Importance of New PRC Tort Liability Law

In December 26, 2009 the 12th session of the Standing Committee of the Eleventh National People’s Congress has adopted the final draft of the Tort Liability Law [1] . As a result, as of July 1, 2010 China has now a specific piece of legislation to govern tort liability. The Tort Law has been prepared and discussed for nearly a decade and its implementation represents the completion of the Chinese Civil Code. From now on, the legal system will be effectively responsible for the definition and protection of the rights of ordinary citizens.

The new Tort Law officially aims at “protecting the lawful rights and interests of civil law parties, explicitly defining tort liability, preventing and punishing torts, and promoting social harmony and stability”. [2] It generally stipulates the liability subjects, methods of assuming and waiving liability and then respectively lists eight special tort liabilities based on the above general principles. Divided into 12 chapters, the 92-provision law deals with liabilities arising from a range of circumstances and covers subject matter that increasingly captures domestic headlines in China. These include, among others: work-related injuries, product liability, liability for medical malpractice, environmental pollution, traffic accidents, liability for harm caused by animals and mental distress as well as violations of privacy or reputation on the Internet.

“Civil rights and interests” protected by this Law include the rights to life, health, name, reputation, honour, self image, privacy, marital autonomy, guardianship, ownership, usufruct, security interest, copyright, patent right, exclusive right to use a trademark, the right to discovery, equities, succession, and other personal and property rights and interests. [3]

Moreover, the new Tort Law assumes another important function in that it further reinforces the unification of other tort-related provisions, which have been, for a long time, scattered around various laws such as the Law on Protection of Consumer Rights and Interests, the Product Quality Law and the Environmental Protection Law. [4]

Whether or not this tort reform in China is necessarily a positive development or not is debatable. Immediately after being passed the Tort Law has been heavily criticised and has received little positive comment. While the critics have chiefly focused on the area of private law and the immediate consequences of the recent codification process, the author of this essay will argue for a different approach. Looking at the area of public, rather than private, law and considering the long-term effects of the codification exercise, the author will point to the real importance of the new Tort Liability Law. She will argue that, while the new Tort Code may indeed be of little significance from a private law perspective, it has the potential to exert an important influence on the Chinese public law landscape.

The argument is divided into three parts. The article begins with a brief outline of the concept of tort law as well as an examination of its historical evolution in China. Part II then takes a closer look at the main arguments put forward by the critics of the recent codification exercise while Part III, at last, sets out, what the author of this paper conceives to be, the real importance of the new Tort Law.

Part I

Tort Law in China

Before we move on to the debate on the significance of the tort reform, it is crucial to first briefly consider the concept of tort law and trace its development in China. This is important not merely for the sake of integrity. Rather, an understanding of the general nature of tort law and its utility, as well as the position that existed in China prior to the introduction of the new Tort Law, will be helpful in better comprehending the various arguments raised for and against the recent codification exercise.

The Concept of Tort

“Tort” literally means “wrong” in Latin. Hence, tort law is a body of law that allows private persons to receive compensation from those who have wrongfully caused them specific forms of harm or injury. Generally speaking, a tort system will define what constitutes a legal injury, establish under what circumstances a tortfeasor may be held liable for the damage he has caused and determine how compensation is to be awarded. [5]

From a moral point of view, ‘tort law represents our respect for and responsibility towards our fellow human being, as individuals and as a society’. [6] It has also an important role in shaping societies, as it promotes certain forms of behaviour while deterring others. [7] Moreover, the law of torts plays also a significant role in a modern economy. Dangerous and reckless conduct is discouraged by economic incentives (the argument that a safer environment leads to an increase in efficiency by minimizing injuries, damage to property or lost labour time) and the threat of money damages. [8] As a general observation, it can be said that in modern civil societies, tortious protection is no longer a privilege but a necessity.

