Consumer protection has been strengthened by the product liability system.
What is "product liability"?
- "Product liability" refers to the manufacturer's liability for damages incurred by consumers due to defects in manufactured or processed movable properties (including cases forming part of other items of movable or real estate. Hereinafter referred to as "product") (Articles 1 and 3(1), 「Product Liability Act」)
- The recall system is a system that prevents damages to consumers in advance through the recall and collection of defective products, whereas the product liability system is a post-damage relief system that compensates consumers for damages they incur as a result of purchasing defective products.
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Division
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Recall System
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Product Liability System
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Purpose
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Prevention of consumer harm
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Compensation for consumer damages
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Target
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All defective items
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Specific products that are defective
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Process
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Repair, exchange, refund, collection, etc.
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Compensation for individual consumers
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Related law
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「Framework Act on Product Safety」 and other related laws by item
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「Product Liability Act」
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Product liability requirements
"Manufacturer" refers to a person subject to the following (Subparagraph 3 of Article 2,「Product Liability Act」):
1. A person who engages in the manufacturing, processing, or importing of products; or
2. A person who indicates himself as the person under the above item by using a name, trade name, trademark, or other identifiable symbol, etc. on a product, or who indicates him/herself so as to be misunderstood as the person under the above item
- In order for product liability to be applied to a manufacturer, damage to the life, body, or property of a consumer(s) (excluding damages caused only to the product) must be caused by a defect in a purchased product. (Article 3(1), 「Product Liability Act」)
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Division
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Description
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Product
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– Refers to manufactured or processed movables (including cases forming part of other movablesor real estate). (Subparagraph 1, Article 2, 「Product Liability Act」)
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Defect
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– Refers to a product that has the following manufacturing, design, or display defects or that lacks commonly expected reliability. (Subparagraph 2, Article 2, 「Product Liability Act」) • Defects in manufacturing: When a product becomes unsafe because itis manufactured or processed differently from the original design, regardless of whether the manufacturer has fulfilled the obligation to ensure careful manufacturing and processing of the product. • Defects in design: Even though damage or risk could have been minimized or avoided if the manufacturer had adopted a reasonable alternative design, the product became unsafe because the manufacturer failed to adopt an alternative design. • Defects in labeling: Even though the damage or risk caused by the product could have been minimized or avoided if the manufacturer had given a reasonable explanation, warning, or other instructions orindications, the product became unsafe due to the manufacturer’s failure to do this.
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Damage to life, body, or property
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– The manufacturer compensates consumers who have suffered damages to their life, body or property (excluding damages caused only to the product concerned). (Article 3(1), 「Product Liability Act」)
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If product liability is established, punitive damages may also be claimed.
Liability
- In the event that consumers sustain serious damages to their life, body or property after purchasing a product about which the manufacturer is aware of a certain defect(s) and fails to take the necessary corrective measures, the manufacturer shall be liable to pay compensation of up to three times the amount of the damages incurred by the affected consumers. (Former part of Article 3(2),「Product Liability Act」)
Calculation of compensation
- The court must consider the following when determining the amount of punitive damages to be awarded to consumers who have incurred damages. (Latter part of Article 3(2),「Product Liability Act」).
· Degree of the manufacturer’s intentionality.
· The degree of damages caused by the defect in the product.
· The economic benefits obtained by the manufacturer from the supply of the product.
· Whether the manufacturer is subject to criminal punishment or administrative disposition due to a defect in the product, the degree of criminal punishment or administrative disposition to be imposed.
· The duration and scale of supply of the product.
· The condition of the manufacturer's property.
· The extent to which the manufacturer makes efforts to remedy the damages.
Relief of consumers' rights can be effectively achieved by reducing the consumer's burden of proof.
Estimation of defects, etc.
- If a consumer(s) proves the following facts, it is presumed that the product in question was defective at the time it was supplied and that the damages were incurred due to the defect in the product. However, if the manufacturer proves that the damages occurred due to a cause other than the defect in the product, it is not presumed that the damages occurred due to the defect in the product. (Article 3-2, 「Product Liability Act」)
1. The fact that the product has been damaged during normal use.
2. The fact that the damage referred to in the foregoing 1 is attributable to a cause belonging to the actual control area of the manufacturer.
3. The fact that the damage referred to in the foregoing 1 would not normally occur without a defect in the product concerned.
If the manufacturer is unknown, the supplier of the product may also be liable for damages.
Liabilities of suppliers, such as sales and rentals
- In cases where the manufacturer of a product is unknown to the consumer, the person who has supplied the product for profit, such as sales or rental, shall compensate the consumer for the above damages. (Main sentence of Article 3 (3), 「Product Liability Act」)
· However, there is no liability for compensation when the manufacturer or supplier is notified to the consumer or the latter’s legal representative within a reasonable period after receiving a request from the consumer or legal representative. (Proviso to Article 3(3), 「Product Liability Act」)
Claims for damages due to product liability shall be exercised within the set time limit.
Extinctive prescription
- The right to claim compensation under the 「Product Liability Act」 shall be extinguished upon completion of prescription if the consumer or his/her legal representative does not exercise that right for 3 years from the date on which the consumer or his/her legal representative becomes aware of the identity of the personresponsible for damages. (Article 7(1), 「Product Liability Act」)
Claim period for damages
- The right to claim damages under the 「Product Liability Act」 shall be exercised within 10 years from the date on which the manufacturer supplies the product alleged to have caused the damage. (Main sentence of Article 7(2), 「Product Liability Act」)
· However, any damages caused by substances that accumulate in the body and harm human health, or damages that produce symptoms after a certain incubation period has elapsed, shallbe counted from the date on which the damages occurred. (Proviso to Article 7(2), 「Product Liability Act」)