Tort Liability Law of the People's Republic of China

Issuing Body: Standing Committee of the National People's Congress
Issuing Date: December 26, 2009
Effective Date: July 1, 2010

The Standing Committee of the National People's Congress moved quickly to effect passage of the Tort Liability Law of the People's Republic of China (Tort Law), approving a final version just three weeks after the period for public comment closed. Still, this final approval came more than seven years after the standing committee released its first draft of a comprehensive tort law, in 2002. As China Law Update noted in coverage of the draft version, the Tort Law integrates provisions and principles scattered among different Chinese laws, regulations and court opinions, theoretically improving the country's legal framework on tort compensation and solidifying the foundation of its civil code.

Background

China has experienced a significant increase in the number of tort-related cases in recent years, with courts reportedly hearing 980,000 new tort cases in 2007 and more than a million in 2008, with a significant increase expected for 2009. With relevant protection provisions scattered throughout more than 40 different pieces of legislation, however, there has been an increasing awareness among lawmakers of the need to consolidate the basic principles underlying Chinese tort law in a single piece of legislation.

China's effort to craft a comprehensive tort liability law began in 2002, when the first draft was reviewed by the National People's Congress (NPC). The Tort Law was revised and submitted to the NPC again in December 2008 and finally in the fall of 2009. The NPC promulgated the final version on December 26, 2009. It will become effective July 1, 2010.

Consisting of 12 chapters and 92 separate provisions, the Tort Law discusses general tort principles, including rights and interests, criteria for liability, damages and compensation and mental damages, as well as specific tort fields, such as product liability, Internet service provider liability, medical malpractice, and liability for environmental pollution.

General Provisions: Protection of Rights and Interests

The first chapter of the Tort Law focuses on general principles, especially the scope of rights protected under the law.

Article 2 provides that tortious liability arises upon the infringement of "civil rights and interests," an extremely broad category that includes personal and property rights and interests such as the right to life, the right to health, rights associated with names, reputation rights, honorary rights, the right to one's image, the right to privacy, the right to marital autonomy, the right to guardianship, ownership rights, usufruct, collateral rights, copyrights, patent rights, exclusive rights to use trademarks, discovery rights, equity rights and inheritance rights.

The Tort Law for the first time expressly stipulates that there is a "right of privacy" in China, but there is no further elaboration of precisely what this right consists of.

General Provisions: Criteria of Liability

Chapter Two of the Tort Law describes three different criteria under which a person may incur tortious liability:

• As a general principle, a person will incur liability where he infringes upon another person's civil rights and interests and is at fault.
• In some circumstances, the law makes a presumption of tortious liability, and the person concerned must produce evidence rebutting that presumption (for example, specific circumstances regarding liability for medical malpractice).
• Finally, in certain circumstances the law provides for "strict" liability or "liability without fault," irrespective of individual fault (for example, with liability for environmental pollution).

General Provisions: Remedies and Damages

Article 15 establishes the principal remedies that may be used, either independently or jointly, against an individual who commits a tort. Possible remedies include:

• Requiring an individual or company to cease infringement (as of civil rights);
• Eliminating the risk caused by a person's tortious conduct;
• Removing the obstacle to the exercise of rights created by such conduct;
• Returning property to the victim of a tort;
• Restoring the state of affairs to what it was prior to commission of the tort;
• Compensating the victim of the tort for damages suffered;
• Making an apology;
• Eliminating adverse effects; and/or
• Restoring the injured party's reputation.

Article 16 describes the damages to which a party is entitled for bodily injuries. Damages include all reasonable expenses incurred in obtaining treatment and recovering from injuries, such as medical care, nursing and transportation expenses, as well as lost income, assistance with daily living and a disabled person's allowance if the victim was disabled as a result of the tort. If the individual dies, the responsible individual may be required to pay all funeral expenses as well as compensation for the death.

General Provisions: Same Lives, Same Payment

Until the Tort Law takes effect, death compensation for urban residents and rural residents in China has been calculated so as to value the lives of urban residents more highly than those who live in rural areas. The Interpretation of the Supreme People's Court Concerning Some Issues on the Application of Law for the Trial of Cases on Compensation for Personal Injury, which was adopted in 2004, specified that compensation should be based on urban residents' per capita disposable income, as opposed to rural residents' per capita net income, calculated over a 20-year period. Both figures were based on yearly government statistics; the net effect was that if two otherwise similar people died in the same car accident, one person's family might receive ten times as much as the other, if one lived in the city and the other in a rural province.

