Case Number

HCJ 687/15

Date Decided

7-9-2015

Decision Type

Original

Document Type

Full Opinion

Abstract

The Israeli Knesset adopted the Victims of Nazi Persecution (Restrictions on Fees for Handling Pension Claims under an Administrative Decision) (Amendment No. 20) Bill, 5775-2014. The questions presented by this petition are as follows: A. Does the amendment infringe the constitutional rights of the Petitioners in a manner that is repugnant to the Limitations Clause? B. Is the retroactive application of the amendment just and proper under the circumstances? C. Was there any fundamental flaw in the legislative procedure of the amendment that would justify its annulment?

The Supreme Court, sitting as High Court of Justice, denied the petition, holding:

The Court will not lightly declare a law to be unconstitutional. The starting point of the Court in examining the constitutionality of a law is that the law enjoys something of a presumption of constitutionality that requires that the Court assume that the law was not intended to violate constitutional principles. The scope of the Court’s intervention in Knesset legislation is, therefore, limited.

The recognition granted to the existence of an infringement of a constitutional right is broad, and every infringement (as long as it is not trivial) that detracts from the right will be deemed one that requires constitutional examination. As has been held, the more severely a law infringes the right, and the closer the infringement to the core of the right, the greater the justification for strict judicial review of the law. And vice versa, the closer the violation is to the margins of the right, the greater the constitutional margin enjoyed by the offending law, and the smaller the margin of intervention of this Court.

The amendment under review is not intended to deprive the Petitioners of the right to handle suits by Holocaust survivors, but rather to restrict the manner of its realization. That being the case, the infringement of the constitutional right to freedom of occupation is limited. This is also true of the infringement of the Petitioners’ freedom of contract, which is also of relatively low magnitude for two reasons: First, the law already placed limits upon attorneys’ fees prior to its amendment, and in that sense, it does not create a “new world order”. Second, the purpose of the amendment is to prevent the charging of exorbitant fees and exploiting Holocaust survivors. The right to charge exorbitant fees is not at the core of the right to freedom of contract.

As opposed to this, it would seem that the violation of the Petitioners’ property right, expressed in the demand to return excess legal fees already paid, does indeed strike at the core of the right. There can be no doubt that applying the amendment retroactively increases the severity of the violation of the Petitioners’ rights. However, if there is appropriate justification, there is no bar to the retroactive application of the law. In the instant case, the primary justification for applying the amendment retroactively is that were that not done, the amendment would almost entirely be a “dead letter”. That is so because most of the Holocaust survivors whom the law intends to benefit have already signed fee agreements, and if the amendment would not apply to them, what would be achieved? Extending the application of the amendment to cases in which the fees have already been paid is also justified, inasmuch as limiting the application of the amendment only to situations in which legal fees have not been paid would, in practice, create an unjustified distinction between survivors who were quick to pay their fees and those who were not. Along with these justifications, we should bear in mind that the amendment adopted mitigating factors that create a proportionate, balanced arrangement.

The infringement of the Petitioners’ rights meets the criteria of the Limitations Clause. In that regard, the purpose was found to be proper – preventing unfair harm by parties who sought to exploit Holocaust survivors. Similarly, we found that we are concerned with a proportionate law: exploitation of Holocaust survivors by parties handling claims is a substantial phenomenon. The legislature was presented with a sufficient factual foundation to provide adequate grounds for the rational connection; the alternatives proposed by the Petitioners do not realize the purpose of the amendment to an extent equal to that achieved by the means selected; the benefit of the amendment is far greater that its cost. First, the legislature adopted mitigating measures that lessen the magnitude of the injury to the Petitioners by creating fee levels corresponding to the extent of the involvement of the person handling the claim, and by creating special mechanisms that treat of mitigating the influence of retroactive application. Second, a comparison of the provisions of the amendment to the prior legal situation reveals that the change introduced by the amendment is not so dramatic, and in some situations, changes nothing at all. On the other side of the scales, the benefit is not expressed solely in a profit of a few hundred or a few thousand shekels for each survivor. First and foremost it is moral.

No defect was found in the legislative procedures, let alone a severe and exceptional defect going to the very core of the procedure. The facts show that, as opposed to the claim of the Petitioners, there was no substantive defect in regard to the principle of participation in the legislative process of the amendment.

Keywords

Administrative Law -- Holocaust reparations, Constitutional Law -- Judicial Review, Constitutional Law -- Legislation

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