Precedent Conviction of a Lawyer for Assisting Parties to a Restrictive Arrangement
It is the first case in which lawyers were accused for assisting parties to a restrictive arrangement. One of the lawyers was sentenced for two months of actual imprisonment to be implemented in community service and 50,000 NIS fine.
Along the years, in several criminal investigations handled by the Israeli Antitrust Authority, lawyers were investigated both as witnesses and as suspects, for their part in cartel cases. In certain cases, the suspects argued that they have relied on a lawyer’s legal advice and claimed for their innocence.
On October 2009 the IAA criminal investigation against water meters companies and their officers was exposed; some of the superior suspects were arrested for several days, for the first time in antitrust cases in Israel. Two years later, on December 2011, an indictment was submitted to court against six companies and seventeen of their superior officers, accusing them in twenty two different cartel agreements starting from 2004 and until 2009. In one of those cartels, two lawyers were also accused, as assistants to the felony.
The water meters case is probably the most severe cartel case that was brought in front of a court in Israel. The parties were accused of being parties to more than twenty restrictive arrangements during more than five years. Two of the companies were also accused for breaching conditions imposed by the Israeli Commissioner in a merger between them, a few years ago.
Those two lawyers were accused for assisting two of the accused companies in drafting, achieving and enforcing a restrictive arrangement between them in 2006 regarding two tenders published by two major municipalities. According to the indictment, one of the companies did not object to the other company’s win in one tender and in consideration, the second company agreed not to compete against the first company in another specific future tender. The convicted lawyer himself also held a security check of 150,000 NIS in order to ensure the fulfilment of the agreement.
As a matter of fact, the said lawyer admitted the accusation against him at the very beginning of the trial and his case was separated from the other accused. He argued that he shouldn’t be convicted, under a specific article in the Israeli penal law that allows the court to avoid conviction in certain cases. Along the years, the courts interpreted this article and the legal test to be implicated is (i) that the conviction will severely harm the rehabilitation of the accused and (ii) that the type of the felony allows in the specific circumstances of the case, to avoid conviction without significantly harm other punishment considerations.
On mid-August 2014, the District court of Jerusalem dismissed the lawyer’s application to avoid his conviction, despite good impression it had. The court held, in its decision that people that are in the central intersections of decision making that might influence the whole public, especially lawyers that are trusted of obeying the law and that have the possibility to provide legal advice that should prevent those felonies, are expected to keep a higher level of personal and moral standard than the rest of the population. Thus, in order to preserve the important value of fair and free competition. The court also held that the Israeli Supreme Court guidance is that antitrust felonies should be severely punished, but also that the level of punishment should be increased gradually.
At the end of the day, the court imposed on the lawyer two months of actual imprisonment to be implemented in community service and additional fine of 50,000 NIS.
The lawyer appealed to the Supreme Court against the decision to convict him and against the punishment imposed on him. The appeal was not decided yet.
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Ziv Abramovich, Lapidot, Melchior, Abramovich & Co., Jerusalem & Tel Aviv
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