Punitive damages under the new Chinese Tort Liability Law

With the adoption of the new Tort Liability Law (TLL) in December 2009, the Chinese legislature not only consolidated the basic principles for tortious liability in one piece of legislation, but also provided a legal framework for a number of special torts, including product liability. One novelty of the new TLL is the establishment of punitive damages—commonly acknowledged as a common law phenomenon—within the realms of Chinese product liability. The introduction of punitive damages in a civil law jurisdiction like China is of great interest to academics and legal professionals alike. From a practitioners’ perspective, awareness of this development is particularly important because companies, who may be their clients, produce and sell products in China, and may be obligated to pay punitive damages. This paper first describes the historical and political background of the various provisions awarding punitive damages under Chinese law. It then examines the circumstances under which punitive damages may be awarded according to Article 47 of the TLL in the context of product liability. As the Supreme People’s Court has not yet issued extensive judicial interpretations, and no case thus far has been published, it is not quite clear how far reaching Article 47 will be. A sub-section is dedicated to analysing problems that may arise from the insertion of this common law institution into a civil law jurisdiction. The last chapter concludes by evaluating the disadvantages and advantages of punitive damages, and assessing the necessity of punitive damages within the Chinese product liability system.