The Russian civil court system consists of two branches: courts of common jurisdiction and state commercial courts that specialise in cases arising from economic and business activities of legal entities.
Consumer claims are tried exclusively by the courts of common jurisdiction. Initially, the case is resolved by the court of first instance (the district court). This initial ruling may be challenged by either the appeal instance (where the case is reviewed on the merits once again) or the cassation court (which reviews the 'procedural' aspect of the case). Afterwards, the case may be finally reviewed by the Supreme Court of the Russian Federation.
In cases of appeal or cassation the case is reviewed by the higher court. The Supreme Court of the Russian Federation conducts supervisory review of product liability claims.
Minor claims (involving an amount less than 50,000 roubles) are tried by magistrate judges. All other consumer cases are reviewed by a district court as the first instance court.ii Burden of proof
The defendant (manufacturer, seller, executor, etc.) always has the burden of proof in product liability cases.
The causation between the defect and the loss has to be proved (or at least be claimed) by the consumer. Thus, it is for the defendant to prove the absence of such causation.iii Defences
The law provides for a set of defences available to manufacturers (sellers, importers, service providers and their representatives) in consumer protection cases.Contributory negligence
Where a claimant is at fault for incurring damage, the compensation awarded may be reduced depending on the degree of fault of the claimant. This limitation of damages (as opposed to a complete defence) is available by virtue of Article 1083 of the Civil Code. Article 1083, however, does not permit the court to absolve the defendant of all liability if a consumer's health or life is injured by using the product in question. Article 1083 of the Civil Code also states that an injured party may not claim compensation for injury resulting from his or her intentional consent to incur the damage claimed.
Manufacturers (sellers, importers, service providers and their representatives) will be fully absolved from liability if the damage, including damage to health or life, is caused solely owing to the consumer's breach of the manufacturer's instructions for use, storage or transportation of the product. The burden of proof is on the defendant to establish that the claimant suffered damage as a result of improper use of the product.Time limitation
Article 1097 of the Civil Code states that in product liability cases the damage shall only be compensated if the damage was caused within either (1) the established lifetime or shelf life of the product, or (2) if the lifetime or shelf life is not established, within 10 years of the date of manufacture of the product. However, the latter defence may only be used when the manufacturer or seller is not required to specify a lifetime or shelf life for the product. Where the manufacturer or seller is required, but simply fails to specify the lifetime or shelf life, a consumer incurring loss may make a claim for compensation regardless of the time the damage was caused. The 'established lifetime or shelf life' of a product is defined as the period during which the product should be able to be used by consumers without danger to health or property (this is different from the 'warranty period', during which a manufacturer warrants, for example, to restore, repair or replace a product if the buyer is not satisfied with its quality).Compliance with regulatory requirements
Products and product ingredients are quite broadly regulated; for example, GOSTs (state standards) set out technical characteristics or requirements for products; methods for sampling and testing products; and methods of packing, transportation and storage). Consumer protection legislation grants a number of state agencies the authority to ensure product safety and also to control the protection of consumer rights. A manufacturer that has complied with all the regulations and state standards may argue that he or she acted in good faith. This defence is likely to be taken into account by the court for the purposes of determining the amount of compensation to be awarded. However, in cases where damage is caused to a consumer's health or life, the court will not accept this defence.Force majeure
The defence of force majeure is available under the Consumer Protection Law to negate a manufacturer's or seller's liability in consumer protection cases. The Civil Code defines force majeure as extraordinary circumstances unavoidable in a given situation, for example, natural disasters, war and other major events that are clearly outside a party's control and cannot be avoided by the exercise of due care by that party. The Civil Code expressly provides that the failure of third parties, such as suppliers and subcontractors, to perform their obligations to the contracting party does not constitute force majeure.iv Personal jurisdiction
Any foreign company whose products are used in Russia may be sued by Russian courts even if the entity does not have a representative office in Russia. De jure the defendant's place of residence does not have any effect on the outcome of the case. However, in such circumstances, certain problems relating to notification may occur.
Although Russia is a member of the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965, the process of notifying the defendant in such circumstances may be very time-consuming and bureaucratically acrimonious.
A consumer may have a choice of jurisdiction depending on the particular case. The claim may be submitted to the first instance court located at:
- the defendant's registered office;
- the place of the consumer's residence (permanent or temporary); or
- the place where the consumer contract was entered into or performed.
Subject to the Consumer Protection Law, a consumer has the right to pre-judicial expertise at the expense of the seller (manufacturer, etc.). As it is conducted by the seller (manufacturer, etc.), the use of such expertise is considered a way of protecting the consumer's rights and it is undertaken where there is a dispute as to the origin of a product's defects.
The consumer has the right to be present during the examination and may challenge the results in the court.
If the court rules in favour of consumer unions acting on behalf of the general public, the liable seller (manufacturer, etc.) will reimburse the costs for independent expertise that provides evidence of a breach of obligatory product requirements.Judicial examination
Subject to procedural rules, the court will appoint experts if any questions arise during the case that require special knowledge in science, technology, etc. Such expertise may be delegated to a forensic expert institution, an individual expert or a group of experts.
Each party may raise questions to be reviewed by the experts. The final list of questions to be answered is determined by the court. If the court dismisses any question raised by a party, it shall give a substantiated response thereto.
If either party escapes participation in the expert evidence process or makes its conduct impossible by any means, the court may acknowledge the issue in favour of its counterparty.
The expert assessment may be conducted within a court hearing or outside if it is necessary owing to the nature of the examined issue. The parties have the right to be present during the examination.
