1.1 General Characteristics of the Legal System
The Maltese legal system has developed into a mixed legal system. In private law matters it is largely a jurisdiction based on the Civil Law tradition; however, decades of British rule exposed the Maltese legal system to English law in various aspects of public law and the law of civil and criminal procedure. Consequently, many branches of contemporary Maltese law are influenced by English law, ranging from public law to company law, fiscal law and maritime law.
The legal system primarily follows the adversarial model, but there is some flexibility for judges to intervene at various stages, although not typically in an inquisitorial manner as is the case in most continental European jurisdictions. The legal process is conducted in both written and oral form, and submissions may be made orally and in writing.
1.2 Court System
The Maltese courts are divided into the Superior and Inferior Courts. In view of the size of the country, the judicial system is not split between federal or state courts.
The Superior Courts consist of the Civil Court, the Court of Appeal and the Constitutional Court.
The Civil Courts of superior jurisdiction hear all cases except where competence has been vested in another court or tribunal, and in principle, where the monetary value of the claim exceeds EUR15,000 or cannot be quantified when filing the lawsuit. The Superior Courts of criminal jurisdiction deal with criminal offences where punishment ranges from over six months up to life imprisonment.
The First Hall of the Civil Court is generally vested with competence to determine claims of a civil and commercial nature, and is divided into four sections:
- the general jurisdiction;
- the commercial section;
- the family section; and
- the voluntary jurisdiction section.
Court of Appeal
The Court of Appeal hears and determines all appeals from judgments of the Civil Court and the Court of Magistrates (Gozo) in its superior jurisdiction, and for this purpose is presided over by three judges.
The Constitutional Court acts as a first instance court in two instances:
- when any question arises as to membership of the House of Representatives; and
- if the Electoral Commission suspends the electoral process.
It also has appellate jurisdiction in a variety of circumstances, as follows:
- in the case of appeals from decisions of the Civil Court, First Hall, on a matter of human rights and fundamental freedoms;
- in the case of appeals from decisions of any court of original jurisdiction affecting the interpretation of the Constitution, other than on a matter of human rights; and
- in the case of appeals as to the validity of laws other than on a matter of human rights.
The Inferior Courts are the Court of Magistrates (Malta) and the Court of Magistrates (Gozo), and are vested with competence to hear and determine all monetary claims of an amount which exceeds EUR5,000 and but does not exceed EUR15,000. All monetary claims of an amount not exceeding EUR5,000 are heard and determined by the Small Claims Tribunal.
The Court of Appeal also hears and determines appeals from the Inferior Courts; the Court of Appeal in its inferior jurisdiction is presided over by one judge for this purpose.
The laws of Malta also establish the following specialised tribunals to hear and determine commercial disputes of a special commercial nature:
- the Financial Services Tribunal, which is set up by the Malta Financial Services Authority Act (Chapter 300 of the Laws of Malta) and is vested with the competence to determine disputes in relation to decisions made by the Malta Financial Services Authority;
- the Public Contracts Review Board which is set up by the Public Procurement Regulations and determines remedies provided for in Maltese public procurement law, including, challenging procurement procedures, challenging decisions made by contracting authorities and challenging contracts which have been entered into illegally by contracting authorities;
- the Financial Services Arbiter, which is established under the Arbiter for Financial Services Arbiter Act (Chapter 555) and hears complaints lodged by aggrieved investors against licensed financial services providers;
- the Industrial Tribunal, which is set up by the Employment and Industrial Relations Act and is vested with the competence to determine certain cases relating to a set of employment relations issues and all cases of alleged unfair dismissals from employment; and
- the Administrative Review Tribunal, which is established by Chapter 490 of the laws of Malta for the purpose of reviewing administrative acts by the public administration (ie, the government of Malta including its Ministries and departments, local authorities and any body corporate established by law of any order, licence, permit, warrant, authorisation, concession, decision or refusal to any demand of a member of the public). Any party to the proceedings before the tribunal who feels aggrieved by a decision of said tribunal may appeal to the Court of Appeal sitting in either its superior or its inferior jurisdiction. Administrative acts that do not fall in the competence of the Administrative Review Tribunal are reviewed by the First Hall of the Civil Court, composed of one judge.
1.3 Court Filings and Proceedings
All proceedings before the above-mentioned courts and tribunals are held in public, and all documents and records of the proceedings are accessible to the public. As an exception to this general rule, the relevant court or tribunal may order certain documents filed in the records of proceedings to be sealed, particularly where such documents contain confidential information or may otherwise be prejudicial to the parties to those proceedings.
1.4 Legal Representation in Court
No person may exercise the profession of advocate in the Courts of Justice in Malta without the authority of the President of Malta, granted by warrant under the Public Seal of Malta. In order to obtain such a warrant, an individual must:
- be of good conduct and morals;
- be a citizen of Malta or of a member state of the European Union, or be otherwise permitted to work in Malta under any law;
- have obtained the academic degree of Doctor of Law (LLD) from the University of Malta, or such other qualification at masters level as the Minister may from time to time prescribe, after consultation with the Senate of the University of Malta, or a comparable degree from such other competent authority in accordance with the principles of the mutual recognition of qualifications, after having read law in Malta or in a member state of the European Union (EU);
- have regularly attended the office of a practising advocate of the Bar of Malta and at the sittings of the Superior Courts;
- have full knowledge of the Maltese language, being the language of the courts; and
- have been duly examined and approved by two judges.
Advocates so admitted to the Maltese Bar have rights of audience before all courts.
Legal procurators in possession of a warrant issued by the President of the Republic and under the Public Seal of Malta have rights of audience before the Courts of Magistrates (inferior jurisdiction) and special tribunals and boards.
