Joint Swedish-Vietnamese Masters’ Programme

MASTERS’ THESIS

PHẠM THN PHƯƠNG ANH

Grounds for Damages in Tort owing to Defective Products

A comparative study of Vietnamese and English law

SUPERVISORS:

Dr. Đo Van Đai

Ass. Prof. Eva Linddell-Frantz

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Preface and Acknowledgements

I am a very ambitious student. I love all the subjects in the law master program. As a result, it was extremely difficult for me to choose a topic for my master thesis. I shared my embarrassment with my husband and some of my colleagues at the time a conference on consumer protection was being held in Ho Chi Minh City. They suggested that I should conduct my research on that subject. I remembered the time when I was in Hanoi to study Civil Law with Associate Prof. Katarina Olsson, and Ass. Prof. Eva Linddell-Frantz. I was very impressed with their class on product liability in the European Union because the term ‘product liability’ was rather new in Vietnamese legal science. It would have been too much to try and study all aspects of product liability, so I selected grounds for damages as the topic of my thesis, with the assistance and advice of my supervisors. Futhermore, among the state members of EU, I have always had a special interest in England since I studied both the English language, and English literature and its social and political life during my undergraduate and postgraduate program in Teaching English to Students of Other Languages (TESOL). These elements facilitated my study of “Grounds for Damages in Tort owing to Defective Products - A comparative study of Vietnamese and English law”.

Primarily, I am greatly indebted to my parents for their support and encourage-ment, to Ph.D. Candidate Le Minh Hung, my beloved teacher and life-partner for his professional and emotional sharing and support and to my children for their sympa-thy during this project. My especial gratitude goes to my supervisors, Ass. Prof. Eva Linddell-Frantz for her helpful and inspiring comments, for her admirable human qualities and for providing me with constant and unfailing trust and encouragement; Dr. Đo Van Đai for his helpful comments and advice, and his kind and generous support of my pursuit of my academic projects. My gratitude also goes to Prof. Hans Henrik Lidgard and Ass. Prof. Christoffer Wong for their devoted and indispensable assistance in the preparation for the writing of this thesis as well as for examinations, and to Mr. Philip Horowitz for language review. It must also be conveyed to my dear professors in the Law Faculty of Lund University, and in Ho Chi Minh City Univer-sity of Law for their enthusiasm, and erudite lectures. It is a pleasure to acknowledge the assistance, both professional and personal, of my colleagues in the Section of Foreign Languages & IT.

I am very much indebted to the Swedish International Development Cooperation Agency (SIDA) for their financial support during this project.

I wish to dedicate this work to my dear students. Ho Chi Minh City, February 2009

Phạm Thị Phương Anh

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Table of Contents

Preface and Acknowledgements .................................................................................. 1 Table of Contents ......................................................................................................... 2 Abbreviations ............................................................................................................... 2 Executive Summary ..................................................................................................... 4 1. Introduction .............................................................................................................. 5 2. Overview of tort law and product liability law in Vietnamese and English law ... 10 3. The existence of personal injury damages ............................................................. 17 4. The existence of illegal acts/omissions and defectiveness of products in

Vietnamese and English law ........................................................................ 25 5. The requirement of causation ................................................................................. 36 6. Fault liability versus strict liability, defences, and persons subject to product

liability in Vietnamese and English law ...................................................... 43 7. Conclusion ............................................................................................................. 53 Table of Statutes and other Legal Instruments ........................................................... 55 Table of Cases ............................................................................................................ 57 Bibliography ............................................................................................................... 58 

Abbreviations

CPA 1987 Consumer Protection Act 1987

CUP Cambridge University Press

EC Bull Bulletin of the European Communities

EC Treaty Treaty establishing the European Community (Consolidated version 2002)

ECJ European Court of Justice

EEC European Economic Community

EPLR European Product Libility Review

EU European Union

ICSA Institute of Chartered Secretaries and Administrators

ILS Information of Legal Sciences

LPGQ Law on Products and Goods Quality (Vietnam)

LQR Law Quartery Review

LS Legal Sciences

LSM Legal Science Magazine

LSTR Law on Standards and Technical Regulations (Vietnam)

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OJLS Oxford Journal of Legal Studies

OPCI Ordinance on the protection of consumers’ interests (Vietnam)

OUP Oxford University Press

PCJM People’s Court of Justice Magazine

SLM State and Law Magazine

VCC 2005 Vietnamese Civil Code 2005

VLR Vanderbilt Law Review

WTO World Trade Organization

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Executive Summary

Consumer protection in general and product liability in particular are topical subjects in Vietnam, but Vietnamese law thereon suffers for grave limitations. In reality, Vietnamese legal documents on product liability such as the Ordinance on Consumer Protection and the Law on Products Goods Quality are simple, general, and even problematic. Thus, because of the potential scope of my work, I decide to conduct research on the grounds for damages in tort caused by defective products only. In this thesis, I select English law as a yardstick to compare to Vietnamese law on the issue because though England is common law country, there exists a statute on product liability, that is Part I of the Consumer Protection Act 1987. Also, the legal situation before England was subject to the CPA was rather similar to that of Vietnam today. It is convenient and advantageous for me to search for and study materials in English. Last but not least, no other research on this topic has been found.

My thesis aims to study and compare the grounds for damages in case of defective products in Vietnamese and English law, and to make some suggestions for the im-provement of Vietnamese legal instruments on product liability.

Although my focus is on tortious product liability, it covers neither breach of con-tract, nor negligence. It looks at strict liability in tort only, the defects of products, excluding medical products, personal injury and causation between defects and dam-age in English law. These elements are compared with the grounds for damages in case of defective products in Vietnamese law, namely personal injuries, illegal acts/omissions, fault, and the causation between damage and illegal acts/omissions.

The comparative method, and the traditional legal method are mainly used to get the results of my work. The former is employed in all stages of thesis writing such as determination of research questions, material search, problem solving, and outcome with careful consideration of each legal system’s social, economic, and legal fields. I also avail myself of the latter to utilize literature, statutes, legal instruments and/or cases to analyze or interpret statements or problems in question.

The main contents of the project are schematically split up into seven sections: In-troduction; Overview of tort law and product liability law in Vietnamese and English law; The existence of the damage known as personal injury; The existence of illegal acts/omissions and defectiveness of products in Vietnamese and English law; Causa-tion; Fault versus strict liability, defences, and persons subject to product liability in Vietnamese and English law; and finally the Conclusion.

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1. Introduction

1.1 Justification

Vietnam has been developing its economy with a consequent increase in living standard, so the demand for products and services is increasingly demanding of both quality and quantity. To meet these requirements, and in line with the development of technology, many new products have indeed appeared in the market. Besides prestigious and responsible manufacturers, there are still those who, for one reason or other, launch products of very low quality, and even endanger consumers by supplying products such as petrol with acetone, soy sauce containing 3-MPCD,1 candy containing CaCO3,2 the Chinese milk brand Yili containing the industrial chemical melamine which caused more than 6,000 mainland infants to suffer from kidney stones, four or whom died. However, it is very difficult for consumers to recover damages due to limitations in Vietnamese law in both consumer protection and product liability. According to the statistics of Department of Market Management, counterfeits, the volume of bad quality goods has dramatically increased year by year. There were more than 60,000 cases in 2005; more than 63,400 cases in 2006; and nearly 65,000 cases in 2007. However, there were only about 1,000 complaints on product liability to consumer protection organisations of which 80% were resolved; 20% could not be. One of the reasons is that consumers did not supply enough evidence.3

The Ordinance on Consumer Protection 1999 is very simple and general. The Law on Quality of Products and Goods effective in July 2008 has breathed new life into Vietnamese legal regulations on products and goods, as well as remedies for their

1 Standing for 3-monochloropropane-1,2-diol, one of a group of chemical contaminants known as chloropropanols, which may cause cancer. See http://www.food.gov.uk/science/surveillance/fsis2005/fsis7505, accessed on 14 July 2008.

2 According to Vietnamnet, on 05 September 2008, the competent authorities suddenly inspected three establishments producing candies at Minh Khai Commune, Hoai Duc District, Ha Noi, and recognised that they had used a rate of 30-50% CaCO3 to make candies, an additive which is not permitted as an ingredient for candies by Ministry of Health, WHO, or FAO. See Using stone powder to make candies: Its file forwarded to Ministry of Police, http://vietnamnet.vn/xahoi/2008/09/802860/, ac-cessed on 09 September 2008, and http://vietnamnet.vn/xahoi/2008/09/804025/ accessed on 16 September 2008.

3 Law on quality of products, consumer protection will takes effect on 1 July 2008, http://www.massogroup.com/cms/content/view/4973/291/lang,en/, accessed on 21 September 2008.

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infringement, but it is still problematic.4 Consequently, Vietnamese laws on product liability in general and the liability for damages in case of defective products in par-ticular need improving. When dealing with such a case, the courts often invokes terms on tort from the Civil Code 2005, and other relevant legal instruments, such as the Ordinance on Consumer Protection 1999, and recently the Law on Products and Goods Quality. Nonetheless, I think that the interests of the injured are not thor-oughly protected when defective products caused the damage.

In the current period of integration, it is valuable for Vietnam to directs it atten-tion towards other countries, especial those in Europe, where consumers’ interests are very well protected. Each country in the European Union has its own legal sys-tem beside that of the Union. Both of them constitute a sufficient and consistent law on consumer protection including product liability. For this thesis, I have selected English law as the yardstick for comparison with Vietnamese law because

(i) although England is a common law country, there is now a statute on consumer protection with detailed regulations on product liability namely, the Consumer Pro-tection Act 1987, which implements Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products (hereinafter referred as ‘the Directive’). According to Michael Bogdan, statutory law is currently playing a more important role at present in England than case law. Further, English law in-creasingly depends on EU legal instruments;5

(ii) the legal situation in England before the CPA was rather similar to that in Vietnam. For example, a consumer who was injured by a defective product which he had bought could bring an action against the retailer for damages for breach of con-tract. Under the Sales of Goods Act an implied term was included in the contract to the effect that the goods will be fit for the purpose intended. Nevertheless, because of the doctrine of privity of contract no action for damages could be brought by a third party even when it was foreseeable that a defective product would cause him harm as, for example, a member of the purchaser's family;6

4 For example, this law utilizes the terms ‘products, goods which do not meet quality standards’ and ‘defective products’ inconsistently, which makes the law vague.

5 Bogdan, Michael, Comparative Law, (Kluwer, Norstedts Juridik 1994) in Vietnamese translation by Le Hong Hanh & Duong Thi Hien, (unknown year) at p. 99.

6 According to Royce-Lewis, before the CPA was passed, English courts had used contract law and the law governing the tort of negligence to solve problems on product liability. See Royce-Lewis, Christine A., Product liability and consumer safety: a practical guide to the Consumer Protection Act (ICSA Pub-lishing Limited, London 1988), p. 3. Cf. Simon Deakin, Angus Johnston, and Basil Markesinis, Mar-kesinis and Deakin’s Tort Law (5th edn, Clarendon Press, Oxford 2003), p. 603.

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(iii) it is convenient and advantageous for me to research materials in English be-cause along with law, I also majored in English; and

(iv) no research on the topic has been found by me. I hope that the outcome of my project will contribute to the current preparation for a consumer protection law, and the improvement of the tort law established by the Civil Code 2005 and the Law on Products and Goods Quality in Vietnam.

1.2 Aims and delimitations

The above raises a number of questions, one of which is “On being damaged by defective products, on what grounds does a consumer rely on seeking damages from the manufaturer under Vietnamese or English law?” Because this issue is a part of tort law, I am also wondering about a decent overview of tort law and product liability in each of Vietnamese and English law because some potential readers of this thesis may know the Vietnamese law on the issue, but do not know or know only a little about the English law position, and vice versa.

The former question raises many sub-questions, which are “What constitutes per-sonal injury in Vietnamese and English law?”, “How does each of the legal system deal with problems thereon (if any)?” Moreover, in Vietnamese law, the second ground for damages in this case is the existence of illegal acts/omissions in compari-son with defectiveness of products in English law. In terms of product liability, which is more accurate and suitable? In addition, what is a product? When is it con-sidered defective? Who bears liability for the defects? How is the demand for a causal relation between the product and the injury defined and put into practice? What is the meaning of fault and of strict liability? Can the manufacturer be excused under any circumstances? After making a comparative study of these issues, what recommendations should be given to improve the Vietnamese law of product liabil-ity?

As a result, my thesis aims to present an overview of tort law and product liability in each of Vietnamese and English law, to study and compare the grounds for dam-ages in case of defective products in each of the two legal system, and if it is possible and appropriate, to make suggestions for the improvement of the Vietnamese Con-sumer Protection Law, which is currently being drafted.

Although the main concern of this thesis is product liability, it will cover neither breach of contract, nor negligence. As for damages, the thesis concentrates on per-sonal injuries only.7 It also discusses illegal acts/omissions in Vietnamese law and

7 See ss 3.2.3 Problems relevant to personal injury, 3.3.2 Mental damage, and problems relevant the-reto & 3.4 Recommendationsof this thesis for more information.

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the defectiveness of products, excluding medical products such as drugs, vaccine, human blood, plasma, human tissue and organs8 as they require special and separate studies. Indeed, drugs are virtually the only products in England not invariably sub-ject to a rule of strict liability since about ninety percent of drugs are supplied by the National Health Service, and they are not sold the Sales of Goods Act but are sup-plied under a statutory duty.9 Causation and fault in tort and strict liability in product liability are naturally studied in the first sections of the work. Furthermore, though my focus is on grounds for damages, subjects bearing liability for a products’ defects and defences are discussed in Section 6.3, which makes product liability more under-standable even though it is still all a matter of controversy.10

1.3 Methods and material

The two main methods of the comparative method, and the traditional legal method are going to be applied in this thesis. The former is used in all stages of the thesis writing including determination of research questions, material study, solving a problem, outcome declaration with careful consideration of each legal system’s social, economic, and legal aspects based on factors such as geography, climate, and race, developments and events shaping the course of a nation’s history (e.g. war, revolution), religion and ethics, the needs of production and consumption.11

In addition to the comparative method, the traditional legal method is utilized in the study of books and articles, the analysis and interpretation of statutes, legal in-struments and/or cases used to solve the problems discussed. Unlike the case in Eng-lish law, cases are non-binding in Vietnam, but they are usually discussed in profes-sional projects to examine whether Vietnamese statutes are applied consistently by courts, and/or whether they are in touch with reality. In my thesis, Vietnamese cases are analyzed to see if the Civil Code 2005 and the Law Products and Goods Quality should be amended in any way so that they can protect consumers’ interest more

8 Miller, C.J. & Goldberg, R.S., Product liability (2nd edn, OUP, Oxford 2004), pp. 305 – 319.

9 Dehn, Guy, “The implications of the new product liability regime”, in R. Hulsenbek & D. Camp-bell (ed), Product liability: prevention, practice and process in Europe and the United States, (Kluwer, Deventer 1989), pp. 51-59, at p. 59.

10 See Nelson-Jones, Rodney & Stewart, Peter, “A United Kingdom Perspective of the EC Product Liability Directive”, in Product liability: prevention, practice and process in Europe and the United States, op. cit. above n. 10, pp. 111-120.

