Fraud and Punitive Damages in China’s Consumer Protection Law
Wang Weiguo (Professor of China University of Political Science and Law)
1. Foreword
Since China’s Consumer Protection Law (hereinafter referred to as the “Consumer Protection Law”) was promulgated in October 1993, there has been a sharp increase in litigation and non-litigation cases related to consumer protection. According to reports, in 1996, the number of consumer complaint cases accepted by industrial and commercial administrative departments at all levels across the country reached 425,008, which was 75 times that of 10 years ago. [1] These complaints involve issues such as quality, price, false advertising, counterfeit goods, measurement, and fraudulent sales. Among them, fraud and sales cases increased the most, reaching 137.9 in the previous year. [2] What is often applied in such cases is the most eye-catching provision of the Consumer Protection Law - Article 49, which reads as follows:
Where an operator commits fraud in providing goods or services , the compensation for losses suffered by consumers shall be increased according to the requirements of consumers, and the amount of increased compensation shall be twice the price of goods purchased by consumers or the cost of receiving services.
It is this provision that has greatly stimulated the anti-fraud fight known as the "anti-counterfeiting movement" in recent years. A large number of cases apply to this provision. These cases are the subject of much discussion and even debate on the streets, in the news media, in the courts, in college classrooms, and in government agencies. Article 49 of the Consumer Protection Law has become a hot topic in the field of consumer protection in China.
Of course, this is just the beginning. In order for Article 49 of the Consumer Protection Law to be used more effectively and to promote the further development of consumer protection legislation, there are some legal issues that need to be clarified. To this end, it is worth trying to compare with Australia’s experience in interests, especially with section 52 of Australia’s Trade Practices Act. [3] The provisions of Section 52 of Australia’s Commercial Law are as follows:
Article 52 (1) Enterprises shall not engage in conduct in trade or business that is misleading or deceptive or that is likely to misunderstand or be deceived. .
(2) Any statement in the following provisions of this section shall not be inferred as a restriction on the general provisions of the preceding paragraph.
The following article will first introduce several cases related to Article 49 of the Consumer Protection Law, then raise several legal issues, analyze them using a comparative method, and finally make some comments in the conclusion.
2. Cases related to Article 49 of the Consumer Protection Law
1. Wang Hai’s anti-counterfeiting case
In the spring of 1995, Wang Hai, a young salesman from a factory in Shandong, came to Beijing on a business trip. He accidentally bought a book introducing the Consumer Rights Protection Law. He was attracted by Section 49 of the Consumer Protection Act. In order to verify the feasibility of this regulation, he came to Longfu Building and saw a "Sony" headset marked "Made in Japan" with a unit price of 85 yuan. He suspected it was a fake, so he bought a pair and went to Sony's Beijing office. After it was confirmed to be fake, he returned to Longfu Building, bought 10 more pairs of identical headphones, and then asked the mall to pay double compensation in accordance with Article 49 of the Consumer Protection Law. The mall agreed to return the first pair of headphones and compensate him 200 yuan, but refused to pay any compensation to the next 10 pairs on the grounds that he "knowingly bought fakes" and "took advantage of legal loopholes." The king was still angry. Believing that his purpose was not to make money but to safeguard the interests of consumers, he was determined to keep fighting.
In the autumn of the same year, Wang Hai came to Beijing again. He visited many stores and purchased goods that he thought were fakes. Once confirmed, he demanded double compensation from the merchants. Most stores complied with his request, but a few refused.
After Wang Hai’s actions were disclosed by the news media, they caused repercussions across the country. He is praised as a hero by most ordinary people and even many business operators. At the same time, he also shocks those who make and sell counterfeit goods. In December 1996, the China Consumer Foundation awarded him a bonus.
At the same time, Wang Hai’s approach has become a topic of debate in the legal community. Some officials and scholars are critical of this.
