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Author: Clement Bonnici

II. Overview

There are two types of horizontal collective redress mechanisms in the Maltese legal system: (1) a Collective Action which is a rudimentary form of procedure whereby two or more plaintiffs bring one application and, (2) a Collective Proceedings action, which is limited to actions asking for the cessation of an infringement, or the rectification of the consequences of an infringement and, or compensation for harm. Both mechanisms allow compensatory and injunctive relief.

The Collective Action is contained in Article 161(3) of the Maltese Code of Organisation and Civil Procedure and allows two or more plaintiffs to bring their actions in one application if the subject matter of the actions is connected or the decision of one of the actions might affect the decision of the other action or actions and the evidence in support of one action is, generally, the same to be produced in the other action or actions.

In Collective Proceedings, an action may either be brought on behalf of a class of members by a registered consumer association/ad-hoc constituted body or by a class representative. The Act adopts an opt-in system. A framework for court-approved settlements exist. A compromise approved by the court binds every class member, except those who have been omitted after applying to the court or notifying the class representative directly. At present, the mechanism is available for breaches of competition law and consumer law.

In Malta, the loser pays principle applies. There are exceptions to this principle. Registered consumer associations are exempted from the payment of the fees due to the court registry and the judicial costs may be shared amongst the parties to the lawsuit where a novel point of law was dealt with. There are no provisions in the Act on third-party litigation funding in the case of collective proceedings. Maltese courts may add up a "penalty" of €2,500 where it finds that the collective proceedings were frivolous or vexatious.

At the time of writing, it does not appear that the Collective Proceedings mechanism has been used in more than 2 reported cases. One case is still pending and the other one is settled.


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