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Daphna Klein
Adv. Daphna Klein

Electra City Tower
58 Harakevet St.
Tel Aviv

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Daphna Klein

Daphna is extensively experienced in representing both Israeli and international companies in complex and high-profile litigation proceedings. She has acted for clients before the district courts, the Supreme Court, and during mediation and arbitration proceedings.

Daphna represents companies in class actions, administrative proceedings, and other complex commercial litigation. She has also served as counsel in legal disputes related to distribution and development agreements. This includes the enforcement of such agreements, corporate proxy battles, civil pecuniary suits, shareholder disputes, lawsuits against contractors, real estate disputes, etc.


Daphna represents local and international corporations in contractual and commercial disputes regarding large-scale projects. She has also acted in suits against end-users, subcontractors, and others.


Daphna routinely serves as counsel for clients before Israel’s various courts. She is well-versed in handling summary proceedings (such as ex parte injunctions and foreclosures) related to intellectual property, commercial secrets, antitrust, torts issues, and unlawful enrichment.


Bar Ilan University,LL.B, 2007


Member of Israel Bar Association since 2008

News and updates - Daphna Klein:

June 13, 2019

Supreme Court: A Service Text Message Is Not a Violation of the Spam Law

The Supreme Court recently ruled on the issue of whether sending a text message in the course of customer service constitutes a violation of the Spam Law.

May 13, 2019

Advertising Message or Informational Content? - How Israeli Courts Interpret the “Spam Law”

More and more people have begun filing claims on the grounds of violations of the “Spam Law.” Israeli courts, for their part, are conveying an encouraging message to consumers in their latest rulings: they are awarding significant compensation and are certifying class actions against advertising companies and also against officers.


The purpose of the “Spam Law” (as defined in section 30.A. of the Israeli Communications Law) is to create a proper balance between protecting users’ privacy and allowing the legitimate commercial use of users’ addresses for direct marketing purposes.


Within this context, Israeli courts have ruled that in order for a message to constitute “an advertisement” its main objective must be analyzed. An “advertisement” is defined as “a commercially distributed message, the purpose of which is to encourage the purchase of a product or service, or to otherwise encourage the spending of money, or a message distributed to the general public, the purpose of which is to ask for donations or disseminate publicity.”


In essence, the courts are examining the question of whether the objective of the message is to advertise a product or service and encourage consumers to purchase or provide service-related information. The potential infringement of privacy is clear when the objective of the message is to encourage the purchase of a product or service. But how should the court rule on the dissemination of a message if its main objective is to provide informational content?


In the United States, the law creates a clear distinction between commercial-marketing advertisements and the publication of company-customer relationship content, technical support content, and post-purchase transactional content. The US law "Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act," which came into effect in 2003 and has been amended several times since then, allows the sending of email and other messages as long as the essence of the content is service-oriented. For example, the US law allows a message to be sent that includes information about the shipment of an ordered product, or that provides an update about the expiration of an insurance policy, even if an “accompanying message” is attached that proposes the purchase of a related product or renewal of the policy.


Israeli law also does not prohibit the publicizing of services if the purpose is the provision of service to the addressee, even if such publicizing also includes an indirect economic interest. For example, the motion to certify a class action against AIG Israel Insurance Company Ltd. revolved around the fact that the SMS advising of a policy expiration included an accompanying proposal to purchase a policy. The court emphatically ruled that since the main objective of the notice sent was service-oriented, this did not constitute an “advertisement” (Cohen Halala et al vs. AIG Israel Insurance Company Ltd., 29.6.2014). In the end, the motion to certify a class action was dismissed consensually, at the court’s recommendation, on the grounds that at issue was a “combined message” that does not meet the definition of an advertisement.


Nevertheless, this case was on the borderline, i.e. the “grey zone,” between an advertisement and service-related information.


Other similar instances of the courts deliberating messages that included both informational content and an advertisement produced the opposite ruling. In these cases, the courts applied the rule whereby if the purpose of a message is to indirectly encourage the spending of money and the purchase of products and services, then it meets the criteria for inclusion under the provisions of the “Spam Law.”


For example, Psagot Investment House sent messages to its customers that included a link to free courses, which, according to Psagot, served the purpose of educating customers about proper financial management. In this case, the court ruled that one of the objectives of the message was to expose the addressees to products and services Psagot offers, in order to attract new customers or encourage existing customers to purchase additional services. Therefore at issue was an advertisement (Ziv Glasberg vs. Psagot Investment House Ltd., 9.5.2017). In this instance, the court certified the filing of a class action and this proceeding is still underway.


