ISRAEL Law and Practice Contributed by: Yitzhak Yaari, Chen, Yaari, Vaki & Co.
er person on behalf of the client and which have an objective connection to the professional service pro - vided by the lawyer to the client.” This is an absolute privilege, which cannot be set aside even by a court order, but it does not extend to a lawyer’s advice to their client on how to commit a future offence. Such advice has no objective connection to the professional service provided by a lawyer to the client and is not included at all in the scope of the privilege (in the words of the Supreme Court in CrimA 670/80 Baruch Abuhatzeira v State of Israel : “This is a purely criminal and illegal matter, which is very far from what the leg - islature intended to protect by means of the privilege between a client and a lawyer and his employees”). Certainly, an agreement between a lawyer and their client for the two of them to commit a criminal offence is unrelated to professional services and is not privi - leged. Information that a client gives to their lawyer about their intentions and plans to commit an offence in the future is also not privileged information. Moreo - ver, if a client tells a lawyer of their intention to commit a felony, and the lawyer does not prevent the commis - sion of the offence, they commit a criminal offence. 7. Special Rules and Laws 7.1 Rules for Claiming Punitive or Exemplary Damages The rule is that a person is only liable to pay com - pensation for the damage they caused. However, there are some specific laws in Israel that give explicit authority to award punitive (or exemplary) damages, ie, compensation that does not have a “remedial” or “corrective” basis but punishes the tortfeasor by requiring them to pay compensation that exceeds the amount of the damage. Thus, for example, the Patent Law entitles the patent owner to punitive damages if the patent was infringed after the infringer was warned of the infringement. The Compensation for Victims of Terrorism (Punitive Damages) Law entitles the heirs of a victim of terrorism to compensation in a sum of NIS10 million, in addition to any other damages awarded, from someone who transferred money to the perpetrator of the terrorist act. The Consumer Protec - tion Law entitles the consumer to punitive damages in a sum of NIS10,000 if the dealer breaches certain consumer obligations.
Moreover, as early as the 1950s, the courts in Israel recognised the possibility of ordering a tortfeasor to pay punitive damages, even without an express provi - sion of statute to this effect. This power is exercised in rare cases involving a particularly severe injury, accompanied by a high degree of fault, when the tortfeasor’s behaviour is abhorrent and reprehensible. Fraud or forgery are obvious cases that satisfy these conditions and in which courts have awarded punitive damages. 7.2 Laws to Protect “Banking Secrecy” A bank owes its customers a duty of confidentiality, according to which it is prohibited from disclosing information about customers to third parties. A dis - tinction should be made between bank confidentiality, which applies outside legal proceedings, and banking privilege, which relates to legal proceedings. This priv - ilege is not determined by statute, but is the product of case law, and it is therefore a relative privilege, ie, it can be removed in certain conditions. The privilege, which also applies after the death of the account hold - er, derives from the contractual duty of confidential - ity that a bank owes its customer, together with the general statutory confidentiality provision determined in the Protection of Privacy Law. When it determines whether the privilege should be removed, the court will strike a balance between the following considerations: • the importance of the information to deciding the dispute; • the existence of evidence that justifies the disclo - sure; • the lack of alternative that will not invade privacy; and • the scope of the disclosure needed to do justice. When the confidential banking information relates to a party (to the legal proceeding), the starting point is that the interest of disclosure, which is required to hold a proper judicial proceeding, outweighs the pri - vacy interest of the party. This is certainly the case when there are claims of fraud. By contrast, when the protected information belongs to a third party who is not a party to the proceed -
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