Foreign legal professionals from other EU member states wishing to practise in Malta may register with the Ministry for Justice, Equality and Governance, but will need to apply for a local warrant in order to practise in the Courts of Justice in Malta. To be eligible, the applicant should have practised law in Malta for at least three years, including experience of Maltese law, and must satisfy the remaining requirements.
2. Litigation Funding
2.1 Third-Party Litigation Funding
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.
Third-party litigation funding is possible, although not expressly regulated. Lawyers are prohibited from entering into funding arrangements with their clients or third parties.
There is no specific legislation that regulates third-party litigation funding models as yet.
2.2 Third-Party Funding: Lawsuits
Subject to 2.1 Third-Party Litigation Funding, any lawsuit is available for third-party funding.
2.3 Third-Party Funding for Plaintiff and Defendant
Subject to 2.1 Third-Party Litigation Funding, both plaintiff and defendant can use third-party funding.
2.4 Minimum and Maximum Amounts of Third-Party Funding
Subject to 2.1 Third-Party Litigation Funding, there are no minimum and maximum amounts.
2.5 Types of Costs Considered under Third-Party Funding
Subject to 2.1 Third-Party Litigation Funding, there is no restriction on the costs a third-party funder may consider funding; such costs may include the court registry costs of filing judicial documents, legal representation fees, and other court fees.
2.6 Contingency Fees
Lawyers are ethically prohibited from entering into contingency fee and other conditional fee arrangements.
2.7 Time Limit for Obtaining Third-Party Funding
Third-party funding can be sought at any point in the litigious process.
3. Initiating a Lawsuit
3.1 Rules on Pre-action Conduct
There are no rules that impose certain pre-action conduct that must be undertaken by parties prior to initiating litigation. However, it is customary for informal legal letters to be sent, calling upon the defendant to meet their obligations, and even more formal judicial letters threatening the taking of legal steps, including precautionary ones. The latter type of letters are similar to pre-action letters, are formally filed through the Court registry and served on potential defendants through court bailiffs or registered court mail, and also serve to interrupt the running of prescriptive periods/applicable statutes of limitation.
3.2 Statutes of Limitations
Time limits for civil suits vary, and are usually determined by the nature and facts of each individual case and the nature of the claim. The main prescriptive periods are as follows:
- five years for contractual claims
- two years for tort claims
Unless otherwise provided by a specific law, time limits start to run on the day the relevant action can be exercised, regardless of the state or condition of the person to whom the action is competent.
In addition to the general prescription periods highlighted above, the law establishes shorter time periods for specific classes of actions, including the recovery of funds arising out of specific types of contract. However, claims for fraud or breach of fiduciary obligations are not time barred.
3.3 Jurisdictional Requirements for a Defendant
In the case of civil or commercial disputes against a defendant domiciled in a Member State of the European Union, the Courts of Justice in Malta would apply the provisions of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (recast).
In the case of disputes where the defendant is not domiciled in a European Union Member State, national rules of jurisdiction are applied by Maltese Courts. In this regard, the Code of Organisation and Civil Procedure provides that the civil courts of Malta shall have jurisdiction to try and determine all actions concerning the following persons:
- citizens of Malta, provided they have not fixed their domicile elsewhere;
- any person as long as he or she is either domiciled, resident or present in Malta;
- any person, in matters relating to property situated or existing in Malta;
- any person who has contracted any obligation in Malta, but only in regard to actions touching such obligation and provided such person is present in Malta;
- 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 that must necessarily be carried into effect in Malta, provided in either case such person is present in Malta;
- any person, in regard to any obligation contracted in favour of a citizen or resident of Malta or of a body having a distinct legal personality or association of persons incorporated or operating in Malta, if the judgment can be enforced in Malta; and
- any person who – expressly or tacitly – voluntarily submits or has agreed to submit to the jurisdiction of the court.
3.4 Initial Complaint
In the Superior Courts, proceedings are usually instituted by a sworn application (ie, a statement of claim), unless the law in specific instances requires merely an application. In the Inferior Courts, proceedings are instituted by application.
A sworn application must be confirmed on oath before the Court Registrar or Commissioner for Oaths, and must contain:
- a clear and explicit statement of the subject of the cause and a declaration of the facts;
- the cause of the claim;
- the claim(s);
- a notice to the recipient that a sworn reply must be filed within 20 days of service of the sworn application, in lieu of which the Court may proceed to adjudicate the matter according to law; and
- an exhaustive list of witnesses intended to be produced in evidence.
The ordinary procedure before appellate courts is by application, which must contain a plea that the judgment appealed against or any part thereof be reversed, annulled or varied. In the case of a request for reversal, the application must contain a reference to the claim and to the judgment appealed against, together with detailed reasons on which the appeal is entered, and a request that the claim be allowed or dismissed. In the case of a request for variation, the application must also distinctly state the heads of the judgment complained of together with detailed reasons for which the appeal is entered and, in conclusion, shall specifically state the manner in which it is desired that the judgment be varied under each head.
The application before the Inferior Courts shall take the form of a notice signed by the Registrar, containing the names of the plaintiff and the defendant, the demand, and the date and hour when the defendant is to appear.
Appeals from Inferior Courts may be made by application of appeal, whether for reversal or variation.
All written pleadings, regardless of the court, must contain the following:
- an indication of the court and section;
- the full name of both parties and, if applicable, the capacity in which they appear;
- the description of the pleading; and
- the number of any relevant action previously brought.
Parties wishing to correct any act instituting a lawsuit may request court authorisation to do so, by means of an application filed in the acts of the proceedings. Such authorisation may be made at any stage of the proceedings until delivery of judgment.