For example, an official from the Ministry of Domestic Trade believes that people who buy counterfeit goods for profit and then demand double compensation are not real "consumers" within the scope of current legislation, and therefore those who "know about fakes and buy fakes" cannot receive compensation. In his mind, someone who buys something and uses it is a consumer; someone who buys something and doesn't use it is not a consumer. [4] There are also some scholars who believe that the behavior of “buying fake products after knowing them” is unethical, and the benefits obtained thereby are unjust enrichment. [5]
On the contrary, many legal workers and scholars support Wang Hai’s move. They pointed out that the term "consumer" is relative to "operator" and anyone who conducts transactions with an operator, except those who are themselves operators, should be regarded as a consumer. They believe that the practice of "knowing about fakes, buying fakes" and then asking for double compensation is ethical because it helps combat counterfeit products and is therefore beneficial to the people and society. Others believe that the claimant's gains cannot be described as unjust enrichment because such claims are based on legal provisions. Moreover, claiming compensation requires a lot of time, labor and expenses. [6]
In early 1996, Wang Hai moved to southern China and bought counterfeit goods in many large shopping malls to claim compensation. However, the businessmen turned their backs on him and the local government treated him with indifference, so he had to return without success. The lesson, as some legal workers have concluded, is that the weapon of legal action is not used; it is not enough to rely solely on the pressure of the news media and public opinion.
In November 1996, Wang Hai became the winner in a court in Tianjin. Following the case of He Shan v. Le Wanda Trading Co. (see details below), he sued Isetan Co., Ltd. for fraudulent sales calls. As a result, he received double compensation in accordance with Article 49 of the Consumer Rights Protection Act. [7]
2． Geng v. Nanjing Central Shopping Mall
In the spring of 1996, when Wang Hai suffered repeated setbacks in Nanjing, a consumer named Geng also experienced the same fate in a certain court in Nanjing. On January 4, Geng bought three sets of "Shengbai" brand thermal shirts labeled as "cashmere sweaters" at Nanjing Central Shopping Mall. The invoice issued by the mall stated that the product was a "cashmere shirt", but in fact the cashmere content of the product was less than 2%. The next day, Geng asked the mall to pay double compensation in accordance with Article 49 of the Consumer Protection Law on the grounds that the shirt was not cashmere and the mall had committed fraud. After being rejected, he filed a lawsuit in court. The court dismissed his claim. The court held that the plaintiff had purchased the same shirt in another shopping mall and received compensation before purchasing it from the defendant on January 4, so he had certain product knowledge. Another reason for the court's decision was that it was not improper to label a shirt containing 2 cashmere as a "cashmere shirt" and the defendant did not commit fraud.
A young scholar, Li Yougen, a lecturer at Nanjing University Law School, wrote a paper analyzing the case of Geng v. Nanjing Central Mall. [8] He raised three issues that he considered to be very important in this case: First, are those who know about counterfeit goods and buy counterfeit goods considered to be consumers, and are they entitled to obtain remedies under the Consumer Protection Law? Second, can the way in which the defendant promotes the product be considered fraudulent? Third, when the plaintiff knows the truth, can the defendant's method still be considered a fraudulent act, and therefore the provisions of the Consumer Protection Law on doubled compensation can be applied?
Li Yougen pointed out that there is a paradox in the judgment that "those who know about fakes and buy fakes are not consumers". If the person who knows about the counterfeit purchase is not a consumer, he is not eligible to request a return under the Consumer Protection Act, so he can only use it. And in this way, he became an out-and-out consumer.
Li Yougen believes that one of the criteria for identifying fraud is legal provisions. Article 19 of the Consumer Protection Law stipulates: “Operators shall provide consumers with true information about goods or services, and shall not make misleading false propaganda.” According to relevant regulations of the Ministry of Textiles, cashmere with a content of less than 5% cannot be described as For cashmere products. Another criterion is the level of awareness of ordinary consumers (rather than experts). Based on this, he concluded that since in the eyes of ordinary consumers a shirt with a cashmere content of only 2% cannot be called a "cashmere shirt", the mall committed fraud.
