Going East: Product Liability in China sponsored by: General Introduction Professor Eleonora...
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Going East: Product Liability in China sponsored by: General Introduction Professor Eleonora Rajneri, Università del Piemonte Orientale
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Transcript of Going East: Product Liability in China sponsored by: General Introduction Professor Eleonora...
Going East: Product Liability in China
sponsored by:
General IntroductionProfessor Eleonora Rajneri, Università del Piemonte Orientale
Going East: Product Liability in China
sponsored by:
ChairProfessor Geraint Howells, University of Manchester
Overview of the Chinese Legal SystemProfessor Gianmaria Ajani, University of Torino
Chinese Product Liability: A Civil Law PerspectiveProfessor Lihong Zhang, East China University of Political Science and Law
Chinese Product Liability: A Criminal Law PerspectiveDr Shenkuo Wu, Associate Researcher, University of Verona
TORT LIABILITIES IN CHINAGianmaria Ajani
Dean, Department of Law, University of Torino
A long march towards the Law of Torts
• Marxist Ideology and the Law of Torts
• The Soviet pattern and the “hostility”
towards strict liability
• A loose legal regime (PCL, 1986, 17 Arts.)
Instead of a Civil Code
• Like the 1999 Uniform Contract Law and the 2007 Property Law, the 2010 Torts Law is an important step in regulating private law issues
• The “prudent” attitude of Chinese judges and the role of the Supreme Court
The importance of definitions
• The Torts Law is not abundant in definitions• Neither Fault, nor Negligence, are defined
• “Force majeure” is not defined (is there a different concept of what force majeure is under a State controlled economy ?)
• “Public interest defense” • “Close relatives” ? (Art. 18)• Determination of punitive damages ?
Which model ?• PRC Torts Law is often introduced as a combination of the
civil law and the common law traditions.• Some provisions are actually a hybrid of civil law and
common law.• As far as damages are concerned, the Law provides for
restitution, in addition to monetary compensation, and imposes punitive damages.
• In fact, US tort doctrines and practices were looked at while drafting the Law, particularly in the areas of special torts.
A Chinese characteristic: ‘‘hexie shehui”
• Art. 1: • “In order to protect the legitimate rights and interests of
parties in civil law relationships, clarify the tort liability, prevent and punish tortious conduct, and promote the social harmony and stability, this Law is formulated”.
Definition of tort liability
• Under Article 2 those who infringe upon civil rights and interests shall be subject to tort liability.
• A tort liability is not based on the unlawfulness of the conduct.
• According to Article 2, the Law grants protection to not only one’s civil rights but also one’s civil interests. The implication is that a tort is a conduct that injures or damages another person’s civil rights and interests.
Right of claim
• Article 3 provides that the victim of a tort shall be entitled to request the tortfeasor to assume tort liability.
• Together with Art. 4, it provides for:
• Independence of Tortious Liability• Superiority
Art. 2: a German model ?
• “Civil rights and interests” shall include right to: • life, health, name, reputation, honor, self image, privacy,
marital autonomy, guardianship, ownership, usufruct, security interest, copyright, patent right, use a trademark, discovery, equities, succession, and other personal and property rights and interests.
Fairness principles
• Art. 24 and its ideological origin:
• “Where neither the victim nor the actor is at fault for the occurrence of a damage, both of them may share the damage based on the actual situations”
The problems of case law and predictability:
• The law of torts is the result of judicial framing, both under the civil law and the common law tradition
• Chinese judicial phrasing is concise
• SC opinion 1988: “157. Where neither party is at fault with respect to the occurrence of a loss, but one party suffered the loss while engaging in activities for the benefit of the other party or of both parties, the party receiving the benefit may be ordered to provide some monetary compensation”.
Part II: Special torts and liabilities
• product liability • liability for motor vehicle traffic accident• liability for medical malpractice• liability for environmental pollution • liability for ultra- hazardous activity• liability for harm caused by domestic animals• liability for injury caused by an object.
Product liability – Ch. 5
• Art. 42: “Where a product with any defect caused by the fault of the seller causes any harm to another person, the seller shall assume the tort liability”.
• “Defect” ? art. 46, Product Quality Law (1993)
Exemptions ?
