The distinction between the two tracks revolves around the difference in the relationship between each of the tracks and the principle of the company's separate legal personality. Thus, lifting the veil is essentially a disregard for this principle, whereas in the path of imposing personal tort liability, the circle of rivalries is expanded without prejudice to the principle of separate legal personality (see Civil Appeal 8133/03 Oded Yitzhak v. Lotem Marketing in Tax Appeal, 59 (3) 66 (October 27, 2004); Civil Appeal 9916/02 Ben Ma'ash Aharon v. Shulder Debtor to Construction in Tax Appeal [Nevo] (5/2/04) (hereinafter: "Ben Ma'ash Judgment"); A. Habib-Segal Corporate Law after the New Companies Law (Vol. 1) on page 275). Taking into account this distinction - i.e., the fact that lifting the veil is capable of violating the principle of separation of entities between the company and its shareholder - it was noted in the case law that the use of the veil-lifting remedy will be reserved only for those extreme cases, and it is even more limited and problematic than the use of the severe remedies in themselves of a personal claim against a controlling shareholder (under section 54 of the Companies Law). This is despite the fact that, as I noted earlier, sometimes the result, in practice, may be similar, i.e., charging a controlling shareholder or a former manager to pay the company's debts or some of them, but the way of reaching it has a different meaning (Chapter (Haifa) 718/07 Yeshayahu Ivy v. Official Receiver Haifa District [Nevo] (30/12/12) at paragraph 53 and the references therein).
In addition, a distinction must be made between the two tracks in view of their different purpose. Thus, the purpose of lifting the veil is to prevent abuse of the company's separate legal personality, while the purpose of imposing personal liability is to expand the circle of rivalries to all those who are harmed, including a manager whose actions have personally caused damage. In this regard, the rulings of the Honorable President (ret.) Justice Shamgar Other Municipality Applications 407/89 Zuk Or in a Tax Appeal v. Car Security Ltd., IsrSC 48 (5) 661 (hereinafter: "the Tzuk Or case"), in paragraph 27 of the judgment: