Anyone wishing to survey and evaluate the principal developments in Israeli labour law since the establishment of the State must relate both to the whole range of labour legislation, including legislation in the area of social security, and to the case law which has grown up alongside this legislation, which has interpreted it, and has completed and developed norms lacking in the legislation.

Labour legislation in Israel, particularly in its initial stages, as Prof. Raday mentioned, was the outcome of a planned initiative. The legislation was designed to express the political and social independence of the State, to adopt the accepted international norms in this area, and to integrate Israel into the international community.

A reform of any body of law necessitates adopting new legal groundrules designed to improve the current situation. A reform is judged significant when the new rules have a major impact on society's daily life. In this respect, the last major reform in corporation law did not take place in the last forty years at all, but rather some 140 years ago, upon the implementation of the “limited liability” concept in England.

In the first chapter, I analyze the term “significant reform” in the context of corporation law. I clarify why the concept of limited liability can be characterized as such a reform. In addition, we will note several other legal subjects that could have been construed as significant reforms.

The principal thesis expressed by Professor Procaccia is that when establishing rules, their economic and political significance should be considered. Accordingly, the agency problem would be solved by developing a collective enforcement mechanism (the derivative action), and by creating rules that would enable the market for corporate control to function. Under his system, it is unimportant which specific rules of liability are set by the legislature since, in any case, the market mechanism will correct the rules. It is pointless, therefore, to “waste energy” on laying down primary principles of liability.

The author has made a valuable contribution in presenting new approaches and their consequences: the previous school, the economic analysis of law, and the new school, critical legal studies. However, when he applies the implications of analysis in terms of these new concepts to corporation law in Israel, Prof. Procaccia fails to examine the question of the relevance and applicability of the models. The economic analysis of law model becomes irrelevant when the market fails. In such a case, the market mechanism does not work to correct the primary rules.

In order to determine what major developments have taken place in tax law in Israel over the last 40 years, it is first necessary to formulate criteria with which to estimate the importance or centrality of changes in tax legislation. The emphasis here is on legal developments (in legislation and case law) rather than on changes in the tax system and tax policy. In the field of taxation, legal, economic and social questions are, however, interlinked; and it is moreover, a legal tool — legislation — that determines the tax system and its composition of various tax bases.

1.1 No discussion has taken place at governmental level about long-term taxation policy, the distribution of the tax burden, whether to distribute it between direct and indirect tax, or about the problems of tax incentives.

1.2 The absence of a central tax authority, together with the neutralization of, and the erosion in, the standing of the department for state income, has led to the existence of three systems - income tax, customs and value added tax, and national insurance. National insurance lost its uniqueness a long time ago and has become, perhaps unknowingly, a fiscal, financial instrument, something that was never coordinated, at a national level, with the other tax systems.

1.3 The lack of an integrated, comprehensive taxation concept has meant the existence of different tax laws, and a variety of contradictory definitions. These laws create contradictions, and provide a multitude of weird sources of tax planning, methods of assessment, collection, and enforcement.

One may ask what changes have occurred in Israeli civil procedure in the 40 years of the existence of the State. The answer is clear—almost none. This is true as to both of the major concerns of civil procedure, i.e., (a) the conduct of the proceedings pursuant to the rules of civil procedure, and (b) the court structure and allocation of jurisdiction among the different courts.

Of course there have been some changes in the last 40 years. Regarding the Rules of Civil Procedure one can point to changes such as the expansion of the use of summary process and originating summons, along with the abolition of the docket preference given to summary process proceedings after a right to defend has been granted; the adoption of the American pre-trial conference proceeding; important developments as to linkage differentials and interest that are added to money judgments; and expansion of third-party practice proceedings.

The central proposals of the Advisory Committee on Civil Procedure cover five areas: the use of affidavits in the support of pleas; witness lists; document lists; alternative pleas; and a redefinition of causes of action. I have reservations about the Committee's proposals both on grounds of principle and on specific grounds.

(a) The committee's proposals assume that a substantial number of the judicial system's deficiencies are a result of faulty rules of civil procedure. These faults allow litigants to play games of “hide-and-seek” and to conceal the truth, and they hinder an examination of the issues actually in dispute. The committee's approach is a very naive one; in reality, efficient judges who make proper use of the existing rules have no difficulty in conducting a proper hearing of the disputes brought before them.