At a 9 December 2020 press conference, the Supreme People's Court (SPC) released the Interpretation on Several Issues Concerning the Application of Laws in the Trial of Civil Cases Involving Disputes over Food Safety (I). The interpretation, which was adopted by the SPC's Judicial Committee on 19 October 2020, came into force on 1 January 2021.
The 14-article interpretation sets out the scenarios in which the following parties will be held liable and the level of compensation liability that they will assume:
- producers and dealers of substandard food;
- e-commerce platform operators which offer services to dealers of substandard food;
- public transport carriers which offer passengers substandard food; and
- individuals and entities which facilitate the actions of producers and dealers of substandard food.
Below are some of the interpretation's positive takeaways.
If a producer or dealer that manufactures and deals in substandard food is believed to have committed fraud, consumers may claim punitive damages from that producer or dealer in accordance with the Food Safety Law or the Consumer Rights Protection Law (Article 7).
If a producer or dealer that manufactures and deals in substandard food rebuts the consumer's punitive damages claim using the defence that no personal injury was inflicted on the consumer, the court will dismiss the rebuttal (Article 10).
Consumers may claim punitive damages from underground workshops that manufacture prepackaged food yet deliberately conceal their name and address on the products and from the dealers selling the food or offering it for sale (Article 11).
Article 1 enables consumers who suffer damage from substandard food to sue the food producer or dealer for losses. The court will dismiss the argument where the accused producer or dealer shirks their responsibility and argues that the other side should be held liable for damages (buck passing). Where the dealer has indemnified the consumer when it is the producer that should bear the liability, the dealer will have the right to recover the loss from the producer and vice versa.
Article 3 provides that e-commerce platform operators may bear joint and several liability with the food dealers on their platform if they fail to:
- ensure that the dealers register their authentic name and contact information;
- review their licences; or
- notify and stop providing online trading services where consumers' legitimate rights are infringed.
Article 6 sets out seven scenarios in which dealers will be construed to be knowingly selling or offering for sale substandard food as provided by Article 148 of the Food Safety Law, for which the consumer may claim losses plus punitive damages of either 10 times the price which they paid or three times the losses which they suffered from the producer or dealer. The following scenarios are believed to target parallel import acts:
- failing to produce the legitimate source of the food being sold;
- false labelling;
- altering the production date and batch number;
- concealing or illegally destroying procurement and sales records; or
- deliberately providing false information.
