Overview of Thailand’s Product Liability Act (2008)

Overview of Thailand’s Product Liability Act (2008)

Purpose of the Act

The main purposes behind this legislation were to:

1. Instill greater consumer confidence in products in Thailand and to better protect the public from dangerous or defective products;
2. Simplify the previous legal approach to product liability which was overly complicated and instead make it easier for injured persons to receive justice and fair compensation.

Scope of the Act

This Act offers consumers considerable protection given that it provides that ‘Business Operators’[1] are subject to a legislative regime whereby they can be held jointly liable to affected persons who have suffered ‘damage’ from ‘unsafe products’ which have been ‘sold, distributed to, dispensed or given to’ consumers, regardless of whether the damage was intentionally or negligently caused by the Business Operator(s).

The purpose of making the various Business Operators jointly liable is to make it easier for consumers to seek redress as it is not necessary for them to single out exactly which party in the product chain was responsible for the damage.

Issue regarding Defendant Shopping:

Under section 5 of this Act, all of the Business Operators are jointly liable for damages occurring to the damaged party from an unsafe product sold to the consumer. This applies to intentional damage or damage that arises from the negligence of the Business Operators.

This feature of the law could lead consumers to undertake ‘defendant shopping’ in the case of a claim, whereby they search for the wealthiest defendant(s) in the supply chain to sue. This aspect of the law could be highly prejudicial to larger and wealthier Business Operators such as large profitable companies as they will offer a more advantageous target for injured parties given their greater financial resources.

Commencement of the Act:

The effective date of the Act (which was 20 February 2009 – i.e. one year from gazette date of 20 February 2008) is also crucially important as section 15 provides that any products sold to consumers before this date are not covered by this legislation, instead they are to be handled by the Civil & Commercial Code.

Definition of ‘Products’:

Section 4 of the Act defines ‘Products’ to mean any kind of movable property manufactured or imported for sale including ‘Agricultural Products’ and electricity, other exclusions are outlined in the Ministerial Regulations (2010) and mainly relate to certain agricultural products that are grown in Thailand such as dried tobacco and de-husked rice.

What Constitutes ‘Damage’ under the Act:

In relation to what constitutes ‘damage’ under this Act, this term is broadly defined given that it encompasses damage to:

• the body;
• health;
• hygiene;
• mental damage; and
• damage to property.

In terms of ‘mental damage’ the act defines this to mean: pain, phobia, anxiety, sorrow, shame, or similar types of mental damage. Note: The scope of damage may be better clarified in future judgments of the Supreme Court when cases involving the interpretation of ‘mental damage’ are clearly addressed by the Court.

Burden of Proof:

In order for Business Operator(s) to be liable under this Act, the injured party must prove that:

1. They sustained the actual damage from the Product of the Business Operator; AND
2. The use and storage of the Product was done in the normal manner.

HOWEVER, the injured party shall not be required to provide evidence that the damage occurred from the action(s) of a particular Business Operator(s).

Application of Strict Liability Doctrine under the Act:

This legislation extends tort law in Thailand by applying the doctrine of strict liability in that each Business Operator is jointly liable to the Injured Party if the injured party can prove that they sustained the actual damage from the Product of the Business Operator.

For instance, the manufacturer of a defective product will be considered liable even if they were not negligent in making the Product defective; however it is worth noting that the Act provides some exceptions with respect to manufacturer liability.

Defenses Available to Business Operators under the Act:

An injured person should be aware that under section 7 of this Act an Business Operator can avoid liability if they are able to prove one of the following:

a)       Their Product is not in fact an unsafe product. Note: This is a question of fact and will likely turn on technical evidence and expert witness testimony to prove that the product is in fact safe;

b)      The injured party was already aware that the Product was unsafe before using it;

c)       The damage that was sustained by the injured person was due to their incorrect usage or storage of the product. It is worth noting that this last exemption only applies when the Business Operator has clearly and accurately marked on the Product the correct usage, applicable warnings and the correct storage method on the product.

d)      Section 8 of the Act provides that a manufacturer of the Product who is producing the Product under the orders of another party authorizing such production will not be liable under this Act if they can provide evidence that:

                                I.            The danger was caused by the design of the party authorizing the production of the Product; OR

                              II.            Compliance with the instructions provided by the party authorizing the production of the Product

Where the manufacturer had not and should not have foreseen such danger/ safety issue.

e)       The manufacturer of component parts shall not be liable under this Act if they can prove that the danger/ product safety issue was caused by the design, assembly, instructions, storage warning message or Product information provided by the manufacturer of the Product.

Agreement between Consumer & Business Operator(s) Limiting Liability:

In relation to whether a preceded agreement between a ‘Consumer’ and the Business Operator (such as purchase terms and conditions) will affect the product liability of the Business Operator; section 9 of this Act provides that the Business Operators’ liability is not able to be exempted or limited by an agreement between the parties which is entered into before the damage occurs.

Prescription Period:

Section 12 provides that a claim for damages caused by an unsafe Product under the Act must be filed within three (3) years from the day when the damage and the person bound to make compensation became known to the injured person OR within ten (10) years from when the Product was purchased.

HOWEVER, if an injured person’s body, health or hygeine suffers damage that is caused by an accumulation of chemicals in their body or in the event that a period of time must pass before symptoms appear, the injured person has three (3) years counting from the date that they became aware of the damage and the identity of the Business Operator(s) responsible but such period must not exceed ten (10) years from the date that the injured person became aware of the damage.

If there are negotiations between an injured person/ or their representative (consumer protection board) and an Business Operator(s) then the prescription period will be suspended until either party terminates the negotiations.

Compensation for Injured Parties:

In terms of product liability compensation for injured parties, there are a number of important issues to consider including:

1. Punitive damages awarded by Thai Courts are in the writers opinion relatively small in comparison to those issued by courts in Western jurisdictions especially those awarded in the USA. Indeed, section 11(2) of the Product Liability Act only permits the Court to award punitive damages in certain limited circumstances (see below) and these are capped at no more than double the actual damages;
2. Punitive Damages may be awarded by the Court to an injured person if it is found that the Business Operator has manufactured, imported or sold a Product where:

a)       it is aware that such product is unsafe, OR

b)      is unaware of such danger but committed gross negligence; OR

c)       had awareness that the Product was unsafe after production, yet imported or sold the unsafe product without taking appropriate action to prevent damage from occurring

1. If an injured person has died then that person’s husband/wife, children or the inheritors under their estate shall have rights to compensation for damage to their mental health.