Background
The Israel Institute of Certified Public Accountants petitioned the High Court of Justice to require the Minister of Justice and the Commissioner of Insolvency Proceedings and Economic Rehabilitation to explain why the Insolvency and Economic Rehabilitation Regulations (Rules for Forming a List of Trustees), 2021, should not be amended. The Institute argued that qualified accountants should have an equal and fair opportunity to serve as trustees in corporate insolvency and rehabilitation proceedings.
The regulations impose experience and examination requirements for admission to trustee lists and define qualifying insolvency experience differently for lawyers and accountants. They were published in January 2021 after proceedings before the Knesset Constitution, Law and Justice Committee in which the Institute participated. The first trustee list, which included dozens of accountants, was completed in January 2022 and was due to expire on December 31, 2026. The Institute filed its petition while a second public committee was preparing the replacement list and also sought an interim order freezing that committee’s work.
The Institute claimed that the requirements disproportionately restricted its members’ freedom of occupation, dignity, and equality, and unjustifiably favored lawyers. The respondents sought summary dismissal, emphasizing the unexplained delay of almost six years, the disruption that relief could cause to the committee and hundreds of applicants, and the Institute’s prior participation in the regulations’ development.
The Court’s Holding
The Court unanimously dismissed the petition in limine, principally because of laches. Justice Gila Canfy-Steinitz explained that subjective delay was especially pronounced: the Institute had known the relevant legal and factual circumstances from the outset, had participated in the legislative committee’s deliberations, and had a representative on the first public trustee-selection committee, yet offered no explanation for waiting nearly six years to challenge the regulations.
The Court also found objective delay because granting relief could affect the ongoing selection process, the applicants participating in it, and the urgent preparation of a new list before the existing list expired. No overriding rule-of-law concern justified hearing the late petition on the merits.
Independently, the Institute’s constitutional and equality claims were too general and unsupported. It supplied no data identifying affected members, their professional characteristics, the nature of the alleged harm, or why the prescribed experience requirements were unnecessarily stringent. Given the exceptional relief requested—judicial intervention in subordinate legislation approved by a Knesset committee—the Institute had not shown a fundamental defect or extreme unreasonableness warranting review. The Court consequently denied the interim-relief application and ordered the Institute to pay the respondents NIS 5,000 in costs.
Key Takeaways
- An unexplained delay of nearly six years can bar a challenge to subordinate legislation, particularly when the petitioner knew of and participated in the rulemaking process.
- A court may find objective laches when belated relief would disrupt an active appointment process, prejudice applicants, or jeopardize timely replacement of an expiring official list.
- General assertions of unequal treatment or disproportionate infringement are insufficient without concrete evidence identifying who was harmed, how they were harmed, and why less restrictive requirements would achieve the regulatory purpose.
Why It Matters
The decision leaves intact the experience and examination requirements governing admission of accountants and lawyers to Israel’s corporate-insolvency trustee lists. It also allows the second public committee to continue preparing the new list without the requested judicial freeze.
More broadly, the ruling underscores that professional associations must challenge regulations promptly and support rights-based objections with specific evidence. Prior involvement in the regulatory process, reliance by public bodies and applicants, and legislative-committee approval all make belated judicial intervention especially difficult to obtain.