SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
OCT -3 P5 :29 
SENATE 
S. No. 1795 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
Our people are excessively litigious. The 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, certainty, 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 user's, manufacturers, and product 
sellers . , 
• This bill was originally filed during the Thirteenth Congress, First Regular Session. 
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SIXTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
OCT -3 P5 :29 
SENATE" 
S. No. 1795 
Introduced by Senator Miriam Defensor Santiago 
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AN ACT 
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ESTABLISHING LEGAL STANDARDS AND PROCEDURES FOR PRODUCT LIABILITY 
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LITIGATION AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION I. Short Title. - This Act shall be known as the "Product Liability Act." 
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SECTION 2. Definitions of Terms. -For purposes of this Act, the term: 
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(A) 
"Actual malice" means specific intent to cause serious physical injury, illness, 
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disease, death, or damage to property; 
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(B) 
"Claimant" means any person who brings an action covered by this title and any 
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person whose behalf such an action is brought; If such an action is bought through or on behalf 
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of an estate, the term includes the claimant's decedent. If such an action is brought on behalf of a 
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minor or incompetent, the term includes the claimant's legal guardian. 
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(C) 
"Claimant's benefits" means the amount paid to an employee as worker's 
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compensation benefits; 
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(D) 
"Clear and convincing evidence" is that measure or degree of proof that will 
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produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegation 
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sought to be establish; it is the level of proof required to satisfy such standard is more than that 
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required under preponderance of the evidence, but less than that required for proof beyond a 
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reasonable doubt; 
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(E) 
"Commercial loss" means any loss or damage solely to a product itself, loss 
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relating to dispute over its value, or consequential economic loss; 
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(F) 
"Compensatory damages" means damages awarded for economic and non-
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economic loss; 
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(0) 
"Economic loss" means any pecuniary loss resulting from ham, including the loss 
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of earnings or other benefits related to employment, medical expense loss, replacement services 
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loss, loss due to death, burial costs, and loss of business or employment opportunities, to the 
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extent recovery for such loss is allowed under applicable laws; 
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(H) 
"Harm" means any physical injury, illness, disease, or death or damage to 
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property caused by a product. The term does not include commercial loss; 
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(I) 
(1) 
"Manufacturer" means: 
(1) 
(2) 
(3) 
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) 
(b) 
Designs or formulates the product or component part of the 
product; or 
Has engaged another person to design or formulate the product or 
component part of the product. 
A product seHer, but only with respect to those aspects of a product or 
component 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 formulate an aspect of the product or 
component part or the product made by another person; or 
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; 
"Non-economic loss" means subjective, non-monetary loss resulting from harm, 
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including pain, suffering, inconvenience, mental suffering, emotional distress, loss of society and 
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companionship, loss of consortium, injury to reputation, and humiliation; 
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(K) 
"Person" means any individual, corporation, company, association, firm, 
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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 
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caused by a product. 
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(M) 
"Product seller" means a person who in the course of a business conducted for 
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that purpose 
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(1) 
(2) 
Sells, distributes, rents, leases, prepares, blends, packages, labels, or 
othelwise is involved in placing a product in the stream of commerce; or 
Installs, repairs, refurbishes, reconditions, or maintains the harm-causing 
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aspect of the product. 
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The term does not include a seller or lessor of real property; a provider of professional 
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services in any case in which the sale or use of a product is incidental to the transaction and the 
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essence of the transaction is the furnishing of judgment, skill, or services; any person who acts in 
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only a financial capacity with respect to the sale or a product; or leases a product under a lease 
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arrangement in which the lessor does not initially select the leased product and does not during 
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the lease term ordinarily control the daily operations and maintenance of the product. 
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SECTION 3. Liability Rules Applicable to product Sellers and Manufacturers. -
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(A) 
In General. - In any product liability action, a product seller other than a 
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manufacturer shall be liable to a claimant only if the claimant establishes that -
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(1) 
(2) 
(3) 
The product that allegedly caused the harm that is the subject of the 
complaint was sold, rented, or leased by the product seller; 
The product seller failed to exercise reason\lble care with respect to the 
product; 
The failure to exercise reasonable care was a direct and proximate cause of 
harm to the claimant; 
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(B) 
(4) 
(5) 
(6) 
(7) 
The product seller made an express warranty applicable to the product that 
allegedly caused the harm that is the sU1:Jject of the complaint, independent 
of any express warranty made by a manufacturer as to the same product; 
The product failed to conform to the warranty; 
The failure of the product to conform to the warranty caused harm to the 
claimant; 
The product seller engaged in intention wrongdoing, as determined under 
applicable law; and such intentional wrongdoing was a direct and 
proximate cause of the ham that is the subject of the complaint. 
Reasonable Opportunity for Inspection. - A product seller shaH not be considered 
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to have failed to exercise reasonable care with respect to a product based upon an aHeged failure 
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to inspect the product if failure occurred because there was no reasonable opportunity to inspect 
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the product; or if the inspection, in the exercise of reasonable care, would not have revealed the 
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aspect of the product which allegedly caused the claimant's harm. 
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(C) 
Liability of Manufacturers. -The manufacturer of the product that caused harm to 
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the claimant shall be liable subsidiarily. In the event that the product seHer has no fault or that 
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the manufacturer's negligence is the direct and proximate cause of the harm done, the 
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manufacturer alone shaH be held liable. 
