Cost-Benefit Analysis of Class Actions: An Israeli Perspective

We propose an analytical framework for evaluating the effectiveness of class actions, in which their costs are estimated against the benefits they produce in attaining three objectives: law enforcement and deterrence; access to courts; and compensation. We outline parameters for measuring the social costs and benefits relevant to these objectives and evaluate them for Israeli class actions, based on original data including all class actions filed between 2006 and 2012 (n = 2,056). Findings indicate that class actions did not substantially facilitate access to courts and compensation, and that they had limited success in realizing law enforcement and deterrence.