• Reference to Art. 41 of the PQL:• A manufacturer is not liable if it is proven that:
• the product is not placed into commerce;• the defect causing the damage did not exist at the time when the
product was placed into commerce or • the science and technology at the time when the product was
placed into commerce was at a level incapable of detecting the defect
Conclusion• • Challenges:
• Conflict of laws• Judicial attitudes• Civil procedure rules disturbing access to justice (ex.
mass litigation, class actions)
Going East: Product Liability in China
sponsored by:
ChairProfessor Geraint Howells, University of Manchester
Overview of the Chinese Legal SystemProfessor Gianmaria Ajani, University of Torino
Chinese Product Liability: A Civil Law PerspectiveProfessor Lihong Zhang, East China University of Political Science and Law
Chinese Product Liability: A Criminal Law PerspectiveDr Shenkuo Wu, Associate Researcher, University of Verona
Product Liability: a Civil Prosperctive
Lihong ZHANG, Professor of LawEast China University of Political Science
and LawLondon, 21 May 2013
19
I. Framework of Civil Liability of Product in China
• 1. Concept of Civil Liability of Product Contractual liability: civil liability on product
under a purchase and sale contract => inconformity in terms of quantity and quality
1999 Contract Law, its 3 related judicial interpretations (1999, 2009, 2012), numerous administrative regulations, Law of Quality of Product
1982 CISG20
2. Tort liability (real sense of product liability): The defective products cause any damages toa. personal life or b.property other than the defective product
itself (another person’s property)Case: Car burning in parkingLaws: 2009 Tort liability Law, 2001 judicial
interpretation concerning the determination of moral damages; 2003 judicial interpretation concerning the trial on personal jury.
Administrative laws: Law of product quality21
3. Special civil liability of product(liability on protection of consumer=>punitive liability)
1993 Law of Protection of Consumer’s rights Double compensation2009 Law on the Protection of Food Safety10 times compensation
22
Art. 47 of 1999 Tort Liability Law
Article 47 Where a manufacturer or seller knowing any defect of a product continues to manufacture or sell the product and the defect causes a death or any serious damage to the health of another person, the victim shall be entitled to require the corresponding punitive compensation.
23
II. Requirements on assumption of product tort liability
1. Falling into ranges of the products causing tort liabilityArt. 2 of Law of Product Quality1) Product processed and manufactured by human beingPrimary products of agriculture, fishery, animal husbandry,
can not be included2) For the purpose of sale3) Only chattel (real estates excluded)
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• However, “products” shall include construction materials, components, parts and equipment for use in construction projects, provided that they are processed and manufactured for sale.
25
• Questions:Eletricity (more than 1000 voltage, yes)Gas, WaterBlood product; Intellectual product;Financial product;
Answer is NO!26
• 2. Existence of causality between tort and damages• How to prove the damages?Appraisal of expert ( experts shall be appointed by the court),
double or triple appraisal!!Mushubishi Glass broken case (Fujian,2009)Yokohama tire case (shanxi, 2005)General knowledge of lifeEgg case (Anhui, 2012)
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3. The damages shall be caused by a defective product .
Debates: Double criteria of determination of defective product
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• Article 46 of 2000 Law of Quality of Product) "Defect" referred to in this Law means the
unreasonable danger (academic criteria)existing in a product that endangers the safety of human life or other person’s property. Where there are national or industry standards safeguarding the health
29
• Design defect, production defect and warning defect
• Knife Case in Carrefour supermarket (2009, Shanghai)
• Tea Case (in Fujian 2010)
30
• Disclaimer subject (Article 41 of Law of Product Quality) :
• A manufacturer shall not be liable for compensation if it can prove the existence of any of the following circumstances:
1) The product has not been put in circulation;2) The defect causing the damage did not exist when the product was put in circulation;3) The science and technology at the time the product was put in circulation was at a level incapable of detecting the defect.
•
31
5. Attribution principleProducer: strict liabilityFault offset shall be applied in any case!Seller: fault liabilityYes for Right of recourseNo for not several liabilityliability between producer and seller is an unreal
several liability!!
