The second system, set forth in section 8 of the Law, sets out four cumulative tests (hereinafter referred to as the conditions for approval). As part of these tests, the applicants of the application for certification are required to show that the action raises substantive questions of fact or law that are common to all the members of the class; that there is a reasonable possibility that these questions will be decided in favor of the group; that a class proceeding is the most efficient and fair way to resolve a dispute in the circumstances of the case; and that there is a reasonable basis to assume that the matter of the class members will be represented and managed in an appropriate manner and in good faith (see: Aviel Flint and Hagai Vinitsky, Class Actions 106-109 (2017) (hereinafter: Flint and Vinitsky)) (ibid., para. 15).
- The process of a motion to certify a class action is a preliminary proceeding, in the sense of a "corridor through which one can enter the lounge" and moves to the hearing of the action itself. Therefore, "the corridor should not be turned into a permanent residence" (Civil Appeal Authority 9617/16 Israel Discount Bank in Tax Appeal v. Lepiner (published in Nevo, October 28, 2018); Civil Appeal Authority 4556/94 Tatz v. Zilbershatz, IsrSC 49(5) 774, 787). On the other hand, permission to conduct a class action should be granted only in appropriate cases that meet all the necessary conditions, so as not to exclude frivolous claims that do not deserve to be clarified as class actions, with all the complexity and problems they entail (see the Lepiner case, supra; Civil Appeal Authority 6567/97 Bezeq - The Israel Communications Company in a Tax Appeal v. Estate of the Late Eliyahu Gat, IsrSC 52(2) 713, 720).
- It was also held that even when the conditions for the approval of a class action are met, this does not necessarily lead to the approval of the motion, since the court has discretion not to approve the motion, which is inferred from the expression "may" in section 8(a) of the Law (see Civil Appeal Authority 3688/20 Derech Eretz Hewiz v. Katran (Published in Nevo, May 17, 2022), paragraph 19). Within the framework of discretion, it is also possible to consider policy considerations, whether it is justified to permit the conduct of the class action in the circumstances of each and every case (see also: Class Action (Haifa) 23787-03-23 Cohen v. Cellcom Israel in a Tax Appeal (published in Nevo, December 19, 2024)).
- In Civil Appeal 1248/19 The Central Company for the Manufacture of Soft Drinks in Tax Appeal v. Gafniel (published in Nevo, July 26, 2022), it was held, with respect to the burden of proof in a motion to certify a class action, inter alia that:
Section 8 of the Class Actions Law enumerates a series of conditions for certifying a class action – foremost of which is the requirement that the action raises substantive questions of fact or law that are common to the class members, and there is a reasonable possibility that these questions will be decided in favor of the class (see, for example, Civil Appeal Authority 9617/16 Israel Discount Bank v. Lepiner, para. 16 and the references there (October 28, 2018)). According to the customary rule, "in order to be convinced that prima facie, there is a reasonable possibility that substantive questions of fact and law will be decided in the action in favor of the class, the court is required to go into the thick of the matter and examine the claim on its merits, whether it reveals good cause and if there is a reasonable chance of a decision in favor of the plaintiffs" (Civil Appeal 6343/95 Avner Oil and Gas in Tax Appeal v. Eban, IsrSC 35(1) 115, 118 (1999)). This rule took root in case law even before the enactment of the Class Actions Law, and it stands firmly on both feet even today – some 16 years after the law was enacted (High Court of Justice 5148/18 Shaham v. National Labor Court, paragraph 26 (July 11, 2022) (hereinafter: the Shaham case); Civil Appeal 5378/11 Frank v. Allsale, paragraph 3 of the opinion of Judge (as then described) A. Hayut (September 22, 2014) (hereinafter: the Allsale case); Appeal of Petition/Administrative Claim 980/08 Miniv v. State of Israel, para. 13 (September 6, 2011)).