In the context of civil litigation conducted in the Chinese courts, there is not yet a consistent, established concept of formal adverse party discovery. However, the Civil Procedure Law and its interpretations determine a set of evidence-focused rules for the pretrial stage, called the 'pretrial exchange of evidences' (PEE).
In general, parties are required to conduct their own investigations and to produce evidence in their possession to meet their respective evidentiary burdens.
PEE is a tool designed to better manage and expedite legal proceedings and serves as a way for both parties to produce, exchange and cross-examine evidence to unravel disputed issues. This exchange may happen when the court allows a party’s application or in more intricate cases, where the courts convene PEE.
A party may petition the relevant court to collect evidence from their opponent or third parties if the petitioning party can establish that the evidence exists, is relevant, and is objectively difficult to obtain or at risk of destruction.
Sometimes, the courts will grant such a petition and permit a limited evidence collection or even an evidence preservation exercise. Evidence can be preserved through interim relief if it can be demonstrated that without this, it is likely to be tempered with by the other party and thus pervert the course of justice. Whether this can be granted at the pretrial stage depends on the urgency of the situation.
During the PEE, the courts will hear and keep a record of the facts and evidence on which the parties have no objection, and those that the parties dispute. A party may submit rebuttal evidence in response to the evidence submitted by the other party.
The court may arrange more than one exchange of evidence, but in general, PEE should not be held more than twice, unless the case is particularly important or complicated.
The authenticity or admissibility burdens for party-introduced evidence can be significant in China. Courts tend to hold parties to a high standard regarding the authenticity of their evidence, and in most cases, parties should be prepared to prove even the most basic information.
According to the Civil Procedure Law, the evidence accepted by Chinese courts includes: personal statements; documentary evidence; physical objects; audiovisual materials; electronic data; witness testimony; examination reports; and investigation records. Documentary evidence is the most used.
During a trial, the claimant first presents its evidence to the court, followed by a cross-examination conducted by the defendant. After this, the defendant displays its evidence, and the claimant may cross-examine.
The cross-examination process should center itself on the authenticity, legality, and relevance of the evidence. Both parties can argue the reasons why the evidence presented is falsified, illegally obtained or irrelevant.
Individuals informed of the facts may be requested by the courts to testify as witnesses. If the courts permit it, a witness may testify by written testimony, audiovisual transmission techniques, audiovisual materials, or other means.
The Chinese law has established a system similar to appointing experts, but with a different way of operating. This is known as “judicial appraisal’.
Chinese courts have adopted the judicial appraisal system and use it regularly in civil and commercial litigations. In general, a list of companies or organizations, with proven qualifications and experience in a particular field is provided, from which the claimant or defendant may choose to conduct the judicial appraisal procedure and present reports to support its claims.
Mutual appointment is also acceptable. However, if no consensus can be reached between both parties, the courts are empowered to appoint an institute chosen randomly from the list through a judicial lottery system.
The courts have discretion and can act on their own accord to initiate the judicial appraisal procedure, if they deem it necessary. The results are published in an official report, which is presented to the courts for cross-examination and further consideration.
Compensatory damages for product liability generally include bodily injury, damage to property, and moral damages.
If a defective product causes bodily injury, the responsible party must compensate for medical and nursing expenses during medical treatment, loss of income due to absence from work and other reasonable expenses.
If the bodily injury results in the claimant being permanently disabled, the responsible party must cover the costs of self-supporting equipment, living allowances, disability compensation, and living expenses of any dependents of the disabled person.
If the defective product causes death, the responsible party must compensate for funeral expenses, death compensation, and living expenses of any dependents.
Compensatory damages for psychological injury are available when there is an injury or damage to the claimant's life, health, or body.
The Chinese Civil Code recognizes punitive compensation for product liability claimants. Article 1207 of the Civil Code states that where a manufacturer or supplier manufactures or sells a product knowing that it is defective and, as a result, causes death or serious injury, the injured party is entitled to claim for punitive compensation.
The Law on Protection of Rights and Interests of Consumers (the Consumer Rights Law), establishes that the maximum amount of punitive compensation is limited to two times the amount of (the consumers') losses.
Other forms of relief
Chinese law recognizes other forms of non-monetary relief in product liability cases, such as the repair, replacement or return of the product; and product recall (ordered by State Administration of Market Regulation).
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DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.