Class action law for business will be given wider scope

A draft law allowing a group of people or businesses to collectively file a class action lawsuit against a company is the first step towards introducing collective legal action in other areas, according to Consumers Parliamentary Secretary Chris Said.

The draft law, called the Collective Proceedings Act, will set off a mechanism to eventually extend the law to sectors other than the Consumers Act, such as the environment, Dr Said explained yesterday.

Launching the draft Bill, Dr Said explained it would make it easier for businesses, consumers and companies to open a lawsuit against any businesses that failed to comply with the law.

The class action may be filed for damages in an alleged infringement of the Competition Act or the Consumers Affairs Act.

Dr Said pointed out that the draft law, open for consultation until November 9, included a mechanism that allowed it to be extended to other sectors through a legal notice.

The suit would be filed by one person, on behalf of the rest of group. Each individual will have to register to form part of the lawsuit before it is filed in court or within the time period allowed by court. Dr Said pointed out that any registered consumer association in Europe could file a lawsuit and these were exempt from paying the court registry fees when filing the document. Also, consumers’ associations would pay a reduced fine if they lost the case.

“We want to strengthen consumer associations and believe that enterprises who don’t fulfil their obligations will think twice with this new draft law,” said Dr Said.

Asked about the court case initiated last year by the Labour Party on behalf of nearly 18,000 people against VAT paid on car registration tax, Dr Said pointed out that it was a joint action and not a class action because, so far, it was permitted by law.

In the joint action, everyone paid their own legal expenses, appointed their own lawyer and had to have their case heard individually, he said.

The consultation document is available online at https://opm.gov.mt/collective_proceedings . Submissions can be sent to konsumatur.opm@gov.mt or Communications Office, Parliamentary Secretariat Consumers, Fair Competition, Local Councils and Public Dialogue, Office of the Prime Minister, Auberge de Castille, Valletta.