CHINA Law and Practice Contributed by: Yue Dai, Zhenghao Li and Xiaokun Yuan, King & Wood Mallesons
the safety of property, the term “defect” includes non-compliance with those standards. Similarly, sector-specific regulations also refer to non- compliance with national standards as one of the criteria for defects. For example, the Admin - istrative Regulations on the Recall of Defective Automotive Products provide that products that do not meet the national or industry standards on personal and property safety are deemed to be defective. That said, regulatory compliance is only a bot - tom line in product liability disputes. Products that meet the national or industry standards or other administrative requirements are not auto - matically considered “free from defects” . They also have to meet a reasonable person’s expec - tations regarding safety (see 2.1 Product Liabil- ity Causes of Action and Sources of Law for further details). 2.14 Rules for Payment of Costs in Product Liability Claims In China, a court fee is calculated in proportion to the amount of the claim and must be pre- paid to the court in all cases (including product liability cases) before the hearing by the plaintiff, unless the plaintiff applies for a postponement, reduction or exemption of the court fee and the court permits this. The court will decide the allocation of the court fee between the parties in the final judgment, as well as other fees such as expert costs and inspection fees. Such fees are usually allocated to the losing party. As for attorneys’ fees, the court usually considers whether the losing party should bear such costs based on the specific facts of the case, taking into account whether the parties had already reached an agreement on this matter in their contract and whether the
attorneys’ fees could be classified as a reason - able expense. 2.15 Available Funding in Product No statutory litigation funding system is currently established in China. It is also difficult to receive legal aid in product liability cases. In practice, however, specific state-supported funding is available for public interest litigation (see 2.16 Existence of Class Actions, Representative Proceedings or Co-ordinated Proceedings in Product Liability Claims ) for parties who cannot afford the cost of litigation. Liability Claims Litigation Funding By law, a court can, after investigating the situa - tion, decide to exempt, reduce or postpone the court fee upon application if it finds that a party is financially disadvantaged and has genuine difficulties in paying court fees. Eligible appli - cants include disabled persons without a steady source of income, persons on minimal welfare benefits, and persons affected by natural disas - ters or other types of force majeure. In particular, victims of product quality accidents are allowed to apply for postponement of court fees. Contingency Fees In civil cases involving property, which covers most product liability disputes, a contingency fee can be agreed upon between attorneys and clients. 2.16 Existence of Class Actions, Representative Proceedings or Co- Ordinated Proceedings in Product Liability Claims To date, China’s legal system has not provided for class actions as they exist, for example, in the USA. However, China does allow public interest litigations and representative litigations
52
CHAMBERS.COM
Powered by FlippingBook