1. Background
The Bill entitled “An Act to provide for
representative actions for the protection of the collective interests of
consumers, and to carry out other consequential amendments” (hereinafter
referred to as the proposed Bill) is to transpose and to implement Directive (EU) 2020/1828 (hereinafter referred to as the Directive) of the European Parliament
and of the Council of 25 November 2020 on representative actions for the
protection of the collective interests of consumers and repealing Directive
2009/22/EC, and to introduce the necessary and consequential amendments with
regard to various laws. The Directive is to be adopted by 25 December 2022 and
shall come into force on 25 June 2023. The aims of the Directive are “to ensure that at
Union and national level at least one effective and efficient procedural
mechanism for representative actions for injunctive measures and for redress
measures is available to consumers in all Member States.”
Moreover, the Directive is intended to enable
“qualified entities that represent the collective interests of consumers to
bring representative actions for both injunctive measures and redress measures
against traders that infringe provisions of Union law. Those qualified entities
should be able to request that such infringing conduct be ceased or prohibited
and to seek redress, as appropriate and available under Union or national law,
such as compensation, repair or price reduction.”
The Directive repeals Directive 2009/22/EC with
effect from 25 June 2023 without prejudice to Article 22(2) of this Directive
(namely Directive EU 2020/1828), that states in the said Article 22(2): “Member
States shall apply the laws, regulations and administrative provisions
transposing Directive 2009/22/EC to representative actions that are brought
before 25 June 2023.”
Malta already has the Collective Proceedings Act
(Chapter 520), that that applies to
infringements to the Competition Act, the Consumer Affairs Act and the Product
Safety Act. By means of the proposed Bill, the Collective Proceedings Act will now be dedicated totally to the competition field since the Directive does not include EU Competition law within its scope. Hence
such amendments provide for the updated title of the present Chapter 520 to
read “the Collective Proceedings (Competition) Act.”, while the transposition
of the Directive, that is aimed at consumer protection, is brought into effect
by means of the proposed Bill and is intended to ensure a high level of
consumer protection with regard to the EU legislation enlisted in the said
Annex.
Part I of the proposed
Bill transposes the Directive. Parts II,
III, IV, V, VI, VII and VIII respectively introduce consequential amendments with regard to the Consumer Affairs
Act (Chapter 378), the Collective Proceedings Act (Chapter 520), the Malta
Competition and Consumer Affairs Authority Act (Chapter 510), the Civil Courts (Establishment of Sections)
Order (Subsidiary Legislation 12.19), the Civil Code (Chapter 16), the Malta
Communications Authority Act (Chapter 418), and the Electronic Commerce Act
(Chapter 426).
This Part is divided into
three Titles that respectively establish provisions, in Title I about the
Purpose, Applicability and Interpretation, in Title II with regard to the
Representative Actions, and in Title III to introduce the Schedule wherein 66
EU Directives and Regulations are enlisted to be in line with the Directive’s
Annex.
Representative actions as
provided for by the proposed Bill may be brought by qualified entities as
designated by the competent authority for this purpose. The term “qualified
entity” means any organisation or public body representing consumers’ interests
which has been designated by a Member State as qualified to bring
representative actions in accordance with the provisions of the proposed Bill.
The “competent authority” (that means the Consumer Affairs Council as
established under Part II of the Consumer Affairs Act) shall inform the
European Commission about the list of the qualified entities designated in
advance for the purpose of bringing cross-border representative actions,
including the name and statutory purpose of those qualified entities, by 26th
December 2023.
Representative actions as
provided for by this Act can be brought before the Civil Court (Commercial
Section), hereinafter referred to as the Civil Court, by designated qualified
entities, by means of a sworn application. Consumers’ interests in
representative actions are to be represented by qualified entities that shall
have the rights and obligations of a plaintiff in the proceedings.
Moreover representative
actions may also in certain instances (the issue of injunctive measures that
include compliance orders) be brought before a national administrative
authority against infringements by traders of the provisions of European Union
law referred to in the Schedule to the proposed Bill.
The qualified entity
shall act in the best interests of the represented consumers, explaining to
them the nature of the representative action proceedings and keeping them
informed on the progress of the proceedings, on any relevant judgment or
decree, and on whether the qualified entity shall appeal. Moreover, the
qualified entity shall keep and maintain a register to record the identity and
the claims of the consumers represented in the representative action
proceedings; and shall be entitled to seek at least injunctive measures and, or
redress measures.