3.5 Rules of Service
The application instituting proceedings, once filed, will need to be served on the defendant through court bailiffs or judicial officers. Service is effected by delivery of a copy of the judicial act on the defendant by a court bailiff (directly or indirectly through registered mail issued by the Registrar of Civil Courts). In the case of corporate entities, a copy of the act may be left at its registered office or with the director, company secretary or other officer.
Multiple service attempts can be made without court authorisation at different times of the day. Once service is validly effected, the court bailiff charged with service shall draw-up a separate certificate of service for each attempt in the records of that judicial act. If multiple service attempts are not successful, court authorisation may be requested for substitute or indirect service by affixation of the judicial act in the relevant town (specifically at the local council and police district office) and on the door of the defendant's residence, and by publication of a summary of the judicial act in the Government Gazette and in one or more daily newspapers.
Defendants can also be sued if they are established or physically located outside the jurisdiction. If they are located in a EU member state, service of judicial documents may take place in accordance with the procedure laid down in Regulation (EU) No 1393/2007 on the service in the member states of judicial and extrajudicial documents in civil or commercial matters.
If they are located in a country that is a Contracting State to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, then service may take place in accordance with the procedure laid out therein.
3.6 Failure to Respond
The failure of a defendant to respond will result in him or her being contumacious (that is, in default), provided the defendant has been validly served with the judicial act instituting the proceedings.
Contumacy is deemed at law to be an automatic contestation and not an admission of a lawsuit.
3.7 Representative or Collective Actions
The Collective Proceedings Act (Cap. 520 of the Laws of Malta) allows group actions as well as representative actions to be brought in the context of alleged breaches of the Competition Act (Cap. 379 of the Laws of Malta), the Consumer Affairs Act (Cap. 378 of the Laws of Malta) and the Product Safety Act (Cap. 427 of the Laws of Malta). Proceedings may be conducted by a representative plaintiff on behalf of multiple plaintiffs. Such collective actions may only be instituted to seek injunctive relief, monetary relief, the rectification of consequences of an infringement, or compensation for harm. The plaintiffs must be specifically identified, and therefore a class description would need to be specified in the application. Thus, all collective actions are opt-in, including for injunctive relief.
Collective actions are instituted by means of a sworn application before the Civil Court (Commercial Section), requesting the collective proceedings procedure and providing certain preliminary information regarding the class and the claim. During the pre-trial hearing, the court will ascertain that the following cumulative requirements are satisfied.
- The proceedings are appropriate for collective proceedings – in other words:
- the claims are brought on behalf of an identified class of two or more persons;
- the claims raise common issues; and
- collective proceedings are the most appropriate means for the fair and efficient resolution of the common issues.
- The court approves the plaintiff to act as class representative – in other words:
- they would fairly and adequately act in the interests of the class members; and
- they do not have a material conflict of interest in relation to the common issues for the class members.
- The court is satisfied the claims fall within the subject matter of the Collective Proceedings Act.
3.8 Requirements for Cost Estimate
There is no statutory requirement to provide clients with a cost estimate of the potential litigation at the outset.
4. Pre-trial Proceedings
4.1 Interim Applications/Motions
Plaintiffs may seek the issue of interim court measures, known as precautionary warrants, in support of lawsuits but only as security for claims made on the merits. The precautionary warrants may only be issued if the essential requisites particular to each warrant are satisfied and each warrant is subject to any procedural formalities or exceptions provided by law. They are issued on an ex parte application confirmed on the oath of the plaintiff and are generally granted within 24 to 48 hours (except for the warrant of prohibitory injunction) without the need for a hearing.
There are various types of warrants under Maltese law available.
A garnishee order would require that moneys or movable property held by third parties for a debtor are attached and deposited in court. The third parties must be generally present in Malta and typically would include credit institutions. Such third parties would be duty bound to deposit any such funds or movable property in court within 19 days from service of the garnishee order.
Warrant of Seizure of Movables
This warrant of seizure orders the removal or attachment of property of the debtor, which is subsequently seized under court authority with a view for it to be sold by means of a court approved public auction (ie, after an executive title is obtained such as a judgment on the merits). This includes not only tangible movables, but also intangible movables such as shares in a company owned by the debtor (which would block future transfers of shares and certain internal reorganisations).
Warrant of Arrest of Sea Vessels
This warrant of arrest orders the seizure of ships (exceeding 10 metres in length) only to secure a debt or claims, whether in personam or in rem, which could be frustrated by the departure of the said ship.
Warrant of Arrest of Aircraft
This warrant of arrest orders the seizure of an aircraft only to secure a debt or claims, whether in personam or in rem, which could be frustrated by the departure of the said aircraft.
The term aircraft includes:
- all data, manuals and technical records;
- the airframe, all equipment, machinery and other appurtenances as accessories belonging to the aircraft, which are on board or which have been temporarily removed therefrom; and
- if in Malta, any engines owned by the owner of the aircraft whether attached to the aircraft or not, as well as any replacement engines which are designated for use on the aircraft and owned by the owner of the aircraft but temporarily not attached to the aircraft.
Warrant of Prohibitory Injunction
An application for a warrant of prohibitory injunction must demand that a person is restrained from doing (both acts and omissions are included) anything which might be prejudicial to the person filing the application. This is the only warrant that it is not decided on a purely on ex parte basis, but requires a hearing before the court decides whether to issue the injunction. Having said that, the Court may in special circumstances issue the injunction on a provisional basis until the matter is heard and decided.
Warrant of Description
This warrants orders a court bailiff to take an itemised inventory of movables.