3. He Shan v. Lewanda Trading Company He Shan is an official of the Legal Affairs Committee of the National People's Congress and participated in the drafting of the Consumer Protection Law. In April 1996, he purchased two paintings from Le Wanda Trading Company, which deals in celebrity calligraphy and painting. These two paintings, one of a single horse and the other of a group of horses, are sold as authentic works of the deceased Chinese painting master Mr. Xu Beihong. A month later, He Shan filed a lawsuit in the Xicheng District Court of Beijing on the grounds that he "suspected it was fake and requested protection." In August 1996, the court ruled that the two paintings were imitations and that the defendant had committed fraud. Therefore, the court ordered the defendant to pay double compensation to the plaintiff in accordance with Article 49 of the Consumer Protection Law. [9]
This case attracted widespread attention and triggered many discussions. In October 1996, the second “Symposium on Stopping Fraud and Implementing Double Compensation” was held in Beijing. At the meeting, how to correctly understand the legislative intent of Article 49 of the Consumer Protection Law once again became the central topic. Su Chi, Vice President of Beijing No. 1 Intermediate People's Court, expressed his opinions at the meeting. He pointed out that the meaning of "for daily consumption needs" mentioned in Article 2 of the Consumer Protection Law should not be interpreted in a narrow and restrictive sense. According to its original meaning, the term "consumer" only refers to people other than producers and operators. people. [10] He advocated that all customers who shop in stores should be regarded as consumers; as for the motivation and purpose of purchasing, they may involve moral issues, but they are not legal issues. [11] Zhang Jiaguang, President of the Civil Trial Division of the Haidian District People’s Court of Beijing, came to the same conclusion based on the trial practice of his court. He believes that as long as a commodity operator commits fraud, Article 49 of the Consumer Protection Law should apply, regardless of the consumer's motivation for shopping. [12]
Mr. Su Chi responded to the view that "fraud must be intentional." He pointed out that merchants have the obligation to carefully examine the goods they sell when purchasing. Those who fail to fulfill this obligation are at least subjectively laissez-faire and should be found to be intentional. [13]
After the case of He Shan v. Le Wanda Trading Co., many cases based on this were brought to court. But not all plaintiffs received satisfactory results. The next case is an example.
4. Xue Ping v. Beijing Yansha Friendship Mall
In March 1997, Xue Ping purchased three terracotta warriors and horses of Qin Shihuang at Yansha Friendship Mall. A few days later, she learned that the terracotta warriors and horses were imitations, so she negotiated with the mall and demanded compensation at double the selling price. After being rejected, she filed a lawsuit with the People's Court of Chaoyang District, Beijing, on the grounds that the product did not have any markings sufficient to indicate that it was a counterfeit. The mall filed a counterclaim, claiming that the plaintiff knew that the Qin terracotta warriors were imitations when they purchased them, and that the purpose of purchasing them was to obtain double compensation, thus constituting fraud. The court held that the plaintiff should have known that the goods she purchased could not be genuine because the Terracotta Warriors and Horses of Qin Shi Huang were precious cultural relics that were banned from market trading by the state. In other words, normal consumers should be aware that the goods are counterfeit when the seller neither explains the truth nor calls them genuine. On the other hand, the court also held that the defendant should have made a rigorous and clear statement on the nature of the goods by clearly stating that the Qin terracotta warriors were imitations, so that no one would misunderstand. Finally, the court ruled that the defendant should return the goods and reject the plaintiff's other claims. Each party should bear half of the litigation costs. [14]
3. Legal analysis of Article 49 of the Consumer Protection Law
It can be seen from the above cases that the provisions of Article 49 of the Consumer Protection Law have not yet been established in some major aspects. The jury is still out. The many and varied opinions that have been expressed are certainly valuable, but most are limited to interpretations of legal provisions. Moreover, we should realize that what we have to do is not only to interpret the law, but also to reform and develop the law.
As far as Article 49 of the Consumer Protection Law is concerned, I would like to point out that in the discussions surrounding the above cases, one important thing has been ignored, which is the nature of this provision. This should have been the starting point for argumentative reasoning.