11 These elements are reviewed because they affect the law on consumer protection relating to prod-uct liability in Vietnam and England. See Zweigert, K. & Kötz, H., An Introduction to Comparative Law (3rd edn OUP, Oxford 1998), Weir Tony (tr) with reference to Rabel, Aufgabe und Notwendigkeit der Rechtsvergleichung (1925), reprinted in Rabel, Gesammelte Aufsätze III (Leser, 1967), p. 32, at p. 36.

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effectively, especially in the case of damages for defective products. In addition to this, I even presume Vietnamese cases to be assisted by English law and vice versa so that I can evaluate which best protects consumers, and which is more in favour of the manufacturers. This assists me to give recommendations more cogently and ap-propriately.

As for material, books, articles, and reports on tort law in general and product li-ability in particular in both Vietnamese and English law have been sought out. Be-cause Part I of the CPA was implementing the EU Directive, materials on EU prod-uct liability, proposals for the Directive, and its reports are also taken into account in order to understand the intent of the legislators, the differences between the CPA and the Directive, and its implementation in England. I pay much attention to all concepts linked to defects in products, namely personal injuries, illegal acts/omissions, causa-tion, fault, strict liability, etc, which help me understand my topic more deeply. Moreover, I have collected statutes, written legal instruments and cases in Vietnam-ese and English law on the topic so as to be able to compare them comprehensively.

1.4 Structure of the thesis

My thesis is divided into seven main sections. Section 1 presents the justifications, aims and delimitations, research methods, material, and structure of the thesis. Section 2 tries to give readers a very general background picture on tort law, the position of product liability, and the grounds for damages in case of defective products in both legal systems. The next four sections deal with the grounds for damages when the defective products result in personal injury, namely personal injury, illegal acts/omissions and defectiveness of products, causation, fault liability versus strict liability, defences, and persons subject to product liability. Each of the four sections discusses legal issues, relevant practice, and gives recommendations where appropriate. Finally, the conclusion summarizes what has been discussed and proposed, and reviews the limitations of the thesis.

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2. Overview of tort law and product liability law in Viet-namese and English law

2.1 Tort law

2.1.1 The notion of tort In English ‘tort’ originates from tortus in Latin, which is meant ‘twisted’. It tends to mean ‘wrong’, and it is currently so used in French: ‘J’ai tort … I’m wrong’12. Tort is a legal institution with a long history, formed relatively early in the legislation of the ancient world.13 Under Roman law, compensation was based on the principle of equal retaliation. Consequently, it had an eseentially penal nature with a life for a life, an arm for an arm, or an eye for an eye, and so on.14 However, the law on tort has changed a great deal.

Tort is not officially defined in any legal document of Vietnam nor is it in Eng-land. Some Vietnamese and English legal scholars and lawyers have stated what tort is, which can be understood under a subjective meaning (According thereto tort is a particular civil liability.) and under an objective one (Tort is an institution of the Civil Code/Common Law).

Le Đinh Nghi and Pham Cong Lac have focused on tort in its subjective meaning. Thus, tort gives rise to a demand for compensation, and it is “a civil relation in which those whose acts or omissions cause damage to the life, health, honour, human dig-nity, prestige, property, legitimate rights and interests of others shall be responsible for damages.”15 In fact, this is a civil liability defined in Article 280 of the Vietnam-ese Civil Code 2005 (hereinafter referred as VCC 2005): “A civil obligation is a task under which a subject or more than one subject (…) must transfer an object, transfer rights, pay money or return valuable papers, perform other tasks or refrain from doing certain tasks in the interest of one or a number of other subjects (…).”

On the other hand, according to Pham Van Tuyet, “tort is a provision of civil law, which forces those whose acts or omissions cause damage to the life, health, honour, human dignity, prestige, property, legitimate rights and interests of others to be re-

12 Harpwood, Vivienne, Principles of tort law (4th edn, Cavendish, London & Sydney 2000), p. 1.

13 Samuel, Geoffrey, Law of Obligations and Legal Remedies (2nd edn, Cavendish, London 2001), p. 262.

14 See Miller, William Ian, Eye for an eye (CUP, Cambridge 2006), p. 39; Cf. Nguyen Ngoc Dao, Luat La Ma (Roman Law), (Hanoi 1994), p. 156.

15 Đinh Van Thanh & Nguyen Minh Tuan (eds), Luat Dan su Viet Nam (Giao trinh) (Textbook on Viet-namese civil law), Vol. 2 (People’s Police Publisher, Hanoi 2006), p. 257.

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sponsible for damages.”16 In this respect, he recognises tort as an institution of Civil Law. Professor Winfield likewise defines tort as follows: “Tortious liability arises from the breach of a duty primarily fixed by law; this duty is towards persons gener-ally and its breach is redressable by an action for unliquidated damages.”17 In fact, it is impossible to give an accurate definition, which can satisfy all readers. Professor Winfield’s definition tends to distinguish tortious liability from other liabilities like contractual liability or criminal liability.

2.1.2 Sources of tort law in Vietnam and England In Vietnam, tort is provided for in Chapter XXI of the VCC 2005, and the related guiding legal instruments ; for example: Resolution of the National Assembly No. 45/2005/QH11 on 14 June 2005 on the implementation of the Civil Code, Resolution No. 03/2006/NQ-HĐTP of the Supreme Court Committee of Judges on 08 July 2006 guiding on the application of some regulations of the Civil Code 2005 on Tort, Resolution No. 388/NQ-UBTVQH of Standing Committee of the National Assembly on 17 March 2003 on paying damages for those unjustly punished caused by competent people in criminal procedural activities.

Unlike Vietnam, England is a member state of the European Union, so now legal sources for tort consist of the legal documents of the European Community: treaties, conventions, declarations, protocols, regulations, directives, decisions; for instance, Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety. Besides this, decisions or judgements of European Court of Justice (ECJ) are important sources of English law on tort under Article 234 of the EC Treaty 2002.18 For example, in the case Declan O’Byrne v Sanofi Pasteur MSD Ltd, formerly known as Aventis Pasteur MSD Ltd and Sanofi Pasteur SA, for-merly known as Aventis Pasteur SA, ECJ rules on the meaning of putting product into circulation under Article 11 of Directive 85/374 on product liability are highly relevant.19 Furthermore, English internal statutes and statutory instruments and the

16 Phan Huu Thu & Le Thu Ha (eds), Giao trinh luat dan su (Textbook on civil law) (People’s Police Pub-lisher, Hanoi 2007), p. 446.

17 Harpwood, op. cit. n. 12, p. 1.

18 Cf. Slapper, Garry & Kelly, David, English Legal System 2003 – 2004 (5th edn, Cavendish, NSW 2003) pp. 2 & 3. Cf. Favret, Jean-Marc, Nhung van de co ban ve Lien minh Chau Au va phap luat cong dong Chau Au (Some fundamentals of European Union and legislation of European Community) in Vietnamese trans-lation by Vietnamese and French Legal House (Culture and Information Publisher, Hanoi 2002), pp. 80-83.

19 Case C-127/04, judgement of the ECJ of 9 February 2006, paras 27-29, 32. Accordingly, a product is put into circulation when it is taken out of the manufacturing process operated by the producer and enters a marketing process in the form in which it is offered to the public for sale or consump-tion. The ECJ recognised that where entities in the chain of distribution are closely connected to the

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common law are sources of tortious liability20 examples being the Civil Liability Act 1978, the Fishing Vessel (Safety Provisions) Rules 1975, etc. and cases like Yachuk v Oliver Blais Co Ltd (1949), Evans v Souls Garage (2000) about the age for contribu-tory negligence causing injury.21

2.2 Product liability law

2.2.1 In Vietnam Before getting to know the regulations of Vietnamese and English law on product liability, it is essential to study the concept itself. At present, this concept has not been dealt with in Vietnamese law. Nevertheless, Chapter V (Section 2), of the Law on Products and Goods Quality is about compensation relevant to the quality of products and goods, which is similar to product liability in England, as to be discussed. Unlike the case in Vietnam, not only product liability based on negligence but also the movement of strict liability for defective products orginated in the United States in 1961 having already been developed in England and the United Kingdom as a whole since 1932.22 Product liability is considered as a liability imposed by law on those concerned with the supply of products when there is any damage arising from their defectiveness.23 In the CPA 1987, we find: “Product libility is concerned with the liability of manufacturers, retailers, distributors, importers and others for damage or loss caused by products which are defective or which fail to meet the standards legitimately to be expected of them.”24

In Vietnam, there are different legal instruments governing issues relevant to product liability. Article 630 of the VCC 2005 says “[I]ndividuals, legal persons or other subjects manufacturing, distributing goods without ensuring the quality stan-dards thereof, thus causing damage to any consumer, shall be liable for damages.”

producer, it is for the national courts to examine the factual situation and determine whether, in reality, the related entity is involved in the manufacturing process. This is a question of fact and takes no account of whether the related entity has an independent legal personality, or whether the prod-ucts have been purchased by it and property in the products has passed. The focus of the assessment should be whether the related entity carries out an activity that is properly to be treated as a produc-tion activity or, in contrast, is simply acting as a distributor of a product manufactured by an asso-ciated company.

20 See Slapper, Garry & Kelly, David, op. cit. n. 18, pp. 3-5.

21 Elliott, Catherine & Quinn, Frances, Tort law (5th edn, Pearson, Edinburgh 2005), p. 115.

22 Deakin, Simon, Johnston, Angus & Markesinis, Basil, op. cit. n. 6, pp. 604-607.

23 See Stapleton, Jane, Product liability (Law in Context Series, Butterworths, London 1994), p. 9.

24 Miller, C.J. & Lovell, P.A., op. cit. n. 8, preface.

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Article 4 of Ordinance on the Protection of Consumers’ Interests25 provides for the liability of organizations, individuals manufacturing and trading in products, services to serve internal consumers, of organizations, individuals trading in imported prod-ucts. Article 9 of the said ordinance also confers on consumers

the right to request a refund or compensation for loss and damage when goods and services do not satisfy the standards, quality, quantity and price as published, or do not satisfy the standards, quality, quantity and price as set out in a signed contract; and to complain, to denounce, and to institute proceedings in accordance with law in respect of any production or trading in prohibited or fake goods, or in respect of any goods and services which do not satisfy the standards or quality or amount, or in respect of any false information or advertising.

In addtion to this, Chapter V (Part 2) of the LPGQ defines in detail the compensation principles relevant to quality of products and goods, such as principles of paying damages, types of damage owing to the failure of product quality; compensatory liability of manufacturers, importers, sellers; defences.

In my opinion, the above provisions may be presented as principles, but they are insufficient,26 disputable,27 and inconsistent.28 It is very difficult for a claimant to rely on them to get compensation owing to defective products, or products not satis-fying the required standards or quality. Consequently, in order to claim damages, the claimant also has to use the provisions on tort in the VCC 2005 (from Article 604 to Article 630),29 and the legal documents guiding the inplementation thereof.30

25 The legal document directly related to this ordinance is Decree No. 55/2008/NĐ-CP of 24 April 2008 providing for the implementation of the OPCI in detail by the Government.

26 For instance, the OPCI is about consumer protection, but only Art. 9 deals with ‘the right to re-quest a refund or compensation for loss and damage when goods and services do not satisfy the standards, quality, quantity and price as published’ generally. It does not deal with people subject to liability, defences, etc.

27 For example, the imposition of fault liability or strict liability with respect to product liability.

28 For instance, the use of ‘products’ and ‘goods’ in the LPGQ. See Section 4.1.1 Definition of prod-uctsfor more information.

29 This institution regulates issues like Grounds for liability for damage (Art. 604), Principles for damage compensation (Art. 605), capacity of individuals to compensate for damage (Art. 606), limi-tations for initiating lawsuits to demand damages (Art. 607), Damage caused by infringement upon property (Art. 608), Damage caused by infringement upon health (Art. 609), Damage caused by infringement upon life (Art. 610), Damage caused by infringement upon honor, dignity or prestige (Art. 611), Duration of enjoyment of compensation for damage caused by infringement on life or health (Art. 612), and Compensation for damage in a number of specific cases (from Art. 613 to Art. 630).

30 Resolution No. 03/2006/NQ-HĐTP of the Supreme Court’s Committee of Judges on 08 July 2006 guiding on the application of some regulations of the Civil Code 2005 on Tort.

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In other words, the provisions on product liability have been laid down in a rather scattered, inconsistent, and unclear way in Vietnamese law, leading to difficulties in legal research and disputes. It is a requisite for Vietnam to have plain, specific, and sufficient regulations on product liability and the grounds for damages claimed from manufacturers, importers, and sellers so that the claimant can indeed recover losses resulting from defective products supplied by them. Such regulations will protect consumers more effectively and create a safe and healthy production system nation-wide.

2.2.2 In England According to Royce-Lewis, before the CPA 1987 was passed, English courts had only applied contract law and the law governing the tort of negligence to deal with cases relevant to product liability.31 The most famous case, which indeed marks the birth of product liability based on negligence is Donoghue v Stevenson [1932] AC 562. This case eliminated the former requirement of common law that product liability arises only when is there privity between the parties, and opened a new approach to the law on liability for defective products based on the ‘neighbour’ principle of Lord Atkin.32 According to this, a ‘neighbour’ is perceived as a person (A) affected so directly and closely by another person (B) that B ought reasonably to believe that A would be so affected when he does an act or omission called in question. In order to be sucessful in a case of product liability involving negligence, an injured person has to prove:33

(i) he is owed a legal duty of care by the defendant;

(ii) the defendant has been negligent;

(iii) owing to (ii), the plaintiff has suffered loss or damage of a type which one

could have reasonably foreseen.

The Consumer Protection Act, which became effective on 1 May 1988, marked a step in the development of the law on product liability in England: strict liability or liability without any concern for fault for defective products became the norm. In other words, strict liability replaced product liability. The birth of the CPA 1987 to some extent satisfied social needs at that time. Especially, the Thalidomide case34

31 Royce-Lewis, Christine A., op. cit. n. 6, p. 3.

32 Howells, Geraint, Comparative product liability (Ashgate, Dartmouth, 2000), p. 70.

33 Royce-Lewis, Christine A., op. cit. n. 6, p. 4.

34 Thalidomide was a drug widely used by pregnant women during the 1960s for morning sickness, and it caused serious damage to their babies during pregnancy. The parents and later the children

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had shown that comsumers’ interests could not be ensured if neglience was the standard applied to defective products causing damage.

Part I of the CPA implements the provisions of the Product Liability Directive (85/374/EEC) into English law.35 Part I excluded primary agricultural produce and game (i.e. food sold in its raw state) from the scope of the legislation. However, Di-rective 1999/34/EC amended the 1985 Product Liability Directive by requiring the removal of this exception with effect from 4 December 2000. From this date food sold in its raw state is included in the legislation. This change was implemented in England - the Consumer Protection Act 1987 (Product Liability) (Modification) Or-der 2000 (Statutory Instrument 2000 No. 2771).

2.3 Grounds for damages owing to defective products in tort

2.3.1 Under Vietnamese law As stated in Section I, this thesis only looks at the grounds for damages in case of defective products in tort. This sub-section intends to briefly introduce the grounds provided in both Vietnamese and English law. A deeper study and discussion is reserved for later sections.

