174/04.

 

Facts: The appellant suffered from a mental illness. On 1 October 1999, the appellant attacked the respondent, who was then an eight year old child, and seriously wounded him. The appellant then attacked his own daughter and killed her. The appellant was indicted for murder and attempted murder, but because of the mental illness from which he suffered, he was found not to be responsible for his actions, and he was hospitalized in a psychiatric hospital. The respondent, through his parents, sued the appellant for compensation.

 

Held: Tort law does not recognize a defence of insanity according to the meaning of ‘insanity’ in criminal law, i.e., when the defendant did not understand what he was doing or the impropriety of his act, or could not refrain from committing the act because of a mental illness. Tort law recognizes only a defence of lack of control, when the tortfeasor had no control over his actions (such as in a case of automatism), either because of a physical or mental illness.

 

Appeal denied.

 

Legislation cited:

Penal Law, 5737-1977, ss. 34G, 34H, 34H(2), 34V(2).

Road Accident Victims Compensation Law, 5735-1975.

Torts Ordinance [New Version], ss. 1, 9, 9(a), 23, 24, 24(1), 35, 56.

Treatment of Mental Patients Law, 5751-1991, s. 15(b).

 

Israeli Supreme Court cases cited:

[1]      LAA 741/06 A v. B (unreported).

[2]      CrimA 549/06 A v. State of Israel (unreported).

[3]      CrimA 118/53 Mandelbrot v. Attorney-General [1956] IsrSC 10 281; IsrSJ 2 116.

[4]      CA 145/80 Vaknin v. Beit Shemesh Local Council [1983] IsrSC 37(1) 113.

[5]      CA 5604/94 Hemed v. State of Israel [2004] IsrSC 58(2) 498.

[6]      CrimA 125/50 Yakobovitz v. Attorney-General [1952] IsrSC 6(1) 514.

[7]      CrimA 852/85 Funt v. State of Israel [1988] IsrSC 42(2) 551.

[8]      CrimA 217/04 Al-Quraan v. State of Israel (unreported).

[9]      CrimA 2325/02 Biton v. State of Israel [2004] IsrSC 58(2) 448.

[10]    CrimA 759/97 Ilyabayev v. State of Israel [2001] IsrSC 55(3) 459.

[11]    CrimA 392/91 Schatz v. State of Israel [1993] IsrSC 47(2) 299.

[12]    CA 67/66 Bar-Chai v. Steiner [1966] IsrSC 20(3) 230.

[13]    CA 360/64 Abutbul v. Kluger [1965] IsrSC 19(1) 429.

[14]    CrimA 549/06 A v. State of Israel (not yet reported).

[15]    CA 187/52 Halperin v. Mayor of Tel-Aviv [1954] IsrSC 8 219.

[16]    CrimA 2/73 Sela v. State of Israel [1974] IsrSC 28(2) 371.

[17]    CA 711/72 Meir v. Directors of the Jewish Agency for Israel [1974] IsrSC 28(1) 393.

[18]    CrimA 382/75 Hamiss v. State of Israel [1976] IsrSC 30(2) 729.

[19]    FH 12/63 Leon v. Ringer [1964] IsrSC 18(4) 701.

[20]    FH 15/88 Melech v. Kornhauser [1990] IsrSC 44(2) 89.

[21]    CA 6216/03 Nasser v. M.H.M. Ltd (unreported).

[22]    CA 5604/94 Hamed v. State of Israel [2004] IsrSC 58(2) 498.

[23]    CA 4733/92 Haifa Chemicals Ltd v. Hawa (unreported).

[24]    CA 418/74 Amamit Insurance Co. Ltd v. Weinberger [1975] IsrSC 29(1) 303.

[25]    CA 8797/99 Anderman v. District Appeal Committee [2002] IsrSC 56(2) 466.

[26]    CA 357/80 Naim v. Barda [1982] IsrSC 36(3) 762.

[27]    CA 2034/98 Amin v. Amin [1999] IsrSC 53(5) 69; [1998-9] IsrLR 611.

[28]    CA 8673/02 Forman v. Gil [2004] IsrSC 58(2) 375.

[29]    CA 11152/04 Pardo v. Migdal Insurance Co. Ltd [2006] (2) IsrLR 213.

[30]    CrimA 186/55 Mizan v. Attorney-General [1967] IsrSC 11(1) 769.

[31]    CrimA 2947/00 Meir v. State of Israel [2002] IsrSC 56(4) 636.

[32]    LCA 5768/94 ASHIR Import, Manufacture and Distribution v. Forum Accessories and Consumables Ltd [1998] IsrSC 52(4) 289.

[33]    CA 8163/05 Hadar Insurance Co. Ltd v. A (not yet reported decision of 6 August, 2007).

[34]    CA 350/77 Kitan Ltd v. Weiss [1979] IsrSC 33(2) 785.

 

Israeli District Court cases cited:

[35]    CC (Hf) 1888/66 Yasmin v. Kahalani IsrDC 80 161.

[36]    CC (Hf) 165/92 State of Israel v. Davidowitz [1993] IsrDC 5753 3.

[37]    SFC (Jer) 5093/02 State of Israel v. Pimstein (unreported).

[38]    CC (Jer) 653/94 Arbel v. Shaare Zedek (unreported).

[39]    CC (Hf) 751/93 Stern v. Z.E. Gilad Security Co. Ltd (unreported).

 

Israeli Magistrates Court cases cited:

[40]    CC (TA) 118124/01 Jarfi v. Somech (unreported).

[41]    CC (Jer) 8636/99 Gordon v. State of Israel (unreported decision of 19 October 2006).

 

American cases cited:

[42]    Williams v. Hays, 143 N. Y. 442 (1894).

[43]    Shapiro v. Tchernowitz, 155 N.Y.S 2d 1011 (1956).

[44]    Breunig v. American Family Insurance Company, 45 Wis. 2d 536 (1970).

 

English cases cited:

[45]    White v. White [1950] P. 39.

[46]    Hanbury v. Hanbury (1892) 8 T.L.R. 559.

[47]    Morriss v. Marsden [1952] 1 All ER 925.

[48]    Nettleship v. Weston [1971] 2 Q.B. 691.

[49]    Cole v. Turner (1704).

 

Jewish law sources cited:

[50]    Jeremiah 17, 9.

[51]    Esther 9, 5.

[52]    Rabbi David ben Shelomo Ibn Abi Zimra (Radbaz), Responsa, part V, 239 and part VI, 2246.

[53]    Rabbi Akiva Eger, Responsa 64.

[54]    Rabbi Yaakov Ettlinger, Responsa Binyan Zion HaHadashot, 98.

[55]    Rabbi Yehuda Assad, Responsa Yehuda Yaaleh, part 1, 1.

[56]    Mishnah, Bava Kamma, 8, 4.

[57]    Maimonides, Hilechot Hovel uMazik 4, 20.

[58]    Rabbi Yosef Karo, Shulhan Aruch, Yoreh Deah, 267, 8.

[59]    Talmudic Encyclopaedia, vol. 8, ‘The human tortfeasor’; vol. 17, 495 ‘Deaf person’, 542 ‘Deaf persons, insane persons and minors.’

[60]    Rabbi Menachem HaMeiri, Bet HaBehira, Bava Kamma, 87, 1.

[61]    Rabbi Moses Sofer, Responsa Chasam Sofer, Yoreh Deah, 317.

[62]    Rabbi Yosef ben Meir Teomim, Pri Megadim, Orach Hayim, General Introduction at the beginning of part 2.

[63]    Prof. A. Steinberg (ed.), Encyclopaedia of Jewish Medical Ethics, vol. 2, ‘Deaf person’; vol. 6, ‘Insane person.’

[64]    Maimonides, Hilechot Mechira, 29, 5.

[65]    Babylonian Talmud, Bava Kamma 26a.

[66]    Babylonian Talmud, Sanhedrin 72a.

[67]    Leviticus 1, 3.

[68]    Rabbi Shelomoh Yitzhaki (Rashi) on Leviticus 1, 3.

[69]    Babylonian Talmud, Arachin 21a.

[70]    Rabbi Meir Leibush ben Yehiel Michel (Malbim), Commentary on Leviticus.

[71]    Rabbi Naftali Hertz Wessely, HaBiur on Leviticus.

[72]    Rabbi Baruch Epstein, Torah Temima on Leviticus.

 

For the appellant — A. Huberman, S. Khatib, E. Yakobi.

For the respondent — S. Efroni.

 

 

JUDGMENT

 

 

Justice E. Rubinstein

1.    This case concerns the liability in tort of a person suffering from a mental illness. It is an application to appeal the judgment of the Haifa District Court of 29 December 2004 (Judges Amit, Elron and Willner) in CA 2174/04, which, by a majority (Judges Amit and Elron, Judge Willner dissenting), denied the appeal filed by the applicant (now the appellant) against the judgment of the Haifa Magistrates Court of 5 January 2004 (Judge Sokol) in CC 12851/00. Judge Rivlin decided to refer the application for leave to appeal to a panel of three justices. On 7 December 2005, at the end of a hearing before the present panel, this Court gave leave to appeal. Now that the parties have filed their closing arguments, we are giving judgment.

Background

2.    On 1 October 1999, a day that ended tragically, the appellant, his wife and their daughter, a ten month old infant, went to the park near their home. The appellant called the respondent, who was then an eight year old child, and asked him to ‘say hello’ to his infant daughter. Ten minutes later the appellant called the respondent once again, and when he came to him, the appellant took out a knife and stabbed him several times deeply in his neck, stomach and hands. The respondent left the site bleeding, with his intestines spilling out of his abdomen. The appellant then proceeded to slit the throat of his infant daughter, who died immediately. The respondent was rushed to hospital, where he underwent surgery five times in ten days, and his life was saved. The appeal concerns a claim in tort that was filed by the respondent through his parents against the appellant.

3.    In the criminal sphere the appellant was indicted for murder and attempted murder. On 13 March 2000, after it received several psychiatric opinions, the District Court (President Lindenstrauss and Judges Joubran and Neeman) granted an application filed by the parties, and held that the appellant had committed the acts attributed to him in the indictment, but he was not liable to any penalty because of the mental illness from which he suffered and also continued to suffer at the time of the trial. The court ordered the appellant to be hospitalized in a closed ward in a psychiatric hospital, under s. 15(b) of the Treatment of Mental Patients Law, 5751-1991 (hereafter: the criminal judgment).

The civil proceeding in the Magistrates Court

4.    After the criminal proceeding ended, the respondent filed a civil claim in tort against the appellant. On 5 January 2001, the Magistrates Court (Judge Sokol) granted the claim, and found the appellant liable to pay the respondent NIS 302,940, which consisted of the following: NIS 200,000 for non-pecuniary damage, NIS 70,000 for loss of future income, NIS 20,000 for expenses and assistance and NIS 12,940 for corrective plastic surgery. In a detailed and learned judgment, Judge Sokol addressed the question of the liability of mentally ill persons in tort. The court discussed the fact that the legislature did not provide any defence against liability in the Tort Ordinance similar to the ‘insanity’ defence provided in s. 34H of the Penal Law, 5737-1977, but it thought that this should not be regarded as a negative arrangement. The court considered the three main approaches to this issue in English law, as they were discussed long ago by Prof. Englard (I. Englard, A. Barak, M. Cheshin, The Law of Torts — General Theory of Torts (second edition, G. Tedeschi ed.. 1977), at pp. 131-137 (hereafter: Englard et al., The Law of Torts)): the first approach, which was the approach of the well-known English judge Lord Denning in White v. White [45], at p. 59, according to which ‘a person will be liable in torts, even if, as a result of a mental illness, he does not know the nature or the moral character of his act’ (Englard et al., The Law of Torts, at p. 133). This approach is founded on the fundamental approach that liability in tort is based on the principle of compensation, not fault. The second approach is the approach of Lord Esher in Hanbury v. Hanbury [46], which is also cited in White v. White [45], according to which criminal and tort law should apply the same standard of liability. The third approach is an intermediate approach that was propounded by Judge Stable in Morriss v. Marsden [47], according to which the tortfeasor does not need to understand the moral significance of his act, but a minimal mental element of control is required (Prof. Englard uses the term ‘volition,’ which means ‘the mental act by means of which a person makes himself the cause of his conduct’ (p. 136), i.e., the control exercised by a person’s personality over the movements of his body). Prof. Englard adopted the intermediate approach. The Magistrates Court also reviewed case law in the United States, and discussed how conflicting rulings have been made on this issue.

5.    After he examined the various purposes underlying the law of torts, Judge Sokol held that ‘the conclusion from all of the aforesaid is that as a rule the tortfeasor’s mental illness does not provide him with a defence against liability in tort’ (p. 10). He therefore turned to examine whether the illness of the appellant before us exempts him from liability in tort for assault (s. 23 of the Torts Ordinance [New Version][1]), which is the relevant tort in our case, since it contains a special mental element — ‘intentionally.’ From an analysis of the criminal judgment the Magistrates Court concluded that ‘the plaintiff acted with intent, will and an ability to refrain from carrying out the act,’ and therefore it held that despite the mental illness from which he suffered at the time of the act, the appellant satisfied all the requirements of the tort, including the requirement of intent, and consequently it found him liable to pay compensation.

The judgment in the District Court

6.    On 29 December 2004 the District Court, by a majority, denied an appeal filed by the appellant against the judgment of the Magistrates Court. The three Judges (Amit, Elron and Willner) considered the unprecedented question at length, with extensive discussion of comparative law and the theoretical elements of the law of torts. I should first point out that the District Court overturned the finding of fact in the Magistrates Court, and it held that the criminal judgment was also based on the second alternative provided in s. 34H of the Penal Law, i.e., a defendant who ‘lacks any real ability… to refrain from committing the act’ (p. 24). We shall return to examine this matter below. The three Judges of the panel considered both the general subject of the exemption of mentally ill persons from liability in tort and the specific issue of whether the elements of the tort of assault are satisfied. Their opinions are comprehensive and thorough, and it appears that there is no argument that was not raised and considered in detail. I will discuss the main points of their opinions in brief, as a basis for our deliberations.

Judge Amit’s opinion

7.    Judge Amit denied the appeal, even though he found that the lack of a defence of insanity in the Torts Ordinance is not a negative arrangement (p. 13). According to him, Prof. Englard’s approach recognizes an exemption from liability even in cases that satisfy the alternative provided in s. 34H(2) of the Penal Law (‘lacks any real ability… to refrain from committing the act’ — emphasis added), but he held that a more restrictive interpretation should be adopted, according to which only cases that fall within the scope of s. 34G of the Penal Law (‘if he was unable to chose between doing it and not doing it because of a lack of control over his body movements’ — emphasis added) will constitute a defence in tort (p. 19). Judge Amit expressed agreement with the remarks of Judge Neumann of the Haifa District Court that were uttered many years ago:

‘The defendant had volition to shoot at the plaintiff and an expectation of harming him. He knew what he was doing. In my opinion these facts are sufficient for determining liability in tort, which is not negated because the defendant did not act with free will but as a result of an irresistible urge, even when the urge increased… I would say in brief: volition is required for liability in tort, free will is not required’ (CC (Hf) 1888/66 Yasmin v. Kahalani [35], at p. 168 (emphasis added)).

Judge Amit found support for this arrangement in s. 374 of the Property Law Memorandum, 5766-2006 (hereafter: the Property Law Memorandum), according to which ‘No one shall be liable in tort for an act if he was incapable of choosing between doing it and not doing it, because of a lack of control over his movements with regard to that act,’ where the emphasis is placed, as stated, merely on the lack of physical control. Judge Amit based this narrow approach on the main purpose of the law of torts, which is to compensate the respondent for the damage that he suffered (p. 28).

8.    Judge Amit discussed how the tort of assault requires a mental element of intent, but he held that de facto the tort has an aspect of strict liability, since anyone who touches another without his consent is considered to have committed an assault, even if he has no improper intent (p. 26). Judge Amit mentioned the wording of the tort in the Property Law Memorandum, according to which ‘An assault is a conscious use of force, whether directly or indirectly, against a person’s body, without his consent’ (s. 389, emphasis added), and he concluded:

‘In my opinion, the special character of the tort of assault as a tort of strict liability or as a tort that has elements of strict liability tips the scale in favour of imposing liability on the appellant as someone who intended to harm the respondent, even if in view of his mental state he lacked intent’ (p. 26).

From an analysis of the defence provided in s. 24(5) of the Torts Ordinance, Judge Amit sought to deduce that just as a person has a right of self-defence against a mentally ill person, so too does he have a right to be compensated by him.

9.    Judge Amit also addressed judicial policy considerations. In the part of his opinion entitled ‘On justice and public policy’, he expressed the opinion that damage that is caused without fault should be borne by the tortfeasor, and not by the victim; this decision is more just, and provides the family and relations of the mentally ill person with an incentive to ensure that he does not hurt others (p. 36). He went on to say:

‘To this we should add the concern — or perhaps the fear — that psychiatry is a less precise science than other fields of medicine… the general public, which is not familiar with fine medical-legal distinctions finds it hard to understand or accept the defence of insanity… In civil law, there is a concern that recognizing insanity as a defence in tort will lead to false claims of insanity’ (pp. 37-38).

Finally, Judge Amit reviewed other legal systems, including Jewish law, but it would appear that this review did not lead to an unequivocal conclusion. Ultimately, Judge Amit proposed that the appeal should be denied.

10. I should also point out that regarding the burden of proof Judge Amir was of the opinion that the finding of the District Court in the criminal proceeding on the question of the appellant’s mental state could not serve as sufficient evidence in the civil proceeding. He said that in the criminal trial the appellant needed to establish a reasonable doubt that the defence applied (s. 34V(2) of the Penal Law), whereas in civil law he needed to prove his mental state on a balance of probabilities, which he did not do. According to Judge Amit, ‘this in itself is sufficient reason to deny the appeal’ (p. 11). I should immediately say here that in this matter I believe that we should adopt the position of Judges Elron and Willner, that —

‘When the parties have reached an agreement that the factual findings of the District Court in the criminal proceeding should serve as a basis for the judgment in the civil proceeding, and when counsel for the state has agreed that at the time of the act the appellant was incapable of refraining from doing it, this should also be regarded as an agreed fact in the civil proceeding’ (p. 57, per Judge Willner; see also the remarks of Judge Elron at p. 79).

This statement does not necessarily cast any light on cases in which there is no such agreement, since in those cases I am of the opinion that the position expressed by Judge Amit is correct.

Judge Willner’s opinion

11. Unlike Judge Amit, Judge Willner was of the opinion that the appeal should be allowed. In her opening remarks, Judge Willner disagreed with Judge Amit and held that the absence of a defence of insanity in the Torts Ordinance is not a lacuna but a negative arrangement (p. 46), and this arrangement is justified since ‘a sweeping and fundamental exemption from liability under the Torts Ordinance for someone who is mentally ill or has a mental disability would be unjust and far-reaching’ (p. 46). In any case, according to Judge Willner, the liability of a mentally ill person in tort ‘should be examined on its merits for each individual tort, in the same way as the liability of a healthy person is examined’ (p. 47).

12. Unlike Judge Amit, however, Judge Willner held that since the tort of assault requires a special mental element (‘intentionally’), this cannot be satisfied by someone ‘who at the time of the act lacked free will and an ability to refrain from the act that he did’ (p. 51). She said that ‘intent’ includes an element of will, but this means free will rather than mere volition:

‘For the purpose of proving the element of “intentionally” that is required in order to satisfy the mental element of the tort of assault, it is necessary to prove that at the time of the act the tortfeasor was graced with free will, i.e., the desire and ability to choose whether to act in a certain way or not’ (p. 50, emphases in the original).

For this reason, she said that:

‘Liability in tort for assault should not be imposed on a tortfeasor if it is proved that even though the act was accompanied by volition, the source of the volition was a mental illness, i.e., if at the time of the act the tortfeasor did not have free will because of the mental illness that took hold of him and denied him the ability to make decisions’ (p. 49, emphasis in the original).

These findings were based on both a dictionary analysis of the requirement of intent and the assumption that the tort of assault requires a certain degree of subjective fault. In broader terms Judge Willner held:

‘The rationale underlying the recognition of an exemption in tort for someone who acts as a result of physical automatism is also entirely applicable in the case of someone who acts as a result of mental automatism. I see no legal, ethical or social justification for distinguishing between the cases and discriminating against someone who acted as a result of a mental illness that controlled his actions, as opposed to someone who acted as a result of a physical factor that controlled his actions. In both cases the tortfeasor is unable to refrain from committing the act’ (p. 52).

13. In the part of her opinion entitled ‘Thoughts about justice,’ Judge Willner discussed the legal policy considerations proposed by Judge Amit. She began by citing the remarks of Prof. A. Porat that ‘if the tortfeasor has a mental illness, he will be regarded as lacking volition. Consequently, considerations of compensatory justice will not justify imposing liability on him’ (A. Porat, ‘Law of Tort: The Tort of Negligence according to the Case Law of the Supreme Court from a Theoretical Viewpoint,’ Israel Law Yearbook (A. Rosen-Zvi ed., 1996), at p. 373). Later Judge Willner discussed the fact that empirically mentally ill persons —

‘… whose minds are in any case troubled by their illness, are compelled to deal with the social and economic difficulties that they encounter on a daily basis. Research shows that these people, in addition to the disabilities that result from the illness, suffer from poverty and a lack of social resources. Research found that 80% of mentally ill persons have been diagnosed with psychoses; 90% do not earn a living…’.

These figures were based on an article of U. Abiram, ‘Social Integration of Chronically Mentally Ill Persons: An Old Problem in a New Context,’ 61 Social Security 42 (November 2001), in which he says:

‘And finally, imposing liability on the mentally ill person is tantamount to a determination that the mentally ill person is in some sense at fault in committing the act. The finding that the mentally ill person is at fault is a paradox, since someone who committed the act as a result of insanity… cannot be considered, from an ethical, social or legal viewpoint, to be at fault’ (at pp. 54-55).

Judge Elron’s opinion

14. The main thrust of Judge Elron’s position is found in the part of his opinion entitled ‘Historical review and comparative law.’ First he surveyed English law, the essence of which was mentioned above in the summary of the Magistrate Court’s judgment. Judge Elron went on to survey the law in the United States, where there are conflicting rulings, both with regard to liability in tort in general, and with regard to torts that require intent in particular (even though I should point out that the approach that imposes liability would appear to have greater support). The same is true in New Zealand, Australia and Canada. The survey ends with a consideration of Continental law, and especially German law, which provides:

Ԥ 827 Ausschluss und Minderung der Verantwortlichkeit

Wer im Zustand der Bewusstlosigkeit oder in einem die freie Willensbestimmung ausschließenden Zustand krankhafter Störung der Geistestätigkeit einem anderen Schaden zufügt, ist für den Schaden nicht verantwortlich...’

Ԥ 827. Exclusion and reduction of responsibility

A person who, in a state of unconsciousness or in a state of pathological mental disturbance preventing the exercise of free will, inflicts damage on another person is not responsible for such damage…’ (German Civil Code (BGB) § 827).

Alongside this exemption, the German Civil Code provides a possibility of imposing an obligation to pay compensation on the tortfeasor, if it is not possible to find a third party liable, and the tortfeasor’s economic position allows and justifies requiring him to pay full or partial compensation:

‘§ 829 Ersatzpflicht aus Billigkeitsgründen

Wer in einem der in den §§ 823 bis 826 bezeichneten Fälle für einen von ihm verursachten Schaden auf Grund der §§ 827, 828 nicht verantwortlich ist, hat gleichwohl, sofern der Ersatz des Schadens nicht von einem aufsichtspflichtigen Dritten erlangt werden kann, den Schaden insoweit zu ersetzen, als die Billigkeit nach den Umständen, insbesondere nach den Verhältnissen der Beteiligten, eine Schadloshaltung erfordert und ihm nicht die Mittel entzogen werden, deren er zum angemessenen Unterhalt sowie zur Erfüllung seiner gesetzlichen Unterhaltspflichten bedarf. ’

Ԥ 829. Liability to pay damages for reasons of equity

A person who, for a reason stated in sections 827 or 828, is not responsible for damage caused in one of the cases stated in sections 823 to 826, shall nonetheless make compensation for the damage, unless compensation can be obtained from a third party who is charged with a duty of supervision, to the extent that in the circumstances, including the economic circumstances of the parties concerned, equity requires indemnification and he does not lack the resources needed for his own reasonable maintenance and for discharging his statutory maintenance duties’ (German Civil Code (BGB) § 829).

Judge Elron said that this is also the position in France and Switzerland. At the end of the survey, Judge Elron said:

‘It can be said that we see how complex the issue in our case is and how many different opinions there are… It can be said with a large degree of certainty that the courts have not yet contended with the question on a fundamental legal level but it would appear that they have usually decided cases intuitively by looking for a fitting solution in the cases that came before them that is consistent with their approach’ (p. 77).

15. Ultimately Judge Elron agreed with the result reached by Judge Amit, but disagreed with his reasons. According to Judge Elron —

‘No distinction should be made between persons suffering from mental illnesses and persons suffering from physical illnesses who act without any ability to determine their conduct, i.e., to control their conduct, and the level of the mental element required for the tort of assault should not be set even lower than the mental element required for the tort of negligence’ (p. 80, emphases in the original).

Judge Elron criticized the approach of Judge Willner, which ‘focused on the protection of the mentally ill tortfeasor and in practice ignored the rights of the innocent and blameless victim’ (p. 84, emphasis in the original), and he discussed the growing tendency to focus on the rights of the victim in criminal trials. Finally, Judge Elron considered what should be regarded as justice in the circumstances of the specific case: ‘Why should a tortfeasor with means be exempted from compensating an injured person without means for the damage that he caused him?’ (p. 85, emphasis added), and ‘What is the law where there is no dispute as to the economic stability of the mentally ill person, whereas the victim has limited means and ability?’ (p. 86, emphasis added). Judge Elron concluded by holding:

‘I too feel compelled by statute in this case — by the wording of the tort of assault and the mental element required to satisfy it. But even if we are returning to the opinion that was expressed in the past — according to which the idea of compensation, rather than the idea of fault, is what lies at the heart of liability in tort — I prefer resorting to this principle to find the appellant liable. Therefore I am of the opinion that we should adopt the approach that even if someone with a mental defect cannot be considered to be aware of his actions in the normal sense, he is still the person who caused harm to another, and as such he ought to be the person who is held liable’ (p. 87, emphasis in the original).

The arguments of the parties in the appeal

16. The main arguments of the parties address fundamental questions concerning liability of mentally ill persons in tort and the basic requirements of the tort of assault. The arguments were presented above, and we shall return to consider them later. The appellants claim, inter alia, that considerations of justice cannot be a substitute for examining whether the requirements of the tort are satisfied — an argument that is directed mainly against the opinion of Judge Elron. Alternatively, they argued that the compensation awarded should be reduced in such a way that it is proportionate to the subjective fault of the appellant.

