Risks and Preventions Related to Driving in China for Foreigners

As more and more foreigners come to China for employment, study, traffic accidents happened to foreigners are not rare. Especially, following with the new car using model, such as the time-sharing car, it is convenient for foreigners to drive a car without buying one, but new risks come.
Driving in China, for foreigners, there are 2 risks: (1) the risk related to driving; (2) the risk related to traffic accidents.
For the risk related to driving, firstly, many foreigners have a foreigner driver’s license, or an international driver’s license, but they have not applied for a China driver’s license. Since China has not acceded to the UNTC’s “Convention on Road Traffic”, foreigners should apply a China driver’s license, otherwise, they will be deemed as driving without a driver’s license. Under such circumstance, the driver would be punished with fines and even detention. If a traffic accident happened, the driver was determined to undertake main liabilities, and the accident resulting in severe injuries of one or more persons, then the driver would constitute a crime of traffic accident. (To be noted that if the driver is driving with a driver’s license, to constitute a crime, it requires the accident resulting in the death of one person, or severe injuries of more than 3 persons) In addition, the mandatory liability insurance and other commercial insurance would refuse to compensate, which means the driver shall undertake all the compensation. Secondly, if a foreigner has not solved a traffic accident completely, then the person might not be allowed to leave China. According to the “Civil Procedure Law” and other regulations related to road traffic accidents, despite a foreigner enjoys diplomatic privileges or diplomatic immunity, normally, if a foreigner is liable in a traffic accident, the public security authorities could prohibit the foreigner to leaver China until the accident has been solved completely. In view of this, if a foreigner is not familiar with the Chinese rules related to road traffic, it would be take a second thought on whether drive or note.
Although to encounter a traffic accident is rare, it would be better for foreigners to get to know the relevant rules related to compensation in China.
Article 44 of the “Law on Choice of Law for Foreign-related Civil Relationships “prescribes that the laws at the place of tort shall apply to liabilities for tort, but if the parties have a mutual habitual residence, the laws at the mutual habitual residence shall apply.
In view of this, normally, where a foreigner encounters a traffic accident, the compensation could be calculated in accordance with the Chinese laws and regulations. It should be noted that, according to Article 30 of the “Interpretation of the Supreme People’s Court of Some Issues concerning the Application of Law for the Trial of Cases on Compensation for Personal Injury”, where the compensation right holder could prove the urban per capita disposable income or the famer per capita net income in his domicile or habitual residence is higher than the standard of the court which the case is filed, then the higher standard could be applied. It seems that foreigners could ask for a compensation by applying the standard of their own country. However, there are different opinions on this. For example, Shanghai and Guangdong have pointed out that foreigners shall apply the standard of the court which the case is filed. For details, please check the “Notice of the High People’s Court of Shanghai Municipality on Distributing the “Answers to Some Questions concerning the Trial of Cases Involving the Indemnity for Injuries from Road Traffic Accidents”, and the “Opinions of the High People’s Court and Public Security Department of Guangdong Province on Several Issues in Dealing with the Road Traffic Accidents Cases after the Implementation of the ‘Road Traffic Safety Law’”. Zhejiang applies the standard of the court which the case is filed as well in the judicial practice. But Fujian has different opinion. The “Answers of Min Yi Ting of Fujian High People’s Court of Some Difficult Issues in the Trial of Cases on Compensation for Personal Injury” has pointed out that if a foreigner could prove he meets the requirements in Article 30 of the “Interpretation”, then the highest standard among all the cities in China could be applied. In view of this, a foreigner shall check the detailed rules and judicial practice rules of the place where the traffic accident happens.
However, when a traffic accident occurs between two foreigners, such as being of the same nationality as the Japanese or living abroad permanently in a foreign country, the claimant may claim the application of the foreign law in accordance with the foregoing provisions.
In addition, during the negotiation stage, both parties should think about Article 44 of the “Law Applicable to the Civil Relations Concerning Foreign Affairs”, which says both parties could agree on the applicable law. For example, if the victim could obtain the sympathy of the responsible party whose economic situation is good, then it is still possible obtain the consent of the responsible party to apply a higher standard.
Since negotiation and litigation might not bring a favorable compensation to foreigners, it is also recommended that foreigners could consider to adopt commercial insurance to reduce risks.