1. Nature and purpose
In China, it has been recognized that Article 49 of the Consumer Protection Law is punitive damages in nature, and it is the first legislative case in China to apply punitive damages. [15] It is well known that punitive damages have never been recognized as a form of civil liability in civil law systems. Our country's "General Principles of Civil Law" follows this tradition, so there is no provision for punitive damages in this law. It is believed that, in principle, “civil liability aims to restore the infringed civil rights” and therefore “most forms of civil liability are not punitive.” [16] However, some civil law scholars insist that civil liability has a dual function: on the one hand, it curbs wrongdoing through sanctions; on the other hand, it redresses damaged rights through compensation. [17] This view leaves room for the recognition of punitive damages. Another factor to mention here is China’s eclectic attitude toward all major legal systems in “learning from foreign experience.” We have no hesitation in adopting a system of punitive damages because it meets the needs of our society, regardless of whether it is consistent with the conceptual system of the civil law system. Moreover, we adopt this system in accordance with our country's social conditions. Therefore, there are certain differences between the punitive damages in our country's current law and the punitive damages in the common law system.
In the common law system, "punitive" damages refer to damages awarded to one party to punish another party. This is often applied by the courts in addition to compensatory damages in certain circumstances (such as fraud). “It not only declares the court’s disapproval of the defendant’s behavior, but also aims to prevent him from committing such behavior again, and may further prevent others from imitating this behavior.” [18] The main purpose of imposing punitive damages It lies in “punishing and stopping” wrongdoers. [19]
However, in China, Article 49 of the Consumer Protection Law also has another purpose, which is (in addition to punishment and deterrence) to encourage consumers to fight against fraud and counterfeit goods. [20] According to the experience of Chinese and foreign consumer protection movements, this kind of encouragement is very important for the purpose of punishment and deterrence. We know that in modern markets, incidents of selling counterfeit goods and committing fraud are numerous and scattered. First of all, due to the high frequency of this behavior, selling fake goods or fraudulently providing services is not only an infringement of the private interests of individual consumers, but also an infringement of the common interests of all consumers. In China, consumer rights are essentially social rights rather than purely private rights. Therefore, fraud under consumer protection law is a special tort; for this kind of behavior, the law should adopt special means to control it. Secondly, due to the decentralized nature of this behavior, there is a "probability of responsibility" problem. That is to say, in practice, a large number of consumers give up their right to claim due to various reasons. In this way, the costs paid by the perpetrators for their illegal acts are much lower than the profits they obtain from it. Implementing this kind of Infringement becomes a profitable business. The provision of punitive damages can increase the number of cases in which claims are exercised and the amount of compensation in a single case, increasing the "probability of liability", thereby making the wrongdoer feel unprofitable and even suffer the consequences. In this way, the occurrence of this behavior can be reduced. Another factor considered in legislating punitive damages is the cost to the claimant. In legal practice, injured consumers often receive compensatory damages that are less than their actual losses. Some costs, such as the fees and time spent on pursuing recovery, the energy expended and the anxiety suffered, etc., are also difficult to recover through judicial procedures. This is one reason many consumers are reluctant to take their rights seriously. Punitive damages are expected to provide the petitioner with more adequate compensation. Even if someone receives compensation that is higher than their actual loss, this cannot be said to be unfair. This income can be seen as a reward for his anti-counterfeiting actions, because such actions are beneficial not only to himself but also to the public. This can be seen as a policy of “making counterfeit sellers fund the fight against counterfeiting”. On the face of it, Section 52 of the Australian Commercial Law is very different.
As Justice Fox pointed out: "It does not purport to create liability; rather, it is to establish a norm of conduct which would be liable to any person who fails to comply with it under other provisions of this Act or the law generally." "[21] However, like Article 49 of China's Consumer Protection Law, this provision has also become a focus of attention in judicial practice, and the number of cases related to it has increased year by year. [22] In the author’s opinion, the reason why this provision is effective in practice is due to its two characteristics: First, according to the relevant interpretation, Article 52 is supported by the general rules of tort law. As Judge Fox said: "Well-recognized concepts, such as those regarding the torts of fraud and the sale of counterfeit goods, and the analysis that has been made of them over many years, may prove to be helpful in deciding cases under Article 52." At common law, the court has the discretion to award punitive damages "where the defendant has acted knowingly to obtain an advantage for himself which may substantially exceed the compensation he might pay to the plaintiff" right. [23] Second, the conduct rules in Article 52 have a wide scope of application. According to the opinion of the High Court of Australia (High Court), “Section 52 has no definite boundaries.” [24] “Given that consumer protection forms the core of Section 52, the High Court refused to draw a clear boundary to the scope of application of this provision. "Under such a system, people can make full use of this legal weapon, so effective punishment and suppression of fraud can be achieved.
