CNN Business Correspondent On Judicial Reforms: Israel Is ‘Willingly Shooting Itself In Both Feet’

JERUSALEM (VINnews) — In a special interview with Israeli journalist Yonit Levy, CNN’s senior business correspondent Richard Quest claimed that the proposed judicial reforms in Israel will definitely have an effect on the local economy.

“You cannot tinker around, undermine the foundations of a country’s unwritten constitution, based on practice and history, and not expect to have a result. It’s as simple as that,” Quest said, adding that the effect would not necessarily be immediate but rather take place over time. “Over the next few weeks, the next few months, few years – that investment didn’t come here, that company or that factory or that start-up moved, and bit by bit by bit people will just evaporate away.”

הפרשן הבכיר @richardquest הביע זעזוע בריאיון מיוחד ל@LeviYonit: "למה שמרצונכם החופשי תירו לעצמכם בשתי הרגליים?"https://t.co/2UuNQxVOhy pic.twitter.com/am06VMxVYU

— החדשות – N12 (@N12News) March 13, 2023

“I was talking with one of the largest venture capital funds in this country, and they say: ‘We are already looking at whether we should invest elsewhere,’ ‘We are already considering this issue, we are not doing anything yet.’ Lots of people are not doing anything yet because they think that this thing isn’t going to pass, but there are people who are prepared to move and to do things,” said Quest.

“Many people say it’s a matter of democracy. That is the core – but there is also the core of judicial certainty. You need to know that if you sign a contract, if you make an investment, if you commit yourself, that the law tomorrow will not have perversely changed from the law today. And these laws being put forward will change that,” he claimedץ

Quest concluded that “The Israeli people have to basically say ‘Do we want to take that risk?’. He added: “Here’s a question for you: Why would you willingly shoot yourself in both feet? This is experts on global economics saying it.”

Dr. Aaron Lerner of the Independent Media Review Analysis (IMRA) challenged Quest’s claim that the reforms would cause companies to lose faith in Israel. The main cause of legal uncertainty, as Quest stated, is if the contract being signed will not be maintained in good faith. Yet this is the upshot of a 1995 ruling by then Supreme Court head Aharon Barak, who stated that “When interpreting a contract, one should study what the true and joint intention of the parties was without being limited to the expressions or terms which they used. In the conflict between the wording of a contract and the intention of its drafter, the position of the latter take precedence.”

Barak’s liberal interpretation of a contractual agreement led foreign investors in Israel to stipulate that disputes would be adjudicated in their own countries. This is because, thanks to the precedent setting ruling of Judge Barak, it is impossible to be certain if Israeli courts will rule on a business dispute based on the signed agreements associated with the business transaction.

Thus, far from discouraging investors, a judicial reform might change laws which had previously led them to mistrust the Israeli legal system.