The Evolution of Tort Law in China

While the new Tort Law is indeed a completely novel piece of legislation, it does not introduce the concept of torts into the Chinese legal framework. The truth is that tort litigation has already dominated China’s legal system for many years. The People’s Republic of China can boast over 40 different statutes concerned with tort law and a total of one million tort actions initiated in 2008. [9]

According to professor Ye Lin [10] , the origins of China’s tort system can be traced back as far as to the Qin (221-206 B.C.) and Han (206 B.C.-201 A.D.) Dynasties. Moreover, it appears that provisions regarding compensation for tortious acts have existed already in the ancient Chinese society as there was already at that time a specific word (chang) that had essentially the same meaning as the modern word for restitution and compensation (peichang). [11]

This tradition of providing tortious protection has continued up to modern times and, rather curiously, during the period from 1911 to 1949 has been actually secured by two separate legal systems – those of the Kuomintang Government and the Chinese Communist Party.

In the PRC itself, tort law has been initially governed both by the first Constitution of the People’s Republic of China (1954) and a series of laws and regulations promulgated by the state. It was only during the Cultural Revolution (1966-1976) that this entire system of protection has been suspended. At that time, when virtually all laws have been trampled under foot, all existing protection of rights has been removed and people were generally precluded from enforcing laws. Under these conditions, the Chinese tort system ceased to exist.

The tort system in China has only been re-established in 1987 when the General Principles of the Civil Law of the People’s Republic of China came officially into force. When passed, the General Principles have been intended only to provide an general framework for more detailed laws to be adopted subsequently. However, as a more complete civil code has not been promptly promulgated, the General Principles have continued to form the basis of tort law in China for a long time. [12]

Eventually, over the years, the General Principles have been supplemented by various other legal instruments directly or indirectly dealing with tort liability. The National People’s Congress, the State Council, and the Supreme People’s Court issued a range of new laws [13] , rules [14] , and case examples [15] addressing issues relating to personal injury tort law and filling existing gaps in law. Together, these new laws were intended to establish a framework for a genuine tortious liability system in China. [16]

While China had, by that time, developed a complex system of tort protection, the truth was that it was far from perfect. Because personal injury has been mostly dealt with under the umbrella of criminal and administrative law, it was always left to the local authorities to pursue wrongdoers in the name of the injured party. [17] Having no personal right to sue, the individual was forced to rely on whatever grievance procedures were provided by political and administrative authorities. When these decided not to act, the affected person was simply left with no power to remedy his harm. And for many years, that sad truth was that enforcement has been continuously hampered by local protectionism and corruption. [18]

Fortunately, in 1997 a discussion of the need to revise the basic Civil Code of China has begun. After five years, in December 2002, the Legislative Affairs Commission on the National People’s Congress has finally released its first working draft for public discussion. The basic parameters of tort liability have been included in Chapter 8 of the draft. The real discussion on tort reform has been, however, significantly delayed, inter alia, by the protracted discussions regarding the proposed changes in the law of property. Yet, once the second draft has been published on December 21, 2008 it has soon been followed by a third draft and already after a year, on December 26, 2009 the Standing Committee of the National People’s Congress has adopted the fourth and final draft of the Tort Code.

Under a new Tort Code the regime will be, arguably, structurally less susceptible to the above mentioned problems. It will be now in the hands of the affected party to decide whether or not to bring a case. This will significantly reduce, if not eliminate, the opportunity for the various authorities to quash the matter even before the case gets to court. At first sight then, it might appear that the introduction of the new Tort Law should be hailed as a great success.

Part II

Criticism of the Tort Liability Law

Interestingly, however, the new Tort Liability Law has received a rather chilly welcome. Some commentators have not only ascribed little significance to the recent codification exercise but have actually pointed to its potential harmful consequences and argued that in the longer run it may actually prove counter-productive.

The new Tort Code has come under attack on mainly two grounds: a) its content, and hence the importance from a private law perspective, as well as b) its ideological background, that is, the true motive behind its introduction and the role awarded to it by the Chinese leadership. These various claims will now be explored in turn.

Content

Having acquainted themselves with the new Code, many scholars have come to the following conclusion: ‘The […]Tort Code contains little that is new and even less that is interesting.’ [19]

As it has been described in the previous part of the essay, China already had a very complex and broad system of tort law. And when these existing laws, regulation and practices have been juxtaposed with the new piece of legislation, many commentators have noticed that little, if nothing, has been added to the system already in place.