Methodology

17. On the question of the liability of mentally ill persons in tort, Prof. Englard wrote the following:

‘This question has two different aspects. First, it is possible that the defect in the tortfeasor’s mind prevents him from forming the special mental state needed for a particular tort. In a situation of this kind, he will not be liable in tort. But this determination says nothing new, because in the absence of the required mental element, it is not possible to hold a mentally ill person liable in tort, just as it is not possible to hold a healthy person liable in such circumstances… Second (and this is the main question), assuming that the requirements of the tort are satisfied from an objective viewpoint, is it necessary to prove that the tortfeasor was graced, at the time of the act, with a certain degree of free will and discernment’ (Englard et al., The Law of Torts, at pp. 132-133).

Accordingly, we shall begin our deliberations with the specific question whether the appellant’s mental state at the time of the incident allowed the requirements of the tort to be satisfied. Obviously, only if the answer to this question is yes will there be any reason to turn to the second and more general question of whether it is possible to impose liability on mentally ill persons who are not liable to any sanction under criminal law for the act. In order to answer the first question, we need to examine both the mental state of the appellant at the time of the incident, and the mental element required for the tort of assault. This is the path that we shall follow.

The appellant’s mental state at the time of the incident

18. The claim was filed in reliance on the findings that were determined in the criminal trial in the District Court. In that proceeding, the court granted the consensual application of the parties and ordered the hospitalization of the appellant under s. 15(b) of the Treatment of Mental Patients Law, 5751-1991, which provides:

‘If a defendant is indicted and the court finds that he has committed the actus reus of the offence of which he was indicted, but it decides, whether on the basis of evidence brought before it by one of the parties or on the basis of evidence brought before it on its own initiative, that the defendant was ill at the time of the act and therefore is not liable to any sanction, and that he is still ill, the court shall order the defendant to be hospitalized or to receive treatment in a clinic’ (emphases added).

It would appear that at no stage did the District Court expressly and clearly determine which of the alternatives provided in s. 34H of the Penal Law applied to the defendant — subsection (1) which provides that the defendant ‘lacks any real ability to understand what he is doing or the impropriety in his act,’ or subsection (2) which provides that the defendant ‘lacks any real ability… to refrain from committing the act.’ A study of the two decisions of the District Court (the decision of 10 January 2000 (hereafter: the first decision) and the decision of 13 March 2000 (hereafter: the second decision)), gives rise to possible indications that support the two alternatives.

19. In the first decision, President Lindenstrauss cited the opinion of Dr Ben-Ephraim, who said that ‘the person I examined committed the act… when he was unable to distinguish between good and evil, what is permitted and what is prohibited’ (p. 11, emphasis added); but later he said that the appellant ‘lacked any real ability to understand what he was doing, or the impropriety in his act and to refrain from doing it’ (p. 12, emphasis added). President Lindenstrauss addressed the fact that the interrogation of the appellant by the police showed that ‘he was aware of his acts at the time of committing the offences’ (p. 13), and he wished to summon the experts in order to consider the question ‘whether the defendant lacked any real ability to understand what he did at the time of the act’ (p. 13, emphasis added). Judge Joubran agreed with this position. But Judge Neeman expressly held that ‘the other criterion provided in s. 34H, that because of his illness he “was unable to refrain from doing the act” also applies here’ (p. 18, emphasis added). For this reason, Judge Neeman held: ‘I see no reason or need to cross-examine the psychiatrists’ (ibid.).

20. In the second decision, which was given after the experts were cross-examined, President Lindenstrauss cited passages from the opinion of the experts that would appear to relate only to the first alternative (p. 48, line 12 (Dr Ben-Ephraim); p. 48, line 22 (the District Psychiatrist)), and addressed the conflict between the opinions with regard to the appellant’s competence to stand trial (with regard to his condition at the time of the act there was no difference of opinion). Finally the court granted the application of the parties and held ‘that the defendant committed the acts involved in the offence of which he was charged, and that he was mentally ill at the time of committing the acts and therefore was not punishable, and that he was still mentally ill’ (p. 54). It is hard to discover from this decision the precise state of the appellant at the time of the act, i.e., which of the alternatives in s. 34H applies.

21. In the civil trial, the Magistrates Court considered the mental state of the appellant on the basis of the criminal judgment and the evidence before the criminal court. First, the Magistrates Court considered the transcript of the appellant’s statements in his police interrogation, from which it concluded ‘that the defendant [the appellant] fully understood the significance of his attack on the plaintiff’ (p. 17 of the judgment). The court attached particular attention to the following remarks: ‘When I arrived at the park… there was a certain moment when I decided that this was it, I worked up sufficient courage, I decided that before I harm the baby and myself, I decided that I would harm another child’ (p. 17). In reply to the police interrogator’s question ‘Why?’, the appellant answered: ‘Not to kill him, to harm him, for the simple reason that the doctors and the police harmed my baby… for reasons that I do not know’ (p. 17). Later, the Magistrates Court held that in the criminal proceeding the District Court:

‘… did not determine that the defendant was not liable because of a lack of volition, nor did it determine anywhere that the defendant could not have refrained from harming the plaintiff because of the mental illness. All that it determined was that the defendant did not understand the impropriety of the act’ (p. 18).

If we translate this finding into the language of criminal law, the Magistrates Court was of the opinion that the appellant fell within the scope of the provision in s. 34H(1) in that ‘he lacked any real ability to understand…’.

22. As stated above, this finding was overturned by the District Court in the judgment under consideration in this appeal. Judge Amit held:

‘In my opinion, it is possible to deduce from the decision of the District Court the opposite conclusion, which is that the District Court intended to attribute to the appellant a lack of volition. At the very least, it is impossible to know which alternative the District Court intended… Consequently, the judgment of the trial court, in so far as it relies on its interpretation of the District Court decision, cannot stand’ (p. 22).

Later, Judge Amit regarded the conduct of the appellant as ‘automatism that deprived him of volition’ (p. 24). Judge Willner held: ‘In determining the mental state of the appellant at the time of committing the act, I disagree with the position of the trial court and agree with the opinion of Judge Amit’ (p. 55). According to her: ‘The parties agreed that when the act was committed, the appellant lacked any real ability to refrain from doing the act’ (p. 56, emphasis in the original), and she went on to say: ‘The finding of the trial court that the District Court did not determine that the appellant could not refrain from harming the respondent because of the mental illness cannot be reconciled with the decision of the District Court’ (p. 56). Judge Elron did not make any express determination with regard to the appellant’s mental state, but he remarked that ‘prima facie the determination of the trial court in our case that the appellant acted “with intent, will and an ability to refrain from committing the act” is problematic and hard to accept’ (p. 83, emphasis in the original).

23. (a) Thus the District Court changed the finding of the Magistrates Court with regard to the interpretation of the District Court’s judgment in the criminal trial, and it held that the appellant not only ‘lacked any real ability to understand what he was doing or the impropriety in his act,’ but also that he ‘lacked any real ability… to refrain from doing the act.’ Admittedly, in his reply to the appeal the respondent claims that ‘the applicant understood the act that he committed and also intended to do it,’ but I see no reason to consider this factual aspect of the matter in the court of third instance (see LAA 741/06 A v. B [1]).

(b) Let me explain briefly. ‘The heart is most deceitful and weak; who can understand it?’ (Jeremiah 17, 9 [50]). The human soul is complex, and ‘to a large extent it remains an unknown science’ (CrimA 549/06 A v. State of Israel [2]). It is hard for a healthy person to understand what is taking place in the soul of someone who has been recognized as suffering from paranoid schizophrenia. What does it mean to ‘lack any real ability… to refrain from doing the act’? To the ordinary person it appears that, in the narrow meaning of the phrase, the defendant did exactly what he intended to do, and had he not wanted to do it, he would not have done it. Indeed, there are those who deny the existence of such an inability — see A. Parush, ‘Insanity, Lack of Control and Section 34H of the Penal Law (Amendment no. 39) (Preliminary Part and General Part), 5754-1994’, 21 Tel-Aviv University Law Review (Iyyunei Mishpat) 139 (1998). The learned author describes the innovation in s. 34H as adding a ‘willingness test’ (‘to refrain from doing the act’) to the cognitive test in the old legislation (‘to understand what he is doing or the impropriety in his act’). As he explains, the new legislation contains an innovation in relation to previous case law, and the wording of the amendment also constitutes an innovation, since it does not use the previously accepted term of ‘an uncontrollable impulse’ (see pp. 140-143). Inter alia, the author analyzed the case in CC (Hf) 165/92 State of Israel v. Davidowitz [36], which is very similar to our case. In that case, a woman killed her two young daughters by drowning them in the bath. The District Court, by a majority, found that she was not liable under criminal law, even though she understood that she was causing the death of her children, and in the opinion of most of the psychiatrists she also understood that what she did was prohibited (p. 164). According to Prof. Parush, defendants in such cases should be exempted from liability by interpreting the cognitive test broadly. (It should be noted that in another tragic case (SFC (Jer) 5093/02 State of Israel v. Pimstein [37], per Judge Zylbertal), a case in which the defendant killed his young daughter by drowning her, it was held that the defendant did not suffer from a mental illness and he was convicted of murder; for the earliest case of the ‘willingness test’ in case law, see CrimA 118/53 Mandelbrot v. Attorney-General [3], at p. 287 {123}, in which Justice Agranat held that the appellant lacked any real ability to refrain from committing the act. See also A. Carmi, Health and Law (vol. 1, 2003), at pp. 847-867).

(c) In the circumstances of our case, however, the court’s ability to arrive at conclusions from fragmented and partial citations of the expert opinions and the interrogation transcript is very limited. As we have said, only one judge in the criminal trial addressed this matter directly, and he expressly held that the alternative in s. 34H(2), namely the inability to refrain from doing the act, is also applicable in this case (Judge Neeman, supra). Indeed, the remarks of his two colleagues in the criminal trial were not absolutely clear, but in view of his express finding, and the extensive consideration by the District Court of the question of interpretation in the judgment under appeal, I see no reason to intervene in this factual finding. In the words of Justice Agranat, it would appear that ‘the imaginary persecution… may become so dominating that volition is ultimately dethroned’ (Mandelbrot v. Attorney-General [3], at p. 300 {140}). Indeed, I cannot rule out the possibility that the other approach is correct, namely that the defendant was unable to understand what he was doing or the impropriety in his action. Were we to adopt this position, our task would be easier. But for the purpose of the civil case we shall adopt the position that is prima facie more favourable to the appellant, namely that in the criminal sphere the appellant ‘lacked any real ability… to refrain from doing the act.’ Let us therefore turn to examine the issues relevant to the law of torts.

Social fault and moral fault

24. I cannot fail to say here that prima facie the consideration of this claim would have been somewhat easier had it been based on the tort of negligence, since in negligence there is liability even if the defendant is not aware of the impropriety of his actions:

‘The concept of reasonableness (or negligence) in the tort of negligence is an objective concept. “The reasonableness of the measures of care is determined in accordance with objective criteria, which are encapsulated in the statement that the tortfeasor should act as a reasonable person would act in the circumstances of the case” (CA 145/80 Vaknin v. Beit Shemesh Local Council [4], at p. 131). The question is not whether the tortfeasor fell short of the standard of conduct of which he is capable (“subjective negligence”). The question is whether the tortfeasor fell short of the standard of conduct that society regards as the proper one (“objective negligence”). Indeed, reasonableness in the tort of negligence is not based on “personal” fault. The tortfeasor may do his best, and still act unreasonably, where the tortfeasor’s competence falls short of the competence expected of the reasonable person. This was well expressed by Lord Denning, when he said that “his incompetent best is not good enough” (in Nettleship v. Weston [48]). The approach is that the tortfeasor fell short of the standard of conduct demanded by society (see G. Tedeschi (ed.), The Law of Torts: The General Theory of Torts (1969), at p. 129; I. Gilad, “On the Elements of the Tort of Negligence in the Israeli Law of Torts,” 14 Tel-Aviv University Law Review (Iyyunei Mishpat) 319 (1989), at p. 321, and Restatement, Second, Torts, at p. 11)’ (CA 5604/94 Hemed v. State of Israel [5], at p. 506, per President Barak).

Negligent persons are examined in accordance with an objective standard, according to which society seeks to regulate conduct and spread losses, irrespective of his subjective fault. Only ‘in those cases where the plaintiff’s personal standard does not fall short of that of society does “moral” fault also accompany social fault’ (I. Gilad, ‘On the Elements of the Tort of Negligence in the Israeli Law of Torts,’ 14 Tel-Aviv University Law Review (Iyyunei Mishpat) 319 (1989), at p. 322). It will be recalled that even in legal systems that impose liability in tort on mentally ill persons there is case law that mentally ill persons are incapable of satisfying the requirement of intent in the tort of assault, which can be regarded as a requirement of subjective fault (see Williams v. Hays [42]; Shapiro v. Tchernowitz [43]). The fact that liability in negligence is generally imposed without subjective fault makes it ‘easier’ (if one can use such a word) when applying it to mentally ill persons. Certainly the tort of negligence is more suited to cases that do not concern an initial manifestation of the illness, which is the position in the present case, since the appellant had psychiatric problems in the past. In such cases it is possible to consider liability in tort both with regard to the mentally ill person who did not take appropriate care and with regard to additional persons (members of his family, and possibly even health and welfare authorities, without making any firm determination on this question; in our case, however, apparently no previous indications were reported). Indeed, focusing on objective social fault allows the court to take into account additional factors such as the economic position of mentally ill persons, the ramifications on the possibility of integrating them in the community, and influencing society’s attitude towards them. But the case before us is a claim for assault.

The elements of the tort

25. (a) Section 23 of the Torts Ordinance provides:

‘Assault

23. (a) An assault is the use of force of any kind, intentionally, against a person’s body…’

(b) The special mental element required for a tort of assault is ‘intentionally,’ and this is one of the mechanisms for limiting liability in tort. This is also the word used in the original version introduced by the British Mandate (see G. Tedeschi & A. Rosenthal, The Tort Ordinance from the Perspective of the History of its Creation and Amendments, at p. 72). As a rule, this term has been interpreted in common law as referring to will and desire (G. Williams, ‘Oblique Intention,’ 46 Cambridge L. J. (1987) 417). Prof. Englard gave the definition that ‘A person acts “intentionally” when he foresees a certain result of his act and wants it to happen’ (Englard et al., The Law of Torts, at p. 126 (emphasis added); see also D. Krezmer, The Law of Torts: The Individual Torts — Assault and False Imprisonment (G. Tedeschi (ed.), Jerusalem, 1981), at p. 8; S. Dagan, Problems in the Law of Torts (vol. 1, 2002), at p. 164). Intention in the present context therefore includes awareness and will (or desire) (this is also the usual interpretation of the requirement of intent in criminal law; there is no reason why reference cannot be made to criminal law in the linguistic sphere, despite the difference between criminal and tortious liability): see S.Z. Feller, Fundamentals of Criminal Law (vol. 1, Jerusalem, 1984), at p. 550; Y. Levy & E. Lederman, Principles of Criminal Responsibility (Tel-Aviv, 1981), at p. 410; CrimA 125/50 Yakobovitz v. Attorney-General [6], at p. 545; CrimA 852/85 Funt v. State of Israel [7], at p. 557. Admittedly, it has been said that from a legal viewpoint ‘intent can even exist without will’ (CrimA 217/04 Al-Quraan v. State of Israel [8], per President Barak), in the context of the ‘foreseeability rule,’ but the foreseeability rule is fundamentally an exception to the rule, and in any case there is an inherent lack of clarity as to whether it refers to ‘intent’ or to some kind of moral equivalent).

(c) In the case before us, the stabbing of the respondent did not occur negligently. It did not happen absentmindedly. It was an intentional act. The appellant knew what he was doing (‘I decided that I would harm another child’ (p. 17 of the judgment of the Magistrates Court)). He planned and foresaw the consequences (‘Not to kill him, to harm him,’ (ibid.)) and the presumption is — and no argument was raised against this — that he wanted to cause those results (CrimA 2325/02 Biton v. State of Israel [9]; CrimA 759/97 Ilyabayev v. State of Israel [10]; CrimA 392/91 Schatz v. State of Israel [11]). This analysis, according to which the requirement of intent relates mainly to awareness of the act itself rather than the mental considerations that underlie it, is prima facie consistent with the definition of the tort as proposed in the Property Law Memorandum: ‘An assault is a conscious use of force… against a person’s body…’ (s. 389 (emphasis added)). The explanatory notes state: ‘The word “conscious” indicates that the section refers to awareness of the actual use of force against another person. The essence is the awareness of the act itself, rather than the question whether there was an intention to cause damage.’ It therefore follows that the appellant satisfies all the elements of the tort.

(4) It is possible to compare this — to a very different case, of course — to the application of the tort of assault to the action of a doctor even though his intention is to cure and not to cause harm. The ordinary person does not regard a doctor as an ‘aggressor’; the doctor does not intend to commit an assault — he intends to cure; but in so far as he acts without obtaining the patient’s consent, he does commit an assault, despite his good intentions (see CA 67/66 Bar-Chai v. Steiner [12], at p. 232 (per Judge B. Cohen); Dr A. Azar & Dr I. Nirenberg, Medical Negligence (second edition), at p. 217; CC (Jer) 653/94 Arbel v. Shaare Zedek [38]). From the viewpoint of the law of torts, any contact without consent is considered an assault. In the words of Lord Chief Justice Holt in Cole v. Turner [49]: ‘The least touching of another in anger is a battery’ (see also CA 360/64 Abutbul v. Kluger [13], at p. 469, per Justice Silberg). Some authorities hold — in my opinion correctly — that the public misconception, i.e., the failure to understand the connection between the doctor’s act and the legal concept of assault, was one of the main reasons for the decline in the use of the tort of assault with regard to medical treatment and the rise of negligence claims: Englard, The Philosophy of Tort Law (1993), at p. 162.

26. Let us return to our case. At this stage, when we are examining the elements of the tort, the question why the appellant intended to do the tortious act or why he wanted its consequences is irrelevant. The question of the motive for committing the act can arise if a defendant raises a defence argument, whether under s. 24 of the Torts Ordinance, or one of the general defence arguments, such as necessity (A. Barak, The Law of Tort — The General Theory of Tort, at pp. 294-301) or a private defence (Englard et al., The Law of Torts, supra, at pp. 281-293). As a rule, this question has no place in the discussion concerning the elements of the tort. The question whether a mental illness constitutes a defence in itself will be considered below.

27. The conclusion that the question of motive is of no significance when considering whether the element of intent exists was expressed in a ‘radical’ manner in the judgment of Judge Neumann in Yasmin v. Kahalani [35], which was cited by Judge Amit and which we cited in para. 7 above. The essence of what he said was that ‘volition is required for liability in tort, free will is not required.’ This, in my opinion, is consistent with common sense and fairness to the victim who bears no responsibility whatsoever. By contrast, the responsibility of the mentally ill tortfeasor is problematic and requires consideration and deliberation, but it cannot be said that it is unfounded, and in my opinion there is a good reason for it.

28. (a) Before we turn to the question of whether a mental illness constitutes a defence, I should add that the word ‘intent’ in this context should be interpreted in accordance with the purpose of the legislation. The concept will not always be given the same interpretation even within the framework of civil law, and certainly its interpretation in civil law will be different from its interpretation in criminal law (see I. Englard, Victims of Road Accidents Compensation (third edition, 2005), at pp. 266-267); see also para. 25(b) above.

(b) I do not deny that ‘intent’ is an amorphous concept that is very hard to define. This can be seen from the difficulties in interpreting ‘intent’ in criminal law, according to the relevant sections in the Penal Law and their complex wording. There are those who seek to define the concept of intent without referring to the element of will, inter alia by means of concepts such as reason, cause or object (for a comprehensive review, see Y. Kugler, Intent and the Foreseeability Rule in Criminal Law (Jerusalem, 1997), at p. 469). It is possible that Judge Amit also sought to follow this path in our case, when he spoke of the new wording of the tort of assault as proposed by the Memorandum: ‘An assault is a conscious use of force…’ (s. 389, emphasis added); in my opinion, ultimately all of the considerations on this issue support the approach that we should identify whether there is volition, even if this volition does not amount to free will, and I return to the remarks of Judge Neumann in Yasmin v. Kahalani [35]. The appellant foresaw that something was going to happen as a result of his actions — and that something did indeed happen — and that is what he wanted at that moment. The intent that we are dealing with is therefore the same as in Morriss v. Marsden [47], as can be seen from the statements of the appellant himself.

(c) What, therefore, is the meaning of the requirement that the tort should be done willingly (and ‘intentionally’)? Can it not be said that in this case the appellant did precisely what he wished to do? The latter question was answered in the negative by Judge Willner (p. 50), mainly following the dictionary definition of the Hebrew word כרצונך (literally, ‘according to your will’): ‘According to your will: as you wish, according to your desire, the decision in is your hands: “And they did to their enemies as they wished” (Esther 9, 5 [51])’ (A. Even-Shoshan (1969 edition, vol. 6, at p. 2559). My opinion is different. In my opinion, the answer to this question is yes. The dictionary definition does not, in my opinion, include all the fine nuances of the law; the will of someone who acts intentionally is also his volition, as we have explained above.

On intent in Jewish Law

29. (1) I should add that even in Jewish law there is a lack of clarity in the definition of ‘intent,’ and a question frequently arises as to whether mere awareness is sufficient or whether a tangible element is needed, and if so, what does this involve (see Rabbi David ben Shelomo Ibn Abi Zimra (Radbaz, Spain and Safed, fifteenth-sixteenth centuries), Responsa, part V, 239 and part VI, 2246 [52]). Admittedly, it is an accepted rule that an insane person (shoteh) cannot have intent. This is true of sacrificial offerings (Rabbi Akiva Eger (Poland, eighteenth-nineteenth century), Responsa 64 [53]), and it is also true of ritual immersion (Rabbi Yaakov Ettlinger (Germany, nineteenth century), Responsa Binyan Zion HaHadashot 98 [54]) and criminal sanctions (Rabbi Yehuda Assad (Hungary, nineteenth century), Responsa Yehuda Yaaleh, part 1, 1 [55]). As the judgment of the trial court states, on the general question of the liability of insane persons in tort, Jewish law holds: ‘A deaf person, an insane person and a minor are problematic in torts; whoever injures them is liable, but if they injure others, they are exempt’ (Mishnah, Bava Kamma, 8, 4 [56]; Maimonides, Hilechot Hovel uMazik (Laws of Tortfeasors) 4, 20 [57]; Rabbi Yosef Karo, Shulhan Aruch, Yoreh Deah, 267, 8 [58]). Notwithstanding, it has been said that judges should punish deaf persons, insane persons and minors, in order to remove their harm from society (see Talmudic Encyclopaedia, vol. 17, 542, ‘Deaf persons, insane persons and minors’ [59], and the references cited there; see CrimA 549/06 A v. State of Israel [14]). Moreover, in cases similar to ours Rabbi Menachem HaMeiri (Provence, thirteenth-fourteenth centuries) explains: ‘And if they harm others, they are exempt, even if they have recovered… since when they committed the act they were compelled’ (Bet HaBehira, Bava Kamma, 87, 1 [60] (emphasis added)). The reason why an insane person is exempt, namely that he is not capable of forming intent and he is treated as someone acting under duress, also appears in other commentators and arbiters (Rabbi Moses Sofer (Hungary, eighteenth-nineteenth centuries), Respona Chasam Sofer, Yoreh Deah, 317 [61]; Rabbi Yosef ben Meir Teomim (Ukraine, eighteenth century), Pri Megadim, Orach Hayim, General Introduction at the beginning of part 2 [62]; see also Y. Bazak, The Criminal Liability of the Mentally Disabled (second edition, 1972), at pp. 253-256).

(b) It may be asked — and naturally I am not an arbiter of Jewish law and am not making any ruling on the subject — whether it is also possible to regard these matters against the background of time and place. For example, a deaf person in Jewish law is not necessarily someone whose hearing is impaired but may be someone of subnormal intelligence (see the scope of the difficulties in this regard in the Talmudic Encyclopaedia, vol. 17, 495 et seq., ‘Deaf person’ [59] and see Prof. A. Steinberg (ed.), Encyclopaedia of Jewish Medical Ethics, vol. 2, ‘Deaf person’ [63], for a description of the deaf person in Jewish law sources as someone who is not entirely lacking in intelligence, but whose intelligence is weak and incapable of comprehension like other human beings (p. 538)). In other words, this is not exactly the deaf person of modern times. Is it possible that the same may be said of insane persons? In this regard, see also Encyclopaedia of Jewish Medical Ethics, vol. 6, ‘Insane person’ [63]. The definition of an ‘insane person’ is not simple (ibid., at pp. 421-423 [63]), and there are persons who are ‘sometimes insane and sometimes sane’ (ibid., at p. 452 [63], and see Maimonides, Hilchot Mechira (Laws of Sale), 29, 5 [64]). Maimonides (ibid.) states the law as follows:

‘If someone is sometimes in control of his faculties and sometimes not in control of his faculties, such as an epileptic, when he is in control of his faculties all of his acts are legally valid and benefit himself and others like any sane person, and the witnesses should examine the matter thoroughly; perhaps he did what he did at the beginning of his period of insanity or at the end of his period of insanity.’

I have not said the aforesaid in order to imply that this is what happened in our case, but to indicate the great complexity of the subject.

(c) It should also be added that ‘Human beings are always responsible, and liable to pay full compensation, whether they act negligently or deliberately, whether awake or asleep, whether acting unwillingly or willingly, and even if others compelled him to cause damage…’ (Talmudic Encyclopaedia, vol. 8, ‘The human tortfeasor’ [59], column 170; see also Babylonian Talmud, Bava Kamma 26a [65], Sanhedrin 72a [66], and elsewhere). This too may have ramifications for our case. The world of Jewish law also recognizes the approach that ‘we compel him, until he says that he is willing’; thus, for example, regarding burnt offering sacrifices the Bible says: ‘he shall offer it willingly before the L-rd’ (Leviticus 1, 3 [67]), and Rabbi Shelomoh Yitzhaki (Rashi) (France, eleventh-twelfth centuries) [68] says: ‘Willingly: how is this the case? We compel him until he says that he is willing’ (following the Babylonian Talmud, Arachin 21a [69]). Professor Nechama Leibowitz, in her book New Studies in the Book of Leviticus, cites various interpretations of the expression ‘willingly.’ Rabbi Meir Leibush ben Yehiel Michel (Malbim) (Ukraine-Romania, nineteenth century) [70] explains ‘willingness’ in two ways — ‘the appeasement that [G-d] will be willing to forgive the sin’ and the will or desire for something. Rabbi Naftali Hertz Wessely (Germany, eighteenth-nineteenth centuries) in his commentary HaBiur on Leviticus [71] explains inter alia ‘that the word “willingness” in the Bible does not mean free will, but the opposite of anger…’. Rabbi Baruch Epstein (nineteenth-twentieth centuries), the author of the Torah Temima commentary on the Torah [72], explains the expression ‘we compel him until he says that he is willing’ as compelling a person to discover what is ‘hidden in the recesses of his soul.’ All of these sources show the complexity of the concept of willingness, which is not limited to one meaning.