Warrant of Seizure of a Commercial Going Concern
This warrant has the effect of effect preserving the totality of the assets of the going concern, including licences and good-will, to order that same is not sold and are to be concurrently kept in business. A court-appointed administrator would oversee the business if this warrant is upheld at the cost of the plaintiff.
Bringing an Action
The plaintiff is bound to bring an action on the merits of the claim within 20 calendar days from the date the precautionary warrant is issued. This action on the merits can be filed in Malta or alternatively in any other EU member state (Regulation (EU) 1215/2021) or by way of international arbitration proceedings.
These interim court measures may be subsequently converted into an executive court measure once the title becomes final and definitive by virtue of the Court's final ruling in the relevant merits-based proceedings (res judicata). The interim order will remain in force until the judgment in the relevant merits proceedings either confirms or sets it aside.
There are also a number of injunctive measures provided for under specific laws. In the realm of intellectual property law, for instance, the court has wide powers to order the conservation of evidence in the hands of the defendant or third parties, and even to issue a "cease and desist" order, restraining the performance of an act likely to infringe a party's intellectual property.
4.2 Early Judgment Applications
When a claim is solely for the recovery of a debt that does not exceed EUR25,000 and is certain, liquid and due, the creditor may file a judicial letter instead of a lawsuit, accompanied by a confirmation on oath stating clearly the cause of the claim, the reasons it should be upheld, and the facts. The letter shall warn the debtor that if he does not rebut the claim within 30 days from service by a note in the record of that judicial letter, then the official letter shall constitute an executive title, without the need for a trial.
Maltese procedural law also provides for special summary proceedings in certain instances, particularly when a claim is solely for the recovery of a debt that is certain, liquid and due (which falls within the jurisdiction of the Superior Courts), or for the eviction of a person from an urban or rural tenement.
In these cases the plaintiff may request, in its sworn application, that the court proceed to give judgment without proceeding to trial. The sworn application must contain a sworn declaration that the plaintiff believes there is no defence to the claim. If, at the hearing, the defendant fails to satisfy the court that he has a prima facie defence to the action on the merits, the court shall proceed to judgment in summary proceedings.
4.3 Dispositive Motions
Prospective defendants may ask for a case to be dismissed before a full trial, most commonly in the following instances:
- where there is a lack of juridical interest of either the plaintiff or the defendant;
- where they allege a cause of nullity in the procedure followed by the plaintiff;
- where they allege a lack of jurisdiction;
- where the matter has already been decided by another judgment (res judicata) or otherwise compromised/settled; or
- where the action is barred by a particular prescriptive period established at law.
In these instances, the court generally tends to hear and decide such defences or pleas first without delving into a full trial. These motions typically take the form of preliminary pleas raised in the sworn reply (statement of defence).
4.4 Requirements for Interested Parties to Join a Lawsuit
Any interested party who shows to the satisfaction of the court that they have an interest in a pending suit may file an application to be admitted as a party to the suit in statu et terminis. An application to intervene may be made at any stage of the proceedings, whether in first or second instance, provided that such application does not suspend the actual proceedings between the parties to the suit.
Alternatively, anyone with an interest in the proceedings may be joined by application of either party or by court decree, when his absence would render the judgment less effective. While intervention in statu et terminis is voluntary, the intervenor does not become a full party to the suit, with the result that the judgment will not be binding over them.
4.5 Applications for Security for Defendant's Costs
There is no specific procedure regulating whether a defendant can apply for an order that the plaintiff must pay a sum of money as security for the defendant's costs. There is also specific provision for plaintiffs to provide security for costs in intellectual property cases, and in cases for the enforcement of mortgages on ships and aircraft.
Separately, in the case of an appeal of a judgment, security for costs must be deposited in court by the appellant before the trial date for the hearing of the appeal.
4.6 Costs of Interim Applications/Motions
Costs of interim applications are typically reserved at the interim stage, saving the right of the court to reapportion liability for costs based on the outcome at final judgment.
4.7 Application/Motion Timeframe
There is no timeframe within which an application must be dealt with or proceedings must be appointed for trial. Generally, causes are appointed for a first hearing within two months of the application being made.
In cases of urgency, the court may abridge any legal time and may even appoint the case for a trial before the close of preliminary written procedures.
Applications for precautionary warrants, especially ex parte applications for such relief, are typically dealt with very expeditiously, and interim court decrees are obtained in a matter of hours.
5.1 Discovery and Civil Cases
There is no full and frank disclosure obligation on the parties, and the possibility of discovery is limited.
5.2 Discovery and Third Parties
Discovery from third parties is not possible, but third parties can be summoned through subpoenas.
5.3 Discovery in this Jurisdiction
As stated above, there is no system of discovery in Malta, and no rules regulating which documents parties must disclose.
5.4 Alternatives to Discovery Mechanisms
Evidence is generally limited to that brought by the parties to corroborate their claim or defence as applicable, and must be relevant to the issue between the parties. A court may disallow evidence if it considers it irrelevant or superfluous to the cause, or if it considers it is not the best evidence that can be brought on the issue.
There are some specific rules of disclosure – for example, in the enforcement of IP rights whereby the court has wide powers to order the disclosure (subject to confidentiality) and conservation of evidence in the hands of the defendant or third parties (Enforcement of Intellectual Property Rights (Regulation) Act (Chapter 488, Laws of Malta)).
A separate action does exist to demand the production of particular documents: the actio ad exhibendum. In practice, this is a limited remedy sought by the plaintiff solely to obtain the production of documents in the following instances:
- if such documents are the property of the party demanding the production thereof;
- if such documents belong in common to the party demanding their production and to the party against whom the demand is made;
- if the party demanding the production of the documents, although he or she is not the owner or a co-owner thereof, shows that they have an interest in such documents being produced by the other party to the suit;
- 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, they have special reasons not to produce the documents; and
- if the documents are public acts, or acts intended to constitute evidence in the interest of the public in general.
