More protection to the consumer

The Collective Proceedings Bill was a step forward in the right direction to safeguard consumers’ rights and would provide a them with a stronger shield, Minister Jason Azzopardi told Parliament on Wednesday.

Introducing the second reading, the minister responsible for fair competition, small business and consumers said the Bill made class actions available for both individual consumers and small businesses. Its introduction was important because it would increase market competition and promote consumer confidence.

He said that the introduction of such legislation was a direct response to a European Union directive on collective proceedings issued last year and was also a fulfilment of a PN electoral promise.

The many objectives of the Bill would mainly offer an effective remedy to consumers’ complaints. It also sought to limit repeated litigation, since there would be the possibility to group litigation if disputes tackled the same issue.

Access to courts would be facilitated and both consumers and businesses would have the right to bring forward actions for damages or else ask for injunctions. Moreover, the Bill would introduce the right of representation to consumer associations, thus empowering them.

Dr Azzopardi said there was a legal distinction between individual action against a defendant and a collective action. The only instance the current civil procedure permitted individual actions was if multiple individuals made one application in court on the same issue and all of them had the same juridical interest in the outcome of the case.

The conditions imposed by law were onerous and were nothing similar to that being proposed in the Bill.

Dr Azzopardi said that many had dubbed the current action as ineffective.

The Bill did not tackle public enforcement but only dealt with strengthening private enforcement. The legal principle had always been that every citizen was responsible for the damage caused by one’s acts.

Similarly, he said, every citizen or business had a right to compensation if damage was suffered due to breach of competition rules. Dr Azzopardi said this was tortious responsibility. Companies which act illegally would be more cautious one the Bill was approved since an effective remedy would be offered to those harmed.

Moreover, the Bill would make the taking up of a lawsuit more attractive to consumers because of the possibility of dividing court expenses and all burdens ancillary to litigation. As the law stands today, consumers were discouraged from filing lawsuits since the burden exceeds the benefit which would come out of a positive outcome.

Dr Azzopardi said this was a pluralistic law since it provided representative action for both consumers and enterprises.

The Bill also included clauses relating to product safety.

He hoped that at committee stage a way could be found to create a public online register where consumers could access information regarding associations and class actions being formed. Anyone interested would then be able to join.

Collective proceedings could be presented in the name of a number of persons or enterprises either through group action or representation. A minimum of two persons were needed to form a collective proceeding. This would be a mechanism through which illegal practices could be stopped and prevented.

The Bill followed an opt-in system whereby one would have to request to be part of proceedings. This system was more compatible with Malta’s legal system and would result in more legal certainty.

The Bill also focused on the importance of information.

Consumers and enterprises needed to be aware that they could request to form part of collective procedures. It also gave due consideration to out of court settlement.

Practicality and implementation had been two important factors kept in mind when formulating the Bill, he said.

Dr Azzopardi will resume his contribution when the debate continues on Monday.