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April 6, 2006

Global Developments in Products Liability Law

The increasing globalization of the world's economies is having a similar influence on law and legal systems.  In the area of products liability law, American law is influencing developments elsewhere in the world just as products liability law abroad has become an important consideration for American lawyers, particularly those who represent businesses that market their products internationally. 

In Australia, a system of litigation funding is developing that effectively circumvents the traditional prohibition on contingent fees by allowing private litigation funding firms such as accounting firms to finance a party's case in return for a portion of any damages recovered.  This process is also attracting some interest in the United Kingdom.  Like the U.S., Australia has an active litigation culture.  Australian courts seem increasingly to recognize the value of externally funded litigation as a means of access to civil justice.  A recent case is Fostif Pty Ltd. v. Campbells Cash & Carry Pty Ltd., in which the New South Wales Court of Appeal noted:  "The considerations of public policy which once found maintenance and champerty to be so repugnant have changed over the course of time.  The social utility of assisted litigation is now recognized . . . as a means of increasing access to justice."  Similarly, the Federal Court of Australia noted in Gore v. Justice Corp Pty Ltd., that "[i]f . . . a business house, openly and reasonably wishes to engage in the business of funding litigation and is prepared to meet the costs of the opposing party should that party be successful, we see no cause for instant alarm."  Some Australian judges, however, remain concerned about the potential for abuse in such a system as reflected in the decisions of the Western Australian Supreme Court and Court of Appeal in Claires Keeley No's 1 & 2 which recognize the importance of access to justice but found that the conduct of the litigation funder, in these cases at least, amounted to "trafficking in litigation" and therefore constituted an abuse of process.  The issue has attracted the attention of the Australian High Court which has taken the appeal in Fostif.

Another development of great interest on the international front is the proposed revision of the Chinese civil code's statement of the basic principles of tort liability including those relating to products liability.  A recently-published article by George Conk (abstract with link to downloadable full article) details these proposals. 

JDP

April 6, 2006 | Permalink

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