FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PI-IILIPPlNES 
1 
First Regular Session 
1 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
Our people are excessively litigious. The civil justice system is overcrowded, sluggish, 
and excessively costly and the costs of lawsuits, both direct and indirect, are inflicting serious 
and unnecessary injury on individuals. 
There is a need to restore rationality, ceitainty, and fairness to the civil justice system in 
order to protect the public against excessive, arbitrary, and uncertain damage awards and to 
reduce the volume, costs, and delay of litigation. 
While the State might be able to fully and effectively respond to this problem, due to its 
magnitude, efforts can be made to at least mitigate this predicament. 
This bill seeks to establish certain legal principles of product liability in order to help 
reduce costs of litigation by providing a mechanism for the speedy disposition of product- 
liability cases and a fair balance among the interests of product users, manufacturers, and product 
sellers.* 
' This bill was originally filed during the Thirteenth Congress, First Regular Session. 


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FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
ESTABLISI-IING LEGAL STANDARDS AND PROCEDURES FOR PRODUCT LIABILITY 
LITIGATION AND FOR OTHER PURPOSES 
Be enacted by the Senate and House of Representative of the Philippines in Congress 
assem bled: 
SECTION 1. Short Title. - This Act shall be lmown as the “Product Liability Act.” 
SECTION 2. Definitions of Terms. -For purposes of this Act, the term: 
(A) “Actual malice” means specific intent to cause serious physical injury, illness, 
disease, death, or damage to property; 
“Claimant” means any person who brings an action covered by this title and any 
person whose behalf such an action is brought; 
(B) 
If such an action is bought through or on behalf o f  an estate, the term 
includes the claimant’s decedent. If such an action is brought or on behalf of a 
minor or incompetent, the term includes the claimant’s legal guardian. 
(C) “Claimant’s benefits” means the amount paid to an employee as worker’s 
compensation benefits; 
(D) “Clear and convincing evidence” is that measure or degree o f  proof that will 
produce in the mind of the trier o f  fact a firm belief or conviction as to the truth of 
the allegation sought to be establish; it is the level of proof required to satisfy such 
standard is more than that required under preponderance of the evidence, but less 
than that required for proof beyond a reasonable doubt; 
“Commercial loss” means any loss or damage solely to a product itself, loss relating 
to dispute over its value, or consequential economic loss; 
(E) 


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(F) “Compensatory damages” mcans damages awarded for economic and non- 
economic loss; 
(G) “Economic loss” means any pecuniary loss resulting from ham, including the loss 
of earnings or other benefits related to employment, medical expense loss, 
replacement services loss, loss due to death, burial costs, and loss of business or 
employment opportunities, to the extent recovery for such loss is allowed under 
applicable laws; 
(H) “Harm” ineans any physical injury, illness, disease, or death or damage to property 
caused by a product. The term does not include commercial loss; 
(I) 
“Manufacturer” mans 
(1) Any person who is engaged in a business to produce, create, make, or 
construct any product or component part of a product and who 
(a) Designs or formulates the product or component part of the product; or 
(b) Has engaged another person to design or formulate the product or 
component part of the product. 
(2) A product seller, but only with respect to those aspects of a product or 
coinponeiit part of the product which are created or affected when, before 
placing the product in the stream of commerce, the product seller produces, 
creates, makes or construct and designs, or formulates, or has engaged another 
person to design or fonnulate an aspect of the product or component part or 
the product made by another person; or 
(3) Any product seller not described in the preceding subparagraphs but who 
holds himself, herself or itself out as a manufacturer to the user of the product. 
(J) “Non-economic loss” means subjective, non-monetary loss resulting from harm, 
including pain, suffering, inconvenience, mental suffering, emotional distress, loss of 
society and companionship, loss of consortium, injury to reputation, and humiliation; 
(K) “Person” means any individual, corporation, company, association, firm, partnership, 
society, joint stock company, or any other entity, including any governmental entity; 
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(L) “Product liability action’’ means a civil action brought on any theory for harm caused 
by a product. 
(M) “Product seller” means a person who in the course of a business conducted for that 
pUlQOSe 
(1) Sells, distributes, rents, leases, prepares, blends, packages, labels, or otherwise 
is involved in placing a product in the stream of commerce; or 
(2) Installs, repairs, refurbishes, reconditions, or maintains the harm-causing 
aspect of the product. 
The term does not include a seller or lessor of real property; a provider of 
professional services in any case in which the sale or use of a product is incidental to 
the transaction and the essence of the transaction is the furnishing of judgment, skill, 
or services; any person who acts in only a financial capacity with respect to the sale 
or a product; or leases a product under a lease arrangement in which the lessor does 
not initially select the leased product and does not during the lease term ordinarily 
control the daily operations and maintenance of the product. 
SECTION 3. Liability Rules Applicable to product Sellers and Manufacturers. - 
(A) In General. - In any product liability action, a product seller other than a 
manufacturer shall be liable to a claimant only if the claimant establishes that - 
(1) The product that allegedly caused the harm that is the subject of the complaint 
was sold, rented, or leased by the product seller; 
(2) The product seller failed to exercise reasonable care with respect to the 
product; 
(3) The failure to exercise reasonable care was a direct and proximate cause of 
harm to the claimant; 
(4) The product seller made an express warranty applicable to the product that 
allegedly caused the harm that is the subject of the complaint, independent of 
any express warranty made by a manufacturer as to the same product; 
(5) The product failed to conform to the warranty; 
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(6) The failure of the product to conform to the warranty caused harm to the 
claimant; 
(7) The product seller engaged in intention wrongdoing, as determined under 
applicable law; and such intentional wrongdoing was a direct and proximate 
cause ofthe ham that is the subject of the complaint. 
