Malta: The International Comparative Legal Guide To: Competition Litigation 2017

Last Updated: 21 October 2016
Article by Sylvann Aquilina Zahra and Anthony Cremona

Most Read Contributor in Malta, July 2019

1 General

1.1 Please identify the scope of claims that may be brought in your jurisdiction for breach of competition law.

For the purposes of this questionnaire, we shall be focusing on claims of breaches of competition law brought in private actions before the courts of civil jurisdiction. It should be noted that allegations of infringement of the competition rules may also be the subject of administrative proceedings (public enforcement action) before the Office for Competition (OC) within the Malta Competition and Consumer Affairs Authority, which has investigatory and decision-making powers under the Competition Act (CA). The latter procedure falls outside the scope of this questionnaire.

A plaintiff may bring an action before any court of civil jurisdiction alleging that an agreement is null and unenforceable in accordance with Article 5 CA and/or Article 101 of the Treaty on the Functioning of the European Union (TFEU) or alleging an abuse of a dominant position under Article 9 CA and/or Article 102 TFEU. A defendant may rely on the said articles (referred to in this text collectively as 'the competition rules') as a defence (commonly referred to as a 'shield') by holding that plaintiff's claim is unenforceable as it breaches the competition rules.

Damages claims arising from an infringement of the competition rules may be made before the courts either in individual or class actions.

Plaintiffs may also request interim measures before or during the pendency of proceedings, including freezing orders and prohibitory injunctions.

1.2 What is the legal basis for bringing an action for breach of competition law?

The substantive legal bases for bringing an action for breach of competition law are Articles 5 and 9 CA and Articles 101 and 102 TFEU.

Both Articles 5 and 9 are modelled on Articles 101 and 102 TFEU respectively, except that they concern conduct affecting trade in Malta as opposed to interstate trade.

Article 5(1) CA prohibits any agreement between undertakings, any decision by an association of undertakings and any concerted practice between undertakings having the object or effect of preventing, restricting or distorting competition within Malta or any part of Malta. A non-exhaustive list of agreements covered by the prohibition like that found in Article 101(1) TFEU is provided.

Such agreements are ipso jure null and unenforceable [Article 5(2)] unless their impact on the market is minimal (de minimis) or satisfy the conditions for exemption under Article 5(3).

Article 9(1) CA prohibits any abuse by one or more undertakings of a dominant position within Malta or any part of Malta. Again, an indicative list of the conduct covered by the prohibition similar to that found in Article 102 TFEU is provided.

The legal basis for an action for damages arising from a breach of the competition rules is Article 27A of the Competition Act for infringements occurring as from 23 May 2011. For infringements occurring before 23 May 2011, claimants can rely on the tort provisions in the Civil Code [see Hompesch Station Limited vs Enemalta Corporation, Malta Resources Authority, Minister for Energy and Rural Affairs and the General Retailers and Traders Union (23 November 2015) currently pending appeal, explained in reply to question 3.2].

The legal basis for a class action is Article 3 of the Collective Proceedings Act (CPA). Where damages arising from an infringement of the competition rules are claimed in a class action, the provisions of Article 27A apply mutatis mutandis.

Precautionary warrants for interim relief are issued in terms of the Code of Organization and Civil Procedure (COCP) which provides the rules of procedure applicable to civil actions in general.

1.3 Is the legal basis for competition law claims derived from international, national or regional law?

The legal basis of claims based solely on Articles 5 and 9 CA is derived from national law. These two articles are interpreted in line with the case law of the Court of Justice of the EU (CJEU) and the decisions and guidelines of the European Commission.

The legal basis of claims based on Articles 101 and 102 TFEU (which have direct effect) is derived from EU law. Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (Regulation 1/2003) conferred upon the national courts and the national competition authorities jurisdiction to apply Articles 101 and 102 TFEU.

Articles 5(5) and 9(4) CA provide that Articles 101 and 102 TFEU apply where the agreement or conduct in question affects trade between Malta and any one or more Member States. Moreover, in terms of Article 4(1) of the European Union Act, all rights, powers, liabilities, obligations and restrictions emanating from the TFEU, which in accordance with EU law are without further enactment to be given legal effect in Malta, shall be recognised and enforced in Malta.

