First, as I will show below, the total amount of the debt calculated by the defendants reflects a deviation from the cogent provisions of the Fair Credit Law, which in any case cannot be legitimized by the consent of the parties.
Second, as already noted, the content of the parties' agreement is learned first and foremost from the language of the agreements, especially in commercial agreements such as the one here, and according to which the calculations must be made.
Third, retrospective confirmation of the total amount of the debt, when it is not clear to what extent there was a decrease in the details of the calculation that underlie it, which themselves are not so clear (see Appendices 2 and 4 to the affidavit of Boaz Barzili on behalf of the lenders), is not equivalent to a clear statement by the class committee that the defendants' calculations in relation to each and every sum are consistent with the agreements between the parties.
- I will therefore turn to the calculation of the amounts of the debt. I will address the provisions of the agreements, the provisions of the Fair Credit Law, and the calculations made by the expert on behalf of the court. This was done with reference to the plaintiffs' claims regarding the implications of the law, and to the defendants' claims regarding the expert's calculations.
E(2)(1) The interest on the loan given by virtue of the first agreement
- As stated in the paragraph 6 above, in the first agreement and in the amending addendum, it was agreed that the lending company would provide the plaintiffs with a loan in the amount of NIS 628,168, for a period of about three months; that the interest rate on it will be at an annual rate of 15% (clauses 4.3-4.2 of the Agreement); and that if the amount is not paid on the set date (June 30, 2015), will apply Arrears interest at an annual rate of 20% and Compensation in the amount of NIS 100,000 (Clauses 5.1, 7.2.1 and 7.3 of the Agreement).
- The plaintiffs claim that this agreement is subject to the interest limits set out in the Fair Credit Law, which are cogent. In their summaries, the defendants did not address this claim, and did not explain why it should not be accepted.[11] Therefore, the interest rates set out in the agreement, including the arrears interest, are subject to the limitations set out in sections 5-6 of the Law.
- The expert opinion on behalf of the court showed that the interest rates set in the first agreement significantly exceeded the permitted rates. In any case, the balance of the total debt for the loan by virtue of the first agreement must be calculated in accordance with the provisions of the law, as calculated by the expert.[12]
E(2)(2) The loan given by virtue of the second agreement: attribution of the amounts to its various parts and the interest rates thereon
- As already stated in the paragraph 7 Above, in the second agreement, the members of the group were provided with a loan consisting of three parts: two designated parts in the amount of NIS 300,000 each; and a third part, which included two "phases" (as the agreement put it) – the first phase of a "credit facility" and costs for the purpose of establishing the venture until the completion of the skeleton, and the second phase of additional loans from the end of the skeleton to the completion of the venture, in the event that after the completion of the skeleton no alternative financing is obtained. The interest rate for the first tranche of the third tranche was set at a fixed sum of NIS 2,700,000, and the rest of the interest rates were detailed above and will be discussed below.
- The plaintiffs do not dispute that in view of the total amount of the loan, the interest limits set in the Fair Credit Law do not apply to it (see section 15(b) of the Law).[13] However, according to the plaintiffs, there is a material lack of clarity in the provisions of the second agreement regarding the interest in the amount of NIS 2,700,000, and therefore the lender should be considered as having breached the duty to disclose the interest rate under section 3(b) of the Law. The plaintiffs claim that the remedy for this is to reduce the interest rate from the same amount specified for interest by 7%, by virtue of section 9 of the Law (see the plaintiffs' summaries on page 5 of the transcript of the hearing of September 18, 2025).
- In my opinion, the argument should not be accepted.
Section 3(b) The Fair Credit Law does indeed stipulate various details that the contract must include "full disclosure", including "the interest rate, in relation to the amount of the loan, in an annual calculation that also takes into account compound interest, in accordance with the dates of repayment of the loan".