Product safety and liability

Safety and environmental

What are the most relevant automotive-related product compliance safety and environmental regulations, and how are they enforced? Are there specific rules for product recalls?

Implementation of wheeled vehicle safety requirements is primarily ensured by Technical Regulation SU 018/2011. Only accredited testing laboratories included in the Unified Register of Certification Bodies and Testing Laboratories are allowed to confirm compliance of automobiles and automobile parts with those safety requirements.

Technical Regulation SU 018/2011 also stipulates requirements to ensure implementation of the emission levels established for different environmental classes of vehicles and internal combustion engines.

In accordance with the Decree of the Russian Government No. 1291 of 26 December 2013 ‘On disposal fee in respect of wheeled vehicles (chassis) and their trailers and amending certain acts of the Russian Government’, importers, local manufacturers and automobile owners (only if payment was not made by the importer or manufacturer) are required to pay a disposal fee to ensure environmental safety, including protection of human health and the environment from the harmful effects of the use of vehicles, taking into consideration technical characteristics and wear and tear.

To protect the environment, manufacturers and importers of goods are also subject to payment of an environmental fee. In addition, an act was developed that will establish the procedure for the elimination of accumulated environmental damage and compensation for environmental damage caused in the course of past economic activity (Decree of the Russian Government No. 542 of 4 May 2018 ‘On approval of the Rules for organization of work on elimination of accumulated environmental damage’).

New draft law has been developed regarding introduction of provisions on environmental tax and disposal fees to the Tax Code of Russia. The environmental tax will replace the fee for a negative impact on the environment, the disposal fee will replace the existing environmental fee and the disposal fee for wheeled vehicles.

Recalls of automobiles are governed by the general provisions of Russian law (the Federal Law No. 184-FZ of 27 December 2002 ‘On technical regulation’), although the Federal Agency on Technical Regulation and Metrology (Rosstandart) has developed specific recommendations on development and implementation of actions to prevent harm due to goods’ non-compliance with the Technical Regulation ‘On the Safety of Wheeled Vehicles’ approved by the decision of the Customs Union Commission of 9 December 2011 No. 877 (Order of Rosstandart No. 1321 of 28 June).

In the event automobiles to be put into civil circulation or that are going to be introduced in Russia are not compliant with the technical regulations at certain stages, an automobile manufacturer (manufacturer’s representative) is obliged to inform Rosstandart, as well as develop an action plan to prevent harm to customers (article 38 of Federal Law No. 184-FZ of 27 December 2002 ‘On Technical Regulation’, Order of Rosstandart No. 1321 of 28 June, article 103 of Technical Regulation SU 018/2011). In the event it is impossible to remove the risk to customers and remedy the revealed non-compliance, the automobiles shall be recalled.

In case of emergency, Rosstandart may issue an injunction to suspend the sale of vehicles. If the action plan is not executed or requests of Rosstandart are not fulfilled, Rosstandart is also entitled to proceed with a judicial forced recall of products.

Product liability and recall

Describe the significance of product liability law, and any key issues specifically relevant to the automotive industry. How relevant are class actions or other consumer litigation in product liability, product recall cases, or other contexts relating to the automotive industry?

We are not aware of any major automotive-related product liability disputes in recent years.

General regulation applies to relations involving consumers of vehicles with certain exemptions provided by special legislation, in particular Law of the Russian Federation No. 2300-1 of 7 February 1992 ‘On Protection of Consumer Rights’ (the Law on Consumer Protection).

For instance, the Law on Consumer Protection provides consumers with additional rights; some of them are described below. Thus, the minimum scope of information that shall be provided to the consumer is established by the law and shall be strictly followed.

The manufacturer is obliged to ensure repair and technical maintenance of the goods, as well ensure manufacturing and supply of spare parts during the term of the goods’ manufacture and during their service life (or up to 10 years after transfer of the goods to the consumer if the service life has not been established).

In addition, consumers’ damages can be recovered in full besides the penalties to be paid, including in the event of recall. In the event the manufacturer, importer or seller refuses to pay the penalty provided by the law or contract, and the consumer’s claim regarding this penalty is further confirmed by the court, the manufacturer, importer or seller will be obliged to pay a fine equal to 50 per cent of awarded amount of the penalty.

In the automotive sector, product liability issues are also closely connected with the fact that under Russian law an automobile is a technically sophisticated product. Thus, the consumer’s right to return a defective car to a seller or manufacturer is limited as follows: the repudiation of a contract or a claim for replacement of a technically sophisticated product of inadequate quality may be filed within 15 days. After this term expires, these rights may be exercised in case of detection of a substantial defect or in the event of violation of the terms of eliminating defects. In addition, vehicles, being technically sophisticated products, cannot be returned or exchanged for similar goods of another size, shape, dimension, style, colour or configuration.

When a vehicle’s non-compliance with technical regulations in full or in part is revealed, and if non-compliance can be remedied, the automobile manufacturer (seller or other authorised person) shall send a relevant notification to customers, including business entities and consumers. As a rule, once the customers have been duly notified, they are invited to contact a dealer and have a free service to remedy the revealed problems. If the non-compliance cannot be remedied, then a recall campaign shall start as described above. According to Rosstandart, three recall campaigns were held in January 2018 alone.

Usually disputes between sellers and consumers of automobiles and automobile parts are resolved amicably, without court proceedings.

Consumer-related disputes shall be brought before the Russian courts of general jurisdiction and shall be heard in accordance with the Civil Procedural Code. The Civil Procedural Code does not provide for such a category of actions as ‘class actions’ as it is understood, for example, in US court practice. However, there are certain tools that might be considered.

Group actions are not dramatically different from individual actions and may be filed in cases where multiple claimants have similar claims (or similar grounds for claims) against the same defendants. Co-participation is possible if certain procedural elements are met (eg, the rights and the duties of several plaintiffs or defendants have the same factual ground (eg, claims arising out of a traffic accident involving several victims)). Group actions are simply separate actions of the various claimants heard in the same proceedings. Each of the plaintiffs or defendants acts in the proceedings independently with respect to the other parties. Each claimant has his or her separate claims to the defendant and the amount of damages awarded depends on the evidence provided by the claimant to support the calculation of damages.

A representative action can be also filed in consumer-related cases. This is an action for the protection of the interests of a large group or the general public, with relief usually sought in the form of a declaration of the illegality of an activity or conduct by an entity, which is contrary to rights and interests. The number of ‘victims’ in a representative action has no relevance and does not need to be established.

Thus, according to Russian law the Russian public prosecutor, the Federal Service for Supervision in the Sphere of Protection of Consumer Rights and Human Well-being, its territorial divisions, municipalities, associations and unions of consumers may appeal to the court and represent before the court the interests of a large number of consumers.

The bill on the settlement of the procedure for reviewing claims for protection of rights and legitimate interests of a group of individuals has passed the first reading in the Russian State Duma (Regulation No. 596417-7). According to the bill, the introduction of provisions into the Civil Procedural Code is planned to allow individuals to file representative actions for the protection of rights and legitimate interests of a group of persons.