Product Liability and Exports – please make it stop

September 21, 2007

Just read an Op/Ed by a self-identified ambulance chaser from the U.S. on the whole export product controversy. You can read it here. I completely agree with the conclusion that an effective, muscular product liability/tort system in the PRC would ultimately lead to better QC. However, I gotta say that the whole China-has-no-legal-system argument is really getting old and making me cranky.

Granted, this is not a China guy, so I can’t really criticize too much. However, the following line bugs me:

Perhaps all China needs is a few good lawyers, and a body of civil law.

This is a good one too:

If consumers are injured by a product, the consequences must fall on those who made it. And, for that, Americans rely on a body of civil law. The Chinese were clearly puzzled by this.

Can we stop with this kind of thing? I usually hear it in an IP context when clueless commentators state that China has no IP laws. Now we have the strange notion that China‘s civil law somehow doesn’t cover product liability? Perhaps the author was just trying to say that the legal practice in this area needs to be more developed – agreed. But these kinds of blanket statements, which are also quite condescending, do not help. China does have product liability laws, people who suffer damages from products can and do sue manufacturers, and courts often find in their favor.

Now, damage awards may be too low, the lack of a system of discovery means that information/evidence is hard to come by, and certainly the writer of this article would not be happy with a legal system that does not include juries. But let’s get the basic facts right, huh?

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4 thoughts on “Product Liability and Exports – please make it stop

  1. Brad Luo

    I share your sentiment about this “China has no law…” argument floating out there.

    yes, the body of tort law in China may not be as sophisicated (“scary” at times too) in the U.S.

    yes, the damages awarded are too low, and punitive damages are hard to come by for plaintiffs.

    yes, the courts are not independent.

    But, none of them, singularly or combined, means that China has no “body of civil law” or no “good lawyers.” It is downright inaccurate and misleading, to say the least.

    Thanks for setting the record straight.

  2. China Law Blog

    Stan,

    You are being way too kind (hell, you are way too kind). This article is more than condescending, it is flat out racist and I am going to go after it big time in a post soon. The article to which it approvingly refers is the one I was telling you about whose thesis was essentially that we can never trust China because it is not Christian. Man this stuff frosts my ass.

  3. William Lewis

    I’ve heard that it can be difficult to determine when a business partner in China is an SOE. Do SOEs play any sort of role in the difficulty of pursuing product liability cases in general and tort claims in general? Or are there other impediments to proper damages and a discovery system?

  4. Stan Post author

    It is not difficult per se to determine if a company is an SOE. However, it may be difficult to determine just which corporate entity your business partner is using to make a deal.

    One common instance is for a local government to use a special purpose domestic company as the signatory in a JV or other sort of deal. Technically, this is not an SOE, but it certainly has government baggage weighing it down.

    If you are dealing with an SOE or any company with government connections, enforcement is always an issue (i.e. very difficult). This applies to product liability as well as any commercial dispute. Discovery is extremely limited in China under normal circumstances; with one of these kinds of companies, you can forget it.