New product liability law passed

Thailand: Until recently, product liability claims in Thailand were based on their Consumer Protection Act as well as on their Civil and Commercial Code. As these laws were considered no longer adequate to protect consumers who incur damages and to deter the sale of unsafe products, in December 2007 the National Legislative Assembly passed the Product Liability Act B.E. 2551 (2008) that will become effective by 20 February 2009

The act provides for a strict liability of the operatoroperator is defined as any person that produces, sells, outsources, or imports a defective product. A seller who cannot identify the manufacturer, outsourcer or importer, or a person who uses a trade name, trade mark or logo or shows by any other means that cause people to consider him as the producer, outsourcer or importer will be held liable like the manufacturer of the product. The operator will be liable, regardless of negligence in manufacturing or selling on his part.

The Act defines three kinds of defects - manufacturing defects (when a product deviates from its intended design or specifications); design defects (when the design renders the product unsafe for its intended use); and warning defects (when no warnings or information on the product are given, or when the warnings are not reasonable given the nature of the product or for its expected use).

The injured consumer only needs to prove that he or she suffered damage from the defective product while using it in an expected manner. He or she does not have to establish that the damage was the result of the act of any operator involved. The liability of the operator cannot be waived or limited. If the court finds an operator liable, under certain conditions, punitive damages or compensation for pain and suffering may be awarded. These kinds of damages had not been available under traditional tort or contract law.

An operator would not be held liable when he can establish that the product was not defective, that the injured consumer used the product, although he knew that it was defective, or that the damages were attributable to improper use or storage of the product. Producers of custom-made products or of component parts will not be liable, if they can prove that the defect is due to the specifications or design of the final product.

With implementation of the Act less than one year away, operators should evaluate and review their production and quality control processes. They should assess litigation risks and costs, and, above all, they should consider buying product liability insurance!

Source: Bangkok Post, 11 April 2008
Asian Casualty Report 10th Edition June 2008 – Gen Re