If you’ve ever found fewer biscuits in a packet than advertised, or been overcharged a few cents for a streaming subscription, you might not think it’s worthwhile to pursue legal action. For too long, small injustices have gone unaddressed, leaving consumers and businesses vulnerable to the anti-competitive practices of larger corporations.

Collective redress mechanisms, which allow a representative to bring a case on behalf of many affected consumers, are a way to address these small but widespread issues and hold companies accountable.

While public enforcement of EU competition law by authorities is vital, it’s not enough. We also need private enforcement, which empowers individuals to seek legal action.

But, for small jurisdictions like Malta, effective private enforcement presents unique challenges. Are we, as a small jurisdiction, destined to be “squeaking mice”, with insufficient influence to ensure a level playing field for our businesses and consumers? The answer, it seems, lies in reforming our approach to collective redress.

Malta’s current opt-in system for collective redress is simply not up to the task. Opt-in systems require individuals to actively choose to join a collective action to be bound by its outcome. This seemingly simple step is a major impediment to justice. The necessity of opting in discourages potential claimants because of the time and effort required. Many individuals are reluctant to invest the resources, especially when the individual gain is small.

The statistics speak for themselves. Studies have shown that opt-in systems result in very low participation rates within the EU, with fewer than one per cent of consumers engaging in such actions. In contrast, opt-out systems, where individuals are automatically included unless they actively choose to withdraw, see participation rates as high as 97 per cent in the Netherlands and nearly 100 per cent in Portugal.

This difference is not trivial. It means that in opt-in systems, the vast majority of those harmed are left without remedy.

If a right cannot be effectively enforced, it is practically useless. The existence of a system on paper does not ensure practical access to justice.

An opt-in system, particularly where awareness or resources are limited, can result in rights being theoretically available but practically unattainable.

In Malta, this issue is particularly acute. The country has a small economy and a limited number of legal professionals specialising in competition law. The public also lacks awareness of collective redress mechanisms, which means that many are unaware of their legal rights or the possibility of pursuing a class action. The existing Collective Proceedings Act, which establishes the opt-in mechanism, has been barely used since its introduction, further demonstrating its ineffectiveness.

Opt-out systems, in contrast, offer a much more effective way of achieving broad compensation for widely dispersed damages. By automatically including individuals unless they choose to withdraw, these systems significantly increase participation rates. This is critical because larger groups are more likely to prevail in litigation, and defendants are more willing to offer larger settlements when faced with a larger group of claimants.

Moreover, opt-out systems ensure a more comprehensive representation of harmed individuals. They address the informational asymmetries that exist in opt-in systems, where individuals may be unaware of their rights or the availability of redress. By ensuring broad participation, opt-out systems can also deter future infringers, as companies know they will be held liable to the majority of those harmed.

Opt-out systems offer a much more effective way of achieving broad compensation- Beppe Micallef Moreno

The European Union has recognised the need for more effective collective redress mechanisms. The 2020/1828 directive mandates that all member states implement representative actions for both injunctive and redress measures. Importantly, unlike a previous non-binding recommendation, this directive allows member states to choose between opt-in, opt-out, or a combination of both.

However, the directive’s flexibility means that its implementation will vary by member state, potentially jeopardising its overall success.

For Malta, the path forward is clear: the country must adopt an opt-out collective redress system, or a meticulously designed hybrid model.

The current opt-in system is simply not fit for purpose, particularly in a small jurisdiction with limited resources and a lack of public awareness.

While domestic reforms in Malta are crucial, an effective cross-border and international class action mechanism is necessary to increase participation and to enable more effective enforcement.

We need a harmonised opt-out model across all member states, a system that better protects the right to access justice. By increasing the likelihood that companies will face collective action for wrongdoing, opt-out systems create a substantial deterrent against illegal practices.

In a vast ocean teeming with powerful forces, the smaller fish – though seemingly vulnerable – have the opportunity to unite with others in a collective effort to resist the predatory and anti-competitive practices of larger, more dominant entities.

By joining forces, these smaller nations can assert their presence and demonstrate the profound importance of a unified approach to consumer protection and competition law.

So, the next time you open a packet of biscuits and find fewer than promised, you might think twice before shrugging it off. With an opt-out collective redress system in place, you could be part of a lawsuit that holds the biscuit company accountable – not just for your missing treats but for everyone else’s too.

And as you enjoy your legally mandated extra biscuits, you’ll know that sometimes, even the smallest crumbs of injustice deserve their day in court. After all, if David could beat Goliath, why can’t we beat a greedy company?

Beppe Micallef Moreno is a fourth-year law student and legal intern at Filletti & Filletti Advocates.