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General product obligations
What are the basic laws governing the safety requirements that products must meet?
In Hong Kong, there is no specific legislation that governs product liability and consumer protection. Instead, general safety requirements of products are governed by various legislation and common law and to pursue a product liability claim, one must rely on existing laws of contract, tort and statutory duty.
The main legislation governing the safety requirements for consumer goods (those ordinarily supplied for private use or consumption) is the Consumer Goods Safety Ordinance (Cap 456). It does not apply to goods specified in the Schedule to the Ordinance, which include food, water, pleasure craft and vessels, motor vehicles, gas, electrical products, pesticides, pharmaceutical products, traditional Chinese medicines, toys and children’s products and any other goods the safety of which is controlled by specific legislation.
For specific goods, the other legislations include the Toys and Children’s Products Safety Ordinance (Cap 424), the Public Health and Municipal Services Ordinance (Cap 132), Pharmacy and Poisons Ordinance (Cap 138), Antibiotics Ordinance (Cap 137), Electricity Ordinance (Cap 406), Dangerous Goods Ordinance (Cap 51), Nuclear Material (Liability for Carriage) Ordinance (Cap 479) and the Chinese Medicine Ordinance (Cap 549), among others.
What requirements exist for the traceability of products to facilitate recalls?
To facilitate recalls of consumer goods ordinarily supplied for private use, section 9 of the Consumer Goods Safety Ordinance (Cap 456) requires the Commissioner of Customs and Excise to have a reasonable belief that the goods do not comply with an approved standard or a safety standard or safety specification established by regulation; or for which a safety standard has not been approved, are, or may be, unsafe; and there is a significant risk that the consumer goods will cause a serious injury. Provided that these criteria are fulfilled, the Commissioner may serve on a person a notice requiring the immediate withdrawal of those consumer goods from being supplied and the retrieval of those items already supplied.
What penalties may be imposed for non-compliance with these laws?
For criminal liability, section 6 of the Consumer Goods Safety Ordinance (Cap 456) provides that any person who supplies, manufactures or imports unsafe goods is committing an offence and is liable to a fine, imprisonment or both. A person who supplies, manufactures or imports into Hong Kong consumer goods that do not meet general safety requirements or the approved standard, will be liable to a fine, imprisonment or both. Section 28 provides that a person who is found guilty under this offence is liable to a fine at level 6 (HK$100,000) and to imprisonment for one year on the first conviction, and to a fine of HK$500,000 and to imprisonment for two years for subsequent conviction. If such offence is a continuing offence, that person is liable to an additional fine of $1,000 for each day during which it is proved to the satisfaction of the court that the offence has continued.
Legislation for consumer goods in Hong Kong does not provide for civil liability. Compensation can be claimed only by way of legal action in tort or contract. The Sale of Goods Ordinance (Cap 26) and the Control of Exemption Clauses Ordinance (Cap 71) supplement the protection offered by common law regarding compensation claims for breach of contract. In respect of tort claims, a person who manufactures and sells an article owes a duty of care in its production and design. The claimant will be required to prove the reasonableness of an inference to be drawn that the defendant was negligent and this negligence caused the harm including personal injury or damage to property.
Reporting requirements for defective products
What requirements are there to notify government authorities (or other bodies) of defects discovered in products, or known incidents of personal injury or property damage?
The Consumer Goods Safety Ordinance imposes a statutory obligation to warn. Section 7 of the Ordinance provides the Commissioner with the power to serve a notice to require a person, at his or her own expense and by his or her own arrangement, to publish a warning that the consumer goods may be unsafe unless steps specified in the notice are taken.
Notification criteria and time limits
What criteria apply for determining when a matter requires notification and what are the time limits for notification?
A matter requires notification as long as the Commissioner reasonably believes that the consumer goods are unsafe in certain circumstances.
To which authority should notification be sent? Does this vary according to the product in question?
The sending of notification varies according to the product in question.
For food products, reports or complaints may be referred to the food trader, who should immediately notify the Food and Environmental Hygiene Department.
For pharmaceutical products, reports or complaints may be referred to the licensee, who should then report the problem to the Department of Health by filling out a Pharmaceutical Product Problem Report Form (Part 1). Serious problems that may lead to the recall of products must be reported to the Department of Health within 24 hours of receipt of the complaint or report for investigation.
