The Study Of Pure Economic Loss In The Product Liability

In product liability cases, defective products tend to cause not only personalinjury and property damage to consumers, users or other third parties, but also somepurely pecuniary loss that has nothing to do with loss of life and property in manycases, and the latter is called pure economic loss.In comparative law, there is not a unified concept of pure economic loss, butmost countries have adopted a negative attitude towards compensation for pureeconomic loss. Britain in history through a series of precedents ultimately determinedthe rules of no compensation for pure economic loss caused by negligence; Germany,although not explicitly excluding compensation for pure economic loss throughlegislation, ultimately identified through wrongful classification in the Civil Codecommitment to tort liability for only three types of damages, which in the oppositeway excluded the compensation of pure economic loss; the U.S. is more inclined tousing contract law to solve this problem of pure economic loss, and has no excessivediscussion on whether to compensate for pure economic loss in the field of tort law.However, these countries have all had exceptions in the attitude towards pureeconomic loss in judicial practice, such as Britain’s exceptions to the generalexclusionary rule, Germany’s Weiterfressende Schaden, etc. These legislative patternsand judicial practice in comparative law give China revelation in our country in dealing with compensation for pure economic loss in product liability. But in the fieldof tort law in China, there has been not a concept of pure economic loss, nor haverelevant laws made a clear provision on it. As "Tort Liability Law" was enacted in2009, the lawmakers given China’s specific national conditions, from the perspectiveof the protection of consumers, no longer distinguish between defective products andproperty damage other than defective products, showing a trend of graduallyincreasing protection of pure economic interests.In product liability, pure economic loss can be divided into four categories:damage to the product itself, loss of expected interest, the burden of third-partydamage claims and other personal injury caused by the defective product. Theselosses are often huge for consumers, which, if excluded from compensation, willseriously prejudice the legitimate interests of consumers. Thus, pure economic lossshould be compensated, only whether to receive compensation will depend onwhether other conditions can be met, which means that criteria on judgment ofcausation and fault in pure economic loss of product liability should be "tightened".On damage to the product itself, the theory of Weiterfressende Schaden inGerman law can be used as a reference to expand understanding of ownershipinfringement, so that parts of product other than the defective parts should becompensated; meanwhile, the "Tort Liability Law" Article41also affirmed thecompensation for damage to the product itself. The judges also cite the terms todirectly support compensation for damage to the product itself suffered by consumers.On compensation for the loss of expected interests and burden of damage claimsby third party, the applicable boundaries between contract law and tort law should bestrictly delineated, trying to limit the solution to compensation for these two to thefield of contract law; only when there is no contractual relationship between theplaintiff and the defendant will the judges be allowed to apply tort law tocompensation for these two pure economic losses. However, compensation for thesetwo is subject to strict limit on subjective fault and causation in order to prevent anexcessive burden of liability on the defendant.On pure economic loss of personal injury caused by product defects, as China’s relevant laws have made more detailed provisions, it in general can be supported byjudges in defective product cases.