CHINA Law and Practice Contributed by: Yue Dai, Zhenghao Li and Xiaokun Yuan, King & Wood Mallesons
One of these model cases concerns civil public interest litigation initiated by the Shanghai Con - sumer Council. According to the case brief, the consumer council brought proceedings against a seller of electronic cigarettes who violated the mandatory standards by adding additional fla - vours to the products, thereby increasing the risks of addiction and harm to human health. Notably, under a collaborative framework, the Shanghai Procuratorate supported the Shanghai Consumer Council in collecting evidence and fil - ing a lawsuit, aiming to empower the consumer council in bringing public interest litigation. Ulti - mately, the court successfully concluded media - tion, with the respondent making a public apol - ogy and paying public interest damages equal to its illegal gains to a specialised fund for con - sumer public interest litigation. 3. Recent Policy Changes and Outlook 3.1 Trends in Product Liability and Product Safety Policy In addition to trends reflected in the typical cas - es discussed in 2.17 Summary of Significant Recent Product Liability Claims , recent legis - lative updates on product liability and product safety policy are as follows. Clarification on Scope of Compensable Property Damage Covered by Product Liability Claims The SPC released a new judicial interpretation on the tort liability section of China’s Civil Code on 25 September 2024, which became effec - tive on 27 September 2024. Importantly, this interpretation clarifies that the “property dam- age” claimed by the buyer in product liability tort claims includes not just damage caused to
“other property” but also damage caused to the “defective product itself” . This understanding, which aligns with the legal spirit of the new Civil Code, takes precedence over the old Product Quality Law, under which property damage caused by product defects in tort claims only covers properties “other than” the defective product itself. Originally, consum - ers were required to file a contractual claim to recover damages for the defective product itself, and a separate tort claim to seek compensation for damage to other properties. By adopting the new interpretation, legislators intend to simplify the filing of lawsuits by consumers and save judicial resources. Under the new approach, for disputes involving product defects, consumers may simply file one tort claim to cover damages to both the defective product itself and any other property. Elaboration of Punitive Damages Rules in Food and Drugs Cases On 22 August 2024, the SPC officially adopted an interpretation on punitive damages in foods and drugs disputes. Key highlights include the following. • Courts shall support punitive damages claims by ordinary consumers purchasing food for personal or family needs. The amount of punitive damages is calculated based on the actual payment made for the product. • Non-professional purchasing agents ( daigou ) do not bear the punitive damages liability. Professional purchasing agents who uninten - tionally sell substandard products may seek compensation from the manufacturer after paying punitive damages to the buyer. • If the consumer brings a punitive damages claim based on violations of the Food Safety Law or Pharmaceutical Safety Law but the
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