Is a mental illness a defence in tort?

30. As stated above, the question why the appellant attacked the respondent may be significant when considering the question of what defences can apply. It is clear that had the appellant committed the act ‘reasonably in order to protect himself or another against loss of life’ (s. 24(1) of the Torts Ordinance), he would have a good defence. Case law has also recognized that the absence of certain defences in the Torts Ordinance does not constitute a negative arrangement, and for this reason, hypothetically, had the appellant raised another necessity argument, he would have a defence against the claim (CA 187/52 Halperin v. Mayor of Tel-Aviv [15]; CrimA 2/73 Sela v. State of Israel [16]). Does the appellant’s argument that he committed his act because of a mental illness also constitute a defence?

31. As the lower courts said, in English law (which has precedence in interpreting the Ordinance — s. 1 of the Torts Ordinance; CA 711/72 Meir v. Directors of the Jewish Agency for Israel [17]) — there are, as we said above, three approaches on this question: (1) the approach of Lord Denning, who does not regard mental illness as a defence at all; (2) the approach of Lord Esher, according to which a uniform standard should be adopted for liability in criminal and tort law (the M’Naghten rules); (3) the intermediate approach of Judge Stable, according to which the tortfeasor does not need to understand the moral significance of his act, but there is a need for a minimal mental element of control (i.e., it was held that someone who acts in a state of automatism is not liable in tort). This third approach — which was also proposed by Prof. Englard (Englard et al., The Law of Torts, at p. 136) — seems to me the proper one: it is accepted in English law (Halsbury’s Laws of England (fourth edition, 1999), vol. 45(2) 334) and in also in the case law of the Israeli courts that have considered the matter (Yasmin v. Kahalani [35]; CC (Hf) 751/93 Stern v. Z.E. Gilad Security Co. Ltd [39], per Judge Grill; CC (TA) 118124/01 Jarfi v. Somech [40], per Judge Kedar). There will be a defence in tort only in a case of automatism. This provides a balance that seeks to be fair to everyone. On the one hand, the courts are open to victims seeking compensation; on the other, someone who was in a state where he had no control whatsoever over his actions is not held to be liable.

32. This approach is also consistent with the Property Law Memorandum. Section 374 of the Memorandum proposes the following innovative provision:

‘No person shall be liable in tort for an act if he was unable to choose between doing it and refraining from doing it, because of a lack of control over his movements with regard to that act. The provisions of this section shall not apply when the tortfeasor voluntarily caused himself to be in a state of lack of control as aforesaid’ (emphasis added).

An exemption will therefore be given when the defendant is deprived of free choice as a result of a lack of control over his body movements. The following is stated in the explanatory notes:

‘A new provision dealing with states of automatism and similar situations in which the tortfeasor has lost his freedom of choice. The wording of the first part of the section is similar to the wording of the first part of s. 34G of the Penal Law, 5737-1977.’

In other words, if we adopt the terminology of the Penal Law, with the necessary changes, the defence provided in s. 34H (‘insanity’), with its two alternatives ((1) ‘lacks any real ability to understand what he is doing or the impropriety in his act’; (2) ‘lacks any real ability… to refrain from committing the act’), does not constitute a defence in tort; only compliance with the conditions provided in s. 34G (‘lack of control’) constitutes a defence in tort. This proposal helps us to interpret the existing law, in the manner described above.

33. (1) I should also say that from the viewpoint of tort law it makes no difference whether the lack of control is the result of a physical illness or a mental illness.

(2) Criminal law makes a distinction between a lack of control that originates in a mental illness and a lack of control that originates in a physical illness or an external factor, but this is because an insane automatism is included in the defence provided in s. 34H of the Penal Law (CrimA 382/75 Hamiss v. State of Israel [18]; Y. Kedmi, On Criminal Law — The Penal Law (first part, 2004), at p. 473). In civil law, which as we have said only contains a defence of a lack of control, the question of its origin is of no significance. The distinction between ‘sane automatism’ and ‘insane automatism’ is not simple from either a scientific or a legal viewpoint: assuming that the level of lack of control is identical, why should a distinction be made between a lack of control originating in a mental illness and a lack of control originating in a physical defect? Moreover, it would appear that today there is no agreed scientific distinction between sane automatism and insane automatism as there was in the past (see H.J.F. Korrell, ‘The Liability of Mentally Disabled Tort Defendants,’ 19 Law & Psychol. Rev. 1 (1995), and O.C. Dark, ‘Tort Liability and the “Unquiet Mind”: A Proposal to Incorporate Mental Disabilities into the Standard of Care,’ 30 T. Marshall L. Rev. 169 (2004); for an example of this relationship between body and mind, see A. Bleich, Z. Solomon, Mental Disability: Medical, Research, Social, Legal and Rehabilitative Aspects (2002), at pp. 296-316). Today the distinction between body and mind has become unclear, and it is possible to regard certain illnesses, which used to be regarded as mental illnesses, as defects or impairments of brain functioning, i.e., organic defects.

34. I therefore propose to my colleagues that, while insanity (within the meaning of the term in the Penal Law) does not constitute a defence in tort law, a lack of control over the body’s movements does constitute a defence, irrespective of whether it originates in a mental illness, a physical illness or a physical coercion by another person.

On opposing considerations

35. The decision is not a simple one. In view of the legal finding in the criminal sphere, upon which we have relied, that the mental illness from which the appellant suffered deprived him of the possibility of refraining from committing the act (and it should not be forgotten that on the same occasion the appellant also murdered his own infant daughter), it is not easy to hold that he is ‘at fault’ (s. 64 of the Torts Ordinance) and that he is liable to pay compensation:

‘Undoubtedly there is some appearance of hardship, even of injustice, in compelling one to respond for that which, for want of the control of reason, he was unable to avoid; that it is imposing upon a person already visited with the insufferable calamity of mental obscurity, an obligation to observe the same care and caution respecting the rights of others that the law demands of one in full possession of his faculties. But the question of liability in these cases, as well as in others, is a question of policy…’ (Shapiro v. Tchernowitz [43], citing Cooley on Torts).

36. Judges Amit (pp. 34-38) and Elron (p. 70) considered three main criteria that have been proposed in foreign case law (see Breunig v. American Family Insurance Company [44]) in favour of imposing liability in tort on mentally ill persons:

‘(1) Where an innocent person has caused damage to an innocent person, the person who caused the damage should be liable for the damage. (2) To increase the supervision exercised by persons responsible for mentally ill persons… (3) The concern that the claim will be misused’ (p. 70).

I will not deny that each of these arguments has been met by counter arguments that support the opinion of Judge Willner. But in my opinion these three arguments have validity.

37. The second consideration mentioned above, namely increasing the standard of supervision required of persons responsible for mentally ill persons, is relevant both to the subject in general and to our specific case, and I shall therefore address this first. Indeed, a main reason for imposing liability in tort on mentally ill persons is to create an incentive for increased supervision and for the adoption of precautionary measures both by the mentally ill person and by those around him. This consideration justifies the imposition of liability in cases where there were prior indications and it was possible to take precautionary measures before the event. In Breunig v. American Family Insurance Company [44] it was said:

‘We think the statement that insanity is no defense is too broad when it is applied to a negligence case where the driver is suddenly overcome without forewarning by a mental disability or disorder which incapacitates him from conforming his conduct to the standards of a reasonable man under like circumstances. These are rare cases indeed, but their rarity is no reason for overlooking their existence and the justification which is the basis of the whole doctrine of liability for negligence, i.e., that it is unjust to hold a man responsible for his conduct which he is incapable of avoiding and which incapability was unknown to him prior to the accident.’

In that case it was held that the driver (the defendant) had forewarning, which required her to adopt precautions and to refrain from driving. The court expressly said that ‘The cases holding an insane person liable for his torts have generally dealt with pre-existing insanity of a permanent nature.’ This is also how Landes & Posner analyzed the judgment:

‘The difference between Breunig and the usual insanity case is that when insanity comes on and causes injury without warning, there is no opportunity to avoid the injury by restraining the insane person. In Breunig, however, the plaintiff (sic) was in a position to alter her activity level before the accident occurred’ (W.M. Landes & R.A. Posner, The Economic Structure of Tort Law (1987), at p. 130).

38. Landes and Posner also proceed to analyze the case with regard to torts that require intent. According to them, there is no justification for a sweeping defence of insanity in every case of a mental illness, but only in cases where the insanity ‘is of such a nature as to prevent the injurer from forming the requisite intent’ (p. 183). After proposing a possible economic analysis supporting this determination, according to their general approach to the law, the authors write:

‘This analysis is incomplete, however, because it neglects the effect of liability in giving an incentive to the custodians and beneficiaries of the insane person's wealth to prevent him from committing torts. This is the traditional rationale for making the insane liable. An ingenious accommodation is suggested by the forewarning cases such as Breunig… lack of forewarning shows that liability would have no deterrent effect either on the insane person himself or on those who have an interest in conserving his wealth. Although Breunig is an accident case rather than an intentional tort case, from an economic standpoint the question of the liability of the insane has little to do with whether the insane person is charged with an intentional or an unintentional tort’ (p. 183, emphasis added).

Thus we see that approaches that seek to impose liability in tort on mentally ill persons, and even approaches that do not give significant weight to fault, hold that it is not effective or fair to impose liability on someone who could not have taken any precautions to prevent the harm. On the other hand, it is right, effective and just to impose liability in cases where it was possible to take precautions before the event. This distinction brings the question closer to the classic tort of negligence, and it is possible to apply it with regard to parties who owe a duty of care relating to mentally ill persons.

The ‘between two innocents justification’

39. Let us now turn to consider the first consideration that was proposed, which I shall express as follows: ‘Where one innocent harms another, the one who caused the harm should pay for it.’ Even if we assume that the appellant is ‘innocent,’ and this is not my opinion, this proposition should be considered. Ultimately the three judges in the District Court addressed what is referred to in the literature as ‘The between two innocents justification’ (Judge Amit, at p. 34; Judge Willner, at p. 53; Judge Elron, at p. 86), with reference to both the economic position of mentally ill persons in general (Judge Willner), and the position of the appellant in the case before us (Judge Elron). Admittedly, in Israeli law, as in common law generally, liability in tort is based on fault; a doctor who has not been negligent is not liable in tort even though he is the cause of the harm (s. 35 of the Torts Ordinance), and the same is true with regard to someone who makes a false representation in the belief that he is speaking the truth, or without any intent to mislead (s. 56 of the Torts Ordinance), or with regard to a person who carries out an assault without intent (s. 24 of the Torts Ordinance), or with regard to a child who causes harm (s. 9(a) of the Torts Ordinance).

40. The ‘between two innocents’ argument, especially when it is used to impose liability on mentally ill persons, has been criticized for many decades on the ground that it is incompatible with a legal system in which the law of torts is based on fault (F.H. Bohlen, ‘Liability in Tort of Infants and Insane Persons,’ 23 Mich. L. Rev. 9 (1924), at p. 17; R.M. Ague, ‘The Liability of Insane Persons in Tort Actions,’ 60 Dick. L. Rev. 211 (1956) at p. 221; H.J.F. Korrell, ‘The Liability of Mentally Disabled Tort Defendants,’ 19 Law & Psychol. Rev. 1 (1995)). Judge Amit held that ‘the damage does not lie at a point equidistant between the appellant (the tortfeasor) and the respondent (the victim), but it lies closer to the appellant, as the person who caused the respondent’s damage’ (p. 34). Judge Amit also cited the remarks of Justice Berinson in FH 12/63 Leon v. Ringer [19]:

‘This should be weighed in the scales of justice, not merely from the viewpoint of the tortfeasor, but also from the viewpoint of the victim, and then it is very possible that the scales will actually tip in favour of the victim. It is he who has been injured and someone should be held responsible. Is there any justification for transferring the burden from the shoulders of the tortfeasor, who committed the tortious act, to the shoulders of the victim, who is entirely innocent… Even from a social viewpoint, it is more appropriate that the tortfeasor should be fully liable for the damage, since he, unlike the victim, is usually insured. In this way the damage is shouldered by the public and not by the individual’ (Leon v. Ringer [19], at p. 713; emphasis added).

Judge Amit also cited FH 15/88 Melech v. Kornhauser [20]. These remarks of Justice Berinson make sense to me and I agree with them; in my opinion, this is the main argument that supports imposing liability in our case. As Justice Haim Cohn said in Justice and Law, at p. 98: ‘… “saving the world” begins with “small steps”.’ Indeed, in the two cases cited above it was first proved that the negligent tortfeasor was at fault, and the question of the scope of liability only arose afterwards; in other words, in both cases it was expressly held that the fact that the tortfeasor was at fault justified imposing on him the burden of proof (Melech v. Kornhauser [20]), and the ‘eggshell skull’ damage (Leon v. Ringer [19]), and therefore these cases do not contain a proof that liability should be imposed without fault (see also CA 6216/03 Nasser v. M.H.M. Ltd [21]). But it cannot be denied that the ‘between two innocents’ argument reflects a basic sense of justice that has interpretive weight. This argument has been accepted and continues to be accepted in courts in the United States. Indeed, Judge Willner referred to National Insurance figures that show that the economic position of mentally ill persons is very difficult, and she expressed a concern that imposing liability in tort will make their economic position even worse, and even result in them being kept apart from society (see E.J. Goldstein, ‘Asking the Impossible: The Negligence Liability of the Mentally Ill,’ 12 J. Contemp. Health L. & Pol’y 67 (1995), at p. 85; Landes & Posner, ‘The Economic Structure of Tort Law,’ supra, at pp. 128-130). Moreover, Landes and Posner argue that in a case where the mentally ill person cannot be deterred, it is more effective to impose the damage on the victim, since he is able to minimize it both by means of insurance and by adopting other measures (p. 183). On the other hand, legal literature has also raised an argument that holding mentally ill persons liable will actually further their integration in society, inter alia because those who come in contact with them and are injured by them are guaranteed compensation (see S.I. Splane, ‘Tort Liability of the Mentally Ill in Negligence Actions,’ 93 Yale L. J. 153 (1983)). Personally, I am of the opinion that the scales are tipped in favour of accepting the ‘between two innocents’ argument, within the scope of legal policy. I doubt — and in this I must differ from Judge Willner — whether imposing liability will significantly harm the community of mentally ill persons and their integration in society, which is highly desirable. I would like to believe that this is not the case; we need to fight the stigmas and prejudices of society that isolate mentally and physically ill persons; I had the opportunity of addressing this in the context of establishing therapeutic communities for drugs victims, when I was cabinet secretary and also served as the chairman of the council of the Israel Anti-Drug Authority. It was not easy to overcome the prejudices of towns near which therapeutic communities were established, but it transpired that it was possible even if people need to be persuaded. But we are not dealing with this in the present case. Tort cases are thankfully few, and ultimately the scales are tipped in favour of the innocent victim; and in so far as insurance is concerned, it can be assumed that among both potential tortfeasors and potential victims there are some who are capable of buying insurance and others that have relatives who are capable of buying insurance for them. Finally I will point out that a proper framework might be found in s. 829 of the German Civil Code that was cited in the opinion of Judge Elron (‘Duty to Compensate for Equitable Reasons’); I believe that such an arrangement requires a legislative amendment, and this ought to be considered.

Misuse of the argument

41. The third argument that was presented in favour of imposing liability in tort on mentally ill persons was ‘the concern that the claim of insanity would be misused’; this concern arises inter alia from the ‘concern — or perhaps the fear — that psychiatry is a less precise science than other fields of medicine’ (Judge Amit, at p. 37). It will be remembered that Judge Amit disagreed with Prof. Englard’s approach and argued that even a defendant who acts while in a state of automatism deriving from a mental illness should not be exempt from liability in tort. According to Judge Amit, we should adopt the distinction made by Justice Agranat between ‘insane automatism’ and ‘sane automatism’ (Hamiss v. State of Israel [18], at pp. 734-735). This distinction, according to which only persons suffering from physical illnesses are exempt from liability, makes it unnecessary for the court to consider the intricacies of psychiatry. I think that this is a problematic distinction. It is not superfluous to point out that both Judge Willner and Judge Elron disagreed with the distinction between a lack of control arising from a physical illness and a lack of control arising from a mental illness.

42. I do not accept the argument that imposing liability on mentally ill persons means that while a tortfeasor with a physical disability will be judged according the standard of the ‘reasonable disabled person’ (see Stern v. Z.E. Gilad Security Co. Ltd [39], at p. 331; CA 5604/94 Hamed v. State of Israel [22], at p. 507, per President Barak), i.e., according to his disability, the mentally ill person will be judged according to the general standard of the ‘reasonable person’ and his special status will thereby be ignored (P.J. Kelley, ‘Infancy, Insanity and Infirmity in the Law of Torts,’ 48 Am. J. Juris. 179 (2003); Shapiro v. Tchernowitz [43]). The picture, as we have seen, is more complex.

43. One of the policy considerations is the difficulty in proving the mental illness:

‘One exception to the average-man rule that the law has generally refused to recognize is insanity. Considerations both of information costs and of activity level support this result. Proof of insanity is difficult; even more difficult is establishing the relationship between insanity and care’ (Landes & Posner, The Economic Structure of Tort Law, at pp. 127-128).

Indeed, proving mental illness, even today, is in many cases more difficult than proving a physical defect. There are many borderline cases involving different kinds of mental disturbance, but I would not place the emphasis on ‘information costs’ as a justification for imposing liability and fault, and ultimately I would not rely specifically on this argument. In my opinion, the ‘between two innocents’ argument is pivotal in a legal system where the appellant is ‘innocent.’ We are speaking of a judicial policy decision, of a sense of justice. The law seeks to compensate a victim who is innocent of all fault, and to restore him, in so far as possible, to his position at the time of the assault — at least from an economic viewpoint — since his body may have been injured in such a way that it will never be fully healed.

44. Were the issue a simple one, we would not spill so much ink over it. Ultimately it seems to be right and proper that we adopt the assumption ‘that the purpose of the law of torts is to grant the injured person a remedy for the damage that he suffered, and the purpose of the law of compensation is, therefore, to negate the consequences of the tortious act’ (A. Barak, ‘Assessing Compensation for Personal Injury,’ 9 Tel-Aviv University Law Review (Iyyunei Mishpat) 243 (1983), at p. 248). This purpose, and the principle of fairness that underlies it, lead to the aforesaid conclusion that only a lack of control over the movements of the body, whatever its cause, constitutes a defence in tort. In the case before us, the appellant does not fall within the scope of this definition, and therefore I am of the opinion that the judgment of the District Court should be allowed to stand.

45. I have also found no reason to intervene in the quantum of damages. Appeal courts do not tend to intervene in these findings if they do not deviate from what is customary and reasonable, which is the position in this case (CA 4733/92 Haifa Chemicals Ltd v. Hawa [23]; CA 418/74 Amamit Insurance Co. Ltd v. Weinberger [24]). I also do not think that the request to reduce the compensation on the grounds of ‘subjective fault’ should be accepted. If the approach that I have proposed is accepted, the appellant does have liability in tort, and the amount of the compensation should be determined according to the damage that the respondent suffered.

46. If my opinion is accepted, the appeal will not be allowed. In the circumstances, we are not making an order for costs.

 

 

Justice M. Naor

I agree. I am also of the opinion that ultimately, in the absence of an unequivocal statutory provision, the question is one of legal policy. Indeed, persons suffering from a mental illness deserve our sympathy and it is very important to integrate them into society (see and cf. CA 8797/99 Anderman v. District Appeal Committee [25]). But in choosing between the interest of the mentally ill person and the interest of an innocent victim, I too am of the opinion that the latter prevails. Recognizing liability will also result in relatives taking better care of mental patients.

 

 

Justice E. Arbel

The question in the case before us is the liability of a mentally ill person in tort generally, and with regard to the tort of assault in particular.

1.    I have read the opinion of my colleague Justice Rubinstein, in which he has thoroughly considered all the different aspects of the question. In the factual sphere, my colleague assumed that at the time of the act the appellant controlled the movements of his body, but lacked any capacity to refrain from doing the act. In the legal sphere he held that all the elements of the tort of assault are satisfied in this case, and this includes the element of intent, which he interpreted as volition but not as free will. Of the three approaches expressed in English law with regard to the question of whether a mentally ill person who commits a tort as a result of his illness is entitled to a defence, he adopted the intermediate approach of Judge Stable, which was also proposed by Professor Englard, according to which a defendant will not be held liable only when he is deprived of free will as a result of a lack of control over the movements of his body. In view of the aforesaid, my colleague proposed that the appeal should be denied, and that the appellant should be held liable in tort to compensate the respondent.

Let me first say that ultimately I agree with the outcome in my colleague’s opinion and with his assumption that, as a rule, a mental illness in itself does not give rise to a sweeping defence against liability in tort. This conclusion is founded on the purpose of the law of torts and the difference between the law of torts and criminal law. Notwithstanding, I would like to suggest a possibility that there may be cases in which a tortfeasor who is mentally ill will be exempt from paying compensation on account of various considerations of justice. Let me explain the main points of my position.

2.    The question of the liability of a mentally ill person in tort is a delicate and complex question. It involves legal principles and questions of liability in tort, which are frequently discussed but remain unresolved until today. I should say at the outset that in my opinion the question ought to be resolved by the legislature, and I will discuss this later in my remarks. In any case, now that the matter has come before us, we have no alternative but to decide it on the basis of the relevant policy considerations, taking into account the purpose of existing legislation and particularly the circumstances of the case before us.

3.    In White v. White [45], Lord Denning discussed the development of the law of torts, and how the focus of the issue of liability was transferred from the question of fault to the question of who ought to be liable for the damage. In that case Lord Denning found that the idea of compensation, rather than the idea of fault, is what lies at the heart of liability in tort, and in view of this, he held that a person will be liable in tort even if as a result of a mental illness he did not know what he was doing or whether it was morally wrong:

‘In the case of torts such as trespass and assault, it is .... settled that a person of unsound mind is responsible for wrongful conduct committed by him before he was known by the injured person to be of unsound mind, even though it has since become apparent that such conduct was influenced by mental disease which was unrecognised at the time: and this is so, even if the mental disease was such that he did not know what he was doing or that what he was doing was wrong: because the civil courts are concerned, not to punish him, but to give redress to the person he has injured...’ (White v. White [45], at pp. 58-59).

This approach makes it possible to impose liability in torts on the basis of the principle of compensation, even without considering the question of fault, and it is a broader approach that that of my colleague, who, as I have said, adopted the intermediate approach of Judge Stable (see also I. Englard, A. Barak, M. Cheshin, The Law of Torts — General Theory of Torts (second edition, G. Tedeschi ed.. 1977), at p. 133 (hereafter: Englard et al., The Law of Torts)).

I am aware that a sweeping determination that the question of the tortfeasor’s fault should be ignored, which is Lord Denning’s approach, is inconsistent with the Israeli Torts Ordinance [New Version], 5728-1968, both in view of the requirement of fault that appears in chapter four of the Torts Ordinance and in view of the disparity between tortfeasors who cause damage as a result of involuntary acts, who are liable in tort, and tortfeasors who cause damage as a result of necessity or force majeure, who have a defence in tort (see Englard et al., The Law of Torts, at p. 137). At the same time, with regard to liability in tort that is imposed on mentally ill persons, I tend to agree with Lord Denning, in view of the conceptual proposition underlying his approach that the focus should be moved from the question of fault to the question of compensating the injured party. This idea, as we shall see below, is also evident in the Israeli law of torts, as developed in legislation, case law and legal literature. Let me explain.

4.    Even though there is an assortment of purposes underlying the law of torts (deterrence, punishment, dispensing justice and spreading the loss), it is clear that precedence is given — and in my opinion rightly so — to the purpose of compensating the injured party and restoring him to the position he was in prior to the tort that was perpetrated against him. The following remarks are most apposite in this regard:

‘… this assumption is like a golden thread in case law — that the purpose of the law of torts is to grant the injured person a remedy for the damage that he suffered, and the purpose of the law of compensation is, therefore, to negate the consequences of the tortious act, by restoring the injured person, in so far as it is possible to do so, to the same position that he would have been in at the time of the tortious act, had it not been for the tortious act. Compensation therefore seeks to achieve a remedial purpose’ (A. Barak, ‘Assessing Compensation for Personal Injury,’ 9 Tel-Aviv University Law Review (Iyyunei Mishpat) 243 (1983), at p. 248).

The purpose of the law of torts is therefore to give the injured party a remedy for the damage that he suffered, and compensation is intended to negate the consequences of the tortious act. The basis for this approach is found in the understanding that communal life in human society makes individuals mutually interdependent and requires them to restrain the pursuit of their own interests by showing consideration for the interests of others. This restraint finds expression in legal arrangements that determine the limits of what is permissible and what prohibited; such is the case in criminal law, and it is also the case in constitutional law and the law of torts. In so far as the law of torts is concerned, when the prohibited act amounts to a tort, the ‘classic’ response is to impose liability on the tortfeasor to pay compensation to the injured party. The purpose of the aforesaid obligation is to compensate the injured party for the damage that he suffered by restoring him to his original position in financial terms (see, for example, CA 357/80 Naim v. Barda [26], at p. 766; FH 15/88 Melech v. Kornhauser [20]; CA 2034/98 Amin v. Amin [27], at p. 85 {631}; CA 8673/02 Forman v. Gil [28], at p. 381; CA 11152/04 Pardo v. Migdal Insurance Co. Ltd [29]; Englard et al., The Law of Torts, at p. 25).

5.    It is not superfluous to point out that the ‘remedial’ purpose reflects, inter alia, the distinction between the law of torts and criminal law. The law of torts concerns the relationship between one individual and another, which is based on an assumption of equality, and its main purpose, as aforesaid, is to compensate the injured party and restore him to his original position. By contrast, criminal law concerns the relationship between the sovereign state and the individual, and the purposes of the criminal prohibitions are to give warning of the danger that they present to the values that are essential for the existence and proper development of society, to deter persons of limited social consciousness from violating them, and to lay down the criteria for society’s response to any failure to observe them. A criminal offence de facto constitutes a conscious conflict between the individual and organized society (see S.Z. Feller, Criminal Law (vol. 1, 1984), at pp. 62-63). Only when a person has criminal capacity, i.e., only when he is capable of comprehending the significance of his conduct and when he knows how to choose between taking action and refraining from taking action, is it possible to speak of a conscious conflict between him and society, and only then is he liable for criminal sanctions (see Feller, Criminal Law, at p. 63). It follows that criminal law inherently and essentially focuses on the defendant, and he is also the subject of the main sentencing considerations: deterrence, punishment and rehabilitation. There is no sense in convicting someone of committing a criminal offence when he could not refrain from committing the criminal act, or when he did not understand what he was doing or that his conduct was wrong, since when the defendant has no ability to choose between different ways of acting and between different objectives, his act does not reflect a readiness to violate the social value that the law is intended to protect (see, for example, CrimA 118/53 Mandelbrot v. Attorney-General [3]; CrimA 186/55 Mizan v. Attorney-General [30]; CrimA 2947/00 Meir v. State of Israel [31], at p. 643; Y. Bazak, The Criminal Liability of the Mentally Disabled (third edition, 1985), at p. 11)). Against this background, we can understand the provision of s. 34H of the Penal Law, 5737-1977, which exempts a mentally ill person from criminal liability.