1.4 Are there specialist courts in your jurisdiction to which competition law cases are assigned?

The courts of civil jurisdiction seised of private actions are not specialist competition law courts, but are generally presided by judges who are familiar with the competition rules.

The Competition and Consumer Appeals Tribunal (CCAT), which is a specialist tribunal, hears appeals from decisions of the OC, but is not competent to hear private actions. The CCAT is presided by a Judge sitting with two other members selected by him from a panel of ordinary members, consisting of two economists, preferably one specialised in industrial organisation economics and the other in behavioural economics, a certified public accountant and three other persons with recognised competence and knowledge in competition law matters, consumer protection, industry and commerce.

1.5 Who has standing to bring an action for breach of competition law and what are the available mechanisms for multiple claimants? For instance, is there a possibility of collective claims, class actions, actions by representative bodies or any other form of public interest litigation? If collective claims or class actions are permitted, are these permitted on an "opt-in" or "opt-out" basis?

Any person (natural or legal) who can prove a juridical interest can bring an action for breach of competition law. Thus, any person who can show that he has or is likely to suffer loss or harm may file an action. This could be an undertaking or a consumer.

Under Article 3 CPA, collective proceedings may be instituted to seek the cessation of an infringement of competition law, the rectification of the consequences of an infringement and/or compensation for harm. Collective proceedings may be instituted as a group action or a representative action. A group action is brought on behalf of the class members by a class representative who has a claim which falls within the proposed collective proceedings. A representative action is brought on behalf of the class members by a registered consumer association or a constituted body.

Class actions may be instituted as stand-alone or follow-on actions. Collective proceedings are permitted on an opt-in basis, so that in order to be represented, a claimant must himself choose to be included as a member of the class by registering his claim with the class representative.

1.6 What jurisdictional factors will determine whether a court is entitled to take on a competition law claim?

Jurisdiction before the EU Member State courts, as from 10 January 2015, is regulated by Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and recognition and enforcement of judgments in civil and commercial matters (recast) (Brussels Recast Regulation).

Where the Brussels Recast Regulation does not apply, the rules in the COCP apply. In principle, the courts have jurisdiction with respect to actions concerning:

  1. citizens of Malta, provided they have not fixed their domicile elsewhere;
  2. any person as long as he is either domiciled or resident or present in Malta;
  3. any person, in matters relating to property situated in Malta;
  4. any person who has contracted any obligation in Malta in regard to actions touching such obligation and provided such person is present in Malta;
  5. any person who, having contracted an obligation in some other country, has nevertheless agreed to carry out such obligation in Malta, or who has contracted any obligation which must necessarily be carried into effect in Malta, provided in either case such person is present in Malta;
  6. any person, in regard to any obligation contracted in favour of a citizen or resident of Malta or of a body incorporated or operating in Malta, if the judgment can be enforced in Malta; and
  7. any person who voluntarily submits to the jurisdiction of the court.

1.7 Does your jurisdiction have a reputation for attracting claimants or, on the contrary, defendant applications to seize jurisdiction, and if so, why?

We have observed an absence of private competition law claims with a cross-border element filed in Malta.

However, there is an increase in private proceedings (unrelated to the competition rules) with a cross-border element in Malta and, based on our experience, plaintiffs are generally comfortable with initiating proceedings here.

1.8 Is the judicial process adversarial or inquisitorial?

The judicial process is adversarial. However, it is still possible for the judge to put questions to witnesses, order inspections in faciem loci and order expert opinions.

2. Interim Remedies

2.1 Are interim remedies available in competition law cases?

Yes. Interim measures may be awarded by the court in the form of precautionary warrants under the COCP in private competition law cases independently of whether they are follow-on or stand-alone cases.

