At the same time, it should be clarified that the existence of a deterrent interest does not, in and of itself, justify granting a "right of standing" to one side or the other, only to ensure the enforcement of proper standards of conduct. Thus, for example, when it comes to a public authority in which one of its officials caused damage (for example, a municipality from which the mayor stole money), private citizens apparently do not have the right to file a "derivative claim" and demand compensation or restitution for such damage in the name of the authority. Similarly, it is not possible for a private person to file a class action even if there is a class that has been injured and has a cause of action, if the class plaintiff is not a member of the class himself (subject to exceptions).
This is also true with regard to the mechanism of the derivative claim, the filing of which is subject to various legal restrictions, inter alia with regard to the identity of those entitled to file it and with regard to the preliminary conditions that the claim must meet in order to be clarified before the court.
- The institution of derivative action therefore seeks to create a balance between considerations of law enforcement, deterrence against its breach and protection of the company's property interests (and indirectly – protection of the property interests of its shareholders, and sometimes of its creditors) – and the protection of the principles of separate legal personality and non-intervention, and safeguarding the company's interest in having claims on its behalf be made clear only if they are in its favor.
Once we have discussed the purposes and incentives underlying the granting of the right to file a derivative claim that justify a deviation from the principle of non-intervention – we will examine their application to associations in general, and to the Football Association, with its special characteristics, in particular.
The Property Interest in the Association
- As stated, in the case of a commercial company, the derivative claim serves the purpose of protecting the company's property interest, and as a result, protecting the property interest of its shareholders (and sometimes of creditors). In light of the differences between commercial companies and non-profit organizations, two questions therefore arise: first, whether the association has a property interest; and the second – whether the members of the association have a property interest in it.
- Regarding the property interest of the Association, it should be clarified that the Association is an association, and it is also "התאחדות" or "Sports Association" as defined in the Sports Law. Section 1 The Associations Law states that "Two or more persons, who are adults, who wish to incorporate as a corporation for a legal purpose that is not intended to divide profits among its members and that its main purpose is not to make profits, may establish an association"; Section 1 (the definitions section) of the Sports Law states that "'Association' and 'Union', for the purpose of sports - Non-profit corporation, which centers and represents a sport or branches in Israel and is recognized by the international bodies that represent and recognize that sport" (My emphases, R.R.). In other words, the association is a corporation whose purpose (or at least, its main purpose) is not to make a profit.
However, the fact that the Association operates for non-profit does not, of course, mean that it has no property interest in receiving funds due to it or in increasing its assets. Indeed, the main purpose for which the Association was established and for which it works to promote it is "the development, concentration and management of the football industry in Israel" (see section 2(a) of the Association's Basic Regulations). In order to achieve this goal, the association needs financial resources. Increasing the financial resources available to the Association, including compensation in the event of financial damage to it, will improve its ability to realize its goals, first and foremost the goal of developing, centralizing and managing Israeli football. Therefore, the association has a property interest, and the purpose of protecting this interest also exists in relation to it.
- With regard to the property interest of the members of the corporation, it should be noted that in accordance with the Association's Articles of Association, "members of the Association" are the adult soccer teams that participate in the games managed by it (see, for example, Chapter 4 of the Association's Articles of Association, entitled "Accepting new members to the association"; Yes, Rabbi Assaf Harel: "A dual body like a handiwork of the legislature in the mirror Sports Law, תשמ"ח-1988" Legal Proceedings T 419, 436 (2011) (hereinafter: "Harel - The Sports Law")). Football teams are "sports associations", which are "A member of persons engaged in a particular sport or disciplines and is affiliated with a sports organization or operates as an independent corporation" (the definition In Section 1 to the Sports Law).
Usually the members of an association do not have a property interest in it, for two main reasons. First, the realization of the association's goals usually benefits its beneficiaries, while these beneficiaries are not necessarily members of the association; Second, the manner in which the beneficiaries of the association benefit from the realization of its purpose is not necessarily property.