In all cases, 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.
5.5 Legal Privilege
Advice and communications between clients and their lawyers in professional confidence in reference to the cause are privileged and cannot be disclosed in court. There is no distinction between external and in-house counsel.
5.6 Rules Disallowing Disclosure of a Document
Certain specified documents are privileged, and their production during proceedings cannot be made. This would include documents which are subject to legal privilege but also correspondence exchanged on a without prejudice basis in furtherance of a compromise.
Documents that would damage the security, defence or international relations of Malta, or that would divulge information or matters communicated in confidence by or on behalf of a foreign government, authority or international organisation, would also be considered privileged documents. Specific documents relating to the cabinet's government are also considered privileged documents.
Moreover, the courts have discretion to restrict the public nature of cases or of pieces of evidence in the interests of justice (such as court disclosure of banking documents or other confidential documents).
There have been court decrees protecting documents containing trade secrets or confidential information, but the circumstances will vary depending on case-specific facts.
6. Injunctive Relief
6.1 Circumstances of Injunctive Relief
The injunctive relief available in terms of Maltese civil procedural law are the acts referred to in 4.1 Interim Applications/Motions.
6.2 Arrangements for Obtaining Urgent Injunctive Relief
In urgent circumstances, interim injunctions can be issued provisionally and even on the same day of the request, exceptionally even out-of-hours, which is very common in the case of arrests of sea vessels and aircraft.
6.3 Availability of Injunctive Relief on an Ex Parte Basis
See 6.1 Circumstances of Injunctive Relief.
Ex parte injunctive relief is in fact obtained without the defendant being able to make submissions, although the application is served on the defendant.
The corresponding protection for the defendant is the possibility to request the removal of injunctive relief on very limited grounds or exceptionally to seek counter-security. This system ensures the effectiveness of injunctive relief, including the element of surprise, but also creates a balance in case of abusive recourse to injunctive relief. Admittedly, however, court judgments have unduly limited the availability of the counter-security or the application for the removal of injunctive relief by interpreting very strictly the instances where such remedies may be available.
6.4 Liability for Damages for the Applicant
Plaintiffs will be responsible for damages suffered by the defendant if it is shown that:
- the proceedings were frivolous or vexatious;
- the plaintiff sought more security than he or she was reasonably entitled to; or
- the plaintiff fails to file an action on the merits within the set timeframe established by law following the grant of injunctive relief.
In some instances, plaintiffs may need to provide security for such damages.
6.5 Respondent's Worldwide Assets and Injunctive Relief
Worldwide asset relief is not possible.
6.6 Third Parties and Injunctive Relief
Injunctive relief against third parties is not strictly possible, but the warrant of prohibitory injunction can be served on third parties to ensure that they comply with the terms of the injunction and not allowed the debtor to act in contravention of the of the injunction.
Garnishee orders are typically issued against third parties who hold funds or assets for and on behalf of the debtor.
6.7 Consequences of a Respondent's Non-compliance
Defendants who do not comply with such injunctive relief will be guilty of contempt of court, and will be liable to imprisonment and/or to a fine.
7. Trials and Hearings
7.1 Trial Proceedings
Judicial proceedings are instituted by filing a sworn application in court, unless otherwise specified by law, containing a statement of facts and the relief requested, to which a list of documents and witnesses is attached. The court will then issue a decree scheduling a first case management hearing and ordering service on the defendants, who will then have 20 days from the day of service in which to file a sworn reply.
Assuming no preliminary pleas are raised, the trial then starts by the plaintiff initiating the evidentiary process, including the presentation of affidavits and other documentary evidence. The defendant would then typically cross-examine the witnesses who submitted the affidavits, and produce its own witnesses and documentary evidence.
This is followed by the exchange of legal submissions in writing, followed by a final round of oral rebuttals.
7.2 Case Management Hearings
The first sitting scheduled for the case is generally a case management hearing (if all defendants are served with the lawsuit).
7.3 Jury Trials in Civil Cases
There are no jury trials in civil cases.
7.4 Rules that Govern Admission of Evidence
The rules that govern the admission of evidence at trial are as follows:
- the court requires the best evidence that the parties are able to produce;
- all evidence must be relevant to the matter at issue between the parties;
- any procedural objection to evidence must be recorded in the proceedings; and
- as a general rule of thumb, the burden of proving a fact shall, in all cases, rest on the party alleging it.
7.5 Expert Testimony
Expert testimony is permitted at trial. If an expert witness is introduced ex parte, their opinion shall only be admissible if, in the opinion of the court, they are suitably qualified in the relevant matter. The court may nominate its own experts, and their opinions would also amount to evidence.
7.6 Extent to Which Hearings Are Open to the Public
Trials are generally conducted in public. However, it is within the discretion of the court to order that the trial be heard with closed doors on the grounds of decency or good morals. The request for a trial to be heard with closed doors may, upon good reason being shown, also be made by both parties together.
Judgments are delivered in open court, with a signed transcript of the judgment itself being deposited in the records of the case.
7.7 Level of Intervention by a Judge
Malta has adopted the adversarial model. Accordingly, the judge is generally passive, intervening only if required to provide direction, seek clarifications from the parties or witnesses, or in the event issue an order, directive or interim decision by judicial decree.
In this respect, in order to ensure full compliance with all matters of procedure, or to seek more detailed information, or to expedite or facilitate proceedings, or to avoid the unnecessary appearance of parties or witnesses, the court may give all such orders and directives it may think fit in chambers.
