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Jiangsu Court Releases Typical Cases on Consumer Protection

Sun, 02 May 2021
Categories: China Legal Trends

On 15 Mar., Jiangsu High People’s Court and the Consumer Protection Commission of Jiangsu Province jointly promulgated the Ten Typical Cases of Consumer Protection in 2020 in Jiangsu Province.

The typical cases (2020) involve disputes over car rental service contracts, disputes over orders placed via delivery Apps and the free refilled amount, and disputes over matchmaking service contracts, etc. These disputes reflect the diverse pattern of China's society consumption and various forms of consumers’ rights and interests.

Among others, one typical case involves the public interest litigation, which marks the largest punitive damages awarded nationwide in consumer protection cases.

In this case, since March 2017, the defendants have been bottling the water from a lake without permission, alleging that it has functions for health care, and the products were sold to more than 20 provinces and cities across the country. In accordance with test results, there is no evidence that the ingredients in the water function as alleged, and that consumers who drink the water over a long period of time will suffer from relevant diseases. As a result, the procuratorate initiated the public interest litigation and argued that the defendant's false publicity and sales of fake and substandard products infringed on the interests of unspecified consumers, which constituted fraud, and punitive damages should be paid in an amount equal to three times of the total price of consumption. Changzhou Intermediate People’s Court held that the defendants’ behavior was in violation of Article 55 of the Consumer Rights Protection Law (消费者权益保护法) and infringed the legitimate rights and interests of many consumers, and so ordered the defendant to pay the punitive damages, a total amount of over CNY 70 million, three times of the sales amount.

Pursuant to Article 55 of the Civil Procedure Law of China (民事诉讼法), where a people's procuratorate finds any act that damages the protected ecological environment and resources, any infringement upon the legitimate rights and interests of a large number of consumers in the field of food and drug safety, or any other act that damages the public interest, while performing its duties, and there is no statutory competent organ or organization or such organ or organization does not initiate a lawsuit, the people's procuratorate may initiate the prosecution, which is known as the “procuratorial public interest litigation” system in China.

The case concerns the rights and interests of a large number of consumers. After the procuratorate initiates the public interest litigation, the court awarded punitive damages against the operator, which not only effectively punished the illegal business operation, but also lightened the litigation burden of consumers.

After the damages has been enforced in full, the consumer may apply for the damages to the competent organ with the consumption receipts and other materials, and the remaining amount may be used for other public welfare purposes in consumer protection.

This case provides a great example for the exploration of public interest litigation in consumer protection.

Contributors: CJO Staff Contributors Team

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