Id-Dritt XXV - Volume 2

Id-Dritt Volume XXV

2015 Published by Għaqda Studenti tal-Liġi

Produced and published by Għaqda Studenti tal-Liġi (GħSL); the University of Malta Law Students’ Society.

Correspondence in relation to this publication should be forwarded to: The Editor Room 219, GħSL Office, Faculty of Laws, University of Malta, Msida, Malta E-mail: editor@ghsl.org © Għaqda Studenti tal-Liġi 2015 All Rights Reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of the copyright holder and the publisher, application for which shall be made to the publisher.

Proofreading and editing done by the Editorial Board.

Some articles have been modified for reasons of clarity and/ or uniformity.

Opinions expressed in Id-Dritt Volume XXV do not necessarily represent the views of the Editorial Board or of Għaqda Studenti tal-Liġi.

Printed in Malta by Progress Press Co. Ltd, Żona Industrijali, Triq l-Intornjatur, Mrieħel, BKR 3000, Malta

Cover Design by Neil Darmanin

978-99957-857-1-0

In Loving Memory of Matthew Meilak

Id-Dritt Volume XXV Editorial Board 2014/ 2015

Editor-in-Chief Luana Bezzina

Editors Ariane Aquilina Vanessa Gatt Michelle Grech Julian Vella

Publications Officer Gaynor Saliba

Għaqda Studenti tal-Liġi Executive Board 2014/ 2015

Francesco Refalo

President

Dirk Urpani

Secretary General

Patrick Gatt

Financial Officer

Rebecca Mercieca

Public Relations Officer

Joshua Chircop

Academic Officer

Gaynor Saliba

Publications Officer

Jacob Portelli

Events Officer

Rebecca Cassar

External Relations Officer

Pier Luca Bencini

International Officer

Luisa Cassar Pullicino

Thesis Librarian

Charles Mercieca

Gozo Relations Officer

Kelton Mizzi

IT Officer

GĦSL PUBLICATIONS OFFICER ADDRESS

by Gaynor Saliba LL.B., Dip. Not. Pub (melit)

It is with immense pleasure and great honour that I present the twenty-fifth volume of Id-Dritt, an acclaimed law journal that has graced our bookshelves since 1947. At the time, a group of avant-garde law students from the Royal University of Malta formed the Law Student’s Society and published the first journal of its kind on the island, entitled The Law Journal. Since then the journal has naturally undergone various changes (including that of its name in 1971), at times risking of becoming obsolete, yet in the last six years the journal has kept its annual appointment.

As Publications Officer, upon the realisation that the 25 th Volume was due, I wanted this edition to be special. My ideas were welcomed by the Executive Board and created a small committee to discuss what the anniversary edition should include. Ultimately we decided that as celebration to the 25th edition, not only should we publish the Commemorative Edition but also the annual edition containing new articles on contemporary subjects. This edition thus, features a total of twenty-three articles ranging from Intellectual Property to Criminal Law, from iGaming to Notarial Legislation, and from Constitutional to Private International Law. Moreover, following the recent tragic accident, GħSL deemed it apt to dedicate this edition to Matthew Meilak, a brave fellow colleague that has left this world to a better life at the beginning of the year – may his soul rest in eternal peace!

I equate my three-year journey within Għaqda Studenti talLiġi, to the infamous phrase ‘united we stand, divided we fall’.

Inexperienced as I was upon my appointment, I soon came to realise that the publication of a law journal entailed the combined effort of a group of committed law students and legal professionals. The particularity of Id-Dritt presupposes that a number of articles be written by different legal professionals on different topics, thus creating a hybridity between traditional and modern subjects into

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one journal. In this regard, I would like to pay tribute to all authors who throughout the years have contributed to this prestigious publication, thus aiding the organisation in keeping its frequent appointment with its avid readers.

On behalf of GħSL, I profoundly thank Professor Kevin Aquilina, Dean of the Faculty of Laws, for the numerous times I have knocked on his door to seek advice. Not only was he instrumental in helping us ensure that the journal’s entries were original by subjecting them to the plagiarism detection software, but assisted the Editorial Board in drafting a set of stringent guidelines which a peer-reviewed journal merits. In this sense, I would also like to express my gratitude towards the network of peer reviewers who ensured that the contributions in this journal are legally correct, thus ensuring the prestigious reputation of the journal.

I would also like to thank the committed group of individuals forming GħSL’s Executive Board for their constant support throughout the publication process. I am particularly indebted to Francesco Refalo and Dirk Urpani, respectively President and Secretary General of the University of Malta Law Students’ Society, for their constant encouragement and assistance in the past two years.

I extend my sincere gratitude to a devoted team of editors, composed of Ariane Aquilina, Michelle Grech, Vanessa Gatt and Julian Vella, who ensured consistency throughout the journal.

Lastly, I would like to wholeheartedly express my profound gratitude to the dedicated individual who acted as my companion and mentor throughout this exciting journey; Ms Luana Bezzina, Editor-in-Chief to this publication. Not only has she lead the whole team with great professionalism, but has worked tirelessly by my side to fulfil a distant dream which we both had – to see the twentyfifth edition come to print.

Id-Dritt Volume XXV marks the end of my term within Għaqda Studenti tal-Liġi. I sincerely hope that in the past three years, I have in my little repaid the organisation that has transformed a shy and somewhat lethargic student to a more complete individual (and hopefully professional!). While naturally encouraging law students to take an active role within the organisation, I augur that future GħSL Executive Boards preserve the prominence and prestige that the organisation, and above all Id-Dritt has managed to re-gain x

in the past years. I humbly feel honoured to have formed part of the organisation that has been active within university for almost seven decades. Ad multos annos GħSL!

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EDITORIAL NOTE

by Luana Bezzina LL.B., Dip. Not. Pub (melit)

As Editor-in-Chief of this publication, it is with great pleasure that I present the 25th Volume of Id-Dritt. This edition features a total of 23 articles addressing topics such as Domestic Violence, the Attribution of Responsibility in aircraft tragedies, the Right to be Forgotten, and Medical Consent. In keeping with the system set out in the 24th edition, this year’s publication endeavours to present its readers with a scrupulous equilibrium of contributions dwelling on the more traditional concepts embedded in our corpus juris and other contributions underscoring concepts or aspects pertaining to more contemporary specialisations, including IT Law, Gaming Law and Tax Law. Continuing on the foundations laid out last year, the editorial board overseeing the publication of the 25 th Volume was conferred with a similar mandate, to that conferred to last year’s editorial board. Following an unprecedented response from readers, the GħSL executive once again entrusted the editorial board to identify the thematics it desired to feature in this important edition. The foremost aim of all editorial boards, since the genesis of this publication, was to publish articles of direct relevance to the law student and the legal professional alike. Thus, once again the editorial board engaged in an exercise to identify subjects or topics which it thought merited inclusion in this year’s volume.

Notwithstanding the emphasis on the importance of student activism, many are those who regard student-edited journals with scorn. The editorial board is mindful that review mechanisms are indispensable for any prestigious journal and more so when such journals are student-edited journals. Thus, the editorial board has once again sought to strengthen review thresholds. After exhaustive consultation with Professor Aquilina, Dean of the Faculty of Laws, and Professor Simone Borg, Deputy Dean of the Faculty of Laws, the Editorial Board has devised a set of guidelines for its peer reviewers, aimed at ensuring uniformity and consistency in the xiii

review of all contributions. All submissions were subjected to the Faculty’s plagiarism detection software and subsequently peer reviewed. I take the opportunity to express my gratitude to Id-Dritt’s network of peer reviewers for their time and assistance during the review process. Their expertise has undoubtedly ensured the retention of the prestige which this publication has always sought to achieve. The Editorial Board thanks Professor Kevin Aquilina, who for the second consecutive year aided us in coordinating this process. I augur that future Editorial Boards persist in further strengthening this mechanism of review with the assistance of the Faculty of Laws, and ensuring that the standing which Id-Dritt has secured throughout the years continues to flourish.

Despite the introduction of more stringent review thresholds, the editorial board strove to include a good number of contributions which cover substantial aspects of an ever broader legal spectrum.

The editorial board is honoured to announce that despite Id-Dritt’s rigorous review mechanism, this volume has surpassed all previous editions with regards to the number of submissions. The 25 th Volume includes contributions by young undergraduates, junior lawyers, practitioners, academics, and members of the judiciary. A number of contributions also feature a collaborative enterprise between professionals in the legal sector and law students. Such collaborations are undoubtedly encouraging for the student body.

Moreover, such collaborative efforts permit the student to further ameliorate research and writing skills while under the supervision of professionals. On behalf of all law students, I thank legal professionals who invest their time in training us students. The editorial board augurs that such collaborations will be encouraged by successive GħSL executives.

A look at the list of contents of this volume reveals a number of articles penned from an inter-disciplinary perspective, including inter alia, law and gender, the law and medical practice, law and finance. Such contributions underscore the fusion of law with other disciplines. Nowadays it is inevitable that law suffuses all these different branches. Moreover, such contributions further accentuate the inherent dynamic nature of law, and further underscores the distancing from the traditional notion of law as a self-contained discipline.

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The Editorial Board expresses its gratitude to Her Excellency President of Malta Marie Louise Coleiro Preca, who has been so kind as to accept our invitation to pen the Foreword to this edition, and Mr Justice Lawrence Mintoff, whose contribution, in the Maltese language, graces the back-cover of this volume. I would also like to thank the committed team of editors whom I was very lucky to have worked with: Ariane Aquilina, Michelle Grech, Vanessa Gatt and Julian Vella. My profound thanks go to our very diligent and enthusiastic Publications Officer, Gaynor Saliba, who for the second consecutive year has led, this year’s team with great professionalism, dedication and expertise, qualities which undoubtedly secured the successful formulation and publication of the 25th edition.

I would also like to express my gratitude to GħSL’s Executive for their assistance throughout the publication process, in particular, Francesco Refalo, President of the University of Malta Law Students’ Society, for once again entrusting me with the role of Editor-in-Chief of this publication, a privilege given to few. I am truly honoured for having been given the opportunity to serve on the board of this acclaimed local publication for the second consecutive year.

The 25th Volume marks an important milestone in the publication of Id-Dritt. This publication was regrettably placed on the back burner for a number of years due to GħSL’s financial constraints. However, for the past seven years, GħSL executives and their respective editorial boards, have successfully maintained this annual appointment, publishing editions of outstanding quality. I would like to take this opportunity to congratulate previous editorial boards and GħSL executives for their sterling work. It is through the diligence of students that Id-Dritt secured the prestige it retains today.

Having served on Id-Dritt’s editorial board for the past two years, I have come to realise that the journal in itself represents the contentions of its contributors, arguments which reflect the spirit of the law and that of the legal sector in a given era. Each edition is representative of the Maltese corpus juris at that particular point in time. Having read through the pages of early editions has made me comprehend that in every single page lies a legacy, a legacy that ought to be cherished for many more years to come. xv

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FOREWORD

by Her Excellency Marie-Louise Coleiro Preca

It is, in my view, more than a happy co-incident, that the publication of this issue of Id-Dritt coincides with the launch of what is probably the most wide-reaching legal reform of the judicial and legal systems proposed so far in Malta. If we accept that the basis of good governance is good law, and that a nation cannot thrive without either, then we understand why the study of law as a major discipline becomes, more than paramount, indispensible.

The proposed bundle of legal reform aims high. Historically there has been widespread dissatisfaction with the way the law translates into the dispensation of justice. The target of criticism was rarely the substantive law itself, but rather the efficiency factor in the administration of the justice system. Some of the proposals could sound daring and challenging, but they may be a last resort.

Almost everything before them failed, notwithstanding the best intentions. They are a glimmer of hope, and hopefully much else.

It can only be extremely gratifying that Id-Dritt goes from strength to strength. Over the past years it has improved in quality, grown in quantity, enhanced its appeal.

It witnesses the commitment of those who study law, as students, as practitioners and as teachers, to expand their horizons and deepen the wellsprings of their learning. The fact that it has reached its twenty-fifth issue demonstrates more than anything else that the far-off pioneers who conceived the idea of its publication so many years ago had a vision and a project that outlasted them, because of the inherent vitality of their dream and the compelling exigency of their programme.

The contents of this issue confirm a trend that has, over the years, become inevitable: that in the realm of law studies, specialization rules. Long gone are the days of the family lawyer as the legal GP, who was expected to be good at everything, though not to be excellent at anything. As leafing through the index of this

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publication shows, the authors who crowd its pages are young undergraduates, qualified practitioners, university lecturers and professors, a member of the judiciary. What unites them is their passion for law; what divides them is their specialization. They are experts in the most diverse gamut of legal offshoots, from aviation law to medieval capitula, from family law to financial services, from taxation to gender law. A combined issue of the last numbers of Id-Dritt would, in itself, constitute a valuable Maltese legal encyclopaedia.

This specialised research into the more frequented or the esoteric provinces of law has to be seen as an essential part of the legal training of students. It is not enough that they absorb and learn.

It is essential that they then learn how to give and share. The culture of law is not inward looking. It is a major form of expression and of communication. It is the ability to formulate a message and to pass it on. The graduates and undergraduates who, over the years, made so many contributions to Id-Dritt, have understood this. May there be many more.

I am sure it is flattering to say that Id-Dritt is the only academic legal journal published in Malta; some may also take that to be a rebuke. Heartening as it is that the students of law felt it imperative to activate a forum for law studies and judicial dissemination, it that enough? Did it have to be the students, or the students alone? What about the legal professionals, what about the legal academics? I believe Malta to be one of the few countries from those that cherish the rule of law, not to have a long-established and prestigious law journal for which the legal profession and the academics of judicial studies are responsible. Kudos to the lawstudents who have stepped in to fill that void with a magazine that, year after year, attains the highest standards of legal scholarship.

Without their initiative, their commitment, their enthusiasm and their mania for perfection, the scientific, academic study of law in Malta would have been an arid desert.

The wide spectrum of legal disciplines covered by this issue of Id-Dritt demonstrates that those responsible for its publication have truly realized that law is a universal imperative, not a sectional interest. Law permeates every corner of our lives, it regulates every activity, it is the bright red line that distinguishes what is good from what is bad. The ‘rule of law’ fails when it turns into a hollow xviii

slogan – it should dominate as the fundamental principle of civilization that we have evolved today. We hold nothing that is not according to law to be right, and anything which is against the law to be wrong. The rule of law is not, nonetheless, an alternative to ethics. There is still a parallel moral code that elevates and refines the rule of law: not all that is legal is necessarily right, nor is all that is wrong necessarily illegal. These are the pastures of philosophy of law, a discipline which should underlie all the others, but which sometimes tends to be overlooked in the tensions and hurly-burly of the judicial marketplace. There has not been one single article on philosophy of law in the last issues of the magazine.

But maybe the greatest attribute of law is that of a living organism. Only its principles are permanent; the way it applies, evolutionary. Continuously, harmoniously, unstoppably, in parallel with social progress, with technological breakthroughs, with the uplifting of the civic conscience, it moves, mostly forwards, sometimes sideways or backwards. To pilot it ever forwards are Parliament, the media, NGOs, constituted bodies, the courts, especially the constitutional court. They are all the custodians of the progress of law as a tool for the betterment of the polis.

We all know how some ‘activist’ supreme courts around the world have changed the face of their nations, sometimes superimposing their ‘activisms’ on the timid inertia of legislators.

The making of law remains unmistakeably the province of parliament, but the enforcement and interpretation of law are the province of the courts, particularly of constitutional courts. On them is placed the delicate and onerous responsibility of applying laws only and exclusively in the spirit of the basic constitutional values, in such a way that the letter of the law should never be read to be antagonistic to the spirit of constitutional principles. The ultimate guardian of these sacrosanct constitutional doctrines are the courts, and they should never let formal legalisms stand in the way of those overarching values that the civilized world has come to consider as indispensible for the assertion of the human condition above all else.

Courts that betray the spirit of the Constitution in their deliberations hardly serve the principal function they are programmed to serve.

The members of the Għaqda Studenti tal-Liġi are doing a superb job. May their successors emulate them and strain to surpass them. xix

CONTENTS Administrative Law Key Elements to Ensure a Legally Valid Process Internal Disciplinary Procedures Kevin Aquilina

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Aviation Law MH17 Tragedy: Where does Responsibility Start and Where does it End? Lara Buttigieg

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Disruptive Passengers on Board Aircraft Rebekah Tanti-Dougall

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Child Law Reporting of Child Abuse – Should it be Mandatory for Professionals?

Daniela Azzopardi Bonanno

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Constitutional Law Maltese Constitutional Development at the Turn of the 20th Century: A Historico-Legal Perspective Claire Bonello

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Quo Vadis Parliament Autonomy? Revisiting of the Maltese Parliamentary Standing Orders Anġlu Farrugia and Clive Gerada

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Questioning Parliamentary Supremacy over the Courts Yet Again Ivan Mifsud

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Judicial Importation of Italian Private Law Solutions and its Implications Mark A Sammut

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Criminal Law The Necessary Requisites of Judgements According to Article 382 of the Criminal Code Amadeus Cachia

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Data Protection Law The Right to be Forgotten: Bringing the Data Protection Directive into the Internet Search Engine Era Ann Marie Spiteri

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European Union Law EU Citizenship: A Rightful Component Emanating from the Transition towards a Union or a too FarFetched Widening of the EU Fundamental Rights?

Justine Calleja

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Financial Services Legislation The Alternative Investment Fund Managers Directive in Malta: Past, Present... What next?

Christopher P Buttigieg

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The Proposed Fourth Anti-Money Directive: What has Changed?

Stephanie J Coppini

Laundering

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Gender and Domestic Violence Consuelo Scerri Herrera and Justine Scerri Herrera

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Gender and the Law

Historico-Legal The Capitula of Malta and Gozo – Late Mediaeval Legislative Enactments with Multicoloured Facets Raymond Mangion

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iGaming Law A Legal Snapshot of the European Online Gaming Industry going into 2015 Michele Magro

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Intellectual Property Law A New Era for Trade Marks?

Jeanine Rizzo

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International Law Today’s Terrorist is Tomorrow’s Statesman – Does the Law of Self-Determination provide any Justification for Terrorist Acts?

Roberta Avellino

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Legislative Review The Mental Health Act of 2012 John M Cachia

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The Value in Legislating for Family Businesses Nadine Sant

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Medico-Legal Informed Consent in Medical Practice in Maltese Legislation Bridget Ellul

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Notarial Legislation Notaries – Too Many Hats?

Roland Wadge

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Private International Law The Six-Week Deadline under The Hague 1980 Convention Sandra Hili Vassallo

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Tax Law Constitutional Safeguards in Tax Litigation: How the John Geranzi Case Upset the Status Quo Conrad Cassar Torregiani and Christopher Bergedahl

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GENDER AND THE LAW

Gender and Domestic Violence Consuelo Scerri Herrera Justine Scerri Herrera

Consuelo Scerri Herrera Justine Scerri Herrera

GENDER AND DOMESTIC VIOLENCE CONSUELO SCERRI HERRERA AND JUSTINE SCERRI HERRERA

_______________________________________________________ Magistrate Consuelo Scerri Herrera obtained her Diploma as Notary Public from the University of Malta in 1988 and her Doctorate of Laws also from the University of Malta after presenting a thesis entitled ‘A Historical Development of Constitutional Law in Malta 1921 - 1988.’ Magistrate Scerri Herrera obtained her Diploma in Canonical Marriage Cases and Jurisprudence and Procedure from the Ecclesiastical Tribunals of Malta in 1999. She was called to the bench in 1997 as a Magistrate and has been presiding over civil and criminal cases which fall within the competence of the Magistrates Courts. She has written many articles in various law journals on the subject of Criminal Law and Constitutional Law. She has delivered many lectures on various topics of Criminal Law. Magistrate Scerri Herrera has also served as an examiner of a number of theses presented for the attainment of the Doctorate of Laws.

Magistrate Scerri Herrera has also been asked to deliver lectures to Law Students at the University of Malta and has also thought at the Police Academy, particularly, in the courses targeting new Police Inspectors. Magistrate Scerri Herrera has also attended a number of seminars and courses over seas to enhance her professional training.

Justine Scerri Herrera is a law student at the University of Malta. She obtained her Bachelor of Laws in 2012 and her Diploma as Notary Public in 2013. She is currently in her final year of Doctor of Laws and writing her thesis entitled 'The Constitutionality and Legality of the Measures which Deal with the Interception of Communications'. Justine spent some months doing voluntary work in the Sector of Human Rights with refugees at the non governmental organization JRS (Jesuit Refugee Services) between 2013 and 2014. She aspires to do a Masters in Criminal Law this coming September hoping to further her studies in the criminal field.

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Preamble

Domestic violence is a crime which has been in existence for many centuries but has only started to gain awareness in the recent decades for the various reasons expounded in this article. Following the awareness of domestic violence by feminist movements, 311

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international human rights activists started to treat the issue as a concern and in turn the issue was incorporated in human rights instruments. The question which followed suit amongst social scientists was: is domestic violence a gender issue or is it gender symmetrical? The authors shall move to answer this question in one of the sections to the article. Although domestic violence features in different relationships, be they between mother and son or between two males in a homosexual relationship, the crux of the article will focus specifically on domestic violence between intimate partners in a heterosexual relationship for the simple reason that the subject of domestic violence is very broad.

1.

Domestic Violence, Gender and Gender Based Violence: Definitions in Regional and Domestic Legislation

According to the Council of Europe Convention on Preventing and Combating Violence Against Women and Domestic Violence ‘gender’ shall mean ‘the socially construed roles, behaviours, activities and attributes that a given society considers appropriate for women and men’, and ‘gender-based violence1 against women shall mean violence that is directed against a woman because she is a woman or that affects women disproportionately’. 2 Furthermore, the Domestic Violence Act defines domestic violence as ‘any act of violence, even if only verbal, perpetrated by a household member upon another household member and includes any omission which causes physical or moral harm to the other’. 3 The term ‘household member’ encompasses many different persons, including those persons who are either in an intimate relationship

1

Gender-based violence (GBV) is the general term used to capture violence that occurs as a result of the normative role expectations associated with each gender, along with the unequal power relationships between the two genders, within the context of a specific society.

2 Council of Europe Convention on preventing and combating violence against women and domestic violence (adopted 11 May 2011, entered into force 1 August 2014) (Istanbul Convention), Article 3(c) 3 Domestic Violence Act, Chapter 418 of the Laws of Malta, article 2 312

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with each other or who are related to one another or who are simply living under the same roof.4 The Council of Europe expressed that; violence is used to exert power and control over another individual. Domestic violence typically comprises abusive and coercive behaviour such as physical, psychological or sexual abuse. A common pattern of domestic violence often starts with intimidation, humiliation and threatening behaviour, including threats of self-inflicted pain. Violence is reinforced by establishing control over another person’s life through isolation, manipulation and by placing limits on personal choices and freedoms. A typical pattern of violence may also involve economic abuse by denying financial independence and controlling economic decisions. Violent behaviour of this sort is often the end result of months or years of intimidation and control.5 Domestic violence revolves around the general control of one person over the other, most commonly but not exclusively between intimate partners. It is usual for an intimate terrorist to deprive the person they are attempting to control of economic resources. 6 This economic abuse is justified by the belief in male privilege. 7 The male perpetrator often uses their victim’s loved ones such as their children to humiliate them or threaten them. 8 The next phase of this cycle is isolation. The perpetrator cuts off any ties with society and friends that the victim might have until ultimately the only source of money, affection and information is him. He convinces her that she is worthless without him and eventually she starts to believe it. If at any point the victim resists then the perpetrator will go on to threaten her, beat her and at times even kill her.

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ibid Council of Europe, ‘Stop domestic violence against women’ <http://www.coe.int/t/dg2/equality/domesticviolencecampaign/Aboutdomesticvio_en. asp> accessed 13 March 2015 6 Also referred as ‘economic abuse’ 7 For example beliefs such as ‘I am the man of the house, and therefore the king in my castle’.

8 For example brainwashing the children’s minds into believing ‘father knows best’.

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Domestic violence is more serious than any other form of violence because the aggressor is not just anybody but is someone who the victim would love and trust and very often shares a life and home with. The element of trust and the fact that the violence is ongoing is what makes domestic violence an immensely horrible crime which must be treated with urgency and sensitivity.

United Nations studies show that physical violence caused by an intimate partner is the most common appearance of violence experienced by females around the world.9

2.

Domestic Violence: A Historical Overview

Women have been battered for centuries but it was not until the 1970’s that domestic violence became a public concern.

Originally it was seen as a private issue and that nobody should interfere with what goes on behind closed doors. During the Middle Ages, church laws were very influential. Women were under the authority of men, who had the express support of the church to correct women’s conduct through punishment. John Stuart Mill in 1869 wrote an essay titled ‘The Subjection of Women’ where he expressed his concern for wives ‘against whom a husband can commit any atrocity except killing her, and if, if tolerably cautious, can do that without much danger of the legal penalty’.10 The total absence of information was a big part of the problem. Until feminist movements such as the ‘battered women’s movement’ came about there was little or no information concerning family assaults. Eventually as a reaction to the uprising of feminist movements the situation for victims of domestic violence started to get better. The first refuge for battered women in England opened in 197211 and the first shelter for battered women in America opened

L Hasselbacher, ‘State Obligations Regarding Domestic Violence: The European Court of Human Rights, Due Diligence, and International Legal Minimums of Protection’ (2010) 8 Northwestern Journal of International Human Rights 10 LL O'Toole, RJ Schiffman and LM Kiter Edwards, Gender Violence (Second Edition, New York University 2007) 247 - 248 11 Known as ‘Chiswick Women’s Aid’ 9

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in 1974. Today there are shelters open in most countries around the world.

It is important to note that women of all demographic groups are victims of domestic violence. There is no one stereotype that exists. It is false to say that only women of a certain class or race are likely to be victims of domestic violence. Variables like race, class and culture may have an effect on domestic violence but are often not the sole cause of the problem. 12 International research shows that different forms of domestic violence may be society or culture specific. In the west domestic violence victims are forced to suffer in silence due to the support of social institutions, however, in other parts of the world, it is seen as normal and as a consequence not a problem.

As various statistics on domestic violence show, domestic violence in not confined to one culture but instead exists in countries with varying cultural, political, social and economic structures. Its ‘pervasiveness signifies that the problem does not originate with the pathology of an individual person’.13 Theorists including Catharine Mac Kinnon and Robin West have expressed that domestic violence is culturally construed. The conflicting issues that are rooted in domestic violence are connected to social norms and power 14 relations. The historical inequality of women and gender socialization of males and females contribute to the cause of domestic violence.

3.

Is Domestic Violence a Gender Issue?

For the last few decades there have been persons arguing that domestic violence is a gender issue and other persons arguing that

12

For example many Asian women come from a culture of traditional family values and honour which result in the belief that women are secondary to men 13 Subrata Paul, ‘Combatting Domestic Violence Through Positive International Action in the International Community and in the United Kingdom, India, and Africa’ (1999) 7 CARDOZO J. INT’L & COMP. L. 227, 243 14 HANNAH ARENDT, ON VIOLENCE 44 (1970), cited in Stanage at 225-26: ‘Power is the ability or entitlement to exercise control over another person’ 315

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domestic violence is not a gender issue and women are just as violent in intimate relationships. Who is right?

Those who believed that intimate partner violence was initiated by both men and women relied on evidence from surveys that showed gender symmetry in intimate partner violence and those who believed that intimate partner violence was initiated almost always by men against their female partners cited opposing evidence from surveys carried out in police departments, court rooms, women’s shelters and emergency hospital rooms.

Before moving to answer this question, the authors will firstly describe the different types of intimate partner violence. The first type is intimate terrorism which is when a partner seeks to take general control over the other. The second type is violent resistance which is when the use of violence is used in response to the partner attempting to take control and the third type is situational couple violence which does not involve the taking control over either partner.

Studies in both the United States have shown that social scientists who argued that domestic violence is gender-symmetric have relied mostly on general surveys which are biased in favour of situational couple violence and they have found rough gender symmetry in their research, leading them to the incorrect conclusion that domestic violence is not about gender. Feminist theorists and researchers in comparison have relied on samples that are biased in favour of intimate terrorism, highlighting gendered patterns, with men as the primary abusers of intimate terrorism.15 In a paper titled ‘Conflict and Control; Gender Symmetry and Asymmetry in domestic Violence’, Johnson conducts a study in order to depict which gender conducted the violence in 4 different types of violent behaviour, two of which include ‘intimate terrorism’ and ‘situational couple violence’. It resulted that when it came to the ‘intimate terrorism’ violent type in 94 out of 97 cases it was the husband who conducted the violence, whereas in contrast when it came to the ‘situational couple violence’ type 56% of the time it was the husband and 44% of the time it was the wife who was violent.

15

O'Toole L L, Schiffman R J and Kiter Edwards L M (eds), Gender Violence (Second Edition edn, New York University 2007).

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The latter result is gender symmetrical whereas the former result is not.16 Therefore, in response to the question, the authors contend that domestic violence is a gender issue because when one uses the term ‘domestic violence’ one usually would be referring to this type of intimate terrorism. Intimate terrorism violence refers to a partner attempting to seek control over another through acts of violence.

This type of violence is ongoing (therefore long-term) and is embedded in a pattern of power and control. In contrast situational couple violence refers to an act of violence perpetrated due to a particular situation which got out of hand and led to the use of violence. This type of violence is usually a one off act of violence and relates to a single situation.

4.

The Evolution of Attitudes of Social Institutions Towards Domestic Violence

Until the 1970’s women were violated, harassed, raped and had to suffer in silence. The reason they had to suffer in silence is because services such as shelters and help lines did not exist. Since the line of thought was that domestic violence is a private matter, there were no services for victims of domestic violence to make use of in times of need or escape.

Furthermore, besides services being inexistent, society’s institutions such as law enforcement and law courts were not effective in their response and handled the matter in a way which would worsen and not better victim’s situation. The influential 18 th century law Jurist Blackstone opined that since a husband was legally accountable for his wife’s behaviour ‘it was reasonable to entrust him with the power of restraint by domestic chastiment’.

Prosecutors resisted using the courts to resolve ‘personal quarrels’. In their opinion such issues did not deserve to be adjudged by a jury. It would be better if parties would ‘kiss and make up’, and for courts to be left for prosecuting real criminals.

16

Johnson P M, 'Conflict and Control: Gender Symmetry and Asymmetry in Domestic Violence' (2006) 12(The Pennsylvania State University, University Park).

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The Judiciary used to follow the same line of thought. Instead of condemning the husband’s actions they would approve of the domestic punishments given so long as it was moderate. However, ‘moderate’ usually meant anything short of life-threatening.

In a 1920s case the court attributed a husband’s brutal actions to his wife’s ‘upset and undemonstrative attitude during menopause’. The response was not criminal punishment but instead a caution to the defendant to show more ‘tender care and affection particularly during this trying time of life’. Such prosecutorial and judicial attitudes combined with the victims fear often prevented battered women from seeking legal solutions or making a report. In the 1980s a US survey showed that out of 350 abused wives, none of the husbands served time in jail. The uncommonness of formal complaints became in turn a self-fulfilling prophecy.

Another shortage which hindered legal responses involved attitudes of law enforcement officers. Up until the 1970’s the general accepted view was that ‘domestic disturbances’ were unimportant and that intervention was not necessary. Unfortunately even though the number of phone calls for police assistance relating to domestic outbreaks was high, the number of police who would actually attend to assist the victim was low. The instructions given to the police was to try and preserve the peace and to only arrest as a last resort. Arrest was only necessary when the victim’s injuries were so severe so as to require surgical repair.

Male officers often identified with male perpetrators and assumed that their female victims were provoking or enjoying the abuse which they were made to suffer. Furthermore, to worsen the situation about the previous accepted view was that the majority of police officers were male. A study carried out by Azzopardi Cauchi signified that ‘the Malta police force is highly gendered and guided by the macho ideal’.17 As awareness and recognition of this problem grew, groups of women organized movements that focused on addressing the needs for safety for victims. They started highlighting the institutional barriers and social attitudes that were a contributory J Azzopardi, F Cassar-Camilleri and S Scicluna, ‘Dealing with Victims of Domestic Violence: An Evalusation of Services in Malta and the Province of Trapani (Sicilia)’ 17

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element for victims of domestic violence. Shelters and services like help lines and social services starting to come into play. Feminist activist groups revolutionized the responses to injustices against women. Legal decision makers in turn started to treat domestic violence as a criminal offence and a pervasive social problem instead of a private matter.

Unfortunately, although the situation is much better than it was a few decades ago, the courts still do not treat domestic violence with the seriousness and sensitivity it deserves. The courts in Malta still hesitate to give out prison sentences, letting perpetrators go with punishments such as suspended sentences, probation and fines (multa). For example in the very recent case Police vs Samwel Formosa, 18 the victim stated that she was abused: L-assistenti soċjali hekk għamlu bl-assistenza talpulizija li meta kellmu lil Maragret Formosa dina dehret li ma xtaqitx tkellimhom fil-presenza ta’ ħuha u għalhekk ġiet meħuda fl-uffiċċju tal-assistent soċjali Stephanie Muscat fejn hawn hija stqarret illi ħuha kien jabbuża minnha fiżikament u spiss kien jerfa’ idejħ fuqha. Dana kien iseħħ meta kien ikun xurban.

The court in its conclusion stated: Il-Qorti għalhekk ma għandha l-ebda dubbju illi limputat kien jerfa’ idejh fuq oħtu tul medda taż-żmien b’mod kontinwu u anke ikkaġunalha ġrieħi ta’ natura ħafifa skond kif iċċertifika Dr. Ian Galea.

Even though the court was convinced that the perpetrator was guilty of domestic violence the court in its conclusion stated: Illi meta tiġi biex tqies il-piena li għandha tiġi inflitta il-Qorti ser tara illi l-imputat jindirizza darba għal dejjem il-problema tiegħu tax-xorb u għalhekk piena karċerarja f’dan il-każ ċertament ma tkunx idonja.

Factors such as alcoholism may increase or worsen the problem but are surely not the sole cause of domestic violence.

18

Police vs Samwel Formosa, Court of Magistrates as a Court of Criminal Judicature (Malta), 9 January 2014 319

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However, the attitude of the above-quoted judgement still lingers in our courts.

It is only when the abuse is as severe as to end in attempted homicide or homicide that prison sentences are meted out. In IrRepubblika ta’ Malta vs Clive Farrugia,19 the perpetrator stabbed the victim twenty-eight times with a knife when he went over to her house to visit their son. The couple did not live together but used to be in a relationship and have a child in common. The accused qua convicted stabbed the victim after she tried to resist him claiming that their relationship was over after he tried to hug her. Luckily although the victim was in danger of dying, she did not die. The court condemned the perpetrator to 40 years imprisonment.

5.

Legislation Protecting Victims of Domestic Violence

Legal reforms exist on both an international and local level.

With regards to the local scene, in 2006 Malta enacted the Domestic Violence Act.20 Article 37 of the Maltese Civil Code21 states that where in an application for separation application there is domestic violence, the application must be appointed for hearing within four days. This shows the element of urgency that cases of domestic violence must be treated with. Articles 543 22 and 54523 of the Criminal Code24 also specifically mention domestic violence.

Another field in which domestic violence is mentioned is in mediation. Mediation in Malta is a compulsory step in separation proceedings; however, where there are claims of domestic violence, mediation is done away with. The reason being that if victims are forced to undergo mediation, they would be placed at high risk. This 19

The Republic of Malta vs Clive Farrugia, Criminal Court, 3 Decdember 2014 Chapter 491 of the Laws of Malta 21 Chapter 16 of the Laws of Malta 22 This Article states that the victim may ask the court to stay proceedings for the interest of any minors involved.

23 ‘When proceedings cannot be instituted except on the complaint of the private party, the complainant may, at any time before final judgment is delivered, waive his complaint’ 24 Chapter 9 of the Laws of Malta 20

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is because of power and control issues which are rooted in domestic violence.

With regards to the international scene in 1993, two major developments followed. The first is the issuance of the Declaration on the Elimination of Violence Against Women (herein referred as ‘DEVAW’) and second is the appointment of a Special Commissioner on Violence Against Women. DEVAW formally adopts the due diligence standard as a method to assess a State’s obligations vis-a-vis all forms of violence against women. The due diligence standard was set out in the landmark judgement given by the inter-American court of human rights in the names of Velasquez Rodriguez v Honduras.25 In its decision the court found that ‘an illegal act which violates human rights and which is initially not directly imputable to a State can lead to international responsibility of the State, not because of the act itself, but because of the lack of due diligence to prevent the violation or to respond to it as required by the American Convention on Human Rights’. In integrating this standard, DEVAW declared that all members of the United Nations have a duty to ‘pursue by all appropriate means and without delay a policy of eliminating violence against women’,26 including ‘due diligence to prevent, investigate and, in accordance with national legislation, punish acts of violence against women, whether those acts are perpetuated by the State or by private persons’.27

6.

The European Court on Gender and Domestic Violence

The European Court of Human Rights recognized that domestic violence is a form of gender discrimination. In the landmark judgment Opuz vs Turkey,28 the European Court of Human Rights heard the case of a Turkish woman (the applicant) and her mother, both of whom had suffered severe abuse from the husband of the applicant and his father. The women received several threats, beatings, stabbings, asking for money, and also getting run over by a 25

Velasquez Rodriguez v Honduras (1988) (ser. C) No. 4 Inter-Am. Ct. H.R. 172 Declaration on the Elimination of Violence Against Women, G.A. Res. 48/104, article 4, U.N. Doc. A/RES/48/104 (23 February 1994) 27 ibid 28 Application number 33401/02 26

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car. The abuse was on going and lasted from 1995 to 2002, ending with the applicant’s mother being killed in a brutal attack where she was stabbed 7 times and shot. The abuser claimed that ‘the applicant’s mother had induced his wife to lead an immoral life, like her own and had encouraged his wife to leave him and take the children’.29 He further stated that he shot her for the sake of his honour and children. The court sentenced him to fifteen years, ten months imprisonment and a fine stating that the deceased had provoked the assault. The court of appeal then ordered his release.

This landmark judgment, for the very first time recognised that domestic violence is a form of gender discrimination, prohibited by the European Convention on Human Rights. The judgment states that domestic violence is not a ‘private family matter’ but rather is a public matter and that it is in the public interest to ensure state protection from it. The Court found the response by Turkish authorities to be manifestly poor and found Turkey to be in violation of the Convention. The European Court quoted article 1 of the Convention on the Elimination of All Forms of Discrimination against Women (herein referred as the ‘CEDAW’),30 where it defines discrimination against women as: any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of impairing or nullifying the recognition, enjoyment or exercise by women, irrespective of their marital status, on a basis of equality of men and women, of human rights and fundamental freedoms in the political, economic, social, cultural, civil or any other field.

The judgment went on to quote the United Nations Commission on Human Rights: The United Nations Commission on Human Rights expressly recognised the nexus between gender-based violence and discrimination by stressing that all forms of violence against women occur within the context 29

ibid, paragraph 56 Convention on the Elimination of All Forms of Discrimination against Women (adopted 18 December 1979, entered into force 3 September 1981) 30

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of de jure and de facto discrimination against women and the lower status accorded to women in society and are aggravated by the obstacles women often face in seeking remedies from the State.31 It also transpired that there were unreasonable delays in issuing injunctions by the courts, under Turkish Law, because the courts treated them as a form of divorce action and not as an urgent action. Delays were also frequent when it came to serving injunctions on the aggressors, due to the negative attitude of the police officers. Moreover, the perpetrators of domestic violence did not seem to receive dissuasive punishments, because the courts mitigate sentences on the grounds of custom, tradition or honour.

In its decision the Court stated that ‘the applicant was able to show, the existence of a prima facie indication that domestic violence affected mainly women and that the general and discriminatory judicial passivity in Turkey created a climate that was helpful to domestic violence.’

7.

Is Domestic Violence still Predominantly Present Today?

Tifft (1993:90) hypothesizes that ‘historically our culture has supported patriarchal family arrangements wherein the male assumes a superior position and takes the role of controller of the household’. Furthermore Dobash and Dobash (1994:79) claim that the possible instigators of domestic conflict are the following: a man’s assumed right of discipline; men’s expectation of women’s domestic duties; and men’s jealous and possessive inclinations.

Although some households today consist of men going out to work and women staying home, many women have in recent decades started to gain employment. However, in spite of this fact, household chores still remain women’s responsibility. This continues to encourage gender inequality (Loseke and Kurz, 2005:85). This attitude in turn contributes to domestic violence (Domash and Dobash, 1994:79). As Viano (1989:5) upholds, 31

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society’s ‘curtain of silence’ carries on to cover up the troubles of women victims of domestic violence from the eyes of the public. 32

8.

Conclusion

In Malta 26.5% of partnered women have experienced at least one act of sexual, physical or emotional violence carried out by a current or past partner in their life span. According to a survey done in 2011 of these women 9% had experienced violence in the last year. There were in total 848 reported incidents of victims of domestic violence in Malta in 2011.33 Challenging these patterns must be an integral part of society’s strategy to manage violence. Most presented research suggests that ‘assaultive behaviour is learned behaviour, and that abuse against women builds on traditional assumptions about gender roles’. When children are exposed to acts of domestic violence and gender stereotypes, it socializes them to accept violence as a valid reaction to stress. Studies on battered women explain that men who grow up in violent homes are more likely to become violent when they become adults. Unsuccessful attempts to find solutions to domestic violence in this generation will increase our difficulties in the next.

How can society work to decrease incidents of intimate partner violence? Firstly, there is the need to communicate the message that violent behaviour against partners will not be accepted.

Secondly, harsher penalties and more enforcement would show the public and perpetrators of violence that such behaviour would not be tolerated. Thirdly educating the public from a young age through school curricula teaching children about respect and equality in our personal relationships. Finally, work towards increasing support in shelters, hospitals and courts in screening for intimate partner

32

Dr.Azzopardi J, Dr. Cassar-camilleri F and Dr.Scicluna S, 'DEALING WITH VICTIMS OF DOMESTIC VIOLENCE: AN EVALUATION OF SERVICES IN MALTA AND THE PROVINCE OF TRAPANI (SICILIA).'

33 Wave, 'Country Report: Violence against women and migrant and minority women' (2012).

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violence and aid victims to escape safely from the nightmare they would be living in.

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HISTORICO-LEGAL

The Capitula of Malta and Gozo – Late Mediaeval Legislative Enactments with Multicoloured Facets Raymond Mangion

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THE CAPITULA OF MALTA AND GOZO – LATE MEDIAEVAL LEGISLATIVE ENACTMENTS WITH MULTICOLOURED FACETS RAYMOND MANGION

_______________________________________________________ Professor Raymond Mangion was born in Hamrun, Malta, and studied at the University of Malta (M.A., History, LL.D.) and at the University of Oxford (D.Phil.). He has been lecturing in legal and legislative history in the Faculty of Laws, University of Malta, from 1993. His first book entitled Minutes of the Council of Government of Malta, 29 December 1935 to 13 August 1849, was published by the Malta University Press in 2010 as part of a series in ‘Documentary Sources of Maltese History, Part VI - Constitutional and Legislative Documents.’

His other publication in two massive volumes entitled ‘Speakers’ Rulings in the Parliament of Malta, The Legislative Assembly 19211924, First Volume, Part One’, was co-published by the Malta University Press and the Parlament of Malta and received first prize in the category of books on general research during the National Book Awards 2013 held by the National Book Council. Professor Mangion has been reseaching for a number of years on over 850 advocates who graduated LL.D. from the University of Malta from 1840 to 1965. ____________________________________________________________

Professor Stanley Fiorini, a leading researcher and medievalist, together with the Malta University Press, an authoritative publisher, has provided the specialised expert and the general public with the thirteenth volume in Documentary Sources of Maltese History. The full-blown series has so far encompassed twelve volumes comprising a sub-series dedicated to the Palermo Chancery ‘Maltese’ records. The present publication is the second in its sub-series dedicated to documents of the Maltese Universitates. It has been a long-drawn-out desideratum to have an exhaustive organic collection of the Maltese and Gozitan capitula in a single accessible tome in which one could home on desired materials. In point of fact, the object of the book is to collate each and every 329

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capitulum, printed albeit dispersed, or in hitherto undeciphered manuscripts, in one comprehensive volume suitably endowed with annotations, captions, glossaries, indices and cross-referencing for ease of access for future scholarly and evaluative quotations.

