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Damages and liability in the Cambodian market

Damages and liability in the Cambodian market

Recently the Ministry of Commerce published an extremely useful handbook on business

and investment in Cambodia entitled Cambodia: The Re-emergence of New Opportunities.

Included in the book are a number of current laws affecting investment and also draft

laws which are in the process of being completed.

One of these is the draft product liability law which will address an area of jurisprudence

which, until now, has had very little coverage in Cambodia.

Very simply put, "product liability" is the generic phrase used to describe

the liability of a supplier of a product to one injured by the product.

It is an area of tort law that also has applications in contractual transactions.

The scope of the draft law published by the Ministry of Commerce is said to cover

the liability of manufacturers, wholesalers, retailers, dealers, sellers and other

distributors of products for injuries caused by such products within the Kingdom

of Cambodia.

Each of these parties has different standards by which they may be found liable for

damages caused by defective products and different defenses to actions taken against

them.

Manufacturers are generally prima facie liable for damages caused by products which

they have created if that product is deemed defective.

A defective product is one containing a manufacturing defect, design defect or a

defect in the packaging, instruction or warnings that could have been avoided if

the manufacturer had exercised reasonable care.

A product will also be considered defective if its manufacture failed to meet the

standard set by the Royal Government for such products and such failure was the cause

of the damage to the user.

Sellers of a defective product (including manufacturers, wholesalers, dealers and

retailers and others who, for payment, transfers ownership of a product to another

for resale, consumption or use) will be liable for injuries caused by that product

if they are aware of the defect, or should have been aware of the defect, at the

time that they sold the product.

Other distributors of defective products (including lessors, carriers and others

not considered to be sellers) will only be liable for injuries caused if they have

been guilty of gross negligence or willful misconduct.

Under the draft law, damages caused by gifts or other products obtained free of charge

will not be recoverable from anyone other than the manufacturer.

Suppliers will not be found liable for defective products if the defect has been

caused by unauthorized modifications to the product after it has passed out of the

supplier's control.

In such cases the injured party must seek relief from the person who made the unauthorized

modification.

Under the draft law, victims of defective products which cause damage to person or

property may recover monetary compensation from the supplier in an amount sufficient

to restore them and their property to the condition that they would have been in

had the product not been defective.

They may also seek to recover compensation for any direct economic or physical damage

caused by the product and their costs in pursuing legal action against the supplier.

If by their use of the defective product the injured party has aggravated the damages

caused or could have reasonably avoided the resulting damage, the compensation available

to the injured party will be adjusted to account for their degree of fault.

Similarly, if more than one party is found to be responsible for the cause of the

injury, the responsibility for compensating the injured party will be divided among

the parties in accordance with their degree of fault.

Actions for product liability will have to be brought within one year from the date

of any injury caused by the defective product, or within one year from when the injury

was or should reasonably have been discovered, if the damage was not immediately

apparent.

Actions against manufacturers and sellers are absolutely barred if more than ten

years have passed from the date of manufacture or sale respectively, and are barred

against other distributors if more than five years have passed.

With the increasing level of local product manufacturing that Cambodia is now experiencing,

this law, should it pass the National Assembly in its current draft form, will be

extremely valuable in addressing the needs of parties injured because of the faulty

workmanship or unsafe design of consumer goods.

(This article was written by Michael Popkin, of the law firm Flipse Driksen Doran

and Le).

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