Precedent compensation in class actions: A supplementary ruling handed down today (Monday) in the Tel Aviv District Court states that Meitav Dash will reimburse members NIS 399,984,000 for collecting management fees in violation of agreements and in violation of the fiduciary duty it owes them. An eligible group member is expected to receive NIS 3,200 in his account, according to estimates, the lawyers representing the plaintiffs will receive NIS 15 million and the plaintiffs will receive NIS 2.3 million.
Tel Aviv District Court Judge Dr. Michal Agmon Gonen, who handed down the ruling, noted in her decision that “this lawsuit has brought the group members a significant economic benefit, amounting to nearly four hundred million shekels. There is no precedent for this amount in class actions. In addition, this class action lawsuit is among the few that ended in a verdict after evidence, that is, the compensation was given after the entire procedure was conducted. ”
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In the ruling given in August, it was determined that Meitav Dash must return to the members of the represented group a management fee that it charged more (NIS 289,139 million as of January 1, 2016). It was also determined that a supplementary opinion will be given for the period from this date, and that the final amount will be calculated later.
A supplementary judgment was rendered today in two matters. First, in determining the amount of the updated return for the members of the group, since the expert’s opinion was updated to the date of its submission, and Meitav Dash continued to charge management fees even after that. It was also necessary to add the linkage differences and interest to the amounts overcharged. In the supplementary judgment, it was determined that the total amount that Meitav Dash must pay is NIS 399,984,000.
In addition, the supplementary judgment deals with the remuneration of the representing plaintiffs and the fees for their attorneys, taking into account the considerations set forth in the law in this regard, and distinguishing between investment and risks taken by the representing plaintiffs and their attorneys, and parameters such as management fees (calculated from the return The group, which must be taken into account to a limited extent in the ruling on remuneration and fees.
Judge Agmon Gonen emphasized in this matter that in lawsuits in which large sums are awarded (more than NIS 100 million), it is appropriate to separate the significant effect of the considerations to be considered regarding remuneration and fees (considerations of input, output and guidance) on the outcome of the lawsuit. , And their lesser effect on the high sums received by the group, which are not a direct result of action in the non-representative power, but derive from the characteristics of the claim and the group represented.Because, as the case before me indicates, The management collected), the number of members, and the length of years in which these amounts were collected (including interest and linkage differences) “.
Considering these considerations, and according to the tiered percentage method, the representative power attorneys were awarded a fee in the total amount of NIS 15,835,255. In addition, compensation to the representing plaintiffs (Greenberg and Lewinard) in the amount of NIS 2.3 million, we were 1,150,000 each.
It was further determined that since the class members received significant consideration from the proceeding, fees to the representing attorneys, and the remuneration to the representing plaintiffs, will be paid out of the total amount that Meitav Dash must transfer to the class members.
In light of the fact that this is a significant amount, and in order to allow Meitav Dash to organize for the purpose of payment and locate the group members who are no longer members of Meitav Dash, it was determined that Meitav Dash will transfer the amount to the group members in early March 2022.
It should be remembered that Meitav Dash made a provision in respect of the compensation and recently appealed to the Supreme Court against the district court’s decision. An appeal hearing has not yet been held.
In the ruling given in August, the judge discussed in detail the purchase of the benefits provident fund by Dash as part of the Bachar reform, and that she had to abide by the agreements the fund had with its colleagues prior to its purchase. The representative plaintiffs who filed the lawsuit are members of the “Remuneration” provident fund, which was, prior to its acquisition by the defendant, a subsidiary of Bank Hapoalim. The rights to manage the fund.
In the judgment regarding institutional investors in general and provident funds in particular, Judge Agmon Gonen elaborated on the fiduciary duties owed by institutional investors to their colleagues and ruled that Institutional investors have a lot of power, which must be managed and exercised responsibly.
It should be remembered that behind all the institutional investors are millions of savers, workers, pensioners and other investors, who trust them and entrust their future in their hands, literally. Great responsibility – Institutional investors have fiduciary duties, given the great power they have. “
Adv. Hagai Netzer from the office of Ivzen Netzer Woletzky, who represented the plaintiffs together with Adv. Amir Ivtsen, stated in August upon receiving the ruling that “There were members in the benefit fund. Anyone who knows who was a member in the fund will apply and receive what they deserve. Until 2016, the members were charged NIS 289 million for a nominal management fee. At this stage, it is not yet known how the amount will be transferred.”
Meitav Dash responded in August, noting that she believes the decision is wrong and she believes it will not stay honest. It was further stated that “it should be noted that the subject of the decision are documents from about 60 years ago. “Bachar reform and endangers other and future reforms. According to the decision, the company must provide quality, professional and expensive services without any consideration, free and forever, to hundreds of thousands of customers, based on documents from the 60s of the last century that have no issues today.”
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