Overview

Manufacturing businesses across a broad range of sectors, including consumer goods, life sciences and automotive industries, should take note that they could face increased personal injury and product liability claims in China after the country enacted new laws that took effect on 1 July 2010.

The PRC Tort Liability Law, which has been under discussion for nearly seven years, was originally passed in December 2009, and has now come into force. It is intended that the legislation will consolidate various statutory provisions, administrative regulations and judicial interpretations related to tort liability which previously existed.

The Law introduces or emphasises several new concepts in liability that may cause concerns to manufacturers, notably: a new obligation to conduct recalls of defective products, uncapped punitive damages, and emotional distress damages. At the same time, the scale of any regime change will be tempered by how the courts and administrative agencies in China actually enforce the new legislation.

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