Each capitulum consisted of a petition or plea which the Maltese (and Gozitan) people of the time across the board however through the deliberations of their representatives, namely the Universitates (or Municipal Councils of Malta and Gozo in the narrower sense, otherwise the whole community), submitted, individually or paired on several occasions, to their monarch or his viceroy for approval. Emissaries or ambassadors were sent to present in person the request concerned to the Emperor, delegate or substitute. Once the capitulum received the royal assent, it constituted a covenant or kind of agreement between sovereign and subjects, and so it progressed into a statutory paragraph or provision, and jointly with its antecedents would accumulate into a whole regulatory and juridical system. It would in all probability become registered in the case the relevant Universitas received a favourable reply. It was indubitably a legislative enactment but surely a device with multicoloured facets because it is profuse in historical script, diverse in thematic terms.

One after the other, the capitula were poised to build up over the years into an acclaimed and treasured corpus of laws, customs, usages and more, now aspirations, then achievements, in Malta as in Sicily, on the continent and beyond, known as the ‘Privileges of the Maltese’, formally ‘codified’ as the Liber Rubeus and since then incorporated in the Codex Univ.9 of the National Library at Valletta.

Inversely, the titles or chapters or sub-headings of later codifications could be broken down into capitola and resort back to their sources embedded in the Late Middle Age. A capitulum would generally allude to the juridical position of a subject matter by citing the jus comune or the unwritten continental (public and private) law based on a juristically and judicially modified version of Justinian Roman Law, and to the unscripted ecclesiastical jus canonicum that included family law. In sum, soon after a capitulum was sanctioned, it became a written and binding juridical disposition.

The re-edition consists of a total of fifty-four sets of capitula half of which is being publicised for the first time. Thirty-two units belonged to the Universitas of Malta while the remainder 330

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appertained to the Universitas of Gozo. Four additional ones are comprised in an Appendix. A large majority of the gamut are ‘complete’ or better they include the regal or vice-regal response with a placet, unconditional or qualified, signed by the protonotarius or secretarius. Needless to say, a number have gone lost or has reached posterity in a defective guise or in a fragmentary shape, although a substantial list has more or less survived. The later examples are of a more standardised structure so much so that they open with a preamble by way of a formula stating what is to ensue.

The capitula span from the years 1409 to 1532 and give a general panorama of Malta and Gozo’s needs and remedies particularly the questions of status, ownership and possession on the one hand, and security and concomitant system of coastal vigilance on the other hand, that are granted top priority and assume centre-stage throughout.

The concluding decades of the XIVth century in Malta and Gozo were characterised by a succession of rebellions that affected the islands but at the turn of the century matters began to settle down. The earliest extant capitula of 1409 establish a footing of the state of affairs in Mediterranean outpost when the Maltese and Gozitan Universitates braced themselves to take stock of the more urgent difficulties that they ought to tackle especially the vulnerability and penury of their soft underbelly as far as three somehow correlated problems were concerned: society’s degree of underlying rights and freedoms, common defence interests and collective survival, as well as the indigenous sterility and poverty, in view of the rulers’ imperial and military exigencies, and the (Seracenic and Christian) enemies’ hostile and armed exertions.

Significantly, the Maltese and Gozitans’ first attempts to have their consuetudines embodied in a written document in line with practices in Sicily and elsewhere within the Regnum, ascends to the dawn of the XVth century.

Indeed, the capitula are not only a documentation of the workings of the domestic Universitates and thus of consequent legislatorial seals by virtue of royal determinations of municipal supplications. They are a priceless testimony of milestones and eventful happenings in local history of the fifteenth century and the Late Middle Age. First of all, an initial selection gives a powerful epitome of the Don Gonsalvo Monroy affair, precisely the 331

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population’s uprising against one of the last barons along a defile of greedy magnates to whom, since the turn of the XIIth century, the islands had been alienated or disposed by the suzerain as a curial item generally on auction to the highest bidder in a bid to scrape the barrel clean by relaxing his dues and settling deficits in the demesne’s coffers. Next, the capitula are a crystal clear mirror on the Moorish massive invasion, indiscriminate ransacking and tragic carting away of a horde of 3,500 inhabitants as slaves, as well as on the Christian’s like aggression and devastation to the detriment of the archipelago and whereabouts on the basin of an enclosed region within the kingdom, exactly in the middle of the first half of the fifteenth century.

An early body of capitula refer not only to Malta and Gozo’s re-annexation to the demanium in perpetuity but to inside jurisdictional conflicts between the Municipal Council in Mdina and the Castellan in Birgu (or Vittoriosa). The preoccupation about the proper running of the maħras or coastal watch is coupled by the tendency of the jurats to pique with the Captain or Castellan by not letting any of them overstep an inch of his jurisdiction. Malta’s Universitas is mentioned to have existed a good 300 years before in the time of King Roger notwithstanding the fact that it began to retrieve its identity and function as an independent organisation at the turn of the fifteenth century. Later capitula reaffirm the Maltese and Gozitan’s people’s ‘Malteseness’ vis-à-vis foreigners of any citizenship completely ignorant of the innate vernacular, notably the locals’ preference for fellow countrymen with respect to their appointment as officials to certain high-ranking and sensitive positions such as syndics and commissioners, especially to be able to converse and communicate in the Maltese language effectively at grassroots level.

No doubt, the capitula are a formidable probative testament of the first major struggle for self-determination and autonomy and an embryonic assertion of a national consciousness. They were forwarded by way of explicit complaints and appeals for the continued physical absence of Pope-nominated ecclesiastical dignitaries who resided abroad (owing to the natural development of the diocese in Malta and Gozo), in particular in Sicily, greatly at the mercy of his religious flock while they derived fat benefices from the islands and ultimately caused issues of inheritance as to 332

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entitlements to the spoils, at times amounting to thousands of ducats, of the deceased clergymen. The Bishop himself started the roll at the top of the hierarchy, because his mensa was in half located in Sicily, and ended right down in the pecking order with minor clerics living and carrying their pastoral duties overseas.

A pressing and rapid order of capitula characterise the earliest and latest actions and enactions while noteworthy interludes crop in over a century of capitula. They are so eloquent and rich in nodes of information that the reader may shift focus on varied themes and evoke in his mind the plight and experience of the forefathers of a State marking its ‘modern’ genesis. For instance, clusters of capitula shed light on the institutional opportunism and insecurity that prevailed internally as a result of the sovereign’s alternation of pawning, forfeiture or redemption of offices remarkably captaincies, secretie and gabelles once the islands as an entity were reintegrated within the realm. Or else, features of capitula show a tendency of the drafters to couch entreats in a hyperbolic tongue from which one could deduce the psychological composure of the Maltese and Gozitans that was one of fear and incubus, in the light of the predominating precarious circumstances arising from the expansionist dictates of the Spanish courts such as the regnal insatiable pressures for funds or from the perils of the sea like the infidels’ razzias for booties.

The volume under review, another magnum opus as a reference fount, contains a table of the dossier of capitula that is also accompanied with the designation of the ambassadors of the Universitates. Unavoidably, it pinpoints against the background, the names of protagonists in the course of the turbulent ebbs and flows of fifteenth century tiny Malta and Gozo within the wider Mediterranean and peninsular contexts. The compilation spells out the names of personalities who figured in Maltese and Gozitan daily life in a period that was to mark a turning-point in the mediaeval texture and story of a people under an extraneous and expansive domination. It demonstrates the interplay that went on in ‘rulerruled’ relationships at two levels, namely the transboundary interactions between His Majesty and his subjects, and the internal communications in between at least two classes, that is to say the ruling coterie sheltered and protected within the bastions of the capital Mdina, and the ruled masses exposed to the unpredictable in 333

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the rest of the four corners of the sizeable but strategic territory and channels. Capitola indicate convincingly that the circumvallated élites, conspicuously the closeted political aristocrats, often used such instruments as an efficacious weapon of control to safeguard and enforce their narrower demands by resolving what claims ought to be inserted or left out (Vide: Charles Dalli, ‘The Voice of the Élite’, Proceedings of History Week 1992, pp.1-8).

The final bunch of capitula turn around the natives’ final relations with the Jewish community and its crucial expulsion in 1492, and the official advent of the Order of Saint John in Malta and Gozo in 1530. The Malta Universitas’s majori voce bear witness to the uproar that took place as soon as rumours had reached it in 1524 that the mare nostrum archipelago was being assessed as an imminent suitable operating seat by title of noble enfeoffment for the reconnoitring Hospitallers in the wake of their ousting from Rhodes two years before. Over the next five years not a whisper was heard coming from the agenda and direction of the Municipium despite the blatant infringement of several time-honoured prerogatives, preserved guarantees and ratified promises, and all the writings on the wall. The capitula were absolutely silent during the interval.

Each and every Councillor seemed to be hearing for the first time about the unilateral cession, as though he was a member of a panic station, when the matter was a fait accompli or better a preempted diktat from above, while the charitable and chivalric institution was already getting down to business and impacting on the Mediterranean sea-girt soil, even blinding the gentry by celebrating the feast of its patron Saint John the Baptist. The Knights emasculated forthwith the ancien régime that was ensconced within the City on the inland hillocks, once the eightpointed cross sacred warriors entrenched their headquarters at Birgu, rooted a brand-new, more directly controllable, Universitas in the harbourside, and heralded the end of the former governing corporation and autonomy.

Grand Master L’Isle Adam’s intendment that he would run and command Malta and Gozo as he wanted without any interference from anyone was patently clear to the inside and outside world from the outset. The incoming leader and his mighty entourage were more concentrated on the issue of competence over 334

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the strategic dependencies criss-crossed with parishes that had to be tackled once they had put a foothold and secured a tight grip over them. He was at the behest of a fresh force that immediately wielded its tactics and stratagems by espousing an unashamed policy of divide et impera as a step towards the deposition of the deathrattling town jurats who partly manifested their pride and made a manu forti resistance and partly bowed their heads and took a conciliatory attitude in reaction to the arrival of the holy garrison and to the ushering in of a novel administrative situation in the country.

Professor Stanley Fiorini has, time and again, traced and deciphered many an act of half a millennium ago that has fortunately not severely suffered from damp, insects, grubby fingers, fading ink as well as incompetent repairs, and has, thus, somehow outlived random destruction by natural assault and human unconcern. He has delved deeper into their meanings of terminology and clauses that are at times virtually unintelligible and contextually elusive. He has regaled all and sundry with a very solid contribution by exploiting the long-distant yet intimate past not only of Malta and the Mediterranean but also of Europe and beyond for the purpose of making the Maltese comprehend who they are, why they are and how they are. He has imparted the lesson that it is now futile and pedantic to continue to lament of an inexplicable paucity of seminal handwritten acts or else of the availability of texts of insurmountable transcription and rendition. He has reiterated that the process of investigation into his motherland’s mediaeval legal institutions is firmly and successfully ahead.

‘History’, solemnly declares Fernard Braudel in his universally magisterial work ‘A History of Civilizations’ (trans.

R.Mayne, Penguin Books, 1993, xxxiv), ‘is a vital element in national self-awareness’, without which ‘there can be no original culture, no genuine civilisation anywhere’. His asseveration applies, of course, to all branches and variants of the annals of yore: legal, political, economic, social, linguistic, literary, cultural, and so on.

Professor Stanely Fiorini has with his unwavering dedication, scrupulous approach, surgical precision, academic rigour, and professional meticulousness, accomplished an enormous task, Herculean by any standards, spanning an inordinate amount of years of patience and perseverance. He has enriched any archival and 335

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library holding. He has graced Melitensia with a sine qua non. He is doubtless ready to follow in due course by other indispensable and impeccable masterpieces.

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IGAMING LAW

A Legal Snapshot of the European Online Gaming Industry going into 2015 Michele Magro

Michele Magro

LEGAL SNAPSHOT OF THE EUROPEAN ONLINE GAMING INDUSTRY GOING INTO 2015 MICHELE MAGRO

_______________________________________________________ Dr Michele Magro graduated as Bachelor of Laws (LL.B) in 2011 and Doctor of Laws (LL.D) in 2014 from the University of Malta after successfully defending his thesis entitled ‘The Protection of the Consumer in the Remote Gaming Industry’. In 2011-2012, he formed part of the Għaqda Studenti Tal-Liġi (Law Students’ Society) editorial board which published Id-Dritt Volume XXII. Dr Magro currently works as a Legal Officer at the Malta Gaming Authority. ____________________________________________________________________

1.

Introduction

Ten years since the enactment of the Remote Gaming Regulations1 (herein referred as the ‘Regulations’) in Malta, it is clear that the initiative was a resounding success. However, the landscape of the international remote gaming market, especially the European market, has seen a transformation that consequently requires radical re-thinking. In 2004, Malta was competing with offshore jurisdictions such as Isle of Man, Alderney and Gibraltar to attract and regulate remote gaming operators, whilst other countries resisted the change within the gambling industry, opting for a restrictive approach by relying on state monopolies to keep operators in check. Conservatives doubted as to how gambling via the internet could be properly regulated and thus opted for a complete prohibition of the online market, pushing entrepreneurs in the sector to opt for the other available and reputable regulated environments.

While favourable taxation systems are always the primary reason why commercial business settles off-shore or mid-shore, the Maltese remote gaming regime was ‘the first country in the world to promote the concept of responsible gaming no matter where the 1

Remote Gaming Regulations, Subsidiary Legislation 438.04 339

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player was located’2 and furthermore, it was the first country in the European Union to regulate online gambling. In the absence of regulatory regimes in other countries, but in the presence of considerable demand, regulated remote gambling flourished.

The tax advantages are obviously a big part of Malta’s success, but so is reputation. The nature of the internet means that controlling what is out there will always be a considerable challenge, and remote gambling is no exception. The online black market is an ever-present threat which is more effectively tackled via consumer education rather than the traditional means of internet protocol (herein referred as ‘IP’) blocking, domain name filtering through blacklists and the like. It thus follows that it is not just the reputation of the consumer-facing brand that is important, but also the reputation of the jurisdiction in which they are regulated. Malta in fact, made consumer protection and responsible gaming a priority within the Regulations.

The regulatory challenge presented by the internet and its effect beyond all borders necessitates an entirely different approach to the regulation of traditional (land-based) gambling. Online gambling is no longer a brand new phenomenon, yet for the most part legislation in Europe is still far off from establishing a stable industry for both the consumer and the operator. The initial failure by legislators worldwide to move away from their traditional rules regulating their land-based segment led to an online black market which was and still is exposing players to a dangerous and unregulated activity. On the other hand, the above-mentioned gaming regulatory regimes offered a licensing model which provided for a high level of consumer protection for players indiscriminately of the location from which they were playing whilst providing a significant boost to the economies of these territories both directly in terms of licence fees and taxation, as well as indirectly through the creation of jobs, consultancy, real estate and hosting services. Malta, amongst other jurisdictions, identified a commercial reality that required regulation, and in doing so effectively and efficiently, nourished a profitable sector whilst providing players with a protected environment.

2

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2.

Developments

The legal vacuum in Europe however, would not last forever.

The economic crisis of 2008 spurred Member States into lifting bans on online gambling, creating licensing regimes of their own, propelled by the need to discover new ways to replenish the dwindling public coffers. By the end of 2014, all EU Member States have specific regulation covering online gambling, with Lithuania being the last to notify specific regulations to the European Commission in February of 2014. The trend however is not simply to regulate online gambling, but also to introduce liberalised regimes which maximise income for the government. The only exceptions to this movement are Sweden, Finland, Hungary and Greece. Not all twenty-eight Member States have completely open licensing regimes, several large countries, including France and Germany favouring hybrid systems which incorporate monopolies or other restrictions.

The development of national authorisation systems throughout Europe is perhaps Malta’s most challenging test as a gaming jurisdiction. A common feature of said national authorisation regimes is the requirement of a licence in the Member State where the gaming activity is being offered, that is, where the player is located. Even the United Kingdom, previously a bulwark of a pan-European remote gaming industry, has reversed its strategy and opted for regulations that require any gaming operator providing services to any consumer within the UK, to hold a gaming licence with the UK Gambling Commission. These requirements are furthermore very burdensome on online gambling operators whose operational costs have suddenly sky-rocketed, requiring a larger compliance team that is able to cater for the legal requirements of all the market territories which the operator wants to target, as well as paying licence fees and taxes in all the respective jurisdictions.

Essentially, this move towards national authorisation frameworks has had the effect of ‘carving up Europe into a multitude of separate

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regulatory systems for a business which because of the very medium through which it is carried out is borderless’.3 Unfortunately for both the industry and the consumers, the legislative and regulatory changes in Europe have not been conducive to the development of a European remote gaming industry that is as stable as it could have been. At this stage, harmonisation in gaming law is little more than a pipe dream for operators, who are now being faced with twenty eight different legal regimes simply to operate within the so-called single market – and twenty eight regimes of highly divergent requirements. The compliance scenario of operators within the remote gambling sector is a ‘veritable legal obstacle course’4 that negatively impacts the profitability of law-abiding traders, whilst lacklustre enforcement empowers black market operators, who, in the absence of regulatory requirements, are able to offer a much more attractive product to players.

The culture of consumers opting to play online is one where players will constantly seek operators from whom they can make the most money. It is a highly competitive market, specifically when it comes to odds that a sports-book is able to offer, or to the sign-up and deposit bonuses available in online casinos, and players will inevitably seek the best opportunities to make money. In the absence of a framework that allows regulated operators to offer attractive products, then players will resort to unregulated online gambling offers, without the consumer protection measures which have become standard in the regulated market. 5

James Scicluna, ‘The Shifting Regulatory Landscape in Europe’ [2009] Autumn Issue, European Gaming Lawyer 15 4 Andrew J Zammit, ‘The reinforcement of Malta’s role as a regulatory hub for remote gaming’ [2009] Autumn Issue, European Gaming Lawyer 8-9 5 ‘Manifesto for a Sustainable EU Policy for Online Gambling’, (EGBA, March 2012) <http://www.egba.eu/pdf/Manifesto-for-a-sustainable-EU-online-gamblingpolicy.pdf> accessed 19 January 2015 3

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3.

The Interpretation of the European Court of Justice

The European Court of Justice (herein referred as the the ‘ECJ’) has cemented the status of remote gaming vis-à-vis the freedom of establishment and freedom to provide services in the internal market as per Articles 49 and 57 of the Treaty on the Functioning of the European Union (herein referred as the ‘TFEU’), whereby Member States were granted exclusive discretion on how to organise their remote gaming market as long as the laws were non-discriminatory, and abiding by the proportionality principle in preventing illegal gambling and fraud, and protecting the consumer.

However, this implementation of the subsidiarity principle cannot be abused in a way to breach the other principles enshrined in the Treaties. There is still ample confusion as to what constitutes a breach of the Treaties or otherwise, especially due to the slow pace of the Commission’s infringement proceedings against countries, but also within the European Court of Justice’s own declarations, which always reverts the decision as to whether a particular law or practice is compliant with EU law, to the national courts from where the preliminary reference was made in the first place.

As early as 1994 with the Schindler judgment,6 gambling has been deemed to be an activity of a ‘peculiar nature’.7 Whilst being a service as envisaged in Article 56 of the TFEU, the ECJ has determined that national rules that seek to restrict such freedoms are not incompatible with the EU treaties, as Article 52(1) of the TFEU allows Member States to impose restrictions on the freedom to provide services in the internal market for reasons of public policy, public security or public health. The Schindler case involved the agents of a German lottery who were sending invitation letters, tickets and application forms within the English territory for English consumers to participate in a lottery drawn in Germany. The authorities enforced a law which prohibited lotteries in the UK with the exception of small-scale lotteries intended strictly for the purposes of public interest, such as charities. In determining the C-275/92 Her Majesty’s Customs and Excise v Gerhart Schindler and Jorg Schindler [1994] ECR I-01039 7 ibid, paragraph 59 6

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compatibility of English law with the free movement of goods and services, the ECJ upheld the argument of the authorities in saying that the law was ‘justified by overriding public interest considerations of consumer protection, prevention of crime, protection of public morality, restriction of demand for gambling and the financing of public interest activities’.8 Thus, the prohibition of lotteries in England was not an unjustified interference with the freedom to provide services, as it was a measure necessary to protect consumers from the social risk of gambling.9 The 1999 Läärä case10 proceeded on the same line of thought, but was analysed from a separate angle. The state monopoly for gambling in Finland precluded other operators from offering gambling services in Finnish territory, and thus, the defendants’ slot machines were confiscated and the operator was subject to criminal prosecution. The defendant’s argument was that the restriction was not one based on public interest objectives as mentioned in Schindler. However, the ECJ accepted the argument that the aim of the Finnish law was to ‘limit exploitation of the human passion for gambling, to avoid the risk of crime and fraud to which the activities concerned give rise and to authorise those activities only with a view to the collection of funds for charity or for other benevolent purposes’11 and ‘the protection of the recipients of the service and, more generally, of consumers, as well as the maintenance of order in society’.12 Thus, such objectives were held to be overriding reasons of public interest justifying the restriction on the freedom to provide services as long as the aim, being the confinement of gambling within controlled channels, is fulfilled without going beyond that which is necessary.13 The ECJ echoed this reasoning in other cases at the time, such as Zenatti in 1999,14 relating to the prosecution of an intermediary to a British betting 8

ibid, paragraph 54 ibid, paragraph 61-62 10 C-124/97 MarkkuJuhaniLäärä, Cotswold Microsystems Ltd, Oy Transatlantic Software Ltd v Kihlakunnansyyttäjä (Jyväskylä) and SuomenValtio (Finnish State) [1999] I-06067 11 ibid, paragraph 32 12 ibid, paragraph 33 13 ibid 14 C-67/98 Questore di Verona v Diego Zenatti [1999] I-07289 9

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services operator within the Italian territory, where sports-betting authorisation was only granted to two companies. The ECJ had stated that even though there was not a total prohibition of betting in Italy, as long as the law sought to ‘bring about a genuine diminution in gambling opportunities’,15 and then the limitation by law was justified as an overriding social policy objective.

The ECJ granted a very wide discretion to Member States to legislate, and it did not go into detail as to whether broad restrictions, such as in the case of state monopolies went beyond that which was necessary for the public interest. As long as the national authorities quoted the social and economic risk of gambling, then restrictions were deemed to be justified and it did not enter into the merits of whether the restrictions were actually having that effect.

The ECJ would also often mention the social and cultural considerations of each Member State that differed greatly when it came to gambling. This was stated in spite of the fact that online gambling knows no borders, and any restriction imposed is easily transcended.

The Gambelli16 judgment was a step forward in this respect.

On one hand it agreed with the previous ECJ rulings in Zenatti, Schindler and Läärä that restrictions on foreign gambling operators were not a violation of the treaty; however it also tackled the issue of proportionality. Gambelli was the Italian agent for the British online bookmaker Stanley International Betting Ltd, facing criminal prosecution for operating betting activities in Italy without a licence, and upon the instigation of Gambelli as to the compliance of Italian law with the EU treaties, a reference was made to the ECJ for preliminary ruling. The ECJ noted that the measures could not be disproportionate or go beyond that which is necessary. Italy could not justify the restrictions imposed on the basis of the preservation of public order, whilst at the same time expanding their gambling licensing regime to the benefit of the public purse.17 Whilst Italy was ‘pursuing a policy of substantially expanding betting and 15

ibid, paragraph 36 C-243/01 Criminal proceedings against PiergiorgioGambelli and Others [2003] I13031.

17 Niall O’Connor, ‘An overview of European Gambling Law: From Schindler to HIT’ (Bettingmarket, 2011) <http://www.bettingmarket.com/eurolaw222428.htm> accessed 19 January 2015 16

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gaming at national level with a view to obtaining funds’,18 it could not justify restrictive measures as being necessary for the purposes of reducing the risk of gambling. The ECJ still allowed for the restrictions, and sent the case back to the national courts to determine whether such law was disproportionate. This decision was considered to be a victory for proponents of a pan-European online gambling market, and a few positive judgments followed.

In Lindman,19 the ECJ ruled against the Finnish government who sought to enforce a law which on one hand, exempted winners of lotteries drawn in Finland from paying tax, but sought to impose tax on a Finnish resident who won a lottery drawn in Sweden. The ECJ found that this was a discriminatory attempt at incentivising consumers to attempt their luck with Finnish lotteries, rather than any other lottery in a different Member State. The Finnish government could not argue that this was justified by overriding reasons in the public interest, and furthermore, the ECJ stated that should a Member State seek to justify restrictive measures imposed by that Member State, they must be accompanied by an analysis, including statistical data and evidence, of the appropriateness and proportionality of such measure, which should prove causality between the risk and the restriction imposed.

Having said this, Gambelli did not end up being the catalyst for a single market in online gambling. In March 2007, a judgment was handed out in the Joint cases of Placanica, Palazzese and Sorricchio,20 pointing out the flaws in the Italian public interest argument. Public interest and consumer protection could not be raised when Italy had just issued a thousand licences for gambling operators for the purposes of increasing tax revenue, however it also said that it could accept the argument that the restrictive licensing regime was so to allow for effective supervision by the Italian authorities for the licensed games which had the role of attracting customers off illegal gambling services.

18

Gambelli (n 15) paragraph 67 C-42/02 Diana Elisabeth Lindman [2003] I-13419 Joined cases C-338/04, C-359/04 and C-360/04 Criminal proceedings against MassimilianoPlacanica (C-338/04), Christian Palazzese (C-359/04) and Angelo Sorricchio (C-360/04) [2007] I-01891 19 20

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In the Santa Casa case, 21 the Portuguese state monopoly fined the Portuguese football league and Bwin International for an advertising breach. The ECJ analysed whether having a state licensee solely authorised for the operation of internet gambling was proportionate to the public interest objectives of Portuguese gambling law. In this respect the ECJ affirmed that Portugal could pursue the regulation of gambling as per the country’s ‘own scale of values’ which differed between Member States. 22 In essence, the ECJ said that despite the more restrictive mode of regulation adopted by Portugal, as long as the restriction tallies with public interest objectives, then the restriction could be proportionate. The purpose of the Portuguese restrictive state monopoly was to ‘fight against crime, more specifically the protection of consumers of games of chance against fraud on the part of operators’.23 The ECJ noted that by limiting the authorisation for operators of online gambling, the Portuguese government would be ‘confining the operation of gambling within controlled channels’, and to a single operator whose reliability spanned five centuries, under the strict control of government.24 The ECJ justified the Portuguese restrictions because even though Bwin lawfully provided its services as per the law of another Member State, the checks performed by that Member State are not necessarily ‘sufficient assurance that national consumers will be protected against the risks of fraud and crime’.25 In the Carmen Media Group case,26 a prohibition on online sports-betting was challenged on the basis that while the objectives were of ‘preventing incitement to squander money on gambling, combating addiction to the latter and protecting young persons’,27 the fact that the offline equivalents of gambling with a higher risk of

21

C-42/07 Liga Portuguesa de FutebolProfissional and Bwin International Ltd v Departamento de Jogos da Santa Casa da Misericórdia de Lisboa[2009] ECR I07633 22 ibid, paragraph 57 23 ibid, paragraph 62 24 ibid, paragraphs 64-67 25 ibid, paragraph 69 26 C-46/08 Carmen Media Group Ltd v Land Schleswig-Holstein and Innenminister des Landes Schleswig-Holstein [2010] ECR I-08149 27 ibid, paragraph 105 347

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addiction were being promoted28 invalidated the reason for the monopoly on grounds of consistency and proportionality. This was also seen in the Joined cases of Stoß and Others dealing with sports betting offerings in Germany by licensees in Austria, the UK, Malta and Gibraltar.29 The ECJ stated that ‘German rules do not limit games of chance in a consistent and systematic manner’ as while online gambling and betting was restricted or prohibited, the national monopoly carried out intensive advertisement and marketing to maximise profit from its lottery offering, whilst promotional activities for land-based casino games were allowed and thus the objective of the German law to prevent gambling as a social risk did not hold ground.30 However, the ECJ then stated that internet gambling presented a higher risk for the consumer, and thus had to be more restrictively regulated as ‘the lack of direct contact between consumer and operator’ and therefore, ‘games of chance accessible via the internet involve different and more substantial risks of fraud by operators against consumers compared with the traditional markets for such games’.31 According to the ECJ, online gambling increased the risk of problem gambling and addiction due to the circumstances in which it was practiced, such as social isolation, and accessibility.32 In the 2013 Biasci case,33 it was further re-iterated that within the current legal scenario in Europe, any Member State is within its rights to go beyond the technical checks made by other EU jurisdictions in issuing a remote gaming licence and the ECJ 28

ibid, paragraph 71 Joined cases C-316/07, C-358/07, C-359/07, C-360/07, C-409/07 and C-410/07 Markus Stoß (C-316/07), Avalon Service-Online-Dienste GmbH (C-409/07) and Olaf Amadeus Wilhelm Happel (C-410/07) v Wetteraukreis and KulpaAutomatenserviceAsperg GmbH (C-358/07), SOBO Sport & Entertainment GmbH (C-359/07) and Andreas Kunert (C-360/07) v Land Baden-Württemberg [2010] ECR I-08069, paragraph 107 30 ECJ, ‘The public monopoly of the organisation of sporting bets and lotteries in Germany does not pursue the objective of combating the dangers of gambling in a consistent and systematic manner’ (ECJ PR No 78/10, 8 September 2010) <europa.eu/rapid/press-release_CJE-10-78_en.pdf> accessed 19 January 2015 31 Carmen Media (n 25), paragraph 102 32 ibid, paragraph 103 33 Joined cases C-660/11 and C-8/12 Daniele Biasci and Others v Ministero dell’Interno and Questura di Livorno (C-660/11) and Cristian Rainone and Others v Ministero dell’Interno and Others (C-8/12) [2013] ECLI:EU:C:2013:550 29

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defended the Italian state’s right to require operators to have a specific authorisation to operate remote gaming in Italy even if it already has a licence issued in another Member State in order to set its own standards of consumer protection and crime prevention which other Member State might not be able to achieve due to different technical control and monitoring techniques. 34 While the ECJ’s position with regards to the applicability of the free movement of services to the online gaming industry, one must not forget that it is far from being a carte blanche for Member States. In fact, both the EJC, as well as the European Commission, have been critical of Member States seeking to impose a requirement of ‘permanent establishment’ for gaming operators who want to acquire a licence in a particular Member State. The commonly cited case here is Engelmann,35 whereby Austrian law requiring any prospective concession holder to operate a gambling business to be a company registered in Austria, was deemed to go against the freedom of establishment. Subsequent case law expanded on this, and extended the prohibition of permanent establishment to a requirement of a branch, or even the location of certain gaming equipment.

The most recent landmark case in the European remote gaming industry is that of Digibet,36 decided on the 12 June 2014, whereby the Gibraltarian operator Digibet Ltd was prohibited from providing online betting services in Germany. Digibet’s defence lay on the grounds that the restrictions imposed by German law on gambling were inconsistent and thus unenforceable due to being in breach of the EU treaties. In Germany, competence to legislate on gambling vests in the Länder, rather than federally, however, the German Länder are part of an Interstate Treaty regulating gambling, with the exception of Schleswig-Holstein, which enacted a shortlived liberal regime in 2012. The Interstate Treaty for the most part prohibited online gambling except under very restricted conditions.

Digibet challenged the discrepancy between the law in SchleswigHolstein and that prescribed in the Interstate Treaty on the basis that 34

ibid, paragraphs 41-43 C-64/08 Criminal proceedings against Ernst Engelmann [2010] I-08219 36 C-156/13 Digibet Ltd, Gert Albers v WestdeutscheLotterie GmbH & Co. OHG [2014] ECLI:EU:C:2014:1756 35

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German law lacked consistency and thus the ban infringed the freedom to provide services in the internal market. The ECJ ruled that just because one German Land had a law that was different to that of the other fifteen Länder, does not mean that the restrictions imposed by the fifteen were inconsistent. This judgment is criticised however, as by the time the preliminary reference reached the ECJ, Schleswig-Holstein had repealed its law and ratified the Interstate Treaty, thus ending the liberalised market. The ECJ took this into consideration; however it did not take into consideration the fact that the forty-eight authorisations which had been issued until the law’s repealing were still in effect.

In this regard, there seems to be no end for the turmoil in the German market, as certain stakeholders are up in arms as Deutsche Sportwetten, a company partly owned by the German government, has plans to launch an online sportsbook by the end of March 2015 on the strength of an Austrian licence. Deutsche Sportwetten is owned to the tune of 64% by Deutsche Telekom, 32% of which is owned by the German federal government. Whilst Deutsche Sportwetten has already been chosen by the German government as one of twenty operators to receive a licence, such licences have not been awarded pending litigation, and Deutsche Sportwetten’s has decided to proceed with the launch of an online portal with the blessing of its shareholders. This is simply another preliminary reference waiting to happen.

4.

Common Standards

However there does seem to be a slow but steady shift towards a more united gambling industry in Europe. The process can be traced back to the Schaldemose Report published by the European Parliament in 2009.37 Schaldemose states that whilst a ‘pure Internal Market approach is not appropriate in this highly sensitive area’, the report identifies a ‘multi-pillar approach’ requiring the close cooperation of Member States for the protection European Parliament, ‘Report on the Integrity of Online Gambling’ (Report) 2008/2215(INI) 37

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of consumers and prevention for fraud, by means of a ‘common position’.38 Schaldemose highlights the need for a common position across the EU for consumer protection areas, in particular in eliminating unauthorised and illegal online gambling services by sharing information between the European Commission, Europol and the law enforcement agencies and regulators of the national states.39 In the same vein, there is also mention of the prevention of criminal activity including money laundering, illegal betting cartels and match-fixing. Advertising is also a particular focus, as the rapporteur’s opinion seems to be that the current scenario whereby online advertising in particular is self-regulated is ineffective, calling for a Code of Conduct to be put in place as a supplementary self-regulatory tool, but not as a replacement for eventual legislation.

The 2011 Creutzmann Report40 followed the Schaldemose Report, and asserted that enforcement of rules in the digital sphere of gambling was hard if not impossible, and this meant that monopolies were ineffective in achieving the objective of turning consumers away from illegal offerings and unto the national regulated market. Creutzmann realised that the reality of the competitiveness of the industry whereby consumers would be wooed by more attractive black or grey market offerings – operators subject to lower tax rates across borders of both MS, and non-EU states meant that state monopolies would never be able to compete or offer similarly attractive packages, and thus would be shunned by the informed consumer of the digital age. 41 Creutzmann re-iterated the ECJ’s position that gambling fell under the principle of subsidiarity - the sensitive nature of gambling invokes a multitude of risks in terms of protection of consumers and prevention of criminal activity, and thus each Member State should impose its own rules. However, Creutzmann is also a very strong proponent of a pan-European legislative framework setting down minimal rules and common standards that would add substantial

38

ibid 5-6 ibid 6 European Parliament, ‘Report on Online Gambling in the Internal Market’ (Report) 2011/2084(INI) 41 ibid 14 39 40

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value to the national regimes of the different Member States. 42 The report recognises the significance of the problem presented by the fragmentation of the European gambling market. Whilst rejecting the proposal for the mutual recognition of licences put forward by representatives of the gambling industry, such as the EGBA, it suggests cooperation between Member States to apply procedures which would ‘reduce administrative burdens by avoiding the unnecessary duplication of requirements and controls’.43 At the same time, the use of the Internal Market Information System for the purposes of cooperation amongst the different national regulators as a means to create a common database and to take joint action against unlicensed operators, fraud, crime and black-listed gamblers and operators is proposed.44 The rights and obligations of both consumers and operators should be enshrined in a ‘pan-European code of conduct’ for the purposes of player protection, the protection of minors, advertising and support structures. Such a code of conduct would not be binding as law, but could be the first step towards better protection and information for gamblers across Europe. 45 On the other hand, the report also stresses the need to find ways to combat illegal gambling offerings, including a system whereby financial institutions, credit card companies and payment system providers would be prohibited from servicing black-listed operators.46 In response to the Schaldemose Report, as well as a call by the Council of the European Union,47 the European Commission issued a Green Paper48 in an effort to determine the possibility of issuing a legal framework which would not replace national laws, but rather seek avenues for EU-wide cooperation which would result in better regulation. The product of the consultation was a 2012 42

ibid 7 ibid 8 44 ibid 9 45 ibid 8 46 ibid 8-9 47 EU Council, ‘Conclusions on the framework for gambling and betting in the EU MS’ (Conclusions) Document 16884/10 <http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/intm/118398.p df> accessed 19 January 2015 48 European Commission, ‘Green Paper on on-line gambling in the Internal Market (Green Paper) COM(2011) 128 final 43

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Commission document entitled ‘Towards a comprehensive European framework for online gambling’, coming to the conclusion that whilst national regimes were there to stay, there was still a ‘unanimous call for policy action at EU level’. 49 The Commission identified priority areas in said document, calling for a common stance on what is deemed to be compliant with the EU treaties -illegal gambling, cooperation, consumer protection, prevention of fraud, money-laundering and match-fixing prescribing a two year time frame to take action.

In September 2013, the European Parliament adopted another resolution50 echoing the Commission’s communication and urging enforcement measures against the so-called grey market operators that are licensed in the EU, but not specifically in the Member State where they are offering their services. The European Parliament Resolution also suggested pan-European self-exclusion and limitation registers, stronger identification controls, including those via electronic identification systems.

On the 14 of July 2014, the European Commission issued a Recommendation on Principles for the Protection of Consumers and Players of Online Gambling Services and for the Prevention of Minors from Gambling Online 51(the ‘Recommendation’). The Recommendation is a non-binding document which lays down standards for a high level of consumer protection, prevention of gambling by minors, responsible advertising and prevention of compulsive or excessive gambling.

Admittedly, the Recommendation talks about measures which most European regulators already provide for, if not already provide for stricter requirements. In Malta’s case, the ten year old Regulations almost cover everything contained in the Recommendation, with the exception of a few issues.

The first measure not included under Maltese law relates to verification of a player during the registration phase. At the moment, Maltese law only provides for verification upon withdrawing 49

ibid 3 European Parliament, ‘Online Gambling in the Internal Market’ (Resolution) 2012/2322(INI) 51 European Commission, ‘Commission Recommendation on principles for the protection of consumers and players of online gambling services and for the prevention of minors from gambling online’ (Recommendation) L 214/38 50

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€2,329.37 as per regulation 36, and this is mostly done for antimoney laundering purposes. The Recommendation indicates a system whereby an operator should seek to verify a player upon registration, whereby the operator only allows a player to withdraw money after having submitted certain documentation, such as copies of identification documents. This measure seeks to make sure that operators know exactly who is playing on their website, minimising as much as possible under-age players and fraudsters. However, verification is a process which players often abhor, and lengthy and hefty verification procedures might push away players to the unregulated market, especially since consumers do not necessarily like to send detailed personal information over the internet.

The second measure relates to free-to-play casino websites which might not offer a prize, but do not require registration. Under current Maltese law, a gaming activity that does not offer a prize does not fall within the purview of the Lotteries and Other Games Act,52 and thus is not licensable. Free-to-play websites are often used by gambling operators to try and lure players who would otherwise not be able to play in monetized online casinos. The fear here is that operators would try and groom under-age players into getting used to gambling, so that upon reaching the age of majority, they can start playing real money. The Recommendations seek to close down this practice, which is especially common on social networks.The final measure relates to certain requirements of advertising in gambling, which Malta’s rudimentary Code of Conduct on Advertising, Promotions and Inducements 53 does not cater for.

The European Commission is also converging on other fronts, specifically for administrative cooperation and efficient enforcement, and technical requirements in licensing and compliance, including IT governance and equipment as well as data monitoring and auditing.54 Most importantly, there is also the issue 52

Chapter 438 of the Laws of Malta ‘Code of Conduct on Advertising, Promotions and Inducements’ (LGA, 2004) <http://www.snapadministration.com/snapdatafiles/files/lga/633537069914585000.p df> accessed 19 January 2015.

54 ‘9th meeting of the group of experts on gambling services’ (EC, 12 December 2014) <http://ec.europa.eu/internal_market/gambling/docs/expert-group/20141211agenda_en.pdf> accessed 19 January 2015 53

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of match-fixing and combating the manipulation of sports competitions. However, the method employed here is through an international convention, namely the Council of Europe Convention against the Manipulation of Sports Competitions 55 (herein referred as the ‘Sports Convention’) adopted by the Council of Europe on the 8 of July 2014 and opened for signature on the 18 September 2014. 56 A significant part of the contents of the Convention relate to measures to be undertaken by regulatory authorities to undertake initiatives against illegal betting and prevention of conflicts of interest. However in the drafting of the wording of the Sports Convention, certain terminology was included and thismay lead to a harmonised definition of ‘illegal gambling’ to the benefit of national authorisation regimes. The contentious issue lies within article 3(5)(a) of the Sports Convention, defining ‘illegal sports betting’ as any such activity which is not allowed under the law where the consumer is located. Together with the provisions in article 11, whereby states are required to seek means to combat such ‘illegal gambling’, including suggesting the restriction of access to such services and blocking of financial transactions relating to such operators.

In view of this, Malta submitted its reservations throughout the drafting stage, and unsuccessfully voted against the adoption of the Sports Convention in its current form. Malta contends that the definition goes beyond the scope of the Sports Convention in combating match-fixing, but rather has the ‘unnecessary and harmful effect of clamping down on regulated operators’ within the internal market.57 There is no proof of the correlation between match-fixing and sports-betting licensed in a Member State other than that in which the consumer is located. Thus, one should not assume that just because an operator does not hold an authorisation in a particular Member State, then such an operator is more likely to be connected to the manipulation of sports competitions. It is on these grounds that Malta has now requested the ECJ for an opinion 55

Council of Europe Convention on the Manipulation of Sports Competitions (Sports Convention or Match-fixing Convention) (adopted 9 July 2014) 56 Council of Europe,, ‘New treaties’ (CoE, July 2014) <http://conventions.coe.int/?pg=/Treaty/projets/Projets_en.asp> accessed 11 August 2014 57 ibid 355

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as to the compatibility of the Sports Convention with the EU treaties58 - that despite the absence of harmonisation at EU level as to what constitutes legal gambling or otherwise in view of the freedoms enshrined in the treaties, the Sports Convention may be establishing a separate, conflicting regime, undermining the current understanding of gaming law within the EU. On the opposite side of the spectrum, but on similar grounds, Belgium has challenged the aforementioned European Commission’s Recommendation on Consumer Protection and Advertising, as they undermine the discretion of Member States to regulate the gambling sector according to their country’s requirements, almost accusing the Commission of seeking to harmonise an area where Member States have been given broad discretion by the ECJ itself.59 Another initiative which has lately achieved consensus in gambling matters is the upcoming Fourth Anti-Money Laundering Directive. A last-minute amendment by the European Parliament in March 2014 had imposed additional requirements on online gambling operators to perform customer due diligence as soon as the customer signs up. This has meant that online operators would be treated more stringently than their land-based counter-parts, and this had not gone down well with operators. The compromise text concluded last December has removed this additional requirement, and imposes an obligation on online operators to apply customer due diligence for any transaction, including both deposit or withdrawal of €2,000 or more, whether carried out in one or more actions.

Member States still may decide to exclude certain gambling activities if following an appropriate risk assessment it is deemed that there are no money-laundering risks involved and notified to the Commission.60 This is another step towards a common anti-money

58

ibid Altaner D, ‘Belgium Challenges European Commission’s Online Gambling Guidelines’ (Gambling Compliance, 2014) <http://www.gamblingcompliance.com/premium-content/news_analysis/belgiumchallenges-european-commission%E2%80%99s-online-gambling-guidelines> accessed 19 January 2015 60 Sennevall L, ‘EU Money Laundering Compromise Drops Stricter Online Gambling Checks’ (Gambling Compliance, 2014) 59

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laundering framework for online gambling in Europe.

5.

Conclusion

Proponents of an online gambling industry as part of the single market economy becry the confusion, disorder and unsustainability of the fragmented market. 2014 was a particularly harsh year for this segment of the industry. In particular, as the United Kingdom shifted from a point of supply jurisdiction, to the other extreme of point of consumption. Previously proud in being a liberal jurisdiction, having opened up their jurisdiction not only to countries within the European Economic Area, including Malta, but also to white-listed jurisdictions which included Gibraltar, Alderney, Isle of Man, Antigua and Barbuda and Tasmania. Upon seeing most other European countries adopt their own profitable national authorisation regimes, the UK abandoned the ‘naïve’ concept of free movement of services, and adopted a point of consumption regime ad excellence, that not only requires operators who are targeting UK consumers to obtain a licence, but also their suppliers.

