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China Product Liability Regulation and Practice

27 August 2012 By In Contracts

Product liability law is relatively new in China. A new law gives plaintiffs in product liability cases the opportunity to forum shop, much to the consternation of foreign manufacturers. China product liability lawyer at the Law Office of Peter Zhu discusses the implications of this legislation for foreign companies. Product liability arises when a defective product is placed on the market, and the defect in such product gives rise to damages to a person or property.

In general, a Producer holds the primary responsibility for product liabilities arising from a defective product, where the product poses unreasonable danger to personal safety or property, or does not meet national or industry standards.

China Product Liability Definition

Product liability is the responsibility of manufacturers, distributors and sellers of products to the public, to deliver products free of defects which harm an individual or numerous persons and to make good on that responsibility if their products are defective. These can include faulty auto brakes, contaminated baby food, exploding bottles of beer, flammable children's pajamas, or lack of label warnings.

China new product liability law

Foreign manufacturers are expecting to see a surge in product liability litigation following the introduction of the "Statute on the Choice of Substantive Law in Foreign-related Civil Relationships” in China in April 2011. A section of this new law expressly concerns product liability lawsuits and claims. It was conceived and enacted for civil courts to respond properly to the steadily growing legal challenges posed by both individual and large scale defect-related accidents in the recent years, such as the milk-powder scandal, Toyota recalls, and cases of contaminated toys. It also aims to provide plaintiffs with more effective means of redress in such cases.

Previously, there were no specific provisions regulating the choice of substantive law in foreign-related product liability cases. The new statute provides a set of rules favorable to the injured person, facilitating a victim's access to Chinese civil courts and providing plaintiffs with the choice of flexible means of redress in complex cross-border product liability litigation.

Product Liability Litigation

Civil liability may be established through strict liability (i.e. without consideration of fault), tort or contract. Claims must be brought personally, not by a representative body. Expert evidence and witness evidence is admissible. The courts have no discovery procedure requiring disclosure of documents. Trials are by a single judge or a three-judge panel. There is no jury system. There is no limit on damages. The losing party will be responsible for court fees. Costs and disbursements are at the discretion of the judge. Recovery of costs, if ordered, is in practice not common.

In a domestic case, the court should deliver its judgment within six months of the case commencing, although a six-month extension can be obtained. There is no time limit for the court to deliver a judgment in a foreign-related claim. Appeals are possible from lower courts to higher courts. China’s Supreme People’s Court is the highest court, and its decisions may not be appealed.

Product Liability Regulation

The State’s Administration for Supervision of Product Quality (ASPQ) and its local administrative agencies are responsible for the supervision and administration of product quality. The ASPQ has the power to seize illegal products and revoke the registered business license of the offender. It also can impose a fine up to three times the value of illegal products. Chinese law does not require mandatory recall of products, although there are some exceptions, such as automobiles. Voluntary recalls can be made. Criminal sanctions include fines, confiscation of personal property, imprisonment and even the death penalty for a person who manufactures or knowingly sells a defective product which causes severe consequences.

Always consult our China product liability lawyer if you have any questions in China.

Read 3272 times Last modified on Monday, 16 September 2013 14:07
Shenzhen Lawyer

A Shenzhen lawyer practicing in one of the best Shenzhen law firms handle commercial and family law matters across the country. Free preliminary legal consultation. Tel: +86 188 19019636. Email: peterzhulaw@hotmail.com

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