Only a few examples suffice to show that there is, indeed, much truth in these arguments:

Article 22 of the Tort Liability Law recognizes the right to emotional damages. While this may seem to be a major issue, the truth is that the China’s Supreme Court has granted this right already in 2001. [20]

Section 8 (Articles 65—68) of the Code provides for liability for environmental pollution. This, however, seems hardy revolutionary. Equivalent obligations are already provided for in Article 124 of the China’s Basic Principles of Civil Law and the various pollution control laws, such as the Law on Prevention and Control of Water Pollution, the Law on Prevention and Control of Air Pollution or the Law on Prevention and Control of Pollution from Environmental Noise.

In short, it seems that if anything, that new law has actually only repeated, in fragmentary form, what was already in place.

Others went even further in their criticism and have submitted that, far from not bringing about any changes, the introduction of new Tort Code may, potentially, have serious harmful consequences. To justify their claim, they have first pointed to the over 2,500 pages long treatise on Chinese tort law written by Yang Lixin and then to the only 25 pages long Tort Liability Law. From this, they have argued that by reducing the existing laws into a considerably shortened form, there is a risk that the new Code will decrease the importance of tort law in practice and hence reduce, even further, the amount of protection awarded in China to private rights.

Ultimately the argument has been made that China already has a comprehensive system of tort laws and hence there is no place or need for a new piece of legislation. Yet, as it will be seen in the next part of the paper, this argument should be rejected as it is based on wrong assumptions and entirely misguided. It fails to understand the true motives behind and purposes of conducting a codification exercise.

Ideological background

Another line of attack has been based not so much on the substance of the new law but has focused on the ideology and motives behind its introduction. The argument has appeared once scholars have compared the codification of tort law with another recent codification exercise. Commentators have argued that when one considers the Tort Liability Law alongside the new Property Law, the reality looks rather bleak. [21]

First of all, they have pointed out, the Property Law has been examined and approved by the National People’s Congress itself whereas the Tort Liability Law has only been dealt with by the Standing Committee. Moreover, the legislative process in the case of the Tort Code has been significantly shorter. It took the Chinese legislature over 17 years to complete its legislative work on the Property Law. On the other hand, in the case of the Tort Liability Law, the legislative process has really commenced only in 2008 and was already brought to an end after one year, when the Fourth Draft has been adopted by the Standing Committee on 26 December 2009. [22]

For these reasons, it seems that the codification of Tort Law has been conducted at a lightning speed and has not received a serious treatment from the Party. It appears therefore, so the argument goes, that the Chinese leadership must have had its own reasons to award the codification of Tort Law such a low level of attention.

Following this way of reasoning, tort law expert Zhang Bao has argued that we should be more careful in welcoming the new Tort Code as the Chinese leadership has not adopted it with honest motives in mind. From his point of view, it appears that there were serious populist tendencies in the drafting process. Far from wishing to bestow upon citizens new rights or promote social harmony, a full speed legislation has been carried out in order to achieve the legislature’s aim to create a “socialist legal system with Chinese characteristics by 2010″ – an overall target set at the Fifteenth National Party Congress.

In other words, China’s legislature has introduced the Tort Liability Law not for its people or the rule of law, but in order to complete a political task.

Additionally, other scholars have made a much stronger ideology argument and went as far as to speculate that the Chinese leadership has introduced the Tort Liability Law in an attempt to better and easier control the masses. [23]

Again, this line of argument will be challenged by the author and come under scrutiny in the next part of the essay.

Part III

The True Importance of the Tort Code

In the previous part we have explored some of the powerful arguments presented by the critics of the new Tort Liability Law. However, as it will be seen in this part, these can be easily defeated and even turned into arguments actually supporting the Code. While from a private law perspective the new Code may appear indeed rather unsatisfactory, the author will argue in this part that it may have actually very important consequences in the area of public law.

The Importance of Codification

The previous section has explored how critics have argued that the recent codification exercise has been a pointless venture and that China does not need a new law to regulate tort liability. With the 2,500 pages long tort law treatise by Yang Lixin, as well as a range of laws, rules and case examples issued by the National People’s Congress, the State Council, and the Supreme People’s Court, there is already a sound system of tortious protection in China. Claims have been made that a Tort Liability Law of just over 90 articles will surely not be in a position to bring any change, and, if anything, may actually limit the protection already granted.