7.8 General Timeframes for Proceedings
Once the application is filed in court, the defendant has 20 days within which to file a reply, whether sworn or otherwise. The same time limit will apply for the filing of any counterclaim. Following the trial proceedings as explained above, the court will generally deliver judgment within four to six months. This process from start to finish is likely to take two to three years.
8.1 Court Approval
Court approval is not required in order to settle a lawsuit.
8.2 Settlement of Lawsuits and Confidentiality
The terms of settlement agreements cannot need to be disclosed without the consent of all parties to the settlement, and therefore, settlements of lawsuits are entirely confidential and privileged.
8.3 Enforcement of Settlement Agreements
Settlement agreements would be enforced in the same way as any other contract. They will invariably contain their own dispute resolution mechanism and method of enforcement, including by recourse to court or arbitration.
8.4 Setting Aside Settlement Agreements
Adherence, enforcement and the setting aside of a settlement agreement would take place in the same way as for any other contract, and are thus regulated by the law of contracts.
9. Damages and Judgment
9.1 Awards Available to the Successful Litigant
The damages available to the successful litigant are:
- actual losses already suffered;
- future losses;
- moral damage, available only in limited instances.
Apart from compensatory or monetary relief, declaratory and injunctive awards are also possible at the full trial stage. With some notable exceptions, damages in Malta are restorative in nature and therefore generally no punitive damages are granted.
9.2 Rules Regarding Damages
Damages under Maltese law are restorative in nature, and therefore, are aimed at restoring the injured party to the position held prior to the damaging event. There is no punitive element in the quantification of damages.
There must be a direct causal link between the damaging event and the loss suffered by the plaintiff. The damaging event must be a result of the defendant's conduct and cannot be due to a force majeure or due to contributory negligence by the plaintiff or third party.
In terms of contractual damages, the successful litigant is only entitled to damages that could have been foreseen at the time of the agreement.
In personal injury claims, a specific formula is largely followed by the Maltese courts in calculating future losses, namely: yearly projected income multiplied by a multiplier based on the projected working life expectancy and further multiplied by the certified percentage disability. A cash deduction (using largely discounted cash flow) is then applied as a deduction.
9.3 Pre- and Post-Judgment Interest
Generally, judgments given on civil pecuniary claims also include the award of interest at the rate of 8% simple interest per annum. In commercial matters, this runs from the date the debt was due, and therefore before the judgment is entered. However, interest can only be imposed from the date of judgment where damages are considered not to be liquid at the time the claim was brought and quantified during and pursuant to a court judgment. Commercial debts are also subject to default interest under Directive 2011/7/EU on combating late payment in commercial transactions (recast) (Late Payment Directive), as applied through the Maltese Commercial Code.
9.4 Enforcement Mechanisms of a Domestic Judgment
The court can give various orders for enforcement, including:
- the issuance of warrants/executive acts, including some of the warrants mentioned in 4.1 Interim Applications/Motions. It is also possible to issue an executive warrant of seizure of an immovable property; and
- judicial sale by auction to recover the payment due, costs of the procedure, and interest.
9.5 Enforcement of a Judgment from a Foreign Country
In cases where a judgment delivered by the courts of another EU member state is being enforced in Malta, the procedure is regulated by Regulation (EU) No 1215/2012. Recognition is automatic, and enforcement can take place immediately with the filing of any executive measures. Enforcement measures will be served upon the judgment debtor, who will then have the opportunity to file an application before the First Hall of the Civil Court, raising any of the grounds of objection to the enforcement of the foreign judgment contained in the aforementioned Regulation. Any eventual judgment will be subject to appeal.
In cases where a judgment has been delivered by a court outside of the European Union, on the basis of an exclusive choice of court agreement by the courts of a Contracting State to the Hague Convention on Choice of Court Agreements, then that judgment can be recognised and enforced in Malta pursuant to the procedure laid down in that Hague Convention. This provides for recognition and enforcement to take place in accordance with local procedural law.
In cases where a judgment delivered by the courts of a non-EU member state (third country) is being enforced in Malta, the procedure is regulated by the Code of Organisation and Civil Procedure. A foreign judgment that is final and binding, and has been delivered by a competent court outside of Malta, will first need to be registered, which will require the filing of an application before the First Hall of the Civil Court. Proceedings involve the judgment debtor, who will have the opportunity to raise any of the grounds for objection to the registration of the foreign judgment contained in the aforementioned code, being far wider than those contained in the EU Regulation. Once registered and recognised, the foreign judgment may then be executed locally in the same manner as other local judgments.
Limitedly, money judgments delivered by the Supreme Courts of the United Kingdom may be registered in Malta in accordance with the provisions of the British Judgments (Reciprocal Enforcement) Act (Chapter 52 of the Laws of Malta). The procedure is very similar to that of the Code of Organisation and Civil Procedure.
10.1 Levels of Appeal or Review to a Litigation
There is only one level of appeal in Malta. There is no third level review in cassation or at a supreme court.
There is a right of appeal to the Court of Appeal against judgments delivered by courts of first instance. However, judgments delivered by the Court of Appeal are not appealable.
Appeals from the First Hall, Civil Court, and from the Court of Magistrates in its superior jurisdiction are heard by the Court of Appeal in its superior jurisdiction.
Appeals from specially constituted tribunals, such as the Financial Services Tribunal, shall lie before the Court of Appeal in its inferior jurisdiction presided over by one judge. Appeals from decisions of the Court of Magistrates (Malta) and the Court of Magistrates (Gozo) are also heard by the Court of Appeal in its inferior jurisdiction.