Article 604 of the VCC 2005 states as follows:

1. Those who intentionally or unintentionally infringe upon the life, health, honor, dignity, prestige, property, rights, or other legitimate interests of individuals or infringe upon the honor, prestige and property of legal persons or other subjects and thereby cause damage shall be liable for compensation.

2. In cases where the law provides that the persons who cause damage must compensate even when they are not at fault, such provision shall apply.

This article is explained in detail in Resolution No. 03/2006/NQ-HĐTP of the Supreme Court’s Committee of Judges on 08 July 2006 (Point 1, Part I). In accordance with this, tortious liability arises when the following elements are at hand: (1) There must be loss suffered and loss may include both material loss and mental suffering; (2) There must be an illegal act/omission; (3) There must be a causal relationship between the loss caused and the illegal act/omission; (4) There must be intentional or unintentional fault on the part of the person inflicting the loss.

themselves had to fight for years to prove that the drug had caused their injuries and recover com-pensation. Elliott, Catherine & Quinn, Frances, op. cit. n. 21Fel! Bokmärket är inte definierat., p. 182.

35 Art. 249(3) EC Treaty: “A directive shall be binding, as to the result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods.” And England is the first Member State who harmonized their internal law with the Directive. See Howells, Geraint, op. cit. n. 32, p. 89.

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However, to my mind, Article 630 on compensation for damage caused by in-fringement upon consumers’ interests relevant to product liability36 is not considered as a special case where “the persons who cause damage must compensate even when they are not at fault”.37 Thus, it is presumed that liability for defective products does not fall into the scope of Section 2, Article 604 of the VCC 2005. Besides, Article 61 of the LPGQ, provides that manufacturers, importers, sellers may be liable for dam-ages when their goods cause damage due to their failure to ensure the quality of the goods. Thus, it is concluded that ‘fault’ is one of the grounds for damages in cases relevant to products and goods under Vietnamese law.

2.3.2 Under English law Unlike the Vietnamese situation, Part I of the CPA 1987 expressly provides that a claimant for damages in case of defective products supplied after 1 March 1988 shall prove: (1) the defectiveness of products; (2) damage suffered by a claimant as a result of defective products; (3) the defendant is a person who manufactures the products or any person who has a liability similar to that of the actual manufacturer.38 Sub-section 2(1)39 of the CPA 1987 requires that the injured person must also prove the damage, the defectiveness of products, and the casual relationship between them without any concern for the fault of manufacturers or similar people. In other words, the CPA 1987 imposed a regime of strict liability or liability disregarding fault for defective products.

2.3.3 Comparative comments The most easily recognisable similarity between Vietnamese and English law on grounds for damages in case of defective products in tort is the presence of damage. However, while Vietnamese law holds generally that there must be an illegal act/omission, English law requires the defectiveness of products. This requirement is more appropriate in the case of product liability.

Causual relationship is an indispensable element in both laws, but the provisions on illegal acts/omissions and the defectiveness of products make it slightly different in each case. In Vietnamese law, The claimant has to prove a causal link between the

36 Art. 630 reads: “Individuals, legal persons or other subjects that undertake production and busi-ness without ensuring the quality standards of goods, thus causing damage to any consumer, shall be liable for compensation.”

37 Art. 604(2), the VCC 2005.

38 Sub-sections 1(2), 2(2), 2(3), the CPA.

39 This sub-section implements Art. 4 of the Directive.

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damage and the illegal act/omission, while under English law he must prove a causu-al relationship between damage and defective products. The remarkable distinction is that while fault is considered as one of the grounds for damages owing to defective products in tort in Vietnamese law, it is not a legal condition in English law. The liability of defendants is also provided for differently in the LPGQ and Part I of the CPA 1987, but this will be discussed in Section 6 below.

3. The existence of personal injury damages

3.1 Introduction

Damage can be considered as the prerequisite ground for the commencement of a claim in every tortious case since the main objective of tort law is to bring the victim back to the status quo ante.40 If no damage is incurred, there will be no claim for the recovery of damages. As a result, damage is a premiss of tort law in general and product liability in particular. As stated above, the law on product liability has not been established officially and obviously in Vietnam. So when discussing personal injury in Vietnam, this section deals with it in terms of tort law in general. Indeed, it is difficult to make a distinction between personal injury in cases of product liability and under other types of liability in tort. I do agree with C.J. Miller that when an injured person claims for personal injury, the claimant’s losses will be compensated to the same extent as in any similar area of the law of tort.41 Analogously, although the law on product liability does exist in England, the general tortious theory on personal injury will be studied in addtion to legal provisions and practical cases specific to defective products. In this part, I discuss three questions in Vietnamese and English law: (1) what constitutes personal injury; (2) problems arising therefrom; (3) suggestions for Vietnamese law on the constitution of personal injury.

3.2 The constitution of personal injury in Vietnamese law, and problems arising therefrom

According to Clause 1 of Article 609, the VCC 2005, damage caused by harm to health42 shall comprise: (a) Reasonable costs43 for treating, nursing and rehabilitating

40 See Owen, Richard, Essential Tort Law, (3rd edn, Cavendish, London 2000), p. 167.

41 Miller, C.J. & Lovell, P.A., Product liability (Butterworths, London 1977), p. 319.

42 This is the literal translation of “thiet hai do suc khoe bi xam pham”, but this phrase is equivalent to “personal injury”. As a result, it is referred to as “personal injury” hereinafter.

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health, and functional losses and impairment of the injured person; (b) Loss of or reduction in the actual income of the injured person; (c) Reasonable costs and actual income losses of the care providers44 of the injured person during the period of treatment. If the injured person loses his or her ability to work and requires a permanent care provider, the damage shall also include reasonable costs for taking care of the injured person. Moreover, Section 2 provides that a person causing personal injury to another person must pay the items provided in Section 1 of this article together with an amount of money as of compensation for mental suffering. Vietnamese law does not define what ‘harm to health’ is, but ‘damage caused by harm to health’ is covered in detail. It constitutes both consequential economic loss45 arising from physical damage46 and mental damage.47

3.2.1 Physical damage Reasonable costs of treatment, improvement and recovery of health and rehabilitation of lost or decreased functions of the injured person include costs of transporting carry the injured person to medical establishments for emergency treatment; costs of medicine, medical equipment, costs of X-rays, scanning images, ultrasonic diagnosis, tests, surgical operations, blood transfusion, physiotherapy and

43 Reasonable costs are meant necessary actual expenses which are appropriate to the nature and extent of the loss and to the average prices in each locality at the time of incurring such costs (Point 1, Part I of Resolution No. 03/2006/NQ-HĐTP of the Supreme Court’s Committee of Judges of 08 July 2006).

44 There is no definition of ‘care provider’ in Vietnamese law. He is often a relative of the injured, and takes care of the injured at his will while he is under treatment. The injured may be looked after by many people, but commonly only one of them is considered as the ‘care provider’ in this respect. Some care providers think that it is their responsibility to take care of the injured, so they do not claim for compensation. See Tran Ngoc Dung v Tran Quoc Tuan, No. 280/2007/DSST re “Claiming for damages for personal injury” of the People’s Court in Ninh Kieu District, Can Tho City and Huynh Nhu Phuong v Tran Van Son, No. 243/2007/DSST re “Claiming for damages for personal injury” of the People’s Court in Ninh Kieu District, Can Tho City.

45 “Consequential economic loss (sometimes also termed parasitic loss) is recoverable because it presupposes the existence of physical injuries, whereas pure economic loss strikes the victim’s wallet and nothing else.” See Bussani, Mauro & Palmer, Vernon Valentine, “ The notion of pure economic loss and its setting” in Bussani, Mauro & Palmer, Vernon Valentine (eds), Pure Economic Loss in Europe (Cambridge studies in international and comparative law, CUP, Cambridge 2003), pp. 3-24, at pp. 5&6. See ibid for more analysis about consequential economic loss and pure economic loss. This term is not mentioned in Vietnamese legal instruments, but naturally it is the same as what I am going to describe about personal injury in the form of physical damage, which is known as indirect damage by Vietnamese legal researchers.

46 Also referred as pecuniary loss, see Owen, Richard, op. cit. n. 40, pp. 172-77.

47 It is also known as non-pecuniary loss under English law. See Damages for Personal Injury: Non-Pecuniary Loss (Law Com. No. 257, 1999), http://www.lawcom.gov.uk/docs/lc257.pdf, accessed on 10 October 2008.

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so forth according to physicians' prescriptions, hospital charges, cost of tonics, transfusions, and expenses for health recovery according to physicians' prescriptions; other necessary and actual expenses for the injured person (if any) and expenses for the fitting of artificial limbs, eyes, for purchase of wheelchairs, crutches and plastic surgery and so forth in support or replacement of lost or declined bodily functions of the injured person (if any).48

It seems that the notion ‘loss of or reduction in the actual income’ is self-explanatory, so there is no interpretation of it in any legal documents. Point 1(1.2), Part II of Resolution No. 03/2006/NQ-HĐTP only says that if before the loss the injured person had actual income which is lost or reduced after the damage to health as he/she must go for treatment, he/she shall be paid damages for actually lost or reduced income. Furthermore, it defines the methods to determine actual income lost or reduced of the injured person. Based on this point, it is clear that actual income may be permanent and temporary salary or wages.

Reasonable expenses of the care provider of the injured person during the treat-ment period include travel costs, rent as per the average price in the locality where they are paid (if any) of one of the care providers of the injured person during the treatment period if necessary or upon request by the medical establishment.49

Personal injury also consists of reasonable expenses for the care of the injured person including monthly reasonable expenses for the nurture and treatment of the injured person and reasonable expenses for the regular care provider of the injured person. Such a provision shall be applied where, after receiving treatment, an injured person still has a loss of working capacity and needs a regular care provider (the in-jured is unable to work due to spinal paralysis, total blindness, paralyzed legs, se-rious mental illness or other cases prescribed by competent State bodies where the working capacity has declined by 81% or more).50

3.2.2 Mental damage In addition to physical damage, mental damage constitute personal injury under Vietnamese law. In terms of product liability, mental damage can be intepreted as loss caused by harm to an individual’s health, which makes him/her suffer from grief, sorrow or emotional loss and so forth.51 The phrase ‘and so forth’ indicates that

48 Point 1(1.1), Part II of Resolution No. 03/2006/NQ-HĐTP.

49 Point 1 (1.3)(a), Part II of Resolution No. 03/2006/NQ-HĐTP.

50 Point 1 (1.4), Part II of Resolution No. 03/2006/NQ-HĐTP.

51 Under Point 1 (1.1), Part I of Resolution No. 03/2006/NQ-HĐTP.

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the list given above lists examples only. In fact, whether a claimant can get compensation for mental damage depends on the judge in charge. There are no statutory requirememts for mental damage like those in English law. However, in discussing mental damage, people do not argue so much about what it comprises, but on how it is computed.52

3.2.3 Problems relevant to personal injury There are many problems relevant to personal injury, but in this part only one issue which I find the most important is discussed. In comparison with the injured person, the care provider is paid damages for the loss of his/her actual income, but not the reduction thereof. This is different from the damages in the case of the injured person. Does it mean that the care provider is not paid damages if he/she only undergoes a reduction of his/her income? Point 1 (1.3), Part II of Resolution No. 03/2006/NQ-HĐTP provides: “If in the time of taking care of the injured person, the care provider was still paid salary or wages by his agency or employer as prescribed by labour and social insurance legislation, it means that he did not lose actual income and therefore will not be compensated.” This provision cannot govern quite a large number of people in certain types of profession such as teacher, translator, embroiderer, craftsman, painter, and so on.

For instance, A is a translator. While taking care of his relative, he may bring a laptop with him to work. If he is paid damages for the loss of his income, this vio-lates the principle of compensation; i.e. the damage must be actual. In addition, if the reduction of the care provider’s actual income is not paid damages for, this does not encourage him to work since he will be paid for what he loses. Another example is where B is a lecturer of a university. While he is looking after his relative, he can get basic salary from his school, but he loses his wages for extra teaching periods.53 Fur-thermore, and in contrast, Section 1(B), Part B, Chapter III of Circular No. 173-UBTP of the People’s Supreme Court of 23 March 1972 guiding the judgement of compensation for non-contractual loss recognised the loss and reduction of the care providers’ income in the case where the attending physician required it. Justifications for its omission have not been found.

However, in practice judges often invoke Section 1(a) of Article 609 to deal with the reduction of the care provider’s income. It is thus considered as a type of reason-

52 See Vu Hong Thiem, ‘Xac dinh thiet hai do suc khoe bi xam pham theo quy dinh cua Bo luat Dan su’ (Determination of damage caused by harm to health under the Civil Code) (2003) 7 PCJM 20, 23.

53 In most universities in Vietnam, lecturers are able to get two types of income: fundamental in-come, and extra income for extra teaching periods.

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able expenses of the care provider.54 This application does not properly match the interpretation of such reasonable costs under 1.3 (a) of Point 1, Part II of Resolution No. 03/2006/NQ-HĐTP as stated above.

3.3 Personal injury in English law, and problems arising therefrom

In 1976 the Council of Europe issued the Strasbourg Convention on Product Liability in regard to Personal Injury and Death. This was the first time that product liability was introduced, but only personal injury was covered. Under Section 5(1) of the CPA 1987, in addition to ‘death, or any loss of or damage to any property’, ‘damage’ is meant ‘personal injury’, which is defined by Section 45(1) to consist of ‘any disease and any other impairment of a person’s physical or mental condition’.

3.3.1 Physical damage Like Vietnamese law, English law recognises that an injured person may recover damages for medical, nursing and other expenses when he suffers a serious injury.55 The general rule is that the plaintiff can recover medical, nursing and other expenses reasonably incurred, or reasonably to be incurred, as a result of an actionable personal injury.56 However, what are considered to be reasonal expenses are significantly different from the rule in Vietnamese law. As summarised by the Law Commission in its Consultation Paper on Damages for Personal Injury: Medical, Nursing and other Expenses,57

expenses incurred by seriously injured victims range, at one end of the scale, from the expenses of surgery and treatment provided by doctors, through the expenses of skilled nursing care, physiotherapy and other forms of therapy, to more ancillary, but still essential, expenses such as the cost of a carer to help with washing and dressing, laundry and shopping. In addition to these expenses, the plaintiff will be entitled to recover the cost of rehabilitative measures such as special appliances needed to cope with physical disability, the cost of new accommodation or of altering the plaintiff’s existing home to take account of the plaintiff’s disability, the

54 My interviews with Nguyen Thi Thuong, a judge of People’s Court of Justice of District 1, Ho Chi Minh City; and with Ho Thi Tuyet Phuong, a judge of People’s Court of Justice of Ninh Kieu Dis-trict, Can Tho City.

55 See Wells v Wells, The Times 24 October 1996, in which the plaintiff, who suffered brain damage in a road accident, recovered £1,594,040.

56 See, Cunningham v Harrison [1973] QB 942.

57 Law Commission Consultation Paper No. 144 (1996), para. 1.4. Although it is not binding like statutory instruments, it is referred by judges when they make judgements.

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cost of modifications to the plaintiff’s car, and other increased living expenses such as higher fuel bills and the additional costs of holidays.

