Tue, Jul 13, 2010 - Page 8 News List

The Chinese legal system faces a tort conundrum

By Paul Nash

China’s courts are bracing for a wave of new civil litigation claims. On July 1, the Supreme People’s Court followed through on its intention to enact the Tort Liability Law, allowing individuals to sue for damages suffered from incidents such as medical malpractice, road accidents, pollution, mental distress, unruly animals and collapsing buildings.

The new law broadly states that any person who infringes on or damages the “civil rights and interests” of other persons shall assume tort liability. It explicitly mentions “punitive damages” without specifying limits, though few observers foresee Chinese courts awarding massive settlements anytime soon.

The landmark law, which has been in the works since 2002, was approved in December last year by the Standing Committee of the National People’s Congress. Consisting of 12 chapters and 92 provisions, it is seen as a cornerstone in China’s gradually reforming legal regime, intended to safeguard individual and property rights. It consolidates a patchwork of earlier provisions scattered throughout more than 40 different pieces of legislation.

China has experienced a rapid increase in the number of tort-related cases over the past decade, with courts now hearing more than 1 million each year.

While the right to privacy has never been a defining characteristic of Chinese culture, the law contains specific provisions on the mishandling of personal information. China’s Constitution vaguely addresses privacy protection, but this legislation grants the right to private legal action. Should a medical institution, for example, disclose personal medical records without a patient’s consent, it can now be sued by that individual.

There are also clauses on Internet privacy. Article 36 establishes the right of an injured party to proceed against an Internet service provider that infringes on the civil rights and interests of an individual, or that fails to take appropriate corrective measures, such as deleting offending content or restricting abusive users.

The Tort Liability Law has significant ramifications for China’s rural/urban divide.

Not only may employers now be held liable for injuries their employees suffer on the job (Article 34), but Article 7 states that “Where the same tortious act causes more than one person to die, the amounts determined to be payable as compensation for death will be the same.”

Previously, a rural worker killed on the job would receive less compensation than an urban worker, as settlements were calculated based on per capita disposable income in the victim’s area over a 20-year period.

The same principle of equality should extend to all claims.

The law also addresses product liability, covering practically everything manufactured and sold in China. Previous product liability and recall laws applied only to certain medicines, foods, toys and automotive products.

There are green considerations as well. Article 65 stipulates that anyone who pollutes the environment may be subject to tort liability, even if that person has not been found in violation of any specific environmental regulation.

While the Tort Liability Law is not retroactive, it does apply to damages arising after July 1, even if the cause occurred beforehand. Legal practitioners await the issuance of further judicial interpretations and guidance, anticipated to fill gaps and give teeth to legislation Beijing hopes will help curb negligent behavior and foster a deeper culture of law.

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