It is also possible to appeal against certain interim or interlocutory decrees, such as a decree allowing a request for urgency or the appointment of a referee. However, such appeal may be lodged only after the delivery of a definitive judgment and only if an appeal against the definitive judgment itself is entered.
Other decrees that necessitate a final decision before the delivery of a definitive judgment (eg, a decree refusing the joinder of a third party) may be appealed against by means of an application within six days of the date on which the decree is read out in open court.
Certain other interlocutory decrees may be appealed against only by special leave of the court, to be requested by means of an application filed within ten days of the day on which the decree is read out in court.
10.2 Rules Concerning Appeals of Judgments
An appeal may be lodged by means of an application, which shall contain the part of the judgment the appellant may wish to be reversed, varied or annulled. The appeal must also be substantiated with detailed reasons in the application. If the appeal is seeking variation, the application must state the manner in which the appellant wishes the judgment to be varied.
There is no appeal from judgments given upon the admission of a claim, or if the party in question has renounced the right of appeal.
Appeals may also be entered into by interested third parties.
Furthermore, if several issues are decided by more than one judgment, then appeals may only be made upon the final judgment, unless the potential appellant obtains leave from the court to appeal at various instances prior to delivery of the final judgment.
10.3 Procedure for Taking an Appeal
An appeal can be entered by any party against either all other parties or any one of them. As mentioned above, an appeal is lodged by means of an application that must be filed in the registry of the Court of Appeal within 30 days of the date of the judgment. If an appeal is not entered into against the whole judgment, then the application must specify the heads of judgment being appealed. This time period cannot be extended.
Security for costs must be deposited in court just after the written pleadings are closed.
The appeal application is served on all parties, but only the parties against whom the appeal is directed must file their answer within 30 days, specifying why the appeal should be dismissed. The written pleadings in appeal are deemed closed by the submission of an answer to the application, but if it deems so expedient, the court may make an order to allow the filing of any additional pleas.
The appeal application or reply must contain all the documents in support of said application or reply. No new evidence is admitted on appeal, except in specific circumstances.
10.4 Issues Considered by the Appeal Court at an Appeal
An appeal can be filed on either points of law or points of fact. In fact, the Court of Appeal may deal with both the principles behind and the merits of a judgment.
Although an appeal from judgments of the Superior Courts in first instance are meant to be full appeals on both the law and legal principles applicable as well as on the facts, a significant number of judgments have consistently upheld that the Court of Appeal should not, in principle, typically disturb the assessment of facts made by the first courts, which would have heard witnesses and had other evidence filed before them.
Generally, new points that were not explored at first instance cannot be raised in appeal, and no evidence that had already been available to the parties can be submitted in appeal. There are, however, certain specific pleas (eg, the defence of prescription) that can be raised for the first time also on appeal. In exceptional cases, new evidence may also be submitted with the Court of Appeal's prior authorisation.
10.5 Court-Imposed Conditions on Granting an Appeal
An appeal from a final judgment is not subject to any conditions, except for the security for costs. It is a right exercisable at the instance of the party in a judgment to ask for a quashing of the judgment in first instance or the amendment thereof.
Appeals from certain interim, interlocutory or other decrees delivered by the courts can only be made following an application for leave of appeal. If such leave of appeal is not granted, appeal from such decrees can only be made together with an appeal from the final judgment.
10.6 Powers of the Appellate Court after an Appeal Hearing
The Court of Appeal may confirm the judgment delivered by the court of first instance. It may also amend, reverse, vary or annul the judgment of the court of first instance; in certain cases, the logical conclusion of such decisions may be to remit the case back to the court of first instance for a decision on the merits in light of the decision in appeal, depending on the circumstances of the case.
Furthermore, if an appeal is found to be frivolous or vexatious, the Court of Appeal may award double costs against the appellant.
11.1 Responsibility for Paying the Costs of Litigation
In its judgment, the court will make a decision regarding who is to bear the costs of proceedings.
These costs are typically made up of Court Registry fees, advocates' fees and legal procurator's fees, which are established and levied in accordance with statutory tariffs. These official rates are found in the schedules to the Code of Organisation and Civil Procedure.
Typically, when judgments allocate responsibility for costs of litigation, whether so apportioned or whether allocated against the losing party in litigation, the quantum of such costs is the quantum established in the said schedules.
The courts generally apply the costs follow the event principle.
11.2 Factors Considered when Awarding Costs
Maltese law does not attempt to restrict judicial discretion in the matter of cost allocation. As mentioned above, costs typically follow the event, although there have been instances where one party's dilatory behaviour during proceedings or a party's refusal to reach an early settlement have been considered in the allocation and award of costs.
11.3 Interest Awarded on Costs
Interest is not awarded on costs.
12. Alternative Dispute Resolution (ADR)
12.1 Views of ADR within the Country
There has been an increased drive in recent years to integrate alternative dispute resolution mechanisms within the general architecture of civil procedure in Malta, with varying degrees of success. Some initiatives have been of purely domestic origin, with others following the transposition of EU instruments like the Mediation Directive.
Leaving arbitration aside, since both domestic and international arbitration having its seat in Malta have significant take-up and a life of their own, mediation is increasingly popular.
Judges now have the power to refer a case before them to mediation and, in certain specific types of lawsuits, there is a mandatory reference to court-annexed mediation schemes that have to be resorted to before the case can proceed to litigation.
12.2 ADR within the Legal System
Court annexed mediation schemes and inferences on costs as a result of unreasonable refusals to refer to ADR before litigation seem to be the direction forward.
See 12.1 Views of ADR within the Country regarding the promotion of ADR. As far as is known, there are not yet any clear sanctions for refusing ADR.