In England, too, loss of earnings58 both actual and prospective59 including loss of wages, loss of salary and in case of professional men and women, loss of fees60 are also considered as arising from personal injury, whereas only the loss or reduction of the injured person’s actual income is recognised in Vietnam since Vietnamese legislators find it very difficult to computing future income. Similarly, “[t]he assessment of general damages for the loss of future (prospective) earnings is, inevit-ably, less precise and fraught with difficulties (…).”61

As for the loss of the care provider’s income, Vietnamese and English law share one view in common, i.e. in practice ‘the proper and reasonable cost’ of taking care of the injured person’s needs also means the carer’s lost earnings.62 The word ‘loss’ in English means ‘damage’, so it covers two situations: (1) The care provider does not obtain any earnings while he is taking care of the injured person, and (2) He gets some income, which is reduced by comparison with the income he received before taking care of the injured person.

According to Miller & Goldberg, “the determination of what constitutes ‘personal injury’ (…) is unlikely to create practical problems other than in the special cases (…). The definition of ‘personal injury’ is wide enough to cover instances of poison-ing, dermatitis or other blemishes of the skin, organic injury (including cancer, coro-nary thrombosis, or a stroke), and the birth of an planned child or the loss of a foe-tus63 as well as the more obvious cases of injury through impact or burning (footnote omitted).”64 In fact, the list of what constitutes personal injury is evidently not ex-haustive because English judges can widen the scope of what constitutes personal injury because of the nature of common law system.

58 Loss of earnings also comprises a reduction or loss of an injured person’s earning capacity. See Moeliker v A. Reyrolle Ltd. [1977] 1 All ER 9; Joyce v Yeomans [1981] 1 WLR 549; Dhaliwal v Personal Representatives of Hunt [1995] 4 PIQR Q56. However, in Foster v Tyne and Wear CC [1986] 1 All ER 567, the court took the view that there was no difference between the loss of earning capacity and the loss of future earnings.

59 In Moriarty v McCarthy [1978] 1 WLR 155, 161, a 24-year-old woman was seriously injured in a car accident. The court held that her future economic loss as the reduction of ‘chances of finding a man who is prepared to take her on and support her’ should be compensated.

60 Deakin, Simon, Johnston, Angus & Markesinis, Basil, op.cit. n. 6, p. 820.

61 ibid.

62 ibid, pp 818 – 819.

63 See Miller, C.J. & Goldberg, R.S., op. cit. n. 8, pp. 650-56.

64 ibid, p. 645.

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3.3.2 Mental damage, and problems relevant thereto As for mental damage, the Directive does not address the issues relevant to non-material damage. Article 9 of the Directive says: “This Article shall be without prejudice to national provisions relating to non-material damage.” Recent documents of European Commission also assume that mental damage is not at present covered by the Directive. This is to say it is determined by the laws of the individual Members States. The preamble of the Directive states that it should not prejudice compensation for pain and suffering and other non-material damages payable, where appropriate, under the law applicable to the case. As a result, under English law, mental damage may be assumed to comprise pain, suffering, and loss of amenities.65 A claimant is entitled to be compensated for actual and prospective pain and suffering. Section 1(1)(6) of the Administration of Justice Act 1982 allows a plaintiff who knows his life expectancy has been reduced to recover for that anguish. A permanently unconscious plaintiff cannot claim for pain and suffering, but he can claim for loss of amenity; for example in Wise v Kaye (1962) and H West & Sons Ltd v Shephard (1964).66

There are many problems relating to personal injury recognised by many legal scholars. Within the scope of this thesis, I present only one problem relating to the word ‘any’ in Section 45(1), the CPA 1987. It covers personal injury includes any disease and any other impairment of a person’s physical or mental condition, which seems that there is no restriction created by English law against recovery for mental damage. However, some restrictions do exist;67 for example damages may only be paid for mental damage when it satisfies at least two requirements: the claimant must suffer actionable damage going beyond ‘mere’ sorrow, grief, emotional distress, hu-miliation, anxiety, or inconvenience and consist of such serious complaints as post-traumatic stress disorder with attendant symptoms of depression or anxiety, or patho-

65 Markesinis, Basil, Coester, Michael , Alpa, Guido, & Ullstein, Augustus (eds), Compensation for Personal Injury in English, German and Italian Law - A Comparative Outline (Cambridge studies in interna-tional and comparative law, CUP, Cambridge 2005), p. 46. According to this, pain and suffering covers the nature of the accident and its immediate after-math; ‘Loss of amenity’ is difficult to de-fine, Lord Reid said in H. West & Son Ltd v Shephard [1964] AC 326 at 341:”There are two views about the true basis for this kind of compensation. One is that the man is simply being compensated for the loss of his leg or the impairment of his digestion. The other is that his real loss is not so much his physical injury as the loss of those opportunities to lead a full and normal life which are now denied to him by his physical condition – for the multitude of deprivations and even petty an-noyances which he must tolerate.”

66 Owen, Richard, op. cit. n. 40, pp. 175&176.

67 See Miller, C.J. & Goldberg, R.S., op. cit. n. 8, paras 16.13-16.18.

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logical grief disorder; and it must originate from a sudden appreciation by sight or sound of a horrifying event, which violently agitates the mind.68

3.4 Recommendations

What constitutes personal injury in England is very advantegously defined for the injured party. This seems reasonable since it increases responsibility as well as awareness of the health and life of others. This is an example worth being studied in Vietnam, but I do not think it is yet time for Vietnam to apply measures identical to those of English law because Vietnam is still a developing country. However, as for the loss of care provider’s actual income, although Vietnamese and English law take a similar approach, personal injury in Vietnamese law should constitute a reduction in the care provider’s actual income in order that his interests are ensured. This would aslo be fairly easy for judges to deal with. This also makes the legal regulations on personal injury consistent. As the injured person can get compensation for both loss and reduction of earnings, why should the care provider only get damages for loss of earnings, but not for a reduction.

Damages for future or prospective income loss should also be considered. At pre-sent, under Vietnamese law reasonable costs for the improvement and recovery of health can be compensated, but they cannot replace the injured person’s future in-come. Though the calculation of the injured person’s future income is not easy, it cannot be excluded from the constitution of personal injury. The claimant can get these damages from the defendant and/or the social security fund.69 Further, support money for those whom the injured person has an obligation to maintain should be provided as well if before the loss of health the injured person was performing his obligation to provide support. As this is now omitted, the injured person’s interests have not been fully taken care of.

If Vietnam had a good social security fund, not only would we solve the problem above, but also the two following problems. First, if damage will occur in the future, but the manufacturers are by then insolvent, the claimant will get damages from the fund. For examples, the case on damages for soy sauce containing 3-MPCD was re-jected by the court because so far there had been no actual victims. Many soy sauce manufacturers are small-size enterprises, which can easily go bankrupt, especially now Vietnam is in the WTO. The injured persons might risk not getting any damages

68 ibid, pp 647-647 (footnote omitted).

69 They have currently received allowances from the Government under Decree No. 07/2000/NĐ-CP of 9 March 2000 of the Government on policies of social relief, but what they have received is still limited, not corresponding to the damage they have been suffering.

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when some years later the damage will be provable, and the manufacturers will have gone out of business.

I do not agree with Tuong Duy Luong’s opinion when he suggests that the gov-ernment should introduce a new rule for product liability. Under this, it would not be necessary for a claimant to prove that he suffers personal injury. He only has to prove that he used bad quality, noxious products which differed from what the manu-facturers claimed because of fraud; or that due to bad quality, noxious products, the claimant is suffering or will suffer personal injury.70 This would violate one of the principles for compensation in Vietnamese law; that is damages must be actual.

The second problem is that collective or mass toxic claims might well make the manufacturers insolvent.71 Assistance of the Government from the social security fund is , I think, the best way to deal with this situation. Such a fund would not only stabilise the economy, but also ensure the legal interests of the injured persons.

4. The existence of illegal acts/omissions and defectiveness of products in Vietnamese and English law

4.1 The concept of product in Vietnamese and English Law

Studying the concept of product before conducting research on defectiveness of products is an important task, which will give readers a clearer picture of the products’ defects issue. In reality, in spite of some similarities, the concept of products in Vietnamese and in English law are different in several ways.

4.1.1 Definition of products To begin with, under Vietnamese Law on Products and Goods Quality, there are definitions of two key notions: products and goods. According to these, products are the results of manufacturing processes or services supplied for commercial or consuming purposes; goods are products put onto the market, consumed through exchanging, trading, marketing.72 According to Part IV of the Report on the Project of Law on Products and Goods Quality by the Ministry of Technological Sciences sent to the

70 Tuong Duy Luong, ‘Roles of courts in the protection of consumers’ interests’, <http://thongtinphapluatdansu.wordpress.com/2008/06/28/286008/> accessed on 30 June 2008.

71 The USA has faced the same problem with asbestos, or even tobacco. See Moore, M. J. & Viscusi, W. K., Product Liability Entering the Twenty-First Century - The U.S. Perspective (Brookings Institution Press, Washington, D. C. 2001), pp. 37-39.

72 Art. 3.

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Government on 14 June 2006, it is necessary to provide two separate definitions for products and goods because of the different natures of the managing manufacturing, importing, and marketing areas.

However, in the law, ‘products’ and ‘goods’ are sometimes misused or used in-consistently. For instance, ‘products’ used in Section 8(2), (4)73 is superfluous be-cause under the definitions above, when a ‘product’ is exchanged or marketed, it is called a ‘good’. That Section 8(2), (4) uses both ‘products’ and ‘goods’ at the same time in exchanging and marketing activities is evidently redundant. Section 10(6) holds that the manufacturer is obliged to supply the buyer, the consumer with a prod-ucts and goods guarantee and to perform what is called for by the guarantee. As in Section 8(2), (4), the word ‘products’ is superfluous. There are many similar provi-sions such as Section 10(9), Section 11(5), Section 12(3), Section 16(3), Section 17(1), Section 18(2), Section 18(3), Section 18(4), Section 22 (4), Section 22 (5), Part 2 on damages on quality of products and goods. It could even be concluded that in the cases mentioned ‘products’ and ‘goods’ are used unconsciously as a compound noun.

Unlike Vietnamese law, under Section 1(2) of the CPA 1987, ‘product’ means any ‘goods or electricity’ and consists of a product that is comprised in another product whether as a component part or raw materials. In other words, ‘goods’ are included in the definition of product, so there is no separation between ‘products’ and ‘goods’ in English law. Nonetheless, in the CPA 1987, products are divided into those in commercial and in non-commercial life.74

4.1.2 What do products comprise? In accordance with the definition stated, in Vietnamese law ‘products’ include all kinds of products, and services. Products in Vietnamese law are considered as results of manufacturing processes for commercial or consuming purposes. One should bear in mind that products in these circumstances have to satisfy two conditions: (1) be the results of manufacturing process, that is, involve the controlled application of energy to convert raw materials (typically supplied in simple or shapeless forms) into finished products with defined shape, structure, and properties.75 Manufacturing also

73 Art. 8 provides forbidden activities such as manufacturing products, exporting, importing, trading goods, exchanging, marketing products, goods incompatible with relevant technical standards; and exporting, importing, trading expired goods, exchanging, marketing expired products, goods.

74 Such as the types of product referred to in the defence of ‘non-business supply’ (s 4(1)(c), the CPA 1987).

75 Unit Manufacturing Process Research Committee, Manufacturing Studies Board, Commission on Engineering and Technical Systems, & National Research Council, Unit Manufacturing Processes - Issues and Opportunities in Research (National Academy Press, Washington, D.C.1995), p. 1.

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means the activity of creating wealth and materials;76 (2) for commercial or consuming purposes. Based on the former definition of manufacturing, ‘products’ in the LPGQ do not include materials and game, but pursuant to the latter, ‘products’ in the LPGQ comprise both materials and game. Vietnamese law does not explicitly exclude buildings from the scope of products, but Article 627 of CCV 2005, and other legal instruments already governed liability for buildings. It is implicitly understood that products do not consist of buildings. In short, the definition of ‘products’ in Vietnamese law is rather vague.

English law defines ‘product’ in a more obvious way, i.e. ‘product’ means any ‘goods or electricity’ and includes a product that is comprised in another product whether as a component part or raw materials.77 As a result, if a defective component is incorporated within a finished product, thereby making the finished product defec-tive, both the manufacturer of the component product and of the finished product will prima facie be jointly and severally liable.78 Also, agricultural produce, previously excluded unless they had undergone an industrial process,79 are now covered by EU Directive 1999/34/EC. And under Section 45(1) of the CPA, ‘goods’ encompass substances, growing crops and things comprised in land by virtue of being attached to it and any ship, aircraft or vehicle; and ‘ship’ includes any boat and any other description of vessel used in navigation; ‘substance’ means any natural or artificial substance, whether in solid, liquid or gaseous form or in the form of a vapour, and contains substances that are comprised in or mixed with other goods. Buildings are specifically excluded except where a supply of goods involves incorporating the goods into a building or structure under English law.80 In addition, in A and others v National Blood Authority (2001), it was accepted that blood for transfusion was a product for the purposes of the CPA 1987.

The remarkable distinction between Vietnamese and English law on the constitu-tion of products is that ‘products’ in Vietnamese law contain services, while in Eng-

76 Nguyen Nhu Y (ed), Dai tu dien tieng Viet (Big dictionary of Vietnamese language) (Culture - Information Publisher, Hanoi 1998), p. 1427.

77 S 1(2), the CPA 1987. The Directive, which the CPA 1987 incorporates, defines ‘product’ to be movables, that is, tangible property other than land or buildings, and excluding agricultural products and game. I think English law on products is more easily applicable than that of the EEC.

78 Miller, C.J. & Goldberg, R.S., op. cit. n. 8, p. 299.

79 S 2(4), the CPA 1987.

80 S 46(3), the CPA 1987.

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lish law, service liability is not treated in the same way.81 The thesis only discusses products excluding services, which should better be compared with English law on ‘service liability’. I retain only agricultural produce, and electricity in this discussion because they are close to the daily life of Vietnamese citizens, especially the farmers who are approximately 80% of the Vietnamese population.

4.1.2.1 Agricultural produce, game

It is evident that agricultural produce, game are recognised as products according to Vietnamese law. However, I am concerned that this protects the consumers’ interests, but badly affects famers’.82 On the other hand, unprocessed agricultural produce, and fish products were originally exempted in the CPA 1987. Some other states83 did regard agricultural produce as products by taking advantage of a permitted derogation under the Directive.84

This had the effect of absolving farmers from liability for naturally occurring ha-zards in products, but it may have also provided an exemption for liability arising from such matters as the spread of salmonella or the continued use of pesticides. Moreover, the ambit of an ‘industrial process’ taking the products out of the exemp-tion was far from clear. It may or may not have included, for example, the freezing of bulk products. Nevertheless, Directive 1999/34/EC removed the exemption, and English legislation was amended accordingly. This was for many reasons: “satisfying public expectations for safety and compensation; a belief that it would not impose irreversible effects on agricultural economies; a desire to promote increased harmo-nisation (…) and the benefits of removing the uncertainty surrounding the scope of primary agricultural produce”.85 In any case, agricultural produce is now embraced by the definition of ‘product’ in English law.

