A similar provision is found in clause 13 of the representation agreement, which states that "I am aware of and agree that your firm represents and will continue to represent the manager/marketer and that in the event of a dispute between us and the manager/marketer, your firm will represent the manager/marketer and I/and I waive in advance any claim and/or demand and/or claim against you regarding such representation."
Attention is drawn to the fact that the latter provision includes a waiver by the class members of raising arguments in the matter, and hence if it is valid, this component of the claim should be dismissed.
- Indeed, it is possible to understand the complexity that Adv. Nof and Adv. Aharonson find themselves in. On the one hand, they were exposed to Ms. Or's demand to advance payment. This was justified by her desire to advance the project's affairs. This is the organizer of the group, who is a strong and influential figure. The lawyers who came out against it may lose their place, and even if they are not in this project, in other projects. On the other hand, they are also obligated to have fiduciary duties towards the members of the group themselves, and these duties are given especially considerable weight when it comes to purchasing groups.
The dilemma becomes acute when it was clear that Ms. Or's demand contradicted the contractual system, and there was no room for it. The defendants admitted in their affidavits (paragraphs 277 and 284) that the sale agreement was clear at this point, and therefore it was clear to them in real time that Ms. Or's demand was unlawful, and put the money of its payers at risk, which deviates from the division of risks that was determined in the contracts with them. Adv. Nof admitted in this matter in his cross-examination that Ms. Or's demand was "wrong" (p. 750, S. 28), although its intention was to assist the project, by increasing the group's budget.
- I am of the opinion that Adv. Nof, as well as Adv. Aharonson, did not act in this matter in subjective bad faith. They did not act out of malice or with the intention of harming the members of the group, God forbid. They thought they were doing well, given the contractual constraints to which they were subject. So they walked between the hammer and the anvil. They did not come out against the group's organizer, but directed those who approached them to read the agreements, in which the clear answer is found. However, the subjective belief does not exempt from liability, where it is justified to impose it in the face of a breach of fiduciary duties, or in the face of negligence.
Against this background, the main question that arises is whether the contractual stipulation - which obligates the lawyers to represent the case of the group organizer, in the event of a conflict with the group members - can serve as a shield against the imposition of liability that the plaintiffs seek to impose on them.
- In my opinion, such contractual provisions cannot be met, in the context of the purchasing groups. They contradict public policy, and are contrary to the provisions of section 30 of the Contracts Law. And while they are invalid, they could not be relied upon in the past and not now in an attempt to refute the plaintiffs' claims.
As you may recall, the members of the purchasing group are vulnerable. One of the factors that balance their weakness is the fiduciary duties imposed on them by the group organizer, as well as by the lawyer who provides its services. The lawyer owes them fiduciary duties that go beyond the concrete obligations specified in the agreements between the parties.