Background
Israel’s Prompt Payment to Suppliers Law, enacted in 2017, generally requires government bodies to pay suppliers within specified periods. Section 12(c), however, excludes transactions between healthcare institutions and suppliers for services provided under the National Health Insurance Law. It authorizes—but does not expressly require—the ministers of economy, finance, and health, with the Knesset Economic Affairs Committee’s approval, to adopt regulations applying some or all of the payment deadlines to healthcare transactions.
The Federation of Israeli Chambers of Commerce petitioned in 2018 to compel the ministries to submit regulations to the committee. It argued that government representatives had committed during the legislative process to present an implementation framework and that continued inaction harmed smaller healthcare suppliers, which had to finance lengthy payment delays. Over several years, the government developed draft regulations backed by NIS 500 million, but the committee approved a substantially broader version estimated to cost NIS 3.9 billion. The ministers did not sign it because no funding source covered the additional cost. By July 2025, the government estimated that full implementation would require a one-time expenditure of approximately NIS 5.6 billion.
The Court’s Holding
The Court unanimously discharged the order nisi and dismissed the petition. President Isaac Amit held that no legally binding administrative promise had been made. The committee chair’s demand for a framework within three months received no affirmative response from government representatives, and the health minister’s later undertaking to bring “something” or the ministries’ “conclusions” to the committee was insufficiently definite. The health minister also lacked authority to act alone because Section 12(c) assigns the power jointly to three ministers and makes any regulations subject to committee approval.
The Court further held that Section 12(c) grants discretionary authority rather than imposing a duty to enact regulations. Its use of “may,” the legislative history, and the provision’s purpose showed that implementation was intended to depend on securing adequate funding without impairing essential healthcare services. Although discretionary authority must be reconsidered on relevant grounds, the ministers had repeatedly examined possible regulations and their reliance on unresolved, substantial budgetary consequences was not unreasonable in the exceptional sense required for judicial intervention. The asserted effects on occupational freedom and equality did not establish a violation of the core of either constitutional right.
The Court stressed that dismissal did not end the issue. The ministers must periodically reconsider whether circumstances require them to exercise the power, particularly during preparation of the next state budget, and should consider partial or phased implementation. The Knesset remains free to amend the statute to make regulations mandatory or eliminate the healthcare exemption. Despite dismissing the petition, the Court ordered the three government ministries to pay the petitioner NIS 25,000 in costs because the litigation had brought forward an important issue delayed for nearly a decade.
Key Takeaways
- A committee chair’s unaccepted demand and a minister’s vague statement that he would bring “something” to the committee did not create an enforceable administrative promise.
- Section 12(c)’s authorization to issue regulations is discretionary, and unresolved funding needs may legitimately weigh against exercising it where healthcare services could be harmed.
- Courts will compel delegated legislation only in exceptional circumstances, particularly when the decision implicates major economic and budgetary policy.
Why It Matters
The ruling leaves healthcare suppliers outside the Law’s general payment deadlines unless the government and the Knesset committee agree on funded regulations or the Knesset changes the statute. It also underscores that assurances made during legislative deliberations should be incorporated into statutory text if lawmakers intend them to be legally enforceable.
At the same time, the judgment does not give the government indefinite immunity from review. The increasing cost of implementation is a relevant factor the ministers must address in future budget planning, and continued inaction could require renewed examination if factual circumstances change.