2.2 What interim remedies are available and under what conditions will a court grant them?

The following precautionary warrants may be obtained before or pending proceedings:

  1. Warrant of description. This is issued to secure a right over movable things when the applicant has an interest that such movable things remain in their actual place or condition. A court official draws up an inventory describing in detail the things forming the subject matter of the warrant by stating their quantity and quality. The things forming the subject matter of the warrant remain in the custody of the person in whose possession they are found.
  2. Warrant of seizure of movables. This warrant of seizure orders the removal of property of the debtor, which is subsequently seized under court authority with a view to it being sold by means of a court-approved public auction (i.e., after an executive title is obtained, such as a judgment on the merits).
  3. Warrant of seizure of a commercial going concern. This may only be issued to secure a claim which could be frustrated by the sale in part or in whole of the said going concern. Thus, it is issued to preserve the totality of the assets of the going concern. The court must be satisfied that there is no other way to safeguard the amount due and that the warrant is necessary to protect the rights belonging to the applicant who, prima facie, appears to have such rights.
  4. Garnishee order. A garnishee order would require that money or movable property held by third parties for a debtor are attached and deposited in court.
  5. Warrant of prohibitory injunction. An application for a warrant of prohibitory injunction must demand that a person is restrained from doing anything (both acts and omissions) which might be prejudicial to the person filing the application. The court will issue such warrant if it is satisfied that it is necessary to preserve any right of the person suing out the warrant, and that prima facie such person appears to possess such right.
  6. Warrant of arrest of sea vessels/aircraft. Such warrants order that the sea vessel or aircraft in question is seized and attached under the control and power of the Authority for Transport in Malta to secure a claim which could be frustrated by the departure of the ship or aircraft.

The precautionary warrants mentioned above may only be issued if the essential requisites particular to each warrant are satisfied. Each warrant is subject to the procedural formalities and exceptions provided by law. Once issued, the applicant must, within 20 days, file an action in respect of the right stated in the warrant. The court may order the party suing out the warrant to provide sufficient security for the payment of the penalty that may be imposed, and of damages and interest in favour of the person against whom the warrant was sought.

3. Final Remedies

3.1 Please identify the final remedies which may be available and describe in each case the tests which a court will apply in deciding whether to grant such a remedy.

In a private action, the court may declare the nullity of the agreement, order the cessation of an infringement, order specific performance or rectification of the consequences and award compensation. In principle, the courts assess all the circumstances of the case and whether the remedy would be proportionate.

3.2 If damages are an available remedy, on what bases can a court determine the amount of the award? Are exemplary damages available? Are there any examples of damages being awarded by the courts in competition cases which are in the public domain? If so, please identify any notable examples and provide details of the amounts awarded.

Under Article 27A(4) CA, the plaintiff is entitled to compensation for actual loss and for loss of profit, together with interest from the time the damage occurred until the capital sum awarded is actually paid. In establishing the quantum of damages, the court must take into account the counterfactual scenario.

Exemplary damages are not available.

The only case where damages have been awarded for anticompetitive conduct that we are aware of is the Hompesch Station case. This case originated from an agreement between Enemalta (the exclusive distributor of fuel at the time of the agreement) and the General Retailers and Traders Union (GRTU) representing service stations, providing for an increase in the commission on sales of fuel to service stations.

The OC found that the overall arrangement, consisting of collusion between the members of GRTU, the individual agreements between Enemalta and the petrol station owners and the agreements between GRTU and Enemalta, infringed Article 5(1) CA. Furthermore, the OC recommended that the law on opening hours should be amended as it was restricting competition. This decision was confirmed by the then Commission for Fair Trading (CFT, today replaced by the CCAT).

In a separate action for damages, the court, relying on responsibility in tort (non-contractual responsibility for damages occurring through fault) and relying on the CFT infringement decision, confirmed that the conduct of the defendants caused harm to the plaintiff. The value of the damages liquidated, representing the difference between the full commission and the commission actually paid to the plaintiff, as well as the loss of commission from reduced sales in the period that it started to adhere to the opening hours, amounted to €242,837. It considered the defendants to be jointly liable to pay the damages, on the basis that in terms of Article 115(1) of the Commercial Code, in commercial obligations, co-debtors are, saving any stipulation to the contrary, presumed to be jointly and severally liable.

3.3 Are fines imposed by competition authorities and/or any redress scheme already offered to those harmed by the infringement taken into account by the court when calculating the award?

Damages actions in Malta are restorative in nature. Hence, the courts when calculating damages will have to take into account any compensation already offered to those harmed.

