You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

August 19, 2016

Product Liability: Recalls and Business Impact

Bangkok Post, Corporate Counsellor Column

A number of well-known companies have recently recalled their products from the market to fix problems or defects. Whenever a recall occurs, business suffers. First, there is the cost of implementing the recall. Second, the company’s reputation is damaged. Both of these factors result in a decreased volume of product sales.

To successfully navigate these pitfalls, companies should be aware of their legal rights and obligations. Thailand’s main laws governing product recalls are the Consumer Protection Act, the Consumer Case Procedure Act, and the Product Liability Act which is officially known as the Liability for Damages Arising from Unsafe Products Act.

Product recalls can be broadly grouped into two categories: voluntary recalls and compulsory recalls. As the name implies, voluntary recalls involve a seller or manufacturer willingly taking the products back. Compulsory recalls involve government entities forcing the seller or manufacturer to recall a product. This article discusses both types of recalls.

Voluntary Recalls

If a manufacturer or seller finds that their products have a problem or defect, they may initiate a recall to resolve the issue. They have a number of options to recall the products. This includes issuing a general announcement to the public and their customers advising on the recall, or issuing a letter directly to their customers asking them to bring the product in to be fixed.

If the defect is minor, and not too many products were sold, the seller can usually ask its customers to bring the product in to be fixed during a stated period. However, the expenses to fix the product will usually be absorbed by the manufacturers or the sellers if the products clearly show the defect because of a production or design flaw. In some circumstances, the product may have deteriorated faster than the warranty period because of customer use. In this case, some manufacturers or sellers ask customers to be responsible for paying some of the expenses to fix the products (e.g., the labor costs).

Whether to voluntarily recall products also depends on the manufacturers’ or sellers’ policies and other factors such as the market situation, a company’s budget, the image of the product, and the potential business impact. In general, a voluntary recall shows the manufacturers’ or sellers’ good faith. A manufacturer or seller is voluntarily taking their products out of the market because of a possible issue, even though the public may not be aware of the defect. Indeed, a voluntary recall generally paints the seller in a more positive light than sellers who are forced to recall goods under a compulsory recall.

Compulsory Recalls

Under Thailand’s Consumer Protection Act, Consumer Case Procedure Act, and Product Liability Act, if consumers find that the products they have purchased are unsafe, they can lodge a complaint with the Consumer Protection Bureau (CPB). They can also file a court case. In general, a potentially liable party under the law can be any individual or entity that manufactures (or authorizes the manufacturing of); assembles; imports (including any seller of goods where the manufacturer, hirer, or importer cannot be identified); uses the name, trade name, trade mark, or statements; or acts in any manner that can cause them to be seen as a manufacturer, hirer, or importer; and who sold goods after February 20, 2009 (the effective date of the Product Liability Act).

In addition, the Product Liability Act defines a “product” as any kind of tangible good that has been manufactured or imported for sale, including agricultural products and electricity, but excluding those ruled out by the ministerial regulations. Real estate and services are excluded. Therefore, real estate buyers are protected by the Civil and Commercial Code or the Consumer Protection Act.

The Product Liability Act defines “unsafe products” as being any product that actually causes or may cause damage or injury due to a manufacturing defect, design defect, lack of clear warning, instruction or other information about usage, and/or maintenance or preservation of the product.

Consequently, if any unsafe product causes damage or injury to a consumer who purchased it, regardless of whether the damage was caused intentionally or negligently by the potentially liable party, every potentially liable party will be jointly liable for the damages sustained by the consumer, with few exceptions.

Under the law, plaintiffs only need to prove that they were damaged or injured by the potentially liable party’s product, and that they had used and maintained the product properly. The plaintiff does not need to prove which potentially liable party caused the damage or injury.

If a consumer lodges a complaint to the CPB, the CPB will investigate and give both parties the chance to present evidence. If the alleged defect is related to a technical problem, the CPB will appoint an expert to consider the evidence. The expert will conduct product tests. The manufacturer or seller must absorb the costs for these tests.