Another blow came by means of the new VAT Directive 61 which came into force on the 1 January 2015, whereby electronically supplied services, including online gambling, will be taxed in the Member State where the player is located. This presents both a logistical, and a financial challenge. Basically, a Maltese operator targeting French customers would previously apply Maltese VAT law, but as from 2015, it is French VAT law that must be applied, and whilst Maltese law exempts gambling from VAT, French law does not. Whilst the VAT Directive obliges Member States to exempt gambling services from VAT, this exemption is ‘subject to the conditions and limitations laid down by each Member State’, and this means that some Member States have made use of the small measure of discretion afforded to them by the Directive to <http://www.gamblingcompliance.com/premium-content/news_analysis/eu-moneylaundering-compromise-drops-stricter-online-gambling-checks> accessed 19 January 2015 61 Council Directive 2008/8/EC of 12 February 2008 amending Directive 2006/112/EC as regards the place of supply of services [2008] OJ L 44/11 357

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either outright make it VAT chargeable, or else impose conditions for it to be VAT exempt, such as the requirement to have a licence.

The legality of these measures is debatable, and thus this opens a whole new Pandora’s box of potential legal challenges. The logistical problem, on the other hand, is that operators targeting various jurisdictions, specifically the ‘.com’ type websites, will need to undergo a sizeable compliance operation to determine how each of their services is VAT chargeable in every jurisdiction where their products are available. The Mini-One-Stop-Shop (MOSS) system, whereby an operator only needs to register in one Member State and pay VAT due in all jurisdictions through one portal, seeks to alleviate this burden, but it is still anything but clear for the industry.

With regards to proponents of national authorisation regimes, the Commission’s move towards a convergent framework is also worrisome in itself. The Recommendations themselves have spurned thoughts that this is just the first step towards harmonisation.

Philippe Vlaemminck and Bart Van Vooren62 compare the Commission’s movement with that in the aviation sector. The Commission had started off with non-binding documents, followed by infringement proceedings against a number of Member States, which ultimately resulted in a common aviation policy. With the Consumer Protection Recommendation already ruffling a few feathers, and the Commission exploring new areas of cooperation, as well as the pending infringement proceedings instituted in November 2013, one cannot but wonder how the industry will look like in a few years.

The Gibraltar Betting and Gaming Association (GBGA) is pushing its second legal challenge against the United Kingdom. In October 2014, the GBGA lost its challenge against the new British regulatory regime, arguing that the new law breached the EU treaties and was largely unenforceable, and proposed alternative solutions, such as a passporting system, however the judge shot these arguments down. However, the GBGA’s legal challenge against the UK government’s 15% point of consumption tax is still to be heard, as the association argues that the restrictions introduced via the new gambling regime cannot be justified economically, and furthermore Vlaemminck P & Van Vooren B, ‘The emergence of an online gambling policy for Europe’ [November 2014] Vol 13 Issue 11 World Online Gambling Report 3-4 62

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it is discriminatory and a hindrance to free trade. 63 In this sense, 2015 already has some exciting legal junctures lined up. Apart from Malta’s request for opinion from the ECJ as regards the Sports Convention, and Belgium’s challenge against the Recommendations on Consumer Protection, Sweden will be facing infringement proceedings before the ECJ, with the Commission accusing it of an inconsistent application of a restriction of the freedom to provide services in implementing and maintaining its online betting monopoly, as well as the unenforced restrictions in online poker.64

Altaner D, ‘Analysts Sceptical As Gibraltar Challenges UK Tax’ (Gambling Compliance, 20 October 2014 <http://gamblingcompliance.com/premiumcontent/news_analysis/analysts-sceptical-gibraltar-challenges-uk-tax> accessed 19 January 2015 64 Sennevall L, ‘European Commission Takes Sweden To Court’ (Gambling Compliance, 17 October 2014) <http://www.gamblingcompliance.com/premiumcontent/news_analysis/european-commission-takes-sweden-court> accessed 19 January 2015.

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INTELLECTUAL PROPERTY LAW

A New Era for Trade Marks?

Jeanine Rizzo

Jeanine Rizzo

A NEW ERA FOR TRADE MARKS? JEANINE RIZZO

_______________________________________________________ Dr Jeanine Rizzo is a lawyer graduated from the University of Malta who has furthered her studies in the fields of Intellectual Property Law and Art and Antiquity Law at Masters Level at University College London. While in London she was a research assistant to Professor Norman Palmer, carrying out research on the law of bailment and on art law. She is now back in Malta, where she practices in Intellectual Property Law and Art Law at Fenech & Fenech Advocates in Valletta. Dr Rizzo specialises in Copyright (both new and old media), trade marks, patents, design rights, entertainment law, music law and film law. Her experience has taken her into the depth of the creative industry with tailored legal expertise to all matters concerning the industry. She is also a lecturer and examiner at the University of Malta, writes about the subject and is member of the Chamber of Commerce RTDI Committee. _____________________________________________________________

1.

Introduction

Over the past twenty years over one million Community Trade Marks (herein referred as ‘CTMs’) have been registered with the European Union’s Office for Harmonisation in the Internal Market (herein referred as ‘OHIM’).1 Many would agree that the CTM system is now coming of age and is undergoing a period of transformation. A revision of Union trade mark law comprising the Regulation2 regulating the CTM system and the Directive3 harmonising trade mark law across Member States, is currently OHIM, ‘20 years of OHIM – at the heart of IP protection in the EU 20 years of OHIM – at the heart of IP protection in the EU’ (Yahoo Finance, 20 November 2014) <http://finance.yahoo.com/news/20-years-ohim-heart-ip-111100010.html> accessed 17 February 2015 2 EC Council Regulation (EC) no 207/2009 of 26 February 2009 on the community trade mark [2009] OJ L 78/1 3 Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the member states relating to trade marks [2008] OJ L 299/25 1

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underway and has reached an advanced stage, so much so that the changes were even touted for a Christmas 2014 release. However, these changes have not yet materialised, at least as of January 2015, when this article was submitted. Before delving into a discussion on the proposed changes to the trade mark system, it is necessary to define the subject matter at the core of this study – the trade mark. A trade mark is a sign, capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings. A trade mark may, in particular, consist of words (including personal names), figurative elements, letters, numerals or the shape of goods or their packaging. 4 Books and theses have dissected the minutiae of each element making up this definition; these now would need to be re-written if some of the proposed changes really do find their way on the statute books. This article will not concern itself with the definition of what can or cannot qualify as a trade mark, however it is imperative to keep this definition well in mind for a better understanding of the proposed amendments.

The European trade mark legislation is often listed as an example of successful European harmonisation in the intellectual property sector – the Directive was in fact implemented and followed by all Member States. It has likewise been hailed as a success story for centralised registration of intellectual property rights insofar as the Regulation set up the CTM system through which the registration of a mark shall have equal effect throughout the Union, thus giving trade mark owners throughout the Community peace of mind. The CTM system is often held up against the failure to come to an agreement on the unitary patent.

Despite this, the success of the CTM is also seen as a burden, with the EU also faced with what is termed the ‘OHIM Surplus’ – OHIM being a very profitable institution within the EU. Controversy has in fact erupted with regard to the ‘OHIM Surplus’ in recent months with the OHIM President and trade mark associations rallying against the proposal to redirect the surplus away from OHIM. Small countries and their intellectual property offices, such as Malta, stand to gain from lobbying for funding from the OHIM surplus.

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2.

Background

A Community Trade Mark is an intellectual property right – a trade mark in effect – which is administered centrally but has an effect across all European Union Member States, both present and future. Applications for obtaining such a trade mark are submitted with OHIM and once granted, give an exclusive right to the owner of the mark lasting ten years, which period can be however renewed.

The idea for a centralised and harmonised European trade mark system had been brewing since 1964 with the Preliminary Draft Convention for a European Trade Mark leading to the 1993 Council Regulation on the Community trade mark. 5 This Regulation was later revised and all revisions and amendments were finally incorporated into Regulation 207/2009 in February 2009. The Regulation regulates not only the substantive rules relating to a CTM but also the procedural aspects which are, in turn, handled by OHIM. The latter 2009 Regulation is the version practitioners have been working with ever since, and which, it appears, is set for an overhaul.

While the Community trade mark system is covered by the Regulation, the approximation of Member States’ laws in relation to trade marks falls under the remit of Community Directive 2008/95/EC which is a revision of the original 1998 Directive. The Directive harmonised the laws within each Member State, resulting in legislative consistency on a number of substantive matters such as the general definition of a trade mark, the absolute and relative grounds for refusal, and what constitutes infringement of a mark.

The Regulation and the Directive contain similar provisions, as is naturally required in order to obtain the harmonisation required at national and at regional levels.

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3.

Why change?

Although the Directive and the Regulation were key to achieving harmonisation in trade mark law, many in the intellectual property – particularly the trade mark – industry have criticised the current system for failing to continue the harmonisation effort. As the years passed, experience and use of the two legislative instruments currently in force have served to highlight the areas where harmonisation is now needed. Furthermore, new trends in trade mark applications, particularly the non-conventional trade mark, and their reception and treatment have given rise to different interpretations and results in different Member States, as well as at OHIM. This is a natural process of evolution. The laws have been in force for a long number of years, and have been tested continuously by the Courts and trade mark owners and users. The Court of Justice of the European Union (herein referered as the ‘CJEU’) has furthermore developed, through its considerable jurisprudence in the field, a number of trade mark principles which have added to trade mark law (or should that be lore?).

A couple of examples illustrate what is meant by evolution.

First and foremost is the notion of the ‘essential function of a trade mark’. Although many readers might think that this would be a crucial element of the Regulation, this is found buried in the Recitals and is not located in the main text of the Regulation. Recital 8 is where one reads of the principle, picked up by the CJEU and repeated as a mantra, that the essential function of a trade mark is, ‘in particular to guarantee the trade mark as an indication of origin’. 6 Reference to the function of origin is made in the definition of a trade mark, as above, but it is not highlighted as the ‘essential function’ in the text of the Regulation itself. The evolution can be witnessed in that this principle is now being featured as the key to most, if not all, contentious matters and is the framework being used by the CJEU and other courts within the EU in which to place their

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judgment – take as an example L’Oreal v Bellure7 and Arsenal v Reed.8 Also evolutionary is the road taken to register colour marks, which has come a long way over the past years. Colours per se were not considered registrable as a trade mark by the CJEU since a colour, any colour, could not convey the fundamental message of origin to the ordinary and reasonable consumer. Moreover, the CJEU feared that if colour marks were to be granted, and if companies were granted exclusivity over the use of a colour, one would soon run out of colours since there is only a finite number of colours to be availed of according to the ‘colour depletion theory’.

Later CJEU decisions such as Libertel9 and Heidelberger Bauchemie10 however allowed colours to be entered into the trade mark register. Through evolution in branding and consumer education, and by better identifying the mark (for example by quoting the Pantone number) colours are now considered to provide the requisite information regarding the origin of the product or service to consumers. The Libertel case is also quoted in discussions relating to the elements necessary for the registration of a trade mark. Three points emerge: the mark must be a sign, it must be represented graphically and it must be capable of distinguishing the goods and services of one undertaking from those of another. These three points are reflected in the current definition of a trade mark as quoted above and as contained in the Regulation, the Directive and in Maltese law.11 Apart from the focus on the mark functioning as an indication of origin, equal importance is placed on the mark being a sign and on its being represented graphically. As will be seen later on, some of what are considered as being fundamental trade mark tenets may soon be changing.

It is this evolution, both in the habits of trade mark owners and in the decisions of the CJEU, which has brought on, the need for a modernisation of Community trade mark rules and legislation.

Case C-487/07, L’Oréal SA v Bellure NV [2009] Case C-206/01, Arsenal Football Club Plc v Matthew Reed [2002] Case C-104/01, Libertel Groep BV v Benelux-Merkenbureau [2003] ECR I-03793 10 Case C-49/02, Heidelberger Bauchemie GmbH [2004] ECR I-06129 11 Trademarks Act, Chapter 416 of the Laws of Malta 7 8 9

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4.

The Proposed Change

A recast of the Directive and a new Regulation are currently being discussed at European level and should have landed on the statute books as of December 2014. The process has long been considered. The Council set the ball rolling in 2007, and with the reform in trade mark law being enacted by the process that was till recently referred to as the co-decision process, the European Parliament became involved. In 2011, the Max Planck Institute produced a study on the overall functioning of the European trade mark system.12 The study concluded that the harmonisation effort which started with the first Directive and Regulation should be continued; that alignment between the Directive and Regulation was desirable; and that there should be cooperation between OHIM and the national trade mark offices. The study proposed specific amendments to the Regulation, such as the treatment of goods in transit.

A proposed Directive and Regulation were published in 2013.13 The proposals call for a quicker and more predictable system to benefit businesses wishing to safeguard their intellectual property assets from counterfeits and infringements. Procedures are also to be streamlined.

Since this is an EU legislative process, the European Parliament has an active role to green light each proposal within the reform package put forward by the Council. As will be seen throughout the rest of this article, there are some proposals which were very much influenced by Parliament.

Max Planck Institute for Intellectual Property and Competition, ‘Study on the Overall Functioning of the European Trade Mark System’ <http://ec.europa.eu/internal_market/indprop/docs/tm/20110308_allensbachstudy_en.pdf> accessed 17 February 2015 13 Text of proposed Regulation: http://eur-lex.europa.eu/legalcontent/EN/ALL/?uri=CELEX:52013PC0161 Text of proposed Directive: http://eur-lex.europa.eu/legalcontent/EN/ALL/?uri=CELEX:52013PC0162 12

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5.

What are the changes?

The following changes are some, though not all, of the changes proposed by both the Regulation and the Directive. These are the changes which have caused most debate, including those proposals which are the fruit gathered from the experience of the past twenty years.

5.1 Definition The first, and perhaps the most fundamental, is the change proposed to the definition of a trade mark. This amendment has reportedly caused the most debate amongst those participating in the legislative process at EU level because of its aim to introduce a change in the most fundamental of concepts: the basic definition of a trade mark. The proposal seeks to remove the requirement of ‘graphic representation’, and replace it with the new requirement that the mark must be, ‘represented in a manner which enables the competent authorities and the public to determine the precise subject of the protection afforded to its proprietor.’

Many have opposed this since it will, in one fell swoop, override the ‘Sieckmann14 criteria’ which had established the underlying elements of the description and ‘graphical representation’ necessary for a successful trade mark application.

The Sieckmann principles are, inter alia, that the mark had to be clear, precise, self-contained, durable, objective, and intelligible.

Numerous CJEU cases and OHIM administrative decisions have been taken on the basis of the Sieckmann criteria, and this explains why so many are uncomfortable with this amendment since it is regarded as a changing of the goal posts.

What the change means is that marks need no longer be subjected to the scrutiny of having a graphical representation. In the past, for example, the provision of a sound file, such as an audio file, would disqualify a mark from being registered as one could not understand what the mark was by looking at sound waves. Similarly, 14

Case C-273/00, Ralf Sieckmann v Deutsches Patent- und Markenamt [2002] ECR I-11737 369

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the submission of a chemical formula in order to register a smell mark was not allowed since any person reading the formula would not know what this smelled like; therefore this was unintelligible.

The shift away from the requirement of ‘graphically represented’ would mean that applicants can now submit any variety of signs for trade mark registration. The so called ‘nonconventional’ marks such as smells, shapes, movement and audio marks will no longer be tied down to ‘graphical representation’.

Audio files can now be accepted, but what about smells? The new criteria indicate that the sign must be presented in such format as to allow the competent authorities and the public to determine the ‘precise subject of the protection’. Chemical formulae, therefore, would still be disallowed since they do not give the person viewing the application, or the registration, an understanding of the precise subject of protection. We have yet to have olfactory transmitters attached to television and computer screens which would, similarly to speakers, convey the smell of what is displayed on the screen.

Therefore, with smell marks, the graphical representation, to convey the precise subject matter of protection must still be a written description of the mark. This is the standard used today – successfully used to register the ‘smell of fresh cut grass’ as a trade mark for a tennis ball manufacturer.

Those who are in favour of this change argue that this requirement will allow the sign to be represented more accurately.

This change was given the green light by the European Parliament.

5.2 Nomenclature The proposed trade mark Regulation introduces a change in terminology. The Community Trade Mark shall now be referred to as the ‘European Trade Mark’, and OHIM shall now be termed the ‘European Union Trade Marks and Designs Agency’, or the ‘Agency’. As with all suggestions, some are in favour of a change in name, while others question why this was done as the current nomenclature used was working well and had no real problems attached to it. As a practitioner, I have witnessed that the current names could be somewhat misleading, in that the general public would not know that the Office for Harmonisation in the Internal Market would be the office responsible for the Community trade 370

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mark. The proposed name, although still quite a mouthful, should better convey to persons not regularly involved in the sector that this is the correct office, or agency as it will be.

5.3 Infringement – identical signs, identical goods Generally a trade mark is infringed when use is made in the course of trade of a mark: (a) which is identical with the earlier trade mark and the goods or services for which registration is applied for are identical with the goods or services for which the earlier trade mark is protected; or (b) which, because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected; the likelihood of confusion includes the likelihood of association with the earlier trade mark.

The proposed addition is to paragraph (a) above, in that it is applicable to infringement when the signs are identical and the goods and services are identical – this is referred to as ‘double identity’. The proposed text of the Regulation dealing with double identity introduces the new requirement that such identical use must affect or is liable to affect the function of the trade mark to guarantee to consumers the origin of the goods or services. This introduction has been criticised for focusing only on the ‘origin’ function of a trade mark, ignoring a trade mark’s other functions which, as indicated by the CJEU in its jurisprudence, constitute the functions of quality indication, advertising, and investment.

The Advocate General’s opinion in the Interflora case15 asked for clarification in the law to be introduced – resulting in the addition presently discussed. However, this proposal was opposed 15

Case C-323/09, Interflora Inc. and Interflora British Unit v Marks & Spencer plc and Flowers Direct Online Ltd. [2011] ECR I-08625 371

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by the European Parliament and for this reason should not be implemented in upcoming legislation.

5.4 Use of own name The use of your own name constitutes a defence in trade mark infringement proceedings. With the proposed amendments to the Regulation and Directive, this defence will be restricted and will apply only to personal names and not to company names. This contrasts with the recent successful defence presented in the case Stitching BDO and others v BDO Unibank Inc and others.16 The proposal has been given the green light by the European Parliament.

5.5 Designation and classification of the goods and services Following the IP Translator case, 17 the proposed Regulation reflects the CJEU decision and the administrative changes carried out thereafter by OHIM. When identifying goods and services, the applicant must indicate them with sufficient clarity and precision to enable the competent authorities and economic operators, on that sole basis, to determine the extent of the protection sought. In this regard the proposed text of the Regulation (which is also being used in the Directive) codifies, almost verbatim, the IP Translator decision.

This is one of the areas in which the EU legislators are incorporating principles which have emerged from CJEU jurisprudence. The CJEU in the IP Translator case had decided that a trade mark applicant who uses all the general indications of a particular Nice class heading must specify whether its application is intended to cover all of the goods or services included in the alphabetical list for that class or only some of them. In the latter case, the applicant is required to specify which of the goods or services in that class are intended to be covered.

Her Majesty’s Attorney General v. Associated Newspapers and News Group Newspapers[2013] EWHC 418 (Chancery Division) 17 Case C-307/10, Chartered Institute of Patent Attorneys v Registrar of Trade Marks.

[2012] 16

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Proprietors of trade marks applied for before 22 June 2012 (the date of the IP Translator decision) which are registered solely in respect of the entire heading of a Nice class, will be given the opportunity to declare whether their intention on the date of filing had been to seek protection in respect of goods or services beyond those covered by the literal meaning of the heading of that class, provided that the goods or services so designated are included in the alphabetical list for that class of the edition of the Nice classification in force at the date of filing. This declaration must be filed at OHIM within 4 months from the entry into force of the Regulation, and shall indicate in a clear, precise and specific manner, the goods and services, other than those clearly covered by the literal meaning of the indications of the class heading originally covered by the proprietor's intention.

5.6 Consignments from commercial suppliers The amendments are proposed to clarify that goods may not be imported into the EU even if only the consignor is acting for commercial purposes. This is to ensure that a trade mark owner has the right to prevent businesses (whether located in the EU or not) from importing goods located outside the EU that have been sold, offered, advertised or shipped to private consumers, and to discourage the ordering and sale of counterfeit goods over the Internet.18 5.7 Goods brought into the customs territory The proposed draft appears to overcome the difficulties arising from CJEU decisions such as Nokia19 and Philips20 when it comes to goods in transit. The treatment of goods in transit, or transhipment, is the subject of great debate, and remains European Parliament and European Parliament, ‘Proposal for a Regulation of the European Parliament and of the Council amending Council Regulation (EC) No 207/2009 on the Community trade mark’ < http://eur-lex.europa.eu/legalcontent/EN/ALL/?uri=CELEX:52013PC0161> accessed 17 February 2015 19 Case C-495/09, Nokia, [2011] 20 Case C-446/09,Koninkljike Philips Electronics NV (C-446/09) v Lucheng Meijing Industrial Company Ltd and Others and Nokia Corporation [2011] ECR I-12435 18

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unharmonised despite the CJEU pronouncements on the matter. In its decisions in the Nokia and Philips cases, the CJEU had held that goods in transit can only be classified as counterfeit, and therefore caught, once the trade mark owner has proof that they are intended to be diverted into the single market and subject of a commercial act such as sale, offer for sale or advertising directed at EU consumers.

This is in contrast to what the Maltese Courts have decided, and continue to decide, in cases dealing with counterfeit goods in transit. The Maltese Courts are of the opinion that the goods infringe intellectual property rights, in this case trade marks, even though they are in transit and are not present on the market.21 The implications of the Philips/Nokia judgments have been met with strong criticism from stakeholders as placing an inappropriately high burden of proof on rights holders, and hindering the fight against counterfeiting. The proposals reverse the burden of proof set out in CJEU decisions, and it will be up to the declarant or holder of goods coming from third countries and placed under a suspensive procedure, to provide evidence as to the goods’ final destination in instances where there are indications providing grounds for suspecting that the relevant goods will be placed on the EU market.

5.8 Protection of geographical indications and traditional names Geographical indications of origin have long existed on the periphery of intellectual property laws, with the EU in recent years pledging to raise these up and someday becoming a ‘full’ intellectual property right. The amendments proposed to the Regulation may very well be the first step in this direction. In proceedings leading up to the registration of European trade marks, the relevant absolute grounds for refusal are to be aligned with the law on geographical indications. Moreover, for reasons of coherence, the grounds for refusal of a trade mark application will be extended to cover protected traditional terms for wine and traditional specialities. Designations of origin and geographical indications protected at Union level will entitle one to bring an 21

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opposition against the registration of a later European trade mark, regardless of whether or not they are also grounds for refusal to be taken into account ex officio by the trade mark examiner.

5.9 Procedural reform A number of proposals having a procedural impact also apply to the Regulation and are applicable to CTM application procedures.

Among these, applications for a CTM will no longer be allowed at the national Industrial Property Offices, and shall only be filed with OHIM. Currently, 96% of all filings done at OHIM are submitted online. Secondly, failure to pay the application fee, means that the application is not fully processed and the applicant is not given an application date. The current procedure allows an applicant to file a CTM application and defer payment for one month. This allowed persons to ‘test’ their application, and if an objection is raised by OHIM then there would be no forfeiture of the application fee. This position, however, despite being adopted by the Commission, is not shared by Parliament nor by the European Council. This notwithstanding, OHIM has already changed its administrative rule on this point and is working in like with this proposal, leading to criticism for doing something not sanctioned by hard law.

Other proposals have in turn already received the green light from the European Parliament and should make it to the final text of the Directive. First, an administrative opposition procedure shall be mandatory in all Member States. This should include a mandatory 2 month cooling off period. Malta is one of the Member States where the Industrial Property Directorate does not administer an opposition procedure during the examination of the application leading up to registration of the mark. This will have to change once the Directive comes into force. At present, a person using a mark will have to file proceedings in Court to stop the registration of a trade mark which has been applied for. Similarly, Member States will be obliged to provide for an administrative procedure to challenge the validity of a trade mark registration before their Industrial Property offices. This will mean more powers for the Maltese Industrial Property Directorate, since, to date, any action challenging the validity of a registration must be filed in Court. Non-use shall be allowed as a defence in opposition proceedings and in proceedings seeking a 375

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declaration of invalidity. The person applying for registration of a trademark will be allowed to claim non-use in relation to an opposition filed against the application.

The procedural changes proposed in the Directive reflect the current procedure used by OHIM, and therefore harmonise the procedure and remedies for all national Industrial Property offices while reducing the need for court action, which would naturally bring with it court fees and court waiting periods.

6.

Conclusion

The proposed Regulation and Directive were earmarked for implementation by Spring 2014, which deadline then changed to Christmas 2014. The subject of the proposals, as can be seen above, includes some controversial points. The prime example is the change in the definition of a trade mark with the removal of the requirement of ‘graphical representation’. This would understandably have caused a delay in the legislative process.

Following that is the reaction by the European Parliament, and its feedback and suggestions with regard to the proposed Regulation and Directive.

All in all, it is known that most proposals will see the light of day, especially the notorious removal of ‘graphic representation’.

These changes will be felt in Malta. The demand for Community registrations is increasing, and we will need to keep up to date with these changes, which might also bring changes in the fees OHIM will be charging. Of greater interest, however, will be the changes proposed by the Directive, in particular the introduction in Malta of opposition procedures which can be filed directly with the Industrial Property Directorate. Will this see an increase in personnel at the Directorate? And more pertinently, will it be well received and utilised?

In conclusion, yes, this appears to be the dawn of a new era for trade mark regulation thanks to the EU’s modernising of trade mark laws and pushing the harmonisation effort across the Community.

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INTERNATIONAL LAW

Today’s Terrorist is Tomorrow’s Statesman – Does the Law of Self-Determination provide any Justification for Terrorist Acts?

Roberta Avellino

Roberta Avellino

TODAY’S TERRORIST IS TOMORROW’S STATEMAN – DOES THE LAW OF SELF-DETERMINATION PROVIDE ANY JUSTIFICATION FOR TERRORIST ACTS? ROBERTA AVELLINO

_______________________________________________________ Dr Roberta Avellino started reading law at the University of Malta in 2004 wherein she graduated as Doctor of Laws in November 2010. She further read for a Master of Laws in International Law at the University of Malta and a Master of Laws in Human Rights Law at the London School of Economics and Political Science, wherein she graduated in 2014 with research about the human rights implications of the EU-US Passenger Name Record Agreements as a traveller surveillance system.

Dr Avellino is currently a Senior Political/Economic Specialist at the U.S. Embassy in Malta and a Visiting Assistant Lecturer within the Department of Public Law at the University of Malta.

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1.

Introduction

The right of self-determination is not only customary but one of the essential principles of contemporary International Law.1 This was encapsulated in the commentary of the International Law Commission (herein referred as the ‘ILC’) to the ‘Articles on Responsibility of States for Internationally Wrongful Acts’.2 Furthermore, the Commentary to the Articles referred to East Timor and the significance of the judgment of the International Court in highlighting that ‘the right of people to self-determination, as it evolved from the Charter and from United Nations practice, has an erga omnes character, is irreproachable’. 3 However, the realisation 1

Commentary to Article 40, paragraph 5. Report of the ILC, GAOR, Supp. No. 10 (A/56/10), 284 2 International Law Commission, Draft Articles on Responsibility of States for Internationally Wrongful Acts, November 2001, Supplement No. 10 (A/56/10) 3 Commentary to Article 40, para 5. Report of the ILC, GAOR, Supp. No. 10 (A/56/10), 284 379

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of the principle of self-determination4 has been described as one of the ‘most controversial and contested of the many controversial and contested terms in the vocabulary of international law’.5 The blurred distinction between terrorism and ‘legitimate resistance against aggression and occupation’6 is one aspect of selfdetermination, which has engaged scholarly debate in legal and political spheres. History shows that struggles for national liberation and subsequent transitions to new regimes have often been characterised by bloody and violent events with acts, which are legally treated as terrorist acts. Can acts that would otherwise be legally treated as terrorist acts be justified or excused by virtue of the law of self-determination? Clapham argues that protecting those who use force in the context of certain liberation struggles has been a traditional concern of those who have won their own nationhood through struggle against colonialism, racism and alien domination. 7 An overview of the historical linkage of terrorism and the right of self-determination is very important to detect the points of convergence in the development of both concepts. Consequently, the historical background has represented itself in obstacles, which have presented the international community with great challenges to agree on the definitions and application of both terrorism and selfdetermination. The analysis of the definitional and conceptual aspects of self-determination will explore the enactment of the

4

For discussion about the development of the concept of self-determination, see Justice, Legitimacy, and Self-Determination: Moral Foundations for International Law (Oxford University Press, 2004), Joshua Castellino, International Law and SelfDetermination: The Interplay of the Politics of Territorial Possession with Formulations of Post-Colonial ‘National’ Identity (Martinus Nijhoff Publishers, 2000), and Connor Walker, ‘Democracy and National Self-Determination: Yesterday, Today and Tomorrow’ in Begona Aretxaga, Empire and Terror: Nationalism/Postnationalism in the New Millenium (Reno: Center for Basque Studies, University of Nevada 2004) 5 James Crawford, ‘The Right of Self-Determination in International Law: Its Development and Future’ in Philip Alston ed., Peoples’ Rights (Oxford University Press 2000) 2 6 Syrian Bar Association, ‘Between the State Terrorism and the People’s Right of Self-Determination’ Paris (2005) 1 7 Andrew Clapham, ‘Secession, terrorism and the right of self-determination’, in Marcelo G. Kohen (Ed.) Secession – International Law Perspectives, (Cambridge University Press 2006) 47 380

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international law of self-determination and the circumstances of their presentation.

The second part of the paper will examine whether antiterrorism instruments provide for exceptions and exclusions for acts carried out in self-determination struggles, which examination displays a stark contrast between regional and international instruments. The final part will then explore two key international anti-terrorism treaties with the aim of identifying whether acts otherwise legally treated as terrorist acts under the Conventions are justified or excused by virtue of the law of self-determination. The aim of this paper is therefore to gain a greater comprehension of the linkages between self-determination and terrorism, identify points of convergence, point out issues of conceptual contention in determining whether such acts are justified by virtue of the law of self-determination and consider the possibility of a move in this direction.

2.

Historical Linkage

‘Popular sovereignty as a near-universal basis for the legitimacy of government is comparatively recent’.8 Indeed, the beginning of the post-war era and the formation of the United Nations (herein referred as ‘UN’) were characterised by colonisation as most of the sovereign independent states, which today form the international community were colonies of European powers or the United States. However, American opposition and increased political and economic costs to sustain colonies overseas prompted European powers to commence a process of decolonisation. This ‘process’ was not carried out in a standard and uniform manner but was selective and conditional on the basis of strategic calculations and political commitments. As a result, nationalists engaged in violence to push out the colonial power, where demands for independence were rejected by the colonial power.

8

Adrian Guelke, The Age of Terrorism and the International Political System (Taurus Academic Studies 1995) 74 381

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The colonial powers reacted by heavily contesting the political legitimacy of those who resorted to violence, defending the legitimacy of their own colonial rule as a general principle, in those territories where they intended to maintain colonial rule. The leaders of movements in territories where violence formed a constituent characteristic of the struggle against colonial rule, such as Makarios in Cyprus and Kenyatta in Kenya, were dealt a harsher fate and labeled ‘terrorists’.9 Nationalist movements tried to strengthen their claims for independence by reaching out to the outside world to rebut the terrorism propaganda, and show that nationalist movements enjoyed popular support. Unsurprisingly, covert actions such as bombings, assassinations and other attacks, which did not depend on popular support for the nationalist cause did not contribute to the aims of the movements, and at times, encouraged colonial powers to further promote and push forward their agenda to portray these secessionist campaigns as terrorist movements. Of course, the political value of their covert actions in demonstrating legitimacy for their nationalist cause was also very limited, 10 earning no further support. Lal claims that the damage carried out by these acts was more to ‘their own people and those from whom they want to separate’ as ‘domestic disorder they breed rarely spills into international disorder.11 The fundamental logic of the situation went through immense transformation by the 1960s when the decolonisation process was nearing its completion. This new setting gave rise to different interests, as colonial powers were now keen to legitimise the new post-colonial order even at the cost of supporting nationalist leaders who had previously struggled to force them out. However, most of the new nationalist leaders were governing fragile political systems with the ever-impending threat of revolution and thus, it was crucial for the new leaders to assert their positions of leadership. Many glorified their roles in the anti-colonial struggles promoting themselves as national heroes while portraying colonial rule as ‘a fundamental denial of the principle of self-determination’ and an 9

ibid, 74-80 ibid, 80 Deepak Lal, ‘Will Terrorism Defeat Globalization?’ in Richard N. Rosecrance and Arthur A, Stein (Eds.) No More States? Globalization, National Self-Determination, and Terrorism (Rowman and Littlefield Publishers, Inc 2006) 39 10 11

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‘affront to the human dignity’ of the ruled people.12 This turn of events presented colonial rule as illegitimate in principle and pushed forward the proposition that violence, which is directed towards the aim of overthrowing colonial rule and enabling peoples to exercise the right of self-determination was legitimate. Little contradiction was meted out by the former colonial powers. It was in their interest to safeguard existing economic interests within the newly established states and prove their success in the way they had managed the process of decolonisation.13 The same sentiments were evident in the international consensus on the interpretation of the principle of self-determination, as incorporated in the 1970 Declaration of Principles of International Law concerning Friendly Relations and Cooperation among States in accordance with the UN Charter.

3.

Definitional Aspects

A vital aspect of contemporary legal education is ‘its emphasis upon precision, specificity, and definiteness’.14 It is difficult to understand and properly implement the law, ‘without a working knowledge of legal definitions, for they set out the fundamental elements’ of the legal system.15 This is the case in international law, especially in entangling the fatal nexus between terrorism and self-determination.16 The old maxims that ‘today’s terrorist is tomorrow’s statesman’, or that ‘one man’s terrorist is another’s freedom fighter’, are demonstrative of a blurring distinction between terrorism and violence engaged by peoples struggling for their self-determination and demonstrate the dilemma produced by militant self-determination proponents with their

12

Guelke (n 8) 81 ibid 14 Robert A. Friedlander, ‘Terrorism and Self-Determination: The Fatal Nexus’ 7 Syracuse Journal of International Law and Commerce (1979-1980) 263 15 ibid 16 ibid 13

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premise that ‘the end justifies the means’.17 Hence, before engaging in the discussion of whether the international law of selfdetermination justifies acts, otherwise deemed as terrorist acts, it is crucial to analyse definitional aspects related to the two separate concepts.

3.1 Self-Determination The phrase ‘national self-determination’ first appeared in the First International’s Proclamation on the Polish Question of 1865 and later became a staple in the writings of Marx, Engels, and Lenin.18 Walker argues that the phrase ‘self-determination’ did not give rise to the phenomenon of the notion but it was the phenomenon, which gave rise to the phrase. He insisted that ‘selfdetermination is much more than a principle or a doctrine’ as it is the ‘popular impulse to resent and resist control by those deemed aliens’ featuring throughout historical times, well before the age of nationalism.19 Anaya described self-determination as ‘a universe of rights’ and ‘a principle of the highest order within the contemporary international system’.20 The principle of self-determination of ‘peoples’ in the UN era started out as an aspirational goal, drawing criticism and doubts from many whether a solution of its practical application, which satisfied the interests of all, was ever to be found.21 Nevertheless, the scope of self-determination has expanded in the aftermath of 1945. The UN presented ‘a vision of state sovereignty, territorial integrity and political independence’ but this notion of state powers Robert A. Friendlander, ‘Terrorism and National Liberation Movements: Can Rights Derive from Wrongs?’ 13 Case Western Reserve Journal of International Law (1981) 281 18 Walker Connor, The National Question in Marxist-Leninist Theory and Strategy (Princeton: Princeton University Press, 1984) Chapters 1 and 2 19 Walker Connor, ‘Democracy and National Self-Determination: Yesterday, Today and Tomorrow’ in Begona Aretxaga, Empire and Terror: Nationalism/Postnationalism in the New Millenium (Reno: Center for Basque Studies, University of Nevada 2004) 18-19 20 S James Anaaya, Indigenous Peoples in International Law (Oxford University Press, New York 1996) 75 21 Hurst Hannum, Autonomy: Sovereignty, and Self-Determination – The Accommodation of Conflicting Rights (University of Pennsylvania Press, 1996) 17

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has many a times conflicted with the powerful principle of equal rights and the self-determination of ‘peoples’, also advocated by the UN, implying that a ‘people’ has a trans boundary or border existence.22 Chadwick explains that the conflict occurs when contexts of ethnic and/or cultural ‘nationality’ are subjected to ‘traditional mechanisms of sovereign state administration and internal management’.23 The original scope of the right of self-determination is traced to the context of colonialism, however, this notion has been stretched to embrace ‘peoples’ in post-colonial states, or in states where human rights abuses carried out by the government justifies the use of force for self-defense or self-preservation. The term has expanded in part ‘as a result of the successful use of violent force in armed struggles by auto- or self-determined ‘peoples’ for the right of self-determination’.24 These dynamics evolved after many new States, which had formerly been under colonial rule and subjected to human rights abuses, were conceded as members of the UN. Another surge of development of the notion of self-determination was experienced in the aftermath of the Cold War, when the principle was applied to the cases of ‘peoples’ in former Communist countries. Correspondingly, there have been claims to territory made by particular groups ‘desiring to correct historic wrongs.’

3.2 The meaning of ‘Peoples’ In the outcomes of 1945, difficulties have arisen as to the definition of the term ‘peoples’ and which of these ‘peoples’ are entitled to the right of self-determination. In this regard, restrictions to the idea of a ‘people’ is seen in the early practice of the UN and this was due to its interest to protect States’ ‘competing interests of preserving existing territorial units, forestalling anarchy’ and safeguarding an already existing ethnic map. 25 This narrow and stringent approach to the idea of a ‘people’ could not succeed for

22

Elizabeth Chadwick, Self-Determination, Terrorism and the International Humanitarian Law of Armed Conflict (Kluwer Law International 1996) 3 23 ibid 24 ibid, 1 25 ibid, 4-5 385

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long as the UN had to face the realities of historic grievance and human rights abuse carried out by repressive regimes.

Instead of the uniformity it sought to achieve, this approach lead to a proliferation of unregulated violence as auto-determined ‘peoples’ resorted to this preferred method to seek self-identification and bring about change.26 Consequently, successful liberation struggles have created major modifications to the understanding of ‘peoples’. The expanding nature of ‘peoples’ was recognised by Special Rapporteur of the Sub-Commission on Prevention of Discrimination and Protection of Minorities, Gros Espiell as he held that: the right of peoples to self- determination exists as such in modern International Law, with all the consequences that flow there from, where a people is subject to any form or type of colonial and alien domination of any nature whatsoever. The notion of colonial and alien domination is broader than - though it includes - the notion of foreign occupation, and hence the right of peoples to self-determination may arise and be typified in other situations in addition to those where there is merely foreign occupation.27 The notion of ‘peoples’ now includes groups with common political goals, and clear ethnic and/or cultural ties, which sometimes desire nothing more than freedom from human rights violations and discrimination. However, ‘peoples’ struggle for their independence and in such cases, ‘peoples’ are prepared to resort to violence and use force to achieve their rights and independence, especially owing to their lack of access to resources as non-state entities.

26

Guelke (n 8) 70-80 Hector Gros Espiell (Special Rapporteur of the Sub-Commission on Prevention of Discrimination and Protection of Minorities) (E/CN.4/Sub.2/405/Rev.1), 1980, Introduction and Chapter 2 27

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3.3 International Law of Self-Determination The principle of self-determination was not part of the Dumbarton Oaks proposals, which formed the basis of the UN Charter28 but it was only later that the Soviet Union proposed an amendment with the text ‘based on respect for the principle of equal rights and self-determination of peoples’.29 Consequently, Article 1(2) of Chapter I of the UN Charter refers to the concept of selfdetermination as a principle of the UN. The self-determination of peoples is also mentioned in Article 55 as a principle upon which ‘peaceful and friendly relations among nations’ are based. However, it has been argued30 that the way the UN Charter portrays the right of self-determination does not intend to create a binding legal norm but rather ‘constitutes the mere expression of a political principle’.31 As a matter of fact, the Declaration of Principles of International Law concerning Friendly Relations and Cooperation among States32 was intended as ‘a clarification of the purposes of the UN’.33 It was passed by the UN General Assembly on 24 October 1970 under a special consensus procedure indicating unanimity or near-unanimity amongst the Member States. Following the adoption of the Declaration, then President of the General Assembly, Edvard Hambro held that the Declaration marked the ‘culmination of many years of effort for the progressive development and codification of the concepts’, which form the basic principles of the Charter. Hambro continued that the work has just begun for States to make the proclaimed principles a living reality

28

UN, Charter of the United Nations, 24 October 1945, 1 UNTS XVI Heather A. Wilson, International Law and the Use of Force by National Liberation Movements (New York: Oxford University Press, 1988), 58-59 30 See Ibid.; Malcolm N. Shaw, International Law (Cambridge University Press, 2003) 31 Burak Cop & Dogan Eymirlioglu, ‘The Right of Self-Determination in International Law towards the 40th Anniversary of the Adoption of ICCPR and ICESCR’ Perceptions (2005) 118 32 UN General Assembly, Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States in accordance with the Charter of the United Nations, 24 October 1970, A/RES/2625(XXV) 33 Malcolm N Shaw, International Law (Cambridge University Press, 2003) 228 29

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because ‘these principles lie at the very heart of peace, justice and progress.’34 States were duty bound to refrain from engaging in any forcible action that sought to deprive people of their right of selfdetermination. Moreover, the Declaration stipulated that those seeking to exercise their right of self-determination had the right to resist and also, the right to seek external assistance for their struggles. On the other hand, while it provided for the possibility that people might not seek to exercise their right through the creation of an independent state, the Declaration insisted that the option of independence should remain available to any territory that did not form an integral part of an existing sovereign independent state. Nonetheless, the right of secession was unambiguously denied. The Declaration was criticised for its portrayal of a world consisting of sovereign independent states with equal status and permanently fixed boundaries, implying ‘a presumption of illegitimacy to any political arrangement that stood in the way of the achievement of such a world’.35 It was clear that the phrase ‘the people’ entitled to self-determination in the Declaration was simply referring to the will of a majority of the population living within a particular territory but there remained a myriad of practical difficulties in the application of this neat principle. In sum, the Declaration symbolised an endorsement of the new order that had resulted out of the process of decolonisation. However, its effects have been more radical in the sense that it implied international legitimacy for nationalist struggles.

This was an outcome of the implication of the suggestion that colonial rule was illegitimate in principle and additionally, that violence directed at its downfall was justified. It was implied that it was sufficient to define a situation as colonial to provide a justification for violence. As a result, groups engaged in organised violence were unchained from the essential requirement of displaying popular support for their actions to legitimise their activities. But surely, the disappearance of this criterion triggered two-edged development for the remaining anti-colonial groups and 34

UN Audiovisual Library of International Law (2013) <http://legal.un.org/avl/ha/dpilfrcscun/dpilfrcscun.html> accessed 2 March 2015 35 Guelke (n 8) 81 388

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movements. In the absence of the imperative to demonstrate popular support, groups, which lacked support directed their attention towards covert acts of violence. This turn of events gave these groups the opportunity to justify their violence acts as a strike against colonialism, bypassing anti-colonial movements with organised opposition to the colonial power. In the end, these tactics did not contribute to the case for anti-colonial violence. On the contrary, they inclined towards a diminished endorsement of anticolonial violence in general.

A controversial concept in public international law, selfdetermination bears a number of characteristics formulated on different legal platforms.36 However, the evolution of the right of self-determination is perhaps crucially evidenced in both the International Covenant on Civil and Political Rights (herein referred as the ‘ICCPR’)37 and the International Covenant on Economic, Social and Cultural Rights (herein referred as the ‘ICESCR’).38 Article 1 of both covenants states that: All peoples have the right of self-determination. By virtue of that right they freely determine their political status and freely pursue their economic, social and cultural development.

