Collective proceedings

People and legal entities in Malta can now pursue claims in so-called ‘class actions’.

The Collective Proceedings Act, published in the Government Gazette on June 19, introduces the institution of class actions under Maltese law. This new legal remedy allows a number of similar or identical claims by different people to be examined in a single lawsuit.

The law is intended to enhance access to justice and increase the possibility for people, be they consumers or undertakings, to seek redress collectively. It should also contribute towards judicial efficiency.

Scope of application

The Act applies to civil proceedings, in which claims arising from common issues are pursued by at least two people. The scope of application is limited to claims arising from breaches of competition and consumer and product safety legislation, although the law empowers the Prime Minister to extend its application to breaches of other laws.

Remedies

Collective proceedings may be instituted to seek the cessation of an infringement, the rectification of the consequences of an in­fringement and/or compensation for harm.

Class representative

A class action is instituted by a person who represents an entire class of members who have similar claims. The person who starts a class action – the plaintiff – is known as the class representative.

The collective proceedings are carried out by the class representative in his own name but for the benefit of all the class members.

Class actions can be of two types – group or representative. In a group action, the class representative is a member of the group.

This means that the class representative must have a claim within the collective proceedings lawsuit like all other members.

In a representative action, the class representative is a representative body that could be either a registered consumer association or a constituted body with no direct claim of its very own in the proceedings.

Procedure

The law provides that collective proceedings shall be instituted by means of a sworn application, in the Civil Court’s First Hall or the Court of Magistrates (Gozo) in its superior jurisdiction, independently of the amount of the claim.

The court has to decide as a first step whether the collective proceedings are admissible. In this respect, it must be satisfied that the proceedings are the most appropriate means for the fair and efficient resolution of the common issues.

Any court decree on the admissibility of collective proceedings must be published in the Government Gazette, local newspapers and any other media the Court deems fit.

This gives potential class members the opportunity to be inform­ed regarding the initiation of the collective proceedings and thus, should they so wish to, register their claim with the class representative to benefit from the outcome of the decision.

Members of the group – the ‘opt-in’ model

Potential class members have the right to opt in the proceedings within the timeframe specified by the court. Opting in after this deadline will also be possible with the permission of the court.

Only those class members who have opted in will be bound by any judgment delivered by the court.

Distribution of compensation

The judge may decide on the manner compensation awarded may be distributed among the class members.

The law provides that, where in its judgment, the court orders the defendant to pay compensation, it may order the defendant to credit the amount due to a specific account held by the class representative and may give such orders as it deems necessary, to the class representative for the effective distribution of that compensation among the class members.

Costs

The law adopts the loser-pays principle with respect to judicial costs. However, the law makes an exception with respect to consumer associations, in that it provides for a reduction of the court registry fees due by a registered consumer association by between a tenth and a half of the fees normally due in the event that the court finds against it.

Moreover, a registered consumer association is exempted from the payment of court registry fees upon the filing of the collective proceedings lawsuit.

This information is provided by the Office for Competition at the Malta Competition and Consumer Affairs Authority.

info@mccaa.org.mt

odette.vella@mccaa.org.mt

Ms Vella is senior information officer, Office for Consumer Affairs, Malta Competition and Consumer Affairs Authority.