1. General

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 generally conducted in both written and oral form.

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.

Superior Courts

The Superior Courts consist of the Civil Court, the Court of Appeal and the Constitutional Court.

Civil 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.

Constitutional Court

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.

Inferior Courts

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;
  • 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 this 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; and
  • the Information and Data Appeals Tribunal Pursuant hears and decides appeals following a decision of the Information and Data Protection Commissioner relating to data protection law or freedom of information requests. One may also appeal the decision of the Tribunal before the Court of Appeal on a point of law.

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. Any proceedings filed against or by the Financial Intelligence Analysis Unit (FIAU) involving money laundering cases are not public and are heard behind closed doors.

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 practice in the Courts of Justice in Malta. To be eligible, the applicant should have practiced 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 and dedicated 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 plaintiffs to send informal legal letters or formal judicial letters putting the defendants on notice of their respective claims. 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 default limitation period is 30 years, but this suffers a number of exceptions, mainly:

  • five years for contractual claims; and
  • 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.

In addition to the general prescription periods highlighted above, the law establishes shorter time periods for specific actions or classes of actions, including the recovery of funds arising out of specific types of contracts. 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 they are 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), or where the law permits, by a mere application (which is not confirmed on oath upon filing). 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 where such correction shall not affect the substance either of the action or of the defence on the merits of the case. 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 by a court bailiff to the defendant directly. In the case of corporate entities, a copy of the act may be served 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, accompanied by publication of a summary of the judicial act in the Malta 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 an EU member state, service of judicial documents may take place in accordance with the procedure laid down in Regulation (EU) No 2020/1784 on the service in the member states of judicial and extrajudicial documents in civil or commercial matters (recast).

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 them 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 (Competition Act) (Cap. 520 of the Laws of Malta) and the Representative Actions (Consumers) Act which transposed the Representative Actions Directive (Directive (EU) 2020/1828 on representative actions for the protection of the collective interests of consumers) allow consumer class actions, group actions as well as representative actions where a party is in breach of laws on, amongst others, competition law, product safety law, consumer protection, data protection, utilities, financial services, product and medicine safety, environment and others. Proceedings may be conducted by a representative plaintiff on behalf of multiple plaintiffs and in the case of consumers, representative actions may be brought by qualified entities, generally designated organisations or public bodies representing consumers.

Thus, all collective actions and representative actions are opt-in.

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 available under Maltese law.

Garnishee Order

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 or financial 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 on a precautionary basis, with a view to it eventually being sold by means of a judicial sale by auction once the executing creditor is in possession of an executive title, such as a final and binding judgment or arbitral award. This warrant can seize 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, any pledging of the shares, and certain internal reorganisations).

Warrant of Arrest of Sea Vessels

This warrant of arrest orders the seizure of vessels (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 vessel.

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 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 or omitting to do anything which might be prejudicial to the person suing the warrant. This is the only warrant that is not decided on a purely ex parte basis but requires a hearing before the injunction can be issued. That being said, the court may, upon the plaintiff's request, issue the injunction on a provisional basis until the matter is heard and decided.

Warrant of Description

This warrant 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 preserving the totality of the assets of the going concern, including licences and goodwill, to order that they are 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.

Pursuant to and by virtue of Regulation (EU) No 1215/2012, provisional measures can be sought in Malta in support of proceedings being heard in another EU member state. In this instance, such measures will only have territorial effect.

If, on the other hand, Maltese courts have jurisdiction over the main lawsuit, any provisional and protective measure sought in Malta is automatically recognised and can be enforced in any other member state.

The Code of Organization and Civil Procedure (Chapter 12 of the Laws of Malta) separately allows provisional measures to be sought in Malta in support of international arbitration proceedings.

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 by the court.

Some of 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 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 they do not contest the claim within 30 days from service, then the judicial 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 does not make an appearance or fails to satisfy the court that they have 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 may 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

While the Code of Organisation and Civil Procedure caters for a request made by the respondent for an order on the applicant to give security for the costs of the suit (Article 200), this is limited to those instances where the applicant is expressly required to give such security at law. Such instances would include security for costs by the appellant in appellate proceedings, and by the applicant in intellectual property cases, and in cases for the enforcement of mortgages on ships and aircraft.

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.

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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.