81 ‘Why are people prepared to contemplate strict liability for injuries caused by defective products but not for injuries caused by defective services?’ is also a question posed by J. Stapleton. See Staple-ton, Jane, op. cit. n. 23, p. 323.

82 See more discussion in Section 4.1.3 Recommendations below.

83 Finland, France, Greece, Luxembourg and Sweden. See Lovells, Product Liability in the European Union - A Report for the European Commission (European Commission Study MARKT/2001/11/D, Feb., 2003), Appendix 2.

84 Art. 15.

85 Grubb, Andrew and others, The law of product liability (Butterworths, London 2000), p. 192.

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4.1.2.2 Electricity

There is no legal instruments in Vietnam explicitly defining ‘electricity’ as a product, but through the definition of ‘product’ in the LPGQ, it can be concluded that ‘electricity’ is one type of product. Article 623 of the VCC 2005 on damages for sources of extreme danger holds that “sources of extreme danger comprise motorized means of transport, electricity transmission systems, operating industrial plants, weapons, explosives, inflammable substances, toxic substances, radioactive substances, dangerous animals and other sources of extreme danger as provided by law.”86 The phrase ‘electricity transmission systems’ seems self-explantory, but one issue regarding this remains open. The first view is that ‘electricity transmission systems’ as a source of extreme danger must involve electricity, so it is not essential to make clear whether electricity itself is a product. It is a source of extreme danger, and its owner has strict liability. The second view is that though electricity exists in ‘electricity transmission systems’, ‘electricity transmission systems’ involve a service not a product, albeit one still considered as a source of extreme danger. I favour the latter view, so when electricity is generated, or when it reaches consumers’ appliances, it is a product (post-delivery). When it is being transmitted, it is a source of extreme danger (pre-delivery).87

‘Product’ is defined explicitly in the CPA 1987 and Directive 85/374/ECC to in-clude electricity. Although there is no definition of ‘electricity’ provided,88 it has been suggested that one treat ‘electricity’ as comprising different products when sup-plied at different voltages.89 According to Miller and Goldberg,90 the minutes of the Council show that Directive 85/374/ECC was merely intended to cover defects at-tributable to external agents intervening after electricity has been put into the net-work. This intention relates to the defence “that the defect did not exist in the product at the relevant time”,91 which for electricity is defined as “the time at which it was

86 S 1 of the Art. (emphasis added).

87 This is similar to the rule set in the American case Bryant v Tri-County Elec Membership Corp 844 F Supp 347 (WD Ky, 1994) (voltage spikes causing damage by fire) cited in Miller, C.J. & Goldberg, R.S., op. cit. n. 8, p. 334.

88 “In the USA electricity has been defined as a ‘form of energy that can be made or produced by men, confined, controlled, transmitted and distributed to be used as an energy source for heat, pow-er and light and is distributed in the stream of commerce’: Ransome v Wisconsin Elec Power Co 275 NW 2d641, 643Wis, 1979” cited in Miller, C.J. & Goldberg, R.S., op. cit. n. 8, p. 333.

89 Grubb, Andrew and others, op. cit. n. 85, p. 197.

90 Miller, C.J. & Goldberg, R.S., op. cit. n. 8, pp. 333-334, & ibid.

91 See more about defences in Section 6.2 Defences hereof.

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generated, being a time before it was transmitted or distributed”.92 As a result, elec-tricity generating companies would be exempt from liability for defects arising dur-ing distribution. It seems that Vietnamese law deal with ‘electricity transmission’ in a better way and it does seem desirable that there be a legal distinction between ‘elec-tricity’ and ‘electricity transmission systems’.

4.1.3 Recommendations In the light of the analysis and discussion above, it is recommended that

(1) The LPGQ should not separate ‘products’ and ‘goods’ because goods are products per se. Because most countries utilise ‘product liability’ to name the liabil-ity imposed on those who are concerned with the supply of products, in this era of integration, ‘product liability’ should also be used in Vietnam. I think that this con-cept will assist Vietnam in international trade although some countries do sometimes use ‘products’ and ‘goods’ interchangeably, examples being the USA,93 England94 and Japan.95

(2) The Government should adopt a decree to guide the implementation of some articles of the LPGQ as soon as possible and it should clarify the concept of prod-ucts, especially what products comprise. In my opinion, products should comprise goods as the results of manufacturing process for commercial or consuming pur-poses, electricity, agricultural produce, game, component parts and raw materials comprised in a product. They should expressly exclude land, buildings, and intangi-ble products. Section 45(1) of the CPA should be referred to as a good example. Ac-cordingly, ‘goods’ should be interpreted to encompass substances, growing crops and things being attached to land and any ship, aircraft or vehicle; and ‘ship’ includes any boat and any other description of vessel used in navigation; ‘substance’ means any natural or artificial substance, whether in solid, liquid or gaseous form or in the form of a vapour, and includes substances that are comprised in or mixed with other goods. I think the more the government clarifies the notion of products, the easier Vietnamese individuals, and business entities will find it when they deal with product liability.

92 S 4(2), the CPA 1987.

93 See Phillips, Jerry J., Products Liability in a nut shell (6th edn, West, 2003), p. 1.

94 Discussed in the previous Section.

95 See Nottage, Luke, Product safety and liability law in Japan : from Minamata to Mad Cows (RoutledgeCur-zon, the USA & Canada 2004).

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(3) That Vietnamese law on product liability embraces agricultural produce and game is desirable because it reflects an equal society where citizens’ interests are ensured. This provision will render both farmers and exporters more confident in international trade which is important as Vietnam is one of the top agricultural pro-duce exporting countries. However, Vietnamese farmers’ educational and techno-logical level is still low. Most of them do farming individually, on small plots of land, so it is not easy for the competent authorities to control product quality. For instance, in the last epidemic of bird flu, some people caught the disease, some even died of it after having eaten domestic fowls. Who was liable for damages? Under the current law, farmers might bear the responsibility. However, they raised domestic fowls informally and separately, so it has been difficult to identify the real perpetra-tors. In any event, it was hard get compensation from them since they could not af-ford the damages. Hence, while adopting laws on the way in which agricultural pro-duce and game are controlled from manufacturing process to consumption, the Gov-ernment should adopt mechanisms to assist farmers to gradually become aware of and familiar with the notion of liability for their products. For instance, strict liabil-ity96 is not being applied to agricultural produce and game in the five years after the law on product liability became effective, while it will be applied to other products immediately. The Government should also encourage farmers to purchase insurance in order to prevent them from being bankrupted – and unable to pay - if they do have to bear any liability for their products.

4.2 The existence of illegal acts/omissions and defects in Vietnamese law

4.2.1 The existence of illegal acts/omissions The existence of illegal acts is the second ground for damages under Vietnamese law. Point 1(1.2), Part I of Resolution No. 03/2006/NQ-HĐTP holds that an illegal act means some specific behaviour expressed in action or nonaction which is in breach of the law. However, in practice there are also acts or omissions causing damage, but they are in compliance with the law. As a result, the person who performs such acts or omissions is not liable for damages. For instance, acts or omissions performed within the scope of legitimate selfdefense, or under the requirements of emergency circumstances. Nonetheless, this general provision is applied to all types of tort, so it is necessary to see what is considered an illegal act or omission in the case of product liability, known as a ‘defect’ in English law.

96 See Section 6.1 Fault liability versus strict liability of this thesis for more information.

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However, what a ‘defect’ is in Vietnamese law, especially in the LPGQ is still problematic.

4.2.2 The notion of defects in Law on Products and Goods Quality The Law on Quality of Products and Goods mentions ‘khuyet tat’ of products and goods. The phrase ‘khuyet tat’ is translated as ‘defect’ in English. However, the actual meanings of ‘defect’ in Vietnamese law and ‘defect’ in English law are not the same. The big problem I have with the LPGQ is the complicated notion of ‘defect’. It is evident that the LPGQ is all about the quality of products and goods, which is defined as “product and goods extent of satisfaction of requirements under announced applicable standards or relevant technical regulations”.97 And a ‘standard’ is a “regulation on technical characteristics and management requirements used as standard for classifying and appraising products, goods, services, processes, environment and other objects in socio-economic activities with a view to improving the quality and effectiveness of these objects”.98 By ‘technical regulation’ is meant “regulation on the limits of technical characteristics and management requirements which products, goods, services, processes, environment and other objects in socio-economic activities must comply with in order to ensure safety, hygiene and human health; to protect animals, plants and environment; to safeguard national interests and security, consumer interests and other essential requirements”.99

The following regulations are consistent with what has been stated above. Article 54 of the LPGQ definitely holds that disputes on the quality of products and goods are conflicts relevant to products and goods not being of appropriate quality, causing damage to human beings, animals, plants, properties, and the environment. In addition, liability for damages is imposed on producers, importers, sellers when they do not ensure the quality of their products, causing damage to buyers or consumers.100

In contrast, Article 62 of the LPGQ on defences deals with cases relating to ‘quality of products, goods’, and ‘defects of products’ without any definition of ‘defects of products’. For example, “the world’s scientific and technological level is not advanced enough to detect the risk level of products by the time they cause dam-

97 S 3(5), the LPGQ.

98 S 3(1), the LSTR.

99 S 3(2), the LSTR.

100 Art. 61, the LPGQ.

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age”,101 which is about product safety or the quality of products; and “that the goods are defective has been notified to purchasers or consumers but they still purchase and use those goods; and the goods are defective even though the producers or importers comply with the regulations of competent state agencies” are about ‘the defects of goods’.102

Thus, what is a ‘defect’ of a product under Vietnamese law? Is it the same as ‘product safety’ or ‘quality of products’? It is unclear because, as I have stated abo-ve, there is no definition of ‘defect of products’ or ‘defective products’. In my opini-on, the notion ‘defect’ mentioned in the LPGQ can be understood in three different ways. To begin with, looking at some sections of Article 10103 of the LPGQ, Section 7 of Article 10 states that one of the obligations of producers is “[t]o repair, refund money or exchange for new goods or receive back defective ones which are returned by sellers or consumers”. On the other hand, sections 8 and 9 of the same article hold that the obligations of producers are “[t]o promptly stop production, notify such to the concerned parties and take remedies when discovering that products or goods are unsafe or fail to conform to announced applicable standards or relevant technical regulations”; and “[t]o recall products and goods of poor quality. If the goods must be destroyed, the producers shall bear all costs of destruction and be liable for its consequences in accordance with law”.

As a result, in accordance with the definition of ‘khuyet tat’(defect) in the diction-ary of Center for Vietnamese Languages and Culture (Ministry of Education and Training); i.e. products’ mistakes which are difficult to be repaired,104my first way of understanding the term is that ‘defect’ refers to any physical problems or defects of products, so it is usually associated with ‘repair, refund, exchange, receive’. It is ob-vious that sections 8 and 9 are not using the same term. This is to say that the legisla-ture assumed ‘defective products’ to be different from ‘products or goods which are unsafe or fail to conform to announced applicable standards or relevant technical regulations’ because different types of remedies are applied to these types of prod-ucts. However, if ‘defect’ is indeed understood like that, the regulations in Article 62 are neither adequate nor reasonable.

The second way of understanding the term is that ‘defects’ in goods or products refer to one type only of ‘products or goods which are unsafe or fail to conform to

101 S 1(đ).

102 S 2(c) & (d). The similar regulations can also be found at s10(7), (8); s 12(8), (9), the LPGQ.

103 This is about obligations of producers.

104 Nguyen Nhu Y (ed), op. cit. n. 76, at p. 929.

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announced applicable standards or relevant technical regulations’. As in the first case, this way renders Article 62 inadequate and unreasonable.

The third way of understanding the term is that ‘defective products’ are ‘products or goods which are unsafe or fail to conform to announced applicable standards or relevant technical regulations’. On this basis, sections 10(7) and (8), sections 12(8) and (9) need amending in order to make the regulations on defective products consis-tent, and thus avoid misunderstandings.

4.3 Concept of defect in English law

The word ‘defect’ in general usage encompasses two distinct concepts: a physical weakness which renders a product unsafe; and a design weakness which, while not rendering the product dangerous, prevents it from being fit for one or more of its purposes, coupled in either case with a failure to warn or instruct in a way which avoids harm inusing the product.105 The CPA 1987 states that a product has a defect if "the safety of the product is not such as persons generally are entitled to expect".106 All of the surrounding circumstances will be taken into account by the courts in determining whether or not a product has satisfied the safety requirement, including three matters in particular:107

(a) the manner of the marketing of the product, and any instructions or warnings provided with it.108 However, reliance on false or misleading statements, instructions, promises or advice, as a result of which damage is caused, is not of itself to be treated as a consequence of a defect in the product. The point here is that the product must be inherently safe;

(b) the things that might reasonably be expected to be done with the product. A product is thus defective if it is unsafe in relation to all of its normal uses. It is well illustrated by an example borrowed from Christine A. Royce-Lewis about the use of lawn mowers for lawn mower racing.109 Generally, the manufacturer will not be li-able in extraordinary circumstances. Nevertheless, if at the time of supplying the goods, he knows or may reasonably have known what the goods will be use for, the goods must be reasonably safe for those purposes;

105 See Grubb, Andrew and others, op. cit. n. 85, pp. 6-11.

106 S 3(1); cf. Art. 6 of the Directive. Safety includes risk of damage to property. As for the consumer expectation test see Miller, C.J. & Goldberg, R.S., op. cit. n. 8, pp. 354-393.

107 S 3(2), the CPA 1987.

108 See Worsley v Tambrands [2000] PIQR 95 in which warnings as to the possibility of toxic shock syndrome were sufficiently prominent, so the product was not defective.

109 Royce-Lewis, Christine A., op. cit. n. 6, p. 29.

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(c) the time at which the product was supplied by the producer. The courts may thus take into account reasonable deterioration in the product due to its age, and the state of the technology available to the producer at the date of the sale of the product by him.110

4.4 Comparative comments and recommendations

The three ways of understanding ‘defects’ of products discussed in 4.2 are not perfect, which leads to difficulties in applying the law. As a result, it is recommended that the LPGQ should include a clear definition of ‘defect’ of products and/or ‘defective products’, which must reflect the substances of ‘defect’. The current regulations are equivocal. There should be an obvious distinction between ‘khuyet tat’ in general usage, and ‘khuyet tat’ in legal science.

To my mind, even in a legal context ‘defect’ of products should mean ‘unsafety’ of products under persons’ general expectations. Unsafe products may be ones which do not satisfy the requirements under announced applicable standards or relevant technical regulations. Technically speaking, this definition will protect the consum-ers’ interests better than a definition based on applicable standards or relevant tech-nical regulations. Although voluminous systems of standards and technical regula-tions were built up and have been built up in virtue of international, regional stan-dards, and the standards of foreign countries, they cannot cover all types of products, and they only focus on product quality.

In other words, to determine whether a product is defective, Vietnamese relevant organs or individuals should not only assess its quality, but also its design; and also. whether it was designed in an appropriate way for consumers’ normal uses,111 and whether consumers know how to use the product, or are warned of its dangers. When a product is regarded in this way, I think consumer interests will be protected more comprehensively.

110 ibid, p. 30.

111 In many cases, it is very difficult to distinguish manufacturing defects from design defects. See Grubb, Andrew and others, op. cit. n. 85, p. 10.