(B) Reasonable Opportunityfor Inspection. - A product seller shall not be considered to 
have failed to exercise reasonable care with respect to a product based upon an alleged failure lo 
inspect the product if failure occurred because there was no reasonable opportunity to inspect the 
product; or if the inspection, in the exercise of reasonable care, would not have revealed the 
aspect of the product which allegedly caused the claimant’s harm. 
(C) Liability of Manufacturers. -The manufacturer of the product that caused harm to the 
claimant shall be liable subsidiarily. In the event that the product seller has no fault or that the 
manufacturer’s negligence is the direct and proximate cause of the harm done, the manufacturer 
alone shall be held liable. 
SECTION 4. Defense Based on Claimants’ Use of Intoxicating Alcohol or Drugs. - In 
any product liability action, it shall be a complete defense to such action if 
(A) The claimant was intoxicated or was under the influence of intoxicating alcohol or 
any drug when the accident or other event which resulted in such claimant’s harm 
occurred; and 
(B) The claimant, as a result of the influence of the alcohol or drug, was more than 50 
percent responsible for such accident or other event. 
SECTION 5. Unqorm Time Limitations on Liability 
(A) In General. - The product liability action may be filed not later than 2 years after the 
date on which the claimant discovered or, in the exercise of reasonable care, should have 
discovered - 
(1) The hanil that is the subject of the action; and 
(2) The cause of the harm. 
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(B) Exception. - A  person with a legal disability, as determined under applicable law, may 
file a product liability action not later than 2 years after the date on which the person ceases to 
have the legal disability. 
SECTION 6. Alterrzative Dispute Resolution Procedure. - 
(A) Service of Oflev. - A claimant or a defendant in a product liability action may not 
later than 60 days after the service of the initial complaint; or the applicable deadline for a 
responsive pleading; whichever is later, shall serve upon an adverse party an offer to proceed 
pursuant to any voluntary, non-binding alternative dispute resolution procedure establish under 
the rules of the court in which such action is maintained. 
(B) Wvitten Notice of Acceptance or Rejection. - Except as provided in paragraph (C), 
not later than 10 days after the service of an offer to proceed under paragraph (A), an offeree 
shall file a written notice of acceptance or rejection of the offer. 
(C) Extension. - The court may, upon motion by an offeree made prior to the expiration 
of the 10-day period specified in paragraph (B), extend the period for filling a written notice 
under such subsection for a period of not more than 60 days after the date of expiration of the 
period specified in paragraph (B). Discovery may be permitted during such period. 
SECTION 7. Uniform Standardsfor Award of Damages. - 
(A) General Rule. - Damages may, to the extent permitted by applicable law, be awarded 
against a defendant if the claimant establishes by clear and convincing evidence that conduct 
carried out by the defendant with a conscious, flagrant indifference to the rights or safety of 
others was the proximate cause of the harm that is the subject of the action in any product 
liability action. 
(B) Limitation on Amount. - The amount of damages that may be awarded in an action 
described in paragraph (A) may not exceed the greater of two (2) times the sum of the amount 
awarded to the claimant for economic loss and non-economic loss. 
(C) Exception for Insuf$cient Award in Cuses of Egregious Conduct. - 
(1) Determination by Court. - If the court makes a determination, after 
considering each of the factors in subparagraph (2) below, that the award of 
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damages is insufficient to punish the egregious conduct of the delendant 
against whom the punitive damages are to be awarded or to deter such 
conduct in the future, the court shall determine the additional amount of 
damages against the defendant in a separate proceeding in accordance with 
this paragraph. 
(2) Factors for Consideration. - In any proceeding instituted pursuant to this Act, 
the court shall consider - 
(a) The extent to which the defendant acted with actual malice; 
(b) The liltelihood that serious harm would arise from the conduct of the 
defendant; 
(c) The degree of the awareness of the defendant of that likelihood; 
(d) The profitability of the misconduct to the defendant; 
(e) The duration of the misconduct and any concurrent or subsequent 
concealment of the conduct by the defendant; 
(f) The attitude and conduct of the defendant upon the discovery of tbe 
misconduct and whether the misconduct has terminated; 
(g) The financial condition of the defendant; and 
(3) Requirements for Awarding Additional Amount. - If the court awards an 
additional amount pursuant to this subsection, the court shall state its reasons 
for setting the amount of the additional amount in findings of fact and 
conclusions of law. 
SECTION 8. Harm Resulting from Action of Employer or Co-employee. - I[, with 
respect to a product liability action that is subject to this Act, the manufacturer or product seller 
attempts to persuade the trier of fact that the harm lo the claimant, which incidentally took place 
in the workplace, was caused by the fault of the employer of the claimant or any co-employee of 
the claimant, the issue of that fault shall be submitted to the trier of fact, but only after the 
manufacturer or product seller has provided timely written notice to the insurer. 
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IT the trier of fact finds by clear and convincing evidence that the harm to the claimant 
that is the subject o f  the product liability action was caused by the fault of the employer or a co- 
employer o f  the claimant - 
(A) The court shall reduce by the amount of the claimant’s benefits the damages 
awarded against the manufacturer or product seller; and any corresponding insurer’s 
subrogation lien; and 
(B) The manufacturer or product seller shall have no further right by way of 
contribution or otherwise against the employer. 
SECTION 9. Separability Clause. 
~ 
If any provision or part hereof, is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
valid and subsisting. 
SECTION 10. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rnle or regulation contrary to or inconsistent 
with the provision of this. Act is hereby repealed, modified or amended accordingly. 
SECTION 11. Eflectivity Cluuse. - this Act shall tale effect fifteen (15) days after its 
publication in at least two (2) newspaper of general circulation. 
Approved, 
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