We are not aware of a case involving damages before the Maltese courts where a fine had previously been imposed on the defendant. However, considering that a fine is intended to punish and deter undertakings from breaching the law, whilst damages are intended to compensate victims for harm suffered, it is probably unlikely that the courts would take into account administrative fines imposed when calculating damages.

4. Evidence

4.1 What is the standard of proof?

The standard of proof in civil proceedings is 'on a balance of probabilities'.

4.2 Who bears the evidential burden of proof?

The general procedural rule is that the burden of proving a fact rests on the party alleging it. Where evidential presumptions apply, the burden of proof is reversed.

In a stand-alone action for damages, the plaintiff will have to show that there was an infringement of the competition rules and that he suffered harm, as well as a causal link between the breach and the harm suffered. However, the burden on the plaintiff to show that there was a breach of the competition rules is alleviated as, in terms of the CA, when in any case a breach of the competition rules is alleged, the court must stay the proceedings and request the Director General to submit a report on the competition questions raised before it and the court will take into consideration such report, and any submissions thereon made by the parties and the Director General, before deciding the case. In drawing up such a report, the Director General may use the investigatory powers conferred upon him under the CA.

In follow-on actions for damages, the court is bound by a final infringement decision of the European Commission and, since the introduction of Article 27A in 2011, by a final infringement decision adopted under the CA. Hence, in a follow-on action, the plaintiff will have to prove only the harm he suffered and the link between the infringement and the harm arising therefrom.

Where the defendant is trying to defend its conduct, the burden of showing any justification for that conduct is on the defendant (see the reply to question 5.1). In an action for damages under Article 27A of the CA, whilst the defendant may not plead lack of intention, negligence or lack of fault on his part, he may demonstrate that the breach was the result of a genuinely excusable error. Where the defendant raises the passing-on defence, the onus of proving that the plaintiff passed on the damage to his customers is on the defendant.

4.3 Do evidential presumptions play an important role in damages claims, including any presumptions of loss in cartel cases that have been applied in your jurisdiction?

Evidential presumptions that apply in civil proceedings generally should also apply to competition cases. Under Maltese law, there is no presumption of loss. Damages need to be proven and quantified using the theory of loss and causation.

If the calculation of the loss is complex, highly technical or otherwise impossible to calculate with precision, the court may award an amount of compensation at the presiding judge's discretion based on all the circumstances of the case (arbitrio boni viri method). Maltese jurisprudence in cases unrelated to breaches of the competition rules have clarified that the arbitrio boni viri method does not, however, exonerate the plaintiff from proving that a loss was effectively suffered.

Moreover, under Article 723 COCP, where a party who has proved his case generally is, through the negligence or fraud of the opposite party, unable to prove the amount or the quantity, in whole or in part, due to him, he shall be admitted, if the court deems it proper, to the oath in litem. The party may also be admitted to such oath, independently of any negligence or fraud of the opposite party, provided there are sufficient inferences in support of the alleged amount or quantity. The party applying to be admitted to the oath in litem must produce a list showing distinctly the sums or things due to him, and the amount or quantity in regard to which the oath is to be taken, together with a declaration to the effect that he is prepared to verify on oath the contents of such list, both as regards the existence as well as the amount or quantity of the sums or things stated therein. The amount or quantity shown on the list shall be accepted by the court insofar as, having regard to all the circumstances of the case, it shall deem it just.

We are not aware of a civil case where the court has considered that there is a presumption of loss in cartel cases. However, once Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union is implemented, the rebuttable presumption introduced by the Directive that cartels cause harm, would be introduced in Maltese law, although the plaintiff would still need to prove the quantum of damages. Furthermore, the rebuttable presumption in the Directive in favour of indirect purchasers that overcharges have been passed on to them will also be provided.

4.4 Are there limitations on the forms of evidence which may be put forward by either side? Is expert evidence accepted by the courts?

So long as the evidence is relevant to the matter in issue between the parties and constitutes the best evidence that a party is able to produce, there is in principle no limitation on the form of evidence. The court will disallow any evidence which it considers to be irrelevant or superfluous, or which it does not consider to be the best which the party can produce. The court may require the party tendering the evidence to state the object of the evidence.

Evidence can be documentary, written or oral. Witnesses are examined in open court at the trial of the action and viva voce. Hearsay evidence is accepted exceptionally in limited circumstances.

