Russia: Product Liability

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This country-specific Q&A provides an overview to product liability laws and regulations that may occur in Russia.

This Q&A is part of the global guide to product liability. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/product-liability/

  1. Please summarise the main legal bases for product liability

    Product liability is regulated by the Civil Code and by the LCRP dated 7 February 1992 (LCRP). The LCRP is the main law as regards the Russian legislation on consumer rights protection. Particular issues that require detailed regulation are governed by other federal laws, binding decrees of the government and other normative acts.

  2. What are the main elements which a claimant must prove to succeed in a strict liability type claim for damage caused by a defective product?

    The principle of strict liability (as opposed to fault-based liability) applies to the injury caused by defective products or lack of information regarding the product, given that the products were bought for personal use.

    The LCRP establishes the following types of product liability:

    • proprietary liability for damage caused by product defects;
    • liability for failure to provide full information on the product;
    • liability for violation of consumer rights; and
    • compensation for moral harm.

    The aforementioned types of liability do constitute both fault-based and strict liability and may be directly or indirectly related to the product defects.

    Practically, the main questions within the proceedings on liability for product defects are the following:

    • does the product differ from the established safety and quality requirements;
    • did the respondent violate any public requirements while dealing with the consumer;
    • are the wrongful actions of the respondent faulty (if applicable); and
    • was any harm (including moral) caused.

    Both the Civil Code and the LCRP stipulate that any injured person has the right to claim compensation, despite lack of any contractual relationships between consumer and seller or producer. The consumer has the right to choose whether the tort loss caused by defective goods shall be compensated by the producer or by the seller.

    The consumer may also claim damages caused by distribution of the defective product. This claim may be filed against the seller or an authorised entity. In certain cases, the consumer may also claim an exchange of the product or its free repair, decrease of the product’s price or claim termination of the contract. Repair and exchange may also be claimed from the producer or importer.

    Usually the defect standard needed for establishing a respondent’s liability in product liability cases will stand with the compliance of the product features (or actions of the respondent) with both applicable public and contractual requirements (including warranty terms, quality representations, etc).

    As a general rule, the manufacturer, seller, authorised entity or importer shall bear the burden of proof in respect of the argument that the product was of due quality at the time of its transfer to the consumer.

    The burden of proof may be shifted to the consumer in the case no warranty period was established with respect to the product and certain other cases, including the following:

    • the warranty period for the product was not established;
    • the product defects were discovered by the consumer after expiry of the warranty period but within two years of transfer of the product to the consumer; and
    • the substantial product defects were discovered by the consumer after two years from the date of transfer of the product to the latter, but within the lifetime (or within 10 years of the transfer of the product if the lifetime was not established for the particular product).

    A causation link between the alleged product’s defect and the damage accrued presumably as a result of such defect has to be proven in the course of the proceedings. Arguments on presence or absence of the causational link have to be supported by evidence (medical reports, results of the technical examinations, etc). Therefore, arguments on exposure of the increased risk of negative causes to the consumer may not be solely used for establishing the causation link between the defects.

    Russian procedural legislation does not prescribe the particular means for proving the existence of the causational link and certain negative causes. Parties are free to present any arguments or pieces of evidence as well as claim certain pieces of a counterparty’s evidence as being non-related to the subject of the dispute.

  3. With whom does liability sit? If there is more than one entity liable, is liability joint and several?

    Under Russian legislation on consumers’ rights protection, related claims may be brought against:

    • manufacturers;
    • sellers;
    • authorised entities (an entity engaged in a certain type of business or established on the territory of the Russian Federation by the manufacturer (seller), including a foreign manufacturer (foreign seller) on a contractual basis to exercise certain functions and authorised to accept and satisfy consumer claims in respect of goods of improper quality); and
    • importers.

    It should be mentioned that the grounds for claims as well as the content of the latter may vary depending on which of the aforementioned entities acts as a respondent.

  4. Are any defences available? If so, please summarise them.

    It is often an effective mean of defence to refer to the fact that the product complies with all applicable standards and requirements, since proving this fact may mean that no consumer rights were violated with the distribution of the product.

    As a matter of procedure, the respondent is allowed to challenge any piece of evidence that has been submitted by the consumer and state that the respective evidence does not contain a clear proof of the fact of a defect or damage caused.

    The parties are able to ask the court to verify the documents submitted to the case files if they suspect them not to be authentic.

    Applying to the court for assistance in collecting evidence may often help with obtaining objective facts that exclude possibility of existence of defects at a certain period of time or even existence of the alleged damage on the consumer’s side.