32
IV. Compensation to damages
• Real damages proven by the plaintiff, including emotional damage in case of serious damages to personal life
• Punitive damagesControversy in legal practice: is it necessary to prove the
damages? Two different cases:Emotional damages can be added, besides punitive
damages
33
V. Conclusion• Chinese judges hold very strong power of
discretion in civil decision, sometimes difficultly to be confined.
• A correct legal reasoning, but the codification of law, is the ground on the basis of which the rule of law can work actually.
• In China, Law in Action is quite different from Law in Books
• Case-based approach for the study of comparative law
34
Going East: Product Liability in China
sponsored by:
ChairProfessor Geraint Howells, University of Manchester
Overview of the Chinese Legal SystemProfessor Gianmaria Ajani, University of Torino
Chinese Product Liability: A Civil Law PerspectiveProfessor Lihong Zhang, East China University of Political Science and Law
Chinese Product Liability: A Criminal Law PerspectiveDr Shenkuo Wu, Associate Researcher, University of Verona
Going East: Product Liability in China
sponsored by:
ChairDr Duncan Fairgrieve, British Institute of International and Comparative Law
Professor Eleonora Rajneri, Università del Piemonte Orientale
Chinese Product Liability: a Lawyer PerspectiveDr Paolo Beconcini, CBM International LLP, Beijing
A Macro-governance perspective on Consumer Protection LawProfessor Ignazio Castellucci, Universities of Trento and Macau
www.cbmlaw.com
Litigating Product Liability Claims in China
Dr. Paolo BeconciniCarroll, Burdick & McDonough – Beijing Office
www.cbmlaw.com
Consumer Rights Protection in China Consumer Rights Protection in China – –
Claim Base and remedies Claim Base and remedies
www.cbmlaw.com
Consumer Rights ProtectionConsumer Rights Protection
Claim BaseClaim Base
Remedies/Remedies/AuthoritiesAuthorities
Legal Frame
www.cbmlaw.com
How are consumer rights really How are consumer rights really protected in China?protected in China?
www.cbmlaw.com
Facts & Figures
PL cases accepted by the China courts from 2009 to 2011 PL cases accepted by the China courts from 2009 to 2011 vs. vs.
General Tort Law Litigation General Tort Law Litigation
Sourced from “Annual Report of China People’s Courts” issued by SPC, see the link: http://www.court.gov.cn/qwfb/sfsj/201105/t20110525_100996.htm
www.cbmlaw.com
Facts & Figures
Complaints handled by China Consumer Association (CCA)Complaints handled by China Consumer Association (CCA)vs. vs.
PL Lawsuits handled by CCA PL Lawsuits handled by CCA
(sourced from “Annual Analysis of Consumers’ Complaints” issued by CCA in 2012, see the link: http://www.cca.org.cn/web/xfts/xfts.jsp)
www.cbmlaw.com
Facts & Figures
Product Liability Cases since Mar 2012 by type
www.cbmlaw.com
Facts & Figures
Product LiabilityCases since Mar 2012 by Authority/Media involvement
www.cbmlaw.com
• Marginal Impact of Tort Law!Marginal Impact of Tort Law!• Exposure to Unpredictable Risks.Exposure to Unpredictable Risks.
• Consumers will search and attract attention of media and authorities.
• Media and authorities are keen to collect input from the public
Analysis
www.cbmlaw.com
Example
Consumer Rights DayConsumer Rights Day
www.cbmlaw.com
WHY CONSUMERS CHOOSE NOT TO FILE CIVIL WHY CONSUMERS CHOOSE NOT TO FILE CIVIL LAWSUITS?LAWSUITS?
- Consumer rights are perceived as public law rights;
- Little familiarity of Chinese attorneys with tort law;
- Timing: justice is too slow and damages too low;
- Foreign manufacturers are hypersensitive to media exposure;
- New Laws and regulations encourage recourse to media and administrative actions.
www.cbmlaw.com
Tort LawDisadvantages for consumers
www.cbmlaw.com
Bad for Consumers, Good for ManufacturesBad for Consumers, Good for Manufactures
-Burden of Proof is on the Claimant-Case law of higher courts on burden of proof is solid-Plaintiff must pay for court appointed technical valuations-Low damage compensation awards-Cases may last long time, while interim remedies are not available.
