Reason for proposal and main contents

The current Act provides that a defect in a product and damage caused by such a defect are presumed if it is proved that the damage has been caused while the product is in normal use.

However, in the case of products that are manufactured using highly advanced technologies, such as automobiles, victims undergo considerable difficulties in obtaining just compensation for damages as it is extremely difficult for them to prove, either scientifically or technically, that a product is defective because the product information is owned by the manufacturer, which makes it difficult for the victims to access the data related to the product. 

Therefore, in order to effectively realize the purpose of the damage compensation system, which is based on the principle of equitable and reasonable bearing of damages, the proposed amendment shifts the burden of proof to the manufacturers in certain cases, which means that they have to prove that the product concerned is not defective and that damages are not caused by the defect. In addition, it introduces to the methods of litigation for damage compensation a new system in which the court may order manufacturers to submit information or data to the court, such that manufacturers cannot refuse to submit information or data when required to prove the existence of defects or damages or to calculate the amount of damages, even if they fall under the category of trade secrets. 

The new system also stipulates that the facts indicated by the claimants shall be acknowledged to be true in the event that the manufacturer fails to comply with the court order to submit information or data. The proposed amendment also aims to improve the law so that the right to collect evidence may be guaranteed in a balanced manner, while correcting and complementing the information asymmetry between the parties by introducing a system that allows the court to issue a confidentiality order to prevent the leakage of trade secrets through the information or data submission submitted by the manufacturers. (Article 3-2, Articles 3-3 to Article 3-6, and newly established Article 9 of the draft).