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5. The requirement of causation

5.1 Introduction

Both Vietnamese and English law on product liability require a causation element. Resolution No. 03/2006/NQ-HĐTP of the Supreme Court’s Committee of Judges on July 08, 2006 (Point 1, Part I) says that causation is one of the element needed for tortious liability arise.112 As a result, it is essential to prove a causal relationship between the illegal acts/omissions and the personal injury. Similarly, the controlling the EU Directive and the CPA 1987113 ask the injured person to prove a causal relationship between the alleged defectiveness of a product and the relevant personal injury in addition to evidence on damage and the defect itself. Thus, it is crucial to study the notion of causation in general and the causal link between personal injury and illegal acts/omissions in Vietnamese law; and between personal injury and defects in English law.

5.2 The notion of causation

As with other damages issues, tortious responsibility requires the determination of a causal link between damage and illegal act/omission; i.e. defective product in this context. If such a causal link cannot be proved, the claimant cannot get any compensation from the defendant. There are various views on causation stemming from Marx-Lenin, Descartes, Aquinas, Suárez,114 Kant, Hume, Mill, but I will only introduce the ones which have been discussed in the field of legal science.

Hume’s analysis ends up throwing into doubt the idea that causal relations are ob-jective. He posits three necessary conditions taken together to be sufficient for some-thing to be perceived as a cause; contiguity, precedence and regular repetition.115 He states that a cause is considered as “an object precedent and contiguous to another, and where all the objects resembling the former are placed in a like relation of prior-ity and contiguity to those objects that resemble the latter”, and again as “an object precedent and contiguous to another, and so united with it in the imagination, that the

112 Item 1.3 states that “There must be a causal relationship between the loss caused and the illegal act: The loss caused must be an inevitable effect of the illegal act and vice versa, the illegal act must be the cause of the loss.”

113 Under Art. 4, the Directive & s 2(1), the CPA 1987.

114 See more about the views of Descartes, Thomas, Suárez in Schmaltz, Tad M., Descartes on Causa-tion (OUP, Oxford 2008).

115 Kistler, Max, Causation and Laws of Nature (Routledge, London & New York 2006), p. 9.

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idea of the one determines the mind to form the idea of the other, and the impression of the one to form a more lively idea of the other”, which was underwent minor changes in the Enquiry, i.e. identifying causation first with regular succession and then with succession together with a psychological association.116

Although Mill shared some opinions from Hume, his doctrine is distinguished by emphasis on four points.117

First, for Mill (as for Hume and most contemporary philosophers) the central notion of the concept of causation is that of invariable sequence of events in nature, with its corollary that to assert that one event is the cause of another is indirectly to assert that events of the one kind are invariably followed by events of the other. (…)

Secondly, Mill shows that if we consider carefully the causal sequences to be found in nature we find, not that single events are followed by others, but the antecedents of such invariable sequences are complex sets of conditions which may include not only events but persistent states and negative conditions.

Thirdly, Mill distinguishes a 'philosophical' or 'scientific' notion of cause from 'the common notion'. (…)

Fourthly, Mill insists that there may be several independent sets of sufficient conditions for an event of a given type and so, both according to the philosophical (or scientific) and the common notion of cause, the same event may have different causes on different occasions.

The notion of causal relationship is also a basic category of Marxist - Leninist philosophy.118 According to this, ‘cause’ is the origin affecting a thing or a phenomenon, which results in some changes of the thing or the phenomenon. ‘Effect’ is the indispensable consequence resulting from the events/facts,119 which is called ‘cause’. Hence, causation is the inherent and indispensable relationship between cause and effect in a specific space and time. ‘Cause’ precedes ‘effect’.

116 This is the most significant and influential single contribution to the theory of causation which Hume developed in Book I, Part III, of the Treatise, summarized in the Abstract, and restated in the first Enquiry, cited in Mackie, John L., The Cement of the Universe: A Study of Causation (Clarendon, Ox-ford 1980), p. 3. Mackie also gave many comments on and arguments against Hume’s theory in his work. Cf. Coventry, Angela, Hume's Theory of Causation - A Quasi-Realist Interpretation (Continuum, NY 2006); & Beebee, Helen, Hume on Causation (Routledge , NY 2006).

117 Cited in Hart, H. L. A. & Honoré, Tony, Causation in the law, (2nd edn, CPO, Oxford 1985), pp. 21,22. Their next chapter also discusses in detail the defects of Mill's analysis.

118 Nguyen Huu Vui & Nguyen Ngoc Long (eds), Giao trinh Triet hoc Mac-Lenin (Textbook on Maxist – Leninist Philosophy) (National Political Publisher, Hanoi 2005), pp. 233-39.

119 “Are causes events or facts?” is discussed profoundly in Mackie, John L., op. cit. n. 116, pp. 248–65. Accordingly, an event can be described in many different ways, but a fact is tied to a specific description.

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It is worth noticing that cause and condition are two different concepts. However, to make the distinction between a cause and a condition is not so easy.120 It is said that the determination of a causal link depends very much on who is doing the judg-ing. I think this is reasonable because from different angles, pursuant to the nature of each particular case, a person will assess whether an event is a cause or a mere condi-tion. Let us take starvation in India as an example. “The cause of a great famine in India may be identified by the Indian peasant as a drought, but the World Food au-thority may identify the Indian government's failure to build up reserves as the cause and the drought as a mere condition.”121

Thus, the notion of causation is complicated, but the following sections will only indicate how causation is assessed in product liability litigation in both Vietnamese and English law. In practice, how Vietnam and England deal with causal relation-ships in tort in general, and in product liability in particular is not the same.

5.3 Causal relationship between personal injury and illegal acts/omissions in Vietnamese law

5.3.1 General view In Vietnam, there is no strict division between factual and legal causation as is to be found in England. Vietnamese scientific theories in civil law concerns only the causal relationship between an illegal act/omission and damage. Accordingly, the illegal act/omission is the cause, and the damage is its unavoidable effect. In order to impose tortious liability on a person conducting an illegal act/omission, the causal relationship between his illegal act/omission and the damage must be proved. The proof of their relationship is also the proof of the decisive link of an illegal act/omission to the actual damage. In short, the determination of causal link in Vietnam is influenced by Marxist - Leninist philosophy.

The study of product liability is just beginning, so few research projects on causa-tion in the area of product liability are to be found. As analysed above, the concept ‘defect’ has not been defined or understood very consistently. When assessing the causal link in the product liability area, judges tend to rely on the ways of determin-ing causation in tort. The illegal act in question is often the act of manufacturing poor quality products. For instance, in the case Bui Thien Thuyen v Cargill Vietnam Com-

120 Mackie, John L., op. cit. n. 116, pp. 117-120. Cf. Hart, H. L. A. & Honoré, Tony, op. cit. n. 117, pp. 459-464.

121 Mackie, John L., op. cit. n. 116, p. 119.

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pany Ltd.,122 the illegal act was marketing the mash of Cargill produced in poor qual-ity. As a result, it is again noted that the Vietnamese legislature should state clearly what illegal acts/omissions in product liability are and how precisely they relate to what are called ‘defective products’ in England and many other countries.

5.3.2 Some problems and their solutions As with English law, it is difficult to study causation in Vietnamese law. What Vietnamese lawyers and legal scholars usually discuss is really a matter of multiple causes. There are many cases in which only one cause creates one relevant effect. But damage may also be caused by more than one factor. Thus actual damage can be caused by various illegal acts of different people. In such cases, the assessment of cause and effect is very difficult though many lawyers and legal scholars do not share this same view. According to Vu Van Mau,123 there are two common theories dealing with this issue. They are equivalence theory or causa sine qua non theory, and adequate causation.

The representative of equivalence theory is a German jurist von Buri. According to him, all events contributing to the damage must be considered as causes of that damage. In other words, if an event is a necessary condition, it is a cause of the dam-age. If one of the causes is lacking, on this definition there can be no damage.124

The representative of adequate causation is the jurist von Kries. He says that not all events contributing to the damage are causes of that damage. Only events causing the damage in the normal state of affairs (dans le cours habituel des choses) may be causes of the damage. “According to a version of the adequate cause theory, which is widely received by civil courts on the Continent, a contingency is for legal purposes a cause of harm if it increases the probability of the occurrence of harm of that sort.”125

Vietnamese legal views have tended to look at all facts affecting damage. Hence, if the damage is presumed to be caused by various causes; or if many events are

122 Bui Thien Thuyen v Cargill Vietnam Company Ltd, No. 17/2004/DSST re “Claiming for damages” of the People’s Court in of Dong Nai Province, and No. 66/DSPT of 10 March 2005 re “Claiming for damages” of the Appeal Tribunal of the Supreme People’s Court.

123 See Vu Van Mau, Phan I: Nguon goc cua nghia vu, Nghia vu va khe uoc (Part I: Origin of obligations, Obli-gations and agreements, in Viet Nam dan luat luoc khao (Concise of Vietnamese civil law), Vol. II (Min-istry of Education, Saigon 1968), pp. 609-11. He is a well-known legal scholar of the previous Viet-namese regime, but his legal theories and works still affect today’s legal science. His studies are usual-ly based on the French legal system. Cf. Khoury, Lara, Uncertain Causation in Medical Liability (Hart, Oxford & Portland 2006), pp. 26-29.

124 Cf. Hart, H. L. A. & Honoré, Tony, op. cit. n. 117, pp. 442-45.

125 ibid, p. 435.

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found to participate in the process of causing damage, their roles are assessed in or-der to determine which event plays an indispensable and decisive role resulting in the damage. If any of them is an indispensable and decisive cause (either direct or indi-rect) leading to the damage, the person(s) whose acts make such events occur will be liable for the damage. If some or even all of the events each play an indispensable and decisive role causing the damage, they will jointly be responsible for the dam-age. In spite of the distinctive language and methods used, the substance of assessing causation in Vietnamese and English law is much the same.

Scientific uncertainty is also a problem for product liability not only in Vietnam, but also in England. Let me take the case soy sauce containing 3-MPCD as an exam-ple. When a person is found to suffer from cancer, how can he prove the causal link between the defective soy sauce and his cancer bearing in mind the existing scientific uncertainty on the point? According to Mark Geistfeld, “[t]his causal issue poten-tially arises whenever we do not fully understand how a substance interacts with the body and produces an adverse health outcome. We do not, for example, adequately understand the aetiology of cancer.”126 He continues that to assess if a substance may cause injuries with unknown aetiology, scientists observe health outcomes in popula-tions of animals exposed to large amounts of the substance, study the biochemical effects of the substance on cells, organs, and embryos, and compare the substance's chemical composition to other known health hazards.

However, these studies usually cannot determine whether the substance is hazard-ous. That determination typically requires a large-scale study comparing the inci-dence of adverse health outcomes in groups of exposed and non-exposed individuals, or comparing the incidence of exposure across injured and healthy groups.127 It is obvious that these epidemiological studies are expensive and time-consuming, and need a large number of people to be exposed to the substance. In Vietnam, how can a claimant prove causation in this way? 128 It is recommended that a special rule should be passed placing the burden on the defendant manufacturer to prove that its product is not hazardous.129 Indeed, the recital of the Directive says that the manufacturer

126 Geistfeld, Mark, ‘Scientific uncertainty and causation in tort law’(2001)54 VLR 1011, 1013, <http://proquest.umi.com/ qdweb?did=72020270&Fmt=4&clientId=53681&RQT=309& VName=PQD> accessed on 10 September 2008.

127 ibid.

128 See also op. cit. n. 70.

129 See ibid. Cf. Art. 6(1) of the Vietnamese Civil Procedure Code provides that the persons con-cerned shall be entitled to and obliged to supply evidences to the Court, and to prove that their claims are grounded and lawful. See also Item 5, Part I, Resolution 03/2006/NQ-HĐTP.

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who wants to free himself from liability by referring to the exceptions130 has the bur-den of proof. This means that he has to prove that; for example, the product was not unsafe when he put it into the market, or the risk was not then known to scientists.

5.4 Causal relationship between personal injury and defects in English law

5.4.1 The assessment of causation Interestingly, Hart and Honoré states that in England, it is the plain man's notions of causation, and not the philosopher's or the scientist's with which the law is concerned.131 In fact, there are two stages in the assessment of the existence of a causal link: causation in fact132 and causation in law.133

The cause in fact process inquires whether the defendant in fact caused the dam-age. The ‘but-for test’ is applied posing the question, in our set of problems: would the damage have been sustained but for the relevant defect of the product? aiming to identify the causally relevant factors.134 It was first applied in Rich v Pierpont in 1862.135 However, the defect of a product is considered only as a preliminary filter and is not determinative of liability.

A subsequent choice must be made amongst all the identified causes in order to select those to which the court will attribute legal responsibility. This is where causa-tion in law enters in. This second step aims to determine whether the defendant’s defective product was a sufficient legally effective cause amongst the complex of other causes.136 The following terms are often used in judges’ question: whether a particular event ‘broke the chain of causation’, ‘direct’, ‘proximate’, ‘foreseeable’, or ‘remote’ to describe the link between the defect of product and the damage. This question is considered to be more one of value, fairness and legal policy than one concerned with the factual existence or absence of a causal link; for instance, ‘which

130 See Section 6.2 Defences

131 Hart, H. L. A. & Honoré, Tony, op. cit. n. 117, p. 1.

132 It is also referred as ‘factual causation’, or ‘but-for cause’. Simon Deakin, Angus Johnston, and Basil Markesinis, op. cit. n. 6, p. 185.

133 Or ‘legal cause’. See ibid.

134 ibid.

135 3 F & F 35.

136 Simon Deakin, Angus Johnston, and Basil Markesinis, op. cit. n. 6, p. 185.

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of the parties is best placed to shift the loss in question’ or ‘which outcome will best promote prevention in that context in the future.’137

I prefer the ways Hart and Honoré analyse legal policies.138 First, they suggest seven possible grounds as a result of which legal responsibility may be imposed, such as “conduct, causation, and fault must be shown”, “conduct and causation must be shown”, and “conduct occasioning harm and fault must be shown”. Then, they argue that there are limits to legal responsibility including some set by legal policy. “Legal policy therefore comes into play at a second stage, after the initial choice of the ground of responsibility has been made by the legislature or judge.”139

5.4.2 Some problems and suggestions thereto In practice, it is not easy to prove causation: Ways are presented in Grubb and others140 to reduce these difficulties in cases of material contribution, alternative causation, and multiple tortfeasors.141 As for material contribution, the law seems to require the claimant to prove that his injury was ‘more probably than not’ caused by the defendant’s negligence.142 In McGhee v National Coal Board,143 the House of Lords held that it was sufficient for a claimant to show that the defendant’s breach of duty materially increased the risk of injury, although there were other factors, which the defendant was not liable for, which had contributed to the injury.144

When there are several alternative or cumulative causes of the events leading to the damage, judges encounter difficulties. The principle of material contribution in McGhee is thought to deal with such a case. According to Lord Bridge in Wilsher v Essex Area Health Authority,145 McGhee may well continue to operate to make it

137 ibid.

138 See Hart, H. L. A. & Honoré, Tony, op. cit. n. 117, pp. xlii-lv.

139 ibid, p. xlvii.

140 op. cit. n. 85, pp. 290-95.