If, after an investigation, the CPB finds that the product is an “unsafe product” under the law, the CPB will issue an order to force the manufacturer or seller to stop selling the product within a specific time period until they can prove that the products are not unsafe. The CPB has a policy to encourage both parties to negotiate and settle if the CPB considers that the problem is minor. The CPB may also state some additional conditions to the manufacturer or seller such as proving that the minor defect is not dangerous to consumers, etc.

If a consumer party files a lawsuit, the court fees are waived. If the court determines that the consumer party was damaged by an unsafe product, it will award damages which are not restricted to those damages stated in the Civil and Commercial Code. The court is entitled to consider other forms of compensation that are unusual in Thai law, such as damages for mental pain and suffering, etc.

In addition, the courts can order business operators to recall, destroy, or cease selling any unsafe product if the business operator fails to proceed with requirements under the law. The court may also impose conditions for those measures, such as a specific period to recall, a specific model of a product to recall, etc.

Given the potentially huge negative business impacts associated with recalls, business operators should ensure that they have in place robust quality-control measures for their production processes and their products.

RELATED INSIGHTS​ 

August 6, 2026
Every month, VAT-registered businesses in Thailand calculate their output and input VAT and file a return to pay the net amount due or claim a refund. Yet a common and costly dispute arises when a business that has paid input VAT to its supplier—and done everything asked of it—later finds that input VAT rejected on the grounds that the tax invoice was issued by “a person not entitled to issue tax invoices.” In these cases, a buyer may have confirmed the supplier’s VAT registration on the Revenue Department’s website, paid through the banking system, received a complete tax invoice, and kept full payment and inventory records. Even so, if the Revenue Department later determines that the supplier did not genuinely make the sale or collected the VAT without remitting it, the department can disallow the input VAT and assess additional tax, surcharge, and penalty—often more than a year after the transaction. A new article from tax and dispute resolution specialists at Tilleke & Gibbins in Bangkok examines how the Revenue Department and the courts approach these disputes, including two recent Supreme Court (Tax Division) decisions confirming that the taxpayer bears the burden of proving a supplier genuinely sold and delivered the goods and received payment. It considers why the VAT registration system offers no legal safe harbor, why the evidentiary burden falls hardest on online and cross-border transactions where buyers and sellers never meet, and how the Revenue Department’s own digital infrastructure could detect non-remitting suppliers at the source rather than shifting the loss to good-faith buyers. The article also sets out practical guidance: how to build a comprehensive “know-your-supplier” file at the time of a transaction, the procedural steps and strict deadlines for challenging a VAT assessment, and why dispute readiness belongs alongside tax planning at the center
June 29, 2026
Thailand’s cabinet has approved the draft Act on Liability for Defective Goods, commonly called Thailand’s “Lemon Law.” The Draft Act is currently pending consideration by Parliament. The draft law aims to strengthen buyers’ position in pursuing cases against sellers. While the Civil and Commercial Code offers provisions governing liability for defective goods, it is difficult in practice for buyers to successfully make a claim against sellers, particularly where defects are latent and not discoverable at the time of sale or delivery. By introducing product-specific rules and clearer remedies, the new law is intended to modernize Thailand’s consumer protection framework and align it more closely with international standards, and to help relieve the buyer’s burden of proof against the seller in product liability cases. If enacted, the draft act will take effect 180 days after publication in the Government Gazette, giving businesses a transition period to assess their compliance obligations. This article provides an overview of the key provisions of the draft act and highlights some practical considerations for businesses operating in Thailand. Scope and Key Definitions The draft act applies to sellers—defined as persons who sell goods in the ordinary course of business—and protects buyers, a term defined broadly to include not just the original purchaser but also transferees and successors in title. This expands the class of people who can bring claims. The law does not apply to used goods, live animals, or goods exempted by future ministerial regulation. It also leaves intact any separate warranties, promises, advertisements, or other guarantees a seller has given; those remain enforceable alongside the new statutory rights. General Liability for Defective Goods Sellers are liable for defects that exist at the time of delivery, regardless of whether the seller knew about them. Liability arises where a defect reduces: The benefit intended under
