Consumers can sue companies together
If you have ever felt ripped off and suspected that you were not alone, a new law set to come into force on August 1 could be the answer to your prayers.
The Collective Proceedings Bill will for the first time allow for class action suits, meaning consumers with the same qualms will be able to group together and collectively take legal action against companies.
Previously, consumers could only take companies to court individually. Legal expenses often meant many did not bother, Consumer Affairs Minister Jason Azzopardi said.
“Now, those costs can be shared equally between claimants. The law will also allow entities such as consumer associations to take companies to court on consumers’ behalf,” Dr Azzopardi added.
He described the upcoming Bill as “a quantum leap forward in the protection and enforcement of consumer rights”, and argued that the threat of a class action suit would deter businesses from trying to skirt their obligations to consumers.
The Bill allows consumers to open a class action suit seeking compensation, the removal of a product from the market or the replacement of a defective product or service.
Any newly opened class action suit will have to be publicised in the Government Gazette as well as in an English and Maltese language newspaper, allowing aggrieved consumers to add their name to the suit.
The Bill adheres to a slightly modified version of the “loser pays principle”, which usually stipulates that any legal costs are incurred by the eventual losers of a case.
But in this case, registered consumer groups that moved class action suits in the name of consumers would benefit from a reduction of up to 50 per cent in their legal fees. Such associations would also only be made to pay case registration fees if they lost the class action suit.
Any consumer rights included within the Consumer Affairs Act, Competition Act and Product Safety Act would be subject to protection by class action suits, Dr Azzopardi explained.
Malta was the 12th EU member state to introduce such a law, although it was under no obligation to do so, the minister said.
Plans are now afoot to launch a media campaign to inform both consumers and businesses of the new law, which was also a Nationalist Party electoral promise.