The Transposition of the Representative Actions Directive into Maltese Law
The Representative Actions Directive (EU) 2020/1828 aims to ensure that consumers are able to protect their collective interests in the EU through representative actions. This Directive facilitates consumers’ access to justice whilst avoiding any abusive litigations.
The Maltese law transposing the aforementioned European Union Directive of the 25th of November 2020, came into force on the 25th of June 2023 by means of Act No. XVII of 2023 entitled ‘An Act to provide for representative actions for the protection of the collective interests of consumers, and to carry out other consequential amendments’.
The Collective Proceedings Act (Chapter 520 of the Laws of Malta) already provided for class actions. However, the Representative Actions Act aims to provide a more comprehensive legal framework on representative actions for the protection of the collective interests of consumers.
Who may file a representative action?
Act XVII of 2023 provides that it is a ‘qualified entity’ which may institute domestic representative actions, cross-border representative actions or a combination of both. The definition of a ‘qualified entity’ is “any organization or public body representing consumers’ interests which has been designated by a Member State as qualified to bring representative actions in accordance with the Act.”
The Consumer Affairs Council as established in Chapter 378 of the Laws of Malta may designate an entity as a qualified entity on an ad hoc basis for the purpose of bringing a particular domestic representative action, at the request of that entity if it complies with the criteria for designation as a qualified entity as provided for in ACT XVII of 2023.
The Consumer Affairs Council 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 the 26th of December 2023.
The scope of a qualified entity and its duties
Following the coming into force of the Representative Actions Act, consumers will now have to register their claim with a qualified entity who in turn shall keep and maintain a register to record the identity and claims of those consumers who form part of the representative action proceedings. A representative action agreement shall be entered into between the consumer and the qualified entity prior to the institution of the proceedings. In the case that a consumer no longer wishes to be represented by the qualified entity in the representative action, the consumer is required to notify the qualified entity in writing. The qualified entity must in turn inform the Court of any withdrawals made by consumers.
Representative actions can be instituted by means of a sworn application before the Civil Court (Commercial Section) and in some cases before a national administrative authority.
The Court must then decide whether the proceedings filed are appropriate for representative actions and whether the claims made are admissible in terms of Act XVII of 2023. The Court must then issue a decree after a pre-trial hearing, in which decree it either orders the continuation or dismissal of the proceedings or, alternatively, it may stay proceedings if the parties agree to attempt to reach an out-of-court settlement. The Court shall order that such decree is published and shall decree that any additional consumers may request to be represented by the qualified entity within a specified date as determined by the Court, which date shall not exceed the five (5) months from the date of the decree. All judgments delivered on issues which are common for all represented consumers shall be binding.
These qualified entities will be able to claim both injunctive measures (measures to cease or prohibit a trader’s infringement or malpractice) and redress measures (measures which can include compensation, repair, replacement or reimbursement amongst others).
The best interest of the represented consumer must be on top of the qualified entity’s agenda.