Expert evidence on economic and technical matters is accepted by the courts. Experts may be appointed by the court on its own motion or on the demand of the parties or brought as witnesses by the parties.

4.5 What are the rules on disclosure? What, if any, documents can be obtained: (i) before proceedings have begun; (ii) during proceedings from the other party; and (iii) from third parties (including competition authorities)?

Under Maltese law there is no pre-trial discovery or disclosure obligation. However, the COCP provides for the documentary evidence that may be demanded during proceedings. Article 637(1) COCP provides that it is lawful to demand the production of documents which are in the possession of other persons:

  1. if such documents are the property of the party demanding the production thereof;
  2. if such documents belong in common to the party demanding their production and to the party against whom the demand is made;
  3. if the party demanding the production of the documents, although he is not the owner or a co-owner thereof, shows that he has an interest that such documents be produced by the other party to the suit;
  4. if the person possessing the documents, not being a party to the suit, does not declare on oath that, independently of any favour for either side, he has special reasons not to produce the documents; or
  5. if the documents are public acts, or acts intended to constitute evidence in the interest of the public in general.

These documents may be demanded at any stage in the proceedings during which evidence may still be provided. The documents must constitute evidence relevant to the case. It rests with the court to decide as to the interest of the party demanding the production, regard being had to the nature of the case and to the nature of the document the production of which is demanded. The demand for the production of documents must state the nature of the documents and all the particulars which may be known to the party making the demand. The party demanding the production of the document must prove that the document is in the possession of the person from whom the production is demanded.

Article 637(3) COCP specifies that the production of any document which is held by a public authority and which is an exempt document under certain provisions of the Freedom of Information Act (FOIA) or the disclosure of which is prohibited by any other law may not be demanded. From the list of exempt documents provided, we would consider that in relation to competition litigation, documents exempted from disclosure are those the disclosure of which:

  • would divulge any information or matter communicated in confidence between a public authority in Malta and a public authority in a foreign country or an international organisation – this could cover documents communicated between the OC and the European Commission or other national competition authorities;
  • could prejudice the conduct of an investigation of a breach of the law or prejudice the enforcement of the law;
  • could disclose the existence or identity of a confidential source of information in relation to the enforcement of the law;
  • could prejudice the fair trial of a person or the impartial adjudication of a particular case;
  • could prejudice the effectiveness of lawful methods or procedures for preventing, detecting, investigating or dealing with matters arising out of breaches of the law; or
  • would divulge internal information, such as opinions, advice or recommendations, relating to the deliberative processes of a public authority.

Trade secrets, although considered as exempt for the purposes of the FOIA, are not considered as exempt for litigation purposes, so that the plaintiff may demand their production under the abovementioned Article 637(1)(c).

Article 588 of the COCP provides for a seemingly narrow legal professional privilege covering communications between lawyer and client, but only in relation to advice given in the context of legal proceedings. This privilege is absolute and may not be lifted by any court or authority, unless the client gives his express consent. As to other communications between lawyer and client, these are also protected by professional secrecy and confidentiality obligations and may only be lifted in very limited circumstances within the ambit of criminal law enforcement (for example, prevention of money laundering).

4.6 Can witnesses be forced to appear? To what extent, if any, is cross-examination of witnesses possible?

In terms of the COCP, a witness is bound to appear in court if he has been summoned according to the procedure prescribed. If any witness duly summoned fails to appear when called on, he will be considered guilty of contempt of court and will be punished accordingly. The court can also, by means of a warrant of escort or arrest, compel such witness to attend for the purpose of giving evidence. Furthermore, any person being present in the court may, upon the oral demand of either of the contending parties, be called upon forthwith to give evidence, as if he had been summoned to attend by means of a subpoena. A witness is bound to answer the questions allowed by the court. However, a witness cannot be compelled to answer incriminating questions. It is within the discretion of the court to determine whether a witness cannot be compelled to give evidence as to facts the disclosure of which will be prejudicial to the public interest. No witness may be compelled to disclose any information derived from or relating to any document to which Article 637(3) COCP applies (see the reply to question 4.5). An advocate may not without the consent of the client be questioned on circumstances stated by the client to him in professional confidence in relation to the cause.

