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7 maltatoday | SUNDAY • 28 JUNE 2026 OPINION Administrative penalties: Questions that need to be answered Lawyer. This contribution reflects his personal views Paul Edgar Micallef ONE issue that has impacted effective regulatory compliance in certain sectors for at least the last decade is the imposition of so-called administrative penal- ties by various public author- ities. The courts presided by different judges have on various occasions questioned the legali- ty of the powers under ordinary law afforded to different public authorities to impose adminis- trative penalties. In the landmark judgment the Federation of Estate Agents vs Director General (Competition) et decided by the Constitutional Court on 3 May 2016, the court held that the infringements of competition law that the fed- eration allegedly may have breached were ultimately of- fences of a criminal nature even though the penalties that the Director General (Competition) could then have imposed were described as administrative. Accordingly, Article 39(1) of the Constitution applied, whereby any person accused of a criminal offence must be giv- en a fair hearing before an in- dependent and impartial court. Subsequently, various consti- tutional court cases have been decided in the same vein against other public authorities notably the FIAU and the MFSA. The main argument accepted by the courts is that once such 'admin- istrative penalties' are meant to punish the non-compliant per- son then such administrative penalties are of a criminal na- ture and should be treated ac- cordingly, leading to a situation where time and again the courts have questioned the legality of certain provisions under ordi- nary law whereby public author- ities are empowered to impose administrative penalties more so where these penalties involve substantial financial penalties. This situation has now been on-going for some years and ob- viously needs to be addressed in short order. In doing so howev- er certain questions need to be asked: Question 1: What is an ad- ministrative penalty and what distinguishes such a penalty from a criminal penalty? There appears to be lack of clarity as to what constitutes an admin- istrative penalty. In some court judgments the fact that the en- visaged administrative penalty that may be imposed is deemed considerable implies that the imposition of the penalty is meant to punish the non-com- pliant person. This in turn has been interpreted in some court rulings as a sign that the admin- istrative penalty is of a criminal nature and should be treated ac- cordingly. Question 2: Who should be empowered to impose an ad- ministrative penalty? In the light of the interpretation that has been given in some court judgments, should then ad- ministrative penalties, more so where the amount of the penal- ties are substantial, be imposed only by a court? Or conversely should public authorities also be empowered to impose such penalties? Question 3: If the courts are to be empowered to impose ad- ministrative penalties, should this power relate to all admin- istrative penalties? Or should recourse to the courts apply on- ly where the envisaged penalty exceeds a prescribed minimum amount? If so, what criteria should be used to determine that amount? Question 4: Should there be some degree of uniformity appli- cable to all sectors in relation to the imposition of administrative penalties? Various regulatory authorities—the MFSA, FIAU, the Competition Office within MCCAA and so on—have their own regime and procedures how administrative penalties are imposed. Significantly, in some instances the regulator in relation to all administrative penalties is required to apply to a court for a decision to impose penalties. Conversely, in other instances it is the regulator who determines the administrative penalty, though this can then be contested before a court. Question 5: Irrespective of whether an administrative pen- alty is imposed by a court or by a public authority, should the right of appeal from any such decision to an Appeals Court be on points of law or also on points of fact? And how should the Court of Appeal be com- posed—should it be the Court of Appeal in its inferior juris- diction, composed of a single judge, or in its superior jurisdic- tion, composed of three judges? Again, the approach across the various sectors differs substan- tially and for no apparent rea- son. One practical issue here is the Court of Appeal Superior will need more time simply be- cause it is composed of three judges. This list of questions is not ex- haustive. It is merely an attempt to identify some key questions that need to be addressed and answered. Certainly, we cannot persist with a situation where the powers of some public au- thorities to impose administra- tive penalties are being success- fully challenged in court and where many sectoral regulatory regimes have their own unique procedure as to how adminis- trative penalties are imposed. A first step would be for gov- ernment to launch a public consultation listing the various options with its proposals for reform. In doing so the ques- tions mentioned above need to be asked and equally important, addressed. A first step would be for government to launch a public consultation listing the various options with its proposals for reform. In doing so the questions mentioned above need to be asked and equally important, addressed