141 They are still debatable. See Stapleton, Jane, ‘Law, Causation and Common Sense’ (1988) 8 OJLS 127,128.

142 See Can, Peter, Atiyah’s Accidents Compensation and the Law (Law in Context Series, 7th edn, CUP, Cambridge 2006), p. 112.

143 [1973] 1 WLR 1, HL. Cf. Holtby v Brigham & Cowan (Hull) Ltd. [2000] 3 All ER 421, CA

144 [1973] 1 WLR 1, p. 12 per Lord Salmon.

145 [1988] AC 1074, p. 1088. Cf. Rhesa Shipping Co SA v Edmunds (The Popi M) [1985] 2 All ER 712, Lexus Financial Services v Russell [2008] EWCA Civ 424. Cf. Ide v ATB Sales Ltd [2008] EWCA Civ 424 with comments in Freeman, Rod, ‘Improbable truths – proof of defect in product liability cases’ (2008) 31 EPLR 29, 31.

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easier to establish proof of causation once it is proved that the specific cause materi-ally contributes to the injury.

In case of defects caused by the manufacturer, the supplier, and even the retailer, how can judges assess causation and hence the parties’ responsibility? The judges in Fitzgerald v Lane held that liability among the defendants for the claimant’s injuries should be shared equally when there is evidence of negligence on the part of more than one defendant, and no evidence to identify the true proportion which each party contributed to the injury.

6. Fault liability versus strict liability, defences, and persons subject to product liability in Vietnamese and English law

6.1 Fault liability versus strict liability

6.1.1 Fault liability Frequently, fault is considered as the fourth and last requirement for damages in tort. The element of fault is considered as the required state of mind which may be intentional, negligent or malicious.146

Fault is required in order to prevent the courts from being overloaded, to promote laissez faire policy; i.e. “individuals should be responsible for their own actions, with as little intervention from the state as possible”147, to enhance careful behav-iour/deterrence, to shift the burden of harm from the person originally suffering from the harm to the person paying the compensation, to make damages easily account-able, to allow the defendant to plead the contributory fault of the claimant as a de-fence, or an element reducing damages in product liability cases.148 The above views seem rational, but I am wondering if fault is the only way to achieve these objectives.

In fact, there are also many arguments against the requirement of fault.149 It may result in unjust distinctions; i.e. people who suffer exactly the same injury may re-

146 See Elliott, Catherine & Quinn, Frances, op. cit. n. 21. Cf. Pham Kim Anh, ‘Khai niem loi trong trach nhiem dan su’ (The notion of fault in civil responsibility) (2003) 3 LSM. Cf. Rogers, W.V. Hor-ton, “Fault under English Law” in Widmer, P. (ed), Unification of tort law: fault, in Principles of Euro-pean Tort Law, (vol 10, Kluwer, Deventer 2005), pp. 65-87, at p. 69.

147 Elliott, Catherine & Quinn, Frances, op. cit. n. 21, p. 5

148 ibid, pp. 5 & 6.

149 ibid, pp. 6 & 7.

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ceive different awards of damages when contributory faults are found. I strongly dis-agree with this opinion. Determining contributory fault is the best way to ensure equality between the injured person and the defendant. On the other hand, fault is often difficult to prove, so the wrongdoer may wriggle out of his liability completely. Certainly, it is always cost and time consuming. Thus, it increases anxiety and pres-sure on both parties. In some cases, too, damages may be paid by an insurance com-pany, which reduces any deterrence effect though a successful claim may give riser to higher premiums. However, it is doubtful that all such costs can simply be passed on to consumers in higher prices.

Fault is also assessed based on an objective standard of behaviour, which ignores the knowledge or capacity of an individual. Thus, a person may be legally at fault, but not at fault morally, or at least not to the degree suggested by the law.

The above arguments have not been shared by all lawyers or legal experts. In cases of product liability, fault is one of the grounds for damages in Vietnamese law,150 while strict liability is applied in England. The following section aims to give arguments in support of introducing the strict product liability regime in Vietnam.

6.1.2 Strict liability In contrast to negligence where the claimant must identify the people whose act or omission has resulted in damage and must prove that this was attributable to their negligence, strict liability only requires the claimant to show that the product in question was defective and that it caused damage.151 There have been many rationales for strict liability, but in this thesis, I only select the arguments that are most appropriate to the context of Vietnam in order to justify the regime of strict product liability.

To begin with, when strict liability is applied, it will protect consumers more effi-ciently because it reduces their burden of proof. I agree with Michael Head and Scott Mann152 that many people, particularly the poor will not even know that they are victims of others’ negligence, because they are poorly informed about risks and dan-gers. They may know that they are suffering, but not why. Also, only a tiny minority of the victims of product-related injuries even take legal action at all and, if they do, they encounter massive difficulties in proving fault and causation. Michael Christiani Havemann, who supports this argument, states that consumers can only be homoge-

150 Art. 61 of the LPGQ.

151 op. cit. n. 8, pp. 210 & 211.

152 Law in perspective: ethics, society and critical thinking (UNSW, Sydney 2005), p. 302.

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neously treated and adequately protected when they are exempted from the heavy burden of proving fault during the production process of which the consumers pre-sumably have little or no knowledge and can only gain such knowledge with a great deal of expense and difficulty.153

It is doubtful that if strict liability is applied, consumers will be put at a greater disadvantage because prices will be higher as a result of the producers having to pay higher insurance premiums. I strongly believe that if the producers market high qual-ity products, which prevent them from claims, they could negotiate lower premiums, which would result in lower price. This in fact encourages producers to be more care-ful with and more responsible for their production, which reduces defective products. Producers should always bear in mind that they are doing business in a competition environment. If they do not take measures to reduce their prices, their companies will eventually encounter problems. An optimistic view here is that producers of the same products anticipate equivalent costs including the expected costs of damages or in-surance premiums, so their mutual competition is not affected.154 Indeed, those who engage in activities for profit should bear the costs of tortious conduct arising out of that activity in one way or another.155

Furthermore, Vietnam has been a member of the WTO since 2007, and has ex-panded its diplomatic activity. This means that we have to accept ‘the common rules of the games’ of most of the countries that do have strict liability for product defects such as the EU Member States, the USA, Japan, and Malaysia. Vietnamese produc-ers, importers, and sellers need to be well-prepared and adapt to this worldwide re-gime to prevent themselves from business difficulties by being too subjective, and ignoring risks to consumers, especially foreign ones. In reality, the institution on product liability in Vietnam is less advanced and effective than that of many devel-oped countries.156 Strict liability is just one way to put pressure on producers in order

153 Havemann, Michael Christiani , “The EC Directive on Product Liability: Its Background, Aims and System”, in R. Hulsenbek & D. Campbell (ed), Product liability: prevention, practice and process in Eu-rope and the United States, (Kluwer, Deventer 1989), pp. 17-30, at p. 19.

154 ibid.

155 Stapleton, Jane, op. cit. n. 23, ch.8.

156 Nguyen Van Cuong, ‘Van de trach nhiem san pham trong luat Viet Nam, Chuyen de: Co che phap ly bao ve nguoi tieu dung thuc tien va kinh nghiem quoc te’ (Product liability in Vietnamese law, Special issue: Legal mechanisms to protect consumers in reality and international experiences thereof), (2005) ILS, at p. 52. Cf. Vu Duy Cuong, ‘Some legal issues related to product liability in EEC Directive and Vietnamese law’ (Master thesis, Ho Chi Minh City University of Law – Lund University 2004), p. 43 (Engish version). Cf. Đinh Thi My Loan, ‘Phap luat bao ve nguoi tieu dung cua Viet Nam – Thuc trang va nhu cau hoan thien’ (Vietnamese law on consumer protection – Reali-ty and demand for improvement) in State and Law Studies Institution, ‘Documents on scientific seminar: Improving legal mechanism on protecting consumers in Vietnam’, (Report) (Feb. 26-27, 2008) at p. 5.

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to make them produce safe products, and protect the proper interests of all consum-ers.157

6.1.3 Recommendations With all the relative strengths and weaknesses of fault and strict liability, it is still recommended that strict liability should be imposed in Vietnam in the legal area of product liability. Accordingly, there should be changes in the LPGQ and the institution on tort in the VCC 2005.

Article 61 on compensation liabilities of the LPGQ should be amended as follows: 1. Producers and importers should pay compensation to sellers or consumers when

their goods are defective, causing harm to the latter, except for the cases specified in Clause 1, Article 62 of this law. Compensation should be paid according to agree-ments between the parties involved, court decisions or arbitral awards.

2. Sellers should pay compensation to buyers or consumers when their goods are defective, causing harm to the latter, but if they cannot identify the producers or im-porters, except for cases specified in Clause 2, Article 62 of this law.158 Compensa-tion should be paid according to agreement between the parties involved, court deci-sions or arbitral awards.

Moreover, Article 630 of the VCC 2005 on compensation for damage caused by infringement of consumer interests should be amended as follows: An individual, legal entity or other subject carrying out production or business and failing to ensure the safety of goods, thereby causing damage to consumers, must compensate for such damage, even where such person is not at fault, unless otherwise provided by law.

6.2 Defences

6.2.1 Defences in Vietnamese and English law Although under Vietnamese law, a claimant has to prove the fault of producers, importers, or sellers if he seek damages for their defective products, there are many defences which exempt them from liability for the defects of such products. English law, in Part I of the CPA 1987 introduces strict liability for producers, not absolute liability,159 so there are still defences. In this part, besides an introduction to the

157 Tang Van Nghia , ‘Discussion on Law on Product Liability in foreign trade’ (2008) 2 SLM, at p. 49.

158 See also the last paragraph of Section 6.3.1 of this thesis.

159 See Grubb, Andrew and others, op. cit. n. 85, pp. 24-25 for more information on absolute liabili-ty.

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similarities and differencies of both legal systems on this issue, the development risks defence will be discussed in a separate section because it is the most contentious defence.

To begin with, Vietnamese producers and importers will not be liable for defec-tive products if the sellers sell and consumers use goods whose shelf-life has ex-pired.160 Similarly, sellers will not be liable for defective products if consumers use goods whose shelf-life has expired,161 or if the damage is caused by the purchaser’s or consumer’s fault.162 This type of defence is not mentioned in Part I of the CPA 1987, but it is considered as contributory negligence of the claimant.163 In case where damage is caused by the fault of the sellers or consumers, producers or sellers may be free of liability.

Secondly, according to the LPGQ, producers, importers, and sellers shall be ex-empt from liability when the statute of limitations for a complaint or the initiation of a lawsuit has expired164 because the claimant will not then be entitled to sue the pro-ducers or sellers. Under the LPGQ,165 it is two years from the time the concerned parties are notified of the damage, provided that the damage is caused during the shelf-life of the products or goods which is displayed on those products or goods, or five years from the date of delivery for products or goods with unspecified shelf-life.

The Limitation Act 1980 of England166 provides that a claimant has a primary pe-riod of three years from the date of which the product caused damage, whether or not the damage was at that time discoverable, to bring an action.167 In the event of dam-age which is not discoverable at the date of its occurrence, an alternative limitation period comes into play. This is again for three years, commencing to run from the date at which the claimant become, or ought to have become, aware of certain ma-terial facts relating to his right to claim, including the identity of the defendant, the

160 S 62(1)(a), the LPGQ.

161 S 62(2)(a), the LPGQ.

162 S 62(1)(g), the LPGQ, & s 62(2)(f), the LPGQ.

163 This is governed by the Law Reform (Contributory Negligence) Act 1945.

164 S 62(1)(b), the LPGQ, & s 62(2)(b), the LPGQ.

165 S 56(3).

166 amended by the Latent Damage Act 1986.

167 S 11A(4), the Limitation Act 1980 (as inserted by s 6 and schedule 1 of the Act).

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fact that the damage is attributable to a defect in the defendant's product and the de-gree of the damage.168

It should be noticed that the claimant's action is automatically extinguished on the expiry of a period of ten years from the date at which the product was first sup-plied.169 Furthermore, in personal injury cases the Limitation Act permits the court to hear an action outside the usual limitation period, where the court believes that it is just to do so. The discretionary extension may also be exercised where a claim under the CPA 1987 relates to personal injury, but the extended time cannot exceed the expiry of the ten year long-stop.170 It is even more favourable than the one in the Di-rective as the limit, according to the Directive, starts to run “when the product was put into circulation”.171

Thirdly, the producers, or importers shall not be responsible for damage caused by their defective products when a recall of defective goods has been notified to sellers and consumers before the goods cause damage.172 Moreover, the sellers shall not pay compensation to purchasers or consumers where the fact that the goods are defective has been conveyed to purchasers or consumers but they still purchase and use those goods.173 Similarly, subject to the construction of the CPA 1987 by the courts, pro-ducers, importers or ‘own-branders’ have a defence when a claimant is fully aware of the defect and nevertheless choose to use the product (voluntary assumption of risk).174

Fourthly, a defence for persons subject to liability in Vietnam is that products or goods are defective due to their compliance with regulations of competent state agencies.175 This provision is the same as that of the CPA 1987; i.e. that the defect is the result of compliance with the law,176 including requirements of both EC and the

168 S 11A(4) and s 14(1A), the Limitation Act 1980.

169 S 11A(3), the Limitation Act 1980.

170 S 33, the Limitation Act 1980.

171 Art. 11, the Directive.

172 S 62(1)(c), the LPGQ.

173 S 62(2)(c), the LPGQ.

174 “The basic tenet of this doctrine is that a party may not receive damages for the injurious conse-quences of a risk he knowingly undertakes. That is to say that a party may not recover in damages for an injury received when he voluntarily exposed himself to a known and obvious danger.” See Tobin, Philip Chase, 25 doctrines of law you should know (Algora Publishing, New York 2007), p. 151.

175 S 62(1)(d), the LPGQ, & s 62(2)(d), the LPGQ.

176 S 4(1)(a).

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UK Law.177 However, who the competent state agencies are is not defined in Viet-namese law. Are they central or local bodies or both? It is less easy to invoke this defence in Vietnam.

Before turning to the development risks defence to be discussed in the next part, there are some defences in English law, which do not exist in Vietnamese law. Pro-ducers, importers or ‘own-branders’ are free from liability if any of the following matters can be established, which are that the defendant did not at any time supply178 the product to any other person;179 that the defendant supplied the product other than in the course of a business;180 that the product was not defective at the relevant time;181 and that the product was a component in some other product, and the defect causing the damage was wholly attributable either to the design of the other product or to installation.182

6.2.2 Development risks defence and suggestions to Vietnamese law In addition to the defences presented above, one which has caused the most controversy and debate is known as the development risks defence. Vietnamese law has provided that the world’s scientific and technological knowledge may not be not advanced enough to detect the risks in products before they cause damage; in this case the producers, importers, or sellers shall be free from liability.183 This should be compared with the defence in the CPA 1987 which provides that when a product was first supplied, if it can be established the state of scientific and technical knowledge was not such that a producer of products of the same description as the product in question might be expected to have discovered a defect if it had existed in his products while they were under his control, producers, importers or ‘own-branders’ have a defence.184 The controlling Directive allows such a defence if “the state of

177 See Grubb, Andrew and others, op. cit. n. 85, pp. 260-62.

178 As defined by s 46, the CPA 1987, supplying includes selling, hiring, lending out, exchanging, providing in fulfilment of a statutory duty and giving as a prize.