While this position is indeed difficult to be challenged by a tort law lawyer, it is much more prone to criticism when looked at from a public law perspective. Focusing on the codification exercise itself rather than the substantive provisions of the new Tort Code, a number of arguments come to the support of the Tort Liability Law.

As a general point, it is first important to realise that new codes rarely purport to replace existing laws and introduce completely new systems. Rather, they are ‘intended to bring some order to an unwieldy system and to resolve certain critical technical legal issues that had remained unclear or in dispute before their adoption’. [24] Hence, the main purpose of the codification exercise in China was exactly to turn these over 2,500 pages of laws and legal decisions into 90, easily accessible and intelligible provisions. Chinese tort law has been a mess of practices and ad-hoc decisions that needed to be systematized and codified.

The amount of both provisions and sources of tort law has not only created difficulties for the judges or the legal profession as a whole. From the point of view of an average Chinese person, it has not only been difficult to navigate around the confusing web of tortious provisions but it was often impossible to even have any real knowledge of the rights he was entitled to. A clear and short Tort Law not only introduces order into the system but also brings law closer to the citizens. And this, arguably, will have a potential to promote both China’s legal and constitutional development .

Citizen Empowerment

Despite the enormous amount of tort cases brought in China, the truth remains that tortious issues continue to be, for the most part, settled behind the scenes. For many years informal dispute resolution and government-directed compensation schemes have been the preferred method for solving private disputes. This unsatisfactory practice has been upheld and further supported by the local governments which preferred to quickly settle claims and give compensation rather than go to court. [25]

The injured citizen himself had little choice. The only thing he could do was to accept whatever he was offered. Having no real knowledge of tort law and being unable to navigate through the complex web of provisions, he was unaware of his rights and entitlements and hence in no position to challenge the assessments of powerful firms or local governments. Arguably, it is exactly the recent codification exercise that may soon change this lamentable position.

On itself, codification is a process of bringing together different pieces of legislation within some given area into comprehensive and systematic statements of law. As a result, the process of finding the relevant law is simplified and the law itself becomes clearer and more accessible. From the point of view of an average citizen, this is of utmost importance. Being presented with a piece of legislation they can themselves understand, without having the need to refer to lawyers or other authorities, it is possible that people in China will become more willing to assert their rights and hence take a more active part in shaping China’s legal landscape. Not only by bringing cases to court but actually taking part in the legislative process by submitting their own comments and suggestions as well as pushing for further reforms.

It is true that for the time being the public involvement in the codification exercise has been rather limited. When seeking public opinion on the new law, the NPC Standing Committee has only received 3,468 submissions. Considering the over 1.3 billion population in China, the response has been indeed weak and unsatisfactory. Despite this, the new Tort Code was, in the end, able to prove that much power rests in citizen action and that even an average Chinese person has the potential to greatly influence the laws in China. This could be observed in a number of situations, when the Draft Code has been considerably revised in the wake of a series of controversial personal rights infringement cases [26] :

The question of joint liability of developers and construction companies in relation to the safety of their buildings has only been addressed following the Lotus Riverside case. When on June 27, 2009 a 13-floor building collapsed at the Lotus Riverside residential complex in Shanghai, killing a worker, the attention of the public opinion has been captured to such extent that a further amendment of the draft could not be avoided.

Similarly, the provisions on compensation for harm from defective products have been greatly altered when a dairy company (Sanlu Group) was found to have adulterated its infant formula milk powder with melamine, an industrial chemical, leaving at least six infants dead and about 300,000 others suffering kidney and other problems.

Also in response to medical disputes, the final draft has reiterated the provision stating that medical staff should not conduct “unnecessary tests” on patients against clinical criteria. This has been done in spite of the previous recommendations to delete this provision as it was too hard to define “unnecessary”.

These changes introduced to the final version of the Tort Liability Law have clearly shown that court judgements and public opinion can play important roles in the legislative process. Arguably, this mere awareness of citizen’s rights and power to influence laws through court judgements has the potential to generate a sense of citizen empowerment.