All States parties to the Covenant must undertake positive action to facilitate ‘realisation of and respect for the rights of peoples to self-determination’.39 Wilson argues that ‘widespread adoption of these Covenants would give the right to selfdetermination legal force established by treaty’40 and indeed the inclusion of the right to self-determination in the two Covenants meant that this right would benefit from ‘a higher ranking in the hierarchy of legal norms’.41 Additionally, the right was promulgated

36

Cop and Eymirlioglu (n 31) 116 UN General Assembly, International Covenant on Civil and Political Rights, 16 December 1966, United Nations, Treaty Series, vol. 999, 171 38 UN General Assembly, International Covenant on Economic, Social and Cultural Rights, 16 December 1966, United Nations, Treaty Series, vol. 993, 3 39 General Comment 12, para. 6 (1984). UN Doc HRI/GEN/1/Rev. 4, 91 40 Wilson (n 29) 75 41 Cop and Eymirlioglu (n 31) 121 37

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as ‘the gateway to economic, social and cultural rights’.42 The most notable characteristic of the two Covenants was that they brought about a major leap of development to the concept of selfdetermination. The Covenants developed the concept of selfdetermination from ‘a political principles to a legal norm associated with human rights’.43 3.4 Terrorism The exercise of reaching a comprehensive definition of terrorism, ‘a phenomenon as old as history’,44 has been described by English as ‘one of the most pressing and difficult issues of our time’ as terrorism cannot be adequately explained unless it is precise in what it is that it is seeking to explain. 45 Primoratz has defined ‘terrorism’ as ‘the deliberate use of violence, or threat of its use, against innocent people, with the aim of intimidating them, or other people, into a course of action they otherwise would not take’.46 Gearty introduces an additional feature to terrorism, that of ‘random target selection’ alongside its widespread broadcasting and argues that: violence is unequivocally terrorist when it is politically motivated and carried out by sub-State groups; when its victims are chosen at random; and when the purpose behind the violence is to communicate a message to a wider audience. 47 The political element is central to the definition of terrorism and Hoffman pointed this out when he stated that terrorism ‘is fundamentally and inherently political’.48 Indeed, ‘terrorism is about

42

Joshua Castellino, International Law and Self-Determination: The Interplay of the Politics of Territorial Possession with Formulations of Post-Colonial ‘National’ Identity (Martinus Nijhoff Publishers, 2000), 31 43 Cop Eymirlioglu (n 31) 122 44 Syrian Bar Association (n 6) 45 Richard English, Terrorism, How to Respond (Oxford University Press, 2010) 1-2.

46 Igor Primoratz, ‘What is Terrorism?’, in Conor Gearty (ed.), Terrorism (Aldershot: Dartmouth, 1996) 23 47 Conor Gearty, Terror (Faber & Faber, 1992) 1 48 Bruce Hoffman, Inside Terrorism (Columbia University Press, 1998) 14 390

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power – acquiring it or keeping it’.49 Lord Carlile admits ‘great difficulties in finding a satisfactory definition of ‘terrorism’’ and advocated for a balance between exigencies presented by threats of modern day terrorism and the ‘need to sustain a fair system of law founded on undiluted democratic values’.50

4.

Difficulties of Definition Under International Law

4.1 Draft Convention on International Terrorism: Attempts to draft a comprehensive legal framework to prevent and punish terrorism date back to 1934. Since 1963, fourteen universal legal instruments and four amendments were adopted under the auspices of the UN and its respective specialised agencies to deal with specific terrorist offences. In 2010, two additional legal instruments were adopted criminalising the act of using civil aircraft as a weapon, and of using dangerous materials to attack aircraft on the ground.51 Finally, Member States attempted to negotiate an international treaty on international terrorism with the scope of building upon existing international instruments to formulate a comprehensive legal approach to the prevention and punishment of terrorism. The Resolution of the General Assembly adopting the Counter-Terrorism Strategy52 mentioned the right of selfdetermination of peoples as it recalled the dedication of world leaders, at the 2005 World Summit Outcome, to uphold resolution of disputes by peaceful means and in conformity with the principles of justice and international law, the right to self-determination of peoples which remain under colonial domination or foreign occupation, non-interference in the internal 49

Christopher C. Harmon, Terrorism Today (Frank Cass, 2000) 160 Lord Carlile of Berriew Q.C., Independent Reviewer of Terrorism Legislation, ‘The Definition of Terrorism’ (March 2007) 4 51 Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation, and the Protocol Supplementary to the Convention for the Suppression of Unlawful Seizure of Aircraft 52 The United Nations Global Counter-Terrorism Strategy, (A/RES/60/288) 50

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affairs of States.53 The Declaration on Measures to eliminate International Terrorism54 was the first of a string of documents with the intention of forming a comprehensive framework on terrorism urging Member States to ‘take effective and resolute measures in accordance with the relevant provisions of international law and international standards of human rights’ for the elimination of international terrorism. Subsequently, the UN oversaw negotiations between Member States with regard to the Terrorist Bombing Convention, the Terrorist Financing Convention55 and the Acts of Nuclear Terrorism Convention.56 Nonetheless, the blurred lines of conceptual issues surrounding both terrorism and self-determination form the basis of the failure to reach an agreement upon a definition, which garners international support. This is manifested in the negotiations for a comprehensive Convention on International Terrorism in the UN Ad Hoc Committee. Negotiations within the UN Sixth (Legal) Committee have stalled because even though States have generally been in agreement on the crucial importance of eradicating international terrorism, there still exist disagreements on aspects, which preclude agreement on a definition of terrorism. Disparities include a legal definition of terrorism; the relationship between terrorism and anti-colonial and national liberation movements; and the activities of States’ armed forces in armed conflicts in exercise of their official duties.57 Some delegations such as those from countries forming part of the Non-Aligned Movement insisted that the definitions of terrorism and terrorist acts must bear a clear distinction from the legitimate struggle of peoples in the exercise of their right of self-determination and independence from foreign 53

ibid, Preamble UN General Assembly, Measures to Eliminate International Terrorism - Report of the Secretary-General, 6 September 1996, A/51/336 55 UN General Assembly, International Convention for the Suppression of the Financing of Terrorism, 9 December 1999, No. 38349 56 UN General Assembly, International Convention for the Suppression of Acts of Nuclear Terrorism, 13 April 2005, A/59/766 57 Inventory of International Nonproliferation Organizations and Regimes, Draft Comprehensive Convention on International Terrorism, Centre for Nonproliferation Studies (2010) 1 54

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occupation. This was substantiated by arguments that the legal definition of terrorism must concentrate on the purpose of terrorism, that of creating fear amongst the population and forcing a Government or organisation to change its actions and decisions. The same concern was raised when delegations discussed a proposal by Arab countries and other members of the Non-aligned Movement, stating that the legitimate struggle against foreign occupation, aggression, colonialism, and hegemony aimed at liberation, self-determination, and independence in accordance with international law should not be considered a terrorist crime.58 The proponents argued that this provision should provide a balance to another provision regarding the exclusion of activities of the armed forces from the scope of the Convention. However, this was met with opposition as while opponents recognised the right of self-determination, they could not agree that such a right could be exercised by whatever means, including terrorist acts, in violation of existing international conventions such as Protocol I to the 1949 Geneva Conventions.59 Once again, this stance is indicative of the limited willingness of States to provide for the justification of acts, which would otherwise be legally treated as terrorist acts by virtue of the law of self-determination. Nonetheless, the need for some States to distinguish between terrorism and the struggle of peoples under foreign or colonial domination for self-determination and independence was also a ground of refusal for terrorism to be included as a crime against humanity. 60 Gearty acknowledged that the breaking point for many of the States participating in the negotiations was the ‘implicit rejection’ of all forms of subversive violence, a part, which owing to some of the States’ individual histories and past support for specific liberation movements in various territories, they could not accept.

58

ibid, 7 International Committee of the Red Cross (ICRC), Protocol Additional to the Geneva Conventions of 12 August 1949, and relating to the Protection of Victims of International Armed Conflicts (Protocol I), 8 June 1977, 1125 UNTS 3 60 Antonio Cassese, ‘Terrorism is Also Disrupting Some Crucial Legal Categories of International Law’ 12 European Journal of International Law (2001) 994 59

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Furthermore, he argues that the additional real threat in the draft Convention ‘lies in what does seem to have been agreed – a definition of terrorism of dangerous width’ to include a range of other situations as long as the ‘purpose of the conduct, by its nature or context, is to intimidate a population, or to compel a Government or an international organisation to do or abstain from doing any act.’61 This was resounded by UN Special Rapporteur Scheinen who maintained that combatting terrorism without a definition ‘carries the potential for unintended human rights abuses and even the deliberate misuse of the term’.62 Indeed, a wide definition of terrorism risks being used as a UN tool for authoritarian and neo-democratic governments to position themselves in a way, which ‘results in the unintentional international legitimisation of conduct undertaken by oppressive regimes’63 and the condemnation of secessionists and national movements in their struggles for self-determination.

5.

Exclusion of Self-Determination Struggles from Terrorism Treaties

As illustrated, the international community has invested huge efforts to address terrorist violence. However, the obstacles hindering success strengthen the understanding that ‘many States accept as legitimate a degree of political violence by individuals and groups in a search for justice as defined by each State for itself’.64 As the International Law Association observed: Only if international terrorism is defined in something which will not bring within its orbit wars of national independence and struggles against racialism and

61

Conor Gearty, Liberty and Security (Polity Press, 2013) 34 E/CN, 4/2006/98 (2005) para. 27 ibid 64 ‘Fourth Interim Report of the I.L.A. Committee on International Terrorism’, 7 Terrorism: An International Journal 123 (1984) 125 62 63

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colonialisms can its prohibition be in conformity with international law.65 This support has influenced negotiations of treaties with the aim of defining terrorist acts as crimes and developing methods of international cooperation to punish such crimes. In identifying terrorism conventions, which exclude actions carried out within the context of self-determination struggles from the ambits of terrorism by virtue of the law of self-determination, Clapham points to the Convention of the Organisation of the Islamic Conference on Combating International Terrorism.66 Article 2(a) states that: Peoples’ struggle including armed struggle against foreign occupation, aggression, colonialism, and hegemony, aimed at liberation and self-determination in accordance with the principles of international law shall not be considered a terrorist crime.

This definition is only applicable within the parameters of this Convention, however other similar ‘non-universal’ Conventions have adopted the same exclusions. Instruments include the Organisation of African Unity (OAU) Convention on the Prevention and Combating of Terrorism67 and the Arab Convention on the Suppression of Terrorism.68 Article 3(1) of the OAU Convention stipulates that: the struggle waged by peoples in accordance with the principles of international law for their liberation or self-determination, including armed struggle against colonialism, occupation, aggression and domination by foreign forces shall not be considered as terrorist acts.

Report of the I.L.A.’s 56th Conference (New Delhi): Committee on International Terrorism (Working Session), 31 December 1974, Statement of Shri M. Asif Ansari (India) 158 66 Organization of the Islamic Conference, Convention of the Organisation of the Islamic Conference on Combating International Terrorism, 1 July 1999, Annex to Resolution No: 59/26-P 67 Organisation of African Unity, Convention on the Prevention and Combating of Terrorism, OAU Doc. AHG/Dec. 132 (XXXV) 1999 68 League of Arab States, Arab Convention on the Suppression of Terrorism, 22 April 1998 65

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However, the Arab Convention on the Suppression of Terrorism provides that in the event of doubt, a secession struggle within any Arab State will not benefit from the exclusion from the constitution of ‘terrorist acts’ covered by the Convention. Article 2 stipulates that: All cases of struggle by whatever means, including armed struggle, against foreign occupation and aggression for liberation and self-determination, in accordance with the principles of international law, shall not be regarded as an offence. This provision shall not apply to any act prejudicing the territorial integrity of any Arab State.

These regional terrorism conventions provide for justifications and exclusions for acts that would otherwise be legally treated as terrorist acts by virtue of the law of self-determination.

However, are the same distinctions and exceptions found in general international instruments dealing with terrorism? Do international terrorism conventions draw upon the international law of selfdetermination to justify or excuse acts carried out within struggles for self-determination? I have chosen to carry out this assessment by focusing on two conventions dealing with international terrorism, namely, the International Convention for the Suppression of Terrorist Bombings69 and the International Convention against the Taking of Hostages.70 5.1 International Convention for the Suppression of Terrorist Bombings Clapham describes the Convention for the Suppression of Terrorist Bombings as ‘the most comprehensive’71 following the 1996 truck bomb attack on United States service personnel in

69

UN General Assembly, International Convention for the Suppression of Terrorist Bombings, 15 December 1997, No. 37517 70 UN General Assembly, International Convention against the Taking of Hostages, 17 November 1979, No. 21931 71 ibid 396

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Dhahran, Saudi Arabia72 and other explosions in Sri Lanka, England and Israel.73 In comparison to the previously mentioned treaties, the Terrorist Bombing Convention provided for no exceptions for those engaged in liberation struggles as opposed to ‘terrorists’. The definition of ‘terrorist’ in this Convention is intentioned to be comprehensive in nature, even though such definitional aspects are highly disputed at the political level. Moreover, this Convention stipulates that acts, which fall within the scope of the Convention are considered as ‘terrorist acts’ also with regards to the Convention for the Suppression of the Financing of Terrorism and the rest of the framework Conventions which are annexed to the Terrorist Bombing Convention, namely, the Inter-American Convention Against Terrorism,74 the European Convention on the Suppression of Terrorism75 and Protocol and the Conventions of the OAU, the OIC and the Arab League.

Upon a textual analysis of the Convention, it becomes evident that there is no assumption on ‘innocent civilians’ to acts of terrorism, while the Convention covers all attacks on public places, which would include a military building or other military objective, as stipulated in Article 2: Any person commits an offence within the meaning of this Convention if that person unlawfully and intentionally delivers, places, discharges or detonates an explosive or other lethal device in, into or against a place of public use, a State or government facility, a public transportation system or an infrastructure facility.

The breadth of this article is intentional to cover an attack during a ‘secessionist struggle by the rebels on the government’s military headquarters’76 and in contrast with African, Islamic and SM Witten, ‘The International Convention for the Suppression of Terrorist Bombings’, 92 American Journal of International Law (1998) 774 73 ibid 74 Organization of American States (OAS), Inter-American Convention Against Terrorism, 6 March 2002 75 Council of Europe, European Convention on the Suppression of Terrorism, 27 January 1977, ETS No. 90 76 Clapham (n 7) 48 72

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Arab Conventions, the Terrorist Bombing Convention does not consider those fighting for self-determination in a protected category in line with the international law of self-determination, despite its explicit reference to the principles of the UN Charter. The Convention excludes specific acts carried out in armed conflict from the scope of the Convention. Article 19 specifies that: 1. Nothing in this Convention shall affect other rights, obligations and responsibilities of States and individuals under International Law, in particular the purposes and principles of the Charter of the United Nations and International Humanitarian Law. 2. The activities of armed forces during an armed conflict, as those terms are understood under International Humanitarian Law, which are governed by that law, are not governed by this Convention, and the activities undertaken by military forces of a State in the exercise of their official duties, inasmuch as they are governed by other rules of International Law, are not governed by this Convention.

Witten argues that this article provides exclusion for the activities of armed forces, including both armed forces of States and subnational armed forces, ‘so long as those activities are engaged in during an ‘armed conflict’, where such activities are governed by laws of war’,77 and submits that the wording of the article could be suitably interpreted by reference to the exclusion criteria in Article 1(2) of the 1977 Protocol II to the Geneva Convention.78 It specifies that the Protocol is not applicable in ‘situations of internal disturbances and tensions, such as riots, isolated and sporadic acts of a similar nature, as not being armed conflicts’. In considering the explanation of ‘armed conflict’ in Article 1(2), reference is made to

77

Witten (n 73) 780 International Committee of the Red Cross (ICRC), Protocol Additional to the Geneva Conventions of 12 August 1949, and relating to the Protection of Victims of Non-International Armed Conflicts (Protocol II), 8 June 1977, 1125 UNTS 609.

78

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the judgment of the International Criminal Tribunal of the Former Yugoslavia in Tadic, which held that: an armed conflict exists whenever there is a resort to armed force between States or protracted armed violence between governmental authorities and organised armed groups or between such groups within a State.79 Therefore, if the scenario within which secessionist fighters and national movements are struggling for their right of selfdetermination satisfies the criteria of this definition and qualifies as an armed conflict, secessionist fighters would not be covered by the Terrorist Bombing Convention. Of course, this does not imply that certain acts would not be violations of the laws of war. The three exceptions provided by Article 19 of the Terrorist Bombings Convention are centered around the military forces of the State and a struggle short of armed conflict. In the first instance, the term ‘armed forces’ is not defined in the Convention, however the term ‘military forces of a State’ is defined in a very broad way to exclude ‘civilians working in support of the armed forces from the reach of the Convention and thus, indirectly from the wider definition of ‘terrorist’.80 Would the international law of self-determination justify or excuse secessionist bombings if such bombings took place in a struggle short of armed conflict? Article 3 refers to instances where the offence is committed within a single State with no transnational element. It holds that the Convention shall not apply, where the offence is committed within a single State, the alleged offender and the victims are nationals of that State, the alleged offender is found in the territory of that State and no other State.

This signifies that a secessionist accused of a Convention terrorist bombing with no transnational element would not be covered by specific provisions which oblige States to submit the 79

Prosecutor v. Dusko Tadic (Appeal Judgement), IT-94-1-A, International Criminal Tribunal for the former Yugoslavia (ICTY), 15 July 1999 80 Clapham (n 7) 50 399

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case to its prosecutorial authorities. However, a secessionist suspected of a bombing that falls within the scope of this Convention can be described as a terrorist upon conviction.

Provisions dealing with mutual assistance and human rights of the detainee would still apply.

In conclusion, in a struggle short of armed conflict, secessionist suspected bombers fall within the scope of the Convention and can thus, be extradited or prosecuted under the treaty. In the meantime, if the bombing takes place in one single State with no transnational element to the offence, the extradition and jurisdictional provisions would not apply to secessionists but their acts can still fall within the scope of the Terrorist Bombing Convention. One may argue that this Convention has further obscured the legitimacy to use force in the struggle for selfdetermination with the justness of the secessionist struggle deemed to be irrelevant. Surprisingly, this Convention includes signatory States, such as Pakistan, Yemen and Libya, who have previously advocated for the justification of acts otherwise legally treated as acts of terrorism by virtue of the law of self-determination.

5.2 International Convention against the Taking of Hostages The International Convention against the Taking of Hostages entered into force in June 1983 and employed different wording to that used in the Terrorist Bombing Convention. ‘Acts of taking of hostages’ are referred to in the preamble as ‘manifestations of international terrorism’81 and the armed conflict exception is found in Article 12, which holds that: the present Convention shall not apply to an act of hostage-taking committed in the course of armed conflicts as defined in the Geneva Conventions of 1949 and the Protocols thereto, including armed conflicts mentioned in article 1, paragraph 4, of Additional Protocol I of 1977, in which peoples are fighting against colonial domination and alien occupation and against racist regimes in the exercise of their right of self-determination, as enshrined in the 81

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Charter of the United Nations and the Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States in accordance with the Charter of the United Nations.

Therefore, the Convention makes explicit reference to the international law of self-determination with direct mention of the UN Charter and the 1970 Declaration but sets out two conditions, which must be fulfilled for hostage taking to be excluded from the scope of the Convention. Firstly, Humanitarian Law treaties have to apply and be ratified by the relevant parties. The second necessary condition for exclusion is that the actual hostage taking has to fall within the grave breaches regime, which triggers ‘extradite or prosecute’ obligations.

This Convention provides for no exception for armed conflict or the armed force of a State as that found in the Terrorist Bombing Convention. The rationale behind this approach is that hostage taking is always illegal, whatever the circumstance and the intention behind it. The only difference is the application of the regime under which, a hostage taker is extradited or prosecuted. Therefore, no exceptions are made for secessionists, whether or not they are struggling for self-determination and despite the explicit recognition of the law of self-determination.

Self-determination struggles are covered by Article 1(4) of Protocol 1 to the Geneva Conventions providing that armed conflicts in which peoples are fighting against colonial domination, alien occupation or racist regimes are to be considered international conflicts. Article 12 also suggests that Article 1(4) of the Protocol has to apply as a treaty obligation meaning that the State must be a party to the Protocol and the secessionist ‘authority’ must have submitted a declaration under Article 96(3) of the Protocol, for the application of the Geneva Conventions to self-determination struggles. Unsurprisingly, there are no conflicts going on in States, which have signed and ratified the Protocol while it is highly improbable that secessionist movements will be able to deposit a declaration without facing objections from the depositary or State parties. As a consequence, States, with sites of secessionist or

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liberation movements have either ratified the Protocol with reservations or refrained from ratifying the Protocol altogether.82

6.

Conclusion

It can be concluded that under existing International Law, acts otherwise legally treated as terrorist acts are not justified or excused by virtue of the law of self-determination. This has become evident upon analysis of the Convention for the Suppression of Terrorist Bombings and the Convention against the Taking of Hostages despite the explicit reference to struggles of selfdetermination and the law of self-determination. The Terrorist Bombing Convention makes no exception for struggles for determination, despite political disputes among States about the definition of terrorism. The circumstances leading to the positions of particular States and the resulting international instruments have also been revealed throughout the outline of the historical linkage between terrorism and self-determination.

Should acts that would otherwise be legally treated as terrorist acts be justified by virtue of the law of self-determination?

Guelke argues that absolutist judgments have become more difficult with the crumbling of global consensus on the interpretation of international norms such as the doctrine of self-determination. In fact, he contends that absence of a consensus on the interpretation of the international norm of self-determination makes it more difficult to make a judgment on political violence, due to the link that has been forged between the question of the legitimacy of violence and the issue of self-determination.83 On the other hand, Hannum argues that nowadays, ‘terrorism is a much-maligned term’ as ‘governments and popular opinion pretend to distinguish between ‘their’ terrorists and ‘our’ freedom fighters’.84 However, what remains clear is that similarly to terrorism, the concept of self82

Clapham (n 7) 54 Guelke (n 8) 187 84 Hurst Hannum, Autonomy: Sovereignty, and Self-Determination – The Accommodation of Conflicting Rights (University of Pennsylvania Press, 1996) 11 83

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determination is scarcely a static concept and surely, the two concepts will continue to evolve in the complex dynamics of their interaction.85 The possibility of justifying acts otherwise legally considered as terrorist attacks by virtue of the law of self-determination presents challenging difficulties. As Friedlander claims, the alliance of nationalism and terrorism has presented the international community of States with a precarious choice – ‘either the establishment of a global society based upon the rule of force, or the creation of a world community adhering to the rule of law’.86 De Visscher echoes this sentiment and blames the labeling of self-determination as ‘an inherently suspect concept’ due to its politicising and selective application by the UN. Thus, lack of precision surrounding selfdetermination does not represent it as a principle of law and warns that ‘applied without discernment, self-determination would lead to anarchy’.87 At this critical juncture for public international law, the justification of terrorist acts by virtue of the law of selfdetermination would lead to a ‘Spencerian environment of crises, conflict, and survival of the fittest’ as opposed to a way of life based on a normative system of ‘equity, justice, and the rule of reason’.88 Nonetheless, it is imperative that the principle of selfdetermination, which is present in the UN Charter and the body of law on self-determination is applied and realised beyond the ambits of the political selection of State politics. Instead, this principle needs to be implemented and realised in a universal manner. The UN has to stand by its own character, as it is on the strength of the UN Charter that minorities are empowered to fight for their rights of self-determination. Certainly, if the UN is not committed to shoulder the implementation of self-determination, it is responsible for encouraging more ‘terrorism’.89 As Judge Hudson wrote: If Governments cannot have confidence that the instruments by which they bind themselves will not be 85

Clapham (n 7) 63 Friedlander (n 14) 268 87 C. De Visscher, Theory and Reality in Public International Law (P. Corbett trans., rev. ed. 1968) 88 Friendlander (n 17) 289 89 K. Gunaseelan, ‘The UN, Self-Determination and Terrorism’ Association of Tamils of Sri Lanka in the USA (2008) 86

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made to serve unintended purposes, if respect is not paid to the terms and tenor of the obligations imposed by such instruments, the progressive development of international law may be seriously retarded.90 Saul concludes, ‘no political objective is that valuable since whereas self-determination presupposes life, life does not presuppose self-determination’.91 In this context, the author believes that due warning must be had so that International Law does not facilitate oppression. It is the duty of States to seriously consider the apparent justifications for non-State political violence and subject them to serious legal and moral scrutiny to assess whether these claims are in fact unprincipled compulsions to violence. However, the international community should never accept claims for justifications of violence, which destroys civilian life for political gain.

Manley O. Hudson, ‘Integrity of International Instruments’, 42 American Journal of International Law (1948) 105, 108 91 Ben Saul, ‘Two Justifications for Terrorism: A Moral Legal Response’, Foreign Policy in Focus (2006) <http://fpif.org/two_justifications_for_terrorism_a_moral_legal_response/> accessed 2 March 2015 90

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LEGISLATIVE REVIEW

The Mental Health Act of 2012 John M Cachia

The Value in Legislating for Family Businesses Nadine Sant

John M Cachia

THE MENTAL HEALTH ACT OF 2012 JOHN M CACHIA

_______________________________________________________ Dr John M Cachia MD MSc FFPH MMCFD DLSHTM is the Commissioner for Mental Health within the Ministry of Energy and Health. He graduated as Doctor of Medicine and Surgery from the University of Malta and specialised in Public Health at the London School of Hygiene and Tropical Medicine and in Health Services Management in Milan and Birmingham. He is a Consultant in Public Health and a Specialist in Family Medicine. Dr Cachia has extensive experience in leadership, strategic direction and governance of health care services, having been responsible at top management level for hospitals, health centres and other health care entities within the Maltese health care system for 25 years. Dr Cachia was president of HOPE – the European Hospital and Healthcare Federation and of the Malta Association of Public Health Medicine.

He is a senior lecturer in Public Health Medicine and Health Service Management at the University of Malta. ________________________________________________________________

1.

Introduction

The Mental Health Act of 2012 was approved by Maltese Parliament on 3 December 2012, with the President of Malta giving his assent on 7 December 2012. Through Legal Notice 276 of 2013, the phased entry into force was established and with effect from 10 October 2014 the new Mental Health Act, 1 completely repealed and replaced Chapter 262, being the old Act. This new law now regulates the provision of mental health services, care and rehabilitation whilst promoting and upholding the rights of people suffering from mental disorders.

Chapter 525 is far more extensive and far-reaching. It introduces the concepts of rights of users and carers, the establishment of a Commissioner to safeguard those rights, introduces specific sections on mental capacity, minors, special treatment, restrictive care and clinical trials and other medical or 1

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scientific research. It also introduces the concepts of community treatment and social inclusion. The New Act includes a list of seventeen (17) Schedules, with the Schedules themselves forming part of the main Act. These Schedules can however, be amended through a legal notice in accordance with the powers given to the Minister in Article 47(3) (e). This facilitates the introduction of amendments to the Schedules should the need arise.

The Minister responsible for the Act is the minister responsible for health, but within the Act there are specific responsibilities pertaining to the Minister responsible for justice in relation to registration of certificates of temporary lack of mental capacity and more importantly in the articles linked to patients concerned in criminal proceedings. The Act requires close collaboration of the Commissioner for Mental Health, the Mental Health Services, the Judiciary and the Police and the authorities responsible for education, social services, social welfare, housing and employment for successful implementation.

2.

Introduction and Interpretation

The introduction and the interpretation in the preliminary section of the new law includes several new concepts that merit attention and consideration. The new legislation underlines the importance of rehabilitation within the traditional care and services model, which inherently implies the ability of the person with mental disorder to return to a meaningful and productive life. From the outset this package of care is balanced by a strong emphasis on the promotion and upholding of rights of persons suffering from mental disorders. This core theme is recurrent throughout the entire text of the law. New terminology reflects the split between the clinical leadership role of the clinical director and the managerial responsibility of the chief executive officer within healthcare facilities. This is the first clear delineation of these two separate roles found in Maltese Health Law. Whenever the new legislation refers to healthcare professionals, it recognises the contribution of many professions in mental health care. It includes obviously all those covered by the 408

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Health Care Professions Act2 such as doctors, nurses, occupational therapists and other allied healthcare professionals but includes also the professions of social work3 and of psychology.4 In the context of a law promoting the rights of persons with mental disorders, it is proper that even in case of involuntary care, informed consent is sought from the patient or the responsible carer before treatmentis commenced. However, the law provides mechanisms whereby necessary care can be given to prevent harm or deterioration to the patient in situations where such consent is not possible or is refused. The process for obtaining informed consent is outlined clearly in the text. Patients and carers are to be adequately informed about the disorder and the multidisciplinary services available to cater for their needs and the treatment options available.

They must actively participate in the formulation of the multidisciplinary treatment plan and give free and informed consent before any treatment or care is provided and such consent shall be recorded in the patient’s clinical record. This is without prejudice to the patient’s right to withdraw consent at any time during administration of treatment.

There are two definitions which merit in-depth consideration due to their implication on other laws, particularly the Civil Code, 5 the Code of Organisation and Civil Procedure,6 and the Criminal Code.7 For civil legislation, it is important to note that ‘mental capacity’ is defined as the patient’s ability and competence to make different categories and types of decisions and to be considered responsible for his/her actions. This is particularly critical in the performance of the normal acts of civil life such as drawing up of wills, etc. in the presence of certified mental disorder.

The definition of ‘mental disorder’ or ‘mental illness’ in the new law is infinitely more complex and reflects the new medical knowledge on the causes and manifestations of mental disorder. It means a significant mental or behavioural dysfunction, exhibited by signs and, or symptoms indicating a disruption of mental 2

Chapter 464 of the Laws of Malta Chapter 468 of the Laws of Malta 4 Chaper 471 of the Laws of Malta 5 Chapter 16 of the Laws of Malta 6 Chapter 12 of the Laws of Malta 7 Chapter 9 of the Laws of Malta 3

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functioning, including disturbance in one or more of the areas of thought, mood, volition, perception, cognition, orientation or memory. These signs and symptoms are to be present to such a degree as to be considered pathological in accordance with internationally accepted medical and diagnostic standards, normally reflected in documents such as the International Classification of Diseases of the World Health Organisation8 or the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition (DSM-5) of the American Psychiatric Association. Certification of lack of mental capacity shall be addressed at a later stage. It ought to be noted that for the purpose of any matter related to criminal proceedings, the definition of ‘mental disorder’ or ‘mental illness’ includes ‘insanity’ as understood for the purpose of the Criminal Code. This is particularly critical for the preservation of the distinction between the medical certification of lack of mental capacity entrusted to a specialist in psychiatry in the presence of mental disorder, and the legal aspects of lack of mental capacity which is entrusted to the Court and its deliberations whenever in the course of proceedings on the charge of a criminal offence the question of the mental capacity of the accused arises, whether at the time of the offence or of the proceedings.

The concept of multidisciplinary and holistic care is one of the pillars of the treatment delivery process. Care is defined as voluntary and involuntary treatment of a medical, nursing, social and psychological nature which is delivered in hospital, residential or community settings. Multidisciplinary care plans follow on from these principles underpinning care and include holistic care and rehabilitation. A forward looking and time based care plan is to be driven by outcomes which can be monitored against targets, timeframes and responsibilities and the emphasis is on a group of skilled and specialised professionals working together as a team.

See Mental and behavioural disorder’ <http://apps.who.int/classifications/icd10/browse/2015/en#/V> accessed 10 March 2015 8

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3.

The Rights of Users and Carers

Articles 3 and 4 make provision for the rights of mental healthcare users and their carers. Service providers and management have a responsibility to respect these rights. There are nineteen different rights which include: equality; least restrictive holistic multidisciplinary care preferably in the community; aftercare, rehabilitation and social inclusion; full information in a form and language that the patient and the carer can easily understand; free and informed consent; choice of responsible carer; confidentiality; access to records; privacy, dignity and the avoidance of all forms of discrimination; protection from cruel, inhuman and degrading treatment; a safe and hygienic care environment; and free and unrestricted communication with the outside world as a right, subject to reasonable restrictions, such as prisoners kept in the forensic licensed facility where prison regulations continue to apply.

The role and responsibility of the responsible carer go beyond the old concept of ‘next of kin or nearest relative’. The patient has the right to choose a person of trust who will be involved and invited to participate directly and actively together with the multidisciplinary team and the patient in care decisions whilst representing the patient’s interest as required. The only exception is when a tutor or curator is appointed by a decree of a Court to represent the patient, in which case the person so appointed shall be deemed to be the responsible carer of the patient. The responsible carer shall be informed by the multidisciplinary team of the rights of the patient and on the services and support available to look after the person and shall have adequate guidance and access to such services and support. The carer participates in the formulation of the multidisciplinary care plan. The article describes how the responsible carer should be identified in situations where the patient is not in a position to identify a responsible carer. There is a guideline to safeguard the responsible specialist and the caring team in situations where the patient lacks mental capacity to choose.

There are also safeguards in case the responsible specialist has reasons to recommend a change in the person of the responsible carer in the interest of the patient.

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4.

The Commissioner

The new law introduces the Commissioner for the Promotion of Rights of Persons with Mental Disorders (herein referred as ‘the Commissioner for Mental Health’) and whose functions also subsume those of the Mental Health Review Tribunal but are far more extensive. Article 5 establishes that the Commissioner is appointed by the Prime Minister after consulting the Leader of the Opposition. The Commissioner has the necessary powers to perform duties under the Mental Health Act in his own individual judgment. At the same time, however, the Commissioner is accountable to the Minister for his action. This accountability together with security of tenure and the necessary qualifications of the Commissioner have been discussed in detail by Chief Justice Emeritus Vincent A De Gaetano in Kapaċita` Mentali, il-Liġi u Drittijiet Fondamentali,9 wherein the necessary level of autonomy of the Commissioner as currently provided by the law to fulfill his functions without interference is challenged.

The functions of the Commissioner include the monitoring of the various treatment orders for the delivery of involuntary care; ensuring that guidelines and protocols as required by law are established and followed; investigating allegations of breach of rights and any complaints about any aspect of care and treatment.

The new legislation places the onus on the Commissioner of the inspection of all licensed mental health facilities at least once a year to ascertain that patient rights and all the provisions of this Act are being upheld. It is important to note that inspections for the purposes of issuing a license are distinct from the duties of the Commissioner and belong to the Superintendent of Public Health in the current legislative framework. The activity of the Commissioner will be subject to Parliamentary scrutiny.

9

See critique of the Mental Health Act by Chief Justice Emeritus Vincent De Gaetano, ‘Kapaċità Mentali, il-Liāi u Drittijiet Fondamentali’ in pages 8-20 <http://health.gov.mt/en/CommMentalHealth/Documents/de_gaetano_speech.pdf> accessed 10 March 2015 412

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5.

Voluntary Admissions

In contrast with former legislation, the new law provides specific provisions to be followed for voluntary admissions. It is well known that these constitute, by far, the majority of admissions for care of persons with mental disorders. There are provisions for written informed consent (including for seclusion), the right to selfdischarge, the right to be informed at the outset about the possibility of being detained involuntarily if criteria for involuntary admission are met, and consultation with the patient and the responsible carer in the formulation of a multidisciplinary care plan. The new law also provides for informed consent by the responsible carer in cases of lack of mental capacity, or legal incapacitation or interdiction.

Finally, there is a window period of 4 hours wherein self-discharge of a patient receiving voluntary care can be suspended at the discretion of the nurse in charge, in order to allow for medical review if it is perceived that there are grounds for involuntary admission. This is a safeguard for those patients who may not be fully aware of potential risks to self or others should they proceed to self-discharge.

6.

Involuntary Admissions

Every involuntary admission starts with a period of observation where urgent care and attention is given to the patient whilst a multidisciplinary care plan is being prepared for those patients who require further treatment against their will for more than ten days.

Throughout any episode of involuntary care, the explicit list of criteria for involuntary admission have to be met at all times.

These criteria stipulate that a person may only be admitted involuntarily to a licensed facility if he or she: (a) has a severe mental disorder, and (b) due to the mental disorder, there is a serious risk of physical harm to that person or to other persons, and

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(c) failure to admit or detain that person is likely to lead to a serious deterioration in his or her condition or will prevent the administration of appropriate treatment that cannot be given in the community.10 Involuntary admission shall only be effected if all these criteria are met and other less restrictive alternatives such as community care cannot be utilised. Admission on an involuntary basis can also occur in those emergency situations when there is a serious likelihood of immediate physical harm to the person or to third parties but where patients are yet to be formally diagnosed as suffering from a severe mental disorder. The law states that in such cases ‘a reasonable suspicion of severe mental disorder shall suffice’.11 This provision protects the patient, the general practitioner, the psychiatrist and society in general and is particularly required in new cases presenting in our community with very acute, violent or suicidal situations.

The New Act further specifies that: The requirement of custodial care on its own does not constitute a criterion for involuntary admission of a person with mental disorder. The new legislation does not link custodial care specifically to an institution and it gives a better and more modern humane description of the type of care envisaged. This provision in the law opens the way for alternative care environments of persons with mental disorder who have unfortunately become institutionalised and have no one or no family or no private residence to return to.

The new legislation improves the quality of the initial medical assessment of the patient prior to admission. One of the two medical practitioners making the recommendation shall be a psychiatrist registered in appropriate register for psychiatrists held by the Medical Council of Malta in line with the provisons of the Health Care Professions Act. In case of discrepancies in the first two medical assessments, there shall be a third independent assessment by a second registered psychiatrist and the majority recommendation will prevail. There is an emphasis on medical assessment of patients as opposed to simply written recommendation.

10 11

Mental Health Act (2012), article 8(1) ibid, proviso 414

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The Act provides for the urgent involuntary admission with only one medical recommendation mainly in order to protect the patient from immediate harm, subject to the second recommendation being completed within twenty-four hours following admission by a specialist in psychiatry in order to ensure that the patient’s rights are not compromised through inappropriate referral for involuntary care.

Contrary to what used to happen under the old law, emergency treatment can be administered during an observation period provided that it is meant solely to prevent physical harm to self or others or to prevent mental deterioration and such treatment can be given even before the second assessment has been completed. The scope is to attempt to return the patient to normality during the period of observation obviating for the need to prolong involuntary care through a compulsory treatment order. Another improvement is that no applications for treatment orders can be initiated from outside a mental health licensed facility, a treatment order is to be invariably preceded by a period of observation.

Applications for observation can be made by the mental welfare officer if this is not done by the responsible carer and the mental welfare officer can do so even when the responsible carer explicitly refuses. The law provides also for the possibility that a mental welfare officer expresses a dissenting opinion to that of the medical recommendation for involuntary admission. However, this does not preclude the admission of the patient. All applications for observation are submitted to the Clinical Director and forwarded to the Commissioner for information.

A major overall improvement introduced is a drastic reduction in time intervals between obligatory reviews. The following table refers to time frames for adult persons: Maximum Length of Stay Current Act

New Act

28 days

15 days

Treatment Order

1 year

10 weeks

First Extension

1 year

5 weeks

Observation ‘Order’

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Continuous Detention Community Order

2 years renewable

6 months renewable

Not available

6 months renewable

By the tenth day of an involuntary admission for observation, a patient is either discharged, or becomes voluntary patient, or else an application for a Treatment Order in the hospital or in the community is submitted to the Commissioner together with a multidisciplinary care plan. Though the final responsibility for application for a Treatment Order and coordination of further care rests with the responsible specialist, the New Act introduces the concept of the multidisciplinary team and the contribution of every member of the team in arriving at such decision. The responsible specialist psychiatrist must submit a multidisciplinary care plan devised by the multidisciplinary care team, outlining the patient’s needs, how and by whom these will be addressed, and specifying expected outcomes and timeframes. The application is made to the Commissioner, who, within 120 hours of receipt of the application shall verify such application and this includes interview of any person involved in the admission and approve or otherwise the application.

7.

Hospital Treatment Orders

The maximum duration of the first Involuntary Treatment Order has gone down from one (1) year to ten (10) weeks. The maximum duration of the first extension of an Involuntary Treatment Order has gone down from one (1) year to five (5) weeks.

It requires application by the responsible specialist to the Commissioner at least seven (7) days before termination of the initial Treatment Order, giving reasons and modification of the care plan. The Commissioner is required to investigate the request for extension including any failure on the part of the health care professionals in not attaining the desired outcomes and may approve or otherwise the request.

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Continuing Detention Order, giving reasons for such requesting and submitting a modified multidisciplinary care plan. An obligatory peer review by an independent specialist will need to be carried out to confirm that the criteria for involuntary admission are still met.

The maximum duration of a continuing detention order has gone down from two (2) years to six (6) months renewable. Each application for renewal of continuing detention must be accompanied by a modified multidisciplinary care plan.

8.

Community Treatment Orders

The New Act introduces the concept of involuntary treatment in the community. One of the basic principles enshrined in this legislation is that the patient should be kept as long as possible in the community and that hospital admission should be a last resort.

The criteria for Community Treatment Order clarify the parameters within which compulsory treatment can be administered in the community avoiding the need of admission as an involuntary patient in a licensed facility. There are the necessary safeguards in order to ensure patient co-operation and compliance with treatment as required. Whilst involuntary care in the community is also possible in the private healthcare sector, the law obliges the state to take over care in the community in a situation where the patient lacks the financial means to continue to receive such treatment privately, so long as such treatment is available in the public sector service. In this manner, whilst safeguarding the freedom of choice of the patient, treatments which do not form part of the free national healthcare system will not be made automatically available for patients in the public service. A Register for Community Treatment Orders is introduced and it shall include all persons receiving involuntary treatment in the community whether in the public or private sector.

The application for a Community Treatment Order includes also the obligation to have a multidisciplinary care plan and a key healthcare professional responsible for the coordination of community care. The involvement of the general practitioner together with and under the direction of the responsible specialist is 417

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encouraged, so that the patient can receive holistic treatment in the least restrictive environment possible, even if the application for such Community Treatment Order did not involve the general practitioner in the first instance. The law requires regular liaison between the general practitioner and the responsible specialist under the direction of the latter. A Community Treatment Order is valid for six (6) months and has to be reviewed at six (6) month intervals and renewed if it is deemed to continue to be necessary.

The responsibility for eliciting the cooperation of the patient is placed on the key healthcare professional. When the patient refuses to follow the prescribed treatment, a Conveyance Order can be issued so that the patient can be accompanied by the Police to be examined by a specialist. If a non-compliant patient requires admission into a licensed facility, the patient can be admitted for observation for not more than ten days and the Community Treatment Order remains valid. If however, the patient requires treatment for more than ten days in such licensed facility, the Community Treatment Order becomes null and an application for an Involuntary Admission Treatment Order in hospital has to be made.

9.

Discharge

The discharge of a patient from involuntary care is now the responsibility of the responsible specialist. The formal application by relatives for discharge under the old legalm regime does not apply because the patient and the responsible carer are now to be involved on a continuous basis in the patient’s care plan. The revocation of an Involuntary Admission Treatment Order or a Community Treatment Order is approved by the Commissioner upon application by the responsible specialist.

10. Certification of Mental Capacity or the Lack thereof ‘Mental capacity’ in the Mental Health Act means the patient’s ability and competence to make different categories and 418

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types of decisions and to be considered responsible for his or her actions.12 The law envisages three (3) levels of lack of mental capacity based essentially on expected duration: less than fourteen (14) days, between fourteen (14) days and twenty-six (26) weeks and more than twenty-six (26) weeks.

A person suffering from a mental disorder is deemed able and competent to make decisions and only a specialist in psychiatry may certify a person as lacking mental capacity due to a mental disorder. Certification of a transient lack of mental capacity for a period of less than fourteen (14) days shall be a clinical judgment made by the specialist in psychiatry which shall be clearly documented in the patient’s case notes.

Transient lack of mental capacity exceeding fourteen (14) days but less than twenty-six (26) weeks is managed by obligatory peer review and registered with the Court of Voluntary Jurisdiction.

An independent specialist in psychiatry is appointed by the Commissioner to verify such certification. Certification shall only be valid if approved by the Commissioner and expires within twenty-six (26) weeks unless procedures for incapacitation or interdiction have been initiated in Court.

When lack of mental capacity is expected to be longer than twenty-six (26) weeks, the certificate of lack of mental capacity by the specialist and verified by the Commissioner after independent scrutiny can be used as part of the application for incapacitation or interdiction and for the issuance of a Guardianship Order by the Guardianship Board in terms of recent amendments in the Civil Code and the Code of Organisation and Civil Procedure.