June 22, 2026
Arbitrator independence and impartiality form the cornerstone of a legitimate arbitral process. Under section 19 of the Thai Arbitration Act B.E. 2545 (2002), prospective arbitrators must disclose circumstances likely to give rise to justifiable doubts as to their impartiality or independence, and existing arbitrators must do so throughout proceedings. This mirrors article 12 of the UNCITRAL Model Law. Yet despite this clear mandate, practical implementation varies significantly across Thailand’s arbitration landscape. Background Thailand’s two principal arbitration institutions, the Thai Arbitration Institute (TAI) and the Thailand Arbitration Center (THAC), both maintain procedures for addressing arbitrator challenges and require compliance with the statutory disclosure obligation. Under both sets of rules, any party wishing to challenge an arbitrator must submit a challenge application within fifteen days of becoming aware of the relevant facts, and a committee is appointed to consider the matter on a case-by-case basis. The TAI additionally prescribes its Code of Ethics and Conduct for Arbitrators to further emphasize the expectation of impartiality and transparency. However, Thailand’s arbitration ecosystem extends well beyond the TAI and THAC. Several sector-specific institutions also administer arbitral proceedings, including the Thai Commercial Arbitration Office under the Board of Trade of Thailand, the Arbitration Centre of the Office of the Insurance Commission, the Arbitration Centre of the Securities and Exchange Commission, the Office for the Prevention and Resolution of Disputes regarding Intellectual Property, and the Arbitration Centre of the Thai General Insurance Association. These institutions each operate under their own procedural rules, which were developed to serve particular industries and dispute profiles. The procedural mechanisms for securing and documenting an independence declaration are not uniformly established across these forums. Consequences of Procedural Inconsistency This creates a notable gap. Not all arbitration bodies have a formalized procedure requiring written independence statements before proceedings commence. Some tribunals proceed
June 16, 2026
The president of Thailand’s Supreme Court has issued new recommendations providing courts with criminal jurisdiction with a comprehensive framework for identifying and dismissing criminal cases brought in bad faith. Published in the Government Gazette on May 29, 2026, after being signed on May 25, the Recommendations of the President of the Supreme Court Concerning Bad-Faith Litigation in Criminal Cases B.E. 2569 were issued under Section 5 of the Act on the Organization of Courts of Justice. The recommendations took effect upon publication and represent a significant step in Thailand’s efforts to curb abusive criminal litigation, including strategic lawsuits against public participation (SLAPP). Background Section 161/1 of Thailand’s Criminal Procedure Code empowers courts to dismiss criminal cases filed dishonestly or with the intent to harass or take unfair advantage of a defendant. The new recommendations provide detailed guidance that courts previously lacked on identifying and handling such prosecutions. Definition of Bad-Faith Litigation Under recommendation 1, filing a criminal case in bad faith is defined broadly to encompass three categories: Harassment-type filings involving intimidation, threats, or creating unreasonable hardship for the defendant; Coercive filings designed to pressure the defendant into acting or refraining from acting for illegitimate benefit; and False or misleading filings that deliberately assert incorrect material facts or conceal such facts. Circumstances Indicating Bad Faith Recommendation 2 sets out specific circumstances that should raise a court’s suspicion that a filing may violate section 161/1. These include: Filing in a distant court far from the defendant’s domicile without benefiting the adjudication; Retaliation against the defendant’s advocacy for human rights, environmental protection, consumer rights, labor rights, or other public interests—effectively establishing an express anti-SLAPP framework; Retaliation against whistleblowers who disclosed corruption or unlawful conduct; Retaliation against individuals responsible for investigating the plaintiff’s wrongdoing or who concluded such an investigation; Filing multiple