Tort Law
www.cbmlaw.com
Tort Law – Undiscovered WeaponDisadvantages for Manufacturers and Sellers
www.cbmlaw.com
Definition of DefectDefinition of Defect
Defective products are products which contain unreasonable risks endangering the safety of persons or property. This is the same as in the older product Quality Law.
There are three major types of defects: design defects, manufacturing defects, and failure to provide adequate warning or instruction.
Products that fail to meet national or industrial standards for health and safety can also be deemed as defective products under PRC law.
Tort Law
www.cbmlaw.com
Continuous duty to warnContinuous duty to warnManufacturers and sellers have a continuous duty to warn of defects, even after the product has been put into circulation. Liability exemption, if the manufacturer could prove that the defect could not be found at the time the product was firstly put into circulation, is no longer available.
Pain & SufferingPain & SufferingA claimant may seek compensation for mental damages where there is infringement on personal rights and interests which results in serious mental damages.
Punitive damages Punitive damages Provided that the plaintiff can prove that they knew of the defect andthat the product caused death or severe injuries.
Instigation of a recallInstigation of a recall Right of the Plaintiff to call, via the court, for the recall of defective productswhich endanger personal or property safety, without needing to prove the existence of any actual injuries.
Tort Law
www.cbmlaw.com
Risks posed by the Litigation SystemRisks posed by the Litigation System
Jurisdiction: In many cases grassroots courts are competent:
- Influenced by local factors- Consumer friendly- Judges often without strong legal background- Corruption
Civil Procedure:- Lack of transparency;- Discretion of judges;- Lack of sound experts;
Tort Law
www.cbmlaw.com
Other Recent Laws and RegulationsOther Recent Laws and RegulationsAutomotive Recall Law as trendsetter
www.cbmlaw.com
Definition of Manufacturers•Chinese auto manufacturers and importers of foreign automotive products into China.•Importers will not be able to shift the recall responsibility back on to foreign manufacturers.
Definition of Defect•Includes the design, manufacture, marks or other reasons where auto products of the same batch, model or category have universally unreasonable hazards which endanger personal or property safety.•Unlike provisions of 2004 provisions, auto products meeting relevant national and industrial standards can still be considered as “defective”.
Broadening the Pool of Complainants•Any organization or individual could complain about possible defects in auto products to AQSIQ (State Administration of Quality Supervision, Inspection and Quarantine). •There is no requirement for the complainant to prove that he or she is the vehicle owner, as under the current provisions.
Automotive Recall Law
www.cbmlaw.com
Other Recent Laws and RegulationsOther Recent Laws and RegulationsChoice of Law Statute
www.cbmlaw.com
Choice of Law Statute
• New provisions regulating the choice of substantive law in foreign-related product liability cases. Choice excludes “conflict of laws”.
• Before, plaintiffs could only choose to apply the law of the place where the tort had occurred.
• According to the new statute, a plaintiff – Chinese or foreign – can now choose to have the Chinese People’s Court apply to his case the substantial law of the place where he has his habitual residence (aside from place of domicile of the defendant).
• Pre-condition: Defendant has relevant business operation at the habitual residence of the plaintiff.
!! Plaintiff may thus increase the liabilities of the manufacturer and sellers, and their exposure to
higher damage compensation !!
www.cbmlaw.com
Recovery against Chinese Manufacturers
Special Case
www.cbmlaw.com
THANK YOUTHANK YOUQ&A
Carroll, Burdick & McDonough LLP
Room 05, Floor 9, Tower D, Vantone CenterNo. 6 Jia Chaowai Street, Chaoyang District
100020 Beijing, P.R.Chinawww.cbmlaw.com
Going East: Product Liability in China
sponsored by:
ChairDr Duncan Fairgrieve, British Institute of International and Comparative Law
Professor Eleonora Rajneri, Università del Piemonte Orientale
Chinese Product Liability: a Lawyer PerspectiveDr Paolo Beconcini, CBM International LLP, Beijing
A Macro-governance perspective on Consumer Protection LawProfessor Ignazio Castellucci, Universities of Trento and Macau
Going East: Product Liability in China
sponsored by:
ConclusionDr Duncan Fairgrieve, British Institute of International and
Comparative Law