The Civil Court shall
hold a pre-trial hearing to assess the admissibility of the representative
action and shall decree the continuation of proceedings if it declares the
proceedings as appropriate for representative actions; and it is satisfied that
the claims are pursuant to the laws listed under the Schedule. Such decree may
also contain such conditions as the Civil Court may deem fit.
The Civil Court shall
order that such decree is published and shall state that any other consumers
who desire to be represented by the qualified entity, may do so within a
specified date as determined by the Court, which date may not exceed five
months from the date of the decree, by registering their claim with the
plaintiff (that is the qualified entity) and entering into a representative
action agreement.
A consumer who does not
opt-in as provided above, may not do so after the specified date, except with
the permission of the Civil Court by means of an application. The Civil Court
may grant such permission if it is satisfied that the delay was not caused by
the fault of that consumer and the continuation of the proceedings would not
suffer substantial prejudice if permission were granted.
A judgment on the common
issues for the represented consumers will bind the represented consumers. Where
in its judgement, the Civil Court orders the defendant to pay compensation, it
may order the defendant to credit the amount due to a specific account held by
the plaintiff and may give such orders, as it deems necessary, to the plaintiff
for the effective distribution of that compensation among the represented
consumers.
When a representative
action for redress measures is funded by a third party, conflicts of interests
shall be prevented and funding by third parties that have an economic interest
in the bringing or the outcome of the representative action for redress
measures, shall not divert the representative action away from the protection
of the collective interests of consumers.
A qualified entity is
exempted from the payment of Court registry fees according to Schedule A,
Tariff A of the Code of Organization and Civil Procedure upon the filing of the
representative action proceedings. In
the event that
the Civil Court finds
against the qualified entity, the Civil Court shall
reduce court registry fees against the qualified entity by between one tenth
and one half of the fees normally due, taking into account the economic
standing of the qualified entity and the legal reasons for finding against the
qualified entity.
This Part states the
consequential amendments with regard to the Consumer Affairs Act (the Act),
that include:
- the amendment of the definition of “qualified entity” in article 2 of
the Act in order to delete the reference
of qualified entity under the Injunctions Directive that will be repealed by
the Directive; and
-
the amendment of article 114 of the Act (relative to the prescription
for judicial proceedings and for offences) by means of the inclusion of a
proviso that enlists the instances that interrupt prescription.
Amendments in this Part
include the substitution of Article 3 of the Collective Proceedings Act, that
concerns the application of the said Collective Proceedings Act, namely as
follows:
“3. 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 where:
(a)
an infringement of the Competition Act and, or Articles 101 and, or 102
of the TFEU, is alleged to have occurred;
(b) an investigation
initiated by the Director General (Competition) according to the Competition
Act and, or Articles 101 and, or 102 of the TFEU, or proceedings before a
tribunal or similar body or the Court including any other court of civil
jurisdiction, concerning an infringement of the Competition Act and, or
Articles 101 and, or 102 of the TFEU, is or are still pending; or
(c) a decision or judgement
establishing a breach of the Competition Act and, or Articles 101 and, or 102
of the TFEU, in relation to the same facts has become res judicata.”.
The reason for such
amendments emerges from the fact that the Collective Proceedings Act will now
be dedicated totally to the competition field.
This Part introduces
amendments in the Malta Competition and Consumer Affairs Authority Act that are
minimal and self-explanatory.
In paragraph (f) of
sub-article (1) of article 29 of the principal Act, the words “including a
qualified entity”, shall be deleted, since “any person”, also in the light of
the definition of “person” in the Interpretation Act (Chapter 249) is sufficient.
Here, with reference to
article 5A of the Civil Courts (Establishment of Sections) Order, the words
“and by the Malta Competition and Consumer Affairs Authority Act.” shall be
substituted by the words “by the Malta Competition and Consumer Affairs
Authority Act, and by the Representative Actions (Consumers) Act.”. This is
necessary since the competent court, also in the case of Representative Actions,
is to be the Civil Court (Commercial Section).
In the light of article
17 in Part I of the proposed Bill, by means of this Part VI, Article 2125 of
the Civil Code is amended to include, as a new suspension of prescription, a new paragraph (f) that refers to: “where a
qualified entity as defined in the Representative Actions (Consumers) Act has
brought a representative action according to the same Act, until the
proceedings are decided definitively.”.
This Part amends the
Malta Communications Authority Act and includes the specific procedure by means
of which a qualified entity can request the Malta Communications Authority to
issue a compliance order.
This Part amends the
Electronic Commerce Act and includes consequential amendments relative to the
repeal of the Injunctions Directive.
2. Documents
The proposed Bill in Maltese and in English: