China Law Blog

China's globalization is influencing its laws and its law enforcement. What this means for business (and hence the title of this series) is that China's laws and law enforcement are evolving towards the West. 

In previous posts in this series (here, here, and here), I talked about cases where Chinese courts have issued rulings that would not be at all unusual in California, but were groundbreaking for China.  I used these cases to extrapolate the changes cursing through China's legal system.  In my last post in this series, here, I wrote on how China's judges and prosecutors are studying law overseas and how that will impact China's own legal system.

This post focuses on a recent case, detailed in a China Daily story, entitled, "Landmark ruling for consumers against airlines.  I see this case as less landmark and more par for a rapidly changing course of Chinese consumer cases. 

The case involved a China Southern Airlines passenger who sued China Southern for not allowing him to board an overbooked flight for which he had bought a ticket.  When this passenger tried to check in for his flight, China Southern would not allow him to board because he had been "bumped by overbooking."

China Southern then arranged for him to take the next flight and upgraded him to a first-class seat. This next flight was due to leave at 10:39 pm, two-and-a-half hours later than the original flight.

The passenger accused the airline of obscuring the truth, causing him to be delayed at the airport and violating his rights and interests.  He sued the company, seeking a public apology and 2,600 yuan in compensation, or double the cost of his ticket.

The airline argued that bumping because of overbooking is an internationally accepted practice aimed at hedging against possible losses.

The People's Court of Chaoyang District ruled in favor of the plaintiff and against China Southern, holding that the airline should refund the 1,300 yuan the passenger spent on his ticket for having failed to inform him that he might not be allowed to fly as planned.  The court also ruled that thethe airline had not cheated the passenger.

The article described overbooking in China as a "fairly new concept" and "few airlines bother to tell passengers about it." The court sent a letter to the General Administration of Civil Aviation (CAAC) suggesting it draft regulations on air ticket overbooking.

The article describes this ruling as having been "without precedent in China," but this is not really true.  This probably was the first time a passenger successfully sued an airline in China for having failed to inform passengers of the potential for overbooking, but it certainly is not the first successful China consumer misrepresentation case.  Though the article rightly notes that Chinese courts "have traditionally favored large enterprises and government departments in consumer-initiated lawsuits, even as such disputes have grown increasingly common in recent years," there has in the last few years been a decided shift in Chinese courts toward the consumer in misrepresentation claims.

Businesses, take note.