Application Of Punitive Damages In Consumer Public Interest Litigation

Since the amendment of the Consumer Protection Law in 2013,whether consumer associations and procuratorial authorities can bring punitive damages claims in consumer public interest litigation,as well as issues concerning the calculation,allocation and management of punitive damages have been widely discussed by scholars.The Supreme People’s Court and the Supreme People’s Procuratorate have issued successive judicial interpretations,which have not only failed to address these issues well,but have also become new points of theoretical controversy.Different judges have different views on whether punitive damages are included in the civil liabilities listed in the judicial interpretations,resulting in different judgments in the same case.In view of this,this article will focus on the application of the punitive damages provisions in consumer public interest litigation.This article will focus on the application of punitive damages in consumer public interest litigation,including whether a plaintiff in a consumer public interest litigation can bring punitive damages,the calculation,allocation and management of punitive damages,in the hope of providing new ideas for the institutional design of consumer public interest litigation in China.This article takes the application of the punitive damages system in public interest litigation in practice as the object of study,and discusses it in the following five parts.The first part is the introduction.A case study is used to introduce the issue under study,namely the source of the plaintiff’s right to punitive damages in consumer public interest litigation and the difficulties of calculating,allocating and managing subsequent damages.The relevant literature is then collated and the different doctrines are categorised and summarised.Finally,the research ideas and design methodology of this paper are presented.The second part is a testimony on the eligibility of plaintiffs in consumer public interest litigation.Firstly,from the perspective of the existing law,the existing law and judicial interpretation cannot provide support for the right of plaintiffs in public interest litigation to bring punitive damages.Secondly,the analysis shows that the litigation trust model has the limitation of contradicting the theory and is not conducive to the interests of the client;the arbitrary litigation model has the limitation of complicating public interest litigation and is not conducive to realistic practice.The second is a comparison of the similarities and differences between the independent punitive damages model and the new rights model,and an analysis of their feasibility.Finally,a new independent right to claim punitive damages is proposed,which combines the advantages of both models,i.e.the creation of a formal right to claim punitive damages directly by legislation for consumer associations and prosecution authorities.The third part is to determine how punitive damages should be calculated,including the basis of calculation,the calculation factor and whether they can be offset against criminal fines and administrative fines,provided that the right to claim punitive damages can be legally obtained.Firstly,the calculation base should be based on the legal income as the base for the calculation of punitive damages;for the calculation coefficient;secondly,for the calculation coefficient,the lower limit of punitive damages should be limited to the illegal income,and the maximum limit should be based on the compensatory damages,which is stipulated not to exceed several times of the compensatory damages.Finally,it is discussed that punitive damages cannot be set off against criminal fines and administrative fines.Part Ⅳ explores the ways in which punitive damages can be distributed to injured consumers.Firstly,it is argued that there are four ways of distributing punitive damages in China: into the state treasury,into the custody of the procuratorate,into the public interest fund or into a special account,and into the relief of consumers in the consumer sector,with the remainder being paid into the state treasury.Finally,it is proposed that punitive damages should be distributed by consumer associations.The fifth part deals with the management of the remainder of punitive damages after they have been distributed.Firstly,it is argued that there are two ways of managing punitive damages: as a public benefit fund and as a consumer association;secondly,it is argued that there is no legal basis for placing punitive damages directly into a public benefit fund;and that the management of a consumer association would lead to a situation where consumers would be reluctant to defend their rights,i.e.neither way is reasonable.The most reasonable way to manage punitive damages is to have them administered by a foundation.