Liability under Thai Product Liability Law
The impacts of the COVID-19 pandemic have led some manufacturers to cut costs by changing production methods, designs or machinery or reducing the number of employees on the payroll. While these strategies can reduce costs and help their business survive, they can also result in lower quality products. In the worst case, however, these shoddy products can negate or even exceed a manufacturer’s cost savings if the products are found to be unsafe for consumers under Thailand’s Product Liability Law (officially the law on liability for damage resulting from dangerous products).
The Product Liability Act has been in force for 14 years. However, there have been few landmark Supreme Court decisions on this matter, as most cases are settled before the final judgment. As a result, most business owners have limited knowledge of previous cases and don’t know what steps they can take to manage and mitigate the risk of being held liable for unsafe product damage claims.
The Product Liability Act identifies several types of contractors and business operators (individuals and entities) as “Potentially Liable Parties” (PLPs) who can be sanctioned under the law:
- Manufacturers or renters
- Sellers of goods whose manufacturer, lessor or importer cannot be identified;
- Any other party who uses the name, trade name, trademark or statements of allegedly unsafe products or acts in a manner which makes them appear to be a manufacturer, lessor or importer
The Product Liability Act defines a “product” as any type of movable property which has been manufactured or imported for sale, including agricultural products and electricity, but excluding those excluded by ministerial regulations. Therefore, real estate and services are excluded from product liability law. However, real estate buyers are protected by the Civil and Commercial Code and by the Consumer Protection Act also in certain circumstances.
In addition, product liability law defines a “hazardous product” as any product that causes or may cause damage or injury by reason of a faulty workmanship, faulty design or lack of clear warning, instructions or other information on the use, care or preservation of the product. If a hazardous product causes damage or injury to the consumer who purchased it, whether the damage was caused intentionally or through negligence, each PLP will be jointly and severally liable for the damages suffered by the consumer, with certain exceptions.
Under product liability law, injured parties need only prove that they suffered damage or injury from PLP’s product and that they used and maintained the product correctly. The injured party need not prove which PLP caused the damage or injury.
Further, PLPs cannot avoid liability by entering into an agreement with the consumer that purports to waive or limit PLPs’ liability in advance.
However, PLPs facing claims under product liability law can avoid liability if they can prove any of the following:
- The product was not dangerous.
- The plaintiff knew that the product was dangerous.
- The plaintiff misused the product, despite clear information and warnings.
The Product Liability Act provides two different methods by which an injured party can bring a claim, either by filing a lawsuit in any court of competent jurisdiction or by filing a complaint with the Consumer Protection Board. Alternatively, a foundation or association authorized by the Consumer Protection Board may file the complaint on behalf of the consumer or injured party. If the foundation or association submits the complaint to the competent court, the legal costs are waived but the costs ordered by the court in its final judgment remain due.
In cases where the court determines that the injured party was harmed by an unsafe product, the court will award damages. Damages are not limited to those set forth in the Civil and Commercial Code, but may include other forms of compensation unusual under Thai law, at the discretion of the court.
For example, the court may award damages for mental pain and suffering, as well as for actual bodily harm and damage to property. If the dangerous product caused the death of a person, the court may award damages for the pain and mental suffering of the immediate family. If the PLP knew (or should have known) that the product was unsafe due to gross negligence, the court may award punitive damages up to twice the actual damages.
The Consumer Protection Commission is empowered under the Consumer Protection Act to order traders to recall, destroy or stop selling any dangerous product if they fail to comply with the requirements of this law.
In summary, the function of product liability law is to protect consumers against unsafe products by simplifying the procedure and reducing the burden on consumers to bring an action. In addition, the law sets out the extent of liability for entities involved in the manufacture, sale and import of products while leaving little opportunity for PLPs to avoid liability. Therefore, these “potentially responsible parties” must be aware of the responsibilities before providing a product to consumers.
Author: Chusert Supasitthumrong (email@example.com) is Partner and Head of Dispute Resolution at Tilleke & Gibbins.
Series Editor: Christopher F. Bruton (firstname.lastname@example.org), Executive Director, Dataconsult Ltd. Dataconsult’s Thailand Regional Forum in Sasin offers seminars and materials to inform businesses about future trends in Thailand and the Mekong region.