Tortious Liability in China's Motorsports Industry

• Citation: Vol. 51 No. 1
• Publication year: 2022

Tortious Liability in China's Motorsports Industry

Dr. Jing Hui,^* Dr. Chen Gengzhao,^** and Sun Bing^***

Table of Contents

I. Background............................................................................................39

A. Factual Scenario.................................................................40
B. Legal Background...............................................................41

i. Regulatory Landscape of Motorsports in China...........41
ii. Regulating Sports Involving Inherent Risk...................42
iii. Article 1176 of the Civil Code......................................43
iv. Exemption Clause and Contract Law Issues................46

II. Legal Issues in Sports Injury Claims...............................................46

A. Organizers' Duty of Safety Protection in Organizing Mass Sports Events..............................................................47

i. legal Source.................................................................47
ii. Content of the Duty.......................................................48
iii. Adequate Medical Support as Part of the Duty of Safety Protection?.........................................................50
iv. Justification with Reference to the Reasonableness Test................................................................................52

B. Article 1176's Effect on Organizers' Duty of Safety Protection............................................................................52

i. Scope of "Risk" and Other Concepts in Article 1176..................................................................53
ii. Participants' Fault in Assessing Organizers' Duty of Safety Protection.......................................................55

C. Article 1176 Defense: Partial Exemption or Complete Exemption?..........................................................................56

i. The Academic Debate...................................................57
ii. VAR in the Context of Article 1176 Application...........59

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III. Australian Position...........................................................................61

A. Duty of Care........................................................................62

i. Common Law Source....................................................62
ii. Particular Content of the Duty of Care........................63

B. Defenses Available to Motorsports Organizers...................64

i. DRA Defense.................................................................65

a. Scope of "Recreational Activity "...........................66
b. Meaning of "Dangerous Recreational Activity "... 67
c. Materialization of Obvious Risk............................69
d. Risk Description in the Context of Motor Racing....................................................................73

ii. The Defense of Voluntary Assumption of Risk..............73

a. Nature and Scope of the Plaintiff's Knowledge.....75
b. Voluntary Acceptance of Risk................................78

IV. Implications from the Australian Experience.............................79

A. Application of the VAR Defense..........................................79
B. Resolving Uncertainties over the Application of Article 1176.........................................................................82

V. Conclusion............................................................................................84

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Abstract

In 2020, the Chinese Civil Code came into effect. Article 1176 of the code offers a statutory defense for those participating in "a recreational or sports activity carrying certain risk" when they cause injury to other participants. However, the Chinese Civil Code does not specify how or to what extent Article 1176 may be relied upon as a statutory defense in assessing the tortious liability of the organizers of such recreational or sports activities. The courts in China have long sought to develop a principled approach to applying the voluntary assumption of risk defense to such organizers. This Article provides a case study to examine how Article 1176 operates in the context of motor racing activities, identifying sources of uncertainty surrounding the application of the law. By reviewing how Australian law analyses the duty and liability of event organizers, this Article also identifies the strengths of the Australian approach and how it may inform Chinese law with respect to addressing the problems associated with Article 1176.

I. Background

This Article uses a case study to examine legal issues in tortious claims relating to motor racing activities. In the Zhejiang International Circuit case, a driver died in a car racing accident and the family attributed the death to the organizer's failure in exercising the duty of safety protection. The organizer attempted to rely on the exemption clause for exclusion of liability, claiming that the victim voluntarily assumed risks when participating in the car racing activity.¹ Specific issues arising from this case include whether the provision of adequate medical support and effective rescue should be deemed part of a sporting event organizer's legal duty and how to assess an organizer's liability in the context of tortious claims associated with dangerous sports activities.² Before Article 1176 of the Chinese Civil Code—China's version of the common law concept of voluntary assumption of risk (VAR)—came into effect in 2021, Chinese law lacked specific provisions for regulating inherently dangerous or highly competitive sports.³ Furthermore, Article 1176 only applies to the allocation of liability among participants in such sports; it does not consider whether the organizers of such sports events have fully

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discharged their duty of safety protection, nor what liability they should bear for their failure to do so. Against this background, this Article reviews a specific set of circumstances in which Article 1176 overlaps with an organizer's duty of safety protection. This Article identifies various uncertainties regarding the legal effect of the VAR defense under Article 1176. It also explores the insights and experience that Australian tort law defenses may provide for the potential reform of China's Article 1176 under similar circumstances.

This Article comprises five parts. The first section (Background) describes the factual scenario of the case in question and the issues that it raises. The second section (Legal Issues in Sports Injury Claims) evaluates whether the provision of adequate medical support and effective rescue should be considered part of an organizer's duty of safety protection and highlights areas of controversy surrounding the application of China's Article 1176. The third section (Australian Position) reviews how Australian tort law analyses an organizer's duty of care in the context of motorsports activities and the rationale for this approach. The fourth section (Implications of the Australian Experience) shows how Australia's approach could inform the development of Chinese tort law. The fifth section concludes the Article.

A. Factual Scenario

On November 22, 2018, during a track day at the Zhejiang International Circuit, a BMW M3 racing car crashed into cement piers inside the track.⁴ The impact rendered the driver unconscious.⁵ Two minutes later, rescue teams arrived; however, it was too late.⁶ The driver did not survive the incident.⁷ The organizer of the event claimed that the driver had been fully aware of the risks involved in motor racing and that it had fulfilled its legal obligation as organizer by conducting the rescue, and therefore did not bear any liability for the driver's death.⁸ As an additional defense, the organizer asserted that it could not be held liable according to the exemption clause in its contract with drivers.⁹ However, the family of the victim suspected that the protective wall involved in the crash did not meet

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the applicable safety standards and questioned whether staff were sufficiently trained and qualified to provide assistance.¹⁰ Moreover, they claimed that the driver's death resulted from the failure to provide immediate and effective rescue, as the rescuers' delay caused the "golden time" for survival to be missed.¹¹

The waiver signed by the driver mentioned neither medical support nor emergency rescue.¹² According to the written waiver, the victim had acknowledged that he understood the risks involved in motor racing. Although the waiver described multiple potential risks such as health conditions that could have impact on driving ability, driver's use of alcohol or substance abuse that could affect his judgment when utilizing equipment, and facilities provided by the circuit, the list was not exhaustive. This led to the key issue of this case: whether the victim could have foreseen the organizer's negligence in failing to provide timely and effective rescue in a sports activity that could potentially lead to participants' personal injury or death, or whether the organizer should be able to claim exemption from liability on the grounds that the victim had voluntarily assumed the risk of injury or death when participating in the activity.

Similar incidents have drawn public attention to China's emerging motor racing industry, and tort claims arising from personal injuries sustained by participants in dangerous sports activities have spurred ongoing debate. This Article discusses the legal issues related to such sports injury claims in China, specifically in the motor racing industry, and draws implications for the future development of the law via a case study.

B. Legal Background

i. Regulatory Landscape of Motorsports in China

In general, motor racing events are divided into the following two categories: competitive activities, which aim at setting new records and creating new winners, and mass activities, in which participants engage merely for relaxation and enjoyment.¹³ However, this division is...