If during an approved period of lack of mental capacity, it is found that the person concerned no longer lacks mental capacity, the responsible specialist shall apply to the Commissioner for the revocation of the certificate of lack of mental capacity. The Commissioner appoints an independent specialist in psychiatry to assess the person and approve or otherwise the revocation of the certificate of lack of mental capacity.

The Commissioner is obliged to notify the Registrar of the Court of Voluntary Jurisdiction of all certificates of lack of mental capacity approved or revoked. Such notifications should be 12

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governed by regulations that establish the procedure for entry and removal of such registrations.

The Commissioner is notified of every decree of incapacitation or interdiction given by a court of law on grounds of lack of mental capacity. During the period of incapacitation or interdiction, the Commissioner may request the review the mental capacity of a person by three specialists if he so deems necessary and where after considering the said review, the Commissioner is of the opinion that the person concerned no longer lacks mental capacity, the Commissioner shall inform the court accordingly. The Commissioner also may submit reports to the Court during any court action for incapacitation or interdiction if he or she suspects or knows that such court proceedings were initiated for vexatious or fraudulent reasons.

It is important to note the last subarticle of Article 24 concerning mental capacity which states that ‘Nothing in this article shall be construed or interpreted in such a way to affect the application of the Criminal Code’. This is important because it further reinforces the distinction in the application of lack of mental capacity in the Criminal Code.

The Mental Health Act places further obligations on the curator of an incapacitated or interdicted person appointed by the Court in cases of persons having lack of mental capacity, in addition to those already required by the Code of Organisation and Civil Procedure. Through these obligations the curator’s actions are being monitored by the Commissioner who has the duty to investigate and report any cases of abuse. Criticism has been levelled that there is unnecessary duplication of obligations of curators between the Mental Health Act and the Code of Organisation and Civil Procedure.

11. Minors

The law places special requirements for the treatment of minors with mental disorders. It safeguards parent-child bonding and adopts the same approach as that applicable to minors in other clinical specialties, example a minor requiring a surgical 420

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intervention in a general hospital. It also makes provisions to safeguard the minor in situations of conflict with parents or tutors.

Parent-child bonding is also safeguarded when the parent is the patient receiving treatment in a licensed facility, unless this is detrimental to either the parent or the minor.

The law specifies that there has to be an approved list of specialists in psychiatry with experience of working with minors with mental health problems. Involuntary admission for observation of a minor can only occur if a specialist whose name appears on this list notifies the Commissioner through a separate schedule that community based alternatives are not available, or are unlikely to be effective, or have been tried and failed, or are unsafe and hence admission is unavoidable.

A further improvement concerning minors is can be seen in time intervals between obligatory reviews. The following table refers to time frames for minors, that is persons under the age of eighteen (18) years: Maximum Length of Stay Current Act

New Act

28 days

15 days

Treatment Order

1 year

4 weeks

First Extension

1 year

4 weeks

Not available

2 weeks

2 years renewable

3 months renewable

Not available

6 months renewable

Observation ‘Order’

Second Extension Continuous Detention Community Order

Article 31 provides for informed consent in the case of minors. It introduces the assessment of maturity and understanding of minors on the part of the responsible specialist when eliciting consent from minors. This approach is being advocated in all other clinical specialties when eliciting consent from minors. In the case of minors deemed to lack sufficient maturity and understanding to provide informed consent, consent shall be elicited from the 421

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responsible carer with the necessary safeguard in situations of emergency or physical or mental deterioration of the minor. In those cases where in the opinion of the responsible specialist, a minor has sufficient maturity and understanding to consent to treatment, no treatment or care shall be given to the minor unless the minor consents to it with the necessary safeguard in situations of emergency or physical or mental deterioration of the minor.

No psychosurgery, sterilisation, implantation of hormonal or other invasive devices to modify sexual and, or emotional and, or behavioural changes arising from mental illness shall be carried out on minors. No clinical trials or other medical or scientific research shall be carried out on minors suffering from a mental disorder unless the Commissioner is satisfied, after an independent review by two specialists, that the expected benefits of the trials or research are likely to outweigh any potential harm to that minor. Such trials or research shall be subject to ethical and any other additional safeguards that may be applicable. Furthermore, the Commissioner shall appoint an appropriate independent specialist to monitor the minor during such trials or research.

12. Special Treatments, Restrictive Care and Medical Research

No medical or surgical interventions may be performed on persons with mental disorders without the informed consent of the person, and in situations where the person lacks mental capacity such consent must be obtained from the responsible carer, unless there is an urgent and evident life threatening situation. This is similar to the norm applied in all other clinical specialties.

No special treatments of an invasive or irreversible nature may be performed on persons with mental disorders without the informed consent of the person, and in situations where the person lacks mental capacity such consent must be obtained from the responsible carer. There are additional safeguards in that there must be an approved list of therapeutic interventions considered to be invasive or irreversible treatments for mental illness and the responsible specialist must still obtain the Commissioner’s approval to proceed with treatment.

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The administration of electro convulsive therapy cannot be performed unless there is the specific agreement of two specialists and the informed consent of the patient. In situations where the person lacks mental capacity or is a minor who lacks sufficient maturity and understanding to consent, then such consent must be obtained from the responsible carer.

The practice of restrictive care is permitted only if it is used as a last resort for the shortest possible time and in the least restrictive manner possible, in the best interests of the patient and with an enabling mechanism in place for prescribing and monitoring such restrictive care. The Commissioner is obliged to ensure that guidelines and protocols for minimising restrictive care are established in mental health licensed facilities and to monitor the implementation of such guidelines and protocols.

13. Patients concerned in Criminal Proceedings

The part of the Mental Health Act dealing with patients concerned in criminal proceedings contains only minimal amendments to prior legislation.

The New Act makes a number of new provisions in cases of detention for observation under a court order to assess the mental capacity of an accused person (whether at the time of the offence or at the time of the proceedings). The term mental capacity replaces insanity, because the court has yet not determined whether the accused was insane. The court shall request independent specialist advice in order to assist it in establishing whether inpatient admission is indicated or otherwise. When an admission is necessary, this admission is to a facility specifically licensed for forensic patients rather than merely to a licensed mental health facility. A detention for observation under a court order to assess the mental capacity must be reviewed by the court every three months.

The conditions for detention of persons committed to a facility specifically licensed for forensic patients by Court Order on grounds of insanity as provided for in the Criminal Code are determined solely by the Court. The New Act provides for the discharge of such patients by the Court consequent to the receipt of 423

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a report by three specialists, one of whom being the responsible specialist. This is a substantial change from the previous law where discharge of such persons was delegated to the Minister responsible for justice with no involvement at all of the Court. Leave of absence can however, still be granted by the Minister responsible for justice and the New Act elaborates the procedures of how this can be applied for and stresses that this must occur in the context of a multidisciplinary treatment plan.

The New Act is a significant improvement on the Old Act since it considers a prisoner with a mental disorder in the same manner as any other person with mental disorder. Hence, it implies that the first treatment option in such a case would be for the prisoner to be treated adequately and safely in prison. If this cannot be adequately done, the patient shall be transferred to a licensed facility for forensic patients. Unless the criteria of involuntary admission are met, the patient shall be treated as a voluntary patient and shall enjoy all rights of voluntary patients, although restrictions imposed by prison regulations will continue to apply. If the involuntary admission criteria are met, the normal procedure applicable to all other persons undergoing involuntary care under the Mental Health Act continue to apply including consent to treatment, the right to a care plan, etc, subject however to any restrictions imposed by prison regulations. Once the patient or prisoner has been adequately treated, he or she shall be transferred back to prison. On the other hand if he or she still requires hospital care after the term of imprisonment, he or she shall be move out of the licensed facility for forensic patients and be treated accordingly in a mental health licensed facility.

14. Licensing

The new legislation does not distinguish between a hospital or a nursing home but uses the term mental health licensed facility which encompasses both. Although the Mental Health Act does not specify the competent authority responsible for licensing and regulation, within the organisational framework of the Ministry

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responsible for health and in terms of the Health Act of 2013,13 the competent authority for the issue of licensing of premises purporting to provide services for patients with mental disorders is the Department for Health Regulation under the responsibility of the Superintendent of Public Health. This same department is also required to make provisions for specific licenses and regulatory requirements for facilities providing services to involuntary patients, minors and forensic patients.

The law places the onus on the operational management of licensed facilities to draw up operational guidelines in order to implement the provisions of this act. All licensed facilities are obliged to have in place patient care management protocols supported by adequate resources to ensure effective and efficient care and minimise the risks of institutionalisation. The legislation also clearly lays down the responsibilities for ensuring compliance with such protocols on the clinical director and the chief executive of the licensed facility. The chief executive is required to submit to the Commissioner on a monthly basis all incident reports and death records. These tools will allow the Commissioner to monitor the quality of care being delivered in licenced facilities.

15. Social Inclusion

Article 43 provides for the promotion of social inclusion of persons with mental disorders and lists the duties and responsibilities of the Commissioner in promoting social inclusion.

Any person suffering from a mental disorder shall have access to or provision of any available health, educational or social service, including social housing and appropriate work training programmes, provided by the State. The Commissioner may make recommendations to the Minister responsible for Social Policy in respect of social welfare, social assistance schemes and subsidies in order to address the needs of persons with mental disorders and to facilitate their integration in the socio economic environment.

Persons with mental disorders shall enjoy equal opportunities and 13

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protection from discrimination and the Commissioner shall take appropriate action against anyone who discriminates, or exploits a person by reason of his mental health status.

16. Police

The Mental Health Act promotes close cooperation between Police authorities and mental health services. In the case of patients who abscond from a licensed facility or refuse to cooperate with the multidisciplinary team in a community setting, the first interventions should be the responsibility of health care professionals. It is only after such attempts fail that Police assistance shold be sought.

Provisions are in place for the filing of a request for a warrant to enter the person’s house to take him or her to a licensed facility for assessment. This can be done in extreme cases by the responsible carer, the key healthcare professional, a social worker or the police when the patient is at risk of harm to self or others. In emergencies where there is an immediate risk of serious physical harm to self or others, intervention without a warrant is permissible. All of the above does not preclude the police from intervening on the basis of their normal general power of entry in mental health emergencies.

17. Prohibition to exert Professional Capacity

Professionals are prohibited from acting in their professional capacity in cases of relatives by consanguinity or affinity up to and including the third degree. This however, does not preclude them from being the responsible carer in terms of the law for their relatives.

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18. Appeal

Any decision taken by the Commissioner in terms of this Act can be appealed before the Court of Voluntary Jurisdiction.

19. Responsibility of the Minister

The law determines that it shall be the function and responsibility of the Minister responsible for health generally to promote, protect, improve and maintain the mental health and wellbeing of all persons in Malta and to ensure the provision of an integrated and comprehensive network of quality mental health services within the available resources.

20. Conclusion

The new Mental Health Act is a catalyst for change. It is a legislative tool which opens new prospects and horizons for persons suffering from mental disorders - the provision of quality care that responds to their needs and the promotion and upholding of their rights. It is only through the implementation of the principles and values enshrined in this law that change can be acheived.

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THE VALUE IN LEGISLATING FOR FAMILY BUSINESSES NADINE SANT

_______________________________________________________ Dr Nadine Sant read law at the University of Malta, at the University of Western Ontario, Canada and at The University of Canterbury at Kent. Dr Sant is recognised as a European lawyer at the English Bar and is called to the Bar of England & Wales as a barrister as a member of Honourable Society of The Middle Temple Inn and is presently a door tenant in Chambers in London.

Dr Sant’s career started as a legal researcher at the University of Western Ontario, Canada and at the University of Kent at Canterbury. Nadine subsequently pursued a career as a diplomat at the Ministry of Foreign Affairs in Malta. After being called to the English bar she practised as a barrister in chambers in the Middle Temple Inn, London. After returning to Malta, Dr Sant joined the Attorney General’s Office.

Subsequently she became a partner in a Maltese law firm and last year took up the role as legal advisor to the Ministry for the Economy, Investment and Small Business and is Chair of the Family Business Act Committee which is responsible for overseeing the introduction of the legislation targeted specifically for family businesses.

_____________________________________________________________

Europe has a rich history of family businesses and many of the world’s best known family businesses are based in the region.

They have been highly influential not just in Europe’s economic development, but also, in many cases, in its social development. If the ancient Egyptians are considered the first example of sophisticated civilization on Earth, then it could be said that family businesses may well have their origins in the Middle East. From a European perspective, Europe has some of the oldest family businesses in the world dating back to the year 1000 and in some instances still in existence. If we glance over at the English Monarchy we understand how that kind of joint family standing, a combination of business and land ownership creates a brand and regime in itself. The British monarchy or Family Firm as Prince Phillip once referred to it can teach us a few things about business and about the importance of governance and succession. The Royal Family is certainly not the only European family with a rich history.

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Many of the world’s best-known family businesses are based in this continent. They have been highly influential, not just in Europe’s economic development, but in its social development too. Today many of the merging family businesses can be particularly seen in Eastern Europe.

On a global level, of the world’s 250 largest family businesses, a third are located in Europe. In fact, 85% of the companies in Europe are family-owned. Probably the two biggest are Volkswagen and the Italian investment company, EXOR, owned by the Agnelli family. Together, the family businesses of Europe employ a staggering 144 million people. If we look at North America, the figure is even higher whereby 90% of companies there are family-owned. To this end, one of the great success stories of modern times and a hallmark of the American dream is Walmart. It was just over 50 years ago that Sam Walton opened his first discount store in Arkansas. Walmart has grown and grown but it is still owned by the Walton family. Today it operates in 27 countries and, according to the Fortune Global Five Hundred list, Walmart is the world’s largest company by revenue. It is worth pointing out that many of the privately held family businesses in the United States and Canada are in their second generation of family ownership or beyond, which has to be testament to the resilience of this type of business.

Looking around the globe, 90% of the companies in the Middle East are family-owned businesses. They control virtually all of the oil producing companies operating in the Gulf. 85% of the companies in Asia-Pacific are family owned, and in Australia the figure is 71%.

One thing that seems to be true the world over is that familyrun businesses don’t blow their own trumpets. They are as unlikely to sing their praises publicly as they are to complain too much when the going is tough. They are very private and don’t like to draw attention to themselves.

Multigenerational family operations, sometimes with centuries of commercial nous, are more prone to ride out the storms than to express too much dissatisfaction about the current state of affairs. But as governments around the world oscillate on which fiscal policies to follow and businesses struggle under the weight of

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unwieldy regulation and inefficient tax codes, family businesses are becoming more vocal.

Some Australian family businesses have publicly said that their government is not giving enough support and is failing to differentiate between family firms and small-to-medium enterprises.

This is despite the fact that some of the country’s biggest companies, such as Westfield chain of shopping centres and the mining giant Hancock Prospecting are family owned.

Last year the Family Business Australia organisation produced a report to government entitled ‘Family Businesses in Australia – Different and Significant: Why they shouldn’t be overlooked’. One of the most promising recommendations of their report was that a legal definition of family businesses be established.

Should this happen it could signal that the Australian government was considering family firms more carefully in its policymaking.

The report asked the government to gather comprehensive data on family firms and assess how legislation might affect family firms differently to other types of companies.

As an offshoot from this we see that family businesses are also formalising their governance structure more than before.

Family councils and charters, business charters and advisory boards are all attracting more attention. Family businesses that continue to prosper from one generation to the next often do so because they have robust governance structures. Nevertheless, many family businesses have not given enough thought to governance. They rely too much on a carefree attitude toward issues such as succession, ownership and management, and they wait until one of these issues becomes an unavoidable problem before attempting to deal with it.

Often, that is too late, and the business will suffer as a result.

Some of the more common governance problems that can arise within family businesses are: - Succession and dependence on its owner; - An unwillingness to relinquish control when it would benefit the business to do so; - Internal family conflicts; - The assets of a business being abused by family members for their own personal benefit; - Nepotism, and discouraging non-family business staff;

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-

-

Tunneling – a situation in which family owners create a complex set of ownership structures that undermine non-family minority shareholders.

This can ultimately damage the efficiency of the business.

Other concerns are: Who can or cannot be a shareholder; What are the different classes of shares; How are the owners to be represented on the board; How will the owners set objectives and challenge management; What are the important issues on which the management should consult the owners; What are the rules on exits for shareholders, and so on.

It is an interesting observation that those operating in consumer markets often promote themselves as family businesses but this is rarely the case in other types of industry, such as engineering or construction. Some observers point out that as countries emerge from recession, the aura of stability and continuity associated with family ownership is just the sort of thing to inspire confidence and fill order books.

Although family participation is critical for business growth, the family structure itself weakens as companies enter their third or fourth generation. This, of course, hampers growth. In generation one, the owner manages the company. In generation two it is largely the sons and daughters. In the third generation, it gets complicated.

Often the challenges posed by ‘family expansion’ are exacerbated by the fact that family constitutions are rare. A family constitution is an especially sensitive issue in second or third generation families where the founder is still alive and succession is an issue and as a result many families have informal verbal codes or understandings that guide their businesses.

Even in families with a constitution, if the founder of the business still holds power, the constitution is often ignored when it contradicts the will of the dominant member of the family. Such lack of institutionalisation can make the family business an unattractive option for the next generation. In the third generation, you see people moving away and starting their own companies.

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But a number of families are finding ways to address the issue of youth flight: some companies are using stock offerings as a way to reorganise power and wealth across a growing family empire. In fact, listing on a stock exchange would give some of the third generation the option of cashing out.

With wealth management and formal governance mechanisms not yet fully entrenched as practices among the business elite, it should come as little surprise that the family office structure has not taken hold. More telling than the fact that many family businesses do not have a family office is the fact that more than a third of them have never heard of a family office.

Family offices face several challenges as much of the wealth is new in Malta, and many first and second generation wealth builders remain focused more on developing their businesses than preserving their wealth. Unsurprisingly, the proportion of third and fourth generation family members, or the next generation as we label them willing to consider establishing a single or multifamily office is far greater than the cross generational average. The next generation’s openness to family offices might be connected to their greater use of wealth management services. Almost two thirds of next generation participants use wealth management services frequently or occasionally, much more than the overall participant average of about 50%.

While trust is an important factor across generations when selecting wealth managers, the next generation gives ‘investment track record’ equal importance, twice the rate attributed by earlier generations. Coupled with higher rates of educational achievement, as well as international travel experience the next generation of wealth builders appear to be primed to adopt more sophisticated business and wealth management mechanisms.

Many next generation wealth builders identify the need for more formal structures in organising family wealth. Whereas on average only half of all family businesses adhere to a corporate code or plan to implement one, almost all third and fourth generation wealth builders have implemented a corporate code into their business.

The third generation wants formal arrangement and protocols.

They understand the changes brought about by globalisation and they are looking abroad for inspiration. They 433

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don’t want narrow, conservative companies. These younger family members are taking a step toward family offices by trying to motivate their financial service providers and trusted family lawyers to establish structures to provide some of the services of a family office.

From a legal business model perspective, purpose trusts, private trust companies, family partnerships, limited liability partnerships and protected cell companies generally provide the building blocks for family holding structures, but competition among jurisdictions is intensifying. As a result many are expanding or upgrading their legislative arsenal to cater specifically for high net worth families and this is currently one of the most innovative areas of offshore legislation.

Hong Kong has just followed Singapore by modernising its trust laws, while Guernsey, Jersey and the Isle of Man have all introduced foundations to broaden the fiduciary options to civil law jurisdictions. The Bahamas Executive Entity was introduced specifically to control and protect decision-making at the top level of a structure. It is also interesting to see that Luxembourg and Qatar have followed Dubai by introducing a specific regulatory framework for family office activities.

Dubai has introduced the legislation on the Single Family Office Regulations which specifically addresses the needs of familyrun institutions and governs the registration procedure and documentary requirements for a single family office.

The regulations offer distinct benefits to single family office by excluding them from many of the regulatory restraints placed on conventional financial institutions of the Dubai International Financial Centre. This is on the basis that single family offices have no direct public liability.

A single family office may be incorporated or established as a body corporate or a partnership for the purpose of providing services to a single family. It must comprise either one individual or a group of individuals who are the bloodline descendants or a common ancestor and must own a minimum of $10 million in investable or liquid assets.

In 2012 Luxembourg introduced a specific regulatory framework for family office activities under the Family Office Act. This states that family office activities consist in providing, on a 434

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professional level, patrimonial-related advice or services to private individuals, families or patrimonial entities founded or owned by, or benefitting, private individuals or families. A draft law that was submitted to Luxembourg’s parliament in July last year is addressing the lack of legislation around foundations. The new orphan tax structure ‘foundation patrimonial’ have no members, shareholders or associates and is aimed at broadening the range of investment vehicles for high net worth individuals in Luxembourg.

So, where are we now? Confidence in market conditions among the family business community is clearly on the rise and visible from survey results. This year, more respondents have been willing to state their view as positive, as opposed to neutral, and for this market segment, all the signs point to market confidence returning even with a war on talent playing out in the background.

There are many reasons for increased confidence not least the changing funding landscape. Access to finance and credit is no longer as big a concern as it was six months ago. A willingness to re-invest profit and the ability to secure bank funding is on the rise.

Understandably, we should recognise that while access to finance is improving, it is not the same experience for everyone. For some family businesses it is still a struggle.

In drawing up legislation for family businesses, observing what the European Union has to say on business transfers is elementary. To this end, the European Union has campaigned to encourage the creation of legislation and a framework of transferfriendly regulation. And, of course, it all begins with money. The European Commission recognises that buying an existing business often requires more capital than starting up a new business. Assisted loans, guarantees and forms of equity capital for a limited period could make it easier for a larger number of potential transferees to take over businesses.

Then there’s the creation of business advisory services. As business transfers touch upon complex problems such as succession legislation, taxation, preparing the company for sale, price evaluation, etc., advice from specialists such as business consultants, tax auditors, lawyers, accountants, banks and notaries is needed to carry out the process.

Training is important for increasing entrepreneurs’ knowledge of business transfers and their readiness to carry one out.

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Specific training courses on business transfers for both transferors and successors will provide the entrepreneurs with the knowledge and tools to plan to carry out the transfer process. These and others are an indication of suggestions from the European Commission which are being taken onboard as the legislation is developed.

To date no other member state has formally recognised in standalone legislation the transfer of a family owned and run business to the next generation, as we in Malta are proposing. There is a soft reference in some jurisdictions, references are made to family members but none define family business or formally assist in the transfer from one generation to the next – the hinge which matters most. The scope of this unique legislation is to assist and facilitate the transfer and ownership of the family business from one generation to the next without hindering the continuity and development of the business. It is imperative that development is encouraged and equally vital that there is continuity in the event of the owner’s or an associate’s death. Legal restructuring must be given a smooth path, in order to avoid liquidation.

Financing is, obviously, another important aspect.

Guarantees for equity or quasi equity fund investments in SMEs should include investments by local or regional funds which provide seed capital and/or capital in the start up phase, as well as mezzanine finance, in order to reduce the difficulties which SMEs face due to their financial structure, and those arising from business transfers.

Operating such an innovative structure entails significant costs both from a human resource, physical resources and capacity building perspective. A regulator or manager will coordinate and administer the legislation, its functions and duties.

One of the functions that the legislation needs to provide is for a central reference point that will be raising awareness because one cause of major problems in business transfers is that the planning for the process starts too late. Raising awareness about the need to prepare for the transfer a long time in advance is the starting point for a successful transfer.

The Family Business Act will be distinctive not only in its legislative scope and intention but unique to the legal community on a European and International level. While this allows for a wide vision, the disadvantage lies in the fact that accurate and tangible 436

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research, statistics and data are either negligible, non existence or irrelevant. Research, statistics and data need to be gathered not only at inception but also during the operational stage to monitor the growth, success, or failure of the legislation. To this end, the initiation and start-up depend entirely on financial assistance from the government. The beneficiaries of this legislation will be nationwide because nearly the entire business community could potentially be eligible to benefit from this legislation. In addition, we must recognise that foreign family businesses, who opt to register their business in Malta, will also become valid beneficiaries.

Whilst this legislation is commendable for spearheading ahead in bringing together the cry from the European Commission, family businesses and government policy, this legislation and its success must be seen as a marathon not a sprint, whereby its true test of success will be calibrated in the generations to come.

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Informed Consent in Medical Practice in Maltese Legislation Bridget Ellul

Bridget Ellul

INFORMED CONSENT IN MALTESE LEGISLATION

MEDICAL

PRACTICE

IN

BRIDGET ELLUL

_______________________________________________________ Dr Bridget Ellul MBChB, MRCPath, FRCPath, is Head of the Department of Pathology and Senior Lecturer in Forensic Pathology, Faculty of Medicine and Surgery, University of Malta. She lectures in both Pathology and Forensic Medicine in medical, dental, healthcare, law, policing and criminology courses.

She also lectures in Medical Law and Ethics in postgraduate courses and participates in thesis supervision. She has provided forensic pathology services as a medical court expert for over twenty years and has an interest in road traffic accidents and deaths by drowning. She is a member of the Medicine and Law Programme, Faculty of Laws, the Bioethics Research Programme, Faculty of Medicine and Surgery, the Research Ethics Committee, Faculty of Dental Surgery and the national Health Ethics Committee. She has served on the Medical Council and the Bioethics Consultative Committee. She is the current President of the Malta College of Pathologists.

_____________________________________________________________

1.

Introduction

Informed consent is at the core of professional and ethical standards in medical practice. It underpins the relationship between healthcare professionals and their patients as it provides the basis for a fiduciary bond that ensures the best possible outcome for the patient through the formulation of a personalised management care plan, ideally prepared with input from all stakeholders, including the patient.

Healthcare aims to provide maximum benefit to the patient, and this guiding principle has been recognised and adopted by healthcare professionals throughout the centuries, with roots dating back to the Hippocratic Oath: I will use regimens for the benefit of the ill in accordance with my ability and my judgment, but

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from what is to their harm or injustice I will keep them. 1 This principle is still stated in the modern version of the Oath, the Declaration of Geneva, which was proposed in 1948 by the newly formed World Medical Association, which declaration includes the maxim ‘the health of my patient will be my first consideration’.2 It is therefore appropriate that the first rule listed in the Code of Ethical Standards for the medical profession, adopted by the Medical Council in Malta is: The Medical profession occupies a position of trust in society. A doctor’s calling is to serve humanity under all conditions. Members of the profession have built up a tradition of placing the needs of the patient above all else.3 This statement reflects the ongoing decline of the paternalistic attitude of doctors and the shift to patient centred healthcare, initially driven by the recognition of World War II atrocities performed by medical personnel. At the same time, society committed itself to the recognition of Human Rights, equality and abolishment of discriminatory practices, for all nations,- with the establishment of the Universal Declaration of Human Rights in December 1948.

Moreover with the explosion in scientific and technological development, medicine has become more complex, and the response of the medical profession has been the adaptation of compulsory professional specialisation and the emergence of multidisciplinary teams to provide the best care for patients. The increasing access to higher education for all is empowering patients to acquire substantial knowledge about health issues and is fostering a real desire to be involved in their own healthcare, exercising their right to self-determination.

1

Steven H Miles, The Hippocratic Oath and the Ethics of Medicine (Oxford University Press, 2004) 2 Declaration of Geneva, World Medical Association, 1948 3 Ethics of the Medical Profession Regulations, Subsidiary Legislation 464.17 of the Laws of Malta, Schedule A, rule 1(a) 442

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The Council of Europe’s Convention for the Protection of Human Rights and Dignity of the Human Being with regard to the Application of Biology and Medicine: Convention on Human Rights and Biomedicine (herein referred as the ‘Oviedo Convention’) clearly embraces patient rights and in particular patient autonomy, emphatically establishing the notion of informed consent as follows: An intervention in the health field may only be carried out after the person concerned has given free and informed consent to it.

This person shall beforehand be given appropriate information as to the purpose and nature of the intervention as well as on its consequences and risks.

The person concerned may freely withdraw consent at any time.4 But how is this concept of consent in healthcare practice addressed in healthcare law? Malta has not signed the Oviedo Convention and neither does it have a statute dealing specifically with medical consent but informed consent has been addressed in various laws and principles are being established in our court cases.

This paper will give an overview of how the legislator has so far dealt with consent.

2.

Background

Consent in healthcare first featured in the context of a court case just a hundred years ago in the United States in the case of Mary Schloendorff, who sued the New York Hospital, a charitable institution, not the staff, for the removal of a fibroid tumour without her consent, during an examination under anaesthesia to which she had consented. The hospital was not found responsible for the acts of the doctors it employed, but the case remains most notable for the seminal statement by Justice Benjamin N Cardozo: Council of Europe’s Convention for the Protection of Human Rights and Dignity of the Human Being with regard to the Application of Biology and Medicine: Convention on Human Rights and Biomedicine (adopted 4 April 1997, entered into force 1 December 1999) ETS 164 (Oviedo Convention), Article 22 4

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Every human being of adult years and sound mind has a right to determine what shall be done with his own body; and a surgeon who performs an operation without his patient’s consent commits an assault, for which he is liable in damages. 5 Many have argued that this statement is technically incorrect as it should refer to battery not assault, since battery only requires intent to achieve contact and not to inflict injury as in assault.

Nevertheless this has been a guiding principle for recognising the importance of consent.

However, legal acceptance of informed consent did not feature significantly until 1957, again in the US, when a Court ruled that medical practitioners must disclose ‘any facts which are necessary to form the basis of an intelligent consent by the patient to the proposed treatment’,6 later referred to as informed consent.

3.

Informed Consent in Maltese Medical Law

Consent is the ultimate manifestation of the patient’s right to self-determination and free choice, particularly in relation to one’s private life. The right to respect for private life is one of the internationally recognised fundamental rights and freedoms of the individual, and is also enshrined in the Constitution of Malta 7 and in the European Convention Act.8 The first definition of consent in Maltese medical law appeared in 2003 in the Public Health Act as ‘approval given by an individual without any force, fraud or threat’,9 a definition influenced by the fact that consent in Maltese law is regulated by the rules of contract as laid out in the Civil Code: ‘where consent has

5

Schloendorff v Society of New York Hospital, 105 NE 92 (NY, 1914) Salgo v Leland Stanford Junior University Board of Trustees, 317 P 2d 170 (Cal, 1957) 7 Constitution of Malta, article 32 8 European Convention Act, Chapter 319 of the Laws of Malta, article 3 9 Public Health Act, Chapter 465 of the Laws of Malta, article 2 6

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been given by error, or extorted by violence or procured by fraud, it shall not be valid’.10 The term ‘informed consent’ first appeared in local legislation in 2004 with the enactment of the Clinical Trials Regulations,11 which were in effect the application of the EU Directive 2001/20/EC, on the approximation of the laws, regulations and administrative provisions of the Member States relating to the implementation of good clinical practice in the conduct of clinical trials on medicinal products for human use. This was the first ever Maltese legislation to address the issue of information imparted to the patient and yet this was solely related to research rather than to the everyday practice of clinical medicine. Informed consent is explicitly defined here as a decision, which must be written in one of the official languages of Malta or in a language understandable to the clinical trial subject and, or his legal representative, dated and signed, to take part in a clinical trial, taken freely after being duly informed of its nature, significance, implications and risks and appropriately documented, by any person capable of giving consent or, where the person is not capable of giving consent, by his or her legal representative; if such person is unable to write, oral consent may be given in the presence of at least one witness.12 The concept of informed consent in routine healthcare was however only addressed with the enactment of the new Mental Health Act in 2012 and 2013. The mention of the word consent in the old Mental Health Act, recently repealed, was conspicuous by its absence, even though the law dealt with involuntary admission to mental hospital. The new Act shifted the emphasis to a more positive attitude, with informed consent being defined as the ‘decision taken by the patient or the carer as applicable after being

10

Civil Code, Chapter 16 of the Laws of Malta, article 974 Clinical Trials Regulations, Subsidiary Legislation 458.43 of the Laws of Malta 12 ibid, regulation 3 11

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informed of his rights under article 3’,13 the latter article referring to the rights of users (patients) and carers and includes the right to give free and informed consent before any treatment or care is provided and such consent shall be recorded in the patient’s clinical record. This is without prejudice to the patient’s right to withdraw consent. 14 The Act also mentions the need for written informed consent in relation to any major medical or surgical procedure required for a patient with a mental disorder:15 In those cases where in the opinion of the responsible specialist, the person lacks mental capacity to give consent, or being a minor, lacks sufficient maturity and understanding to consent to treatment, then consent shall be given by his responsible carer.16 Moreover consent for treatment is also required for treatment by patients who are admitted involuntarily: Prior to the administration of any treatment, informed consent shall be given by the patient and in those cases where the patient lacks the mental capacity to give consent, such consent shall be obtained from the responsible carer.17 In fact it was the Health Act, in 2013, which finally formally upheld patients’ rights universally in Maltese legislation for routine medical practice. Though there is no specific mention of consent, the law does emphasise the right ‘to receive information concerning the state of his health and the health services and treatments available’18 and ‘to be provided in advance with clear information on the treatment options available and to be involved in discussions and decisions about the treatment to be given’.19 There is also the 13

Mental Health Act, Chapter 525 of the Laws of Malta, article 2 ibid, article 3(1)(i) 15 ibid, article 32(a) 16 ibid, article 32(b) 17 ibid, article 14 18 Health Act, Chapter 528 of the Laws of Malta, article 27(b) 19 ibid, article 27(c) 14

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inclusion of the right ‘to refuse treatment provided this is endorsed by his signature’.20 Any new healthcare law is now addressing the issue of consent.

One looks forward to the promised Charter of Patient Rights and Responsibilities21 to see how consent in medical practice is to be regulated. A Patients’ Charter of Rights and Responsibilities had been formulated in 2001 by the Hospital Management Committee at St Luke’s Hospital, but this was never encompassed into law. That Charter addressed the rights of patients to be fully informed about their medical diagnosis and proposed management plan and to be involved in their own management, including the right to refuse any procedure or treatment.

In the recently enacted law to ratify the Council of Europe’s Convention on Prevention and Combating of Violence against Women and Domestic Violence,22 the consent language is even more forceful. There is agreement that forced abortion and sterilisation are criminal offences if there is lack of the woman’s informed consent and for sterilisation, also if there is lack of understanding of the procedure: Parties shall take the necessary legislative or other measures to ensure that the following intentional conducts are criminalised: a. performing an abortion on a woman without her prior and informed consent b. performing surgery which has the purpose or effect of terminating a woman’s capacity to naturally reproduce without her prior and informed consent or understanding of the procedure.23

20

ibid, article 27(f) ibid, article 29 22 Convention on Prevention and Combating of Violence against Women and Domestic Violence (adopted 11 May 2011, entered into force 1 August 2014) CETS 210 23 Convention on Prevention and Combating of Violence against Women and Domestic Violence (Ratification) Act, Chapter 532 of the Laws of Malta, article 39 21

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4.

Types of Consent

Consent may be implied and this is the norm for most healthcare procedures, especially when the patient presents directly to a General Practitioner and willingly submits to a medical examination or investigation, for example when a patient voluntarily bares an arm for a blood sample to be drawn. The problem of assessing how genuine implied consent is in a hectic medical environment has never been addressed. Most patients give in to healthcare professionals without question, just to get over the stressful experience – few actually argue with their doctors.

But for major interventions, in particular when surgery and anaesthesia are necessary, consent should be expressed – it is the safeguard to an action against the healthcare professional of tort or battery, as expressed by Cardozo.

Oral consent is legally valid but difficult to prove, unless it is recorded. This form of consent is specifically addressed in the Clinical Trials Regulations, Article 3, where if the trial subject ‘is unable to write, oral consent may be given in the presence of at least one witness’.24 The law requires written consent for medical or surgical procedures only on patients with mental disorders.25 Written consent is also required for a change in the care plan of a mental health patient. 26 The Embryo Protection Act provides for written consent by the prospective parents for medically assisted procreation,27 and for ‘clinical interventions on a human embryo that are for an exclusively diagnostic and, or therapeutic purpose related to the embryo and are in the interests of the health and development of the embryo itself, provided that no other alternative medical method or procedure is available.28 It is a recognised practice to sign a Consent Form in hospital for operations and invasive interventions for diagnostic tests but the legal standing of such forms is debateable. True these forms are at 24

Clinical Trials Regulations, regulation 3 Mental Health Act, article 32(a) ibid, article 7(2)(f) 27 Embryo Protection Act, Chapter 524 of the Laws of Malta, article 18(1) 28 ibid, article 15(3) 25 26

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least a formal way of acknowledging that a discussion has taken place, between the patient and a healthcare worker but the quality and content of the material discussed are not recorded.

Written consent is also required on refusal of treatment.

Refusal of treatment under the Health Act must be endorsed by the patient’s signature.29 4.1 Validity of consent: Competency Consent is valid if the patient has competency, the legal capacity to consent, and it is a voluntary decision or approval by the individual (or his legal representative where appropriate), based on the assessment of adequate information.

Competency implies the ability to understand issues related to the disease and its prognosis as well as the ability to weigh pros and cons of different treatment options available, assessing their possible consequences and the inherent risks and benefits. The British Medical Association states that all of the following are necessary for a person to be able to make a decision: to understand the information relevant to the decision; to retain the information relevant to the decision; to use or weigh the information; or to communicate the decision (by any means). 30 An adult is generally considered competent unless the person is unable to give valid consent because of, as in the law of contracts in the Civil Code, interdiction or diminished capacity.31 This includes permanent or temporary mental disability, which may be secondary to a physical disability, such as a patient in a coma after head injury.

The medical profession will be involved in assessing capacity and in some countries there are defined guidelines how to address this issue. The Mental Health Act safeguards the right to self- determination of patients diagnosed with a mental disorder; 29

Health Act, article 27(f) British Medical Association, ‘Mental Capacity Act tool kit: Assessing capacity’ < file:///C:/Users/user/Downloads/mental%20capacity%20act%20tool%20kit_card4%2 0(1).pdf> accessed 17 February 2015 31 Civil Code, articles 966 and 967 30

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A person suffering from a mental disorder shall be deemed able and competent to make decisions unless certified by a specialist as lacking mental capacity to do so.32 Moreover ‘only a specialist may certify such persons as having mental capacity or lack thereof’.33 It is as yet unclear whether this also applies to the diagnosis of patients with dementia, whether living in institutions for the elderly or even in the community. Also, there are no guidelines as to who is required to assess the temporarily incapacitated person in the hospital setting.

However the Office of the Commissioner for Mental Health and Older Persons has recognised these lacunae and in February 2014 organised a seminar to discuss such grey areas.

Minors are persons under 18 years of age and they are considered legally incompetent but many mature minors may be able to understand the information provided and may be able to give limited consent in proportion to their age and maturity and the intervention proposed. This lack of legal acknowledgement causes difficulties for children over 16 years old who might want to see the family doctor not in the presence of their parents. Some European states have legislated for allowing consent in young adults, 15 to18 year olds. Maltese law has granted certain rights to such minors, including work and even marriage, but there is no mention of consent for routine medical practice, although it is now common practice in Mater Dei Hospital to consider the views of patients over 14 years old. However, the Mental Health Act specifically caters for consent to treatment or care for minors with ‘sufficient maturity and understanding to consent to treatment’,34 even if admission is involuntary. The responsible carer must consent in cases of lack of sufficient maturity.35 Free consent is accompanied by the right to refuse treatment. The Health Act gives patients the right to refuse any treatment.36 The Mental Health Act specifically mentions the 32

Mental Health Act, article 24(1) ibid, article 24(2) ibid, article 31(1)(a) 35 ibid, article 32(b) 36 Health Act, article 7(2) 33 34

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patient’s right to withdraw consent for treatment or care37 or for participation in any clinical trials or medical or scientific research,38 with such withdrawal being also done by responsible carer if patient lacks capacity. The latter article also provides for involuntary patients who refuse treatment and have to be treated to ‘prevent physical harm to self or others or to prevent mental deterioration’, such action needing to be documented in the patient’s medical notes.39 A trial subject can withdraw from a clinical trial at any time by revoking his informed consent without suffering any detriment. 40 4.2 Validity of consent: Voluntary consent Consent in the Data Protection Act is defined as ‘any freely given specific and informed indication of the wishes of the data subject by which he signifies his agreement to personal data relating to him being processed’.41 Although this refers to any data collection, it would also be applicable to data used in medical practice and it also applies to consent in all healthcare fields.

The Civil Code goes further in that ‘where consent has been given by error, or extorted by violence or procured by fraud, it shall not be valid’.42 The worst form of lack of free consent is that seen in the exploitation of persons for ‘the removal of any organ of the body’,43 for instance, for organ transplantation, by the use of excessive means of coercion, such as: (a) violence or threats, including abduction; (b) deceit or fraud; (c) misuse of authority, influence or pressure;

37

Mental Health Act, article 3(1)(i) ibid, article 35(3) 39 ibid, article 14 40 Clinical Trials Regulations, regulation 4(1)(b) 41 Data Protection Act, Chapter 440 of the Laws of Malta, article 2 42 Civil Code, article 974 43 Criminal Code, Chapter 9 of the Laws of Malta, article 248C 38

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(d) the giving or receiving of payments or benefits to achieve the consent of the person having control over another person.44 The Clinical Trials Regulations state that informed consent: means a decision, which must be taken freely after being duly informed of its nature, significance, implications and risks and appropriately documented.45 The Mental Health Act mentions free and informed consent before any treatment for a patient suffering from a mental disorder,46 and for provision of special treatments, with the added safeguard that the Commissioner must be satisfied as to the consent being free and of benefit to the patient. 47 4.3 Validity of consent: Information provided Consent cannot be really free if there is lack of adequate information to enable a choice and a decision as to what care to accept. Knowledge must be communicated in a manner that can be understood by the patient. This requires ample time to explain the management and intervention, if any, proposed, including the benefits and risks of different options and the effect on the lifestyle of the patient and his family. Patients should feel free to ask any relevant questions to ensure they understand the information imparted.

However, how much information should be provided is a difficult decision and there are two schools of thought, the reasonable or prudent patient approach and the reasonable doctor approach. In the US, the doctrine of informed consent has developed in favour of the prudent person approach, which requires that the reasonable patient receives sufficient information that is necessary to reach a decision: 44

ibid, article 248A(2) Clinical Trials Regulations, regulation 3 46 Mental Health Act, article 3(1)(i) 47 ibid, articles 33(2)(a) and(b) 45

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The scope of the physician’s communications to the patient, then, must be measured by the patient’s need, and that need is the information material to the decision.48 This contrasts with the way English case law developed, initially using the Bolam principle,49 which holds that a doctor is not liable for negligence if his practice is in line with what is acceptable by medical peers or as Justice McNair stated: a doctor is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art.50 Although he also stated that: The doctor cannot be criticised if he does not stress the dangers, which he believes to be minimal, which are involved in that treatment. 51 It was not immediately clear if this principle could be also applied to disclosure of information until the Sidaway case.52 Mrs Sidaway sued after she developed hemiplegia due to developing spinal vein thrombosis following neurosurgery for back pain, a complication with a risk of less than 1% probability of occurring; she claimed she would have refused surgery had she known about such risk. Although the court of first instance reaffirmed the Bolam principle: the degree of disclosure required to assist a patient to make a rational choice as to whether or not to undergo a particular treatment must primarily be a matter of clinical judgment,53 There was more criticism by the Law Lords on Appeal, notably that of Lord Scarman who argued for a less paternalistic 48

Canterbury v Spence, 64 F 2d 772 (DC, 1972) Bolam v Friern Hospital Management Committee [1957] 2 All ER 118 50 McNair J [1957] 2All ER 118 at 122 in Sidaway 51 ibid 52 Sidaway v Board of Governors of the Bethlem Royal Hospital [1985] AC 871 53 ibid 49

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attitude by doctors, thus showing a shift in legal thinking towards recognising the right of the patient to self-determination; It would be a strange conclusion if the courts should be led to conclude that our law, which undoubtedly recognizes a right in the patient to decide whether he will accept or reject the treatment proposed, should permit the doctors to determine whether, and in what circumstances, a duty arises requiring the doctor to warn his patient of the risks inherent in the treatment which he proposes.54 He concluded that the doctor had a duty to inform the patient of the risks involved but was of the opinion that it should be the remit of the court not the doctor to establish the extent of the doctor’s duty to disclose information, as had been affirmed in Canterbury v Spence.55 However, more valid is the fact that in reaching a decision on which treatment option to take up, the patient uses non-medical principles to decide. The patient may be influenced by the effect of a particular treatment on lifestyle, and not solely on the medical relevance of a particular choice. Most often the doctor is not in a position to assess which risks to disclose since he is unaware of crucial aspects of the patient’s life which may influence decision making.

