Amendment no. 7 to the Civil Wrongs (Liability of State) Law, which was passed by the Knesset some eighteen months ago denies residents of the Occupied Territories, subjects of "enemy states" and activists in "terrorist organizations" the right to compensation for damages inflicted upon them by security forces, even outside the scope of wartime action (with minor exceptions). The amendment authorizes the Minister of Defense to declare any area within the Territories a "conflict zone," even if no actual fighting took place there. Such a declaration denies anyone who suffered damages in this area the right to claim compensation in a court of law. Moreover, the Law applies retroactively to damages incurred as of September 29, 2000 and to civil torts pending before the courts.
In the petition brought before the HCJ, the petitioners demanded amendment no. 7 to the Civil Wrongs Law be voided as it blatantly violates the fundamental principles of international humanitarian law and human rights law, as well as Israeli Basic Law: Human Dignity and Liberty. The amendment, the petitioners claimed, sends an extreme and alarming message that the lives and rights of victims who are residents of a "conflict zone" are worthless, that the courts will provide them no remedy and that their victimizers will go unpunished. The amended law is, therefore, immoral and racist. The provisions of this law, the petition goes on to claim, practically remove all monitoring of military action in the Occupied Territories. They encourage the military to avoid carrying out investigations and indicting those responsible for deaths and injuries, either maliciously or as a result of negligence, for torture and abuse, for looting and for the destruction of civilian property. Thus, the law violates the right to life, to bodily integrity, to equality and dignity, property rights and the constitutional right to access the courts. The harm is doubly severe, the petition emphasizes, since it sweepingly denies remedy for the violation of fundamental rights – a denial which is tantamount to denying the rights themselves.
In the judgment given on December 12, 2006, nine Supreme Court justices maintained that article 5c of Amendment no. 7 to the Civil Wrongs Law, which states that the State is not civilly liable for damages caused in a "conflict zone" as a result of the actions of its security forces, is unconstitutional and therefore void. The reasoning given was that the amendment it disproportionately violated the rights of Palestinian residents of the Territories to compensation for damages caused by security forces outside the scope of wartime action. "The exclusion of cases of damages where security forces are involved and which have no combative aspect," ruled President Barak, "does not serve the proper purpose of relieving the State from civil liability in conflict zones…" Barak goes on to rule that "sweeping immunity of the nature given to the State under article 5c of Amendment no. 7 amounts to relieving the State of civil liability with respect to expansive areas of actions which are not wartime actions, even under the broad definition of the term. It amounts to leaving many victims, who had not taken part in any sort of hostile activity and who were not harmed as a result of the actions of the security forces attempting to tackle any hostile activity, with no remedy for the harm inflicted upon their lives, bodies and property. Such sweeping violation of rights is not necessary in order to fulfill the purposes underlying article 5c of Amendment no. 7."
However, the Supreme Court justices did find it necessary to rule on the constitutionality of article 5b of the law which applies to "enemy subjects" and activists in "terrorist organizations." They did, however, state the petitioners may argue against the constitutionality of said article in the future as the question arises in the context of specific cases.