chinablawger
A law intern's look at China and Chinese law.
Punitive Damages going up in China?
chinaPunitive Damages. The word has America’s corporate, medical, and even legal sectors on their knees. If you make a mistake you can get hit for hundreds of thousands or even millions of dollars of damages. McDonald’s got sued for over 2 million dollars because someone poured hot coffee on her lap. Doctors pay tens of thousands of dollars a year for medical insurance because ambulance-chasing lawyers are sue-happy. And people believe urban legends, whether they are true or not, about thieves who sue those whom they rob for leaving knives in a place that might hurt the thief.
Fear. American doctors, corporations, and individuals are afraid to make mistakes because they might get sued for massive amounts of punitive damages. It can be argued that punitive damages have gone overboard in America, but the fact of the matter is that fear is the point of punitive damages. If a company knows it will be fined to the tune of millions of dollars, it will be much less likely to knowingly make mistakes that endanger lives.
This is not the case in China. Right now, punitive damages are limited to twice the actual costs of damages (say, hospital costs) and even those damages, in the case of death caused by a fake product, are limited to just a few thousand US dollars.
Chen Beiyuan, a Chinese lawyer from Guangzhou, along with four other attorneys, have submitted a proposal to China’s National People’s Congress (NPC) asking for an amendment to the Law on the Protection of Consumer’s Rights and Interests. They want the cap on punitive damages to be raised from double the damages to four times the damages when the offender intentionally provides a faulty product or service. This is in contrast to America’s punitive damages, which do not have a cap and reach incredible sums. Mr. Chen expects the proposed law to take a few years to pass, if it is passed.
Chen Beiyuan and his colleagues apparently submitted the proposal because a Guangzhou pharmaceutical firm knowingly sold fake drugs that resulted in at least 9 deaths. The current punitive damages laws only ended up as a slap on the wrist. They are not enough to stop a similar crime from occurring again. And making fake medicine that is either poison or not effective as advertised when given to a mortally sick person is simply wrong. Imagine a loved one dying because Tylenol made a bad drug on purpose. You would certainly want them to be punished. And I don’t think a few thousand US dollars could be called justice.
There’s no guarantee that 4 times actual damages will be enough of a deterrent—Chinese punitive damages probably won’t cause anything close to the fear that American damages do. Still, that may or may not be a good thing.
Source: China Daily
Fear. American doctors, corporations, and individuals are afraid to make mistakes because they might get sued for massive amounts of punitive damages. It can be argued that punitive damages have gone overboard in America, but the fact of the matter is that fear is the point of punitive damages. If a company knows it will be fined to the tune of millions of dollars, it will be much less likely to knowingly make mistakes that endanger lives.
This is not the case in China. Right now, punitive damages are limited to twice the actual costs of damages (say, hospital costs) and even those damages, in the case of death caused by a fake product, are limited to just a few thousand US dollars.
Chen Beiyuan, a Chinese lawyer from Guangzhou, along with four other attorneys, have submitted a proposal to China’s National People’s Congress (NPC) asking for an amendment to the Law on the Protection of Consumer’s Rights and Interests. They want the cap on punitive damages to be raised from double the damages to four times the damages when the offender intentionally provides a faulty product or service. This is in contrast to America’s punitive damages, which do not have a cap and reach incredible sums. Mr. Chen expects the proposed law to take a few years to pass, if it is passed.
Chen Beiyuan and his colleagues apparently submitted the proposal because a Guangzhou pharmaceutical firm knowingly sold fake drugs that resulted in at least 9 deaths. The current punitive damages laws only ended up as a slap on the wrist. They are not enough to stop a similar crime from occurring again. And making fake medicine that is either poison or not effective as advertised when given to a mortally sick person is simply wrong. Imagine a loved one dying because Tylenol made a bad drug on purpose. You would certainly want them to be punished. And I don’t think a few thousand US dollars could be called justice.
There’s no guarantee that 4 times actual damages will be enough of a deterrent—Chinese punitive damages probably won’t cause anything close to the fear that American damages do. Still, that may or may not be a good thing.
Source: China Daily
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