The Representative Actions Directive comes into force half way through 2023 and the deadline for implementation by EU Member States is at the end of this year.
Malta has just launched a public consultation – which ends on the 25th November – and it is hardly likely that the law will be adopted be on time.
Not new to Maltese Law!
There already is a Collective Procedures Act – Chapter 520 of the Laws of Malta – which contemplates a number of collective actions. The Bill seeks to limit the actions under that law to competition claims, while the new bill itself will deal with collective actions tackling consumer redress. The adequacy or otherwise of this proposal, in terms of compliance with EU law, will remain to be seen.
Methodology
The Directive (RAD) empowers qualified entities to file actions on behalf of individuals entitled to claim. This is in contrast with (and intending to move away from) the US model where a head plaintiff files a case on behalf of several other plaintiff.
The EU is seeking to move away from ‘class actions’ as certain features of the US legal system have given rise to negative connotations around this. Examples would include: punitive damages, pre-trail discoveries and blackmail. The EU seeks to control abusive litigation by certain safeguards being placed in the RAD.
Qualified Entities
Qualified entities will have to choose whether they will deal with purely domestic actions or those with an international aspect (i.e. where they file claims in States other than where they are based). In the latter case they will have to meet the checklist established by the Commission to qualify as an entity that can bring actions of this type. Those entities limiting themselves to domestic claims may still need to meet criteria that are in line with those in the Directive.
The financing of the claim remains a bone of contention. Some consumer organisations may find this a daunting process even without the money aspect. The Bill seeks to exonerate the entities from paying registry fees upon filing, while reducing heavily those fees if the claim is lost.
Many of the Malta organisations may well find themselves struggling in the event of a consumer claim. Examples could be: lack of funding for lawyers (prior to the claim), small membership, lack of young members who might be willing to take on very large cases.
Malta chose to use the opt-in method. A consumer must select to be included as part of the Claim. We still need to see how pro-active consumers will be in joining claims where the benefit is not very significant.
Reactions to the Public Consultation?
The open consultation is worth reading – collective redress is not new to the Maltese legal system and there have been court cases that welcomed it and even interpreted the powers of the court, within those claims, in a rather wide fashion.
Seminar / Workshop on the RAD
I will be giving training on the directive and its implementation – with reference to the Malta situation – over this week. It will be an intensive three mornings of discussions, contributions and learning for all and sundry!
