Legislative Amendment Enables Filing Claims against Foreign Entities in Israel

November, 2019 – Israel – Granot-Speiser

In September 2019, the Ministry of Justicepublished an overall reform of the Civil Procedure Regulations 5744-1984 (“Civil ProcedureRegulations“ and the “Reform”, respectively). The Reform is expected to come into force in September 2020. However, some of the proposed amendments were already implemented in the Civil Procedure Regulation.

One such major amendment concerns Regulation 500(7), which allows the courts in Israel to enable service of tort claims to foreign defendants for damage they caused in Israel as a result of acts or omissions performed outside of Israel, an act which broadens the jurisdiction of the Israeli courts and grants them jurisdiction over foreign defendants (“Regulation 500(7) Amendment”).

Under the previous legislation, it was not possible for courts to grant service of civil claims to a foreign defendant when the claim was based on an act or omission that took place outside of Israeli jurisdiction. Meaning, it was not sufficient to indicate damage which occurred within Israel, but rather the act or omission must have been committedin Israel.

After the implementation of the Regulation 500(7) Amendment, in order for service of a claim to be permitted outside of Israel, it is sufficient for a plaintiff to demonstrate that its damage was sustained in Israel, even if the act or omission did not take place in Israel, subject to two aggregate conditions: (1) the defendant could foresee that the damage may occur in Israel; and (2) that the defendant, or a person affiliated with it, engages in international trade or provides international services of significant scope.

This amendment has a significant impact on foreign companies who offer their products and services to Israeli residents. These include most internet giants such as Google, Facebook, Amazon, Booking, Alibaba etc, but also numerous online retails or service providers, which are now exposed to claims by Israeli plaintiffs for damages which occurred within Israel.

For more information on the above or in other matters, please contact Oren Speiser (orens@grs-law.co.il).