There is general agreement that one must disclose any significant risk, that is, one which either a reasonable patient or a reasonable doctor would consider significant, as well as, risks of high incidence and, equally important, rare risks which produce serious complications. The Sidaway case did in fact accept limitations to disclosure, accepting that it is allowable not to disclose risks of the order of 1% or less, providing the doctor was following acceptable medical practice.

Naturally any specific question by the patient must be truthfully answered. In the Sidaway case, Lord Bridge stated: When questioned specifically by a patient of apparently sound mind about risks involved in a 54 55

[1985] 1All ER at 649 Canterbury v Spence (n 47) 454

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particular treatment proposed, a doctor’s duty must, in my opinion, be to answer both truthfully and as fully as the questioner requires56 However, the therapeutic privilege, again emphasised by Lord Scarman in Sidaway, still holds, that is the doctor may withhold information if it is seen to be detrimental to the patient’s health. In fact, this concept has found its way into the Mental Health Act, which allows access to: clinical records unless, in the opinion of the responsible specialist revealing such information may cause harm to the person’s health or put at risk the safety of others. When any information is withheld, the patient or the responsible carer may contest such decision with the Commissioner.57 The patient may waive his right to receive information but this should be expressly recorded and preferably accompanied by the patient’s signature.

5.

Extent of Information in Maltese Legislation

With regard to Maltese legislation, information is required in detail in The Embryo Protection Act, which requires the doctor to ‘inform in detail and in writing both prospective parents on: the methods and treatment of any procedure to be employed’ as well as the possible complications, expected success, risks, psychological effects on prospective parents and offspring and the bioethical issues and costs.58 There is also the requirement to keep the documentation.59 A Clinical Trial cannot start unless the trial subject can

56

Sidaway v Board of Governors of the Bethlem Royal Hospital (n 51) Mental Health Act, article 3(l) 58 Embryo Protection Act, article 18(2) 59 ibid, article 18(4) 57

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understand the objectives, risks and inconveniences of the trial, and the conditions under which it is to be conducted and has also been informed of his right to withdraw from the trial at any time by revoking his informed consent without suffering any detriment. 60 For Clinical Trials the Informed Consent Forms are extensive documents that provide all relevant information in the language understood by the patient; locally these have to be available, both in Maltese and English.

Interestingly the Medical Exposure (Ionising Radiation) Regulations is the only local legislation that requires the employer to provide written information to a patient in routine medical practice, making use of specific healthcare services (radiography) as follows: In the case of patients undergoing treatment or diagnosis with radioactive medicinal products, the employer’s procedures shall provide that, where appropriate, written instructions and information are provided to: (a) the patient, where he has capacity to consent to a treatment or diagnostic procedure, or (b) where the patient is a child who lacks capacity so to consent, the person with parental responsibility for the child, or (c) where the patient is an adult who lacks capacity to consent, the practitioner shall decide in the best interest of the patient.61 Maltese practitioners often follow the guidelines 62 provided by the General Medical Council, UK, for direction as to which information should be provided. These guidelines advice that besides the information related to the disease, the investigations and 60

Clinical Trials Regulations, regulation 4(1)(b) Medical Exposure (Ionising Radiation) Regulations, Subsidiary Legislation 465.01 of the Laws of Malta, regulation 20(1) 62 General Medical Council UK, ‘Consent: patients and doctors making decisions together, 2008’ < http://www.gmc-uk.org/guidance/ethical_guidance/consent_guidance_index.asp> accessed 17 February 2015 61

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the treatment options, patients should be told who provides the health services and also be informed if these are part of research projects. Patients have the right to refuse treatment and the right to refuse involvement in teaching or research.

Worth noting is that the Malta Medical Council has published Guidelines for Medical and Dental Students, but none for doctors, which state that for fitness to practice, such students should ‘respect the decisions and rights of patients’ and that ‘failure to obtain proper consent from a patient’ constitutes unprofessional behaviour.63

6.

Maltese Case Law

So how have the Maltese courts addressed the consent issue?

In the Appeal case of Vanessa Sammut vs Dr Charles Fenech,64 where the claim was for poor aesthetic results in dental work, the Court quoted Smith v Auckland Hospital Board,65 which stated that information should be related to the needs of the patient in a particular case and the doctor should consider the seriousness of the case, the benefits, risks and the capacity of the patient to understand and how much the patient relies on the doctor. The Court also quoted from Professor Maurice Cauchi: L-informazzjoni lill-pazjent għandha tkun biżżejjed biex ikun jista’ jieħu deċiżjoni. Din għandha tinkludi l-iskop, in-natura u l-konsegwenzi ta’ l-intervent kif ukoll ir-riskji sewwa ta’ l-intervent li jkun qed jiġi propost, kif ukoll l-alternattivi li jistgħu jeżistu. U dan għandu jingħata b’lingwaġġ li jiftiehem mill-pazjent.66

63

Guidelines for Medical and Dental Students: Professional Values and Fitness to Practice (Malta Medical Council 2010) 64 Court of Appeal, 1 December 2006 65 Smith v Auckland Hospital Board [1964] NZLR 241 66 Maurice N Cauchi, Bijoetika fl-Ewropa Tal-Lum (Publishers Enterprises Group, 2002) 457

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In the case of Frankie u Sonja konjugi Zerafa vs Olga Avramov, Donald Felice, Tabib Ewlieni tal-Gvern,67 the Court recognised that the duty of disclosure of the doctor in aesthetic interventions is higher than for other operations, stating that rravviżat obbligu ta’ informazzjoni komplut u dettaljat f’każ ta’ intervent estetiku, però f’każ ta’ intervent kirurġiku ta’ tip differenti, ma jidhirx li s-sitwazzjoni hija neċessarjament l-istess.

The plaintiff had become pregnant following tubal ligation.

The doctor had failed to inform her that she might get pregnant but this was considered to be a rare possibility and not normally communicated to the patient. The court decided in favour of providing information in line with accepted medical practice: it-tabib mhux obbligat li jagħti lill-pazjent linformazzjoni kollha meħtiega relatata ma’ lintervent, iżda dik l-informazzjoni li, skond il-prattika professjonali, għanda tingħata.

In the case of Joseph Micallef vs Dr Ivan Vella MD u Dr Josie Muscat MD who was representing the Summit Eye Laser Clinic and St. James Health Centre, the plaintiff alleged he suffered damage to his right eye following laser therapy. The court considered the criteria for obtaining informed consent, including an assessment of the plaintiff’s capacity to understand the information provided consent.

7.

Vulnerable Patients

The Council of Europe’s Convention on Human Rights and Biomedicine highlights protection for persons not able to consent, stating that:

67

Frankie u Sonja konjugi Zerafa vs Olga Avramov, Donald Felice, Tabib Ewlieni tal-Gvern, Court of Appeal, 30 May 2008 458

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an intervention may only be carried out on a person who does not have the capacity to consent, for his or her direct benefit.68 The same article safeguards minors by requiring consent from a legal representative or authority or body provided by law, but: the opinion of the minor shall be taken into consideration as an increasingly determining factor, in proportion to his or her age and degree of maturity. 69 Similarly for adults without the capacity to consent because of mental disability or other reasons, consent is to be provided by a legal representative. Persons with a mental disorder of a serious nature: may be subjected, without his or her consent, to an intervention aimed at treating his or her mental disorder only where, without such treatment, serious harm is likely to result to his or her health. 70 The Mental Health Act provides for a responsible carer, appointed by the patient, in writing, to act for the patient. Article 4(2) provides for the next of kin or a close friend or other relative of the patient to be appointed as a responsible carer if the patient lacks mental capacity or fails to appoint one. As a last resort, a healthcare professional may be appointed by the Commissioner for the Promotion of Rights of Persons with Mental Disorders: to assume the role of responsible carer, in so far as the giving or withholding of consent to treatment is concerned.71 A carer may also be appointed by the Court. The responsible carer participates in the formulation of the multidisciplinary care

68

Oviedo Convention, Article 6 ibid 70 ibid, article 7 71 Mental Health Act ,aticle 4(2)(e) 69

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plan72 and gives consent to treatment for a voluntary patient, who lacks mental capacity or is legally prevented from giving consent. 73 The Mental Health Act now also devotes a specific section for minors, thus increasing protection of their rights. When a specialist is satisfied a minor has sufficient maturity and understanding to consent to treatment the minor must consent to treatment; otherwise the responsible carer can consent. 74 Maltese law does cater for a legal representative in the Clinical Trials Regulations for minors and incapacitated persons, who need to be given information according to their capacity to understand and their wish to refuse to participate should be considered.75 Furthermore for incapacitated adults who have not given and not refused informed consent before the onset of their incapacity, regulation 6 states consent must be the presumed will of the subject who must suffer from the condition studied and benefit from the medicinal product studied. Minors can only participate if they, or at least minors in general, obtain some benefit from the trial.

This point is also highlighted in Article 31(3) of the Mental Health Act for minors with a mental disorder, when the Commissioner has to be satisfied of such benefit following an independent review by two specialists and as an added precaution the Commissioner is required to appoint an independent specialist to monitor the minor during such trials.

8.

Exemption from Consent

There are certain situations where the right of an individual is subservient to the rights of others and society at large. This is mainly related to the legal responsibility of notification of infectious diseases to the Superintendent of Public Health. A medical practitioner and a person in charge of a laboratory, which obtains a positive result for the organism causing an infection, must report 72

ibid, article 4(4)(c) ibid, article 7(2) 74 ibid, article 31(1) 75 Clinical Trials Regulations, regulations 3-6 73

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such cases. Those reporting ‘shall not require the consent of the person being treated or examined’,76 and for this purpose, the Superintendent regularly issues a list of notifiable diseases in the Government Gazette.

Another exempt legal requirement is the disclosure of information regarding a diagnosis of cancer to the Superintendent of Public Health, in keeping with the Notification of Cancer Act. 77 In a medical emergency situation, common sense dictates that it is likely that a patient would be in favour of unauthorised treatment rather than to develop complications.

One can also argue on similar lines for disclosure of medical information to third parties. In the Mental Health Act, disclosure of information by healthcare professionals to third parties shall take place only with the patient’s consent in writing, or if it was ‘required for the ongoing care of the patient under the Community Treatment Order’.78

9.

Special Forms of Consent

9.1 Organ donation It is internationally accepted that there must be consent for organ donation as outlined in The Additional Protocol on Transplantation of Organs and Tissues of Human Origin which states: Parties shall provide information for health professionals and for the public in general on the need for organs and tissues. They shall also provide information on the conditions relating to removal and implantation of organs and tissues, including matters relating to consent or authorization, in particular with regard to removal from deceased persons.79 76

Public Health Act, Chapter 465 of the Laws of Malta, article 31 Notification of Cancer Act, Chapter 154 of the Laws of Malta, article 3 Mental Health Act, article 22(b) 79 Additional Protocol on Transplantation of Organs and Tissues of Human Origin, Strasbourg 2002 Article 8, Information for health professionals and the public 77 78

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Malta has adopted this principle in law, including the need for adequate information, in legislation transposing the European Parliament and Council Directive 2010/53/EU on standards of quality and safety of human organs intended for transplantation: (1) The Authority shall lay down the standards expected in relation to the obtaining of consent.

(2) The procurement of organs shall be carried out only after all requirements relating to consent, authorisation or absence of any objection have been met.

(3) The procurement of organs shall be carried out only when: (a) all prospective organ donors, their relatives or any other person granting consent on behalf of donors, have been given information in accordance with guidelines and authorisation requirements as established by the Authority; (b) information in accordance with guidelines and authorization requirements established by the Authority has been obtained from all persons who are willing to donate organs, their relatives or any other person granting consent on behalf of donors.80 Standards for consent are yet to be laid down by the Licensing Authority, specified in the legislation to be the Superintendent of Public Health. The Parliamentary Committees for Health and Social Affairs have held joint meetings to discuss new legislation in this field, and are presently preparing a report for public consultation. Although not specified, free consent is implied in the current Maltese legislation, in both the Organ Transplants (Quality and Safety) Regulations, which states in Regulation 13(1): Donations of organs from deceased and living donors shall be voluntary and unpaid,81 and in the Criminal Code wherein article 248C, which makes it illegal to indulge in traffic involving persons

80

Organ Transplants (Quality and Safety), Subsidiary Legislation 483.06 of the Laws of Malta, regulation 14 81 ibid, regulation 13(1) 462

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for exploitation in the removal of organs, for instance, for transplantation.

Consent is obviously important for donations from the living as well as from the deceased. Consent from the living is different from consent for medical treatment as the donor is usually healthy and the harvesting of organs is not beneficial to the donor and may also be harmful if complications set in. This results in living donation being only automatically approved from family members; altruistic donation from non-related donors has to be approved by a committee.

However, more contentious is consent necessary for donations from the deceased. Consent in countries with an opt-in system of consent may be obtained from relatives but as the principle of autonomy is increasingly accepted by society, the importance of advance knowledge of the deceased’s views regarding organ donation, are encouraged. Future legislation in Malta should make it obligatory to favour the deceased’s wishes and not allow relatives to override this decision of the donor.

To obviate wastage of potential organs, and in an attempt to increase the number of organ donors, policymakers have suggested the practice of presumed consent, also called opt-out system of consent. This assumes that there was no objection to donating one’s organs prior to death. So doctors can use any organ unless when alive the deceased had objected to donation. A soft opt-out system is in place in some EU states, where relatives are still contacted and asked to give permission to organ donation and may even object.

In the opt-in system functioning in Malta, donor cards have no legal standing although they are an indication of the deceased’s views and assist the relatives in deciding according to the wishes of the deceased. In the Eurobarometer study, 82 75% of Maltese had voted for being donors, while only 10% were against, and 71% were in favour of donating an organ from a deceased relative, however only 15% had donor cards, although this was higher than the European average. To increase donation from dead donors, new legislation should make such donor cards official documents, or else use driving licences or a better option for Malta, use the ID card to record the wishes of the individual. Tied to this there must be 82

Europeans and Organ Donation, Special Eurobarometer, May 2007 463

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registers available, which healthcare professionals can access to check if organs can be used from brain dead donors. Naturally there must be the possibility to change one’s views during life and opt-out of the system.

It appears that the Maltese favour an opt-in system. Surveys related to an organ donation awareness campaign in 1995, one prior to the campaign, and the second, third and fourth at three months, 3 years and 10 years after the end of the campaign, showed that only a small proportion of people were in favour of an opt-out system, the highest figure of 30% being reported in the second survey. Some felt an opt-out system negated a ‘totally free decision’.83 In fact even the wish to make a conditional donation, that is give consent to donate only to certain persons, has always been objected to, due to the recognised altruistic nature of organ donation.

The issue of whether Advance Directives, in the form of a Living Will should be used as a means of registering the wish to donate for transplant purposes was considered by the Bioethics Consultative Committee, which came to the conclusion that this is unlikely to increase donation in Malta. 84 9.2 Clinical trials I have already discussed local legislation with regard to Clinical Trials, which applied EU Directive 2001/20/EC. It is worth noting that the Directive is being repealed in May 2016 by Regulation No. 536/2014, with a view to harmonization of regulations across the EU. Malta will have to enact legislation to include the new aspects in this Regulation.

One change regarding consent is related to clinical trials in emergency situations, where there is an ongoing trial involving one of the necessary interventions the patient requires but s/he is unable to give consent prior to the inclusion in the trial and there is no easy access to a legal representative. There is provision for obtaining informed consent after the trial starts: 83

Mary Anne Lauri, Attitudes towards organ donation in Malta in the last decade (2006) Malta Medical Journal 18 84 Advance Directives and Organ Donation (2010) <https://ehealth.gov.mt/HealthPortal/others/regulatory_councils/bioethics_committee /opinions.aspx> accessed 17 February 2015 464

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informed consent to participate in a clinical trial may be obtained, and information on the clinical trial may be given, after the decision to include the subject in the clinical trial,85 provided that: the investigator certifies that he or she is not aware of any objections to participate in the clinical trial previously expressed by the subject.86 The establishment of a legal representative remains the remit of each member state. It is interesting that the Regulation has removed a mention of the parents giving informed consent, and has just included the legal representative. Also it is now specifically stated that: The minor shall take part in the consent procedure in a manner adapted to his or her age and maturity. 87 In the Mental Health Act, Article 35 covers the participation of persons with a mental disorder in a clinical trial or any research.

This is allowed only if there is approval by an ethics committee and the subject gives free and informed consent with the safeguard of assessment by an independent specialist to determine if: the person is capable to give free and informed consent and that the expected benefits of the trials or research are likely to outweigh any potential harm to that person.88 For patients who lack mental capacity, the responsible carer will provide consent while two experts, one being a specialist in mental health, must confirm that benefits outweigh risks. The participant or the responsible carer can withdraw at any time.

In the case of a minor with a mental disorder, besides ethical approval, two specialists must ascertain that benefits are likely and moreover the ‘Commissioner shall appoint an appropriate 85

Regulation 536/2014 of the European Parliament and of the Council of 16 April 2014 on clinical trials on medicinal products for human use, article 35(1) 86 ibid, article 35(1)(d) 87 ibid, article 32(2) 88 Mental Health Act, article 35(1)(b) 465

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independent specialist to monitor the minor during such trials or research’.89 What needs to be added is that there must also be rigorous data protection. Health information is sensitive personal data, which can only be processed if the data subject ‘has given his explicit consent to processing’.90 The Data Protection Act states that sensitive personal data may be processed for research and statistics purposes, provided that this has been approved ‘by the Commissioner on the advice of a research ethics committee of an institution recognised by the Commissioner’,91 currently the Health Ethics Committee.

9.3 Personalised medicine Informed consent has also become crucial in the development of new medication for the practice of personalised medicine, which is the provision of the right drug to the right person at the right time, thus ensuring minimal adverse reactions. There are three pathways that involve informed consent: pharmacogenetic tests of affected individual patients; consent to provide human tissues to drug companies engaged in research to identify molecular targets for new drug development; and the study of such new drugs through clinical trials.

Pharmacogenetic tests are offered as a routine diagnostic service subject to usual consent to treatment and diagnostic investigations but requires provision of adequate information as to the value of the test, emphasising the predictive estimate of identifying a real response to a particular medication or the likelihood of adverse reactions. The greatest drawback to test uptake is the fear of discrimination from test results being used by an employer or an insurer. Some patients want to protect their privacy regarding health issues and may decide not to be tested if the test is likely to identify genetic characteristics which may also be relevant to other family members.

89

ibid, article 31(3) Data Protection Act, article 12(2)(a) 91 ibid, article 16(2)(b) 90

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Collection of biological material by pharmaceutical companies is essential to the development of new drugs. It is necessary to obtain human tissue from as many patients as possible to build up a large database, crucial for significant data analysis.

Research is now global, with large pharmaceutical companies collaborating in international networks. Obtaining such biological material has proved difficult and the industry has been searching for ways of obtaining human tissue, some methods involving new forms of informed consent.

Most clinical trials now include a separate genetic arm to the protocol, to identify molecular biomarkers related to the use of the drug in the specific disease being tested. Informed consent for such tests is obtained separately. This however soon led to the realisation that specific consent limited to specific tests would not allow researchers to return to the specimens and look for any newly discovered markers not listed in the protocol after the main study is over.

Initially participants were being asked to indicate if they consent to be recalled to provide further tissue. Now the trend is for obtaining broad or open consent, that is asking the potential trial subject to agree to future research related to the index disease, or even to new markers that may be used in other diseases, without the need for recalling them back for new specific consent. There has been criticism that this cannot be real informed consent, but as it still allows the participant to exercise autonomy in deciding whether to participate or not and also because of the possibility of withdrawing consent, then it is in line with the concept of informed consent. One safeguard is that any amendments to a clinical trial still require approval by an ethics committee. However, this may change in some EU states when the new Regulation comes into force as it now leaves each individual member state free to decide as to which body, whether primarily a scientific one or an ethical one, assesses clinical trials. One trusts that informed consent assessment will remain the remit of an Ethics Committee in Malta.

There are also now schemes to use already archived biological material, obtained as part of diagnostic pathology services, to provide for repositories or biobanks of biological material and of relevant clinical and demographic data for future

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research. The Convention on Bioethics allows additional use of biological materials: When in the course of an intervention any part of a human body is removed, it may be stored and used for a purpose other than that for which it was removed, only if this is done in conformity with appropriate information and consent procedures. 92 To fulfil such ethical considerations, this material is being made retrospectively available by contacting the persons whose samples are in the repositories. On the other hand there are projects, to collect new material through nationwide campaigns encouraging participation. However consent at the time of donation must necessarily be broad consent as not even the research may have been formulated at the time of specimen collection. So the consent should include information as to how data is handled and who has access to it, so that confidentiality is maintained. Naturally anonymisation is not possible because there is need for cross linking data and also for making possible the withdrawal of samples or data on request by the donor. There are now international consortia managing such biobanks, pooling data from international research groups to reach useful bioinformatics interpretation.

There has been discussion as to why material that is going to be discarded, example after surgical intervention should not be kept without attempting to obtain consent but many feel that there should be broad consent at the time of providing the original sample, usually prior to undergoing medical or surgical intervention. Some countries provide for use of archived biological material without consent provided there is ethical approval for any project using such material and there has been no specific objection to use of such samples by the donor.

Recommendation Rec (2006) 4 of the Committee of Ministers to member states on research on biological materials of human origin does provide for use without consent if there is reasonable effort to contact the owner, research is of important scientific interest and could not be carried out by using other biological material obtained with consent.

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Oviedo Convention, Article 5 468

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Legislation for biobanks should also address what to do with samples ater the death of the donor, whether to remove the sample and data from the bank or whether to ask the relatives what they wnt to be done.

10. Conclusion

The author has outlined the local medical law that provides for informed consent in routine medical practice and in research, and in particular developments that are expected in the near future, such as the Charter of Patient Rights and Responsibilities, the new legislation to cover Organ and Tissue Transplantation and amendments to the Clinical Trials Regulations. The rapid advances in scientific development and in particular in molecular medicine are posing new challenges for legislation regarding informed consent but these can be successfully addressed if the law is focussed on providing optimum healthcare to individual patients and to society.

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NOTARIAL LEGISLATION

Notaries – Too Many Hats?

Roland Wadge

Roland Wadge

NOTARIES – TOO MANY HATS? ROLAND WADGE

_______________________________________________________ Dr Roland Wadge is a Notary Public graduated with a Notarial Diploma in 1995 and as Doctor of Laws in 1997 and obtained his warrant to practise as a Notary also in 1997. He has been an active member of the Notarial Council for the last 15 years (currently holding the post of Treasurer of same) and was also President of the said Council for 4 years starting on 2007, as well as a lecturer in Fiscal Law at the University of Malta. He has been involved in the drafting of various pieces of legislation notably the law relating to the reform of Notariat, during his tenure as President of the Council, as well in various other pieces of legislation amongst which the Central Registry act, (which has not as yet found its way into our law), Duty on Documents and Transfers Act and Notaries (Compulsory Insurance) Regulations.

_____________________________________________________________

1.

Introduction

For those who are in some way interested in and sporadically connected with Notarial legislative development, both on a Maltese and on a European scale, lacunae in the law, the exploration and development of legal issues, and the opportunity to contribute to the legal world are sought after much like a duck seeks water. This is also true when it comes to legislation pertaining to this profession.

The recent Professional Qualifications Directive, 1 recent judgments of the Court of Justice of the European Union (herein referred as ‘CJEU’) and the obvious need to regulate advocacy in Malta through the proposed Lawyers Act have brought into further definition the role of Maltese notaries in the legislative framework of their community and the larger society in general.

1

Directive 2005/36/EC of the European Parliament and of the Council on the recognition of professional qualifications [2005] OJ L 255/22 473

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2.

Origins of the Notarial Profession

The origin of the Notarial role is largely attributed to a new form of shorthand, which originated in the last century of the Roman Law Republic during the rule of Cicero’s adoptive son Marcus Tullius Tiro. This shorthand was called Notae Tironianae or simply notae, which were signs and words which substituted other words in common usage.2 The transcriber of this short hand was originally called a notarius which name was eventually assigned to high ranking government officials and secretaries to the Emperor. The role of a tabellio under Roman law arose from a different need of persons to draw up a document in a manner which was intelligible to them and to any other person who was to use these documents thereafter. However, documents so produced did not have the attribute of public faith therein but needed confirmation from the persons who had requested the creation of the document itself and more often than not through the use of the Courts which sought to establish the nature of the transaction between the parties. Such documentation merely had probative force. There was some lack of clarity as to the extent and probative force of documents drawn up

by Notaries at this time, but eventually the two roles of Notaries and tabelliones fused together.

Between the 5th century and the 12th century notaries were probably sought out to satisfy the need for persons to have a trusted third party through which a legal transaction could be concluded due to the fact that State control was somewhat non-existent or distant.

In this sense, the notary was very much a libero professionista.

However, this characteristic was reined in after the 12th century, when state control started being exercised further and a notary came also to have this hybrid characteristic of being a libero professionista and a state official at the same time. Another important development was that documents drawn up by a Notary

2

It is interesting to note that this practice has now been abolished legislatively in the Notarial Professions and Notarial Archives Act, Chapter 55 of the Laws of Malta in Article 29 which states that Notaries may not make use of abbreviated clauses commonly called et caetera clauses, in any notarial act.

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were also eventually attributed with public faith, 3 instead of having to be confirmed by a higher authority.

Public faith in documentation is an attribution which necessarily lies within a State’s authority to give, and is a necessary tool to avoid litigation on issues relating to whether or not a legal transaction would have taken place and the terms and conditions established within its context. Today, these are well established notions but they took centuries to develop. Nevertheless, it is not uncommon that in events where notaries are sometimes asked by unenlightened lawyers to confirm a public deed in the courts of law, instead of accepting that the public deed is prima facie valid unless proved otherwise, they treat it the other way round. It is of course an unequivocal fact that public deeds should be considered to have the probative force because of the faith attributed to them by the state.

Public faith in documents produced by notaries derives from the power of the state as the ultimate repository of power. If the state recognises a document as having probative force, then it is also the State which has the power to appoint its agents, that is, notaries, to produce such documents. Having examined this background one would get the impression that notaries are mere producers of public documents.

Most lawyers will argue that a notary cannot wear any hat other than his public officer chapeau, and in this sense a notary should then be a bulwark of independence, an all-guaranteeing recorder of facts and agreements, an embodiment of the state, and an engagee of somewhat promiscuous discourse with the gentiles who must not be called clients, authorised by the State to act in front of the (civil servant) glass as opposed to being behind it, but in any case a benevolent, albeit unnecessarily expensive transcriber, a necessary evil, a Sherlock and a reporter of problems in property titles, a curator of deeds, but ultimately a protector of interests including those of the state itself. Any lawyer will tell you that a notary is a public officer, and as a notary he cannot or should not act This is largely attributed to a Bolognese Jurist Rolandino de’ Passèggieri who lived during the second half of the 13th century and died in the year 1300, through the creation of his celebrated Summa Artis Notariae which largely identified in a scientific matter notarial functions and concerning contracts, wills, judicial acts, copies and the renovation of notarial deeds, and was the essential textbook in Italy and beyond for notaries right up to the XVII century.

3

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as anything else, as he would thus undermine his independence and possibly demean himself.

3.

Is this a reflection of the modern day Notary?

As a starting point if one had to look at the law itself, the law states that: Notaries are public officers. They are charged to receive acts inter vivos and wills, and to attribute public faith thereto; they shall be responsible for their custody and shall give out copies and extracts of or from such acts or wills.4 A quick search on a legal dictionary defines a public officer as an individual who has been elected or appointed to exercise the functions of an office for the benefit of a public. 5 The essential element of this definition is that the public officer is primarily an individual and hence a physical person, and thus, this would indicate that there is an element of human interaction as opposed to a legal person. This individual is either elected or appointed and hence, this would mean that a public officer is a posting for the fulfilment a role, or as the law puts it ‘the functions of an office’, and it would seem that all this is done for the benefit of the public. Having said this, the State is also benefitting from the notary’s work who translates for the said public their obligations vis-à-vis the state in their transactions. To sum up it would seem that to address a public need, the State creates a ‘post’ or an ‘office’ to perform certain functions to address that need, and then subsequently appoints or elects through various mechanisms an individual to fulfil that role. So the identifiable key element here is ‘the public need’, and it is in this light that we have to examine the

4

Notarial Professions and Notarial Archives Act, Chapter 55 of the Laws of Malta, article 2(1) 5 --, The Free Dictionary <http://legal-dictionary.thefreedictionary.com/> accessed 17 February 2015 476

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role of the notary public. Once the public’s needs are being met without prejudice, then the notary is fulfilling his role.

Within this context the law lists various Notarial powers: Notaries shall also have power:to sign applications; to receive on oath; to administer oaths; to authenticate signatures; to give out proof of life certificates; to draw up protests of bills of exchange; to give out copies; to give out certificates attesting faithful translation; to act as mediators; to act as Commissioners for Oaths; to exercise such other powers as are assigned to them by law; to draft private writings; to examine title (and controversially so).6 One can note that the first article of the law speaks of what Notaries are whilst the second article lists what Notaries can do.

The list of powers is an arbitrary one, and powers can be added or subtracted so long as not so many toes are stepped upon depending on the public’s needs. When the law states that Notaries are public officers, is this an inescapable attribution or is it a descriptive function which the notary needs to fulfil? What is also of relevance is that the Notarial function is (as is also mentioned in the law) an ‘office’ which is a position of authority or service, typically one of a public nature.

It is of course obvious that, other than the fees due for the service. The office holder must disqualify himself in any matter in which his official position may benefit him personally, since as the holder of that position he would be exercising a power granted to him by the State and as the holder of that office he must avoid any situation where he has actual or even an apparent conflict of interest.

However, if the needs of the general public are being fulfilled, and no conflict of interest can arise, the author submits that notaries need 6

Notarial Profession and Notarial Archives Act, article 2(2) 477

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not solely be defined by their public office and can wear a different hat from time to time.

In fact the law itself actually contemplates scenarios where notaries can act outside their notarial functions. Chapter 55 of the Laws of Malta has established that the only professions incompatible with those of a notary are advocates, legal procurators, bank managers, estate agent or similar broker, a partner in a commercial partnership and a director or shareholder in a limited liability company whose principle service is estate agency. 7 So once the law has listed professions or jobs which the notary cannot perform, it is also a natural conclusion that notaries can do anything else which the law has not prohibited. There is no blanket provision to the effect that notaries cannot have any other job, posting or other professional interest.

This would seem to imply that notaries could variously be directors in limited liability companies, architects, stockbrokers, politicians, doctors of medicine and so on whilst still holding their warrant as notary. It seems that the law, while protecting the general public’s need to be served by the notary, is also allowing for a degree of flexibility towards the notary. The incompatibility of certain defined professions with the office of notary does not mean that there are no other incompatible functions or acts. Some are also contemplated directly in the law. Some common examples include where a notary cannot do contracts where he has a direct interest such as for companies in which he is a shareholder, or where family members are involved, or where the party involved is a trustee where the notary is a beneficiary of the trust. These are all specified in the law.8 The law however is even more generic when it states that a Notary shall cease exercising his functions where he, for

7

This list was actually shortened by Act XXIV of 2011 where amongst other definitions the word ‘trader’ was excluded due to the increasing number of notaries engaging in activities which had they been carried out more frequently would have been testing the limitations set down by the law. It was also felt that due to other related professions such as architects having a free hand to engage in commercial activities whilst notaries were feeling unnecessarily restricted when these were ‘trading’ in activities not related to their profession, such as collecting antiques or buying one or two properties every couple of years.

8 Notarial Profession and Notarial Archives Act, article 12 478

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example, ‘assumes an office incompatible with the office of notary’..9 The criterion to determine whether any other office is incompatible with the office of notary is where one ‘office’ could have a financial benefit when one inhabits another ‘office’ or in other words where the needs of the public might not be adequately met due to a potential conflict of interest. So for example a notary employed with a bank to review documentation presented by other notaries for the purposes of a banking facility has an obvious conflict of interest in that he could not divest himself of protecting the bank’s interests and also protect the client’s interests since these might be diametrically opposed. In such cases one would expect notaries employed in such a manner to have a clause in their employment contracts with the Bank to be prohibited from publishing such contracts or in any case to desist from publishing any contracts where the bank itself is involved, but does not per se prohibit the notary from publishing other deeds not related to the Bank with whom he/she is employed.10 Another example of an incompatible office would be for example a director of a public corporation since one cannot represent the direct interests of the state and also be independent.

4.

Notaries: The Lunga Manus of the State?

Notaries had until recent times advocated the position that they are an extension or lunga manus of the State, and actually administer the delegated powers of the State. The European Commission disagreed and recent CJEU judgments have dashed any expectations of Notaries in regard to this effect.

9

ibid, article 14 There is some doubt as to whether a legal officer vetting deeds employed by the Bank can be considered to be a Bank manager, prohibited by Chapter 55 of the laws of Malta seeing as the grade of a vetting officer is a grade equivalent to that of a manager, although it is thought that the intention of the legislator was otherwise.

10

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The CJEU11 cases were instituted on the basis of the imposition by a number of member states of a nationality requirement when appointing notaries of that state and to quote from the Press release of the CJEU.12 The principal issue in these cases is whether the activities of the profession of notary are connected with the exercise of official authority within the meaning of the EC Treaty. The Treaty provides that activities which are connected, even occasionally, with the exercise of official authority are excepted from the rules on freedom of establishment. The Member States concerned in these cases, while acknowledging that notaries generally provide their services in those States as members of a liberal profession, argue that a notary is a public office-holder connected with the exercise of official authority whose activities are excluded from the rules on freedom of establishment.

The Court then proceeds to rebut this argument by underlining that notaries only act according to terms as established by the parties and not according to terms which they may impose, that authentication per se is not an exercise of official authority, that pursuit of legal formality of documentation is frequently also sought by other professions, which does not make it an exercise of official authority, that (echoing the principles of Roman Law) the enforceability of notarial deeds stems from the parties’ intent to give them probative force between them and the notary merely checks the document’s conformity with the law, that the fact that notaries exercise their profession within defined limits in conditions of competition is not characteristic of the exercise of official authority.

Notaries are also civilly responsible to their clients in the exercise of their profession, and this unlike public authorities whose liability is assumed by the State.

In this same judgment the Court however stated that notarial functions pursue objectives in the ‘public interest’, and thus national protectionist laws regulating access and numerus clausus seek to justify the exclusion of the Notariat from the applicability of the 11

Case C-47/08 Commission v Belgium [2011] I-04105, Case 50/08 Commission v France [2011] I-04195, Case C-51/08 Commission v Luxembourg [2011] I-04231, Case C-52/08 Commission v Portugal [2011] I-04275, Case C-53/08 Commission v Austria [2011] I-04309, Case C-54/08 Commission v Germany [2011] I-04355, Case C-61/08 Commission v Greece [2011] I-04399 12 Press Release Number 50/11 of the 24 May 2011 480

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Treaty on Free Movement of Persons in the national interest. This means that notaries, for the moment, still continue to exercise their profession in a manner which is protectionist but also in respect of the EU Treaties. Saving the fact that any national of any member state may become a notary in any EU state, the role of notaries thus continues to remain the same, that is, that of an independent and impartial legal professional whose job is to prepare for any persons who seek his services the legal texts they require in a manner which would be required by law for its recognition, and which, once signed, are imbued with public faith.

The issue of being warranted by the State to exercise a profession is of course diffused in all of the European Union. Some States regulate a large number of professions, such as Germany which regulates professions such as water well driller and rope-net maker.13 In respect of the treaty there is nothing to prevent a person from having diverse professional qualifications which are regulated by the State, and of course a person could for example be a warranted teacher and a warranted architect if these professions are not incompatible.

The point about incompatibility, however, is a delicate one since any person according to EU treaties has the right to exercise his profession, or any legal activity, in the pursuit of his personal satisfactions and, as identified by the judgments abovementioned, it is only where public interest prevails, as safeguarded by the Treaties, that incompatibilities between professions may thus lead to their regulation and restriction. It is only in the light of this that judges, for example, cannot also be warranted to act as lawyers. But it would be possible for a lawyer to also act as a stock broker, after being duly qualified to act as such, saving any conflicts of interest according to the ethical consideration of any profession.

The reaction to the above-quoted CJEU judgment was received with glee by certain sectors in Common Law countries since in these countries, 14 often being the base of some of the larger --, ‘Regulated Profession - Seiler und Netzmacher (Germany)’ (The EU Single Market, Regulated Professions Databases) <http://ec.europa.eu/internal_market/qualifications/regprof/index.cfm?action=regprof &id_regprof=7826> accessed 17 February 2015 14 Jonathan Goldsmith, ‘The revolution behind the recent ECJ decision on notaries’ The Law Society Gazette (27 May 2011) <http://www.lawgazette.co.uk/analysis/the13

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International law firms. Such firms are always seeking to expand their professional fields of operation and the ‘protectionism’ afforded to notarial functions is a hindrance to their interests that they have long tried to overcome. The incompatibility of the Common Law mentality and that of Civil Law jurisdictions lies in the fact that in Common Law the idea that it would not be ethically correct to act on behalf of two clients having opposing interests since one must always act in the best interests of one’s client,15 while Civil Law practice has actually shown that it works quite well.

To any Common Law legal professional, the notarial profession could be deemed of course to fall foul of this Common Law dogma since it is very difficult for anyone coming from a Common Law jurisdiction to understand that it is possible for the notary to acting impartially and in the best interests of both parties although the impartiality so integrated within the wording of the law is not in fact ever mentioned within the law itself.

This judgment clearly shifts the perceived status of notaries more towards the liberal professional as opposed to being a state public official (or as a delegate of the state with delegated power).

Even prior to the mentioned judgment, the vision of every Maltese notary reflected in the larger part of their European counterparts is that of a free and liberal professional, who seeks out ‘clients’ to whom he can propose his services, and while wary of the boundaries of his role, may seek to expand his fields of interest in which he feels capable to act. As a result notaries have, over and above their notarial role, variously been employed for example as legal directors in private16 and public companies17 and of course Members of Parliament. It is clear that these roles have not brought them into conflict with their warranted role, so long as, of course. a particular notary’s work does not bring him in a situation of conflict of interest. In this respect Notaries can therefore step outside their revolution-behind-the-recent-ecj-decision-on-notaries/60708.fullarticle> accessed 17 February 2015 15 Solicitors Regulation Authority, Solicitors’Code of Conduct 2007 <http://www.sra.org.uk/documents/code/rule-3-conflict-of-interests.pdf> accessed 17 February 2015 16 The undersigned was a director of AquaBiotech Limited for a number of years 17 Notary Alicia Agius Gatt was appointed a board member of Bank of Valletta p.l.c. at its meeting of the 17 December 2014 482

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function as public officers and act in a private capacity or in other words wear a different hat.

5.

Notaries and Legal Advice

Closer to home, notaries have been variously engaged to give legal advice in the context of a particular legal transaction usually related to property. Notaries have at times assisted ‘clients’ of theirs in this context. The Courts have even endorsed such a practice.18 This practice has brought notaries in conflict with lawyers who protest that such areas of work are best left to them. They are, of course, right for one reason and this is that, while a lawyer’s advice is legally privileged, a notary’s advice is not. There are of course other subtle differences. A lawyer’s advice can find its way into court where the lawyer would need to argue the point in front of a judge while any advice given by a notary has got to stop at the court threshold since, unlike lawyers, he is not warranted to defend clients in court.

Other subtle differences may result from the type of legal advice. It is one thing where a notary is called upon to assist in an amicable situation such as a promise of sale agreement where a party merely seeks comfort in that all possible scenarios would have been catered for. In a contentious situation, on the other hand, where relations are already strained, with a good possibility that the situation may end up in court, any client would be better advised to engage a lawyer. The author is of the opinion that most notarial advice in this field generally attempts to tackle the different opinions and possibilities that may occur in a particular legal scenario, whilst a lawyer’s advice would tend to mitigate scenarios which would have been the subject of particular law suits. In this sense, the author while perhaps generalizing, contends that a lawyer’s advice would tend to be deeper in mitigating any ill effects of a transaction, the notary experience would tend to cater for a broader range of potential issues.

18

Nutar Dr Remigio Zammit Pace vs Sunrise Park Hotels Ltd (C 2587) u Paul Debono għal kull interess li jista’ jkollu, decreed 20 November 2009 483

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Recent legal developments19 have brought the issue of notarial legal advice into the limelight. In reality, the amendments have merely consolidated the existing practice of notaries collating researches on title. Behind the scenes, the issue was hotly debated between the notaries themselves, as to whether notaries wanted to take on the responsibility of giving legal advice on title which was being imparted by them to clients or whether to fall back on to the traditional role of simply publishing contracts. In reality, the decision was one which had already been taken through the now oft quoted case Galea Carmel et vs Falzon Nutar Dr Pierre decided by the First Hall of the Civil Court on the 12 October 2006, where the court had stated:Din il-Qorti qed tagħmel riferenza għal din ix-xejra ġurisprudenzjali fl-Italja, għax tħoss li wasal iż-żmien li anke hawn Malta, in-nutara jibdew jassumu tali responsabilitajiet. Huma ħafna l-każijiet fejn nutara jieħdu linja li ‘jiggwidaw’ lill-’klijenti’ tagħhom, u jagħtu pariri fuq aspetti legali tal-att; jekk, però, tinqala xi problema u l-każ jispiċċa l-Qorti, ilposizzjoni tan-nutara invariabilment tkun li rresponsabilità tagħhom tibda u tispicca mal-kitba formali tal-att. Hemm bżonn li għall-pariri li jagħtu de facto jibdew jassumu responsabilità da diritto, u meta jiġi avviċinat minn partijiet biex jippubblika att, hu għandu jkollu obbligu mhux biss li jħejji l-att li jridu l-partijiet, iżda li jimpenja ruħu f’attività preparatoria adeguatà, biex jara li dak l-att jilħaq ilmira taż-żewġ partijiet involuti u b’hekk jasal li jagħti assikurazzjoni għaċ-ċertezza tad-dritt meritu tal-att.

The Court actually found the notary responsible for damages since he had told the parties that the title was in order when the vendor on the promise of sale agreement manifestly held only a possessory title over the property. Any decision by government to assign all such responsibilities to lawyers would also have created havoc in the existing practice.

19

Act XXIV of 2011 484

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It has since been argued that a possible compromise could have been that notaries should merely be instruments to ‘compile and report’ their findings on title whilst the person so acquiring would not be able to rely on any ‘advice’ given to him by the notary on his findings but would in unclear situations be advised to seek advice granted by a lawyer. The issue is mired in what actually constitutes ‘legal advice’. Legal advice can be defined as the identification of a course of action which a client is advised to take by a legal expert as opposed to a mere exposition of the law or of a legal scenario explained by other professionals. The difference is clear in the sense that in the latter scenario a notary would tell the contracting parties that, for example, the law states that a payment made on account of a price on a promise of sale agreement could be either a deposit on account or earnest, and also explain the legal differences of same, but would then leave it up to the parties to decide which of the two courses of action would be preferable without indicating which course of action any particular party would be better advised to contract. It would be then that such party could either decide of his own accord or engage a lawyer for ‘advice’ on the course of action.

Although this proposed course of action could be seemingly preferable, it would to my mind be somewhat naïve to imagine that an experienced notary’s ‘advice’ would somehow fail to transpire through a report on the compilation of the said researches. Notaries would also be treading on dangerous ground if they had to pussyfoot around the issues, if they could be found to be criminally responsible for the giving of legal advice when they would at law not be authorised to do so.20 On the other hand, clients would also be ill served if upon acting on ‘hints’ by the Notary, find themselves not being able to sue the notary for acting on the said hints. In any case the decision has been taken by our Parliament.

The issues which has now resulted as a result of this position taken by the Legislator, are that it can be argued that notaries may be wearing too many hats, in that a notary will wear his public 20

Article 42 of the Code of Police Laws, Chapter 10 of the Laws of Malta, establishes that no one other than a duly qualified advocate or legal procurator or notary public can give legal advice whether oral or in writing to any person. This state of fact could change with the promulgation of the Lawyers Act. 485

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official hat whilst publishing the deed while he will be wearing his ex parte hat immediately preceding the deed when advising an acquirer whether or not to acquire property. It is however submitted by this writer that this apparent contradiction is not as contradictory as may initially appear.