Witnesses may be cross-examined and re-examined viva voce in open court at the trial of the action. Leading or suggestive questions are allowed in a cross-examination. On the other hand, leading or suggestive questions may not, without special permission of the court, be put on an examination-in-chief. In a cross-examination, a witness may only be questioned on the facts deposed in his examination or on matters calculated to impeach his credit. Should the party cross-examining wish to prove by the same witness any circumstance not connected with the facts deposed in the examination, he must produce the witness and examine him as his own witness. At any stage during cross-examination, the court may ask the witness questions.

4.7 Does an infringement decision by a national or international competition authority, or an authority from another country, have probative value as to liability and enable claimants to pursue follow-on claims for damages in the courts?

In follow-on actions, the courts are bound by final infringement decisions of the European Commission. Furthermore, under Article 27A of the CA, which was introduced by the 2011 amendments to the CA, the courts are bound by infringement decisions adopted under the CA which are final and definitive.

Decisions of a national competition authority outside Malta are not binding on the courts but are admissible as evidence in a damages action.

4.8 How would courts deal with issues of commercial confidentiality that may arise in competition proceedings?

The courts are bound to protect confidential information. The judge will assess whether the information is truly confidential. The documents may be sealed and deposited in the registry of the court. A request may be made for evidence to be heard in camera. The court must adhere to the principle of fair hearing and thus can rely only on documents that have been made available to both parties.

4.9 Is there provision for the national competition authority in your jurisdiction (and/or the European Commission, in EU Member States) to express its views or analysis in relation to the case? If so, how common is it for the competition authority (or European Commission) to do so?

Article 27 CA requires the court to stay proceedings and request the Director General of the OC to submit a report on the competition questions raised before it. This report is not binding on the court. The Director General must also request this procedure to be applied when he becomes aware of a case involving the competition rules.

Under Article 960 COCP, the Commission may, on its own motion, intervene during the pendency of proceedings (in statu et terminis), if it shows to the satisfaction of the court that it is interested in the suit.

Furthermore, under Article 15(1) of Regulation 1/2003, the court may ask the Commission for its opinion on questions concerning the application of the EU competition rules and, under Article 15(3), the Commission, acting on its own initiative, may submit written observations to the court and, with the permission of the court, may also make oral observations.

We are not aware of a case where the European Commission or national competition authority of another Member State has intervened in a competition case.

5. Justification / Defences

5.1 Is a defence of justification/public interest available?

Article 5(3) CA, which is modelled on Article 101(3) TFEU, provides that the prohibition in Article 5(1) CA will not apply to any agreement between undertakings, any decision by an association of undertakings or any concerted practice, which:

  • contributes towards the objective of improving production or distribution of goods or services or promoting technical or economic progress;
  • allows consumers a fair share of the resultant benefit;
  • does not impose on the undertakings concerned any restriction which is not indispensable to the attainment of the said objective; and
  • does not give the undertakings concerned the possibility of eliminating or significantly reducing competition in respect of a substantial part of the products to which the agreement, decision or concerted practice refers.

This provision is interpreted in line with the case law of the CJEU and the Commission's Guidelines on the application of Article 81(3) of the Treaty.

Agreements, decisions or concerted practices which may affect trade between Member States but which do not restrict competition within the meaning of Article 101(1) TFEU or which fulfil the conditions of Article 101(3) TFEU, or which are covered by a Block Exemption Regulation, cannot be prohibited under national competition law [Article 3(2) Regulation 1/2003; Article 5(6) CA].

Like Article 102 TFEU, Article 9 CA does not explicitly provide for the grounds on the basis of which the alleged abusive conduct may be defended. Nevertheless, it is still possible for a dominant undertaking to attempt to justify its behaviour by showing that the conduct is objectively necessary and proportionate or by showing that its conduct produces substantial efficiencies which outweigh any anti-competitive effects.

The defendant can also invoke the state compulsion defence in cases where the anti-competitive conduct is required by law, so that the infringement is not the result of its own autonomous conduct.

The above defences can be invoked where the infringement has not yet been established by a final decision, as explained in the reply to question 4.7.

5.2 Is the "passing on defence" available and do indirect purchasers have legal standing to sue?

The passing on defence is available under Article 27A(8) of the CA.

