The matter of all the members of the group will be represented and managed in an appropriate manner and in good faith
- In this issue, we must consider the question of whether the plaintiff himself and his counsel have the required skills to act with the proper degree of professionalism, seriousness and diligence and to conduct the claim efficiently and fairly. In Parashat Tetz Determined by the President Lightning that the condition regarding the existence of good faith "is not fulfilled if the class action was filed out of improper motives, such as harm to a competing company or a desire to 'blackmail' a settlement. It seems to us that the class plaintiff's sophistication does not, in and of itself, harm his good faith. A class plaintiff may sue in good faith, whether he is a sophisticated investor or not."Name, at p. 788).
In the present case, we did not find, and it was not even argued before us, that the claim was filed for improper considerations. The appellants are institutional entities that held (for the public) the shares of Elsynt. As a rule, institutional investors are appropriate and worthy class plaintiffs (see, the judge's judgment A. Grosskopf IIClass Action 14144-05-09 Apex Underwriting & Management of Offerings inTax Appeal v. Harel Fund ManagementTax Appeal ([Published in Nevo]October 3, 2010) and the references there in paragraph 15). Institutional investors have the resources and knowledge required to manage the class action. In addition, the advantage of institutional investors lies in the long-term interest they have in the capital market and its proper conduct, which encourages them to choose the legal proceedings they conduct and to compromise only in appropriate cases and conditions. The U.S. Court emphasized the advantages of institutional investors in managing class actions in the field of securities, in the following words:
“… institutional investors… have fiduciary responsibility to the very investors whom the securities class action is designed primarily to help. The ability of the class action device to give redress to investors with losses too small to justify individual litigation has long been one of the main justifications for the use of class actions in Rule 10b-5 cases... Institutional investors… which is responsible for investing the money of state workers, represent precisely this type of interest" (In re California Micro Devices Sec. Litig., 168 F.R.D. 257, 275 (N.D. Cal. 1996)).