2． Scope of application
It can be seen from the above analysis that the scope of application of Article 49 of the Consumer Protection Law obviously should not be limited to "purchasers and users." The motivation of the purchaser is not a factor that must be taken into account in applying this provision. Coincidentally, Section 52 of the Australian Commercial Law also adopts a similar position. It is said that the article is concerned with conduct performed by businesses on people, and its only requirement for such conduct is that the transaction must be in the nature of trade or commerce. [25] As for those who deal with enterprises, it is meaningless to inquire whether they are consumers; in fact, the word "consumer" does not appear at all in this article.
Indeed, as some judges and scholars pointed out in the above cases, Article 2 of my country’s Consumer Protection Law cannot be interpreted as a limitation on the scope of application of Article 49. Section 52(2) of the Australian Commercial Law seems to contain the same meaning. This paragraph shows that the commercial law is on guard against arbitrary interpretation of paragraph 1 of this article by citing sentences from other articles.
In the case of Geng v. Nanjing Central Shopping Mall, the court rejected the plaintiff’s claim on the grounds that he “had certain product knowledge”. This is very strange. If the purpose of the law is to encourage people to fight against counterfeiting, it certainly does not exclude those who have the knowledge of goods necessary to carry out such a fight. Does the law expect people who know nothing about the goods to be able to take the counterfeit sellers to court? This reminds the author of a rule established by a British judge in the famous "Eggshell Head" case in the history of tort law: "The tortfeasor must take his victim as he finds him)” [26] This means that the wrongdoer has no right to find fault with his victim. Obviously, a fraudulent act does not become legitimate just because it is discovered.
3. Definition of conduct
The key word in Article 49 of the Consumer Protection Law is "fraudulent conduct." Similarly, Section 52 of the Australian Commercial Law focuses on “conduct that is misleading or deceptive or is likely to mislead or deceive”, a term that seems to have been more carefully and precisely considered. Let us now discuss some issues relating to the meaning of "fraudulent conduct" and its application, while making some comparisons with the experience of section 52 of the Australian Commercial Law.
In Article 2 of the "Penalty Measures for Consumer Fraud" (hereinafter referred to as the "Penalty Measures") promulgated by the State Administration for Industry and Commerce of China in March 1996, "consumer fraud" is defined as "operators providing goods ( The goods referred to below (including services) or services use false or other unfair means to deceive or mislead consumers, causing harm to consumers' legitimate rights and interests." This definition is often cited in judicial practice. There are several points that need clarification here.
(1) Testing method of behavior
According to Article 49 of the Consumer Protection Law and the provisions of the penalty measures, "fraudulent behavior" should be tested and identified by objective methods, that is, Judge based on the methods used by merchants to sell goods and provide services. Article 3 of the Punishment Measures lists some typical fraudulent behaviors, including: (1) selling adulterated or adulterated goods, passing off fake goods as genuine or substandard goods; (2) selling false "clearance prices", " Selling goods at "fire sale price", "lowest price", "preferential price" or other deceptive prices; (3) Selling goods with false product descriptions, product standards, physical samples, etc.; (4) Not using one's own Selling goods under their true names and marks; (5) Using methods such as hiring others to conduct deceptive sales inducements; (6) Using mass media such as radio, television, movies, newspapers and periodicals to falsely promote goods, etc. Of course, there are also the sales of counterfeit goods and expired or spoiled goods. These provisions are included in Article 4 of the Measures. In practice, all of these actions can be determined based on objective facts (or, alternatively, the appearance of business actions).