There is a rule that any balance between values reflects the context in which it is made, and when the context changes, so too does the actual balance (see LCA 5768/94 ASHIR Import, Manufacture and Distribution v. Forum Accessories and Consumables Ltd [32], at p. 451). Thus, in so far as the law of torts is concerned, the different context requires a different balance, in which the emphasis is placed, as stated above, on the injured party and on the damage that was caused to him, while the question of the tortfeasor’s position, as well as his objectives and motives, is secondary and incidental, and does not lie at the heart of the case.

Moreover, criminal law may lead to the defendant being sent to prison, a consequence that no one will dispute is very serious. By contrast, in the law of torts the nature of the remedy is merely economic. Although this is likely to harm a person’s property, clearly the harm is less serious than the harm caused by depriving someone of his liberty. The court should therefore bear in mind the disgrace inherent in a criminal conviction, which is not necessarily shared by someone who is found liable in tort. The aforesaid consequences mean that greater caution needs to be taken in a criminal trial with regard to the rights of the defendant. But the sweeping exemption from criminal liability granted to mentally ill persons, which is derived from this caution, is not essential in tort law.

6.    As we have said, the main purpose of the law of torts — as distinct from the criminal law — is to ensure that, as a rule and subject to the conditions stipulated by statute, the tortfeasor will compensate the injured person for the damage that he caused him. Legislation and case law have recognized exceptions to this rule and, on the basis of various rationales, have determined cases in which the victim will not be compensated for the damage that he suffered. Thus, for example, a minor who has not yet reached the age of 12 is exempt from liability in tort (s. 9 of the Torts Ordinance). The limits and scope of these exceptions are determined in the light of the rule that requires the payment of compensation to the injured party for the damage that he suffered. The following remarks are apposite:

‘When we are speaking of borderline cases, which may, according to one construction or another, be determined in either direction, it will be right, in my opinion, to hold that within the framework of the “margin of reasonableness” of the various legal constructions we should choose the construction and the legal solution that give the victim a complete remedy for the damage that he suffered, rather than the construction that leaves the victim without compensation, even if only in part’ (Melech v. Kornhauser [20], at p. 96; emphasis added).

This guideline requires us to adopt a strict interpretation with regard to defences that may be available to the tortfeasor. In our case, a strict interpretation of this kind may lead to the conclusion that a mental illness does not necessarily provide an absolute defence to being liable to pay compensation in tort, as my colleague Justice Rubinstein has indeed held. It should be emphasized that placing the burden of compensation on the shoulders of the mentally ill person does not mean that he was morally at fault for committing the act. That is a question for criminal law. We, however, are concerned with the law of torts, which focuses on the question of the injured party being compensated by the person who caused him damage.

7.    This conclusion — that liability should be imposed on mentally ill persons — is also supported by additional considerations, which were addressed in my colleague’s opinion and in the judgments of the Magistrates Court and the District Court that were given in this case. Thus, for example, it has been held that where one innocent person causes damage to another, the one who causes the damage should be liable for it. An additional factor that tips the scales in favour of imposing liability on mentally ill tortfeasors is the concern that the public will not accept the proposition that mentally ill persons should have a sweeping exemption from liability in tort, which may result in a loss of public confidence in the legal system. Moreover, the courts have discussed the difficulty in proving mental illness, and they have held that imposing liability in tort on mentally ill tortfeasors will prevent people who have caused damage trying to have themselves wrongfully included within the definition of mentally ill persons. Moreover, there are some who regard imposing liability as aforesaid as an incentive to families and closely related persons to increase the supervision and care of mentally ill persons, in so far as this is required and circumstances allow. This has been discussed at length, and I agree with the approach underlying this and the main considerations that support it.

8.    In my opinion, the purpose of the law of torts necessitates imposing tortious liability on a mentally ill person, even if the tort was committed as a result of his illness, and even if it is proved that he could not have refrained from doing the act. Notwithstanding, I do not rule out a decision according to which, on the basis of various considerations of justice, there will be certain cases in which it will be right to exempt a mentally ill tortfeasor from paying compensation, out of a sincere concern for the community of mentally ill persons and in view of the importance with which I regard their integration into the community (see and cf. CA 8163/05 Hadar Insurance Co. Ltd v. A [33]; A. Porat, ‘The Law of Torts: the Tort of Negligence According to the Case Law of the Supreme Court from a Theoretical Perspective,’ Israel 5756 Law Annual 373 (1996), at p. 391; regarding the emphasis being placed on considerations of justice, see, for example, ss. 827-829 of the German Civil Code; s. 54 of the Swiss Federal Code of Obligations; and s. 489-2 of the French Civil Code; it should be noted that the premise  is that there is an exemption from tortious liability). Thus, for example, granting a mentally ill tortfeasor an exemption from paying compensation should, in my opinion, be considered when it has been proved that the injured party can be compensated by a third party. If, after the mentally ill person committed a tort, it transpires that it was possible to take steps to prevent the tort, but these were not taken, it is possible that one of the parties who was liable to take those steps may be found liable to compensate the injured party on the grounds of negligence (see, for example, CA 350/77 Kitan Ltd v. Weiss [34]; CC (Jer) 8636/99 Gordon v. State of Israel [40]), and the mentally ill tortfeasor may be granted a corresponding exemption from such liability.

It should be noted that where considerations of justice support exempting a mentally ill tortfeasor from the duty to compensate the injured party, this does not need to be a complete exemption. The court should consider a possibility of a partial or reduced liability to pay compensation, where the amount of the reduction will be determined according to the circumstances of the concrete case and the degree of control that the tortfeasor had over his actions, as shown by the professional opinions that will be submitted. In any case, it does not appear that our case falls within the scope of such cases.

I should add that it is possible to examine various possibilities of financing compensation for victims, in those cases where the mentally ill tortfeasor is not liable to pay any compensation at all or is liable to pay only partial compensation. Thus it is possible to consider establishing a national compensation fund that will shoulder the burden of compensating victims in such cases. I would point out that it is well-known that national compensation funds have been recognized by the legislature in various spheres. Thus, for example, a fund was established under the Road Accident Victims Compensation Law, 5735-1975, for victims of road accidents. The establishment of a compensation fund as aforesaid raises many questions, including the method of determining entitlement to receive payment from the fund, and the way in which the fund will be financed. In any case, if and when a decision is made to introduce a compensation mechanism in this matter, it may be assumed that a thorough debate of the issue will be held in order to examine the various issues that will arise and consider the relevant ramifications and the difficulties posed by each option.

9.    As I have said, I support the result in Justice Rubinstein’s opinion, according to which the appellant is liable in tort for his actions. Notwithstanding, I should point out that my colleague’s opinion raises certain legal questions that have not, in my opinion, been resolved. Thus, I have not found any justification for the distinction, which has also been adopted in s. 374 of the Property Law Memorandum, 5766-2006 (hereafter: the Memorandum), which provides that ‘while insanity (within the meaning of the term in the Penal Law) does not constitute a defence in tort law, a lack of control of the body’s movements does constitute a defence’ (para. 34 of Justice Rubinstein’s opinion). This approach de facto adopts the approach of Justice Stable in Morriss v. Marsden [47], according to which liability in tort requires a minimal mental element of control, which Prof. Englard interpreted as ‘the mental act by means of which a person makes himself the cause of his conduct’ (see Englard et al., The Law of Torts, at pp. 134-138). I have found no sufficient rational, ethical or social justification for distinguishing between someone who acts without any control over his body movements, who is entitled to a defence, and a mentally ill person who acts in consequence of his illness, who is not entitled to such a defence, and for distinguishing between ‘sane’ automatism (‘automatism that deprives a person of control’) and ‘insane’ automatism (‘automatism that deprive a person of will’). In both cases a person is deprived of the ability to refrain from committing the act (see in this regard CrimA 382/75 Hamiss v. State of Israel [18]; Mandelbrot v. Attorney-General [3], at p. 298 {137-138). Cancelling the distinction between ‘sane’ automatism and ‘insane’ automatism prima facie indicates a need to compare the laws relating to each. In any case, I do not think that this difficulty undermines the result of my colleague’s opinion, since in my opinion there is in any case a basis for finding the appellant liable in tort. I therefore leave this question to be considered at a later date.

10. Before closing, I would like to point out that, as I said above, in view of the importance of the matter and in view of the lack of clarity on this subject, I am of the opinion that the question before us is a matter that should be addressed by the legislature. The legislature’s silence on this matter is particularly notable in view of the exemption from liability given to mentally ill persons in the criminal sphere (s. 34H of the Penal Law), as well as in view of the exemption from liability in tort given to minors (s. 9 of the Torts Ordinance). Much has been written in judgments of the lower courts on the legislature’s silence with regard to the question of the liability of mentally ill persons in torts: does this silence constitute a negative arrangement or is it a lacuna? There is no need to discuss the matter further. The issue has been addressed in the Memorandum (see ss. 374 and 389), but I am of the opinion as aforesaid that it involves certain difficulties. The question of the liability of mentally ill persons in tort is a complex legal question, and it touches upon certain disciplines that are outside the law, such as medicine and the social sciences. Formulating a policy on this question requires a clarification and discussion of the relevant issues after hearing the appropriate professionals, including experts in medicine, education, social science and law, and any other persons who may be relevant. I am sure that this work was done before the Memorandum was prepared, and it may be assumed and hoped that the matter will be considered in depth once again after the final draft is tabled in the Knesset.

 

 

Appeal denied.

22 Kislev 5768.

2 December 2007.

 

 

[1]    Translator’s note: the Israeli Tort Ordinance uses one word, which is translated here as ‘assault,’ to include both the English common law concepts of battery (unlawful physical contact) and assault (threat of unlawful physical contact). 

 

 

C.A. 2034/98

Yitzhak Amin

v.

1.  David Amin

2.  Batya (Sara) Amin Sharabi

3.  Avraham Amin

 

 

The Supreme Court Sitting as the Court of Civil Appeals

[October 4, 1999]

Before Justices T. Or, I. Zamir, and I. Englard

 

Petition to the Supreme Court sitting as the Court of Civil Appeals.

 

Facts: Three children, orphaned of their mother, were emotionally abandoned by their father, who refused all contact with them. The emotional neglect caused them severe psychological damage that continues to impede on their adult lives. The children sued their father in tort for emotional damage and won at the district court. The father appealed.

 

Held: The father’s severe emotional neglect of his children breached his duties under the Legal Capacity law, which, inter alia, requires parents to provide for the educational needs of their children. Education includes equipping children with the basic life skills. A parent must act for the benefit of his or her child, with the care that an ordinarily devoted parent would use. The severity of the father’s neglect constituted a breach of his duty of care, giving rise to an action in tort based on breach of statutory duty. Justice Or wrote to note that the egregiousness of the father’s behavior made this case unique, and that in future cases, courts may have to draw more precise lines delineating parental duties.

 

Appeal denied.

 

For the appellant—Yisrael Shalev

For the respondents—Shlomo Kochli and Sara Sharvad

 

Appeal of the judgment of the Tel-Aviv-Jaffa District Court (Judge H. Stein) on 26 June 1998 in Civil Case 1016/98. Appeal Denied.

 

Legislation Cited:

Torts Ordinance [New Version], ss. 4, 35, 36, 63.

Legal Capacity and Guardianship Law, 5722, ss. 15, 16, 17, 22.

Penal Law, 5737-1977, ss. 323, 362, 365.

Interpretation Law, 5741-1981, s. 7.

Courts Law [Consolidated Version], 5744-1984, s. 79A.

 

Regulations Cited:

National Insurance Regulations (Determining Levels of Disability for Victims of Work Accidents), 5716-1956 (Addendum), ss. 34(e), 34(f).

 

Israeli Supreme Court Cases Cited:

[1]        CA 245/81 Sultan v. Sultan, IsrSC 38(3) 169.

[2]        CA 549/75 Anonymous v. Attorney General, IsrSC 30(1) 459.

 

American Cases Cited:

[3]        Burnette v. Wahl, 588 P. 2d 1105 (1978).

[4]        Courtney v. Courtney, 413 S.E. 2d 418 (1991).

 

Israeli Books Cited:

[5]        2 A. Barak, Parshanut Bimishpat [Interpretation in Law],     Parshanut Hachakika [Statutory] (1993).

 

Israeli Articles Cited:

[6]        G. Tedeschi, Mashber Hamishpacha Vichasidei Hamesoret [Family     Crisis], in Mechkarei Mishpat Lizecher Avraham Rosenthal 282 (G.    Tedeschi, ed., 1964).

 

Jewish Law Sources Cited:

[a]         Psalms 103:13.

[b]        Yevamot 70:1.

[c]         Deuteronomy 32:11.

[d]        Rashi, Commentary on Deuteronomy 32:11, “As an eagle stirs up its nest”.

[e]         Lamentations 4:3.

[f]         Rashi, Commentary on Lamentations 4:3, “Even the jackals”.

[g]        Maimonides (Rambam), Mishnah Torah, Halchot Deot (Laws of         Characteristics) 7:10.

[h]        Song of Solomon 8:7.

[i]         Leviticus 19:18.

[j]         Babylonian Talmud, Tractate Sota 8:2.

[k]        Babylonian Talmud, Tractate Baba Metzia 51:1.

[l]         Babylonian Talmud, Sanhedrin (Courts) 45:1; 52:1-2.

[m]       Naftali Hertz Wiesel, Exegesis of the Book of Leviticus.

[n]        Rabbi Yosef Karo, Shulhan Aruch, Yoreh Deah 240:1, 3, 8, 18.

[o]        Rabbi Moshe Isserlish,  Commentary on Shulchan Aruch, Yoreh Deah 240:1, 8, 18.

[p]        Shiftei Cohen, Yoreh Deah 240:18.

[q]        Torei Zahav, Yoreh Deah 240:1.

                                               

 

 

JUDGMENT

Justice Y. Englard

 

 

Are children entitled to compensation from a father whose neglect caused them severe emotional damage? This is the exceptional question we must decide in this appeal. Following an extensive, detailed, and in-depth discussion of the different aspects of the issue, the district court, in an opinion by Justice H. Stein, answered that question in the affirmative. This issue is rare not just in our system of law but in other legal systems as well. A single prior decision addressing this issue was cited in the lower court, and a majority of judges in that opinion dismissed the claim.

 

I am referring to the decision by the Supreme Court of Oregon in the United States, Burnette v. Wahl Or [3]. The district court was un-persuaded by the explanations of the majority opinion in that case, preferring Justice Linde’s dissenting opinion. It may very well be that the district court’s decision obligating the father to pay compensation for the emotional harm he caused his children by neglecting them constitutes a global precedent. It may also be true, however, that the facts of this case are exceptional in their severity.

 

1. The facts surrounding the case of the Amin family are indeed extreme and tragic. I will describe them in abridged summary, based on the lower court’s findings. The father has three children, a daughter and two sons (Sara, David, and Avi). Not long after the birth of the younger boy, the mother committed suicide. The children stayed with their grandmother for a short time, but that home was experiencing distress, and the welfare authorities transferred the children to educational institutions. Until they reached their majority, the children went back and forth from institution to foster family to institution, and from institution to institution and back again. The children were separated from each other. Their fate was poor and bitter. The older they grew, the more they deteriorated into lives of drug abuse and crime. One son started a family but is unable to work and lives off monthly National Insurance payments. The other son wandered from job to job, unable to keep a place of employment for long. The daughter married and divorced. She has six children: the eldest was given up for adoption, and the others were put in group homes; their mother’s drug abuse renders her unable to care for them. The tragedy of the children passes from generation to generation.

 

2.  In their bitterness and distress, the sons and daughter point accusatory fingers at their father; he turned his back on them throughout their childhood and youth and continues to do so today. The children sought and pleaded for fatherly attention, for a modicum of warmth and concern and care, and for any measure of interest in them and in their lives from their father, but they hit a brick wall. The severance was intentional and absolute. It became clear that the primary reason for the separation originated in an agreement the father made with his second wife, in which he promised to build their new home with no foundations from the past: The father would cut off all connection with his children from the previous marriage, and his wife would do the same to her children from a previous marriage. The couple executed this “agreement” with such stringency, they did not allow the children to enter their home, and the children’s few visits to their grandmother met with loud disapproval from the father and the stepmother. Their eyes full of yearning, the children watched how the father showered his love on the two sons born to him by his second wife and ensured their education. And they were neglected and left to care for themselves!

 

 

3.  The complaints – the cries – of the children are backed by testimony of social workers who took care of them. The court emphasized the testimony of Ms. Shoshana Samak, a social worker who cared for the Amin children:

 

When I received the children, they told me that they used to sit for hours by the fence of their father’s home. He would not open the door for them and would ignore them when he saw them in the collective village. In our line of work, we mix the therapeutic component with an emotional connection between the children and a relative. These children were completely cut off and received only feelings of rejection from every direction. As a social worker, I therefore had to take my children to attend Avi’s birthday in the morning. I desperately tried to get the grandmother and father to come, but they systematically ignored the invitations. During my tenure, no one visited the children in the institutions. The father unequivocally did not visit … our complaint against the father is that he denied his fatherhood of the children and absolved himself of all responsibility for their emotional suffering. Pp. 13-15 of the judgment (emphasis in original).

 

…

 

Every trip to the collective village was a setback in the children’s progress. They would return traumatized. I don’t know how to define it. Id.at 13.

 

On September 5, 1978, another social worker, Mr. Avraham Rachamim, wrote to the Ministry of Labor and Welfare (exhibit 3):

 

From their childhood, the children stayed in various institutions while the father completely ignored them. Every attempt by our office to involve him in their care and custody failed. Mr. Amin’s second wife adamantly refuses to allow them into the house, such that for years there has been no connection between the father and the children. P.16 of the judgment (emphasis in original).

 

Mr. Yoel Ben-Yehuda, the head of social services in the Gezer Regional Council, described the children’s plight in his testimony:

 

On a scale of 1 to 10, with 10 being the worst, I would classify the Amin children’s case as a 10. P. 18 of the judgment.

 

Mr. Naftali Drazner, Director of the Raziel Institute in Herzliya where Sara was a resident, wrote to the father on May 21, 1979 (exhibit 5):

 

We have no choice but to write to you and draw your attention to the behavior of your daughter, Sara. It is true that, in the four years in which Sara has lived in the village, you have not visited the place nor expressed interest in her studies and behavior. However, because her behavior has worsened lately, we have seen fit to bring the issue to your attention, so that you will also be aware of it. P. 18 of the judgment.

 

The court also noted additional testimony by Mr. Drazer:

 

I remember turning to the family to tell them that Sara refuses to eat, and that we cannot be responsible for her health if she persists in her refusal. To the best of my recollection, the family did not respond. We had almost no connection with the family. P. 18 of the judgment (emphasis in original).

 

4. The experts testified to the severe psychological damage that the children suffered as a result of their father’s behavior.

 

      The court adopted the opinion of Dr. Shabtai Noi, a well-established expert in clinical and educational psychology who issued an expert report on behalf of the respondents (no opposing report was offered). Dr. Noi assessed the level of disability using the percentages established in the addendum to the National Insurance Regulations (Determining the Disability Level for Employment-Related Injuries), 1956. Dr. Noi determined that David and Avi had a disability level of 50% under Section 34(e) of the Addendum and that Sara had a disability level of 70% under Section 34(f) of the Addendum. Dr. Noi found David to be an intelligent person and determined that:

 

I have no doubt that David’s disability is connected to and stems directly from the extreme way in which his father rejected him, his father’s cruelty toward him, and the lack of parental care throughout his childhood … in effect, he constantly lived in his father’s shadow, with sporadic visits which revived in him, with renewed intensity each time, the need for a father and the burning frustration from being rejected and deprived of a parental relationship. The image of this adult shaped his personality into what it is today. P. 5 of the report.

 

Dr. Noi noted that memories of Sara’s sporadic contact with her father had a “quality of traumatic memory which causes disability” (p.6 of the report) and he summarized her situation in the following way:

 

I am of the opinion that Sara demonstrates disability and tremendous suffering which were undoubtedly caused both by lack of care as well as active cruelty against her. Id.

 

Regarding Avi, Dr. Noi found that “He has post-traumatic thoughts about his past.” P.9 of the report. Dr. Noi summarized his report in the following words:

 

The personalities of the three siblings are characterized by a sense of trauma in their past which constantly endangers them with a flood of feelings too powerful for them to control … for all three, this state of affairs causes severe disability which may never be able to be corrected.

 

In addition, the personalities of all three are at a childish stage of development … the formal definition is personality disorder. It is difficult for children to grow in the absence of parental support. With their post-traumatic background, it is not clear if they will be able to develop even today. What is clear is that for the three, the developmental delay and the post-traumatic difficulty are related to their past, to the lack of parental support and what it is supposed to impart to a child, as well as the active cruelty toward them. P. 50 of the judgment, pp 9-10 of the report.

 

5. The father’s impenetrability regarding his children shocks the spirit. Our moral sense cries out against the cruelty of this estranged behavior. Isn’t the compassion of a father toward his children a basic natural feeling, common to the entire human species? Indeed, the Jewish psalms say: “As a father has compassion for his children,   so the Lord has compassion for those who fear him.” Psalms 103:13. And the sources add: “This nation is distinguished by three characteristics: They are merciful, bashful and benevolent. ‘Merciful,’ for it is written, And shew thee mercy, and have compassion upon them, and multiply thee.” Yevamot 70:1 [b]. Even in nature, there is an instinctive feeling of this sort, as we learn from the Bible: “As an eagle stirs up its nest, and hovers over its young; as it spreads its wings, takes them up, and bears them aloft on its pinions.” Deuteronomy 32:11 [c]. And Rashi, in his commentary on Deuteronomy 32:11, “As an eagle” [d], says: “He guides them with mercy and pity like the eagle which is full of pity towards his young and does not enter its nest suddenly – before it beats and flaps with its wings above its young, passing between tree and tree, between branch and branch, in order that its young may awake and have enough strength to receive it.”  And: “Even the jackals offer the breast and nurse their young, but my people has become cruel, like the ostriches in the wilderness.” Lamentations 4:3 [e]. And Rashi, in his commentary on Lamentations 4:3, “Even the jackals” [f] writes that “Even though he is cruel, a demon who sees his son from afar, hungry, will take a blindfold from his breast to cover his eyes so as to avoid seeing his son, and he will retreat back the way he came.”

 

 

6. The matter is even worse: the children were orphaned of their mother’s physical and emotional care. A child who grows up without a mother’s love and comfort is harmed in any event. That situation creates special obligations:

 

A man ought to be especially heedful of his behaviour towards widows and orphans, for their souls are exceedingly depressed and their spirits low. Even if they are wealthy, even if they are the widow and orphans of a king, we are specifically enjoined concerning them, as it is said “Ye shall not afflict any widow or fatherless child” (Ex. 22:21). How are we to conduct ourselves towards them? One must not speak to them otherwise than tenderly. One must show them unvarying courtesy; not hurt them physically with hard toil, nor wound their feelings with harsh speech. One must take greater care of their property than of one's own. Whoever irritates them, provokes them to anger, pain them, tyrannizes over them, or causes them loss of money, is guilty of a transgression, and still more so, if one beats them or curses them. Though no stripes are inflicted for this transgression, its punishment is explicitly set forth in the Torah (in the following terms) “My wrath shall wax hot, and I will slay you with the sword” (Ex. 22:23). He who created the world by His word made a covenant with widows and orphans that when they will cry out because of violence, they will be answered; as it is said, “If thou afflict them in any wise – for it they cry at all unto Me, I will surely hear their cry” (Ex. 22:22). This only applies to cases where a person afflicts them for his own ends. But if a teacher punishes orphan children in order to teach them Torah or a trade, or lead them in the right way – this is permissible. And yet he should not treat them like others but make a distinction in their favour. He should guide them gently, with the utmost tenderness and courtesy, whether they are bereft of a father or mother, as it is said “For the Lord will plead their cause” (Prov. 22:23). To what age are they to be regarded in these respects as orphans? Till they reach the age when they no longer need an adult on whom they depend to train and care for them, and when each of them can provide for all his wants, like other grown-up persons. Maimonides, Mishnah Torah, Hilechot Deot, 6:10 [g] (emphasis added – Y.E.).

 

 

7. In effect, counsel for the father acknowledges that his behavior was inappropriate, but he consistently repeats that it is a breach of a moral duty for which there is no legal sanction. In other words, the moral defect in severing the relationship between the father and his children does not give rise to a cause of action in tort. It is argued that while there is a legal duty to provide children with their material needs, there is no legal duty, nor can there be such duty, regarding the psychological need for an emotional, fatherly connection as an expression of love, compassion, and kindness. Indeed, how is it possible to force a person to impart love?  Furthermore, the argument goes, even if we were to recognize the legal character of a duty like this, it would be unwise to allow children to sue their fathers based on it. Who could stop the flood of suits over withheld love and emotional harm which occur within families? For policy reasons stemming from the purpose of law and its effectiveness, we should not create a cause of action in tort allowing children to sue their parents for damages for emotional and psychological harm.

 

8. As for the distinction between morality and law, it is clear that we should not turn every worthy human characteristic into a legal duty, which we would recognize by threatening physically to compel compliance with them. The Jewish tradition recognizes a distinction between duties enforced upon a person by earthly courts and moral duties left to the heavens or to the conscience of a person who seeks self-improvement. The Jewish tradition and the modern liberal state, however, draw the boundaries between the two normative systems – law and morality – in very different places. According to Kant’s pure theory, the very enforcement of a duty deprives compliance of its moral character, because an action is moral only when carried out through internal-autonomous recognition of the duty. As noted, the father’s claim is that we cannot impose a duty for him to establish a “fatherly connection” with his children beyond taking care of their material needs.

 

            The question, however, is not what the father thinks about the proper scope of legal duties in parental-child relationships; the question is what arises from the statutory provisions in this area.

 

9. The district court held that the father’s alienating behavior constituted a breach of his statutory duties toward his children as well as the duty of care imposed on him by Section 35 of the Torts Ordinance (New Version), 1968. The district court held that Sections 15 and 17 of the Legal Capacity and Guardianship Law, 1962 and Sections 323, 362, and 365 of the Penal Law, 1977, impose statutory duties on the father. According to the district court, breaching those duties constitutes breach of a statutory duty under Section 63 of the Torts Ordinance, a wrong which entitles the victims to damages.

