On 12 Jan. 2022, China’s Supreme People’s Court (SPC) issued the “Interpretation on the Application of Punitive Damages in Cases Involving Eco-environmental Infringement Disputes” (hereinafter “the Interpretation”, 最高人民法院關于審理生態環境侵權糾紛案件適用懲罰性賠償的解釋), taking effect on 20 Jan. 2022.
Generally speaking, in case of an infringement, the infringer shall be liable for compensatory damages and the amount shall be limited to the actual damage incurred. This is also known as the rule of compensation.
However, since the Civil Code (民法典) came into effect in 2021, China has added provisions on punitive damages in several areas, such as intellectual property infringement and eco-environmental infringement. It suggests that China has adopted a more serious approach towards such behaviors in recent years.
The Interpretation, based on the Civil Code, provides specific regulations on how courts should apply its provisions.
For example, according to the Interpretation, the amount of punitive damages should be calculated based on the amount of compensation for personal injury and property damage incurred by environmental pollution and ecological damage.
When determining the amount of punitive damages, the people’s courts should take full account of factors including the degree of maliciousness of the infringer, the severity of the consequences of the infringement, the benefits obtained by the infringer, and the repair measures and effects taken by the infringer afterward. The amount shall not exceed twice the base number.
Cover Photo by Cullen Zh on Unsplash
Contributors: CJO Staff Contributors Team