It can be found that Australian courts also adopt the objective test when applying Article 52 of the Commercial Law. The judges held that "whether a conduct is misleading or deceptive is a question of fact to be determined on the basis of evidence about the conduct and the facts and circumstances surrounding it. Whether or not the conduct is likely to be misleading, so long as all the circumstances indicate that it If it contains or conveys a false statement, it can be classified as misleading under Article 52. "[27]
(2) The result of the behavior
According to Chinese Civil Law, Theoretically, the concept of "fraudulent conduct" is different from "civil conduct resulting from fraud." The latter refers to the victim's behavior, while the former refers to the wrongdoer's behavior; the latter is caused by the former. Therefore, actual results are not necessary in determining fraud.
Although Article 2 of the Punishment Measures contains the words "damage the legitimate rights and interests of consumers", this does not mean that actual loss or damage is required. As long as the merchant's behavior is enough to mislead consumers and bring them some kind of disadvantage, it can be deemed as fraudulent behavior.
In Australia, Article 52 of the Commercial Law expresses this view more directly. The very mention of "likely to cause people to misunderstand or be deceived" indicates that "it is not necessary to prove that the conduct in dispute actually causes people to be deceived or misunderstood." [28]
(3) Subjective elements
According to the concept of Chinese civil law, fraud includes two elements, one is the objective element and the other is the subjective element. Objective elements refer to certain acts or omissions, such as false statements or concealment of the truth. The subjective element refers to the intention with which such act or omission is performed. Intention is committed if a person knowingly makes a statement or conceals something that will harm another person.
As far as "fraudulent conduct" under consumer protection law is concerned, the issue of whether subjective elements are necessary is worthy of study. Some people in the legal field believe that the negligence of merchants when purchasing goods should be deemed intentional. This statement is neither accurate nor necessary. According to the legislative policy of the Consumer Protection Law, the civil liability for fraud stipulated in Article 49 should be understood as a no-fault liability (or strict liability). This responsibility can be provided for by special laws, and consumer protection laws have the nature of special laws. [29] Therefore, the subjective state of the person accused of selling counterfeit goods does not need to be considered.
Australian jurists hold the same view when interpreting Article 52 of the Commercial Law.
As Professor R. Miller pointed out: "Under Article 52, the defendant's inner will is irrelevant. The only concern is whether the conduct was misleading or deceptive or likely to misunderstand or deceive." "If an enterprise is accused of breaching Article 52 in a statement of past or present fact, the enterprise's state of will is meaningless unless the statement contains the enterprise's state of will. Whether or not Article 52 is violated depends on the statement Whether a false implication was in fact contained or conveyed does not depend on the enterprise's intention or belief." [30] Judge Fox stated: "Intention is not a necessary element... This tort is more objective, however. The concept of a hypothetical reasonable person is not quite right to apply here. One looks at the audience, or some part of them, and...asks them whether the behavior is misleading or deceptive, but the question to be asked is not just about them ( or he) has been misled. Whether the conduct was misleading or deceptive is a question for the court to decide.”[31]
4. The subjective state of the petitioner
In a sense, consumer protection cases can be regarded as cases between individual operators and all consumers. It can be properly said that the subjective status of a specific petitioner does not affect the application of Article 49 of the Consumer Protection Act. What affects its application is simply the objective state of the operator's behavior. This is the question: Has this behavior misunderstood the average consumer? This is within the control of the operator. If the operator's behavior is enough to mislead ordinary consumers, it constitutes fraud; this is true even if the specific requester "knows the fake and buys the fake". Conversely, if it is not sufficient to mislead the average consumer, it does not constitute fraud, even if the petitioner does have a misunderstanding.