 

10. I agree with the lower court that the duties imposed on parents by Section 15 of the Legal Capacity and Guardianship Law are not limited to purely physical needs; the section explicitly states that “the parents’ guardianship includes the duty and the right to care for the needs of the minor, including educational needs, his or her studies, and his or her professional and vocational training.” The concept of education is broader than the ocean and deeper than its depths. According to the broadest conception (J.S. Mill), education is the entirety of personal, social, and even physical influences which operate – intentionally or unintentionally – on a person’s experience, character, and talents. Another approach distinguishes between education and training, assigning to education the task of shaping the entire personality of the pupil as a person by introducing him or her to values which constitute a purpose unto themselves. See “Education,” 17 Hebrew Encyclopedia at 612, 618. Indeed, Section 15 of the Legal Capacity and Guardianship Law itself does not limit education to studies and professional training. Assuming, however, arguendo, that the statute limited education to studies and professional training, the father would still have failed to fulfill this limited duty; he did not take the trouble to concern himself with his children’s educational and training difficulties while they were living in various institutions, despite the warnings of education officials. The absolute severance of any relationship with his children is a severe breach of the duty to take care of their needs in general, and their education in particular. However, there are clear limits to the extent to which law can invade the fabric of family life: there is no doubt that a child needs the love of his or her parents and that such love is a critical necessity. As is well known, withholding love is likely to adversely affect a person’s personality. Yet imparting love is beyond the capacity of the law, whose reach is both heavy-handed and short in the field of emotions. Therefore, in imposing a duty on parents to provide for the needs of minors, including education, the legislature did not intend to impose a legal duty to love, i.e. a requirement that a person develop an internal feeling. Indeed, He is who is wiser than any person said that, “Many waters cannot quench love, neither can floods drown it. If one offered for love all the wealth of his house, it would be utterly scorned.” Song of Solomon 8:7 [14]. This is true even of the commandment to love one’s neighbor as oneself (Leviticus 19:18), which is, in Rabbi Akiva’s opinion, a greatly important rule in the Bible. The legal-religious aspects of the commandment – as opposed to its emotional duty – are expressed through external actions such as the rules related to the principle of ensuring a humane death even for someone sentenced to death. See Sota, 8:2 [j]; Baba Kama, 51:1 [k]; Sanhedrin 45:1 [l]; Sanhedrin 52:1,2 [l]. Similarly, the learned Naftali Hertz Wiesel said in his Exegesis of the Book of Deuteronomy (19:18) [m], “Neither love nor hate can be dictated, as no person can rule over them.”

 

11. It should be noted that the Legal Capacity Law does not require parents to succeed in seeing to the education of the child; they are only required, in the words of Section 17, to act for the benefit of the minor as devoted parents would act under the circumstances.

 

In other words, their duty is not to achieve the desired results of the education, studies, and training; they are obligated to make an attempt, according to the level of behavior that ordinarily devoted parents would display.

 

Furthermore, the legislature even went to the trouble of creating a certain immunity for parents from claims of damages caused to children as the result of their behavior (Section 22 of the Legal Capacity Law): “The parents will not be held liable for damages caused to the minor through the fulfilling of their duties of guardianship, unless they acted in the absence of good faith or did not intend the good of the minor.” Without going into the question of whether good faith, in this context, is examined through objective or subjective criteria, there is no doubt that the father in this case behaved as he did not in order to promote the good of his children but rather out of undeniably personal interest, whatever that interest may be. The father therefore has no defense under Section 22 of the above-mentioned law. We should also note that the meaning of Section 22 of the Legal Capacity Law is not limited to granting a certain immunity to parents from liability for damages caused to the minor through the fulfillment of their guardianship duties. The provision also contains a kind of imposition of direct liability on parents for the damages caused to the minor. Section 15, which defines the role of parents, outlines their duties without determining their liability for damages that minors are likely to suffer as a result of the breach of those duties.

 

In my opinion, the legislature intended that Section 22 impose on parents – as evidenced by the footnote to the section – liability for damages caused to the minor by breaching their duties as natural guardians. It is indeed true that the parental duties outlined in Section 15 also fit into the general receptacle of Section 63 to the Torts Ordinance. This inclusion does not, however, significantly derogate from the independent meaning of Section 22 of the Legal Capacity Law as imposing direct liability on parents.

 

12. In contrast, I have certain doubts about the court’s conclusion regarding the breach of duties imposed by the Penal Law. Indeed, there is no theoretical reason that the crimes listed in the Penal Law could not create statutory duties under Section 63 of the Torts Ordinance. See Justice S. Netanyahu’s opinion in CA 245/81 Sultan v. Sultan [1]. However, considering the way the criminal provisions are formulated, I am not convinced that they apply beyond providing for the material necessities they detail.

 

It may very well be that the phrase, “other critical life necessities” within Section 362 of the Penal Law can be interpreted according to the rule of eiusdem generic, meaning according to the substance of the previously-listed issues: clothing, food, shelter. We might interpret it as such in spite of the provisions of Section 7 of the Interpretation Law, 1981 (2 A. Barak, Parshabut Bimishpat [Interpretation in Law] [5] at 129). Because, however, I have found that the father breached his statutory duty under the provisions of the Legal Capacity Law, I do not see a need to decide the question of whether he also breached statutory duties under the Penal Law.

 

13. I agree with the lower court’s conclusion that the behavior of the father constitutes a certain breach of his duty of care toward his children, in the meaning of Section 35 of the Torts Ordinance, and because such breach caused damage to his children, the elements of a negligence tort have been established.

 

The father’s omissions rise to the level of unreasonable behavior, to say the least. The fact that the father intentionally ceased caring for his children does not take away from the possibility that the elements of negligence have been established. Negligence, in the technical sense, can also include intentional acts and omissions, because the test for negligence is the unreasonableness of the behavior and the foreseeability of the harm. Indeed, determining that the element of foreseeability has been established is a kind of value judgment, because we are talking not about the empirical possibility of foreseeability but rather about “normative” foreseeability: “which a reasonable person under similar circumstances would have foreseen in advance.” As noted, counsel for the father asks us to negate the father’s liability through a value judgment, based on the above-mentioned general considerations of legal policy. I am not convinced that, in the special circumstances of this case, these considerations require us to conclude that the father should not be held liable for the foreseeable emotional harm that his behavior was likely to cause his children. In summary: What could have been foreseen, should have been foreseen.

 

14. The negligence in this problem is, substantially, the twin sister of the breach of statutory duties outlined in the Legal Capacity Law. Therefore, if the father’s behavior falls under the auspices of the immunity provision in Section 22 of the Legal Capacity Law, I would also tend to limit, in accordance with that section, the duty of care within the tort of negligence. In other words, I would not recommend expanding the scope of the negligence tort beyond the limits of the specific parental liability established by the Legal Capacity Law.

 

15. Section 15 of the Legal Capacity Law refers to the authority of parents as natural guardians of their minor children as “the duty and right to care for the needs of the minor.” There is no doubt that people may waive their rights, but they may not shirk their duties. Therefore, so long as a parent is the natural guardian of his or her children, he or she bears the duty established by statute to care for the needs of the child, needs which should be given a broad meaning, beyond purely material needs. The fact that the parent does not have custody over the children affects his or her rights, but not his or her duties. Those duties remain on his or her shoulders, subject, of course, to the concrete circumstances of the parent-child relationship. On this issue, compare CA 549/75 Anonymous v. Attorney General [2] at 465-66.

 

16. Counsel for the father raised the argument of the “slippery slope,” meaning that the recognition in principle of parents’ legal liability for emotional damages to their children will open the floodgates for damage claims, like the hairline crack in the dyke that threatens to flood an entire village. Judge H. Stein gave a resounding answer to that claim:

 

The “slippery slope” argument cannot withstand rejecting the doctrine of immunity. Courts have many “stop-gaps” in using different techniques for imposing liability, and they can sort cases according to their severity. Claims for de minimis harms will be dismissed immediately. P. 67 of the judgment.

 

17. The level of severity is not the only test for determining liability in tort. It should be noted, by the way, that rejecting liability for an act of limited significance is not unique to parent-child relationships; the legislature established a general principle that a tort does not include an act of which a person of ordinary intelligence and temperament would not complain under the given circumstances. Sec. 4 of the Torts Ordinance. An important additional test is the balance of interests between parents and children. With all the emphasis on the rights that children have with respect to their parents, an emphasis which is characteristic of current times, the personal autonomy of each parent to shape his or her private life is also important. The duty is to act as a devoted parent, not a tormented parent. The district court therefore correctly held that:

 

There are certain aspects of family life to which judicial adjudication is foreign, as it should be. It is inconceivable that a minor can sue his or her parents in tort for emotional harm caused by the parents’ divorce and break-up of the family unit, despite the damage which, at some level, is widely foreseeable and known. P. 71 of the judgment.

 

18. It should be noted that parent-child relationships are not one-sided, and in addition to the rights which children have with respect to their parents, they also have duties. This additional aspect occupies an important position in the Jewish tradition, and it is expressed in the commandment to honor one’s parents. This commandment still echoes in Section 16 of the Legal Capacity Law: “The minor is obligated, through honoring his or her father and mother, to obey his or her parents in every issue subject to their guardianship” (emphasis added – Y.E.). On the history of the enactment of Section 16, see G. Tedeschi, Mashber Hamishpacha Vichasidei Hamesoret [Family Crisis] [6], 283-84. The religious commandment to honor one’s parents applies throughout a person's life, even after the parents have died. And the learned author of the Shulchan Aruch summarizes these principles according to the religious sources, which are relevant to our subject:

 

1. One must be extremely careful to fear and revere one’s father and mother.

 

…

 

3. To what degree shall parents be feared? If a son attired in costly garments, were to preside over a meeting, and his father or his mother came and rent his garments, and struck him on the head, and spat in his face he should not insult them [-- ed.] but he should remain silent and fear the King, who is the King of kings, the Holy One, blessed be He, who thus decreed.

 

…

 

8. To what degree shall parents be revered? Even if they took from his pocket gold coins and cast it into the sea in front of him, he should not insult them or show distress in their presence or display anger toward them but accept the decree as written and remain silent.

 

…

 

18. Even if his father is wicked and a sinner, he must fear and revere him. Shulchan Aruch, Yoreh Deah, 240 [n].

 

 

Despite these stringent rules, religious law includes a moderating trend which aspires to balance the rights of the son with the duties the commandment imposes toward the father. For example, Rabbi Moshe Isserlish, learned author of the Mapa, adds to the above-mentioned Section 8:

 

Some say that if the parent wants to throw coins belonging to the son into the sea, the son may prevent him and he need not honor him just because he is the son and it is his father. And there is no difference between honoring him and not showing him distress. If he has not yet thrown them, it is permissible to prevent him from doing so, but if he has already thrown them, it is forbidden to insult him but the son may sue him for the damages.

 

And Rabbi Isserlish comments on section 18, mentioned above: “Some say he need not honor a father who is wicked unless he has repented,” and Siftei Cohen comments on this: “Even though he is not obligated to honor him, he may not insult him.” See comments on Rabbi Isserlish. Similarly, on the court imposing the commandment, see the qualifying opinion in Rabbi Isserlish’s comments on verse 1, and the expansive opinion in Torei Zahav. It would seem, then, that Jewish law, too, sets a balance between the different purposes and conflicting interests in this complicated issue, and it in particular permits a son to sue his father in law if the father damages his property.

 

19. The conclusion arising from what I have said thus far is that we should evaluate the tort liability of a father toward his children for breaching the duty to care for their needs in light of the special circumstances of each case. A general statement like this does not seem to break new ground, because it is true of all cases of damage arising from negligence torts and breach of statutory duties.

However, the statement in this context relates to special considerations of balance, which differ substantively from other cases of harm. We are dealing with an intrusion into familial relationships, in which the rights of minors under the natural guardianship of their parents are likely to clash with the rights of the parents to shape their lifestyles autonomously. The modern legal system prefers the interests of minors, but it does not completely negate the freedom of the parents. While a parent cannot completely absolve himself or herself of the duties toward his or her children, the content of those concrete duties is likely to vary, depending on the special circumstances of the internal relationships within the family. We should recall that the legislature granted parents partial immunity in Section 22 of the Legal Capacity Law.

20. Given these considerations, I will now evaluate the special circumstances which will determine the question of a father’s liability for harm caused to his children. As the court held:

The [appellant] knew that he was the father of the children and that they were not given up for adoption. He knew of their yearning for a relationship with him, and he cold-heartedly ignored them. He did not respond to a single one of the requests by the welfare authorities to extend a supporting hand to his children.” P. 47 of the judgment.

The lower court expressed reservations about the very existence of the agreement between the father and his second wife, in which they agreed to exclude the children from his first marriage from their lives. The court added that it does not see a reason that the father could not have cultivated a relationship with his children, had he so desired, without violating the terms of the agreement. The court held:

Even if the father submitted to his wife’s dictates not to bring the children from his first marriage into the house, not even for visits (something that, in my opinion, has no justification and cannot be condoned), that submission would not explain why the father did not visit the children in their place of residence in the institutions and in foster families. P. 48 of the judgment.

I agree with this finding by the lower court. It shows that even if we were to give the maximum consideration to the father’s situation and his aspirations for an alternative family unit, there was still no need for him to display the level of cruelty which he displayed toward his children.

21. U.S. law contains formal and substantive obstacles to suits by children against their parents, including: the traditional common law principle of parental immunity from suits by their children and the reluctance to recognize a tort cause of action for the breach of a statutory duty which is of a penal character. See Justice Hollman’s majority opinion in Burnette v. Wahl. And here, despite these obstacles – which do not exist in our legal system – U.S. courts have recognized the right of children to sue their parents in tort for intentional outrageous conduct. Courtney v. Courtney (1991) [4].  Unfortunately, we can assume that the shocking and disgraceful conduct of the father in the case before us would meet the stringent tests in the above-mentioned category of claims.

22. Under these circumstances, the lower court was correct in concluding that the elements necessary to impose tort liability on the father in our legal system have been established. The remaining question is the level of compensation. The appellant complains that it is too high, both because of his financial situation and also because the goal of tort law is to restore the victim to his or her prior situation, not to deter tortfeasors. Without getting into the substance of these arguments – which on their face do not appear convincing – because the compensation was determined by an agreement under Section 79A of the Courts Law [Consolidated Version], 1984 a court of appeals is not inclined to intervene in the amount determined.

The appeal is therefore denied. The appellant will pay the respondents costs and attorney’s fees in the amount of 10,000 NIS.

 
Justice T. Or

 

I agree with the opinion of my colleague, Justice Englard. I wish to emphasize a single point. Counsel for the [appellant-ed.] expressed his concern that recognizing the right of the respondents to compensation from their father for the emotional harm caused to them would lead the court down a slippery slope. In Burnette v. Wahl [3], mentioned by Justice Englard, the majority opinion by Justice Holman gave a resounding response to this concern:

 

There are probably as many children who have been damaged in some manner by their parents’ failure to meet completely their physical, emotional and psychological needs as there are people. Id. at 1111.

 

Indeed, there is no doubt that the relationship between parents and children is often complex and emotionally-laden. It is not immune from frustrations, disappointments, and disillusionment, whether mutual or one-sided, which are likely to give rise to the feeling that one side has not fulfilled his or her duties with the appropriate amount of dedication. The court, therefore, should be doubly cautious in addressing these issues, and must take care not to intrude unnecessarily upon this delicate fabric of relations. It must not clear the way for a wave of tort claims of children against parents, claims which are based in complex life circumstances which are difficult to judge in retrospect. Parents are not immune from errors in judgment during the course of such a long and complicated relationship. The court must exercise appropriate caution in drawing the line delineating when it will intervene by recognizing a cause of action in tort by a child against his or her parent. Appropriate judicial policy dictates that only in extreme cases will parents’ acts or omissions rise to the level of the negligence sufficient to sustain a tort claim against them.

 

The case at bar does not require us to delineate where the line falls. The circumstances of this case are so extreme in their severity, the question of where to draw the line does not arise at all.

 

This is not the ordinary case requiring us to evaluate how a parent exercised his or her judgment. The appellant shirked all his parental duties completely and harshly. He simply abandoned his children and ignored their existence. His behavior is particularly harsh in light of the fact that the children had already been orphaned of their mother. Even worse: this case shocks the conscience in particular because of the fact that his children watched him establish a new family, which he nurtured and of which he took care. His children watched him do this from afar, while they yearned for him. The circumstances of this case are unique, and our recognition of the rights of the respondents to damages under the circumstances should not be seen as opening the floodgate to suits by children against their parents for every case of inappropriate behavior by parents toward their children. Indeed, ordinarily, parents are entitled to the defense imparted by Section 22 of the law of Legal Capacity and Guardianship Law, 1962.

 

Even if future cases require courts to address the question in depth and delineate the appropriate scope of parental duties, I agree with my colleague, Justice Englard, that courts are equipped with the legal tools to do so. The court will have to delineate rules which will, on the one hand, allow children, in appropriate cases, to claim compensation from their parents for emotional harm, and on the other hand, recognize that a parent’s judgment enjoys an autonomy which should not be unnecessarily infringed upon. In any event, the question is beyond the scope of the case before us, and so we will leave a discussion of the issue, with all the problems it raises, until such time as it becomes necessary to adjudicate it.

 

 

 

Justice I. Zamir

 

I concur with Justice Y. Englard’s opinion and with Justice T. Or’s comments.

 

Appeal Denied

October 4, 1999

 

 

 

 

 

Appeal CA 754/05 allowed in part. Appeal CA 759/05 denied.

19 Sivan 5767.

5 June 2007.

 

HCJ 8276/05

Adalah Legal Center for Arab Minority Rights in Israel

and others

v.

1.             Minister of Defence

2.             State of Israel

HCJ 8338/05

Estate of the late Shadan Abed Elkadar Abu Hajla

and others

v.

1.             Minister of Defence

2.             Minister of Justice

3.             Attorney-General

HCJ 11426/05

Estate of the late Iman Alhamatz

and others

v.

1.             Minister of Defence

2.             State of Israel

 

 

The Supreme Court sitting as the High Court of Justice

[12 December 2006]

Before President Emeritus A. Barak, President D. Beinisch

and Justices A. Procaccia, E.E. Levy, A. Grunis, M. Naor, S. Joubran,

E. Hayut, D. Cheshin

 

 

Petition to the Supreme Court sitting as the High Court of Justice.

 

Facts: In 2005, an amendment was made to the law of torts with regard to the liability of the State of Israel arising from the activities of its security forces in the territories of Judaea, Samaria and the Gaza Strip. Section 5C of the Torts (State Liability) Law, 5712-1952, which was introduced by the amendment, increased the scope of the state’s exemption from liability, which was previously limited to combatant activities, to any activity (subject to some exceptions) taking place in a ‘conflict zone,’ and the Minister of Defence was authorized to determine which areas would constitute ‘conflict zones.’ He exercised this power on a large-scale basis.

The petitioners attacked the constitutionality of this amendment.

 

Held: Section 5C of the Torts (State Liability) Law, which was introduced by the 2005 amendment, is unconstitutional. It releases the state from liability for tortious acts that are in no way related to ‘combatant activities,’ no matter how broadly the term is defined. The proper approach is to consider each claim on a case by case basis, in order to determine whether the damage is the result of combatant activities or not.

 

Petition granted.

 

Legislation cited:

Basic Law: Human Dignity and Liberty, s. 3.

Torts Ordinance [New Version], ss. 38, 41.

Torts (State Liability) Law, 5712-1952, ss. 1, 2, 5, 5A, 5A(2), 5A(3), 5A(4), 5C(b), 5C(b)(1), 5C(b)(3), 9A.

Torts (State Liability) Law (Amendment no. 4), 5762-2002.

Torts (State Liability) Law (Amendment no. 7), 5765-2005.

 

Israeli Supreme Court cases cited:

[1]           CA 5964/92 Bani Ouda v. State of Israel [2002] IsrSC 56(4) 1.

[2]           CA 623/83 Levy v. State of Israel [1986] IsrSC 40(1) 477.

[3]           HCJ 7957/04 Marabeh v. Prime Minister of Israel [2005] (2) IsrLR 106.

[4]           HCJ 1661/05 Gaza Coast Local Council v. Knesset [2005] IsrSC 59(2) 481.

[5]           CA 6821/93 United Mizrahi Bank Ltd v. Migdal Cooperative Village [1995] IsrSC 49(4) 221.

[6]           HCJ 1715/97 Israel Investment Managers Association v. Minister of Finance [1997] IsrSC 51(4) 367.

[7]           HCJ 6055/95 Tzemah v. Minister of Defence [1999] IsrSC 53(5) 241; [1998-9] IsrLR 635.

[8]           HCJ 1030/99 Oron v. Knesset Speaker [2002] IsrSC 56(3) 640.

[9]           HCJ 6427/02 Movement for Quality Government in Israel v. Knesset (not yet reported).

[10]         HCJ 4593/05 United Mizrahi Bank Ltd v. Prime Minister (not yet reported).

[11]         HCJ 4128/02 Man, Nature and Law — Israel Environmental Protection Society v. Prime Minister of Israel [2004] IsrSC 58(3) 503.

[12]         HCJ 366/03 Commitment to Peace and Social Justice Society v. Minister of Finance [2005] (2) IsrLR 335.

[13]         HCJ 2334/02 Stanger v. Knesset Speaker [2004] IsrSC 58(1) 786.

[14]         HCJ 5026/04 Design 22 Shark Deluxe Furniture Ltd v. Director of Sabbath Work Permits Department, Ministry of Labour and Social Affairs [2005] (1) IsrLR 340.

[15]         HCJ 450/97 Tenufa Manpower and Maintenance Services Ltd v. Minister of Labour and Social Affairs [1998] IsrSC 52(2) 433.

[16]         HCJ 1435/03 A v. Haifa Civil Servants Disciplinary Tribunal [2004] IsrSC 58(1) 529.

[17]         HCJ 10026/01 Adalah Legal Centre for Arab Minority Rights in Israel v. Prime Minister [2003] IsrSC 57(3) 31.

[18]         HCJ 3434/96 Hoffnung v. Knesset Speaker [1996] IsrSC 50(3) 57.

[19]         CA 1432/03 Yinon Food Products Manufacture and Marketing Ltd v. Kara’an [2005] IsrSC 59(1) 345.

[20]         CA 6521/98 Bawatna v. State of Israel (unreported).

[21]         CA 6790/99 Abu Samra v. State of Israel [2002] IsrSC 56(6) 185.

[22]         CA 1354/97 Akasha v. State of Israel [2005] IsrSC 59(3) 193.

[23]         CFH 1332/02 Raanana Local Planning and Building Committee v. Horowitz (not yet reported).

[24]         HCJ 2390/96 Karasik v. State of Israel [2001] IsrSC 55(2) 625.

[25]         CA 2781/93 Daaka v. Carmel Hospital [1999] IsrSC 53(4) 526; [1998-9] IsrLR 409.

[26]         HCJ 7052/03 Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [2006] (1) IsrLR 443.

[27]         HCJ 4769/95 Menahem v. Minister of Transport [2003] IsrSC 57(1) 235.

[28]         HCJ 5016/96 Horev v. Minister of Transport [1997] IsrSC 51(4) 1; [1997] IsrLR 149.

[29]         LCA 3145/99 Bank Leumi of Israel Ltd v. Hazan [2003] IsrSC 57(5) 385.

[30]         HCJ 2056/04 Beit Sourik Village Council v. Government of Israel [2004] IsrSC 58(5) 807; [2004] IsrLR 264.

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

[32]         HCJ 7015/02 Ajuri v. IDF Commander in West Bank [2002] IsrSC 56(6) 352; [2002-3] IsrLR 83.

[33]         CFH 9524/04 Yinon Food Products Manufacture and Marketing Ltd v. Kara’an (unreported).

[34]         CrimA 4424/98 Silgado v. State of Israel [2002] IsrSC 56(5) 529.

 

American cases cited:

[35]         Koohi v. United States, 976 F. 2d 1328 (1992).

[36]         Sosa v. Alvarez-Machain, 542 U.S. 692 (2004).

 

English cases cited:

[37]         Mulcahy v. Ministry of Defence [1996] 2 All ER 758.

[38]         Bici v. Ministry of Defence [2004] EWHC 786.

 

For the petitioners in HCJ 8276/05 — H. Jabareen, O. Kohn, D. Yakir, Y. Wolfson.

For the petitioners in HCJ 8338/05 — H. Abuhussein, R. Masarwa.

For the petitioners in HCJ 11426/05 — O. Saadi, A. Yassin, L. Tsemel, G. Hliehel.

For the respondents — A. Licht, S. Nitzan.

 

 

JUDGMENT

 

 

President Emeritus A. Barak

The Torts (State Liability) Law (Amendment no. 7), 5765-2005, provides that the state shall not be liable in torts for damage that occurred in a conflict zone as a result of an act carried out by the security forces. There are several provisos to this rule. Is the law constitutional? This is the question that needs to be decided in the petitions before us.

A.            Factual and normative background

1.             The first Intifadeh began at the end of 1987. It was characterized by demonstrations, tyre-burning, the throwing of stones and Molotov cocktails at the security forces and Israeli citizens in Judaea, Samaria and the Gaza Strip, stabbings and the use of firearms and other weapons (see CA 5964/92 Bani Ouda v. State of Israel [1], at p. 4). The security forces operated in the territories in order to maintain order and security there. In the course of these operations, they used weapons and ammunition. This resulted on more than one occasion in injuries to persons and damage to property that was suffered by inhabitants of the territories, whether they were involved in the disturbances and hostile acts or not. In consequence, actions for damages were filed in the courts in Israel against the state by inhabitants of the territories who claimed that the state was liable under the law of torts for damage that they suffered as a result of what they alleged were negligent or deliberate actions of the security forces. From figures submitted by the respondents it can be seen that thousands of claims of this kind were filed in the various courts in Israel.

2.             These actions were tried in the courts in Israel in accordance with the Israeli law of torts. Under Israeli law, the state’s liability in torts is governed by the Torts (State Liability) Law, 5712-1952 (hereafter — the Torts Law). The fundamental principle enshrined in s. 2 of the law is that ‘For the purpose of liability in torts, the state is like any incorporated body.’ There are several provisos to this principle. The relevant proviso for our purposes concerns ‘combatant activity,’ which states (in s. 5):

‘The state is not liable in torts for an act that was caused as a result of combatant activity of the Israel Defence Forces.’