On the one hand, it must be said that ‘clients’ (if we can now call them so) are better served since they are now being advised on particular courses of action, especially in the field of whether or not to buy property by insured 21 Notaries are clearly responsible for the advice they impart. It must be said in this regard that such advice when accompanied by a property title report22 is usually coupled with a number of disclaimers which mostly reflect the limitations of what is ascertainable through researches in the public registry and from other resources, or where what is ascertainable is better served through the advice of other professionals such as an architect. Such clients have the option in all cases to also seek the advice of a lawyer in contentious scenarios, and the reason is that a notary’s advice should always stop at the threshold of where a situation becomes contentious between the parties to the transaction.

One must in this context also appreciate that where a notary advises a prospective buyer not to acquire a property because there is a defect in title he is actually protecting the buyer from a detrimental situation but he would also be saving the vendors from possible future liability should the defect in title result in the exercise by the acquirer of property of the warranty for peaceful possession which is traditionally granted by vendors on public deeds of sale. In this sense the notary is acting in the spirit of the ‘tanto piu notaio, tanto meno giudice’ uttered by Carnelutti – a famous Italian Jurist who defined one of the best functions of notaries.

On the other hand, it is manifest that where a notary is being engaged by a party to examine title, he is doing so on behalf of the future acquirer of such property, and the inescapable fact is that his advice is being given particularly for the benefit of the acquirer.

However, as outlined above, any person holding the office of notary 21

As from 1 January 2013, all Maltese notaries shall at all times by covered by a professional indemnity insurance policy in terms of Legal Notice 446/2012.

22 This report is a report on the title of property, which is the culmination of the researches on the examination of title as established through Article 84C of Chapter 55 of the Laws of Malta.

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would be betraying the office, if the needs of both parties to the transaction are not met. The raison d’être of a notary is that he leads the parties satisfactorily to the result which they both need. 23 In this regard the examination of title is a step in the right direction, since once title is established, the deed can be concluded. It is also clear that without an examination of title, parties would not usually conclude a transaction. In this sense, the notary examining a title is fulfilling the functions of his office in that he is leading the parties to the desired result.

It is common practice even among lawyers that where a client could be better served in a particular field of law by any other lawyer who has better experience in the matter, such lawyers usually refer such clients to other lawyers, not necessarily in the same firm, for the better attainment of such advice. There is nothing wrong in such practice and in fact, this would be the responsible course of action for any legal professional whether he is a lawyer or notary.

This is the position which the author would ‘advocate’ Where a legal situation as resulting from a research on title is relatively clear, a notary could well give his legal advice on the matter by disclosing the facts to both parties and advising on the course of action to be taken. On the other hand where the course of action being proposed by the notary is possibly detrimental to one of the parties and where the parties are not in agreement on the way forward on presentation of the facts, then the notary should stop advising the parties and refer them to separate legal advice. In this sense the notary, strange though it may sound, is still acting impartially. Hence there is actually nothing wrong where the advice imparted by a notary is not as extensive as possibly one could expect where this could be given by a lawyer in a contentious scenario, because the notary should not overstep his expertise, but this is merely a question of the notary acting responsibly and asking the parties to seek further legal advice where it would be clear that the matter is a contentious one and could end up in a judge’s lap. At such a point seeing as the parties could have opposing interests, it would of course be prudent and ideal for each party to have its own legal counsel.

23

Also supported by the Court Judgement Galea Carmel et vs Falzon Nutar Dr Pierre, Civil Court First Hall, 12 October 2006 487

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It is understandable that it is difficult for a lawyer, who throughout his profession acts partially on behalf of his clients, to understand that it is a notary’s experience to always act in the best interests of both clients and that indeed a notary will always endeavour to explain the legal implications of a contract being signed to both parties, since he may otherwise be held to be in breach of his obligations. It is also of relevance that the notary has a legal interest to see that a deed he publishes is not nullified, which could happen if one of the parties proves that the notary did not explain the deed to him, and this can only happen if a notary acts impartially notwithstanding that the examination of title is primarily for the benefit of an acquirer of property.

It must also be appreciated that the type of legal advice prior to a deed and on the deed are not the same. The legal advice represented by an opinion on the title to property is very different to the explanation of the legal implications of the clauses which find themselves on a deed of transfer. It is indeed the experience of most Notaries to not find it difficult to advise the buyer on the property he would be acquiring and to advise both parties on the legal implications of what they would be signing since in both cases the ultimate result is that which both parties want, namely the transfer of property in a manner where all the parties to the transaction know and are conscious of implications of what they would be signing. It just so happens that the acquirer is the party who needs to understand the most about what he is be signing, since it is he who would usually be parting with his money, and thus he needs to understand the extent of the property he would be acquiring, (an exercise which results from the examination of title) and also the conditions which may be imposed by the transferor of such property on the deed of transfer itself. On the other hand, the transferor of the property needs to understand the conditions related to his releasing the property to the acquirer. Both can be done through notarial intervention without the notary losing his impartiality in the process.

It is also a fact that most parties to a public deed understand the implications of what they would be signing, and it is actually this fact that leads to disagreements, since it is only when the legal implications are clear (possibly through a thorough explanation by the notary) that most parties take a stand (which is sometimes diametrically opposed to the other). It is usually also at this point 488

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that most people engage lawyers to represent their opposing interests in the best way possible such that the matter does not end up in Court.

The recent CJEU judgments abovementioned, which largely abolished the nationality requirement for any person to become a notary in any Member State, stopped short of stating that notaries are caught up under the Freedom of Establishment Provisions as established by Article 49 TFEU.24 This has meant that the activities of notaries are reserved solely to notaries owing to the fact that they are excluded from the Treaties since it is up to each and every State of the EU to legislate to govern the activities of notaries and these may do so by the setting up of a public office with public responsibility.

There is, however, some movement within EU circles to define further those activities which fall within a public function of notaries and those activities which may be exercised by other professionals. In such cases the EU may decide that, for example, the examination of title, albeit today a notarial function would not be considered as a service reserved solely to notaries but may be exercised by analogous professions, and therefore as such could lead to increased competition in this and other areas of law.

This shall mean that where an activity does not conflict with the office of notary, and where the activity is not identified as being an activity exercisable through a public office, this may be carried out by notaries in direct competition between themselves, and members of other professions, without any limitation of nationality, territory, number of practitioners, scope and extent. This will also mean, however, that once an activity is not restricted to any particular profession, and always keeping the public interest in mind, the directives on freedom of establishment and freedom to provide services across intra-Union territories, this may be carried out by any competent person able to give the service and may not be reserved.

24

Treaty on the Functioning of the European Union (2012) OJ C326/47 489

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6.

Conclusion

The cornerstone of the profession is the notary’s independence, and it must be stated that once a notary has too many interests outside of his profession he is also bound to have some conflicts of interest. The notary has to renounce to publishing a contract where such conflicts of interest arise to thus retain his integrity, since any notarial deed must never be tinged with hints of lack of impartiality. It must however be stated further that once a public deed is published and signed by all parties, it acquires independence from all concerned, including the notary himself, and that document, shall appertain to the State, and the notary is the mere custodian of it. It is also true that the notary is a recorder of facts, but he is a recorder of facts as stated to him and the notary is by no means wearing the hat of a public ascertainer of those facts. If Party A wants to sell a prominent hotel to Party B, even where it is manifest that the property does not belong to Party A, the notary cannot stop the parties from doing so. He is of course obliged to explain to the parties the futility of this public deed, but if the parties want to sign he cannot stop them, and indeed he is obliged by law to publish the deed.

Another hat which the notary does not wear is that of a guarantor for the State. The notary collects taxes for the state. The notary ensures that public deeds are drawn up according to law of the State, but he does not as such represent the interests in general of the State, unlike public officers in direct Government employment, but he may be considered to be a mandatary of the State, where the State by law obliges the notary to collect taxes and transmit same to it.

The notary is not a guarantor of title for all and sundry, or a guarantor of title, even where he has been engaged to do so by the acquirer of a property, except where such person specifically engages him to vet title. His responsibility here stops at what the law dictates should be checked and not beyond. So the notary does not guarantee title, but he may guarantee certain aspects which may be checked (and not all aspects which may be checked) relating to title.

Any third party who relies on a public deed cannot sue the notary if

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the facts are incorrect or the object of the deed in question did not belong to the parties transacting it.

Ultimately notaries acting as liberal professionals have ‘clients’ but these are both parties (as opposed to any one of the parties)to the particular transaction since a client is anyone who needs a service which is undoubtedly what the Notary is giving in furtherance of his clients’ needs.

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PRIVATE INTERNATIONAL LAW

The Six-Week Deadline under The Hague 1980 Convention Sandra Hili Vassallo

Sandra Hili Vassallo

THE SIX-WEEK CONVENTION

RULE

UNDER

THE

HAGUE

1980

SANDRA HILI VASSALLO

_______________________________________________________ Dr Sandra Hili Vassallo LL.D, Mag. Jur. (Europ. Law) served as legal officer and subsequently as Director within the Department for Social Welfare Standards for seven years and is currently legal officer at the EU Affairs Directorate within the Ministry for the Family and Social Solidarity. _____________________________________________________________

1.

Introduction

This paper shall attempt to explore whether the six-week deadline for Hague proceedings under the 1980 Hague Convention on the Civil Aspects of International Child Abduction (herein referred as ‘the Convention’) is in fact realistic and feasible, and whether there might possibly be alternative periods of time stipulated for the completion of such proceedings.

The six-week period may be deemed an arbitrary decision taken by the drafters of the Convention, as it states that proceedings should be completed within a stipulated period of time without that period of time having been tried and tested beforehand. The very notion of such a period of time may also be the subject of debate. Is it a realistic and feasible expectation within the scope of the Convention? What is the underlying reason for this requirement within the Hague proceedings?

The author shall be attempting to explore whether the six weeks can be extended without negatively affecting the situation of the child or of the parents and by what time period they could be extended, without impinging negatively on the effectiveness of such proceedings.

In order to give a clearer picture of the issue to be discussed, it may be highlighted at this point that abduction cases do not follow the same procedural path as other family law cases and differ on 495

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three main points: proceedings are initiated by an application (rikors) not by letter, compulsory mediation does not apply and finally, there is a shortened deadline for appeal from a decision in the local courts.

2.

The Relevant Provisions in the 1980 Hague Convention

The six-week requirement is specifically laid down in article 11 of the 1980 Hague Convention: The judicial or administrative authorities of Contracting States shall act expeditiously in proceedings for the return of children.

If the judicial or administrative authority concerned has not reached a decision within six weeks from the date of commencement of the proceedings, the applicant or the Central Authority of the requested State, on its own initiative or if asked by the Central Authority of the requesting State, shall have the right to request a statement of the reasons for the delay. If a reply is received by the Central Authority of the requested State, that Authority shall transmit the reply to the Central Authority of the requesting State, or to the applicant, as the case may be.1 2.1 Terms ‘administrative’ and ‘judicial’ authorities In the article quoted above, there is separate and distinct mention of administrative and judicial authorities. In most countries applying the rule of law, the judicial authorities would be the courts, in most cases the Family Courts or similar judicial entities, ‘the First Hall of the Civil Court or any other court which the Minister may by order designate shall have jurisdiction to entertain applications 1

Convention on the Civil Aspects of International Child Abduction (adopted 25 October 1980, entered into force 1 December 1983)1343 UNTS 22514 (Hague 1980 Convention) 496

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under the Convention’.2 However, there is no comprehensive precise definition of the term ‘administrative authorities’. By default, one can say that the administrative authorities are the Central Authorities appointed under the Hague Convention, as transposed into national law.

In Malta’s case, the Convention is transposed by means of article 5 the Child Custody and Abduction Act, which appoints the Department for Social Welfare Standards formerly known as Department for Family Welfare, as the Central Authority (herein referred as the ‘CA’): The functions under the Convention of a central authority shall be discharged by the Director responsible for welfare and any application made under the Convention by or on behalf of a person outside Malta may be addressed to the office of the Director responsible for welfare.

Article 6 also goes on to state that: (2) Whenever any person interested or the Director responsible for welfare alleges that a child has been wrongfully removed within the meaning of Article 3 of the Convention, he may, without prejudice to any other action with respect to the same matter that is lawfully available, make an application under sub article (1) for redress.

(3) Any party to the proceedings shall have a right of appeal to the Court of Appeal.

2.2 Two types of decision taken by the administrative or judicial authorities From these provisions, it transpires that there are two possible types of decisions that are taken in such cases:

2

Child Custody and Abduction Act, Chapter 410 of the Laws of Malta, article 6(1) 497

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-

-

The decision by the CA whether the case falls under the Convention. In this case there are specific criteria listed in articles 3 and 4;3 and The decision eventually taken by the courts should the case be thereto referred. Very often cases are referred to the courts since they do satisfy the criteria in articles 3 and 4.

2.3 Interpretation of the six weeks The time frame of six weeks may therefore be interpreted thus: - Either six weeks from the date of the original receipt of the incoming application by the CA until it is finally decided by the courts; or - Six weeks from the date of the original receipt by the CA of the incoming application until it decrees that it is not a Hague case.

The reasons for this are twofold: the application does not satisfy the criteria, or because a successful amicable solution through some form of mediation has been reached superseding the need for such contentious proceedings; or - Six weeks from the day when the CA files an application (rikors) in court until a final decision is taken by the courts, including any appeal procedures.

It is the case of these last six weeks and any related delays which this paper is exploring, namely that period of time from the filing of application (rikors) up to the final decision.

3

Convention on the Civil Aspects of International Child Abduction; The criteria in Articles 3 and 4 of the Convention lay down; Article 3: The removal or the retention of a child is to be considered wrongful where – (a)it is in breach of rights of custody attributed to a person, an institution or any other body, either jointly or alone, under the law of the State in which the child was habitually resident immediately before the removal or retention; and (b) at the time of removal or retention those rights were actually exercised, either jointly or alone, or would have been so exercised but for the removal or retention. The rights of custody mentioned in sub-paragraph a) above, may arise in particular by operation of law or by reason of a judicial or administrative decision, or by reason of an agreement having legal effect under the law of that State; and Article 4: The Convention shall apply to any child who was habitually resident in a Contracting State immediately before any breach of custody or access rights. The Convention shall cease to apply when the child attains the age of 16 years.

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The issue of the six week deadline is also dealt with in Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000 (herein referred as the ‘Brussels ii bis’).4 In actual fact the Brussels ii bis provisions are even stricter and do not grant the possibility of the applicant nor of the CA to request an explanation for the delay. It is only The Hague Convnetion which grants this possibility. Article 11 (3) Return of the child states: A court to which an application for return of a child is made as mentioned in paragraph 1 shall act expeditiously in proceedings on the application, using the most expeditious procedures available in national law.

Without prejudice to the first subparagraph, the court shall, except where exceptional circumstances make this impossible, issue its judgment no later than six weeks after the application is lodged.

3.

Role of the Central Authority in Hague Proceedings

The CA is bound to file the application in Court: After receiving notice of a wrongful removal or retention of a child in the sense of Article 3, the judicial or administrative authorities of the Contracting State to which the child has been removed or in which it has been retained shall not decide on the merits of rights of custody until it has been determined that the child is not to be returned under this Convention or unless an application under this

Official Journal L 338 (23December 2003) 1 – 29; Amendments were made to the Code of Organization and Civil Procedure by means of Legal Notice 279 of 2008 in order to transpose the Brussels ii bis into Maltese law and for the courts to take cognizance of provisions of such regulation together with Hague Convention provisions.

4

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Convention is not lodged within a reasonable time following receipt of the notice.5 This article therefore states that the case is referred to the courts by the CA when the application is received from its counterpart CA in the sending country. It also establishes that the issue of care and custody becomes a secondary issue to be decided after completion of the Hague proceedings, and thus the hands of the adjudicator would not be tied by the decision of return or otherwise taken in parallel but purely separate proceedings.

4.

Administrative Body taking Decision of Return or NonReturn

A scenario which merits note is the one wherein the CA does not in fact refer the case to the courts but takes the decision itself as an administrative body. The Maltese CA did encounter such a case a few years back.

In a 2008 case, a mother took her daughter to Moldova without the father’s consent. The latter filed an application for the daughter’s return with the Maltese CA. After some time, the Moldovan CA sent its decision (in Moldavian thus necessitating translation of document) quoting article 13(b).6 Thus, the Moldovan CA decided on the case itself without ever referring it to the courts.

The Moldovan CA in this case took two decisions: the initial eligibility decision that the case does fall under the Hague criteria, and the decision of the non-return. The issue was decided in an expeditious manner curtailing any appeal proceedings for the father who was left without his daughter in Malta. Furthermore, the Moldovan CA quoted article 13(b) without going into the merits of the case.

5

Convention on the Civil Aspects of International Child Abduction, Article 16 ibid, Article 13 states that notwithstanding the provisions of the preceding Article, the judicial or administrative authority of the requested State is not bound to order the return of the child if the person, institution or other body which opposes its return establishes that - b) there is a grave risk that his or her return would expose the child to physical or psychological harm or otherwise place the child in an intolerable situation.

6

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In the author’s opinion, the Moldovan CA had gone over and above its right to decide on the eligibility of the application. The minor was indeed under sixteen years of age and Moldova was a Hague Signatory State and that was the basis for the first decision to take cognisance of the case on this premise. The second decision, namely to decide on the substance of the case and even invoke article 13(b) might be deemed ultra vires, because it did not give the father further access to legal remedies to appeal or to oppose such decision. Furthermore, case law has shown that article 13(b) is to be used with caution since grave and serious harm has to be proven, preferably within due processes of law.

5.

Amicable solution suggested by Article 7 of The Hague Convention

There is another instance when the CA can take a decision itself without resorting to the courts and that is when an amicable solution has been suggested to the abducting parent and the latter has indeed accepted it. For a variety of reasons, these occurrences are unfortunately very rare.

This attempt at an amicable solution is carried out when the CA summons the abducting parent to its offices, preferably alone without legal representation, to suggest the option of sending back the minor without the need to commence court procedures. This is a form of attempted mediation and depends on the good will and consent of the abducting parent. If he or she refuses, the CA has no choice but to file the application (rikors). This requirement is laid down in article 7: Central Authorities shall co-operate with each other and promote co-operation amongst the competent authorities in their respective States to secure the prompt return of children and to achieve the other objects of this Convention.

In particular, either directly or through any intermediary, they shall take all appropriate measures

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(c) to secure the voluntary return of the child or to bring about an amicable resolution of the issues. 7

6.

Element of Uncertainty on the Commencement of the SixWeeks

The Convention does not really delineate the moment of commencement of the six weeks, whether it is from the time when the application is received by the CA (the administrative body) or when the application is filed in court (rikors). This can give rise to different interpretations.

The Maltese CA has always taken the approach that the six weeks start running from the date when the application (rikors) is filed in court since that is what very often happens. The application is received from the counterpart CA and then the application (rikors) is filed in courts for proceedings to start. The Maltese CA has always placed great importance on dealing expeditiously in these initial stages.

One main reason for the delays is the problem in tracing the abducting parent to request an attempt at an amicable solution, or the refusal of the same abducting parent to cooperate even at this point. The attempt at an amicable solution is an obligation imposed by the Convention on the CA and omitting it might lay the CA open to attack on the basis that it has not tried to avoid contentious proceedings, both from the abducting parent as well as from the Hague mechanisms. As it is, there is no actual time saving benefit to be gleaned from skipping this stage since the whereabouts of the abducting parent have to be known in any case for the eventual court notifications for the start of contentious proceedings.

At this point, the CA has to proceed with extreme caution since through this attempt at an amicable solution, the abducting parent would know that the authorities are after him or her and they might try to escape once again with the minor. Thus, the CA files an impediment of departure against the minor. It does not file an impediment against the parent since ultimately the CA is only 7

ibid 502

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concerned with the return of the minor to the former jurisdiction and it does not have the right to curtail the freedom of movement of the parent.

7.

Delays due to Untraceability

The untraceability of the abducting parent and the minor is a major hurdle in the proceedings. In several cases, the parent deliberately stays away from the address or addresses given in the application to prevent them being notified of the pending court proceedings. One may think that in the Maltese context, due to the country’s size, it would not be difficult to be aware of the whereabouts of a person but one has to keep in mind the ingeniousness born out of desperation that can result in the parent and minor being ‘in hiding’ for months.

In such instances, the CA would involve the police authorities and it is authorised to make any investigations itself. The CA may request assistance, principally from schools since the minor would have been registered in a school for the continuity of his or her schooling. The Convention provides for such instances and empowers the CA to make such requests for information. This would be a case of lex specialis derogat lex generalis and Chapter 410 would override the Data Protection Act, 8 in particular in cases where there might be concerns for the welfare of the minor. Article 7 (a) in fact lays down that the CA ‘either directly or through any intermediary, they shall take all appropriate measures to discover the whereabouts of a child who has been wrongfully removed or retained’. The schools or other entities requested are thus obliged to provide such information to the CA. 7.1 Why the requirement of expeditiousness in proceedings?

Chapter 1 in fact comprises the Scope of the Convention and indeed, one of the objectives is listed in article 1(a) as ‘to secure the

8

Data Protection Act, Chapter 410 of the Laws of Malta 503

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prompt return of children wrongfully removed to or retained in any Contracting State’.

In Re C (Abduction: Grave Risk of Physical and Psychological harm),9 Judge Thorpe describes the remedy in the Hague proceedings as one of ‘hot pursuit’. The authors Lowe and Stephens,10 list three reasons for this expeditiousness: lessening disruption for the child, prevention of the possibility of settlement of the child in new place of residence and deterrence of abductions.

They state that ‘timing, therefore, is the key to the successful operation of the 1980 Convention. The Convention itself aims to promote the speedy disposal of applications’. Article 2 goes on to state that ‘Contracting States shall take all appropriate measures to secure within their territories the implementation of the objects of the Convention. For this purpose they shall use the ‘most expeditious procedures available’.

Article 11 of the Convention lays down the six-week deadline, however the actual requirement of expeditious proceedings is mentioned at the outset and it is in fact underlined in articles 1 and 2. Hence, one is left in no doubt that Hague proceedings are about speedy procedures, a return to the status quo ante within the shortest time frame possible. The reason for this is the intrinsic nature and scope of the Convention itself, which has a procedural framework and aims at preventing abduction attempts.

Technically and legally speaking, the care and custody of the child in these cases is still in the hands of the custodial parents, both the abducting parent and the parent from whom the child has been abducted. In fact, as we shall see later on, care and custody is not decided upon at this stage.

It is also being maintained that the custodial parents do have the best interests of the child at heart and that they take courses of action which do not intentionally or incidentally harm the child. In cases where the actions taken by the parents do hold potential harm to the child or actually cause such harm, the State Parties, represented by the CA, and thereafter by the Courts, have obligations in this otherwise purely domestic scenario. When 9

[1992] 2 FLR 478 at 488 Nigel Lowe and Victoria Stephens, ‘The Timing of the 1980 Hague Abduction Convention Applications: the 2011 Findings’ (2012) Cardiff Law School 10

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proceedings end up in front of the courts, they should be expeditious. The decision for the return or non-return of the minor should be taken in as brief a time as possible. This is why the Convention does not, at this stage, debate who shall have final care and/or custody.

The Convention includes interim measures that come into play where the safety of the child requires such measures, until the decision is taken under the Convention. But this is in fact another reason why the proceedings should not take long. These are interim measures not life time arrangements and the sooner that the child is returned to a stable environment, the better. Article 7 states the following: Where an application has been made under the Convention to the First Hall of the Civil Court or to any other court which the Minister may by order designate, the court may, at any time before the application is determined, give such interim directions as it thinks fit for the purpose of securing the welfare of the child concerned or of preventing changes in the circumstances relevant to the determination of the application.

Hence, for Hague proceedings to be applied, it is a requirement that the abducting and the applicant parent both have custody of the child. Article 12 states: Where a child has been wrongfully removed or retained in terms of Article 3 and, at the date of the commencement of the proceedings before the judicial or administrative authority of the Contracting State where the child is, a period of less than one year has elapsed from the date of the wrongful removal or retention, the authority concerned shall order the return of the child forthwith.

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8.

The travaux preparatoires of the Convention

The most pertinent document relating to the initial work on the Convention is the Explanatory Note by Elisa Vera Perez, official reporter of the working on the Convention: The Convention, in order to bring this about, places at the head of its objectives the restoration of the status quo, by means of 'the prompt return of children wrongfully removed to or retained in any Contracting State.11 This Explanatory Note does not really go into the reasons why the period of six weeks was specifically chosen. It frequently happens that the person retaining the child tries to obtain a judicial or administrative decision in the State of refuge, which would legalize the factual situation which he has just brought about.

However, if he is uncertain about the result of the decision, he is just as likely to opt for inaction, leaving it up to the dispossessed party to take the initiative. Even if the latter acts quickly, that is to say manages to avoid the consolidation through lapse of time of the situation brought about by the removal of the child, the abductor will hold the advantage, since it is he who has chosen the forum in which the case is to be decided, a forum which, in principle, he regards as more favourable to his own claims.

9.

The psychological and emotional effects on the children

As a digression from the purely legalistic aspects of the issue under discussion, the author shall mention the numerous studies on the effects of instability in children and its effects on their brain development, resilience, attachment issues and the relationship between emotional trauma and healthy development.

11

Elisa Perez-Vera, Explanatory Report, Hague Conference on Private International Law (1982 ) <http://www.zoominfo.com/p/Elisa-Perez-Vera/29480587> accessed 4 February 2015 506

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The justification for having expeditious proceedings apart from safeguarding the rights of the dispossessed parent, are also there to safeguard the children’s wellbeing through the need to reinstate the status quo. This would be more amenable towards a holistic and durable solution to issues within that family unit to be dealt with as soon as possible and prevent as much as possible further trauma for the child. This reinstatement of the status quo is more conducive to durable solutions being found to solve the issues within the family unit, which should be dealt with as soon as possible to prevent further trauma to the child.

Dr Marilyn Freeman12 conducted one such study back in 2006 for REUNITE International, an NGO which assists families in such inter-country conflicts: Although parents may have stated their view that the abduction had caused effects, deeper probing produced evidence that ‘the abduction’ had a more global meaning to many of those who had been through the experience and the ‘ancillary matters’ detailed below form every bit as much a part of ‘the abduction’ to these people as the physical much a part of ‘the abduction’ to these people as the physical abduction incident itself.13 Various examples were cited of these ‘ancillary matters’: (a) the length of time taken by the Courts in reaching a conclusion, (b) the continuing conflict between the parents post-return, and (c) the absolute upheaval caused by the return order only to be swiftly followed by a successful leave to remove application in the home State.14

12

Co-Director of the International Centre for Family law and Practice in the UK, International Child Abduction: The Effects 13 M Freeman, ‘International Child Abduction - The Effects’ (Reunite, 2006) <http://www.reunite.org/edit/files/Library%20%20reunite%20Publications/Effects%20Of%20Abduction%20Report.pdf> accessed 4 February 2015 14 ibid 507

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This excerpt relates solely to the issue of lengthy proceedings and the possible consequences and not the effects of the abduction process in its entirety.

A case which also features the opinion of Elisa Perez Vera as regards the settlement of the child is Robinson v Robinson15 wherein the judge clearly takes into consideration the idea that since the child is settled in his or her new environment, the decision would be one of non-return: With those factors in mind, there is significant, essentially undisputed, evidence that the children are settled in their new environment: they have lived in the same area for 22 months prior to commencement of action; as exemplified by the testimony of Respondent's father and brother, the children have had active involvement with the Respondent's extended family; the children are doing well in school; and they are active participants in extracurricular matters such as Cub Scouts, Kampus Club, hockey and soccer. There is also evidence that, as healthy children usually do, they have made friends in school and elsewhere. In short, they have adjusted well to their new community.

On the basis of this and other evidence, I conclude that the Respondent has established by a preponderance of the evidence that the children are settled in their new environment.

9.1 The best interest of the child The United Nations Convention on the Rights of the Child (UNCRC) specifically mentions the best interest of the child in cross border abduction and access cases in article 11(1) but it distinguishes between Hague cases and those falling outside the scope of the Convention. In Hague cases and cases under the

15

Robinson v Robinson, United States District Court, D. Colorado, 7 Robinson v Robinson 983 F Supp US 1339 (1997) 508

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Brussels II bis16 (applicable to EU Member States except Denmark),the court may hear the child, but it is not in any way bound or obliged to follow the child’s wishes. 17

10. Issue of parental authority of the dispossessed parent

The court is however obliged in such cases to take into consideration all the circumstances of the case. After all, even a parent deemed undeserving of custody, does not lose parental authority arbitrarily and he or she would still have the right of access to his or her children. Should instances of abduction or retention be allowed to happen without impunity or without attempts at restoring the status quo, a huge injustice would be done to the dispossessed parents who would have their means to defend their parental rights or their rights of access severely curtailed.

The reverse side to this is the fact that the minors themselves are being denied the presence of the dispossessed parent. Abducting the children or retaining them without the consent or knowledge of the other custodial parent denies access or makes such access very difficult to exercise. The Convention is actually not just protecting the rights of the dispossessed parent but also of the child’ s right to have contact with the dispossessed parent.

16

Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000 [2003] OJ L338/01 17 Policy Issues in Non-Convention Abduction Cases: ‘When a parent seeks the return of a child outside the scope of the Hague Convention, or another international or regional instrument, the court seised will have to decide how to balance the interests of the child with the general international policy of combating the illicit transfer and non-return of children abroad’; United Nations Convention on the Rights of the Child, Article 11 (1) 509

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11. The process at the CA and subsequently the law courts

In brief, the author shall now attempt to follow the process from when the application is received by the CA and delve into possible reasons why the six-week period is not adhered to, why it might not be possible to adhere to it, and illustrate such points through case-law.

11.1 Receipt of application An application is received by the CA by normal or registered post, or by fax. Very often, both are used. The language in which it is received is also important - ashaving to translate an application would delay the process.

Malta did not make any reservations as to what language the application should be written in. The Maltese CA has the advantage of having staff conversant with a second language which is English and also having working knowledge of other languages such as French and Italian, and less often of Spanish or German. When the application is not in English, for accuracy’s sake, the Maltese CA opts to have a translation and this of course takes time.

11.2 Initial contact with the notification by the Court

abducting

parent/

subsequent

The other difficulty would be the fact that the abducting parent is difficult to contact. If there is no address indicated in the application or if the whereabouts are not known, it would take some time for the location of abducting parent and minor to be identified and the police would have to be involved.

At this point, the failure of the parent to reply to court notification might lead to a charge of contempt of court. The court official would go to the address given in the application and, failing that, to a second address such as the address of a relative. Should they fail to serve the parent personally, there is an attempt of notification after hours (that is, after official working hours, namely in the evenings or at night when the person is more likely to be at home). Failing that, a notification is published in the local papers.

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11.3 The issue of appeals The Code of Organisation and Civil Procedure, lays down a different period of time for appeals than under the Child Abduction and Custody Act, granting a shorter period of eight days instead of the usual twenty days. This right to lodge an appeal is always granted, in contrast with the UK system wherein in such cases, the granting of an appeal would be at the discretion of the Court of First Instance. The Maltese CA had encountered one case wherein the child was returned and the abducing mother could not appeal such decision.

11.4 The issue of the hearing of the child Although this right of the child to be heard is stated in both the Convention as well as the Brussels II bis Regulation, it does have the unfavourable consequence of lengthening proceedings.

From studies and research on abducted minors, it has been found that from a psychological point of view, being heard by the judge in appropriate surroundings does attenuate the trauma suffered by the minor, in particular if he or she is at an age when they can formulate an opinion and understand what is happening. Although the judge is not bound to follow the child’s wishes, he or she can take into consideration what the child says within the context of the whole scenario: the circumstances of parents, their behaviour, their relationship with each other and with the child and their parenting skills.

12. Counter arguments for the six weeks

At a conference on mediation attended by the author in June 2014,18 one of the speakers brought up the issue of the six weeks

18

Opening conference organised by the Hungarian Ministry of Justice in collaboration with the Ministries of Justice of France and Germany, and funded by 511

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stipulated in the 1980 Hague Convention for the finalisation of cases and in her opinion, she deemed it too brief a period of time for proceedings to be take place. The speaker did acknowledge that lawyers representing the abducting parents at times resort to procedural tactics to buy time but she was of the opinion that it does take time for proceedings to evolve, even without such delaying tactics.

Stephens and Lowe19 also deem the six-week target/obligation (as) unrealistic for two reasons. The first one is the actual time necessary for procedures to be instituted and exhausted in the Member States. Secondly the uncertainty mentioned earlier as to where do proceedings commence and at which point do they finish, from application at the law courts to the appeal stage or to another stage prior to that?

Brussels ii bis also introduces the issue of enforcement of a foreign judgment which was not present in the Hague Convention and which sometimes results in delays until that order is indeed recognised and enforceable in the other country. The International Social Service20 comments on the issue of delays in intercountry cases 21 and mentions a possible solution: Timeframes are a recurring issue for cases under the 1980 Convention. ISS notes that the time issue becomes problematic when States take a long time to expedite cases under the convention to another country, or when States become involved in matters beyond the scope of the convention (e.g. custody arrangements).

ISS refers to mirror decisions, which together with mediation, would assist in reducing delays:

the Civil Justice Programme of the EU, Dr Blanka Illes, lawyer and Vice President of the European Mediation Institute 19 Lowe and Stephens (n 13) 20 The International Social Service (ISS) is an international charitable, nongovernmental organisation providing assistance in cases of inter-country family breakdowns and issues.

21 Questionnaire concerning the Practical Operation of the Hague Conventions 1980 (On Child Abduction) and 1996 (On Parental Responsibility across Borders and Measures on the Protection of Children 512

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in many cases, a useful suggestion is that the order should require the taking parent to obtain a ‘mirror order’ from a court in the foreign jurisdiction before being allowed to take the child overseas.

Mirror orders would in fact be a time saving tool and they are issued by a court containing the same terms as those contained in the order that is being mirrored. Inherent in the mirror order concept is the fact that the foreign court shall have the right -- and more importantly the obligation -- to enforce the terms contained in the order, specifically including the obligation to effectuate the prompt return of the child at the end of a designated period of time. Equally critical is that the foreign court should not be permitted to modify the original order.22

13. Pertinent Maltese Jurisprudence

The issue of the six weeks requirements and the possible delays invariably involve other issues, and so local and foreign case law would not deal solely with the six weeks. However, the cases mentioned hereunder illustrate what lead to delays, the reaction of the counterpart CA and what are the effects on the proceedings themselves.

By application dated January 2010 filed with the Maltese CA,23 French left-behind father obtained a first hearing for June 2011. The major problem was that the mother’s address could not be located neither for the possible amicable solution nor for notification by the courts. Once this hurdle was overcome and the mother was finally notified, the Maltese CA filed an application for the hearing to be set at an earlier date and thus the Court set the hearing for April 2011, instead of June 2011 bringing it forward by a few

22

Mirror Orders to help Prevent International Child Abduction Jeremy Lowe and Stephens, Report dated 2012 The Timing of 1980 Hague Abduction Convention 23 Direttur tad–Dipartiment Ghal Istandards fil-Harsien Socjali vs Merlevede Lara Maria, Court of Appeal (Civil, Superior), 25 February 2011 513

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months. The French CA had requested explanation under article 11 why Hague proceedings were taking so long to be resolved.

In another case involving Norway, 24 the mother filed an abduction application with the CA in February 2010 and in the meantime, the father filed a request for custody. The Maltese CA made a request to the courts to stay custody proceedings until The Hague case was decided. The custody case was heard on the 16 March and temporary custody was given to the father, without Hague proceedings being as yet resolved. Furthermore, it is not the practice of the Norwegian CA to send an affidavit with the original application, attesting the left behind parent’s situation. The Maltese CA requested repeatedly such affidavit to present in court.

In January 2001, the Norwegian CA sent a complaint based on article 11 of the Convention namely that the six-week time period was not being adhered to. The case was finally decided on the 1 February 2011, upheld by the Court of Appeal on the 25 March 2011.

Article 15 Declaration in the Grech – Hellerman case;25 during the hearing of this case, the German Courts requested the Maltese CA to obtain an Article 15 declaration from the Maltese Courts. To this end, on the 10 March 2009 the Maltese CA instituted proceedings before the Family Court in Malta against the mother to obtain an Article 15 declaration, in order to determine whether the removal or retention was unlawful in terms of Article 3 of Hague Convention.

On the 30 April 2009, the Family Court reached its decision with regard to the Article 15 Declaration. In fact, it acceded to the request of the Maltese CA, and declared that the removal of the children from Malta was illegal as provided for in the Convention. The Article 15 declaration given by the Family Court was transmitted by the Maltese CA to the German CA for the latter to bring it to the attention of the German Courts. The case was decided in a relatively brief period of time but the father renounced to the continuation and completion of proceedings at the final stage.

24

Direttur tad–Dipartiment Ghal Istandards fil-Harsien Socjali vs Turner Dorian, Court of Appeal (Civil, Superior), 25 March 2011 25 Sitting of the 15 th February, 2010 Civil Appeal Number: 106/2009/1 John Grech in his own name and on behalf of the minors N.B.T.L. Grech Hellermann and S.M.R.L. Grech Hellermann vs Christianne Hellermann 514

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A very relevant case to the issues of expeditious proceedings and stability or ‘settlement’ of the minor was the Bridge case.26 Left-behind mother in the UK had filed an application through UK CA to Malta CA for the return of a minor abducted by her father and brought to Malta. After two years the case was still being heard. The father’s lawyer actually filed a constitutional case under Human Rights articles 8 and 14 for the child’s right to family life, claiming that this was being denied her and that the child will be totally uprooted if she were to be returned to the UK. At the same time, the left behind mother’s right to have access to the child and possibly even have the child returned was being severely undermined.27

14. ECtHR Cases: Neulinger & Shuruk v Switzerland and Raban v Romania

A very important international case is Neulinger & Shuruk v Switzerland,28 wherein the controversial decision was taken of not ordering the return of the minor due to the considerable numbers of years, which had passed from the abduction. Article 8 of the European Convention of Human Rights concerning the integrity of family life was given precedence over the Hague Convention and its basically procedural character. This would have considerable influence over the future workings of the Hague Convention. To quote David Hudson;29 The answer is not to criticise the European Court of Human Rights. The real answer is to have a system which enforces and penalises those countries who are 26

The Director of Social Welfare Standards Department vs Bridge Richard John, Court of Appeal (Civil Superior), 3 July 2011 28

Neulinger & Shuruk v Switzerland, Application Number 41615/07, Grand Chamber, 8 January 2009 29 Consultant, the International Family law Group. International Family Law: More on Neulinger & Shuruk v Switzerland, <http://www.internationalfamilylawfirm.com/2010/08/more-on-neulinger-shuruk-vswitzerland.html> accessed 5 February 2015 515

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so slow to return abducted children as to work against the best interests of children.

There were other cases in fact wherein the delay in reaching a decision was not treated in such a way as to be almost ‘rewarded’. In Maire v Portugal30 for instance the ECHR held that Article 8 included a parent’s right to the taking of measures to reunite the parent and the child and an obligation on the national authorities to take such measures. The onus was thus on the authorities to make the abducting parent appear before the courts for the case to proceed and hence avoid the undue delay.

In Monory v Hungary and Romania 31, the ECHR also recognised that the interpretation to article 3 as given by the Romanian courts deprived it and the Hague Convention itself of its effectiveness and that Article 8 cannot be interpreted and used in a way which goes against the text of the Vonveion itself, the Explanatory Report and recognised practice.

A second land mark case was Raban v Romania,32 wherein the judges quoted the above case and went on to elaborate on the ‘paramount interest of the children – who were very young (3 and 2 respectively) at the time of their departure from Israel, and who now appeared to be very well integrated in the new environment’. This case also resulted in a non-return based on the notion of settlement.

The Guide to Good Practice is a document published by the Hague Conference which highlights good practices in abduction and access cases and it brings together points of good practices without interfering in any way in the ways in which the particular member State is applying the Hague Convention. 33

30

(48206), (ECHR) (2004) 2 F.L.R. 653, 26, June 2003 Application Number 71099,/01, (2005), 41 EHRR 77 32 Raban v Romania, Application No. 25437/08, Third Chamber, 26 October 2010 33 Excerpt from the Guide to Good Practice: Under the Hague Convention of 25 October 1980 on the Civil Aspects of International Child Abduction: 1.5 Expeditious procedures 31

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15. Conclusion The minor is uprooted from his usual ‘habitat’, removed or kept away from everyone and everything he has known. The task of the Convention is to decide on the return or non–return of the minor to the place where he was living before, where he was habitually resident. In cases where the minor is transplanted once again after a long period of time, a second home might have been formed and roots started afresh resulting in a second trauma.

So the decision of the custody under the Hague Convention is a sort of interim decision which albeit based on the facts does not really determine the final situation of the child, namely which parent is to have full care and custody or whether it shall continue to be joint.

A swiftly taken decision on the return of the minor would mean a quicker deliberation on the substance of the case. A parent should not resort to taking the law into one’s hands, depriving the other parent of the possibility to see the child, whatever their circumstances. It is also legally and morally deplorable and unjustifiable to deprive the minor of contact with his or parent.

It is therefore crucial to keep in mind the human dimension that runs parallel to the legal process, and in particular in relation to the children themselves, whose childhood is rudely disrupted by the unilateral decisions taken by their parents.

Central Authorities, which are the front line of receiving such cases, should work very closely with the judicial authorities, which ultimately make the decisions. In Malta the CA and the courts fall under different Ministries so there has to be enhanced interministerial and inter-departmental cooperation. Increased awareness

1.5.1 Speedy, prompt or expeditious action is required at all stages of The Hague Convention process 1.5.2 Failure to act promptly undermines the Convention 1.5.3 Interests of the child require expeditious action: viii Part I - Central Authority Practice � to minimise disruption or dislocation to the child � to minimise harm to the child � to prevent or limit any advantage to the abductor by the passage of time

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and training for the professionals involved would also raise levels of expertise and awareness of the human dimension of the issues as well as the complex legal issues involving private international law, EU law in cases involving shared competences as well as domestic laws on custody and parental responsibility cases.

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TAX LAW

Constitutional Safeguards in Tax Litigation: How the John Geranzi Case Upset the Status Quo Conrad Cassar Torregiani and Christopher Bergedahl

Conrad Cassar Torregiani Christopher Bergedahl

CONSTITUTIONAL SAFEGUARDS IN TAX LITIGATION: HOW THE JOHN GERANZI CASE UPSET THE STATUS QUO CONRAD CASSAR TORREGIANI AND CHRISTOPHER BERGEDAHL

_______________________________________________________ Dr Cassar Torregiani joined the Deloitte Malta tax department in 2001 after graduating Master of Laws in International Taxation from University of Leiden and Doctor of Laws from the University of Malta and was admitted to partnership in 2007. Dr Cassar Torregiani is the Malta firm’s leader for CrossBorder Tax with responsibility for the leadership of International Tax Services, Mergers and Acquisitions and Transfer Pricing within the firm’s practice dedicating the majority of his time to the provision of tax consultancy services to multinational or foreign based groups operating in Malta and to the design and implementation of tax solutions in a cross-border context.

Mr Christopher Bergedahl joined Deloitte Malta’s LL.D. Pathway Programme in July 2014 and is concurrently pursuing a Doctor of Laws at the University of Malta. Mr Bergedahl has a keen interest in taxation (both local and crossborder) and international affairs. He was involved in the founding of the Junior Chamber of Advocates and the Malta Model United Nations Society, the latter of which he served as Founding President. He has maintained an active interest in the international simulation circuit.

____________________________________________________________ ‘Make sure you pay your taxes; otherwise you can get in a lot of trouble.

Richard M Nixon

1.

Introduction

Fiscal austerity, tax collection, and tax evasion have become topical subjects. The economic realities various governments are facing in this age of austerity, have necessitated a clampdown on tax dodgers. Although it has been stated that ‘one may so arrange his affairs that his taxes shall be as low as possible; and he is not bound to choose that patterns which will best pay the Treasury; there is not

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even a patriotic duty to increase one’s taxes’,1 this in no manner implies that the taxpayer can evade paying amounts which are legally due by him to the revenue department? The media have been quick to pounce on administrations that fail to collect their taxes efficiently and effectively, and several high profile companies have suffered considerable reputational damage due to their tax planning strategies.2 This elevated awareness of the perils of tax evasion has been mirrored locally. Recent times have seen increased activity in tax litigation and enforcement, with authorities exerting pressure on alleged tax evaders to pay their dues. Sophisticated legislation has been put in place in order to discourage individuals from knowingly understating their income. Unfortunately for the taxpayer, the regime underpinning this procedure weighs heavily in favour of the authorities, resulting in a disproportionate burden upon the accused to prove his case. Local commentators have criticised the approach adopted by the legislator as potentially breaching the fundamental human rights of the taxpayer. 3 As litigators become more perceptive of the legal questions being raised by tax contestations and enforcement procedures, more attention is placed on the procedural safeguards afforded by the relevant legislation.

