China: Tort Law Reform in the People's Republic of China

Last Updated: 8 July 2010
Article by Peter Coles

The Tort Liability Law ("the Law") of the People's Republic of China (PRC) 2009 takes effect on 1 July 2010. Those doing business in China will need to understand the potential for increased liability and the associated need to expand insurance coverage.

Existing provisions for tort-related liabilities were covered in more than 40 different pieces of legislation, across a fairly wide spectrum of social and business regulation. The new Law was drafted, in part, to integrate these different rules and to provide a more solid basis for the development of tort law and practice in China.

Aircraft operators' liability

Article 71 of the Law states that operators of aircraft are liable in tort for damage caused to others unless the operator can prove that the damage was caused by the victim acting with intent. It is presumed that the Law will only apply to circumstances where the Civil Aviation Law does not apply.

Product liability

In so far as product liability is concerned, the Law restates the general rule established under the Product Quality Law that the manufacturer is strictly liable for personal or property damages caused by a defective product. Article 42 provides for the seller's strict liability in cases where the seller is unable to identify the manufacturer or the supplier of the defective product.

The Law does not provide for any defences for manufacturers or sellers; however, the Product Quality Law does and is expected to still apply: manufacturers are not to be liable if (i) the products have not been put into circulation; (ii) the product defects do not exist at the time of circulation; or (iii) the defects cannot be found at the time of circulation due to scientific and technological limitations.

When a product is discovered to be defective after it has been put into circulation, the manufacturer and the seller must promptly issue warnings and recall the product, as necessary. If the manufacturer or the seller fails to undertake such actions in a timely manner, or the remedies are insufficient and damages occur, the manufacturer and the seller will be found liable. The Law also allows consumers to bring actions to require corrective actions before any real harm has occurred. In situations where product defects endanger consumer personal or property safety, consumers are entitled to require that manufacturers and sellers eliminate the risk of harm. Consumers do not have to demonstrate that they have already suffered actual harm as a result of product defects.

Punitive damages

Punitive damages are payable when two conditions are satisfied: (i) where the manufacturer or seller knew that a product was defective; and (ii) the defective product caused death or serious injury. The Law, however, does not set forth the standard or methodology used to calculate punitive damages. Damages are not capped or based on the price of the defective product. This issue is expected to be clarified in a future Supreme People's Court judicial interpretation.

The Law becomes of increasing significance to China's aerospace manufacturing industry. Chinese companies already provide parts for Airbus and Boeing aircraft; and the domestic airframe manufacturing industry is ramping up the design and production of various aircraft. The Commercial Aircraft Corporation of China (Comac) has been busy constructing an assembly plant in Shanghai for its C919 (168-190 seat narrow-body airliner) and ARJ21 regional jet aircraft; and awarding contracts to various original equipment manufacturers (OEMs) and suppliers. It aims to have the C919's first test flight in 2014 and entry into service in 2016, while the first ARJ21 is due to be delivered in late 2010 to China's Kunpeng Airlines.

Environmental pollution

The Law also provides for enhanced liabilities for environmental pollution. Article 66 provides that, where any dispute arises over environmental pollution, the polluter shall assume the burden to prove that it should not be liable, or its liability could be mitigated under certain circumstances as provided by law, or to prove that there is no causality between its conduct and the harm. Article 68 of the Tort Liability Law further states that plaintiffs can claim compensation from polluters or a third party if the environmental damage was caused by a third party. This article certainly imposes more liabilities on the polluters in that polluters may still be liable for damages even if the pollution was not caused by their own actions.

Damages for death/personal injury

The basis upon which compensation for consumers (and their dependents) is to be calculated and awarded is set to change. Currently, claimants can recover:

  1. funeral/condolence expenses (which is based on the average monthly income of a resident of the place where the claim is brought);
  2. compensation for death or personal injury (= 20 years (being the maximum working life expectancy) x average disposable income of a resident of the place where the claim is brought x percentage disability (fixed by law, 100 per cent if dead));
  3. dependency costs which are payable only to those who are genuine dependents (based on average income of a resident of the place where the claim was brought x percentage disability x number of years entitled to support);
  4. loss of income (period of unemployment x average disposable income of a resident of the place where the claim is brought); and
  5. reimbursement of various special damages like medical and transportation expenses.

Under the new regime, dependency damages will be abolished (compensation for dependents will be subsumed under compensation for death/disability); different general statistics will be used when assessing compensation, rather than the current one based on the average disposable income - further guidance from Supreme Court or National People's Congress (NPC) expected; and the pool of possible claimants will be widened to include grandparents, siblings, uncles, aunts, nieces and nephews in addition to immediate family and parents. In addition, a new head of damage is being introduced: damage to personal property (clothing/shoes/lost wallet). Also, the courts will adopt a system whereby similar amounts of compensation are made to claimants whose claims arise out of a similar incident. The changes continue to ignore the peculiar circumstances of the individual, and are aimed at bringing uniformity to claims.


While no one knows yet how Chinese courts will interpret the new tort liability laws, there are likely to be significant financial and legal ramifications for companies doing business in China. Companies will experience increased liability exposure and higher defence costs regardless of their compliance

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.