The Intifadeh claims gave rise to the question of how the term ‘combatant activity’ should be interpreted. Judgements that were given in these claims by the District Courts varied, on this question, between a ‘broad outlook’ and a ‘narrow outlook’ (see A. Yaakov, ‘Immunity under Fire: State Immunity for Damage caused as a result of “Combatant Activity”,’ 33(1) Hebrew Univ. L. Rev. (Mishpatim) 107 (2003), at pp. 158-172). The two approaches held that the activity of the security forces to maintain order and security in the territories during the First Intifadeh might be protected by this immunity. The broad approach tended to regard most of the operational activity of the security forces, which was intended to maintain order and security, as combatant activity. The narrow approach distinguished policing activities from combatant activities and sought to examine the circumstances of each activity in order to determine whether it was a combatant activity or not.

3.             This question of interpretation came before the Supreme Court at the beginning of the 1990s in Bani Ouda v. State of Israel [1]. During the hearing in that appeal, the respondents said that they intended to regulate the question of the state’s liability for damage caused in the Intifadeh by means of Knesset legislation. This led to the publication of the government-sponsored draft Treatment of Defence Forces Claims in Judaea, Samaria and Gaza Strip Law, 5757-1997 (Draft Laws 2645, at p. 497). The draft law sought to give the term ‘combatant activity’ a broad interpretation. It was proposed that ‘any operational activity of the Israel Defence Forces whose purpose was to combat or prevent terrorism, and any other action of protecting security and preventing a hostile act or an uprising that was carried out in circumstances of risk to life or body…’ should be regarded as combatant activity. But the legislative process was unsuccessful, and the draft law did not become statute. In these circumstances, the Supreme Court was required to make a decision in Bani Ouda v. State of Israel [1].

4.             The question that arose in Bani Ouda v. State of Israel [1] was whether shooting by the IDF in the direction of wanted persons who were in flight, without there being any danger to the lives of the soldiers, fell within the scope of combatant activity. For the purpose of the definition of combatant activity, it was held that:

‘The activity is a combatant one if it is an act of combat or a military-operational act of the army. The act does not need to be carried out against the army of a state. Acts against terrorist organizations may also be combatant activities’ (ibid. [1], at p. 7).

Notwithstanding, it was held that not all activity of the security forces should be considered combatant activity:

‘“Only genuine combatant activities within the narrow and simple meaning of this term… in which the special character of combat with its risks, and especially its ramifications and consequences, finds expression, are those that are intended by the wording of s. 5” (per Justice Shamgar in CA 623/83 Levy v. State of Israel [2], at p. 479)… The army carries out various “activities” in the territories of Judaea, Samaria and the Gaza Strip, which create risks of various kinds. Not all of its activities are “combatant” ones. Thus, for example, if the injured party is harmed by an assault of a soldier because of his refusal to comply with an order to erase slogans that are written on a wall, the act of assault should not be regarded as a “combatant activity,” since the risk that this act created is an ordinary risk of an act of law enforcement. This is not the case if an army patrol in a village or town finds itself in a situation of danger to life or serious physical risk because of shooting or the throwing of stones or Molotov cocktails, and in order to extricate itself it fires and injures someone. The act of shooting is a “combatant activity,” since the risk in this activity is a special risk. Between these two extreme cases there may be intermediate positions’ (ibid. [1], at p. 8).

It was therefore held that:

‘When answering the question whether an activity is a “combatant” one, all the circumstances of the incident should be examined. The following should be considered: the purpose of the act, the place where it occurred, the duration of the activity, the identity of the military force that is operating, the threat that preceded it and is anticipated from it, the strength of the military force that is operating and the duration of the incident’ (ibid. [1], at p. 9).

5.             Meanwhile the second Intifadeh broke out in September 2000. A fierce barrage of terrorism befell Israel and the Israelis in the territories. Thousands of terror attacks, which were mainly directed at civilians, were committed inside Israel and in the territories. More than a thousand Israelis lost their lives in the years 2000-2005. Approximately two hundred of these were in Judaea and Samaria. More than seven thousand Israeli citizens were injured. Approximately eight hundred of these were in Judaea and Samaria. Many of the injured became seriously disabled (see HCJ 7957/04 Marabeh v. Prime Minister of Israel [3], at para. 1 of my opinion). The terrorist organizations and terror operatives employed many different methods in their war against Israel. Frequently they operated from among the civilian population inside the territories. The security forces required special deployments and special operations in order to contend with the terrorism and its perpetrators. Sometimes they were compelled to fight in densely populated areas. Between 2000 and 2005 thousands of Palestinians living in the territories were injured as a result of the activity of the security forces. Some of these took part in the hostilities; others did not. As a result of these injuries, once again many claims were filed against the state for damage that was sustained, according to the plaintiffs, as a result of negligent or deliberate activity of the security forces.

6.             Against the background of these events, and in view of the interpretation given to the expression ‘combatant activity’ by the Supreme Court in Bani Ouda v. State of Israel [1], which in the opinion of the Knesset was too narrow, there was a further attempt to regulate in statute the question of the state’s liability for damage caused during the Intifadeh. The government-sponsored draft law that was formulated in 1997 was once again tabled in the Knesset. This time the legislative attempt was successful, and the Knesset adopted (on 24 July 2002) the Torts (State Liability) Law (Amendment no. 4), 5762-2002 (hereafter — ‘amendment 4’). This amendment added to s. 1 of the Torts Law a definition of the expression ‘combatant activity,’ which said the following:

‘“Combatant activity” — including any act of combating terror, hostilities or an uprising, as well as an act for the prevention of terrorism, hostilities or an uprising that was carried out in circumstances of risk to life or body.’

In addition, amendment 4 added s. 5A to the Torts Law, which provides special arrangements for claims that would be filed after its enactment for damage that was caused as a result of the activity of the security forces in the territories. Inter alia, s. 5A provides that notice should be given of damage within 60 days as a condition for filing a claim (s. 5A(2)); the limitations period for these claims is reduced to two years instead of seven (s. 5A(3)); and the rule concerning the transfer of the burden of proof in negligence with regard to dangerous items that is provided in s. 38 of the Torts Ordinance [New Version] and the rule of res ipsa loquitur provided in s. 41 of the Ordinance shall not apply (s. 5A(4)). The law allows the court to depart from these rules for special reasons that should be recorded. Obviously these restrictions apply in cases of claimants who have shown that their damage does not derive from ‘combatant activity,’ according to the new definition in the law, since otherwise the state would have immunity under s. 5 of the law.

B.             Amendment no. 7

7.             The legislature was not satisfied with this. On 27 July 2005, the Knesset amended the Torts Law once again in a manner that restricted even further the state’s liability for tortious acts that occurred in the territories. It passed the Torts (State Liability) Law (Amendment no. 7), 5765-2005 (hereafter — ‘amendment 7’). This amendment is the focus of the petitions before us. The essence of the amendment was the addition of ss. 5B and 5C of the Torts Law, which state:

‘Claims of an enemy or an operative or member of a terrorist organization            5B. (a) Notwithstanding what is stated in any law, the state is not liable in torts for damage that is caused to anyone stipulated in paragraphs (1), (2) or (3), except for damage that is caused in the types of claims or to the types of claimants as stated in the first schedule —

                (1) A national of an enemy state, unless he is lawfully present in Israel;

                (2) An operative or a member of a terrorist organization;

                (3) Anyone who is injured when he is acting on behalf of or for a national of an enemy state or a member or an operative of a terrorist organization.

                (b) In this section —

                ‘enemy’ and ‘terrorist organization’ — as defined in section 91 of the Penal Law, 5737-1977;

                ‘the state’ — including an authority, body or person acting on its behalf.

Claims in a conflict zone     5C. (a) Notwithstanding what is stated in any law, the state is not liable in torts for damage that is caused in a conflict zone as a result of an act done by the security forces, except for damage that is caused in the types of claims or to the types of claimants as stated in the second schedule —

                (b) (1) The Minister of Defence shall appoint a committee that shall be competent to approve, beyond the letter of the law, in special circumstances, a payment to an applicant to whom subsection (a) applies and to determine the amount thereof…

                                …

                (c) The Minister of Defence may declare an area to be a conflict zone; if the minister makes such a declaration, he shall determine in the declaration the borders of the conflict zone and the period for which the declaration shall apply; notice of the declaration shall be published in Reshumot.’

The first schedule provides that state immunity under s. 5B shall not apply to damage that is suffered by someone who is held in custody by the State of Israel. The second schedule provides that state immunity under s. 5C shall not apply to damage that is caused by a criminal offence, damage that is suffered by someone who is held in custody by the State of Israel, damage that is suffered as a result of an act of the civil administration that was done without reference to the conflict and damage that is suffered as a result of a road accident in which a vehicle of the security forces is involved when it is not being used for security operations.

8.             Section 3(b) of amendment 7 authorizes the Minister of Defence to declare areas conflict zones retroactively for the period from the beginning of the conflict (29 September 2000) until six months from the date of publication of amendment 7. The significance of this declaration is that tortious claims that were filed in the years 2000-2005 cannot be tried if the Minister of Defence has declared that they concern events that occurred in a conflict zone. The Minister of Defence made use of his power under this section and on 9 February 2006 and 12 February 2006 he declared (in Yalkut Pirsumim 5942 and 5943 respectively) various areas to be conflict zones for periods that preceded the enactment of the amendment. The territory of Judaea and Samaria was divided into 88 districts and an additional 22 crossing points. Some of these districts were declared conflict zones during a part of the period under discussion. Thus, for example, the Hebron district was declared a conflict zone during 100% of the period from September 2000 until the end of that year; during approximately 90% of the years 2002 and 2003, and during approximately 80% of the time in the years 2001, 2004 and 2005. The Greater Tulkarm district was declared a conflict zone during approximately 88% of the time in the years 2002 and 2003, and during approximately 82% of the time in 2004. The Greater Ramallah district was declared a conflict area during approximately 75% of the time in the years 2001-2003. District 64, which includes villages to the north of Jerusalem, was declared a conflict area during approximately half of the time since the Second Intifadeh broke out until the date of publishing the declaration. The territory of the Gaza Strip was divided into four districts and seven crossing-points. The southern district of the Gaza Strip was declared a conflict zone throughout the period. The central district of the Gaza Strip was declared a conflict zone during approximately 86% of the time. The northern district of the Gaza Strip was declared a conflict zone during approximately 95% of the time. Since 12 September 2005, when the IDF forces withdrew from the Gaza Strip, the whole of the Gaza Strip has been declared a conflict zone.

9.             The Minister of Defence exercised his power under s. 5C(b)(3) of the Torts Law and on 13 June 2006 enacted regulations that govern the activity of the committee for paying compensation beyond the letter of the law, which was established under s. 5C(b) of the law. In the regulations, it was held that the committee is competent to make payments to family members of anyone who was killed in a conflict zone, and to anyone who was seriously injured, on the conditions prescribed in the regulations. Inter alia, the committee should consider the seriousness of the injury and its circumstances, the family status of the injured person and to what extent making the payment will contribute towards the rehabilitation of the injured person. The committee is also authorized to make payments, for personal injury and property damage that are not insignificant, to anyone who is injured as a result of a criminal act, even if no one has been convicted of that act.

C. The contentions of the parties

10. The petitioners in HCJ 8276/05 are human rights organizations. The petitioners in HCJ 8338/05 are the estate and surviving relatives of the late Shadan Abed Elkadar Abu Hajla. According to them, on 11 October 2002 in the evening the deceased was sitting with her husband and their son on the balcony of their house at Rafidia in Shechem. Two IDF jeeps stopped on the road that passes by the house. Several shots were fired from the vehicle in the direction of the windows of the house. As a result of the shooting, the deceased was killed instantly and her husband and son were wounded. In December 2004, the Chief Military Advocate gave instructions to begin an army investigation to establish the circumstances of the deceased’s death. Before the investigation was completed, the petitioners filed a claim in torts against the state in the Nazareth Magistrates Court. After the enactment of amendment 7, and before the claim was tried, the state filed an application to dismiss the claim in limine. In its application the state said that the Minister of Defence had declared the Shechem district a conflict zone during the whole period from June 2002 until the end of March 2003. For this reason the court was requested to dismiss the claim in limine. In HCJ 11426/05 the petitioners include two separate groups. Each group filed a claim in torts against the state with regard to deaths or serious injuries that were caused, according to them, as a result of negligent and even deliberate activity of the security forces in the territories. All of the events took place between 2001 and 2004. After the enactment of amendment 7, these claims cannot be heard, if the districts in which the events took place are declared conflict zones.

11. The petitioners’ position is that amendment 7, and especially ss. 5B and 5C, are unconstitutional and therefore should be set aside. According to them, the Basic Laws apply to the violations of rights that arise from amendment 7, for four reasons. First, the Basic Laws apply to the violations of rights that arise from the amendment, because the amendment denies rights in Israel itself and in its courts; second, because the amendment applies, according to its wording, both to Israelis and to Palestinians; third, the Basic Laws apply in the territories because these laws apply to all the organs of government, and therefore every soldier carries in his knapsack not only the principles of administrative law but also the Basic Laws; fourth, because the Basic Laws give rights to Palestinians who are inhabitants of the territories, by virtue of their being protected persons who are present in an area that is subject to Israel’s belligerent occupation.

12. The petitioners argue that several constitutional rights have been violated. First, amendment 7 violates the constitutional right to life and physical integrity, in that it denies someone who has lost his life or suffered personal injury as a result of a deliberate or negligent act any relief for this injury. Second, the amendment violates property rights, in that it denies someone whose property has been damaged as a result of a deliberate or negligent act any relief. Third, the amendment violates the constitutional right to apply to the courts. Fourth, the amendment violates the constitutional right to equality, since it is intended to apply mainly to claims of Palestinians. Especially serious, according to the petitioners, is the fact that all of these violations include a retroactive violation of the rights of those persons who were harmed by negligent acts of the security forces and who filed a claim in the years preceding the enactment of the amendment. According to them, the violations are particularly grave when we consider the application of the law de facto. In this regard, the petitioners say that the Minister of Defence has declared extensive areas of the West Bank and the Gaza Strip conflict zones for long periods of time. Thereby he has denied the right of many persons to obtain relief for their damage. The petitioners discuss how Israel holds the territories under belligerent occupation. It maintains strict urban control in most of the towns and villages of the West Bank. This control of the towns and villages, streets and crossings, involves close daily contact between soldiers and civilians. This contact is really a form of police work. Notwithstanding, it sometimes involves harm to civilians, whether negligent or deliberate. The result of amendment 7 is that the law exempts the security forces from liability for all the consequences of their acts in the territories that have been declared conflict zones. It justifies, inter alia, shooting injuries and physical injuries in the course of regular checks at roadblocks, property damage in the course of searches, and looting in the course of patrols and arrests. In all of these cases, the injured parties cannot obtain any relief. This results in contempt for the lives of the Palestinians who live in the territories, and contempt for their rights to physical integrity and their property rights.

13. The petitioners’ position is that the violations of the constitutional rights do not satisfy the conditions of the limitations clause. First, legislation that violates rights retroactively cannot be said to satisfy the condition that the violation should be made in ‘statute.’ Second, amendment 7 was not intended for a proper purpose, nor does it befit the values of the State of Israel. The purpose of the legislation is to prevent Palestinians who live in the territories from applying to the courts in Israel. This is a purpose that is improper. It undermines the status of the judiciary. It also violates the rule of law. Another purpose underlying the law is to exempt the state from the financial cost involved in paying compensation. Considerations of economic cost and administrative efficiency do not constitute a proper purpose for a violation of human rights. An additional purpose that underlies the law is to provide a solution to the special difficulties of evidence that confront the state when it seeks to defend itself against tort claims that are related to combat incidents. The petitioners’ position is that the state has not made clear what is special about these difficulties, especially in view of the fact that the burden of proof in claims of this kind rests in any case with the plaintiffs, and therefore the objective difficulties of proof fall mainly on the shoulders of the plaintiffs. Third, even if we say that the purpose is a proper one, the measures adopted in amendment 7 are disproportionate. The state and its agents have already been granted immunity from claims concerning damage that is caused during combatant activity under the provisions of s. 5 of the Torts Law. The definition of ‘combatant activity’ was even expanded in amendment 4. That amendment also introduced additional substantial and procedural advantages for the state in tort claims. All of these are sufficient in order to achieve the proper purpose, which is to protect the state from tort claims that arise from combatant activity.

14. The petitioners further argue that amendment 7 also violates the rules of humanitarian law that apply in territories that are under belligerent occupation, as well as the provisions of international human rights law. The petitioners say that Israel’s control of the territories is a belligerent occupation. The military commander is responsible not only for security interests but also for the safety, security and rights of the protected inhabitants in the territories. Inter alia, the military commander has the duty to compensate protected inhabitants who are harmed as a result of the negligent actions of the security forces. The amendment denies this obligation of the military commander and therefore it is contrary to the provisions of humanitarian law and the provisions of international human rights law.

D. The respondents’ arguments

15. The respondents discuss at length the security background to the enactment of amendment 7. Their position is that the second Intifadeh is a ‘war in the common meaning of the word’ (para. 1 of the respondents’ reply of 6 July 2006) that is being waged in the streets of Israel as well as in the territories of Judaea, Samaria and the Gaza Strip. The scope of the security activity whose purpose is to contend with the threats of terrorism in the second Intifadeh is very great. The conflict has a special character, because the terrorist organizations operate frequently from within residential areas. This requires activity of the security forces inside those residential areas. This activity is intended to target terrorists, but unfortunately inhabitants who are not involved in terrorist activity are also sometimes harmed. These inhabitants file thousands of tort claims against the state for personal injury and damage to property that they allegedly suffer as a result of the activity of the security forces. But the law of torts was not designed to deal with a situation of this kind. Inter alia, this is because the risks in times of war are greater in scope and of more diverse kinds than in times of peace and because of the difficulties of obtaining evidence in cases concerning war damage. Moreover, it is intolerable that the State of Israel should be liable to compensate not only its citizens who are injured by the armed conflict, but also the inhabitants of the Palestinian Authority. The principle that should be followed is that each party to the armed conflict should be liable for its own damage. The Palestinian Authority has mechanisms that are designed to compensate persons who are injured by the armed conflict for their damage. In addition, the Palestinians receive aid from international organizations. For these reasons, there is no basis for applying the law of torts to damage resulting from the armed conflict between the State of Israel and the Palestinians who inhabit the territories. The law of torts should be adapted to the new reality that has been created. Amendment 7 was intended to achieve this goal. The provisions of s. 5B enshrine in the law the principle that is accepted in international law, in English common law and also in Israeli common law, according to which a state is not liable for damage sustained by an enemy alien.

16. The respondents’ position is that it is doubtful whether amendment 7 violates constitutional rights, since it is doubtful whether the Basic Laws give constitutional rights to inhabitants of the territories. Notwithstanding, in view of their position that, even if there is a violation of constitutional rights, it satisfies the conditions of the limitations clause, the respondents focused their arguments on the conditions of the limitations clause. The respondents’ position is that the purposes underlying the amendment are proper ones. The main purpose of the amendment is, as aforesaid, to adapt the law of torts to the special characteristics of the armed conflict with the Palestinians. The amendment was not intended to undermine the status of the judiciary, but to limit the scope of the state’s liability in torts. Therefore the amendment does not conflict with the principle of the separation of powers. The law also does not contain any approval for or consent to negligent or unlawful activity of the security forces. The absence of any liability in torts does not prevent scrutiny of the conduct of the security forces within the context of the criminal law and disciplinary proceedings. It cannot therefore be said that the amendment undermines the rule of law. In addition, the amendment seeks to avoid an undesirable and unjust result, whereby Israel is responsible both for damage to Palestinian inhabitants and for the burden of the considerable damage suffered by Israel and Israelis. The respondents discuss how this purpose, which does indeed involve an economic element, reflects a proper ethical purpose. Finally, in so far as enemy aliens and members of terrorist organizations are concerned, amendment 7 seeks to restrict their claims in order not to aid the enemy in its war against Israel.

17. The respondents’ position is that the violations of rights in amendment 7 satisfy the requirements of proportionality. First, the arrangements in the amendment make it possible to overcome the ethical and practical difficulties of implementing the law of torts in the course of an armed conflict. The amendment also realizes the principle that each party in a war is liable for its damage. This satisfies the rational connection test between the purpose of the amendment and the arrangements provided in it. Second, the arrangements in the amendment satisfy the second test of proportionality (the least harmful measure test). The amendment does not provide an arrangement that amounts to a sweeping denial of the right to compensation. The application of the amendment is conditional upon a declaration that a certain district is a conflict zone. These declarations are limited in time and place and they are made only after a careful examination of the conditions in the area. Admittedly, because of the large scale of the war, large parts of the territories of Judaea, Samaria and the Gaza Strip have been declared conflict zones for lengthy periods. But this is not a sweeping and general declaration, merely a declaration that is based on a careful and precise analysis. Moreover, the broad principle ruling out liability in torts is accompanied in the second schedule by exceptions to the rule. These exceptions reduce the intensity of the violation. Furthermore, the Minister of Defence may add to the list of exceptions. Finally, the law provides a further ‘exceptions mechanism’ that allows compensation to be paid beyond the letter of the law. On the basis of all of these, the respondents’ position is that amendment 7 reflects an arrangement that satisfies the requirements of proportionality. The respondents’ position is that amendment 4 cannot be regarded as an arrangement that violates rights to a lesser degree. There are several reasons for this. According to them, amendment 4 was prepared after the first Intifadeh, and it does not provide a solution to the unique nature of the current armed conflict. Moreover, amendment 4 does not reflect the ethical purpose that each party in an armed conflict should be liable for its losses. Finally, amendment 4 does not address the claims of enemy aliens and members of terrorist organizations. Therefore for this reason also it is insufficient. Third, the respondents’ position is that amendment 7 satisfies the third condition of proportionality (the test of proportionality in the narrow sense). The benefit of the amendment is very great. It adapts the law of torts to the unique circumstances of the armed conflict. It enshrines ethical standards and solves practical problems in implementing the existing law. The amendment also prevents an abuse of Israeli law for the purpose of obtaining money that may be used to wage war against Israel. On the other hand, the harm caused by the amendment is not as serious as the petitioners claim. The respondents discuss how even according to the law that prevailed before the amendment was enacted, the state had immunity against a claim for combatant activity. Many claims arising from events that occurred in the territories since September 2000 may be dismissed on this ground alone. Moreover, some of the claims can be addressed within the framework of the exceptions to the rule or by the committee that is authorized to pay compensation beyond the letter of the law. Finally, it should be remembered that the plaintiffs have an alternative relief of receiving compensation from the Palestinian Authority. In view of all this, the respondents’ position is that the amendment to the Torts Law satisfies the third requirement of proportionality.

18. The respondents’ position is that the amendment does not violate the provisions of international humanitarian law or international human rights law, since both of these sets of laws restrict the right of claim of enemy aliens and recognize the immunity of the state against claims arising from combatant activities during an armed conflict. The respondents point out that exceptions to the state’s liability for claims in torts that derive from combatant activities are recognized in the law of many countries such as the United States, England, Canada, Italy, Japan and Germany.

E.             The proceeding

19. The petitions in HCJ 8276/05 and HCJ 8338/05 were filed at the beginning of September 2005. The petition in HCJ 11426/05 was filed in December 2005. The hearing of the petitions was deferred twice (in March 2006 and April 2006), with the consent of the parties, until regulations were enacted with regard to the committee for paying compensation beyond the letter of the law. The first hearing of the petitions took place on 13 July 2006 before a panel of three justices. At the end of this, an order nisi was made. On 17 July 2006 it was decided that the petitions would be heard before an expanded panel of nine justices. According to an agreed statement filed by the parties, an interim order was made on 30 July 2006, according to which the hearing of pending claims that the state contended were subject to amendment 7 was suspended. The hearing of the petitions on their merits took place before the expanded panel on 30 August 2006.

F.             The questions that arise

20. The petitions challenge the constitutionality of amendment 7. A claim of this kind should focus on one of the Basic Laws. In our case, this is the Basic Law: Human Dignity and Liberty. Claims that amendment 7 violates human rights that are recognized in Israel under Israeli common law, international human rights law or international humanitarian law cannot — according to the constitutional structure of the State of Israel — lead to the unconstitutionality of a statute. The Supreme Court discussed this in HCJ 1661/05 Gaza Coast Local Council v. Knesset [4], where it held:

‘It is not sufficient to find that the Israeli settlers in the area being vacated enjoy human rights that are enshrined in Israeli common law. It is not sufficient to find that they enjoy human rights that are recognized by public international law. Such recognition — and on this we are adopting no position — while important, cannot give rise to a constitutional problem in Israel. The reason for this is that when the violation of a right that arises in common law or public international law conflicts with an express provision of a statute of the Knesset, the statute of the Knesset prevails, and no constitutional problem arises. Indeed, a constitutional problem arises in Israel only if the right of the Israeli settlers is enshrined in a constitutional super-legislative normative provision, i.e., in a Basic Law. Moreover, it is insufficient that the Disengagement Implementation Law violates a right enshrined in a Basic Law. A constitutional problem arises only if the Disengagement Implementation Law violates the right unlawfully. When these conditions are satisfied, we say that the law is unconstitutional and we consider the question of the relief for the violation of the Basic Law’ (Gaza Coast Local Council v. Knesset [4], at p. 544).

This is the position in our case. We should examine whether amendment 7 unlawfully violates the Basic Law: Human Dignity and Liberty. This examination, according to our accepted practice, is done in three stages (see CA 6821/93 United Mizrahi Bank Ltd v. Migdal Cooperative Village [5]; HCJ 1715/97 Israel Investment Managers Association v. Minister of Finance [6]; HCJ 6055/95 Tzemah v. Minister of Defence [7]; HCJ 1030/99 Oron v. Knesset Speaker [8]; Gaza Coast Local Council v. Knesset [4], at p. 544; HCJ 6427/02 Movement for Quality Government in Israel v. Knesset [9]; HCJ 4593/05 United Mizrahi Bank Ltd v. Prime Minister [10]). The first stage examines whether the law — in our case, amendment 7 — violates a human right that is enshrined and protected in a Basic Law. If the answer is no, the constitutional scrutiny ends (see HCJ 4128/02 Man, Nature and Law — Israel Environmental Protection Society v. Prime Minister of Israel [11]; HCJ 366/03 Commitment to Peace and Social Justice Society v. Minister of Finance [12]). If the answer is yes, the constitutional scrutiny passes to the second stage. In this stage, we consider the question whether the law containing the violation, in whole or in part, satisfies the requirements of the limitations clause. Indeed, our basic constitutional outlook is that not every violation of a constitutional human right is an unlawful violation. We recognize lawful violations of constitutional human rights. These are those violations that satisfy the conditions of the limitations clause (see HCJ 2334/02 Stanger v. Knesset Speaker [13]; HCJ 5026/04 Design 22 Shark Deluxe Furniture Ltd v. Director of Sabbath Work Permits Department, Ministry of Labour and Social Affairs [14]). If the violation of the constitutional human right is lawful, the constitutional scrutiny ends. If the violation does not satisfy one of the conditions of the limitations clause, the violations is unlawful. In such a case, we pass on to the third stage of the scrutiny, which concerns the consequences of the unconstitutionality. This is the relief stage. I discussed the importance of this division of the constitutional scrutiny into three stages in Movement for Quality Government in Israel v. Knesset [9], where I said:

‘This division into three stages is important. It is of assistance in the legal analysis. It is intended “to clarify the analysis and focus the thinking” (HCJ 450/97 Tenufa Manpower and Maintenance Services Ltd v. Minister of Labour and Social Affairs [15], at p. 440; …). It clarifies the basic distinction, which runs like a golden thread through human rights law, between the scope of the right and the degree of protection afforded to it and its de facto realization (see A. Barak, A Judge in a Democracy (2004), at p. 135; …). It serves as a basis for the distinction between the horizontal balance (in the first stage) and the vertical balance (in the second stage), between human rights inter se and between human rights and social values and interests (see HCJ 1435/03 A v. Haifa Civil Servants Disciplinary Tribunal [16], at p. 537); it is of assistance in outlining the distinction between the role of the court in the interpretation of the rights in the Basic Law (in the first stage) and its role in the constitutional scrutiny of the violation of these rights in legislation (in the second stage). It is of assistance in examining arrangements in the law, such as affirmative action, while examining the question whether this falls within the scope of the right to equality (the first stage), or whether is constitutes a violation of equality that satisfies the requirements of the limitations clause (the second stage) (see HCJ 10026/01 Adalah Legal Centre for Arab Minority Rights in Israel v. Prime Minister [17], at p. 40; …). It clarifies disagreements on the question of the burden of proof’ (Movement for Quality Government in Israel v. Knesset [9], at para. 21 of my opinion).

