Judgment standards in ‘obviously unfair’ cases

By Xia Ling, Boss & Young
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Hua was a victim of a traffic accident. She was knocked down by an electric bicycle while walking on the road. The driver did not help, and instead tried to escape. After passers-by raised the alarm, Hua was sent to the hospital for treatment.

The police then looked at surveillance video and found the electric bicycle driver, Gao. After investigation, Gao was found to be fully responsible for this traffic accident. A few days later, the two sides signed a “Traffic Accident Damage Compensation Mediation”.

Xia-Ling---Boss-&-Young
Xia Ling
Boss & Young

The mediation was drafted by the traffic police and signed under their auspices. The content reads: “Party A (Gao) must compensate Party B (Hua) for all expenses, such as Party B’s medical expenses, for a total amount of RMB20,000 (US$3,000) and the cash will be paid on the spot. In the future, the two parties will not have any involvement, and the case is closed accordingly.”

But on the second day after the mediation was signed, Hua was diagnosed with a “ninth anterior rib traumatic fracture, and left femoral neck fracture on the left side”. So, Hua has had to undergo a “left total hip arthroplasty” surgery.

Hua’s injuries in the traffic accident constituted a grade 8 disability, resulting in various medical costs of up to RMB200,000. Hua’s daughter approached the electric bicycle driver and the logistics company he worked for, but they both said they would not pay more than RMB20,000 to Hua, the number that was written on the mediation that Hua had accepted. So Hua sued the court and claimed that the above mediation be revoked, and also claimed compensation for all her losses.

Under the General Rules of the Civil Law of the People’s Republic of China, article 151 states the injured party has the right to request a people’s court or arbitration organizations to revoke such a mediation, if one party uses either a state of danger or a lack of judgment by the other party that results in unfairness in the establishment of civil juristic acts.

In this case, Hua and Gao reached a mediation agreement under the auspices of the traffic police. Whether Hua could be identified as being in a state of “danger or lack of judgment” was the focus of dispute in this case. The author supposed that when the traffic police presided over the reconciliation between Hua and Gao, Hua was still in the process of treatment, and the degree of physical damage was not clear yet.

Although the traffic police has plenty of experience in handling traffic accident liability identification, it was obviously not familiar with medical knowledge in its judgment of determination of the consequences of physical injury caused by the accident. The mediation was signed before the final diagnosis conclusion was reached, which made the content of the drafted mediation: “the parties are not involved, and the case is closed accordingly”, obviously sloppy and irresponsible.

Before the results of the medical examination of the injury, Hua should have been identified as having a lack of judgment in the case of injury and damage.

What’s more, in order to solve the traffic accident case and determine which side is responsible for the traffic accident, and to determine the amount of loss caused by the accident, both parties should sign the mediation book before the certificate or other third-party test materials are issued.

In this situation, the victim of the traffic accident often has an error in estimating the degree of damage, resulting in the amount of compensation in the mediation book being far less than the actual damage. Revoking an unfair mediation is not only a relief to the victim, but also a demonstration of the principle of fairness in the law.

In the end, the court judged that Hua could not know that her injury had constituted a level 8 disability when signing the mediation, and it was even more unpredictable that the loss was far greater than the amount of compensation agreed in the mediation. Therefore, the mediation was judged unfair and the court supported the claim of Hua to revoke the above compensation mediation and request for compensation for all losses.

However, the author believes that although the law provides relief paths for unfair contracts, the contracts are private and belong to the field of private law. Public law cannot easily interfere in contracts between two private sides. Moreover, the provisions of China’s laws on the criteria of “significantly unfair” are relatively general.

Therefore, judges have greater discretion in the trial of cases, which leads to the phenomenon of unification of law enforcement in trial practice occurring from time to time.

Therefore, each adult should have a certain discriminating ability and predictive ability for the results of his or her legal behaviour. When the matters involved exceed their own judgment ability, they should be extra cautious when performing legal acts to avoid causing huge losses.

XIA LING is a partner and attorney-at-law with Boss & Young

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