The landscape has altered drastically following a landmark judgment4 handed down by the Constitutional Court in November 2012, which shall be given special attention below. Its significance lies in the emphasis the court placed on particular aspects of the contestation procedure: primarily the issue of access to a court as well as the classification of the so-called ‘additional tax’ as being of a penal nature, and thus, subject to the typical procedural safeguards afforded to the accused in criminal proceedings. The decision, 1

Gregory v Helvering, Supreme Court of the United States, (1934) 6369 D.2d 809, at 810 2 UK Parliament, ‘Tax Avoidance-Google - Public Accounts Committee Conclusions and recommendations’ (Parliament.uk, 2013) <http://www.publications.parliament.uk/pa/cm201314/cmselect/cmpubacc/112/11204 .htm> accessed 11 December 2014 3 R Attard, An Introduction to Income Tax Theory (1st edn, Malta 2005) 4 John Geranzi Limited vs Kummissarju tat-Taxxi Interni issa maghruf bhala Direttur Ġenerali, Taxxi Interni, u l-Prim Ministru għal kull interess li jista’ jkollu; u b’dikriet tal-4 ta’ Mejju 2009 ġie kjamat fil-kawża l-Avukat Ġenerali, Constitutional Court, 30 November 2012 522

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which has been hailed as a breakthrough by practitioners, has essentially turned the law relating to additional tax on its head. 5 It has been further stated that: The John Geranzi Limited decision has received much media attention due to its impact on procedural tax law. It has been cited in a number of decisions but is also expected to have an impact on substantive law. 6 The question thus arises: in what circumstances can the taxpayer legitimately expect to avail himself from the procedural guarantees of criminal cases? Can the criteria adopted by the Constitutional Court be applied a priori to the other penalties imposed in terms of the relevant laws, or must the taxpayer rely on the courts to adopt a case-by-case approach? Is the contestation procedure as formulated in Chapter 123 of the Laws of Malta, the Income Tax Management Act (and broadly borrowed by other fiscal legislation) incapable of reaching the desired equilibrium required by modern human rights standards?

The following sections will dissect these questions and attempt to provide an objective legal analysis of the shortcomings demonstrated under the current system(s). The circumstances surrounding, and the result of the John Geranzi Limited case, shall provide the backdrop to the article. Furthermore, a study shall be undertaken with reference to European Court of Human Rights decisions to put the reader into perspective as to the basic legal reasoning underpinning the tax litigation process vis-a-vis human rights compliance. The results extracted from this analysis shall then be applied to the status quo and an attempt shall be made to provide possible ways forward in guaranteeing a measure of consistency and fairness within the structure of our present fiscal legislation.

Macdonald, ‘Taxpayers no longer guilty until proven innocent’ Times of Malta (2014) <http://www.timesofmalta.com/articles/view/20140601/businessnews/Taxpayers-no-longer-guilty-until-proven-innocent.521464> accessed 11 December 2014 6 Robert Attard, ‘Maltese Tax Litigation Taken by Storm’ (2014) 54 Eur. Taxn. 11 5

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2.

The Tax Contestation Procedure under the Income Tax Management Act7 and the VAT Act8

Contesting a disputed assessment begins long before any tribunals or courts are involved. The law on taxation regulates the relationship between the taxpayer (that is, private persons) and the revenue authorities (that is, the State). Defining the relationship as such would place laws of a fiscal nature squarely within the remit of Administrative Law.9 As a natural consequence of colonial administration, Maltese Administrative Law has been greatly influenced by the practices adopted in the United Kingdom. That being said, Administrative Law is vast in nature and encompasses various different aspects which span across the legislative, the executive, and the judicial aspects. For the purposes of this study, the authors intend to primarily focus on the judicial aspect of fiscal law.

The contestation procedures under Maltese Fiscal Law utilise an Administrative Law approach of quasi-judicial decision-making before recourse to the judiciary can be availed of. The established notions regarding the observation of the principles of natural justice and mandatory procedural requirements emanating from the law itself are of great relevance in this context. However, it is pertinent to point out that for the purposes of tax contestation procedures under the various fiscal acts, judicial review as found in Article 469A of the Code of Organisation and Civil Procedure is excluded.10 Furthermore, for the purposes of this article, the procedure relating to contestations prior to year of assessment 199911 are being excluded.

7

Income Tax Management Act, Chapter 372 of the Laws of Malta Value Added Tax Act, Chapter 406 of the Laws of Malta 9 Whose definition has itself remained vague and shares many characteristics with other branches of law.

10 Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta, article 469A (4); The provisions of this article shall not apply where the mode of contestation or of obtaining redress, with respect to any particular administrative act before a court or tribunal is provided for in any other law.

11 Income Tax Management Act, article 30 8

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As a parenthesis prior to commencement of this discussion, it is necessary to place the reader in the correct context. It will be noted by the reader that the various contestation procedures share very similar characteristics at their various stages. That being said it is paramount to appreciate that divergences arise, especially in the earlier stages, due to the nature of the taxes and their manner of imposition. The manner in which income tax is calculated varies to a considerable extent to that of value added tax. The point being made here is that while there are varying methods of assessment at an initial stage, the ultimate quasi-judicial process remains somewhat constant.

It should be further noted that the official designation(s) for the chief administrator of the various revenue departments has changed a number of times over the past few years. For the purposes of this article, the nomenclature adopted in the Commissioner for Revenue (Amendment) Act 201412 shall be utilised.13 2.1 The procedure under the Income Tax Management Act Under Maltese law, income tax is calculated on a selfassessment basis. This means that individuals (both natural and body corporate) are responsible for declaring to the Inland Revenue any income (including capital gains) 14 which may be subject to tax for the year of assessment, and apply the appropriate rate of tax15 in order to arrive at the final taxable figure. Although appearing straightforward, given the myriad deductions, exemptions, and 12

ACT No. XXIII of 2014 Article 3 of the principal Act was amended to read: and all references to the Commissioner of Inland Revenue, the Commissioner of Value Added Tax and the Comptroller of Customs in any law shall be read and construed as references to the Commissioner for Revenue.

14 Income Tax Act, Chapter 123 of the Laws of Malta, article 4(1) Subject to the provisions of this Act, income tax shall be payable at the rate or rates specified hereafter for the year of assessment commencing on 1st January, 1993 but only with respect to any capital gains made on or after the 25th November, 1992 and for each subsequent year of assessment upon the capital gains as defined in article 5 accruing or derived from Malta or elsewhere, and whether received in Malta or not, and for the year of assessment commencing on 1st January, 1949 and for each subsequent year of assessment upon the income of any person accruing in or derived from Malta or elsewhere, and whether received in Malta or not in respect of etc.

15 Vide article 56 of the Income Tax Act 13

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guidances littered throughout various sources, there is much room for interpretation on the treatment of certain income or expenditure which may ultimately affect tax payable. At times, it may be difficult to accurately calculate income, particularly when a literal interpretation of the law does not provide sufficient guidance on grey-area issues.

The Commissioner for Revenue16 is empowered at law to make an ex officio assessment of the return submitted by the taxpayer.17 His findings, based on the information contained within the return, may result in an adjustment to the figures submitted.

Should the Commissioner find that the figure presented by the taxpayer to be less than that actually owed, he may make additional assessments in accordance with his best judgment.18 Upon calculation, a notice is sent to the taxpayer’s ‘usual place of abode or business’19 with the adjusted figures and furthermore informing the taxpayer of his rights.20 The taxpayer may file a notice of objection in writing within thirty days (30) to dispute the figures reached by the Commissioner.

Interestingly the law stops short from prescribing a time-limit by which the Commissioner is obliged to reply to the taxpayer as to his acceptance or otherwise of the notice of objection. This apparent lack of foresight was subjected to scrutiny in the John Geranzi Limited case.21

16

Following Act XXIII of 2014, all functions vested in the Commissioner of Inland Revenue, the Commissioner for Value Added Tax and the Comptroller of Customs under the revenue acts shall be transferred to and shall be exercised by the Commissioner and all references to the Commissioner of Inland Revenue, the Commissioner of Value Added Tax and the Comptroller of Customs in any law shall be read and construed as references to the Commissioner for Revenue. For this reason, the designation ‘Commissioner for Revenue’ shall be utilised in this article in order to spare the reader any confusion.

17 Income Tax Management Act, article 31 18 ibid 19 ibid, article 33 20 That is to say the right of the taxpayer to file a notice of objection.

21 The Constitutional Court in fact stated that ‘Tassew illi l-attriċi kienet taf bilvertenza u għalhekk kien imissa ħadet ħsieb aħjar tad-dokumenti, iżda huwa inevitabbli illi wara dak iż-żmien kollu l-memorja tal-fatti tibda tiċċajpar u, bħal ma ġara fil-każ tallum, in-nies li jafu aħjar il-fatti jibdew imutu. Dan ukoll iwassal għal ksur tal-jedd għal smigħ xieraq’.

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Indeed the contestation procedure cannot move on to the next stage without the aforementioned notice of refusal by the Commissioner. Article 35(1) of the Income Tax Management Act indicates that only taxpayers aggrieved by the decision of the Commissioner may lodge an appeal in front of the Administrative Review Tribunal.22 Significantly, the law indicates that the onus of proving that the Commissioner’s assessment is excessive lies on the taxpayer.23 The Income Tax Acts24 do not define the meaning of the term ‘assessment’. It would appear, by way of inference, that it includes the process of determining the chargeable income of the taxpayer, the tax chargeable thereon, and the tax payable for the year of assessment.25 That being said, under Article 56(12) of the Income Tax Act, additional tax is chargeable26 when the taxpayer makes default in submitting his return or omits from his return any amount which should have been included therein.

As is the general practice under Maltese Administrative Law, both parties are afforded a right of appeal on a point of law to the Court of Appeal.27

22

The Administrative Review Tribunal replaced the Board of Special Commissioners by virtue of Legal Notice 336 of 2010, in line with governmental policy at the time of consolidating a number of disputes of an administrative nature under a single tribunal. Vide Records of Session Number 470 of the Tenth Parliament p. 311: Ilħsieb tal-liġi huwa wieħed mill-iktar sempliċi. Huwa sempliċi għax qiegħed jipprova jġib id-diversi tribunali li ġew iffurmati tul dawn l-aħħar 60 sena taħt umbrella ta’ tribunal wieħed, u flok ikollna diversi tribunali mxerrdin ikollna tribunal wieħed li jisma’ kollox. Pero’ rridu ngħidu li biex wasalna għal din il-pożizzjoni kien hemm żvilupp ukoll interessanti f’pajjiżna. Għalkemm qegħdin naċċettaw li l-prinċipju huwa li l-qrati ordinarji għandhom kemm jista’ jkun jiddeċiedu kwestjonijiet ta’ natura purament legali, pero’ fejn tidħol ċerta teknika u ċerta konoxxenza partikolari f’ċertu settur, allura wieħed għandu jmur għal dawn it-tribunali. Allura qegħdin ngħidu li se nagħmlu tribunal ieħor li qisu jimxi paripassu ma’ dak li għandna bħalissa fil-qrati tagħna.

23 Income Tax Management Act, article 35(1) 24 This term is being used to refer to the Income Tax Act and the Income Tax Management Act, collectively.

25 Income Tax Management Act, article 31 (5) 26 This arises from the operative phrase ‘shall be chargeable’, which is utilised throughout article 56 (12) of the Income Tax Act. 27 In its inferior or superior jurisdiction, depending on the amount of tax in dispute, according to article 37 (1) of the Income Tax Management Act. 527

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2.2 The procedure under the VAT Act The procedure found under Chapter 406 of the Laws of Malta reflects, if only to a limited extent, that found under Chapter 372.

Significantly, by virtue of Articles 31 to 34 of the VAT Act, the Commissioner for Revenue is empowered to make assessments where the taxpayer has or has not made a return. Interestingly, the law does not provide for an objection and notice of refusal stage as in the Income Tax Management Act, however, it is understood that as a matter of good administrative practice the authorities engage in such a procedure.

The VAT Act contains a number of administrative penalties in Articles 37 et sequitur which vary according to type and gravity of the infringement made by the taxpayer. 28 Interestingly Act IV of 2007 amended Article 48(5) of the VAT Act, which deals with record keeping, to the extent that failure to produce records to the Commissioner following a request by the latter, will prevent the taxpayer from producing such records later on in the contestation procedure.29 The implications of this provision in light of John Geranzi Limited shall be examined below.

Vide for example, administrative penalty for incorrect tax return – Article 37 of the Value Added Tax Act (Chapter 406 of the Laws of Malta), administrative penalty for understated or assessed tax under Article 12 – Article 37A of the VAT Act, administrative penalty for default in the furnishing of a tax return or other declarations and statements – Article 38 of the VAT Act, administrative penalty for default in applying for registration or giving notice – Article 39 of the VAT Act, administrative penalty for default by person registered under article 11 – Article 40 of the VAT Act. 29 Vide Value Added Tax Act, Article 48(5)The Commissioner may, at any time within the period specified in subarticle (4), request any person to produce, or may remove from any person, including a third party, the records, documents, accounts and electronic data required to be kept by him in virtue of this article and to make copies thereof: Provided that, if there is evidence that after being requested by the Commissioner by means of a notice in writing, that such person failed to produce without any reasonable excuse any records, documents, accounts and electronic data within thirty days from the date of service of such notice, such person shall not be allowed to produce such records, documents, accounts and electronic data at a later stage after the issue of the provisional assessment or assessments or before the Tribunal or in any Court of law.

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3.

The Decision in John Geranzi Commissioner of Inland Revenue et

Limited

vs

The

3.1 Facts of the case John Geranzi Limited concerned an assessment made by the Commissioner for Revenue in relation to unpaid income tax amounting to Lm 7,912 for the year of assessment 1977. The plaintiff company filed an objection wherein it contested the findings of the Commissioner. The objection was eventually refuted following a delay of twenty-seven years. As the law required a notice of refusal to be issued prior to an appeal being lodged, plaintiff was effectively denied the right to access the Board of Special Commissioners to contest the assessment. On receipt of the notice of refusal, the company lodged an appeal in front of the said Board, which ultimately held against the plaintiff.

Aggrieved by the decision of the Board, the plaintiff appealed to the Court of Appeal (Inferior Jurisdiction). The case eventually ended up in front of the First Hall of the Civil Court in its Constitutional Jurisdiction, on the basis that its principal concern was of a constitutional nature. The plaintiff claimed that the protracted delay in issuing the notice of refusal had prejudiced its rights and further maintained that the Board of Special Commissioners had breached his fundamental human rights by failing to invert the onus of proof in instances of additional tax, as dictated by recent ECHR case law.30 The complaint was based in part on the inability of the company to produce adequate evidence in terms of documentation and witnesses to contest the assessment given the protracted delay.

The plaintiff’s application cited Paykar Yex Haghtanak Limited vs Armenia App 21638/03 [ECHR, 2 June 2008] which dealt with the nature and legal classification of surcharge tax and fines.

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3.2 The decision of the First Hall, Civil Court (Constitutional Jurisdiction) The First Hall considered that the Commissioner had unduly delayed in issuing the notice of refusal and had effectively prejudiced the plaintiff’s ability to defend itself, so much so that the persons who had originally been responsible for the company’s management at the time of assessment had passed away in the interim period. The directors in charge at the time of these proceedings had assumed control of the company in the period following the assessment and certain documents could not be traced.

The First Hall held that the defendant (that is, the Commissioner for Revenue) was not answerable for the dispute regarding the onus of proof as the Commissioner for Revenue had no control over the Board of Special Commissioners, and neither was the Board answerable to the Commissioner. It ordered the Commissioner to pay 30,000 EUR as compensation in respect of the protracted delay in proceedings.

3.3 The decision of the Constitutional Court Both parties appealed from the decision. The Commissioner cited several factors beyond his control as having contributed to the excessive delay, and relied on the plaintiff’s obligation to have retained its trade books given its knowledge that it was being investigated for unpaid taxes. The Constitutional Court disagreed with this line of reasoning and ruled that even if the plaintiff was partly to blame for the delay, in no way could twenty-seven (27) years be considered a reasonable time to issue a notice of refusal.

The situation was further compounded given that plaintiff was prevented from launching an appeal until the Commissioner reached his decision. The company was deprived of its access to the judicial organs of the state and by extension a breach of its fundamental rights.

The Commissioner further contested the applicability of Article 6 of the European Convention of Human Rights to the case at hand as the dispute between the parties was fiscal in nature and thus not within the definition of ‘civil rights’ as defined under said

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article.31 The court noted that the power to impose and collect taxes arises from the law, and that this power may only be exercised in accordance with the letter of the law. The Commissioner was demanding the payment of the unpaid tax, as well as an additional tax, the latter of which was designated as an ‘administrative penalty’ imposed due to the failure of the taxpayer to correctly calculate its dues.

Terms under the European Convention of Human Rights have an autonomous interpretation in order to prevent instances where national governments disguise penalties as administrative measures in order to escape the remit of Article 6. Regardless of its cosmetic appearance, the additional tax remained a penalty inflicted upon the taxpayer.32 The rule of law dictates that a citizen cannot be denied access to a court when the dispute involves a penalty of a pecuniary nature.

The Constitutional Court thus quashed the notice of refusal issued by the Commissioner for Revenue and ordered the latter to accept the original objection submitted by the plaintiff, while further quashing the decision of the Board of Special Commissioners by roping into the proceedings the Attorney General as the legitimate representative of the Board in judicial matters.

4.

The Perspective of the European Court of Human Rights

4.1 Are Taxation Disputes covered by Article 6 of the European Convention on Human Rights?

It has been stated by local commentators that an outcome similar to that of the John Geranzi Limited case would ‘imply a

31

Ferrazini v Italy [GC] Application number 44759/98 (ECHR, 12 July 2001) This marked a visible departure from the previous approach to additional tax. In fact, the Commissioner for Revenue noted in its pleas the remarks of the Court of Appeal in case 165 of Volume 5 of the Decisions of the Court of Appea; ‘joħroġ mill-istess liġi li għaliha t-taxxa addizzjonali hija taxxa bħal kull taxxa oħra imponibbli taħt l-istess Att u toħroġ permezz ta’ stima li minnha it-taxpayer għandu dritt ta’ Appell’.

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radical departure from the traditional tax rules’.33 The ruling is without doubt significant especially in light of its implications. That being said, an appreciation of the current scenario requires knowledge of the case law on Article 6 of the European Convention of Human Rights (the Convention) at an international level. The insight provided by the Court is invaluable in interpreting local legislation. It also serves as a useful exercise in examining the manner in which the current string of case law fit in within the framework of European decisions.

Disputes of a fiscal nature are not alien to the European Court of Human Rights. Tax matters touch upon various rights appertaining to the citizen, and they represent one side of a special, mutual relationship between an individual (or otherwise) and a sovereign entity. The sovereign State cannot abuse of its power to tax its inhabitants, and it must do so within the confines of the object and scope of fundamental rights.

The relationship between taxation disputes and the right to a fair hearing is, on the other hand, more complex. This stems from the wording of Article 6, which inter alia states: In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a hearing with a reasonable time by a tribunal.34 The keywords in the above extraction are ‘civil rights and obligations’ and ‘criminal charge’.

The Court has had ample opportunity to flesh out the meaning of these phrases in its case law, however its relevance to this article is its applicability to disputes of a fiscal nature.

In Ferrazzini vs Italy,35 the Italian tax authorities had instituted three separate proceedings concerning the payment of supplementary taxes due to, inter alia, incorrect computations. The proceedings remained unsolved for almost thirteen (13) years, and the applicant sought relief on the basis of his right to a fair trial. Of 33

R Attard, Principles of Maltese Tax Law (1st edn, Malta Institute of Management, Malta 2008) 34 European Convention on Human Rights 1950, Article 6 35 Ferrazini v Italy (n 31) 532

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primary importance was establishing the purview of Article 6 to the dispute, in particular its civil head. It was considered that tax matters ‘still form part of the hard core of public-authority prerogatives’36 and furthermore that they fall outside the scope of civil rights and obligations.

The decision in Ferrazzini had a marked effect on the manner in which practitioners view tax cases. Persons involved in ‘pure’ tax disputes such as the contestation of tax due, are not protected by the right to a fair trial.37 Despite this, it would be incorrect to take a narrow view on the applicability of Article 6, especially in the light of the fact that modern legislation, particularly with respect to enforcement and collection, often strays into other branches of law.

This reality has become increasingly prominent in the wake of certain states’ practice of masking criminal offences as ‘administrative’ or ‘regulatory’ offences. An alternate approach having the same effect involves classifying the penalty imposed as ‘administrative’ or as a ‘supplementary tax’ in an attempt to circumvent the scope of Article 6.

Classifying a dispute as penal in nature has significant ramifications for both the state and the accused. As is well known, the Convention provides an extensive list of protective guarantees for the individual when faced with a criminal charge, including the right to remain silent and the right to be presumed innocent until proven guilty. The cumulative effect of these guarantees is to safeguard the citizen from unjustified prosecution and sentencing at the hands of a potentially hostile state. Yet, it also serves as a crucial mechanism to ensure that criminal liability is not established, and criminal punishment is not imposed, if the individual is prevented from adequately defending himself. 38 36

ibid The Ferrazzini principle has been accepted by our Constitutional Court in the past.

See the decision in Joseph Busuttil pro et noe vs Prim Ministru et, Constitutional Court, 20 July 2014: ‘Issa l-Qorti taqbel illi hu ġeneralment aċċettat illi l-espressjoni “drittijiet u obbligi ċivili” ma tkoprix liġijiet fiskali. Il-Qorti tasal għall-konkluzjoni illi l-proċedura impunjata kkontemplata fl-artikoli 466 u 467 ċertament ma tistax titqies li hi kontra l-Kostituzzjoni jew kontra l-Konvenzjoni Ewropeja fil-każ ta’ proċedura konnessi ma’ materji ta’ natura pubblika fosthom l-ordinament fiskali’.

38 Being prevented from defending oneself should not be equated to not being able to defend oneself due to lack of evidence (insofar as this isn’t unduly withheld from the accused), or due to a poor defence.

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The European Court has been sufficiently alert to identify instances where similar strategies have been utilised. Various judgments over the years have sought to identify, with some precision, the boundaries of Article 6 and in particular adopt an autonomous interpretation of criminal charge and penalty. Although the Engel39 case immediately comes to mind, there have been other prominent decisions (some of which have been quoted by our own courts and tribunals in tax disputes) on this matter. In Bendenoun vs France40, the government submitted that ‘the tax surcharges imposed on Mr Bendenoun bore all the hallmarks of an administrative penalty within the meaning of the Court’s caselaw.’41 This was due to the behaviour having been described as ‘deception’42 which was considered by the Conseil d’État as being intimately linked with tax offences. Following an analysis of the relevant provisions of the General Tax Code, the court concluded that: (i) The ‘tax offences’ were applicable to all citizens; (ii) The tax surcharges were intended as a punishment to deter reoffending; (iii) The surcharges were both deterrent and punitive; (iv) The surcharges were substantial in size.

On the basis of the above the Court ruled that the case had a profoundly ‘criminal connotation’,43 and was thus subject to the guarantees afforded under the criminal head of Article 6.

The case in Janosevic vs Sweden44 delved deeper into the debate by tackling tax surcharges. The applicant had been subjected to an audit by the tax authorities. Having disagreed with the applicant’s computation of his tax arrears, the authorities revised upwards his tax liability and furthermore ordered him to pay tax surcharges on the amount of the increase. The Swedish Supreme Administrative Court had defined the surcharges as ‘an 39

Engel and Others v the Netherland, Application numbers 5100/71, 5101/71, 5102/71, 5354/72, and 5370/72 (ECHR, 8 June 1976) 40 Bendenoun v France, Application numbers 12547/86 (ECHR, 24 February 1994) 41 ibid 15 42 ibid 43 ibid 44 Janosevic v Sweden, Application numbers 34619/97 (ECHR, 21 May 2003) 534

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administrative sanction akin to a penalty’45 and that ‘no requirement of intent or negligence on the part of the taxpayer for [its] imposition.’46 The applicant contested this approach, pleading that the imposition of the surcharges came at the expense of a court determination of the disputes. The court, referencing Ozturk v Germany amongst others, held that in determining a criminal charge three (alternative) criteria applied:47 (i) The legal classification of the offence in domestic law; (ii) The nature of the offence; and (iii) The nature and degree of severity of the possible penalty.

It determined that the surcharges were ‘not intended as pecuniary compensation for any costs’ but rather their aim was to ‘exert pressure on taxpayers to comply with their legal obligations and to punish breaches of those obligations.’ Thus, any determination of guilt (even if there was objective liability) had to be determined in front of a competent court or tribunal in accordance with Article 6. Interestingly, when delving into Sweden’s compliance with said article, the Court was highly disapproving of a ‘system that allows of considerable amounts of surcharges before there has been a court determination of the liability to pay the surcharges’.48 It emerges quite clearly from a review of these cases that an objective standard can be used in order to identify instances of pecuniary measures. This standard has been applied, and will most likely continue to be applied, in local disputes and thus, serves as an important point of reference.

45

ibid 13 ibid These same criteria made an appearance in the subsequent case of Paykar Yex Haghtanak Limited wherein the Court noted in paragraph 33 that ‘The second and third criteria are alternative and not necessary cumulative: for Article 6 to apply by virtue of the words “criminal charge”, it suffices that the offence in question should by its nature be ‘criminal’ from the point of view of the Convention, or should have made the person concerned liable to a sanction which, by its nature and degree of severity, belongs in general to the “criminal sphere”. The minor degree of the penalty, the in taxation proceedings or otherwise, is not decisive in removing an offence, otherwise criminal by nature, from the scope of article 6.’

48 Janosevic v Sweden (n 44) 32 46 47

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5.

The Curious Cases of Additional Tax and Others

As discussed in the previous section, although taxation disputes per se tend to fall out of the scope of Article 6 of the European Convention on Human Rights, it would be incorrect to generalise and suggest that the exclusion is applicable in all corners to tax legislation.49 It is clear that the authorities are adopting a much stricter stance in terms of tax evasion and criminal penalties in this regard are becoming more numerous and far reaching.

It would also be short sighted to underestimate the potential impact of this shift in favour of the taxpayer. Although tax evaders are generally viewed with distaste by the general public, failure to provide them with the adequate procedural safeguards places the fundamentals of the judicial system in jeopardy. A democratic society relies on the rule of law in order to safeguard the stability and effectiveness of its justice system, whosoever may be the beneficiary of it.

The John Geranzi Limited case brought to light a clear deficiency in the manner in which safeguards were being applied within the context of certain tax procedures. That much has already been established and the reasoning of the Constitutional Court deserves some praise. Notwithstanding this, the recognition of additional tax as a pecuniary charge has revealed a gaping hole within the current configuration and upon further analysis may appear to be particularly vulnerable to attack. Given the comparable nature of penalties under other tax statutes, a spill-over effect is occurring and may well continue to occur over time. This is demonstrated by an unpublished (and partially redacted) decree handed down on 16 July 2013 by the Administrative Review Tribunal. The decree, which treated the constitutional compatibility of administrative penalties levied on the taxpayer in accordance with the Value Added Tax Act, built upon the foundations established John Geranzi Limited and reinforced the applicability of article 6 of In fact, in Janosevic the Court stated that ‘In the light of its conclusion that Article 6 does not apply to the dispute over the tax itself, the Court will consider the proceedings to the extent to which they determined a “criminal charge” against the applicant, although that consideration will necessarily involve the “pure” tax assessments to a certain extent.’

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the Convention. Of particular significance was the emphasis placed

by Magistrate Gabriella Vella on the right ei incumbit probatio qui dicit50 and the right of the ‘accused’51 to remain silent.

The unfortunate reality is that while such progress is desirable, it is creating an irreconcilable divergence between law and proper practice. The following sub-sections shall demonstrate some of the main aspects of the proecdure which have been affected as a result.

5.1 Does the imposition of additional prosecutions based on the same facts?

tax exclude

other

Another form of additional tax, 52 was the source of conflict in a constitutional reference emerging from a criminal prosecution in Il-Pulizija vs Godwin Muscat.53 An issue arose as to whether the combined effect of articles 23(4) and 23(13) of the Income Tax Management Act could give rise to a situation of double jeopardy.

The Court noted with approval the nature of the additional tax as a ‘criminal penalty’, quoting Vastberga Taxi Aktiebolag and Vulic v Sweden54 and Rosenquist v Sweden.55 However, the Court made an interesting statement in that the scope of Article 4 of Protocol 7 of the European Convention of Human Rights was limited to instances ‘prohibiting the repetition of criminal proceedings that have been concluded by a final decision’.56 When comparing this to the provisions of Article 39(9) of the Constitution of Malta57 the Court came to the conclusion that as additional tax is 50

A legal maxim more commonly referred to as the right of innocence until proven guilty.

51 It should be understood that the Income Tax Acts at no stage refer to the taxpayer as an ‘accused’. There is no formal method of accusing the taxpayer as the penalty applies upon the discretion of the Commissioner.

52 Income Tax Management Act, articles 23(4) and (5); That imposed by the Director General of Taxes for the failure to make payments at source from certain income 53 Il-Pulizija vs Godwin Muscat, First Hall Civil Court (Constitutional Jurisdiction), 21 February 2014 54 Västberga Taxi Aktiebolag and Vulic v Sweden, Application number 36985/97 (ECHR, 21 May 2003) 55 Rosenquist v Sweden, Application number 60619/00 (ECHR, 14 September 2004) 56 European Convention on Human Rights, Protocol 7 Article 4 57 Constitution of Malta, article 39(9): No person who shows that he has been tried by any competent court for a criminal offence and either convicted or acquitted shall 537

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imposed by the Commissioner for Revenue in his discretion, then the qualifying criteria of being ‘tried by a competent court’ is not satisfied. It justified its reasoning by referring to an amnesty clause found in Article 23(9) of the Income Tax Management Act which grants the Commissioner for Revenue the option of refunding the taxpayer any additional tax paid.

This decision is particularly concerning and the First Hall seems to have curbed the admirable development made by the Constitutional Court. The decision has important ramifications on the interpretation of Article 56(12) as a similar ‘amnesty’ can be found in a proviso therein. In the opinion of the authors, it seems absurd and contradictory that the courts should seek to limit the extensive nature of the rights contemplated under Article 39 of the Constitution and article 6 of the European Convention.

5.2 Guilty without trial Another anomaly which has emerged relates to the preappeal stage. Following a comparative analyses of the regimes found under the Income Tax Management Act, the VAT Act and the Duty on Documents and Transfers Act, it has emerged that taxpayers, on failing to exercise their right to appeal, may be inflicted with a criminal penalty without there even being need of a determination of guilt in front of an independent and impartial tribunal.

The criminal justice system is based on the right of the accused to receive a fair hearing in front of an independent and impartial body which decides whether he should be discharged or again be tried for that offence or for any other criminal offence of which he could have been convicted at the trial for that offence save upon the order of a superior court made in the course of appeal or review proceedings relating to the conviction or acquittal; and no person shall be tried for a criminal offence if he shows that he has been pardoned for that offence: Provided that nothing in any law shall be held to be inconsistent with or in contravention of this sub-article by reason only that it authorises any court to try a member of a disciplined force for a criminal offence notwithstanding any trial and conviction or acquittal of that member under the disciplinary law of that force, so however that any court so trying such a member and convicting him shall in sentencing him to any punishment take into account any punishment awarded him under that disciplinary law.

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punished based on the facts of the case and the application of the law. Although different configurations may be utilised under criminal procedure one feature remains constant: the process through which the determination of guilt is ascertained by an independent figure cannot be dispensed with. The accused may exercise his right to remain silent or he may contest the facts upon which the accusation is based. But in such circumstances he cannot be punished until his case has been proven beyond reasonable doubt by the prosecutors.

The crux of the matter lies in the defective nature of the contestation procedure, insofar as criminal penalties are involved.

Using the Income Tax Management Act as the example par excellence the taxpayer has, at various stages, a right to contest an assessment made by the Commissioner for Revenue. The procedure may eventually lead to a hearing of the dispute by the Administrative Review Tribunal. In other instances, for example, where the taxpayer elects not to file an objection, he effectively admits his guilt without ever appearing in a court of law. 58 This also occurs when a notice of refusal of an objection is issued by the Commissioner for Revenue and the taxpayer fails to appeal the decision in front of the Administrative Review Tribunal.59 Both these examples are clearly unconstitutional. 60 The same applies for the analogous situations under the VAT Act, insofar as the imposition of various administrative penalties is concerned, as well as the Duty on Documents and Transfers Act, insofar as additional duty is concerned.61 58

This would occur by not availing of his right under article 33(1) of the Income Tax Management.

59 Income Tax Management Act, article 33(4): In the event of any person assessed, who has objected to an assessment made upon him, agreeing with the Commissioner as to the amount at which he is liable to be assessed, the assessment shall be amended accordingly, and notice of the tax payable shall be served upon such person.

60 When seen in light of article 39(1) of the Constitution of Malta: Whenever any person is charged with a criminal offence he shall, unless the charge is withdrawn, be afforded a fair hearing within a reasonable time by an independent and impartial court established by law.

61 There has been no decision by a court of law or otherwise in Malta determining the status of additional duty under article 10 of the Duty on Documents and Transfers Act as a criminal penalty. Notwithstanding this, it cannot be helped but noticed that additional duty shares a number of characteristics with additional tax under the Income Tax Management Act and administrative penalties under the VAT Act. 539

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5.3 Tempered right of silence?

A further deficiency can be found in the 2007 amendments to the VAT Act. As stated in the previous sections, the VAT Act also provides for the possibility of the imposition of administrative penalties.

Keeping in line with the modus operandi of the previous section, a particular aspect of the VAT contestation procedure shall be dissected. Article 48 of the VAT Act requires registered taxable persons to keep records of their transactions. These records must be produced upon request by the Commissioner, and failure to do so will result in the taxable person forfeiting his right to using such evidence later on in the contestation procedure. 62 Logically, this provision applies extensively, including situations where administrative penalties may to be imposed.

Should an administrative penalty be imposed, this provision of law would become clearly incongruent with the right to remain silent. The taxable person, who in such a situation may be assimilated to the accused in criminal proceedings, is being compelled to produce evidence against himself. Should the taxable person avail of his ‘right to silence’63 then he would be subsequently prohibited from bringing forward any evidence to aid his defence at a later stage of proceedings. It is interesting to draw parallels between this provision and those disputed in the relation to the ‘Chambaz Principle’ laid down by the European Court of Human Rights in the case Chambaz versus Switzerland64. In this case a Swiss national was subjected to several investigations in relation to tax evasion. He refused to provide the authorities with certain information upon request in exercising his right not to incriminate himself. However, Swiss law prescribed that such refusal was tantamount to a criminal offence. Thus, by refusing to incriminate himself he had effectively incriminated himself. The European Court of Human Rights deemed this to be a violation of article 6 of the ECHR. Article 48(5) of the VAT Act speaks specifically of ‘the Tribunal or any Court of law’.

63 Which, following John Geranzi Limited, should be guaranteed.

64 Affaire Chambaz v Switzerland, Application Number 11663/04 (ECHR 142 2012) 62

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5.4 Competence of the Administrative Review Tribunal The Income Tax Management Act delegates the authority to determine appeals on contested assessments to the Administrative Review Tribunal.65 The wording of the provision indicates that the Administrative Review Tribunal is competent to hear and determine appeals in accordance with the provisions of Article 35.66 Of particular interest to the reader would be the manner in which said Article circumscribes the scope of the appeal, in that the tribunal is empowered to decide on assessments contested by the taxpayer.67 This raises the question: as additional tax under the Income Tax Act has now been defined as a criminal penalty, does the Administrative Review Tribunal still have the competence to hear and determine disputes relating to additional tax? What is clear is that Article 34 of the Income Tax Management Act does not fulfil the role of a provision which allocates jurisdiction for all disputes/penalties found under the Income Tax Acts to the Administrative Review Tribunal. Its competence appears prima facie to be strictly limited to the review of assessments. The problem is perhaps exacerbated by the ambiguous definition of an assessment.68 Does an assessment include the imposition of additional tax?

Unfortunately this issue, which has not yet been raised, presents difficulty and may be very much open to debate. The provisions of law tackling additional tax and its contestation were clearly designed prior to the John Geranzi Limited decision and are thus ill fitting given the current context.

What remains clear is that the legislator has refrained to take any steps to amend the status quo in the aftermath of. This is quite curious in the opinion of the authors, as one would imagine that 65

Income Tax Management Act, article 34(1) Tax Management Act, article 35(1): Any person who, being aggrieved by an assessment made upon him, has failed to agree with the Commissioner in the manner provided in article 33(4) may enter within thirty days after the date of service upon him of notice of the refusal of the Commissioner to amend the assessment as desired, an appeal against such assessment to the Administrative Review Tribunal.

67 This emerges from the wording of article 35(1) which indicates that the appeal is limited to disputes regarding the quantum of the assessment.

68 Vide the discussion in the section 2 entitled ‘The Tax Contestation Procedure under the Income Tax Management Act and the VAT Act’ of this article.

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such ground breaking decisions at a constitutional level would be swiftly followed by legislative intervention. 69 That being said, the author submits that the decision was handed down amidst a somewhat turbulent period politically, which would explain the inactivity. In fact, no Acts of Parliament were passed in the period between 7 December 2012 and 16 April 2013.70 One could thus speculate that the John Geranzi Limited case and its ramifications are not topping the current administration’s agenda for reform, regrettable as it is.

6.

Moving forward: has the time for a specialised tax court come?

This article has demonstrated the main aspects of fiscal law which are showing clear signs of decay in the face of human rights concerns. Disappointingly, our legislators have all too often eschewed deeper reform in favour of a piecemeal approach. 71 Yet, mending our fiscal laws (be they of a taxing, administrative, or judicial nature) by patching up its weakest links is both shortsighted and counter-productive. The legislator faces innumerable further difficulties by neglecting wider reforms as fiscal laws become

69

Interestingly enough, this does not only appear to be an issue for the Maltese jurisdiction. As to the situation in the United States of America, the following has been stated: ‘Although Congress changes the tax law frequently, and taxpayers then respond to the new laws, instances of Congress acting promptly to change the law interpreted in a court decision are not particularly frequent. One study found that ‘on average, the likelihood of a congressional response to a case in the first year after decision is 3%’, though a quick response is much more likely in cases involving lobbyists, a Supreme Court invitation for oversight, and other factors (Staudt, Lindstadt, and O’Connor (2007) 1381–1382)’; Leandra Lederman, ‘What do Courts have to do with it? The Judiciary’s Role in Making Federal Tax Law’ 65 (4) (2011) National Tax Journal 905 70 Parlament ta’ Malta, ‘Acts - Eleventh Legislature (2008 - 2013)’ <http://www.parlament.mt/actslist?legcat=7> accessed 11 December 2014 71 This could be mainly attributed to the fact that fiscal laws are updated regularly in order to mould governmental economic policy. As an example, in the period spanning between 1990 and 2014, the Income Tax Act (excluding subsidiary legislation) was amended forty-five times.

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increasingly more difficult to read and interpret. Inconsistencies with the general corpus of law and practice are inevitable.

This begs the question: are our fiscal laws developing in a suitable fashion? Are we, as both taxpayers and practitioners, content with simply filling in the gaps as we go along, or should we push for the greater reform?

The authors of this paper are of the conviction that Malta’s future as a competitive tax jurisdiction is highly reliant on the dependability and ease of use of its legislation. At the time of writing, Maltese Fiscal Law has not yet encountered the difficulties faced by other States’ fiscal legislations, particularly the United States.72 Yet it must certainly be worrying to third party observers that great difficulty may be found to derive a conclusive opinion on an issue (such as that discussed in this article) when aspects of the law are diametrically opposed to current constitutional practice.

What should prevail when such obstacles are encountered: the black letter of the law or the written word of our judiciary?

Addressing these deficiencies requires a two-pronged approach which will tackle the short-term issues whilst simultaneously paving the way for deeper reform in the long-run.

The only realistic short-term solution to the constitutional questions posed by John Geranzi Limited would be to adjust the contestation procedure accordingly in order to render it ECHR compliant. The crux of the problem clearly entails the status of additional tax. Its precise nature has required continuous classification and interpretation by the courts, resulting in much uncertainty. Any changes would firstly entail the curbing of the semi-automatic infliction of pecuniary charges under the various fiscal acts together with a clear delineation of the competences of the Administrative Review Tribunal to hear and decide on fiscal disputes of a criminal The United States’s problems have been well summed up in the following passage: ‘The second problem is that the tax code is maddeningly complex. It is 4m words long and changes, on average, once a day. A 90-page booklet from the Internal Revenue Service is necessary to explain the 15 different tax incentives for higher education. There are 42 different definitions of a small business. And so on’; --, ‘Fixing the tax sieve Two lawmakers are determined to overhaul America’s woeful tax code. Will their parties let them?’ (The Economist, 2013) <http://www.economist.com/news/united-states/21581726-two-lawmakers-aredetermined-overhaul-americas-woeful-tax-code-will-their-parties-let> accessed 20 November 2014 72

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nature. The role of the Commissioner in these proceedings must also be reviewed to reflect his role as a prosecutor, rather than a defendant.

The above suggestions are only indicative of the solutions to the larger problems at hand and perhaps a practical long term solution would be the consolidation of Maltese fiscal laws under a single Tax Code: an exercise which will not only provide an opportunity to the legislator to eradicate legislative inconsistencies but to also trim any excess administrative red tape.

A reform of this kind could venture further and look towards the segregation of fiscal law disputes from the general corpus of administrative law and subject it to the jurisdiction of an ad hoc court or tribunal, in similar vein to the situation pre-2010. Such a measure, which is prevalent in, inter alia the United States, Canada and the United Kingdom, would need to be complemented by an army of well-trained specialists and legislatively mandated clear parameters of competence. Such a reform would necessitate a reversal of governmental policy of the last few years which has aimed at consolidating administrative disputes by subjecting them to the jurisdiction of the Administrative Review Tribunal.

It is regrettable that the scope of this paper does not allow for the authors to elaborate further on this possible solution.

7.

Conclusion

The decision in John Geranzi Limited is a positive one and it is certainly fascinating to observe our fiscal litigation process develop in reaction to it. Notwithstanding this statement, it is clear that a Pandora’s Box has been opened and there are now more questions being asked about the quality of our fiscal laws than are being answered.

In the opinion of the authors, the legislator is faced with a fork in the road as to what policy it wishes to assume in the face of tax collection. The current system has forged elements of Fiscal Law and Criminal Law without fully appreciated the intrinsic differences which exist under the two branches of law. It is assumed

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that such a policy was pursued in order to make tax collection more efficient and more effective.

Yet the current position cannot continue indefinitely. If the legislator wishes to pursue a policy of punitive and deterrent penalties for tax evasion, then it is at liberty to do so, insofar as it recognises the reality that by ‘criminalising’ elements of the tax collection process then it needs to treat the taxpayer in a manner which is congruent to the rights of the accused in criminal proceedings. This cannot be a half-hearted measure and tackle one end of the process. This article has clearly demonstrated that kinks exist in practically every quarter of the process insofar as contestation is concerned. The legislator must bring the entire process, starting with the very basic elements of the assessment stage, in line with human rights standards as set by John Geranzi Limited. If the law intends to treat taxpayers as potential criminals, then it must treat them as potential criminals with the bundle of rights and protections that come along with it.

On the other hand, the legislator could observe additional tax and its analogous companions for what they are and take the necessary steps to eliminate them from our fiscal legislation. It is not incompatible with human rights to levy an administrative fee for recovery of taxes. Reigning in on the punitive and deterrent nature of the penalties would allow the tax authorities to continue recovering costs through traditional suits. Consequently, alternate routes for the prosecution of tax evasion or tax fraud can be found through the provisions in the Criminal Code. Such an approach would go a long way in rectifying the inconsistencies which dog our Fiscal Law.

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