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SECTION 4. Defense Based on Claimants' Use of Intoxicating Alcohol or Drugs. - In . 
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any product liability action, it shaH be a complete defense to such action if-
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(A) 
The claimant was intoxicated or was under the influence of intoxicating alcohol or 
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any drug when the accident or other event which resulted in such claimant's harm occurred; and 
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(B) 
The claimant, as a result of the influence of the alcohol or drug, was more than 50 
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percent responsible for such accident or other event. 
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SECTION 5. Uniform Time Limitations on Liability. -
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(A) 
In General. - The product liability action may be filed not later than two (2) years 
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after the date on which the claimant discovered or, in the exercise of reasonable care, should 
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have discovered -
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(B) 
(I) 
(2) 
The harm that is the subject of the action; and 
The cause of the harm. 
Exception. - A person with a legal disability, as determined under applicable law, 
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may file a product liability action not later than two (2) years after the date on which the person 
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ceases to have the legal disability. 
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SECTION 6. Alternative Dispute Resolution Procedure. -
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(A) 
Service of Offer. - A claimant or a defendant in a product liability action may not 
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later than sixty (60) days after the service of the initial complaint; or the applicable deadline for a 
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responsive pleading; whichever is later, shall serve upon an adverse party an offer to proceed 
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pursuant to any voluntary, non-binding alternative dispute resolution procedure establish under 
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the rules of the cOUli in which such action is maintained. 
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(B) 
Written Notice of Acceptance or Rejection. - Except as provided in paragraph (C), 
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not later than ten (10) days after the service of an' offer to proceed under paragraph (A), an 
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offeree shall file a written notice of acceptance or rejection of the offer. 
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(C) 
Extension. - The court may, upon motion by an offeree made prior to the 
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expiration of the ten (10)-day period specified in paragraph (B), extend the period for fi11ing a 
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written notice under such subsection for a period of not more than sixty (60) days after the date 
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of expiration of the period specified in paragraph (B). Discovery may be permitted during such 
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period. 
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SECTION 7. Uniform Standards for Award of Damages. -
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(A) 
General Rule. - Damages may, to the extent permitted by applicable law, be 
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awarded against a defendant if the claimant establishes by clear and convincing evidence that 
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conduct carried out by the defendant with a conscious, flagrant indifference to the rights or safety 
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1 
of others was the proximate cause of the harm that is the subject of the action in any product 
2 
liability action. 
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(B) 
Limitation on Amount. - The amount of damages that may be awarded in an action 
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described in paragraph (A) may not exceed the greater of two (2) times the sum of the amount 
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awarded to the claimant for economic loss and non-economic loss. 
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(C) 
Exception for Insufficient Award in Cases of Egregious Conduct. -
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(1) 
(2) 
(3) 
Determination by Court. - If the court makes a determination, after 
considering each of the factors in subparagraph (2) below, that the award 
of damages is insufficient to punish the. egregious conduct of the 
defendant 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. 
Factors for Consideration. - In any proceeding instituted pursuant to this 
Act, the court shall consider -
(a) 
(b) 
(c) 
(d) 
(e) 
(f) 
(g) 
The extent to which the defendant acted with actual malice; 
The likelihood that serious harm would arise from the conduct of 
the defendant; 
The degree of the awareness of the defendant of that likelihood; 
The profitability of the misconduct to the defendant; 
The duration of the misconduct and any concurrent or subsequent 
concealment of the conduct by the defendant; 
The attitude and conduct of the defendant upon the discovery of 
the misconduct and whether the misconduct has terminated; and 
The financial condition of the defendant. 
Requirements for Awarding Additional Amount. - If the court awards an 
additional amount pursuant to this subsection, the court shall state its 
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reasons for setting the amount of the additional amount in findings of fact 
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and conclusions oflaw. 
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SECTION 8. Harm Resultingfrom Action of Employer or Co-employee. - If, with respect 
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to a product liability action that is subject to this Act, the manufacturer or product seller attempts 
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to persuade the trier of fact that the halm to the claimant, which incidentally took place in the 
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workplace, was caused by the fault of the employer of the claimant or any co-employee of the 
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claimant, the issue of that fault shall be sUbmitted to the trier of fact, but only after the 
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manufacturer or product seller has provided timely written notice to the insurer. 
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If the trier of fact finds by clear and convincing evidence that the harm to the claimant 
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that is the subject of the product liability action was caused by the fault of the employer or a co-
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employer of the claimant -
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(A) 
The court shall reduce by the amount of the claimant's benefits the damages 
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awarded against the manufacturer or product seller; and any corresponding insurer's subrogation 
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lien; and 
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(8) 
The manufacturer or product seller shall have no further right by way of 
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contribution or otherwise against the employer. 
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SECTION 9. Separability Clause. - If any provision or part thereof is held invalid or 
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unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
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valid and subsisting. 
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SECTION 10. Repealing Clause. - Any law, presidential decree or issuance, executive 
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order, letter of instruction, administrative order, rule, or regulation contrary to or inconsistent 
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with the provisions ofthis Act is hereby repealed, modified, or amended accordingly. 
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SECTION 11. EffectiVity Clause. - this Act shall tale effect fifteen (15) days after its 
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publication in at least two (2) newspaper of general circulation. 
Approved, 
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