This view has been adopted by my country’s judicial practice. The aforementioned case of Xue Ping v. Beijing Yansha Friendship Mall is an example. The solution that can be summarized from this case is that if the operator's behavior is not enough to mislead ordinary consumers, but may cause misunderstandings to individual individuals, Article 49 of the Consumer Protection Law cannot be applied. At this time, the provisions of Article 59 of the General Principles of the Civil Law may apply. [32] In this case, according to Article 61 of the General Principles of Civil Law, one of the legal consequences is that each party shall return the property obtained by the act to the other party. As for the liability for losses caused by this behavior, it depends on the fault of the parties and the status of the causal relationship. If the operator is at fault and his behavior is a necessary condition for the loss to occur, even if it is not a sufficient condition for the claimant's misunderstanding, he should pay compensatory damages; otherwise, the claimant should bear his own losses. If both parties are at fault, they should share the loss in proportion to their liability. Australia's experience can provide support for this view. Professor Miller concluded on the basis of some cases: "If a statement is not taken seriously by any normal person after hearing it, and a stupid person is misled by it, how should we deal with this? On the one hand, , the test for breach of Article 52 is objective, and the common law 'reasonable person' test is obviously not suitable. On the other hand, although the petitioner was in fact misled, a reasonable person would be heard. The same statement will not be misled. In this case, there is no violation of Article 52.”[33]
5. Causal relationship
If an operator’s behavior is enough to mislead ordinary consumers with normal attention, he may not use the petitioner’s intention or negligence as a defense. On the other hand, if the operator has made false statements or failed to report the facts, but his behavior is not enough to mislead consumers with normal attention, then he cannot be found to have committed fraud. In this case, the person who caused the misunderstanding due to excessive negligence should not be protected by Article 49 of the Consumer Protection Act. The legal policy contained here is that the risks of operators should be limited to the extent that they should and can foresee and prevent misunderstandings by ordinary consumers.
In Australia, “In a number of cases, the courts have considered how to deal with the position of a person who has failed to exercise reasonable care and has fallen into a misunderstanding.
”[34] For example, in a case involving a restaurant with the same name, Judge Franki expressed the view that “unduly stupid people” should not be protected.[35] There was also a case in which a junior lawyer It was held that reliance was placed on a misleading planning certificate attached to a sale and purchase agreement. In that case, the court noted: “It may be conceivable that a case could be envisaged in which the claimant was so negligent in protecting his rights that he could. Found the fact that the accused statement was not in the circumstances a genuine inducement for him to enter into the contract. In such a case, the element of causation between the misrepresentation and the damage has been severed by the negligent intervention of the claimant. ”[36]
It should be pointed out that since there is no provision for punitive damages in Article 52 of the Commercial Law, the burden of proof to prove the causal relationship between the alleged conduct and the damage lies with the plaintiff. As the Australian courts have stated: "To claim compensation, the claimant must prove that the loss or damage alleged to have been suffered was 'based on' a breach of the Act. ”[37]
In contrast, in China, a person making a request under consumer protection law usually does not bear this burden; he only has to prove that he has committed fraud when the operator commits fraud. A price was paid for the goods or services. Proof of actual loss or damage is usually not necessary, as double compensation may be sufficient. Of course, the claimant may be able to recover more than double the price, provided he can prove it. The victim has indeed suffered loss or damage in an amount exceeding double the price. Under the principles of civil law, the victim is entitled to full compensation for the actual loss or damage. However, the general provisions on civil liability shall apply in this case, notwithstanding this. This method is not as convenient as the one provided by Article 49 of the Consumer Protection Law.
IV. Conclusion
There is no doubt that the Consumer Protection Law, as a special law, needs to be obtained from ordinary civil law. Therefore, for Article 49 of the Consumer Protection Act, the coordination of relevant rules in the civil liability system is indispensable. This may be difficult because the differences between special law and common law are subject to legal interpretation. Even bridged through legal reform. Another problem is that many judges are accustomed to applying general concepts of civil law to current cases, often ignoring the special legal policies contained in the provisions of the special statutes to be applied. Therefore, this should be done more often. Use case studies and improve case study methods. For example, because the traditional thinking method in civil law systems is generally deductive, Chinese judges are not as active as their Australian counterparts in interpreting or even creating legal rules. It is difficult to understand that in Australia, the interpretation of Article 52 of the Commercial Law always comes from judicial practice, while in contrast, in China, the interpretation of Article 49 of the Consumer Protection Law mostly comes from academic research.
( Originally published in "Law Science", Issue 3, 1998, P. 22~28. Reprinted from "Civil and Commercial Law", Issue 6, 1998, of the newspaper of Renmin University of China)