January 01, 2010

Draft Tort Liability Law

Issuing Body: Standing Committee of the National People's Congress
Issuing Date: November 6, 2009

Continuing a broader effort to update and reform China's civil legal system, the Standing Committee of the 11th National People's Congress has released for public comment a draft version of a comprehensive Tort Liability Law (Draft Tort Law) designed to modernize a key element of the country's civil law. Issued by the committee on November 6, 2009, and released for public comment on December 5, this third draft of a new tort law focuses on multiple tort activities closely related to people's daily lives. If finally approved, it will integrate provisions and principles scattered among different Chinese laws and regulations, theoretically improving China's legal framework on tort compensation and solidifying the foundation of China's civil law code.

Since 2007, the Chinese government has enacted extensive reforms in many areas of civil law, including antitrust, bankruptcy, civil procedure, employment, insurance and patents. These revisions to the country's tort law regime continue that trend.

The Draft Tort Law has 12 chapters and 91 separate provisions. The first four chapters discuss general tort principles, including elements, liabilities, compensation and subjects of tort. The remaining chapters focus on specific torts, including product liability, automobile accidents, medical injury, environment pollution and animal-related injuries.

Some highlights of the Draft Tort Law:

  1. The Draft Tort Law for the first time expressly stipulates that there is a "right of privacy" in China. The law—at least in draft form—strengthens protection of this right.
  2. Anyone who suffers "severe mental damages" in the course of infringement of his or her personal rights can make a claim for compensation for mental damages.
  3. In case of a labor dispatch service or personal employment, the receiver of a dispatch service or the personal employer shall accept liability for compensation for damages caused by a dispatched worker or the individual employee.
  4. The Draft Tort Law adds disclaimers for medical institutions and improves the existing regulation of medical disputes regarding the presumption of causation in medical accidents.
  5. In product liability cases, punitive compensation shall apply when products are manufactured or sold while the manufacturer or seller is aware of the defects in the products.

Conclusion

Submission of the Draft Tort Law to the National People's Congress for final deliberation and approval is expected in 2010. Despite its breadth, this version of the tort law will certainly require extensive implementing rules and regulations. We will follow developments related to this important law in future issues of China Law Update.

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