Let us now turn to the required constitutional scrutiny.

G.            First stage: the violation of the constitutional right

(1) Presentation of the problem

21. The first stage of the constitutional scrutiny examines whether the statute of the Knesset — in our case, amendment 7 — violates a human right that is protected in the Basic Law: Human Dignity and Liberty. This stage is comprised in our case of two separate questions. The first of these is whether the Basic Law: Human Dignity and Liberty applies in the petitioners’ case, since the damage was caused to them outside Israel. This is a question that arises specifically with regard to amendment 7. If the answer to this question is yes, then the second question arises. This question arises in all the cases where a constitutional contention is raised. The question is whether a human right that is enshrined in a Basic Law has indeed been violated. As we have seen, it is insufficient that a law violates a human right. The constitutional question arises only if the human right is enshrined in a Basic Law. For our purposes, this is the Basic Law: Human Dignity and Liberty. It is also customary to consider at this stage whether the violation is not merely a trivial one (see United Mizrahi Bank Ltd v. Migdal Cooperative Village [5], at p. 431; HCJ 3434/96 Hoffnung v. Knesset Speaker [18], at p. 57). Let us turn to the first of these two questions.

(2) The first question: does the Basic Law apply?

22. In general, Israeli legislation has territorial application. When a law is intended to apply to persons or acts outside Israel, this needs to be stated in statute (expressly or by implication). Indeed, there is a presumption that the laws of Israel apply to legal relationships in Israel, and they are not intended to regulate legal relationships outside Israel. This is the case with criminal legislation in Israel; it is also the case with legislation in other spheres. This presumption is rebuttable (see A. Barak, Legal Interpretation: Statutory Interpretation (vol. 2, 1993), at p. 578). This rule also applies to Israeli legislation in the territories. Judaea, Samaria and the Gaza Strip are not a part of the State of Israel; no declaration has been made that they are subject to the ‘law and jurisdiction and administration of the state.’ There is a presumption that Israeli legislation applies in Israel and not in the territories, unless it is stated in legislation (expressly or by implication) that it applies in the territories (ibid., at p. 579). A similar rule applies also to the Basic Laws. There is therefore a presumption that the various Basic Laws apply to acts done in Israel. As we have seen, this presumption may be rebutted (either expressly or by implication). Can it be said that this presumption is rebutted when the Basic Law concerns human rights? Should the need to enforce human rights against the state not lead to a conclusion that the Israeli organs of government are obliged ‘to uphold the rights under this Basic Law’ everywhere? Should it not be said that any Israel official carries in his knapsack the Basic Law: Human Dignity and Liberty? Should it not be said that wherever the official goes, the Basic Law goes with him? Should it not be said that this approach is particularly appropriate when the act of the official is done in a place that is subject to Israel’s belligerent occupation (see A. Barak, Legal Interpretation: Constitutional Interpretation (vol. 3, 1994), at p. 460)? These questions are good ones. We considered some of them in Gaza Coast Local Council v. Knesset [4] (at p. 560). We held in that case that the Basic Laws concerning human rights ‘give rights to every Israeli settler in the area being vacated. This application is personal. It derives from the fact that the State of Israel controls the area being vacated’ (ibid. [4]). We left unanswered the question whether the Basic Laws concerning human rights also give rights to persons in the territories who are not Israelis. Should we not say that with regard to ‘protected inhabitants’ international human rights law replaces Israeli internal law in this regard? There is no simple answer to these questions. Indeed, in its reply the State does not devote much attention to this question, since in its opinion amendment 7, even if it violates rights that are enshrined in the Basic Law: Human Dignity and Liberty, does so lawfully. It is also our opinion that there is no reason to consider the question of the territorial application of the Basic Law: Human Dignity and Liberty, since the rights that amendment 7 violates are rights in Israel, not rights outside Israel.

Let me explain.

23. Section 5B of amendment 7 applies, according to its wording, to tortious acts done in Israel. The question of the application of the Basic Law therefore does not arise at all in this context. By contrast, s. 5C of amendment 7 provides that ‘the state is not liable in torts for damage that is caused in a conflict zone as a result of an act done by the security forces.’ A ‘conflict zone’ is outside Israel. Does the question of the application of the Basic Law: Human Dignity and Liberty outside Israel arise with regard to this provision? My answer is no. The rights of the residents of the territories which are violated by amendment 7 are rights that are given to them in Israel. They are their rights under Israeli private international law, according to which, when the appropriate circumstances occur, it is possible to sue in Israel, under the Israeli law of torts, even for a tort that was committed outside Israel. Indeed, since the Six Day War, and especially since the first Intifadeh, the courts in Israel have heard claims in torts filed by Palestinian inhabitants of the territories who were injured in the territories by Israeli tortfeasors in general (see, for example, CA 1432/03 Yinon Food Products Manufacture and Marketing Ltd v. Kara’an [19]), and by the activities of the security forces in the territories in particular (see, for example, Bani Ouda v. State of Israel [1]; CA 6521/98 Bawatna v. State of Israel [20]; CA 6790/99 Abu Samra v. State of Israel [21]; CA 1354/97 Akasha v. State of Israel [22]). This situation is consistent with the principles of the conflict of laws in torts that prevail in our legal system (for an extensive survey, see Yinon Food Products Manufacture and Marketing Ltd v. Kara’an [19]). Even the state made no claims against this application of the Israel law of torts. During the oral pleadings in the petitions before us, we asked the state’s representatives whether they had any contention under Israeli private international law with regard to the application of Israeli tort law to the Intifadeh claims. The reply of the state’s representatives was no. It follows that amendment 7 violates the rights given in Israel to inhabitants of the territories who are harmed by tortious acts of the security forces in the territories. This was the position before amendment 7. This position was changed by s. 5C of amendment 7. The rights in Israel under the law of torts were taken away from the inhabitants of the territories for tortious acts done by the security forces in a conflict zone. The effect of amendment 7 is therefore in Israel. It violates rights that the injured parties from the territories had in Israel. The denial of these rights is subject in principle to the Basic Law: Human Dignity and Liberty. This application is not extra-territorial. It is territorial. Of course, this still leaves us with the second question of whether amendment 7 violates one of the rights prescribed in the Basic Law: Human Dignity and Liberty. Let us now turn to consider this question.

(3) The second question: has a right enshrined in the Basic Law: Human Dignity and Liberty been violated?

24. Amendment 7 provides that the state is not liable in torts when the conditions set out therein are satisfied. Does this denial of liability for torts violate rights that are enshrined in the Basic Law: Human Dignity and Liberty? The answer is yes. There are two main reasons for this. First, the right in torts that is given to the injured party (or to his heirs or dependants) and that was denied by amendment 7 is a part of the injured party’s constitutional right to property. Indeed, the word ‘property’ in s. 3 of the Basic Law: Human Dignity and Liberty — ‘A person’s property should not be harmed’ — means a person’s property rights. In Gaza Coast Local Council v. Knesset [4] it was held with regard to the word ‘property’ in the Basic Law: Human Dignity and Liberty:

‘“Property” in this provision includes every property right. The Basic Law protects against any harm to a person’s property rights. It follows that the protection of property extends not only to “property” rights such as ownership, a lease and an easement, but also to “obligatory” rights that have a property value’ (ibid. [4], at p. 583; see also United Mizrahi Bank Ltd v. Migdal Cooperative Village [5], at pp. 431, 572).

In United Mizrahi Bank Ltd v. Prime Minister [10] I added:

‘The question “what is property?” has arisen in several judgments. The answer to this is not at all simple. The difficulty arises from the complexity of the theoretical concept of “property” and the lack of a consensus as to the reasons underlying it… It would appear that everyone agrees that property in the Basic Law extends to all the various kinds of property rights according to their meaning in private law. Everyone also agrees that property in the Basic Law is not limited merely to property rights. Indeed, property in its constitutional sense is not the same as property in its private law sense… Therefore the constitutional concept of property also includes the right of possession and obligatory rights… In one case it was held that the word property in the Basic Law includes a pension… Against this background it has been held that property in its constitutional sense means a property right, whether it is a right in rem or a right in personam’ (ibid. [10], at para. 9).

This approach to the constitutional concept of property is accepted in most countries where property is given a constitutional status (see Y. Weisman, ‘Constitutional Protection of Property,’ 42 HaPraklit (1995) 258; see also A.J. van der Walt, Constitutional Property Clauses (1999), at p. 22). This leads to the conclusion that the right of an injured party under the law of torts is a part of his property rights and therefore part of his ‘property.’ Moreover, the right of a person to compensation for a violation of his right against the state is also a part of his ‘property.’ Indeed, ‘the right to compensation that is intended to restore the injured party to his original position… is a property right according to its meaning in the Basic Law’ (E. Rivlin, Road Accidents — Procedure and Calculation of Damages (New Extended Edition, 2000), at p. 932). The violation of the right to compensation is also a violation of property rights (see Gaza Coast Local Council v. Knesset [4], at p. 589; CFH 1332/02 Raanana Local Planning and Building Committee v. Horowitz [23]; HCJ 2390/96 Karasik v. State of Israel [24]; CA 2781/93 Daaka v. Carmel Hospital [25]).

25. Second, liability in torts protects several rights of the injured party, such as the right to life, liberty, dignity and privacy. The law of torts is one of the main tools whereby the legal system protects these rights; it reflects the balance that the law strikes between private rights inter se and between the right of the individual and the public interest. Denying or restricting liability in torts undermines the protection of these rights. Thereby these constitutional rights are violated. Indeed:

‘The basic right of a person, who has been injured by a tortious act, to compensation is a constitutional right that derives from the protection afforded to his life, person and property… Any restriction of the right to compensation for a tortious act needs to satisfy the constitutional test of having a proper purpose and not being excessive’ (I. Englard, Compensation for Road Accident Victims (third edition, 2005), at p. 9).

Other legal systems that afford constitutional protection to human rights are also familiar with the approach that the law of torts is subject to constitutional restrictions, and changes to it require constitutional scrutiny (I. Englard, The Philosophy of Tort Law (1993), at pp. 125-134).

H.            Second stage: Is the violation of the constitutional rights lawful?

(1) The limitations clause

26. The second stage of the constitutional scrutiny considers the limitations clause in the Basic Law: Human Dignity and Liberty, which states:

‘Violation of rights                8.             The rights under this Basic Law may only be violated by a law that befits the values of the State of Israel, is intended for a proper purpose, and to an extent that is not excessive, or in accordance with a law as aforesaid by virtue of an express authorization therein.’

This provision plays a central role in our constitutional system. It has two aspects. On the one hand it protects the human rights that are set out in the Basic Law; on the other hand it determines the conditions for violating the basic right (see HCJ 7052/03 Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26], at para. 54 of my opinion). The limitations clause is based on the outlook that in addition to human rights there are also human obligations; that the human being is a part of society; that the interests of society may justify a violation of human rights; that human rights are not absolute, but relative. The limitations clause reflects the approach that human rights may be restricted, but there are limits to such restrictions (see Design 22 Shark Deluxe Furniture Ltd v. Director of Sabbath Work Permits Department, Ministry of Labour and Social Affairs [14], at para. 11; Movement for Quality Government in Israel v. Knesset [9], at paras. 45 and 46 of my opinion). Indeed, human rights are not afforded the protection of the law to the fullest extent; the constitutional system does not allow the realization of human rights in their entirety.

27. The limitations clause is based on two main elements. The first element concerns the purpose of the legislation. The limitations clause provides that a statute that violates a constitutional human right should satisfy the requirement that it ‘… befits the values of the State of Israel, is intended for a proper purpose…’. The second element concerns the means used to achieve the purpose. The limitations clause provides that the means adopted by the statute to realize the purpose should violate the constitutional human rights ‘to an extent that is not excessive.’ There is a close relationship between these two elements. The means are intended to realize the purpose. Therefore we should examine whether the purpose is constitutional. When this has been determined, we should examine whether the means for realizing that purpose are constitutional.

28. The question of purpose is complex. In our case, it is sufficient if we determine that the purpose that should be considered is the main purpose of the statute (see HCJ 4769/95 Menahem v. Minister of Transport [27], at p. 264). This purpose should be a ‘proper’ one in the context of a violation of human rights (see Gaza Coast Local Council v. Knesset [4], at p. 548; Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26], at para. 61 of my opinion). The characteristics of the proper purpose are that it ‘is intended to realize social purposes that are consistent with the values of the state as a whole, and that display sensitivity to the place of human rights in the overall social system’ (see Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26], at para. 62 of my opinion). From the viewpoint of the need to realize the purpose, the law is that this need varies according to the nature of the right and the degree of the violation thereof (see Tzemah v. Minister of Defence [7], at p. 273; Menahem v. Minister of Transport [27], at p. 258; HCJ 5016/96 Horev v. Minister of Transport [28], at p. 52 {206}). When a central right — such as life, liberty, human dignity, property, privacy — is violated, the purpose should realize a significant social goal or an urgent social need (Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26], at para. 62 of my opinion).

29. In addition to the proper purpose, there are the proportionate means. It is insufficient that the purpose of the statute is a proper one. The means that are adopted to realize it should be proper ones. The means are proper is they are proportionate. The principle of proportionality is based on the outlook that ‘the end does not justify the means’ (per Justice T. Or in Oron v. Knesset Speaker [8], at p. 465); see also Movement for Quality Government in Israel v. Knesset [9], at para. 47 of my opinion). In a host of cases, this court has consistently held that proportionality is determined by three subtests (see A. Barak, A Judge in a Democracy (2004), at p. 346). The use of the subtests is affected by the nature of the right being violated, the degree of the violation thereof and the importance of the values and interests that the violation is intended to realize. The first subtest is the rational connection test or the suitability test. The means that the statute adopts should be suited to realizing the purpose that the statute seeks to realize. The second subtest is the least harmful measure test or the necessity test. It demands that the statute that violates a constitutional right should not violate it to a greater degree than is necessary in order to achieve the proper purpose. ‘The legislative measure can be compared to a ladder, which the legislator climbs in order to achieve the legislative purpose. The legislator must stop at the rung on which the legislative purpose is achieved and on which the violation of the human right is the least’ (Israel Investment Managers Association v. Minister of Finance [6], at p. 385; LCA 3145/99 Bank Leumi of Israel Ltd v. Hazan [29], at p. 405; HCJ 2056/04 Beit Sourik Village Council v. Government of Israel [30], at p. 840 {297-298}). The third subtest is the proportionate result test or the test of proportionality in the narrow sense. The benefit arising from achieving the proper purpose should be commensurate with the harm caused by the violation of the constitutional right (see Beit Sourik Village Council v. Government of Israel [30], at p. 850 {309-310}; Marabeh v. Prime Minister of Israel [3], at para. 116 of my opinion). This is an ethical test (see the opinion of Vice-President M. Cheshin in Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26], at para. 107). It focuses on the outcome of the legislation, and the effect that it has on the constitutional human right. It is a balancing principle.

30. With regard to the three subtests of proportionality, we should point out the following: first, there is a major difference between the first and second subtests and the third subtest. The first two subtests — the rational connection and the least harmful measure — focus on the means of realizing the purpose. If it transpires, according to these, that there is a rational connection between realizing the purpose and the legislative measure that was chosen, and that there is no legislative measure that is less harmful, the violation of the human right — no matter how great — satisfies the subtests. The third subtest is of a different kind. It does not focus merely on the means used to achieve the purpose. It focuses on the violation of the human right that is caused as a result of realizing the proper purpose. It recognizes that not all means that have a rational connection and are the least harmful justify the realization of the purpose. This subtest seeks in essence to realize the constitutional outlook that the end does not justify the means. It is an expression of the concept that there is an ethical barrier that democracy cannot pass, even if the purpose that is being sought is a proper one. Second, the three subtests do not always lead to the same outcome. On more than one occasion there is a margin of possibilities that satisfy the proportionality tests to a greater or lesser degree. The fundamental approach is that any possibility that the legislature chooses is constitutional, if it falls within the margin of proportionality. This is the constitutional margin of appreciation given to the legislature within the limits of the margin of proportionality (see United Mizrahi Bank Ltd v. Migdal Cooperative Village [5], at p. 438; Menahem v. Minister of Transport [27], at p. 280; AAA 4436/02 Tishim Kadurim Restaurant, Members’ Club v. Haifa Municipality [31], at p. 815; Gaza Coast Local Council v. Knesset [4], at pp. 550, 812; Movement for Quality Government in Israel v. Knesset [9], at para. 61 of my opinion; Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26], at para. 77 of my opinion).

(2) The constitutionality of section 5B of amendment 7

31. The question of the constitutionality of s. 5B of amendment 7 arose before us in a marginal manner only. The parties focused their main arguments on the provisions of s. 5C. They did not discuss s. 5B at length. We were not presented with any cases in which the question of its application arose. All of this reflects upon the question of the constitutional of the section. In these circumstances, as long as these questions have not been properly addressed, the time has not come to decide the constitutionality of s. 5B. Much depends on the manner in which it is implemented and the interpretation that is given to the provisions of the section. Thus, for example, we have heard no argument on the question whether the correct interpretation of the section includes a causal relationship between the activity and the membership of the terrorist organization or what was done on its behalf and the damage suffered by the injured parties. Naturally the parties have the right to raise their arguments concerning the constitutionality of s. 5B in so far as it will arise in specific cases. The civil courts are competent, in specific tort cases, to examine arguments concerning the constitutionality of the section. In the circumstances of this case, we see no reason to decide the question of the constitutionality of s. 5B of amendment 7.

(3) The constitutionality of s. 5C of amendment 7

32. Section 5C of amendment 7 provides that the state is not liable in torts for damage that is caused in a conflict zone as a result of an act done by the security forces. This rule has several exceptions. The exclusion of liability does not depend on the identity of the injured party but on the fact that the damage occurred in a conflict zone. The purpose underlying this provision was addressed by the respondents before us:

‘The main purpose of the amendment, which justifies a restriction of claims that are filed for damage caused in a conflict zone, is to adapt the law of torts to the special characteristics of the war with the Palestinians. Within this framework, the amendment also seeks to prevent an improper and unjust outcome that Israel should be liable for the damage of Palestinian inhabitants, in addition to being liable for the huge damage caused to the Israeli side’ (para. 275 of the respondents’ reply of 6 July 2006).

The respondents’ position is that the law of torts was designed to regulate ‘risk management for harmful acts in ordinary life within a given society’ (para. 26). It is not suited to dealing with damage caused in a time of war. There are several reasons for this:

‘First, the risks in times of war are different from those in times of peace. We are speaking of risks to the soldiers and risks to the state if they fail in their operations… Second, in war the scale of the damage is greater, and sometimes it is caused during a short period… Third, in times of war many soldiers and citizens are harmed… Fourth, war is, as a rule, a confrontation between states, or between a state and organizations, who operate from within the territory of another state… Fifth, litigating a claim in torts is not completely practical with regard to damage that is caused in war, or it encounters many difficulties… Sixth, the law of torts naturally examines a given incident on the basis of a specific and particular set of facts… Therefore, for all of the aforesaid reasons, there is no basis for applying the law of torts to war damage’ (para. 33 of the respondents’ reply of 6 July 2006).

This background gives rise to the question whether the provisions of s. 5C of amendment 7 are constitutional. As we have seen, they violate the rights of a Palestinian who was injured in a conflict zone by a tortious act of the security forces. Before amendment 7 was enacted, the state was liable to Palestinians in conflict zones if the tortious act was caused by a non-combatant activity of the security forces. Now the law provides that the state is not liable in torts for damage caused in a conflict zone as a result of an act carried out by the security forces, irrespective of the question whether the tortious act was caused by a ‘combatant activity’ or a non-combatant activity. This restriction of the state’s liability has violated the constitutional right of the Palestinian (or his heirs or estate) who was injured by a tortious act that was caused by a non-combatant activity. Does this violation of the constitutional right satisfy the provisions of the limitations clause?

33. Is the purpose underlying the provisions of s. 5C of amendment 7 a proper purpose? In my opinion, the answer to this question is yes. Indeed, the ordinary law of torts was not designed to contend with tortious acts that are caused during the combatant activities of the security forces outside Israel in an armed conflict. Excluding liability in torts in situations of ‘combatant activity’ is also accepted in other legal systems (for a survey, see Yaakov, ‘Immunity under Fire: State Immunity for Damage caused as a result of “Combatant Activity”,’ supra, at pp. 115-125). An arrangement whose purpose is to adapt the law of torts to the special circumstances that prevail during the combatant activity of the security forces is an arrangement that is intended for a proper purpose. I discussed this in Bani Ouda v. State of Israel [1]:

‘Combatant activities that cause harm to the individual should not be tried according to the ordinary law of torts. The reason for this is that combatant activities create special risks which should be addressed outside the framework of ordinary tort liability… Combatant activities create, by their very nature, risks that the “ordinary” law of torts was not designed to address. The purposes underlying the ordinary law of torts do not apply when the damage derives from combatant activity that the state is waging against its enemies… It should be noted that the approach is not that “combatant activity” is beyond the reach of the law. The approach is that the problem of civil liability for combatant activities should be determined outside the scope of the classical law of torts’ (ibid. [1], at p. 6).

34. Is s. 5C of amendment 7 proportionate? The first subtest, which concerns a rational connection between the proper purpose and the provisions of s. 5C, is satisfied. The exclusion of liability in torts provided by s. 5C of amendment 7 removes the damage caused by the security forces in a conflict zone from the scope of the ordinary law of torts. This realizes the proper purpose that amendment 7 sought to achieve.

35. Does s. 5C of amendment 7 satisfy the second subtest of proportionality? According to this test, the statute should adopt the measure that is least harmful. Does s. 5C satisfy this constitutional requirement? My answer is that it does not. In order to realize the purpose underlying s. 5C of amendment 7, it is sufficient to provide legal arrangements that the state is exempt from liability for combat activities. The ordinary law of torts is not suited to addressing liability for tortious acts in the course of combat. Arrangements of this kind were provided in s. 5 of the original Torts Law, which determined that the state is not liable in torts for an act done in the course of the combatant activity of the Israel Defence Forces. Amendment 4 extended the definition of ‘combatant activity’ beyond the scope that was given to it in decisions of the courts. It was provided in amendment 4 that combatant activity includes ‘any act of combating terror, hostilities or an uprising, as well as an act for the prevention of terrorism, hostilities or an uprising that was carried out in circumstances of risk to life or body.’ It further provided that notice of the damage must be given within sixty days; it shortened the prescription period and it ruled out the application of laws that transfer the burden of proof to the state. This amendment is proportionate, and it does not give rise to any constitutional difficulty. It realized the purpose underlying amendment 7, which is the need ‘to adapt the law of torts to the special characteristics of the war with the Palestinians’ (para. 27 of the respondents’ reply of 6 July 2006). Amendment 7 goes far beyond this. It excludes liability in torts for all damage that is caused in a conflict zone by the security forces, even as a result of acts that were not done in the course of the combatant activity of the security forces. This amplification of the state’s exemption from liability is unconstitutional. It does not adopt the least harmful measure that achieves an exemption from liability for combatant activities. It releases the state from liability for tortious acts that are in no way related to combatant activities, no matter how broadly the term is defined. Nothing in the ordinary activities of law enforcement that are carried out by the security forces in a territory controlled by them justifies an exclusion from the ordinary law of torts. This is certainly the case when the tortious act is totally unrelated to security activity. Only combat activities justify, as the purpose of amendment 7 indicates, an exclusion of the arrangements in the ordinary law of torts. Excluding tortious acts in which the security forces are involved but which have no combatant aspect does not realize the proper purpose of adapting the law of torts to combat situations. It seeks to realize an improper purpose of exempting the state from all liability for torts in conflict zones. This is certainly the case in view of the retroactive nature of this provision.

36. Section 5C of amendment 7 rules out any liability in torts on the part of the state with regard to any claim in torts that was filed with regard to an incident that occurred in a ‘conflict zone.’ From the respondents’ statement it appears that after the enactment of amendment 7, large areas of the territories of Judaea, Samaria and the Gaza Strip were declared conflict zones for lengthy periods. The territories were divided into several large districts. Sometimes one district encompasses whole cities or several villages and towns. According to the criteria that were determined in this regard, it was sufficient for one terrorist incident to occur in one part of a certain district in order to declare the whole district a conflict zone for several days. In these circumstances, the exclusion of the state’s liability under s. 5C causes a major violation of constitutional human rights. We should remember that the territories of Judaea and Samaria, and until August 2005 also the territory of the Gaza Strip, have been subject to a belligerent occupation for almost forty years. Thus the Israeli security forces are present in the territories on a constant basis and in large numbers. The inhabitants of the territories come into close contact with them on a regular and daily basis, on their way to and from work and school, at checkpoints and roadblocks inside the territories and at crossings into and out of Israel. The security forces have a fixed and permanent presence in the territories. They are deployed and operate in the territories both in combatant activities and in activities that have the character of law enforcement, both in areas where there is terrorist activity and in quiet areas, both in times of conflict and in times of relative calm. In these circumstances, a sweeping immunity of the kind given to the state by s. 5C of amendment 7 means that the state is given an exemption from liability in torts with regard to many kinds of operations that are not combatant activities even according to the broad definition of this term. This means that many injured persons, who were not involved in any hostilities whatsoever and who were injured by operations of the security forces that were not intended to contend with any hostile act, are left without any relief for the injury to their lives, persons and property. This sweeping violation of rights is not required in order to realize the purposes underlying s. 5C of amendment 7. Exempting the state from liability under s. 5C does not ‘adapt the law of torts to the state of war.’ It excludes from the scope of the law of torts many acts that are not combatant ones. It is inconsistent with Israel’s duty that arises from its belligerent occupation in Judaea, Samaria and the Gaza Strip. This occupation imposes on the state special duties under international humanitarian law, which are inconsistent with a sweeping immunity from all liability in torts. We are not adopting any position — since the matter did not arise before us — with regard to changes that may arise from the Oslo accords (see Gaza Coast Local Council v. Knesset [4], at pp. 523-524; HCJ 7015/02 Ajuri v. IDF Commander in West Bank [32], at p. 364 {96}). Obviously we are making no determination with regard to the legal status of the Gaza Strip after the disengagement. Even if Israel’s belligerent occupation there has ended, as the state claims, there is no justification for a sweeping exemption from liability in torts.