Furthermore, in other recent proceedings, the courts have ruled that even a message that includes, for example, an invitation to a lecture or conference or, in particular instances, a message that contains holiday greetings is liable to be deemed an advertisement.


The question being examined in each case on its merits is whether the objective of the message is to induce the public included in the mailing list to purchase products or services (even if at issue is a future purchase).


It appears the courts’ interpretive approach has become more stringent over time, and they are including more and more types of messages under the definition of “advertisement.” Consequently, even if the message sent to customers is not explicitly an advertisement, there is reasonable concern that the court may define it as such. This would thus trigger the imposition of related obligations, mainly the obligation to obtain consent in advance of the sending of messages (which may be particularly laborious).


Source: barlaw.co.il

October 14, 2018

Officers’ Liability in “Spam” Lawsuits

It is not common knowledge that officers of companies who customarily disseminate advertising messages in a manner that constitutes a violation of the Israeli Anti-Spam Law are personally exposed to lawsuits, even to class actions at millions of shekels. This exposure increases substantially when these officers are the sole shareholders or directors of the company, or are personally responsible for disseminating the unlawful advertisements.


Recently, courts of all instances have ruled that there is no obstacle to suing officers of a company who commit violations of the Anti-Spam Law. The courts further note that doing so serves an important purpose - i.e. the principle of deterrence - despite the fact that forcing a private individual to pay compensation may be extremely hard on that officer and his/her family.


An officer of a company can be held personally liable in several ways. The first is the possibility the court will order a lifting of the corporate veil and attribute the company’s liabilities to its officers. This involves a very complex proceeding that is difficult to prove, in which the plaintiff must demonstrate to the court that the use of the company's separate legal identity was done with fraudulent objectives, etc.


The second is by virtue of Section 30.A(h) of the Anti-Spam Law. This section prescribes that if the corporation violated provisions of the law, it shall be assumed that the manager also committed the violation, unless it is explicitly proven that the manager did everything possible to fulfill his/her legal obligation.


According to the wording of the law, this presumption applies only in the instance of a criminal proceeding, but there are still differing opinions about whether it may also be extended to civil proceedings. In other words, it must be proven that the officer was personally involved in disseminating the advertisement, or personally issued instructions to others to disseminate the advertisement.


Currently, the courts are becoming more and more vigorous in their examinations of officers’ conduct, and are slightly shifting the burden of proof in this context.


The third way is the direct way, in which the manager’s personal liability is proven. In such instance, in order to impose personal liability on an officer in respect of a violation of Section 30.A of the law (and not by way of lifting the corporate veil), the officer himself must be deemed to have been the party who disseminated the advertisement without having received prior consent from the recipients.


As stated, the courts have been petitioned numerous times recently to decide in what way and to what extent it would be right and equitable to impose personal liability on company managers, and through which of the aforesaid ways.


The Israeli Supreme Court, which deliberated the issue of the liabilities of the companies Mega Advanced Mathematical System, Lotonet, and New Sport, and their owners, took up the question of the liabilities of these corporations’ officers pursuant to the Anti-Spam Law. The court ruled that it suffices that the officers are the sole shareholders and directors of the companies under their control for it to establish a reasonable likelihood that they bear personal liability as parties who were actually involved in the commission of the violations. It was further ruled in the same judgment that it is reasonably likely that it will not be necessary to lift the corporate veil in order to impose personal liability on the officers, since their actions were intended to promote the businesses of the corporations employing them.


Considering the aforesaid judicial atmosphere, the courts today are examining whether an officer took reasonable measures to prevent the dissemination of unlawful advertisements. This scrutiny is particularly meticulous when the officer being sued is the owner, the CEO, or the person who was personally involved in engaging with the various advertisers and benefited from the advertising.


The presumption whereby if the company committed a violation of the provisions of the Anti-Spam Law then its manager is also “guilty until proven innocent,” and the broad interpretation that the courts are employing when examining the manager’s personal liability, are greatly expanding the scope of the liability usually attributed to an officer. This requires every relevant officer to show that he/she took active measures to comply with the provisions of the Anti-Spam Law.


Accordingly, more and more courts are ruling that there is cause of action against an officer when at issue is a violation of the Anti-Spam Law. This has received expression in civil suits (from small claims to wide-scale actions) and in the certification of class actions (at sums of millions of shekels). Consequently, the argument that a manager has no connection to the matter of disseminating advertisements, but rather only the company as a separate legal entity, is unlikely to be upheld in suits of this kind.


Source: barlaw.co.il

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