179 S 4(1)(b), the CPA 1987. For example, in case that a product is stolen from a manufacturer.

180 S 4(1)(e), the CPA 1987.

181 S 4(1)(d), the CPA 1987. Under s 4(2), the CPA 1987, relevant time is the important moment when a ‘primary defendant’, i.e. producer, own-brander, or importer etc supplied the product to another, or when the product is last supplied by a primary defendant if the defendant is a ‘subsidiary defendant’ such as a supplier.

182 S 4(1)(f), the CPA 1987.

183 S 62(1)(e), the LPGQ, & s 62(2)(e), the LPGQ.

184 S 4(1)(e), the CPA 1987.

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scientific and technical knowledge at the time when he put the product into circulation185 was not such as to enable the existence of the defect to be discovered”.186

The CPA 1987 uses the term ‘supply’ instead of ‘put into circulation’, as the latter had not been interpreted by the courts at the time the CPA was passed and it was considered the choice would avoid misunderstandings. A further issue is that the Commission has argued that the wording of Section 4(1)(e) imports a subjective test into the defence on the basis that it was the state of scientific knowledge of a hypo-thetical producer of the same or similar goods which was the yardstick of whether the defence was made out, rather than the state of scientific knowledge generally.187 Further, the ECJ has held that the UK Courts would have to interpret the CPA 1987 in the light of the Directive188

Generally, it is unclear whether the time at which the product causes damage, the time when the product is supplied or put into circulation, or even the date of trial is the one to be used to assess the state of scientific and technical knowledge in relation to the defectiveness of products .189 Vietnamese law chooses the time when the dam-age is inflicted, while English law selects the time at which the product is supplied. In this case it seems that Vietnamese law protects consumers better than England. However, this is less clear when thinking in terms of evidence costs190 and the risks of products with a long life-span.191

At the first glance, it seems that Vietnamese law protects consumers better than English law because the former provides fewer defenses for producers, importers and sellers. But looking at the limitation period, there are some products whose defects are not easily discovered, so it takes a long time to determine the damage caused by such defect. The calculation of the limitation period in the LPGQ based, as it is, on the shelf-life of products or goods cannot, I think, best protect the consumers’ inter-

185 See op. cit. n. 19.

186 Art. 7(e), the Directive (footnote added).

187 Case C-300/95 European Commission v United Kingdom [1997] ECR I-2649, [1997] All ER 481, para. 36. See more comments in Schulze, Reiner, Schulte-Nölke, Hans, & Jones, Jackie (eds), ‘CASE NO. 20 — Commission of the European Community v The United Kingdom of Great England and Northern Ireland’ in A Casebook on European Consumer Law (Hart, London 2002), pp. 263-96, at pp. 266-69.

188 Ibid at p. 481.

189 Grubb, Andrew and others, op. cit. n. 85, p. 8.

190 op. cit. n. 9, p. 58.

191Grubb, Andrew and others, op. cit. n. 85, p. 8.

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ests. It is suggested that the legislature should think of an extension of the limitation period in product liability, especially in cases of personal injury. English law and the Directive192 should be taken into consideration if the legislature does want to change the current limitation period.

6.3 Persons subject to product liability

6.3.1 Under Vietnamese law

One of the reasons for the birth of the Law on Quality of Products and Goods is that previous legal instruments have not clearly separated out the product liability of pro-ducers, importers, and sellers and the treatment of infringements of product quality were not severe enough to prevent this type of infringement; consumer protection had not been well handled.193 The Ministry of Technical Sciences presided over the making of the LPGQ together with other relevant ministries and branches. Neverthe-less, in my opinion, the objective of the LPGQ has not been attained.

Article 61 of the LPGQ states that, apart from Article 62, producers and importers shall be liable for damages when, through their fault, the quality of their products is not ensured, causing damage to buyers, or consumers; the sellers shall be liable for damages when through their fault, the quality of their products is not ensured, caus-ing damage to the buyers, or consumers. By a ‘Consumer’ is meant a person purchas-ing or using goods and services with the aim of consumption by an individual, a fam-ily or an organization.194 However, the regulations above are problematic.

First of all, there are no definitions of producers, importers or sellers. This causes difficulties in separating out their respective liabilities. For example, the concept of a seller may be found to include actual retailers as well as manufacturers, wholesalers, distributors, assemblers, bulk suppliers, component parts manufacturers, trademark licensors, lessors, and sellers of used goods. Thus, the definitions of the three terms should be clearly stated, and the relative liability of the manufacturer of a component and the ultimate manufacturer in respect of defects in the component should be estab-lished.

Secondly, Article 61 imposes liability on producers, importers and sellers with re-spect to consumers only, not to bystanders; for example, a person comes to visit his

192 The Directive provides the member states to have a minimum period of ten years, so the whole of Europe actually refers to this limit in their laws.

193 Under the Report on the project on the Law on Quality of Products and Goods of Ministry of Technical Sciences sent to the Government on June 14, 2006.

194 Art 1 of the OPCR of Vietnam.

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friend, then the friend’s television explodes due to some defect, causing personal injury to the visitor. In this case, we have to apply the general regulations on tort to be found in the VCC 2005. There should be more obvious and specific regulations on this issue to facilitate its legal application. It is greatly recommended that producers, importers and sellers bear strict liability for the damage caused by defective products to all the injured persons including bystanders.

Lastly, one problem arising in this case relates to counterfeits or other products of obscure origin. If damage occurs, the claimant will sue the seller, but the seller may say that it is not his fault, but that of the manufacturer or the importer. But in many cases, the manufacturer or the importer cannot be identified by either the claimant or the seller. Consequently, the regulations on the liability of manufacturers, importers and sellers need to be amended to take account of this situation. Further, Article 61 does not say anything about the liability of an ‘own-brander’.195 Thus, it is recom-mended that if a claimant cannot determine the identity of the producer or importer, the seller should bear responsiblity for the damage caused by a defective product; and that the ‘own-brander’ should also be included as a person subject to product liability. This would mean that a claimant would have more choices when he initiates legal action; especially in case where the manufacturer and the inporter are unknown.

6.3.2 Under English law Producers, importers and ‘own-branders’ are all subject to liability under the CPA 1987. The word ‘producer’ is given a specific extended meaning by the CPA.196 Primarily it refers to the manufacturer of a product, but it also encompasses a person responsible for extracting a nonmanufactured product, such as the miner of a raw material, and a person who carries out an industrial or other process to obtain a non-manufactured product, such as a person who cans or otherwise processes any agricultural produce. The process of manufacture inevitably often involves the amalgamation of a series of component parts into a finished product.197 Here the CPA imposes liability both upon the manufacturer of the component and upon the ultimate manufacturer in respect of defects in the component. However, the notion of ‘process’ has not been defined.

195 Under s 2(2)(b), the CPA 1987 ‘own-brander’ is meant any person who, by putting his name on the product or using a trade mark or other distinguishing mark in relation to the product, has held himself out to be the producer of the product.

196 S 1(2)

197 Although it may be difficult to establish whether the component was inherently defective or whether the problems arose from improper installation: see Evans v Triplex Safety Glass Co [1936] 1 All ER 283.

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Where a product has been manufactured outside the EU, the importer of that product into the EU is strictly liable for any damage or injury resulting from its de-fects.198 The important point to note here is that the CPA is not concerned with im-portation or re-importation into England from elsewhere in the EU, but is only con-cerned to impose liability on the first importer into the EU. Under fault principles the importer of a product of an established manufacturer might reasonably claim to have discharged any duty of care, notwithstanding a failure to undertake separate testing for latent defects.

The word ‘own-brander’ is not used by the CPA, but it is convenient to describe a third class of person upon whom strict liability is imposed, namely, a supplier who is not the producer or first importer into the EU of a product, but who nevertheless holds himself out to be the producer by affixing his own name or trademark to the product.199 The two classes of person most commonly affected by this provision are the increasing number of retailers who sell own-brand goods, and importers from one EU Member State into another who repackage or affix their own trademark to prod-ucts.

There is one situation in which a supplier bears liability under the CPA 1987. This arises where the supplier is requested by a person who has suffered damage or injury as the result of a defective product, but who is himself unable to identify one or more of the persons primarily liable under the CPA 1987, to identify the next supplier up the chain of liability. If the request is made within a reasonable time, and the supplier fails either to comply with the request or to identify the person from whom he re-ceived the product within a reasonable time of the request, the supplier becomes re-sponsible for the damage.200

7. Conclusion

I have discussed the grounds for damages in case of defective products by making a comparison between Vietnamese and English law on personal injuries, illegal acts/omissions and defects of products, the causal link between illegal acts/omissions or defects and the damage and fault liability versus strict liability. They are many

198 S 2(2)(c), the CPA 1987. It follows that indemnity clauses in supply agreements may assume con-siderable significance.

199 S 2(2)(b). The Act contains no clear definition or indication as to what amounts to holding out, and case law will need to eventually determine the language and prominence with which an own-brander can disclaim responsibility for production.

200 S 2(3), the CPA 1987.

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differences as well as similarities. The main rationale for the substantial distinctions between the two legal systems is that Vietnam has not had law on product liability for very long, whereas this legal area has long been developed in England.

The suggestions presented in previous sections are temporary solutions to current provisions on the grounds for damages in case of defective products. As discussed above, the regulations on product liability in Vietnam are still too incoherent. Article 61 of the LPGQ concerns the liability of the producers, importers, and sellers in-volved in the quality of products and goods both in contract and in tort, so this law is not so suited to be the law on product liability. In the long term, it is essential for Vietnam to have a law on product liability, which may be a separate law like that of Israel (1980), Austria (1988), Finland (1990), Belgium (1991), Japan (1994)or Thail-and (2008), or may be included as a part of consumer protection law like that of Eng-land (1987), Sweden (1992), and Malaysia (1999).201

My suggestions were not only based on what I have studied about English law but also on Vietnamese law itself as well as on the current context of Vietnam. I think English law is just one example on the grounds for damages. To make more in-sightful recommendations, I should have conducted more research on the law of the USA - the cradle of the law on product liability -, of Japan - an Asian nation - , and of Malaysia - a country in South-East Asia, and some other countries.

It is unavoidable that there are limitations in my thesis. Although I tried my best to complete the project, this is definitely not an easy task. For the truth of the matter is that the structures, divisions, concepts and notions used in this thesis were some-times not so convincing because of the differences between Vietnamese law, having a civil law origin and English law, with its common law origin. Furthermore, on the account of page limitation, some issues were only introduced, not discussed or ana-lysed. I also did not have space to explore the methods of computing damages, or compensation payable, and especially alternative methods of compensation for per-sonal injury, such as insurance, special funds, and the social security system, where the burden for tort liabilities is distributed among the public as a whole.202 Also, I found only a small number of cases arising out of product liability because manufac-turers are often afraid of exaggerated damages, so they negotiate with consumers very quickly and settle generously but normally in secret.

201 This suggestion has been shared by Nguyen Van Cuong, op. cit. n. 156, p. 52.

202 See Atiyah, Patrick, Personal Injuries in the Twenty-First Century: Thinking the Unthinkable, in Birks, Peter (ed.), Wrong and Remedies in the Twenty-First Century, OUP: Clarendon, pp. 1-43. According to him, liability on personal injury in tort should be abolished.

55

Table of Statutes and other Legal Instruments

International Treaty and Convention Treaty establishing the European Community (Consolidated version 2002), published

in Official Journal C 191 of 29 July 1992 pp. 4-67

European Union legislations Directive 95/46/EC of the European Parliament and of the Council of 24 October

1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data

Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products.

Directive 1999/34/EC of the European Parliament and of the Council of 10 May 1999 amending Council Directive 85/374/EEC on the approximation of the laws, regulations and administrative provisions of the Member States concerning liability for defective products.

Directive 2001/95/EC of the European Parliament and of the Council of 3 December 2001 on general product safety

Strasbourg Convention on Products Liability in regard to Personal Injury and Death

National legislations

The United Kingdom Administration of Justice Act 1982 Civil Liability Act 1978 Consumer Protection Act 1987 Fishing Vessel (Safety Provisions) Rules 1975 Law Reform (Contributory Negligence) Act 1945 The Limitation Act 1980, amended by the Latent Damage Act 1986

Vietnam Civil Code of Vietnam 2005 by the National Assembly of the Socialist Republic of

Vietnam

Civil Procedure Code 2004 by the National Assembly of the Socialist Republic of Vietnam

Law on Products and Goods Quality No. 05 /2007/QH12 of the National Assembly of the Socialist Republic of Vietnam

56

Law on on Standards and Technical Regulations No. 68/2006/QH11of the National Assembly of the Socialist Republic of Vietnam

Ordinance No. 13/1999/PL-UBTVQH10 of 27 April 1999 on the protection of consumers’ interests by Standing Committee of the National Assembly of the Socialist Republic of Vietnam

Resolution No. 03/2006/NQ-HĐTP of the Supreme Court’s Committee of Judges on 08 July 2006 guiding on the application of some regulations of the Civil Code 2005 on Tort

Circular No. 173-UBTP of the People’s Supreme Court of 23 March 1972 guiding the judgement of compensation for non-contractual loss

57

Table of Cases

Court of Justice of the European Communities Case C-300/95 European Commission v United Kingdom [1997] ECR I-2649, [1997]

All ER 481.

Case C-127/04 Declan O’Byrne v Sanofi Pasteur MSD Ltd and others [2006] ECR 1313

The United Kingdom A and others v National Blood Authority (2001) 3 All ER 289

Cunningham v Harrison [1973] QB 942

Dhaliwal v Personal Representatives of Hunt [1995] 4 PIQR Q56

Donoghue v Stevenson [1932] AC 562

Foster v Tyne and Wear CC [1986] 1 All ER 567

H. West & Son Ltd v Shephard [1964] AC 326

Holtby v Brigham & Cowan (Hull) Ltd. [2000] 3 All ER 421, CA

Ide v ATB Sales Ltd [2008] EWCA Civ 424

Joyce v Yeomans [1981] 1 WLR 549

Lexus Financial Services v Russell [2008] EWCA Civ 424

McGhee v National Coal Board [1973] 1 WLR 1

Moeliker v A. Reyrolle Ltd. [1977] 1 All ER 9

Moriarty v McCarthy [1978] 1 WLR 155, 161

Rhesa Shipping Co SA v Edmunds (The Popi M) [1985] 2 All ER 712

Wilsher v Essex Area Health Authority [1988] AC 1074

Worsley v Tambrands [2000] PIQR 95

Vietnam Tran Ngoc Dung v Tran Quoc Tuan, No. 280/2007/DSST re “Claiming for damages

for personal injury”of the People’s Court of Ninh Kieu District, Can Tho City

Huynh Nhu Phuong v Tran Van Son, No. 243/2007/DSST re “Claiming for damages for personal injury” of the People’s Court of Ninh Kieu District, Can Tho City

Bui Thien Thuyen v Cargill Vietnam Company Ltd, No. 17/2004/DSST re “Claiming for damages” of the People’s Court in of Dong Nai Province, and No. 66/DSPT of 10 March 2005 re “Claiming for damages” of the Appeal Tribunal of the Supreme People’s Court

58

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