What product information and other data should be provided in the notification to the competent authority?
The product information and other data provided in the notification vary according to the product in question.
For example, for pharmaceutical products, the Pharmaceutical Product Problem Report Form (Part 1) should be filled out when notifying the authority. Information in relation to the details of the problem (ie, reporting company’s contact details, source of complaint, description of the problem, etc) and details of the product (eg, product registration number, manufacturer details, importer details, etc) should be included.
Obligations to provide updates
What obligations are there to provide authorities with updated information about risks, or respond to their enquiries?
Under the Consumer Goods Safety Ordinance, there is no obligation to provide authorities with updated information about risks. However, there is an obligation to respond to their enquiries. Section 10 of the Consumer Goods Safety Ordinance provides that the Commissioner may require the manufacturer, importer or supplier to test certain consumer goods in the form and manner the commissioner specifies.
However for food products, the traders must conduct follow-up action by providing a progress report at regular intervals at the request of the Department. After food recall is exercised, the trader should submit a final report within a specified time frame determined by the Department. As for enquiries, the Department may assess the adequacy of the food trader’s action. For example, whether a prompt announcement of recall or prohibition of supply or import through the media was made, whether convenient and adequate locations for return of the food was made, and whether proper record of the recalled food is kept by the traders.
What are the penalties for failure to comply with reporting obligations?
Section 28 provides that a failure to comply with a notice served by the Commissioner is an offence. A person who is found guilty under this offence is liable to a fine at level 6 (HK$100,000) and to imprisonment for one year on the first conviction, and to a fine of HK$500,000 and to imprisonment for two years for subsequent conviction.
Is commercially sensitive information that has been notified to the authorities protected from public disclosure?
Use of information in prosecution
May information notified to the authorities be used in a criminal prosecution?
Product recall requirements
What criteria apply for determining when a matter requires a product recall or other corrective actions?
The criteria for product recall differ depending on which product is in question as the government authorities have issued different practice guidelines for specific types of product.
For private consumer goods, the criteria for product recall is satisfied when the Commissioner has the reasonable belief that the consumer goods do not comply with an approved standard or for which a safety standard has not been approved, are or may be unsafe and there is a significant risk that the consumer goods will cause a serious injury.
There are similar recall requirements for electrical products and goods under the Electricity Ordinance (Cap 406) and the Public Health and Municipal Services Ordinance (Cap 132), respectively.
The Chinese Medicine Ordinance (Cap 549) was revised in 2018 and it now empowers the Director of Health to serve Chinese medicine safety order for recall of Chinese herbal medicine, proprietary Chinese medicine and intermediate products when the Director has the reasonable beliefs that the products are sold without the required licence or in breach with the licensing conditions, are dangerous or injurious to health or are unfit for use by human.
For voluntary recalls, the government issued guidelines to facilitate voluntary recall of certain products, such as consumer goods and toys and children’s products.
What are the legal requirements to publish warnings or other information to product users or to suppliers regarding product defects and associated hazards, or to recall defective products from the market?
The Consumer Goods Safety Regulation (Cap 456A) requires any warning or caution in respect to the safe keeping, use, consumption or disposal of any consumer goods to be given in both Chinese and English languages. The warning or caution must be legible and placed in a conspicuous position on the goods themselves, on any packaging containing the goods (and may be a label securely fixed to the package or a document enclosed within the package).
In the Electrical Products (Safety) Regulation (Cap 406G), section 11 allows the Director of Electrical and Mechanical Services to serve on the supplier a written notice requiring the supplier to notify the purchasers about the hazardous effects in the product, accept a return of the product, and refund the purchasers any sum paid for the product, provided that a receipt for the product is returned.
Are there requirements or guidelines for the content of recall notices?
Yes, for certain goods. For example, the Pharmaceutical Products Recall Guidelines, published recently in 2016, provides that where a recall on a pharmaceutical product is initiated, required information may include details of the problem (eg, contact information of the person reporting the problem, nature of the problem, number of similar report received, etc), details of the product (eg, active ingredients, dosage form, batch number(s), date manufactured, etc), and health hazard evaluation and proposed action (eg, type of hazard, availability of alternative product, etc). The Recall Guidelines for Chinese Medicine Products, revised recently in 2018, provides that where a recall on Chinese medicine is initiated, required information may include details of the problem and the concerned hazards, the advice not to supply or use the products, and details of the product (eg, name, type and registration number of the product, etc).