A person who is not the immediate customer of the defendant is entitled to sue for damages [Article 27A(2) of the CA].

5.3Are defendants able to join other cartel participants to the claim as co-defendants? If so, on what basis may they be joined?

Under Article 961 of the COCP, a third party may, by decree of the court, whether upon the demand of either of such parties, or without any such demand, at any stage of the proceedings before the judgment, be joined in any suit pending between other parties in a court of first instance. The third party joined in the suit is considered as a defendant, so that he will be served with the application of the plaintiff and he will be entitled to file any written pleading, raise any plea and avail himself of any other benefit which the law allows to a defendant. The claim may be allowed or disallowed in his regard as if he were an original defendant.

Furthermore, a cartel participant may intervene during pending proceedings (in statu et terminis) whether in first instance or appeal, if he satisfies the court that he has a juridical interest in the suit as required under Maltese procedural law. As an intervener he is able to make submissions before the court.

6. Timing

6.1 Is there a limitation period for bringing a claim for breach of competition law, and if so how long is it and when does it start to run?

Under Article 27A of the CA, an action for damages is barred by the lapse of two years commencing from the day the injured party became aware or should reasonably have become aware of the damage, the infringement and the identity of the undertaking responsible for the infringement. This period is suspended if infringement proceedings are initiated by the Director General under the CA or by the European Commission under Regulation 1/2003. Moreover, this period is interrupted where separate proceedings involving the application of the competition rules have been instituted before a court until any such proceedings are terminated by a decision which has become final.

Under Article 22 CPA, the period of prescription applicable to a claim for damages is interrupted in favour of a class member on the commencement of the collective proceedings, but that interruption is deemed inoperative if he withdraws from the collective proceedings.

6.2 Broadly speaking, how long does a typical breach of competition law claim take to bring to trial and final judgment? Is it possible to expedite proceedings?

It is difficult to estimate the duration of civil proceedings since this depends on a number of factors (for example, complexity of the case, nature of the breach, availability of evidence) particular to each case. Broadly speaking, proceedings at first instance may take between two to three years. However, we have observed that presiding judges are increasingly willing to manage proceedings efficiently in cases of commercial disputes, particularly those which are sensitive and/or complex.

7. Settlement

7.1 Do parties require the permission of the court to discontinue breach of competition law claims (for example if a settlement is reached)?

No permission is required. Any of the parties may, at any stage of the trial before definitive judgment is given, withdraw the acts filed by him [Article 906(1) COCP].

7.2If collective claims, class actions and/or representative actions are permitted, is collective settlement/settlement by the representative body on behalf of the claimants also permitted, and if so on what basis?

In terms of Article 6(b) CPA, the court may at the pre-trial stage stay proceedings if the parties agree during the hearing to attempt to compromise the lawsuit by alternative dispute resolution or other means. Articles 19 and 20 CPA also make provision for the possibility of the class representative to compromise or discontinue all or part of a claim with the permission of the court. A compromise approved by the court binds every represented person, unless a represented person has obtained permission from the court or has notified the class representative to be omitted from the compromise.

Where one or more of the represented persons are to be omitted from the compromise, the court will give directions for the future conduct of the proceedings, which may include provision that the proceedings will continue as one or more proceedings between different parties.

8. Costs

8.1 Can the claimant/defendant recover its legal costs from the unsuccessful party?

In its judgment, the court will determine who is to bear the judicial costs. These are generally awarded against the unsuccessful party. Judicial costs can be recovered in accordance with the judgment.

8.2 Are lawyers permitted to act on a contingency fee basis?

Lawyers are not permitted to act on a contingency fee basis. Article 83 COCP prohibits advocates from entering into or making any agreement or stipulation quotae litis.

8.3 Is third party funding of competition law claims permitted? If so, has this option been used in many cases to date?

In principle, third party funding of claims governed by Maltese law is permitted, unless the funding is characterised as champerty (stipulations quotae litis are deemed void). Regulatory clearance may be required if funding is made on an ongoing basis. There are operators based in Malta which do engage in third party litigation funding, but we are unaware of such operators funding claims filed in Malta, whether in the commercial realm, or specifically, in competition law cases.

