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A 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”

CLOSED CONSULTATION

 
From: Ministry for Inclusion, Voluntary Organisations and Consumer Rights
(Office for Consumer Affairs within the Malta Competition and Consumer Affairs Authority (MCCAA))​
​Published: 11 November 2022
Running till: 25 November 2022
​Last Updated: ​28 November 2022

We are analysing your feedback.

Please visit this page again to download the outcome report with reference to this public consultation.

Original Consultation


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.”[1]   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.”[2]   

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.

 

1.1       Brief overview​

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).

 

1.1.1    Part I ​

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.

 

1.1.2    Part II​​

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.

 

1.1.3.   Part III​

            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. 


1.1.4. Part IV​​

            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.

 

1.1.5.    Par​t V

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).

 

1.1.6.    Part VI​​​

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.”.

 

1.1.7    Part VII​

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.

 

1.1.8    Part VI​​II

This Part amends the Electronic Commerce Act and includes consequential amendments relative to the repeal of the Injunctions Directive.


[1] Extract from recital 7 of the Directive

[2] Extract from recital 8 of the Directive


2.        Documents

The proposed Bill in Maltese and in English:
3.        Submission of input

Submissions were sent in through one of the following channels:
By email:    publicconsultation.mccaa@mccaa.org.mt  and/or,​
By post:      Public Consultation
            Malta Competition and Consumer Affairs Authority
            Mizzi House,
            National Road,
            Blata L-Bajda HMR 9010

Submissions were received by 25 November 2022.  
We thank you for your input.

Please be informed that submissions will be published on the webpage of this consultation at the end of the scoping phase. The lead Ministry has sole discretion upon the publication of comments.

Received contributions, together with the identity of the contributor, will be published on the Internet, unless the contributor objects to the publication of his/her personal data on the grounds that such publication would harm his/her legitimate interests. In this case the contribution may be published in anonymous form. Otherwise the contribution will not be published nor will, in principle, its content be taken into account.  Any objections concerning the publication of personal data should be sent to the service responsible for the consultation on the following email address: onlineconsultations@gov.mt.

Data Protection Statement the General Data Protection Regulation and the Data Protection Act (Chapter 586)

The General Data Protection Regulation and the Data Protection Act Chapter 586 regulate the processing of personal data whether held electronically or in manual form. The Ministry for European Affairs and Equality collects only information which is necessary for it to perform its intended functions and is set to fully comply with the Data Protection Principles as set out in the Data Protection Legislation.  Verification of the ID number provided will take place as deemed necessary. All personal data provided will be processed according to the General Data Protection Regulation and the Data Protection Act (Cap 586).

 

In addition, please be aware of:
 
·         Disclosure under the Freedom of Information Act (Chapter 496)
As we are a public authority all documents we hold, including documents related to this public consultation process, may be released following a request to us under the Freedom of Information Act (Chap. 496), unless such request may be subject of an exemption arising from the same Act.​


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