What media must be used to publish or otherwise communicate warnings or recalls to users or suppliers?
The media for information dissemination may take the form of a press release, letter addressed to the concerned parties, paid advertisement in the media, public announcement and putting up posters.
Do laws, regulation or guidelines specify targets or a period after which a recall is deemed to be satisfactory?
Repair and replacement
Must a producer or other supplier repair or replace recalled products, or offer other compensation?
No, but usually they will provide a full refund of the goods.
What are the penalties for failure to undertake a recall or other corrective actions?
According to section 2 of the Consumer Goods Safety Regulation (Cap 456A), a failure to comply with the requirements of a warning will result in a fine at level 6 and imprisonment for one year on first conviction and, for subsequent conviction, to a fine of HK$500,000 and to imprisonment for two years.
What powers do the authorities have to compel manufacturers or others in the supply chain to undertake a recall or to take other corrective actions?
Under section 9 of the Consumer Goods Safety Ordinance (Cap 456), the Commissioner may exercise under a reasonable belief his or her option to serve a recall notice requiring the recall of consumer goods and may decide the manner and extent reasonably possible. The power of authorities to compel manufacturers and suppliers to undertake a recall is also provided in specific legislation. For example, section 30 of the Food Safety Ordinance states that the Director may make an order to direct that any food supplied be recalled and may specify the manner and period in which the recall is to be conducted.
Can the government authorities publish warnings or other information to users or suppliers?
Yes. Warnings and other information published to users or suppliers are frequently found on the websites of relevant governmental authorities or the Consumer Council (or both). The Consumer Council issues consumer alerts for both services and products, the power of which is granted under section 5(2)(d) of Consumer Council Ordinance (Cap 216). Other relevant governmental authorities that publish warnings include the Centre for Food Safety, the Transport Department and the Drug Office, among others.
Can the government authorities organise a product recall where a producer or other responsible party has not already done so?
Yes. Voluntary recalls made by the government authorities are a common occurrence, especially in the pharmaceutical sector. Other than reports or complains made by the referral of manufacturers, wholesalers, retailers, hospital pharmacies, research institutes, medical practitioners, dentists and patients, recalls may also be initiated as a result of testing of samples of pharmaceutical products initiated by the manufacturers and by the Department of Health. For overseas pharmaceutical products, recall may be initiated by the local or overseas health authorities or from information received directly from such authorities.
Are any costs incurred by the government authorities in relation to product safety issues or product recalls recoverable from the producer or other responsible party?
Yes. Section 33 of the Consumer Goods Safety Ordinance states that the court or magistrate may order the person convicted or any other person having an interest in the destroyed or altered consumer goods to reimburse the government chemist for any costs associated with testing the consumer goods and the Commissioner for any expenditure that has been or may be incurred by him or her that is in connection with any seizure or detention of the consumer goods.
How may decisions of the authorities be challenged?
To challenge the decisions of the authorities, section 13 of the Consumer Goods Safety Ordinance states that a person may, within 14 days after the decision or action of the Commissioner, deliver to the Commissioner a notice of appeal stating both the substance of the matter and the reasons for the appeal. It is important to note that an appeal against a decision of the Commissioner does not suspend the decision, unless decided otherwise by the Commissioner.
After receiving the notice of appeal, the Commissioner will forward it to the Secretary. The Secretary will then appoint members to an Appeal Board panel that will hear the appeal.
Implications for product liability claims
Implications for product liability claims
Is the publication of a safety warning or a product recall likely to be viewed by the civil courts as an admission of liability for defective products?
The court will give considerable weight to the publication of safety warnings or a product recall when considering liability for defective products.
Can communications, internal reports, investigations into defects or planned corrective actions be disclosed through court discovery processes to claimants in product liability actions?
Yes. Order 24, Rule 1 of the Rules of High Court (RHC) states that both parties to the action must discover documents which are or have been in their possession, custody or power relating to matters in question in the action. However, the court has the power to limit the extent of such discovery on the application of any party (Order 24, Rule 2(5) of the RHC).