9. Appeal

9.1 Can decisions of the court be appealed?

Decisions of the court are subject to appeal to the Court of Appeal. An appeal may be entered not only by the contending parties but also by any person interested. No further appeal lies from the decision of the Court of Appeal.

Under the CPA, an appeal from a judgment of the court on behalf of the class or sub-class may only be filed by a class representative. However, if a class representative does not appeal, any class member may file an application to the Court of Appeal for leave to act as the class representative to file an appeal.

10. Leniency

10.1 Is leniency offered by a national competition authority in your jurisdiction? If so, is (a) a successful, and (b) an unsuccessful applicant for leniency given immunity from civil claims?

There is no leniency programme in Malta. The draft leniency regulations published in June 2013 have not been brought into force and no time-frame has been established for their coming into force.

10.2 Is (a) a successful, and (b) an unsuccessful applicant for leniency permitted to withhold evidence disclosed by it when obtaining leniency in any subsequent court proceedings?

Please see the answer to question 10.1.

11. Anticipated Reforms

11.1 For EU Member States, highlight the anticipated impact of the EU Directive on Antitrust Damages Actions at the national level and any amendments to national procedure that are likely to be required.

In substance, the impact of the Directive is unlikely to be very significant in view that Article 27A already provides for a tailor-made action for damages in case of a breach of the competition rules. Thus a claimant is already entitled under Article 27A to compensation for actual loss and for loss of profit, together with interest from the time the damage occurred until compensation is actually paid as provided by the Directive. From a procedural aspect, some of the principles found in the Directive already exist under Maltese procedural law or are followed by the courts. Nevertheless, some changes are anticipated as a result of the Directive, particularly the following:

  • Some adjustments may need to be introduced to cater for the particular requirements in the Directive relating to the disclosure and use of evidence included in the file of a competition authority. In particular, it is expected that a specific provision will be made for the absolute protection required under the Directive for leniency statements and settlement submissions.
  • Provision will need to be made for a final infringement decision by a competition authority or by a review court in another Member State to constitute at least prima facie evidence of an infringement before the Maltese civil courts.
  • The limitation period within which an injured party may bring an action for damages will have to be increased from two years to five years. Moreover, it would have to be provided that suspension of the limitation period during infringement proceedings shall end at the earliest one year after the final infringement decision.
  • Maltese procedural rules already provide for joint and several liability. However, special provision will need to be made to transpose the exceptions in the Directive in favour of immunity recipients and SMEs.
  • Indirect customers are already entitled under Article 27A of the CA to claim compensation. However, provision will have to be made for the rebuttable presumption in the Directive in favour of indirect customers that they suffered overcharge harm which would be estimated by the judge.
  • A rebuttable presumption that cartels cause harm will need to be introduced.
  • Provision will also have to be made for the limited responsibility of a settling co-infringer and the suspensive effects of consensual settlements in line with the Directive.

11.2Have any steps been taken yet to implement the EU Directive on Antitrust Damages Actions in your jurisdiction?

Member States have until 27 December 2016 to transpose the Directive. We are informed that draft legislation transposing the Directive has been prepared which will be issued for public consultation.

11.3 Are there any other proposed reforms in your jurisdiction relating to competition litigation?

Apart from leniency which may still be considered to be on the proposed reforms agenda, no other proposed reform relating to or affecting competition litigation between private parties has been published.

In the light of the case Federation of Estate Agents v Director General (Competition) et (decided 3 May 2016) there may, however, be amendments to the CA which will be expected to have a substantial impact on the public enforcement domain of competition law. In this case, the Constitutional Court considered that the provisions in the CA enabling the Director General of the OC to decide upon competition infringements and impose fines and providing for the CCAT to hear appeals from the decisions of the Director General are in breach of Article 39(1) of the Constitution of Malta, although they are not in breach of Article 6 of the European Convention on Human Rights. Article 39(1) of the Constitution requires that a person charged with a criminal offence must be afforded a fair hearing by an independent and impartial court established by law. The Court reached its conclusion after considering that public enforcement proceedings by the OC under the CA are criminal in nature and that the OC and the CCAT are not courts for the purposes of Maltese law.

Previously published in the latest edition of the ICLG guide on Competition Litigation, 16/09/2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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