Article 7 of the Tort Law changes that situation, providing 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." In other words, deaths that result from the same tort will result in the same compensation regardless whether rural or urban residents are involved.

Special Torts: Product Liability

Chapter 5 of the Tort Law discusses liability for defective products. The principles are consistent with provisions of China's General Principles of Civil Law, the Product Quality Law and relevant interpretations of the Supreme People's Court.

Manufacturers are liable for damages caused by defects in their products, and sellers are liable for damages attributable to their actions. If the defects involved are the responsibility of third parties, such as a shipper or retailer, manufacturers and sellers are entitled to seek compensation from such third parties after paying the compensation.

Where a product is found to be defective after it is put into circulation, the manufacturer and sellers shall give timely warnings, recall the defective product or take other appropriate remedial measures. If any damage results from a delay in, or the ineffectiveness of, such remedial measures, the manufacturer and sellers shall be liable for such damages.

Punitive compensation shall apply when products are manufactured or sold while the manufacturer or seller is aware of defects in the products. The Tort Law offers no guidance on the amount of punitive compensation.

Special Torts: Internet Service Provider Liability

Internet-related infringements are increasing in both number and variety in China, including infringements of trademark, copyright, unfair competition and other matters.

Article 36 of the Tort Law creates obligations for Internet service providers (ISPs) and gives additional protection to the rights of individuals in China. In accordance with the law, ISPs will bear tortious liability in the event they infringe upon an individual's civil rights or interests through the Internet. Where an Internet user engages in tortious conduct through the Internet, the injured party shall have the right to inform the ISP and request that it take necessary protective action, such as deleting content, screening content or denying service to the offending individual. Where an ISP fails to take necessary action after being informed of such offenses, it shall be jointly and severally liable with the Internet user for additional damage.

Special Torts: Medical Malpractice

As a general principle, Article 57 of the Tort Law says medical institutions shall be liable and have to pay compensation if the institution and/or any of its medical professionals are at fault and damage is caused to a patient during medical treatment.

Under certain circumstances, medical institutions shall be presumed to be at fault for damage to a patient:

• If medical professionals have violated laws, administrative regulations, rules or other relevant requirements for diagnostic and treatment practices;
• If medical professionals have concealed or refused to provide medical records relating to the dispute; or
• If medical professionals have forged, tampered with or destroyed medical records.

The Tort Law also establishes the following obligations for medical institutions and medical professionals, the breach of which will lead to tortious liability:

• Medical professionals are obligated to inform patients about their conditions and treatment measures, about the risks of treatment, and about available alternative treatments.
• Medical professionals are obligated to perform diagnosis and treatment according to current medical standards.
• Medical institutions and medical professionals are obligated to keep and preserve hospital admission records, doctors' instruction sheets, laboratory test reports, surgical and anesthesia records, pathology data, health care records, medical cost records and other medical records.
• Medical institutions and medical professionals are obligated to maintain the privacy and confidentiality of patients.
• Medical institutions and medical professionals are obligated not to carry out unnecessary exams or other procedures in violation of clinical norms.

Special Torts: Environmental Pollution

Article 65 of China's Tort Law establishes a general principle for a polluter's liability: The polluter shall bear tortious liability without regard to fault (strict liability) if damage is caused by environmental pollution. To challenge such liability, the company or individual responsible for damaging pollution bears the burden of proving that it is entitled to an exemption from or mitigation of liability under the law, or that there is no relationship between his conduct and the environmental pollution that caused the damage.

Where two or more companies or individuals are responsible for causing pollution, the proportion of damages for which each party is liable shall be determined according to the type of pollutant, the volume of emissions and other factors. Where damage is caused by pollution attributable to a third party, the injured party may seek compensation from either the polluter or the third party. The polluter may, after paying compensation, claim the same from the third party.

Conclusion

While some critics contend the Tort Liability Law will have no impact, the more general consensus is that it serves several important purposes. At present, tort-related law in China is scattered in some 40 places—in a variety of rules, regulations and court opinions as well as actual laws. And some of those rules, regulations, opinions and laws conflict with one another. Codifying and centralizing the core principles of China's tort law will, as a start, give those principles the full force of law. And it makes the law more accessible to those, including lawyers and judges, who may not know or be able to research dozens of different rules, regulations, court opinions and laws. That said, interpretations and implementing regulations are sure to follow.