12.3 ADR Institutions
The institution which regulates arbitration in Malta is the Malta Arbitration Centre (MAC), and the institution which regulates mediation is called the Malta Mediation Centre (MMC).
The functions of the MAC/MMC include the following:
- the promotion of Malta as a centre for international commercial arbitration;
- encouraging domestic and international arbitration/mediation as a means of settling disputes; and
- conducting domestic and international arbitration/mediation in Malta.
The MAC is run by a Board of Governors, the Chairperson and Deputy Chairperson of which must have been practising lawyers for not less than 12 years. This requirement also applies to the MMC.
13.1 Laws Regarding the Conduct of Arbitration
For arbitrations where the arbitral procedure is governed by Maltese law, the Arbitration Act and the Arbitration Rules (subsidiary legislation 387.01) apply. The arbitration agreement must be in writing, and the arbitration must be registered with the Malta Arbitration Centre (MAC). In order to institute arbitration, a notice of claim must be lodged with the MAC, including information about the claim and the nomination of an arbitrator. The notice must then be served on the defendant. If the parties agree on the procedure to be adopted by the arbitral tribunal, then the arbitrator may themselves determine said procedure to be adopted. Proceedings are generally informal and flexible in nature. In default of agreement between the parties, the rules set out in the Code of Organisation and Civil Procedure will apply with respect to the production of documents and/or witnesses.
Domestic arbitration awards are deemed to constitute an executive title under Maltese law.
As for the recognition and enforcement of foreign awards, Malta has signed and ratified the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. In matters relating to international arbitration, the Arbitration Act is based on the 1985 UNCITRAL Model Law.
13.2 Subject Matters Not Referred to Arbitration
Certain subject matters are not arbitrable, including criminal cases and cases relating to acts of civil status and public law matters, amongst others.
13.3 Circumstances to Challenge an Arbitral Award
An application may be made to the Courts of Justice in Malta to set aside an award where Malta was the seat of the arbitration largely on the same grounds as those for the refusal of recognition and enforcement of foreign arbitral awards listed in the New York Convention and the setting aside grounds in the UNCITRAL Model law. Thus, an award will only be set aside if the appellant proves to the satisfaction of the Court of Appeal, that, for instance:
- proper notice was not given;
- the arbitral award falls outside the parameters of the arbitration agreement;
- the arbitration was not conducted in accordance with the agreement of the parties; or
- the award conflicts with the public policy of Malta.
An application to the Court of Appeal to set aside an arbitral award must be made within 15 days of the notification to the applicant of the award, and the applicant must notify the arbitrators and the MAC with a copy of the application not later than 15 days after the filing of said application.
Appeals against arbitral awards can also be filed before the Court of Appeal. However, this is only applicable in domestic arbitrations and if the parties have agreed in writing to make such a right of appeal available. Furthermore, with respect to mandatory arbitration, parties have a right to appeal on both points of fact and points of law to the Court of Appeal.
13.4 Procedure for Enforcing Domestic and Foreign Arbitration
Domestic awards in procedures that have been initiated by means of a notice of arbitration and delivered by arbitrators under the auspices of the MAC are recognised as executive titles and can be enforced in Malta in exactly the same manner as court judgments.
Foreign arbitration awards must also be registered with the MAC, whereby they will be enforced by the courts of Malta in the same manner as domestic arbitral awards. This applies to foreign arbitral awards to which the treaties set out in the Second Schedule to the Malta Arbitration Act (ie, the Geneva Convention, the Geneva Protocol and the New York Convention) are applicable. An application for registration will be served upon the judgment debtor, who will have the opportunity – within a specified time period – to file a note of objection to the registration on any of the grounds specified in those conventions.
The entity designated as the competent entity for recognition and enforcement under the New York Convention is the Chairman of the Malta Arbitration Centre. Decisions regarding recognition and enforcement delivered by the Chairman of the MAC may be appealed from before the Court of Appeal.
14. Outlook and COVID-19
14.1 Proposals for Dispute Resolution Reform
There have been a number of legislative changes with respect to the dispute resolution landscape, some already implemented while others are still in the pipeline at the time of writing. These include changes to the manner in which judicial appointments are made, and the raising of provisions dealing with the office of the Ombudsman to the constitutional level. There are also plans to modernise and harness the use and implementation of ICT technologies. In fact, the use of videoconferencing and virtual hearing has increased, particularly in view of the restrictions imposed to combat the current COVID-19 pandemic. However, at the time of writing, the expected large-scale reform on increased use of technology in litigation hast still not been launched.
There are also ongoing initiatives relating to a deeper integration of ADR in the dispute resolution process, and amendments to the Arbitration Act and the Code of Organisation and Civil Procedure are in the pipeline.
14.2 Impact of COVID-19
The COVID-19 pandemic prompted the temporary closure of the courts of justice in Malta, from 16 March 2020 until 5 June 2020. This closure affected the superior and the inferior courts, as well as the appellate courts, irrespective of their competence or jurisdiction. Tribunals, boards, administrative commissions, committees and other entities that operate from the building of the Courts of Justice were also affected.
The court registry was also temporarily closed from 16 March 2020, but was reopened with effect from 4 May 2020.
The running of any legal and judicial times and of any other time limits including peremptory periods, either civil or commercial, was suspended with effect from 2 April 2020.
With regard to substantive or procedural time limits relating to any court operating from the building of the Courts of Justice, this suspension lasted until 12 June 2020.
The courts of justice in Malta have now been reopened, with certain rules in place to minimise the number of people present in the building at any given time, including the scheduling of hearings at set appointment times.
Originally published by Chambers Litigation Global Practice Guide
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.