    Even if the defects were proven by the consumer, the respondent still may rely on the existence of circumstances that release the latter from liability (namely, the consumer ignoring the requirements of the product manual, etc).

  5. What is the limitation period for bringing a claim?

    The consumer may address the claims prescribed by the LCRP related to defects of the product to manufacturers, sellers, authorised entities or importers by default if such defects were discovered within the warranty period or shelf life of the product. If such periods were not established, the consumer may address the said claims if the product defects were discovered within the two years basically starting from the date of transfer of the product to the consumer.

    Within product liability, cases regarding claims related to death, injury or damage to property of the consumer shall only be compensated if such damage was caused within:

    (i) an established lifetime or shelf life of the product; or
    (ii) within 10 years of the manufacture date of the product, if the lifetime or shelf life is not established.

    However, rule (ii) only applies when the manufacturer or seller was not required to specify a lifetime or shelf life for the respective product. Whereas such specification was required and a consumer is entitled to claim the respective compensation regardless of the time when the damage was caused in the following cases:

    • the manufacturer or seller simply fail to specify the lifetime or shelf life; or
    • the consumer was not warned of the necessary actions upon the expiration of the lifetime or shelf life or was not supplied with full required information upon the product.
  6. To what extent can liability be excluded (if at all)?

    We see that there are no effective means of limiting product liability. Thus, such liability cannot be excluded neither contractually, nor by any other legal means.

  7. What are the main elements which a claimant must prove to succeed in a non-contractual (eg tort) claim for damage caused by a defective product?

    A causal link and compliance of the product with all applicable statutory regualtions would be the main elements to prove within the proceedings on non-contractual liability related to products and consumers’ claims.

  8. What types of damage/loss can be compensated and what is the measure of damages? Are punitive damages available?

    In the event of bodily injury, the injured person may claim a full, lifelong compensation of the loss of its average salary (professional revenue) and compensation of other losses incurred as a result of the injury (eg, medical expenses); this amount may be increased or decreased based on the medical conditions of the injured person; this amount is also index-linked.

    Financially dependent persons may claim loss of revenue incurred by the death of the person who is the earner (supporter). Where the injury or death was caused by deficient goods, either the producer or the seller of the goods may be held liable for the loss. The liable entity must also reimburse the burial expenses.

    The principle of full compensation applies to compensation for the losses caused to the property of the consumer.

    Where the producer is found to be guilty for the defect that caused moral harm, moral harm may be compensated in addition to compensation of the other losses.

    Payments with respect to moral harm may be awarded on the conditions set above in question 12.

    The LCRP prescribes in certain cases the penalty of 1 per cent of the product’s price for each day of the delay caused by not satisfying the consumer’s claim, which can be reduced in exceptional cases.

    A fine of 50 per cent of the amount awarded to the consumer may follow the court’s decision in favour of the consumer.

    The amount of ‘compensation’ for the loss of salary (professional income) is not decreased in the case of subsequent growth of income of the injured person. Equally, the ‘compensation’ for burial expenses is not decreased in the case the same person gets monetary aid for burial from the state. Thus, the sums to be paid in both cases are not of purely compensatory nature.

  9. How are multiple tortfeasors dealt with? Is liability joint and several? Can contribution proceedings be brought?

    Consumers in Russia are entitled to bring both joint and several claims against the parties mentioned in section 3. Generally contribution proceedings may be brought by such parties against each other under general rules of civil law depending on the substance of the case. The main goal of such proceedings would be to establish causal link between actions of one party and the losses suffered by the other in result of the consumer’s claim.

  10. Are any defences available? If so, please summarise them.

    See section 4.

  11. What is the limitation period for bringing a claim?

    See section 5.

  12. To what extent can liability be excluded (if at all)?

    We see that there are no effective means of limiting product liability. Thus, such liability cannot be excluded neither contractually, nor by any other legal means.

  13. Does the law imply any terms into B2B or B2C contracts which could impose liability in a situation where a product has caused damage? If so, please summarise.

    Generally, such terms would relate to the role of the commercial party to the contract. Namely, should it follow from the contract that such party may be defined as the producer of the goods, it shall bear the producer’s risks of product liability.

  14. What types of damage/loss can be compensated and what is the measure of damages?

    Amongst the damages/losses described in section 2, practically all of them may be compensated within B2B relationship, should the causal link be proven by the claimant.

