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[According to the Interpretation, for consumers’ requests for punitive damages, the scope of “consumers” should be determined based on objective standards, rather than based on the plaintiff’s motivation for protecting their rights. In other words, in the field of food and drug safety, those who “knowingly buy fake products” are considered “consumers” and can obtain reasonable punitive damages.]

Food and drug safety is the most basic livelihood issue. The Supreme People's Court (hereinafter referred to as the "Supreme Court") recently issued a judicial interpretation, clarifying that "punitive damages are supported for all purchasers within the scope of daily consumption", which means that the previously controversial "knowingly buying fake products" also have the right to request punitive damages.

On the 21st, the "Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in Handling Food and Drug Punitive Compensation Dispute Cases" (hereinafter referred to as the "Interpretation") was officially released and will come into effect on August 22nd.

The "Interpretation" has a total of 19 articles, which make provisions for protecting the rights of ordinary consumers, refunds and returns of food and drugs, the liability of purchasing agents, the liability of small workshops, the identification of defects in labels and instructions, the competing liability for punitive damages, the liability for the production and sale of counterfeit and inferior drugs, the determination of the base for punitive damages, the regulation of continuous purchase claims and repeated claims, and the punishment of illegal claims.

It is particularly worth mentioning that the "Interpretation" clearly states that for those who "knowingly buy fake goods" and make malicious high claims, their requests for punitive damages will be supported in accordance with the law within the scope of reasonable living consumption needs.

The industry respondents believe that the punitive compensation system has the function of punishing, curbing and preventing serious illegal acts. However, since the system was introduced into the Consumer Rights Protection Law, the behavior of "knowingly buying fake products and claiming compensation for buying fake products" has emerged in an endless stream in practice. This "Interpretation" insists on using daily consumption as a condition for applying the punitive compensation system for food and drugs, refining the relevant rules of "knowingly buying fake products" and clearly regulating high-value claims. This is conducive to unifying judicial judgment thinking and fully protecting the reasonable rights protection behavior of ordinary consumers, while avoiding improperly increasing the main responsibilities of small and micro business operators and maintaining the normal production and operation order of the market.