A logical starting point for any discussion about dividends is the Irrelevance Theorem developed by Modigliani & Miller. According to this theorem, dividend policy does not affect the firm's value if its investment policy is predetermined. In practice, however, the market does not behave in this manner. Firms do distribute dividends, and increases in dividends usually lead to increases in share prices. Given the inferior tax treatment of cash dividends as opposed to capital gains and the high costs involved in raising new funds in the market, this suggests, contrary to the irrelevance theorem, that investors and managers do care about dividend policy. This phenomenon is known as the “Dividend Puzzle”.

The literature on dividend policy revolves around this “puzzle”. Why do managers distribute dividends at all? Why do investors care about dividends? Various explanations have been offered suggesting some benefits to compensate for the extra costs associated with dividend distribution: information or signaling effects (managers use dividends to credibly signal their forecast of the firm's future performance through changes in the level of distribution); reduction of agency costs (by both driving the firm into the capital market and diminishing the internal cash flow available to management).

Some fifteen years ago, an address on the subject of judicial review of the actions of the Knesset would have been extremely short and quite familiar to English jurists. Our practice was basically the same as in England: the Parliament is sovereign, its laws inviolate, and its inner proceedings immune from review.

Beginning with two decisions in the early 1980s, Flato-Sharon and Sarid, the Court has gradually recognized the justiciability of a limited range of Knesset decisions. While the precise level of review varies according to the type of decision at issue, the Court's review has been motivated in all cases by the need to preserve the rule of law and the integrity of our democratic regime.

An increasingly common practice in Israel and other countries is the imposition of restrictions and burdens on land developers, without utilizing formal planning or expropriation processes. A land owner, for instance, may agree to dedicate part of his land for public use and to transfer its title to the planning authority, with no compensation and without expropriation procedures. Similarly, the parties can agree on height or bulk restrictions for buildings to be constructed on the land, beyond those imposed by the plans applicable to the area. The burdens might take the form of a contract between the planning authority and the developer, or may be included in the building or subdivision permits. In many cases, the authority attempts to use these tools to obtain benefits that it could not have acquired through its statutory powers. This article examines the legality of this practice and the restrictions which should be imposed on it. As regards the transfer of rights in land without compensation, the question arises whether such agreements or permits should be subjected to the same restrictions that apply to injuries caused by plans and expropriations. For instance, should one invalidate an agreement in which a developer purports to transfer land without compensation in quantities beyond that permitted by statutes authorizing expropriation without compensation? Does the fact that the land was transferred with the owner's consent (and not through the coercive power of expropriation statutes) restrict judicial intervention to contract law grounds, such as duress, misrepresentation or mistake?

Since Israel's independence, the Supreme Court has been very active in establishing and securing an impressive edifice of human rights. Lacking a written constitution, the Court has based its constitutional jurisprudence on the democratic character of the state. It has developed an “Israeli made” bill of rights, relying on comparative studies, yet with little reference to the standards set in international human rights instruments.

Two legal events of the last three years may change the judicial attitude towards international human rights. The first major event was the Israeli government's ratification of important human rights conventions during 1991, first and foremost among them the 1966 Covenant on Civil and Political Rights, which has been named the “International Bill of Rights” (hereinafter: the 1966 Covenant).