Charities’ legal battle costing over £2 million
SAMUEL HAYEK, the chairman of Keren Kayemeth Le’Israel’s new UK branch, this week revealed that the cost of its two-year-old legal dispute with its former British associate, JNF UK, has run into millions — even before next year’s scheduled High Court trial.
Mr Hayek said that he and his recently appointed board “were horrified to learn that the estimated cost to date, for our side alone for the legal action, is approximately £2 million before the substantial costs of the trial. We assume that JNF have accumulated a similar cost.”
The conflict began in October 2005 when KKL, the international Zionist agency which supports land and water projects in Israel, announced it was splitting from JNF UK and planning its own British branch.
A month later, JNF UK launched a High Court action to stop KKL from using the names “JNF” or “Jewish National Fund” to fundraise in Britain but suspended it during attempts to reach an out-of-court settlement.
If the two sides fail to reach agreement, they are due to return to court in February — and the loser could face costs of many millions.
Mr Hayek added: “We are desperate to settle this dispute. It is deeply regrettable that we have been forced to defend ourselves in this action, thereby diverting our resources and finances from important community and charitable causes.”
But a JNF spokesman hit back, saying: “If they are so desperate to settle, why not pick up the phone to the JNF UK president and ask to meet?
“One should remember who initiated the problem in the first place. KKL advertised that they had publicly expelled JNF from the KKL family.”
He said that JNF’s legal costs were “nowhere near” KKL’s: “Every penny is covered by a donor who has ringfenced the money in excess of his already considerable support for JNF projects.”
As for KKL’s £2 million figure, he commented: “That’s what happens when you go to the most expensive firm of lawyers in the country.
“One must remember that KKL spent approximately £500,000 on a vicious newspaper advertising campaign against JNF. This profligacy and unaccountability is symptomatic of the way in which KKL handled JNF Charitable Trust’s money, which was the root cause of the dispute.”
KKL has used solicitors Herbert Smith, while JNF has engaged the services of Mishcon de Reya.
A KKL spokesman said that further talks to resolve the dispute had been scheduled but challenged JNF to disclose its legal bill.
The JNF spokesman said the organisation “remains willing to settle on any terms that protect the integrity of our charity”.