An expert will conduct a complete, independent and justified examination by answering all the questions raised by the court and the parties. Afterwards, the expert shall come to trial and respond to the questions connected with the conducted examination.
Where the issues exceed the bounds of special knowledge or the materials and the documents are insufficient or improper, the expert will provide the court with a written and reasonable notification about the impossibility of conducting the examination.
The parties may demand the appointment of a particular expert, but it is the court that ultimately decides. The parties may also obtain private expert opinions, although such opinions have no significant value. Their main purpose is to influence the court-appointed experts in their conclusions (or to criticise it).vi Discovery
Procedural legislation does not provide any special regime similar to the discovery or disclosure procedure in the United Kingdom or the United States. Owing to fundamental differences in procedural law, a Russian court has a much more significant role in the court hearing and the examination of evidence.
Subject to procedural legislation, evidence is considered legally obtained information about the facts constituting the claims and objections of the parties, as well as other circumstances that are important for the correct examination and resolution of the case.
Such information may be obtained by the court from:
- explanations of the parties or third persons;
- testimony of witnesses;
- written or material evidence;
- audio and video materials; and
- expert examination.
No evidence may have its force established in advance. The court will assess the relevance, admissibility and authenticity of all evidence, as well as its sufficiency and interconnection.
Each party must prove the circumstances it refers to within the claim or objection. However, it is the court that determines both the circumstances relevant to the case and which party successfully proves their case. The court may also propose that the parties bring additional evidence.Explanations of the parties or third persons
Explanations of the parties or third persons concerning the circumstances necessary to resolve the case are checked and evaluated like any other evidence. Thus, such explanations do not take precedence over other evidence, such as witness or material evidence. In addition, if the party acknowledges any facts constituting the claim of the counterparty, the latter does not have to prove it later on.Witness evidence
Witness evidence provides any facts that may assist the case adjudication. However, witness evidence may not be considered by the court if the witness cannot name the source of its information. Legal representatives, judges and members of the jury shall not be considered witnesses.
Witnesses must come to trial and give true evidence. The Russian Criminal Code provides criminal liability for intentional misrepresentation by a witness.Written and material evidence
Written evidence is any possible documents that provide information about the circumstances of the case and must be filed in original form or a duly verified copy.
Material evidence is any object that by its nature may lead to an adjudication of the case. Generally, such evidence is kept at the court. Where the material evidence cannot be delivered to the court, the judge shall examine the piece of material at the place where the evidence is kept.vii Apportionment
The concept of 'apportionment' is not recognised by Russian law. As indicated, Russian legislation directly specifies the list of the 'liable' entities that bear joint and several liability under consumer claims.viii Mass tort actions
The concept of class action is not recognised in Russian legislation. A draft law on class actions is considered by the State Duma (low house of the parliament), and may be adopted in near future.
Under procedural law, if a judge establishes that there are several similar cases involving the same or similar parties, or that various claims against the same defendant were filed in one court, the court may aggregate those cases into one proceeding to have a combined hearing, provided this ensures a more expedient and accurate consideration and resolution.
The Consumer Protection Law specifically allows certain state agencies, local authorities and consumer protection associations to file lawsuits on behalf of an indefinite number of consumers. In these cases, however, a court may only issue an injunction against the wrongdoing rather than award damages. Also, the court may declare the activity illegal; such a declaration would have a res judicata nature and may be subsequently used by an individual in a separate private claim for damages.ix Damages
The general remedy against injury caused by defective products is compensation in the form of damages.
Russian law requires full compensation for all damage. The definition of damage includes expenses actually incurred or to be incurred to restore the right breached, property loss or damage and lost profits. In the case of bodily injury, the compensation may include regular payments based on the loss or earnings of the injured party and payments for medical treatment and medicine; in the case of wrongful death, payments shall be made to dependants. However, a court may take any contributory negligence or intent of the victim into account and lessen the amount of compensation if necessary.
In addition, the claimant may be awarded moral damages (i.e., compensation for physical and emotional suffering) over and above economic damages. Moral damages are available to the claimant only when the damage was caused at the fault of the defendant. The levels of moral damages awarded in reported case law have not been that high; however, they do appear to be increasing.
Moreover, by virtue of the Consumer Protection Law if a claimant wins a case the court is required to impose a fine on the defendant equal to 50 per cent of the amount awarded to the claimant. The fine is normally payable to the state budget. In cases where the claim has been brought by a local authority or a consumer protection association, half of the penalty is payable to the local authority or the consumer protection association, respectively.
Apart from the right to claim for damages caused by a product of improper quality, the consumer has the right, at his or her own discretion, to choose to:
- demand its replacement with a product of the same brand (model, type);
- demand its replacement with a product of another brand (model, type) with the relevant recalculation of the purchase price;
- demand a proportional decrease of the price for the product;
- demand immediate and free-of-charge remediation of the defects of the product or reimbursement of the expenses of their remediation by the consumer or by a third person; or
- refuse to perform the sale-purchase agreement and demand the return of the price paid for the product – the consumer may return the defective product at the seller's request and at the seller's expense.
Additionally, the Consumer Protection Law provides that the seller (manufacturer, etc.) must pay a penalty to the consumer, of 1 per cent of the price of the goods for every day of delay in failing to abide by the time limits for satisfying the aforementioned remedies. Although the law does not cap the maximum amount of this penalty, the courts usually limit such compensation by awarding not more than 100 per cent of the price of the goods.