China has been quite successful in encouraging foreign investments since the Sino-Foreign Equity Joint Venture Enterprise Law was promulgated in the beginning of the country’s economic reform in 1979.
With the passage of time, the Chinese government has recognized the limitations of the old case-by-case approval regime which is typically time-consuming and burdensome for foreign investors. The government has sought to test various reform measures as seen through the establishment of several Free Trade Zones and new rules that only applied within the boundaries of these Free Trade Zones.
Many people have heard about the lawsuit in which a consumer won a substantial verdict against McDonalds over a burn from a cup of hot coffee. Last year, General Motors faced claims due to a faulty ignition switch that shut off the engine during driving, disabled power steering and power brakes, and even prevented airbags from inflating. Toyota faced similar problems in the past with claims of sudden acceleration in certain car models. Tobacco companies like Philip Morris faced lawsuits over cigarettes and many medical device companies have faced serious claims that their products harmed the very people they had aimed to help. Products liability cases affecting consumers tend to make headlines. Defending companies often take a hit to their reputation as well as their bottom line.
Our next installment of GSB’s Resource for Doing Business in the U.S. introduces products liability law concepts and explains why negligence or fault may not even matter. Moreover, it’s not just the manufacturer who is at risk; others in the distribution chain can be sued too. With judgements frequently in the millions of dollars, foreign investors in the U.S. must think ahead about ways to mitigate the substantial risks that products liability claims can present. This installment offers a few concrete steps a potentially affected company can take to protect its business and investment.
The International Practice Group of Garvey Schubert Barer is a cross-disciplinary group of attorneys practicing in areas ranging from business transactions, immigration, maritime, government regulatory work, transportation and logistics, and estate planning. The group members include bilingual and multicultural attorneys who are well-versed in handling these subject matters in a cross-border context. The firm’s attorneys have been actively practicing in the international arena since the early 1970s.