37. Indeed, the proportionate approach is to examine each incident on a case by case basis. This examination should consider whether the case falls within the scope of ‘combatant activity,’ however this is defined. It is possible to extend this definition, but this case by case examination should not be replaced by a sweeping exemption from liability. I discussed this in Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26]:

‘The need to adopt the least harmful measure often prevents the use of a blanket prohibition. The reason for this is that in many cases the use of a criterion of an individual examination achieves the proper purpose while using a measure whose violation of the human right is less. This principle is accepted in the case law of the Supreme Court… A blanket prohibition of a right, which is not based on an individual check, is a measure that raises a suspicion of being disproportionate. This is the case in our law. It is also the case in comparative law’ (ibid. [26], at paras. 69-70 of my opinion).

This approach was accepted by additional justices in that case. The vice-president (Justice M. Cheshin) said that the question is whether it is possible to create ‘a mechanism of an individual check for every resident of the territories who is a spouse or parent of an Israeli citizen, instead of imposing a blanket prohibition on all the residents of the territories who are of certain ages’ (ibid. [26], at para. 105 of his opinion). Justice D. Beinisch said that ‘Not carrying out an individual check and determining a blanket prohibition gives too wide a margin to the value of security without properly confronting it with the values and rights that conflict with it’ (ibid. [26], at para. 11 of her opinion). Similarly, Justice E. Hayut said that:

‘… security needs, no matter how important, cannot justify blanket collective prohibitions that are deaf to the individual… there is certainly a basis for a presumption of dangerousness that the respondents wish to impose in this matter of family reunifications between Arab citizens of Israel and residents of the territories. Notwithstanding, in order that the fear of terror does not mislead us into overstepping our democratic limits, it is proper that this presumption should be rebuttable within the framework of an individual and specific check that should be allowed in every case…’ (ibid. [26], at paras. 4-5 of her opinion).

Justice A. Procaccia emphasized in her opinion that:

‘We should beware of the lurking danger that is inherent in a sweeping violation of the rights of persons who belong to a particular group by labelling them as a risk without discrimination… we should protect our security by means of individual scrutiny measures even if this imposes on us an additional burden…’ (ibid. [26], at para. 21 of her opinion).

Justice M. Naor said that ‘… I do not dispute the importance of making an individual check, where this is possible… As a rule I accept that a violation of a basic right will be suspected of being disproportionate if it is made on a sweeping basis rather than on the basis of an individual check’ (ibid. [26], at para. 20 of her opinion). Justice E. Rivlin also emphasized the importance of the individual check, but he thought in that case that such a check would not realize the purpose of the law. Justice E. Levy emphasized in his opinion that ‘… in the final analysis there will be no alternative to replacing the blanket prohibition in the law with an arrangement based on an individual check…’ (ibid. [26], at para. 9 of his opinion). The case before us is different from Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26]. Notwithstanding, there are similarities between the two. In both cases very important human rights were violated. Amendment 7 denies the right to compensation, and thereby it is likely to result in the injured person or his family becoming destitute. In both cases, the state chose a sweeping denial (‘the state is not liable in torts’) to an individual check on a case by case basis to discover whether ‘combatant activity’ is involved. In Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26] it was argued that it was not possible to realize the purpose of the statute by means of an individual check. This argument cannot be made in the case before us. The individual check is capable of realizing the purpose of the statute.

38. The state addressed extensively in its written pleadings the arrangements that prevail in comparative law in this matter. A study of the state’s claims shows that in the countries surveyed by the state in its pleadings, the arrangements prescribed with regard to the liability of the state in torts are similar to the arrangement provided in amendment 4, whereas the sweeping arrangement provided in amendment 7 is unprecedented. Thus, for example, in American law, the Federal Tort Claims Act recognizes, alongside the general liability of the Federal government in torts, an exception that releases the state from liability in torts for combatant activities. But this exception is limited to acts of the security forces in a time of war (section 2680(j)). Admittedly this section has been interpreted broadly. It has been held that a ‘state of war’ prevails even in a period of significant hostilities between the United States army and other military forces, and that ‘combatant activities’ include both the actual combat operations and activities that are directly related to them (Koohi v. United States [35]). But even with its broad interpretation, this section provides arrangements that are similar in essence to the arrangement provided in amendment 4, and not the sweeping immunity provided in amendment 7. The same is true in English law, which recognizes the immunity of the state with regard to tort claims arising from combatant activities (combat immunity). In the words of Sir Iain Glidewell, ‘… during the course of hostilities, no duty of care is owed by a member of the armed forces to civilians or their property…’ (Mulcahy v. Ministry of Defence [37]). Even this immunity from liability has been interpreted broadly, but without resorting to a sweeping exemption:

‘[Combat immunity] must cover attack and resistance, advance and retreat, pursuit and avoidance, reconnaissance and engagement. But the real distinction does exist between active operations against the enemy and other activities of the combatant services in time of war’ (Bici v. Ministry of Defence [38]).

That case (in 2004) concerned a claim in torts of Albanians living in Kosovo who were injured by gunfire from British troops who were in Kosovo as part of the NATO force sent there. The court held that the soldiers were negligent in that they violated the rules of engagement, and in the circumstances of the case, it rejected the state’s contention that it should enjoy combat immunity. Thus we see that the arrangement in English law is also similar in essence to the arrangement provided in amendment 4. State immunity from liability for combatant activities is the broadest in Canadian law. Section 8 of the Crown Liability and Proceedings Act provides that:

‘… nothing in those sections makes the Crown liable in respect of anything done or omitted in the exercise of any power or authority exercisable by the Crown, whether in time of peace or of war, for the purpose of the defence of Canada or of training, or maintaining the efficiency of, the Canadian Forces.’

This clause excludes the liability of the state in tort claims that arise from actions of the Canadian army that are done in order to defend Canada, whether in time of peace or of war, and whether it is actually a combatant activity or training for it. But even this broad arrangement does not give the state a sweeping immunity, and the state needs to show that the activity of the security forces that caused the damage was done in the defence of Canada. By contrast, in Israel the state is released from any burden of proof, and it is sufficient for it to show that the damage was caused in a conflict zone.

39. Section 5C has several exceptions. The second schedule of amendment 7 provides that the state’s immunity under s. 5C shall not apply to damage that is caused as a result of a criminal act, damage that is caused to someone who is held by the State of Israel in custody, damage that is caused as a result of an act of the civil administration that was not done within the framework of the conflict, and damage that is caused as a result of a road accident in which a vehicle of the security forces is involved but not in the course of operational activities. Do these exceptions to the general arrangement, which are stipulated in s. 5C, save it from being disproportionate? Are they capable of changing the conclusion with regard to the second subtest? My answer to this question is no. These provisos and exceptions cannot constitute a less harmful measure to human rights. On the contrary, if the immunity from liability that is provided in amendment 7 does not apply to these cases, why does it apply in other cases of torts that do not derive from ‘combatant activities’? If the liability for a ‘road accident’ in which a military vehicle is involved does not fall within the scope of the state’s immunity from liability, why in other accidents that are not road accidents is liability excluded in a sweeping manner without allowing an individual check? It is true that there are difficulties in producing evidence. But the way to overcome this is not to exclude liability, but to make individual checks and determine burdens of proof and shorter limitation periods.

40. Does s. 5C of amendment 7 satisfy the third subtest of proportionality, the test of proportionality in the narrow sense? Is the benefit to the public interest from excluding the state’s liability for the damage caused in a conflict zone commensurate with the loss caused to individuals who are injured as a result of tortious acts of the security forces? It should be noted that the question of proportionality in the narrow sense does not arise in all those cases where it transpires in the trial that no tortious act was committed at all, whether because there is no (conceptual or concrete) duty or because there is no carelessness or because there is no causal link or for any other reason (with regard to other torts). Moreover, the question of proportionality (in the narrow sense) does not arise at all with regard to a tortious act that was done as a result of ‘combatant activities’ of the security forces. The state is not liable in torts for this tortious act under the law that was in force before amendment 7. It follows that the question that we should ask ourselves is the following: is the benefit to the public interest that is afforded by excluding the state’s liability for a tort that was not caused by ‘combatant activities’ commensurate with the damage that is caused to someone who is injured as a result of this tort? We asked the respondents once again what public benefit is realized by amendment 7 that was not realized under the law of torts that preceded it, including amendment 4. We sought to ascertain in what additional circumstances does amendment 7 give the state immunity from liability, as compared with the legal position that preceded the amendment, and how do these realize the legislative purpose and the public interest. The following was the answer that we were given:

‘First, amendment 4 is an amendment that was prepared against the background of the Intifadeh that broke out in 1987. The draft of amendment 4 was tabled before the armed conflict broke out in the year 2000, and it was not intended at all to provide a solution to the unique nature of the armed conflict with the Palestinians. Indeed, amendment 4 also does not provide a solution to the armed conflict de facto. This is reflected in the fact that amendment 4 is a limited amendment. It deals mainly with the technical-procedural aspect of claims that arise in the territories. This amendment looks at the damage from within the law of torts. By contrast, amendment 7 is a substantial amendment.

The purpose of amendment 7 is different from the purpose of amendment 4. The amendment seeks to exclude war damage from the scope of the law of torts, and not to adapt the law of torts to war damage. The purpose of the amendment is mainly ethical. It is completely different from the purpose of amendment 4. Therefore amendment 4 on its own is insufficient.

Second, amendment 4 does not address claims of enemy aliens and claims of members of a terrorist organization at all, and therefore for this reason also amendment 4 is insufficient.’

In my opinion, these reasons are unconvincing. First, it was not made clear how the date of preparing the legislation is relevant to the question of the public benefit that the legislation realizes and why amendment 4 does not also provide a legal solution to the conflict that broke out in the year 2000. Second, the assertion that amendment 4 is technical-procedural is unacceptable. Amendment 4 made a major change to the definition of the term ‘combatant activity.’ The definition greatly broadened the interpretation given to this term in case law, and thereby significantly restricted the liability of the security forces operating in the conflict with the Palestinians. Third, we received no explanation of the significance of the distinction between ‘excluding war damage from the scope of the law of torts’ and adapting ‘the law of torts to war damage.’ With regard to the second reason given by the state, this relates solely to s. 5B of amendment 7.

41. The respondents also discussed the general benefit of amendment 7:

‘The amendment restores the balance in the law of torts, and adapts it to the new circumstances of war. It enshrines ethical principles and solves practical difficulties in implementing the existing law. It enshrines the principle that in times of conflict each side is liable for its own damage, and it prevents the outcome, which currently exists, in which Israel is compelled to bear a double burden of claims for war damage suffered both by its own citizens and also by the inhabitants of the Palestinian Authority.’

These remarks also do not answer the question as to how exempting the state from liability for committing tortious acts that do not fall within the scope of ‘combatant activities,’ as defined in amendment 4, realizes a public benefit from an ethical viewpoint. Prima facie, the immunity from liability for ‘combatant activities’ in its broad sense is sufficient in order to adapt the law of torts to a situation of war and in order to release the state from the burden of liability for claims arising from war damage. It would appear that the main benefit does not lie in realizing these purposes, but in releasing the state from conducting legal proceedings in order to determine the question of whether there were ‘combatant activities.’ Indeed, giving the state a sweeping immunity makes it unnecessary to conduct many proceedings in which the state is required to prove that the damage for which it is being sued was caused by combatant activities. But this benefit to the public interest — a benefit that lies mainly in a savings of administrative resources — is disproportionate in comparison to the damage to the various individuals, which was caused by non-combatant activities. This damage often involves great suffering. Injured parties suffer major injuries; they become seriously disabled; their ability to earn a livelihood is significantly impaired. All of these — and of course the loss of life — are far greater than the limited benefit that arises from releasing the state from liability and from the need to defend its position in court, both when the damage is caused by combatant activities and when it is caused by non-combatant activities.

42. Amendment 7 established a committee that was authorized ‘… to approve, beyond the letter of the law, in special circumstances, a payment to an applicant to whom subsection (a) applies and to determine the amount thereof…’ (s. 5C(b)(1)). It was also provided that ‘The Minister of Defence, in consultation with the Minister of Justice and with the approval of the Constitution, Law and Justice Committee of the Knesset, shall determine the preconditions for submitting an application to the committee, the manner of submitting the application, the work procedures of the committee and the criteria for making payments beyond the letter of the law’ (s. 5C(b)(3)). Do the existence of this committee and its payments of compensation make the arrangements in s. 5C of amendment 7 proportionate? My answer is no. Naturally, where the disproportionality is based on the absence of a ‘beyond the letter of the law’ arrangement, the provision of such an arrangement can remove the disproportionality. But where the disproportionality in an arrangement arises from a disproportionate violation of human rights — and certainly when the rights that are violated are fundamental and important ones and the violation thereof is serious and painful — the violation does not become proportionate by means of a payment beyond the letter of the law. Someone who has been injured by a non-combatant activity of the security forces is entitled to compensation by law, and not to compensation beyond the letter of the law. We should give him justice, not charity. Of course, the state would act meritoriously if it considered making payments beyond the letter of the law to someone who is seriously injured as a result of ‘combatant activities’ of the security forces, in circumstances where the state thinks that a charitable payment is justified (cf. the remarks of Vice-President M. Cheshin in Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26], at para. 126 of his opinion).

The result is that we deny the petitions in so far as the constitutionality of s. 5B of amendment 7 is concerned. We grant the petitions and make the order nisi absolute, in so far as the constitutionally of s. 5C of amendment 7 is concerned. This section is void.

 

 

President D. Beinisch

I agree with the opinion of President Emeritus A. Barak.

 

 

Justice A. Procaccia

I agree with the opinion of my colleague, President Emeritus A. Barak.

 

 

Justice E.E. Levy

I agree with the opinion of the honourable President Emeritus A. Barak.

 

 

Justice M. Naor

I agree with the opinion of my colleague, President Emeritus Barak.

 

 

Justice S. Joubran

I agree with the opinion of my colleague, President Emeritus A. Barak.

 

 

Justice E. Hayut

I agree with the opinion of my colleague, President Emeritus A. Barak.

 

 

Justice D. Cheshin

I agree with the opinion of my colleague, President Emeritus Barak.

 

 

Justice A. Grunis

1.             I agree with the outcome in the opinion of my colleague, President Emeritus A. Barak. My agreement with the outcome derives mainly from the fact that the respondents did not address, and certainly did not address satisfactorily, two main questions: first, what — under the rules of private international law — is the substantive law that governs claims filed in Israel against the state and its agencies for acts outside Israel? Second, do the Basic Laws have extra-territorial application? It should be noted that the respondents raised certain arguments that my colleague, President Emeritus A. Barak, did not address, even though I am of the opinion that they should be mentioned with regard to these two questions. I am referring to various arrangements in English and American law, which I shall address below, that apply to factual situations that are relevant to our case and that may prevent the courts from giving relief.

2.             One of the first questions that are relevant to an action filed in an Israeli court with regard to an incident that occurred outside the borders of Israel concerns the substantive law that should be applied. This question also arises in every case of a tort action that is brought before an Israeli court with regard to an incident that occurred in Judaea and Samaria. The cases under discussion can be of many different kinds. Thus it is possible that an Israeli citizen who works for an Israeli employer in an Israeli settlement in Samaria is injured in a work accident and files an action on account of this in the court in Israel. A small change in the facts presents a case in which the worker who is injured is a Palestinian. Another possibility, which brings us closer to the cases addressed in the petitions, concerns a claim filed by a Palestinian resident of Samaria on the grounds that he was injured by the gunfire of IDF soldiers. In each of these examples, the court is supposed to consider the question of which law will apply to the claim under the rules of private international law. My colleague, the president emeritus, says that under the conflict of law rules that are practised in Israeli law, the Israeli law of torts applies to actions of the security forces in the territory of Judaea and Samaria. In my opinion, the answer to this question is not so clear. CA 1432/03 Yinon Food Products Manufacture and Marketing Ltd v. Kara’an [19] (an application for a further hearing was denied: CFH 9524/04 Yinon Food Products Manufacture and Marketing Ltd v. Kara’an [33]) comprehensively considered the position of Israeli private international law with regard to a tortious act that took place in the aforesaid territory. It was held that the rule is that the law of the place where the tort was committed (lex loci delicti commissi) applies. Therefore in principle Jordanian law should apply. The aforesaid rule is subject to a rare exception, according to which the court should apply the law of the country that has the closest connection with the tort (Yinon Food Products Manufacture and Marketing Ltd v. Kara’an [19], at pp. 374-375, 377). Yinon Food Products Manufacture and Marketing Ltd v. Kara’an [19] concerned an action of a Palestinian woman that was filed in a court in Israel. The plaintiff was injured in a work accident, while working at a plant of an Israeli company that was situated in an Israeli town in Samaria. The Israeli aspects of the case — an Israeli employer, an Israeli plant that was situated in an Israeli town in the territories — led the court to say that ‘the exception begs to be applied’ (ibid. [19], at p. 378). Therefore in that case it was held that the Israeli law of torts would apply, rather than the Jordanian law. Indeed, as my colleague President Emeritus A. Barak says, claims of Palestinians against the state for alleged tortious acts of the security forces have been tried for years under Israeli law. It is to be wondered why in those cases the state did not raise the argument that the substantive law that should apply, under the conflict of law rules, is the law of the place where the tort was committed. This argument was also not raised in the petitions before us. It is possible that a determination that Jordanian law applies would make it unnecessary to consider the constitutional question. This would be the case if Jordanian law does not give rise to a cause of action in the situations that we are considering, as a result, for example, of an ‘act of state’ doctrine (paras. 6-7 below). If there was no right of action until amendment 7 of the Torts (State Liability) Law, 5712-1952 (hereafter — the Torts Law), under the law of the place where the tort was committed, it would not be possible to argue that the amendment denied an existing right and therefore no constitutional question would arise. Nonetheless, we should note that it would appear that the premise for changing the Torts Law in amendment 4 and amendment 7 was that the law of torts that applies with regard to claims concerning the activities of IDF soldiers in the territories is the Israeli law.

3.             The other main question that should be considered is the question of the application of the Basic Laws — in this case the Basic Law: Human Dignity and Liberty — to events that occur outside the borders of Israel. According to the approach of my colleague President Emeritus A. Barak, there is no need to consider the aforesaid question. According to his position, the rights of Palestinians who are inhabitants of the territories ‘are rights that are granted to them in Israel’ and amendment 7 of the Torts Law violates those rights. And why are these rights that are granted to them in Israel? It is because under Israeli private international law they may, in certain circumstances, sue in Israel under the Israeli law of torts for tortious acts that were committed outside Israel (para. 23 of the opinion). We have already seen (para. 2 supra) that the conflict of law rules in Israel provide that the law of the place where the tort was committed should apply. When we are dealing with the territory of Judaea and Samaria, the significance of this is that we should refer to Jordanian law. Indeed, the aforesaid rule is subject to an exception, as was indeed held in Yinon Food Products Manufacture and Marketing Ltd v. Kara’an [19]. For the purpose of considering this question I am prepared to assume that the conflict of law rules in Israel lead to the application of the Israeli law of torts with regard to an incident in which a Palestinian is injured as a result of shooting by IDF soldiers. According to the approach of my colleague the president emeritus, ‘The rights in Israel under the law of torts were taken away from the inhabitants of the territories for tortious acts done by the security forces in a conflict zone. The effect of amendment 7 is therefore in Israel. It violates rights that the injured parties from the territories had in Israel’ (para. 23 of his opinion). This leads my colleague to conclude that there is no need to consider the question of the application of the Basic Law outside the borders of Israel. I cannot agree with this.

Let us remember that we are dealing with events that took place outside the borders of Israel. Even if according to the conflict of law rules the Israeli law of torts applies to those events, this does not change the place where the tort was committed. Applying the Israeli law of torts does not create a fiction whereby the event occurred in Israel. The mere fact that the matter is tried before an Israeli court, under Israeli law, cannot lead to the conclusion that the rights are given to the injured parties in Israel. If you say this, then you arrive at a far-reaching conclusion that the Basic Laws apply to every proceeding that takes place in an Israeli court where the conflict of law rules determine that Israeli law applies. No connection should be made between the rules of Israeli private international law and the scope of application of the Basic Laws. Therefore it would appear that we need first to decide the question of the extraterritorial application of the Basic Law: Human Dignity and Liberty. However, since the respondents stated that in their opinion no decision on this question is required, there is no reason to address it in the present case. It would appear that it will be necessary to address the issue in the future, if an argument is presented before the courts.

4.             Ultimately we are determining that s. 5C of the Torts Law is unconstitutional. By contrast, we are not deciding the question of the constitutionality of s. 5B of the law. It can be assumed that this question will be brought before the courts again. In the opinion of my colleague President Emeritus A. Barak, section 5B of the Torts Law applies, ‘according to its wording, to tortious acts done in Israel.’ This leads to his conclusion that the question of the application of the Basic Law does not arise. I would point out that a careful reading of section 5B shows that it is indeed possible that it will also apply to tortious acts committed by the state and those acting on its behalf outside Israel. Therefore it is possible that in the future it will be necessary to consider the question of the application of the Basic Laws with regard to the aforesaid section as well.

5.             In consequence of the finding that the Basic Law applies in this case, my colleague goes on to consider the question whether amendment 7 of the Torts Law violates a right that is included in the Basic Law. His conclusion is that such a violation does indeed exist with regard to the right to life, liberty, dignity, privacy and property. My colleague adds that ‘Denying or restricting liability in torts undermines the protection of these rights’ (para. 25). I am prepared to agree that in the present case a basic right has been violated. This is because of the broad application of s. 5C of the Torts Law. Notwithstanding, I cannot agree that any restriction or denial of liability in torts will constitute a violation of a constitutional right, just as I cannot accept that every new criminal norm or stricter penalty constitutes a violation of a constitutional right (CrimA 4424/98 Silgado v. State of Israel [34], at pp. 553-561 (per Justice T. Strasberg-Cohen); see also para. 2 of my opinion in HCJ 7052/03 Adalah Legal Centre for Arab Minority Rights in Israel v. Ministry of Interior [26]).

6.             The respondents mentioned in their arguments arrangements that exist in foreign law, even though they did not go so far as to claim that those arrangements constitute in themselves a response to the petitions. Thus the respondents raised an important doctrine that exists in English law, the act of state doctrine. According to this doctrine, certain acts of the state and its agents may not be tried in the English courts, if they were committed outside the borders of the state with regard to persons who are not British nationals. These also include acts of a violent nature that are committed by the state and its agents (see H.W.R. Wade & C.F. Forsyth, Administrative Law (ninth edition, 2004), at pp. 838-840; O. Hood Phillips & Jackson, Constitutional & Administrative Law (eighth edition, 2001), at pp. 320-326; Halsbury’s Laws of England, vol. 18(2) (fourth edition, 2000), at pp. 452-455; see also CA 5964/92 Bani Ouda v. State of Israel [1], at p. 7, and A. Yaakov, ‘Immunity under Fire: State Immunity for Damage Caused as a Result of “Combatant Activity”,’ 33(1) Hebrew Univ. L. Rev. (Mishpatim) 107 (2003), at pp. 124-125 and the references cited there). The scope of the doctrine’s application is unclear. It also appears that there is now a trend to limit its application (Yaakov, ‘Immunity under Fire,’ supra, at p. 194). In American law there is a similar rule to that of an act of state, by virtue of a specific provision of statute. Section 2680(k) of the Federal Tort Claims Act provides that the government of the United States shall not be liable ‘for any claim arising in a foreign country.’ The American rule, like the English doctrine, is not limited to acts carried out by military forces nor is it limited to combatant activities. Thus the United States Supreme Court has held that it is not possible to file a claim in torts in an American court against the United States government and agents of the Drug Enforcement Administration with regard to their liability for the abduction of a Mexican citizen from Mexico to the United States (Sosa v. Alvarez-Machain [36]).

7.             The act of state doctrine is part of English common law. Therefore it was prima facie incorporated into Israeli law. One might argue that even if it was incorporated, it was abolished by the enactment of the Torts Law. It is well known that this law was intended to replace the common law rule that the state has immunity in torts. It would appear, without making a firm determination, that the enactment of the law did not abolish the act of state doctrine, just as that doctrine was not abolished in England by the Crown Proceedings Act 1947. It should be remembered that the doctrine applies to acts that are carried out outside the jurisdiction of the state. Indeed, s. 5A of the Torts Law expressly addresses the territories, i.e., Judaea, Samaria and the Gaza Strip, and therefore it seems that the aforesaid doctrine does not apply in the territories. We should point out, in passing, that the aforesaid s. 5A was adopted when Israel was in control of Gaza. It may be asked whether there is any need today for the aforesaid provision following the withdrawal from Gaza, if the act of state doctrine applies to that area. In any case, it is possible that the doctrine will apply in other places outside the state, as for example with regard to the combat activities that took place last summer in Lebanon or acts of Israel’s secret services outside the state. It should also be noted that it is possible that a hint of the act of state doctrine may be found in the provisions of s. 9A of the Torts Law, which was adopted in amendment 7. The section provides that ‘Nothing in the provisions of sections 5B and 5C shall derogate from any defence, immunity or exemption given to the State of Israel under any law.’ We should add that the act of state doctrine may apply in addition to the statutory rule that exempts the state from liability in torts ‘for an act that was done by a combatant activity of the Israel Defence Forces’ (s. 5 of the Torts Law). Even if the act of state doctrine has no relevance to the matters that arose in the petitions, it is possible that it will be important in future cases.

8.             Since the respondents did not address central questions, and since in practice they agreed, if only by implication, that the tort actions under discussion are subject to Israeli law and that there is no need to consider in this case the extraterritorial application of the Basic Law, I can only agree with the outcome proposed by my colleague President Emeritus A. Barak. It would appear that the time will come for deciding the aforesaid questions.

 

 

Petition granted.

21 Kislev 5767.

12 December 2006.