  15. To what extent can liability be excluded (if at all)?

    Within B2B relations, the parties may agree to contractually exclude civil liability between each other and this particularly may be applied to the compensation of losses by one commercial party to another suffered in result of any consumer related claims.

  16. Are there any recent key court judgements which have had a significant impact on the approach to product liability?

    The Russian courts are reluctant to creating outstanding ‘precedents’ in the sphere of product liability, although the Russian legislation on consumers’ rights protection remains extremely consumer-oriented. There have been various attempts by Russian consumers to follow the examples of massive consumer-related claims precedents in the US, but none of them have reached comparable amounts in terms of claims or awards.

    Nevertheless, from time to time Russian courts do issue certain decisions that do form a legal "corridor" of those grounds, damages and other legal elements that are acceptable for the claim to be satisfied.

  17. What are the initial litigation related steps you should take if you are facing a product liability claim or threatened claim?

    Along with ensuring that proper legal support is secured, the primary steps could be limited to obtaining proper knowledge of the stage of such litigation proceedings (namely, in Russia a party may be involved to the proceedings after these are commenced against another respondent) and preparation of the tactically and substantially grounded reply to a claim.

    There is a list of the procedural requirements as to the format and content of the statement of claim that are to be complied with in order for the statement of claim to be accepted by the court. At the same time, no such strict requirements are prescribed in relation to the reply to the statement of claim. The main aim of the reply is to address the points and circumstances raised in the statement of claim.

    No specific terms with respect to filing the pleadings are applied. However, in practice Russian courts often do specify a fixed term or date for filing the reply to the statement of claim.

    Participants of the civil proceedings are entitled to file additional documents and present additional evidence during the proceedings in the court of the first instance. These additions may supplement the content of both the statement of claim and the respective reply.

  18. Are the courts adept at handling complex product liability claims? Are cases heard by a judge or jury?

    Russian court practice contains examples of dealing with complex product liability cases, however due to the strict interpretation of the causal link between one’s actions and the occurred losses, consumer litigation in Russia may be considered to not be as complex as, for instance, similar proceedings in the US.

  19. Is it possible to bring a product liability related group action? If so, please summarise the types of procedure(s) available

    Russian procedural legislation together with the legislation on protection of consumers’ rights only prescribes the following two actions that may be referred to as a sort of group, class or collective action:

    • public: certain claims may be brought by the prosecutor, the state supervision body (Rospotrebnadzor, the Federal Service for Supervision of Consumer Rights Protection and Human Welfare) and municipal bodies for protection of rights of the indefinite group of individuals; and
    • organisational: certain claims for protection of groups or indefinite group of individuals may be brought by the consumers’ non-governmental organisations (associations or unions).

    If the claim is brought by the aforementioned entities, the latter is presumed to have all procedural rights and obligations of the claimant in the course of the civil proceedings. Even if the aforementioned entities do waive the claim, the case will continue to be considered on merits.

  20. How are cases typically funded? Can lawyers charge success fees? Is third party funding permissible?

    Lawyers hired by the consumers are often using success fee based models of funding. Contingency (conditional) fees are in general not prohibited by Russian law and no party is obliged to inform the opponents of such funding arrangement.. However, the court practice in this respect remains contradictory. This results in a very high risk of impossibility of recovering legal costs in part of the contingency fee.

    In the case if the consumer is represented by a public organisation for protection of consumers’ rights, 50 per cent of that fine is paid to the organisation. In the case if the consumer is represented by a public organisation for protection of consumers’ rights, 50 per cent of that fine is paid to the organisation.

    Third-party litigation funding is not prohibited by Russian legislation and no party is obliged to inform the opponents of such funding arrangement.

  21. How common are product liability claims and what factors influence their frequency?

    Since the LCRP is considered to be extremely consumer-oriented, the number of product liability litigations in Russia remains at a high rate. A great number of respective claims filed by consumers are still filed in a bad faith, in the hope of making a profit rather than being compensated for the actual loss (if any).

  22. What are the likely future developments in product liability law and practice? To what extent is the suitability of the law being challenged by advances in technology?

    There were no recent precedents able to substantially reshape product liability legislation in Russia. Nevertheless, the President’s Council on codification of legislation plans to work on the amendments to the Second Part of the Russian Civil Code, which contains provisions on tortious claims and product liability claims.

    Regarding trends, the number of product liability claims is increasing. Many of the claims have started to involve the automotive industry.

    Also in 2018 the bill on regulating the activity of so called aggregators (taxi services, rental services, cleaning services, etc.) was submitted by the Government to the Parliament and is currently being considered.