The recent reform has brought law closer to the people. It has shown them that the law is there for them to use and that they enjoy certain important rights that the law will protect. Being now provided with a code they can more easily understand, it is possible that the people in China will, in the future, be more willing to interfere in legal matters and fight for their rights.

Without a doubt, at first, this new assertiveness will manifest itself in a greater willingness to make claims against fellow citizens. However, it is argued that once having realised that other citizens owe them certain important duties, Chinese people may increasingly demand their own government to award them the same level of respect and protection. And this, in turn, would create a momentum for far more significant and deeper reform in the future.

It is possible that, at some point, Chinese citizens will exert pressure on the party and government to make these new rights more meaningful in practice and thereby establishing a foothold for developing a more extensive rights protection in the future. Therefore, what has perhaps been initially conceived of by China’s leadership as a top-down exercise in social management may soon turn into a process that is markedly bottom-up .

A parallel can be drawn here to the constitutional impact of the famous Sun Zhigang incident. [27] The case was not only important in that it has led to the repeal of the challenged administrative detention called “custody and repatriation”. More significantly, it had a broader influence on China’s constitutional development by promoting constitutional consciousness and empowering citizen activists. No sooner has the case come to an end than new challenges have been brought before the Chinese courts.

There exists already a trend towards “rights consciousness” in China and the adoption and promotion of the Tort Law will accelerate it. Chinese citizens are becoming ever more willing to defend their rights in court and the enactment of the Tort Liability Law will serve to enhance public awareness of citizens’ rights and obligations. And so, as citizens have a greater awareness of their rights, more cases will be brought before courts. This will not only allow lawyers to file cases with broader, constitutional development goals in mind (as it was the case in the Sun Zhigang incident). Additionally, by shifting the centre of gravity towards the courts, this will potentially result in important changes to the role and position of the courts and judiciary.

A new role for the courts

At this point it is important to first appreciate the importance between the appointment of judges in civil and common law systems. Typically a lawyer in a common law system would be first required to have decades of legal experience before being able to become a judge. On the contrary, in a civil law system, law students often become judges straight after graduation from university with just a four year bachelor’s degree and short training. Their knowledge of law is still considerably limited. For this reason, creating a system whereby the multiplicity of practices, provisions and ad-hoc decisions is systematized and codified in a readily accessible way is highly important.

Moreover, it is true that in Beijing or Shanghai there is no shortage of senior judges and lawyers that have probably read all 2,500 pages of the above mentioned treatise. However, for example in the case of rural Hunan, the number of judges and lawyers that have done so to make a decision is a lot smaller. Hence, if it is possible to distil everything into 25 pages with another 100 pages of commentary, then a judge in rural Hunan is provided with something he can read, understand and then use to reach a decision that is similar to a finding of someone who has read all 2500 pages of a tort law treatise.

The creation of this kind of system is exactly one of the main points of codification. One of the reasons why the new Tort Law is so important is that it brings everything into one place – so that a judge can look at one law rather than forty. [28]

Moreover, it is argued that once being provided with a code they can easily understand and are further called to interpret, the judges will become more assertive and hence less willing to blindly rely on the assessment and arguments made by the government and local authorities. Becoming less deferential, it is possible that the courts will eventually claim for themselves a new, enhanced role in the Chinese constitutional framework.

Firstly, one should note that the Chinese courts have already for a longer time played an important role in the development of the Chinese constitution by providing a forum for expression of public and academic opinion. ‘For this reason, in China […] the courts despite their well-known constitutional infirmities have paradoxically become major vehicles for expression of political reform.’ [29]

Becoming more assertive against the government and more active in dealing with constitutional matters, the courts can further strengthen this important role.

Secondly, there is another way in which the courts may win for themselves more power and significance in the Chinese legal landscape.

At this point it is important to realise that the new Tort Code is just a simple collection of basic tort principles described in broad terms. As such, judicial interpretation is needed in order to fully detail the application of the law and provide interpretative guidance. [30] This can be observed on the example of the concept of punitive damages. [<