The government of south China's Guangdong Province is likely to
help local toy manufacturers file a lawsuit against the world's
biggest toy company, Mattel, for destroying their reputation, a top
official of the provincial fair trade bureau said yesterday.
Mattel recalled more than 21 million China-made toys from the
market this summer. But an investigation later showed 85 percent of
the products were recalled because of design flaws, for which the
US-based company apologized in September.
"The incident has stained the reputation of Chinese toy
manufacturers and made a large number toy factories in Guangdong
lose a great deal of money, even though Mattel has apologized to
China," Guangdong fair trade bureau director Chen Lipeng said.
"A simple apology cannot compensate for our losses," he said.
Chen is now in talks with American and Chinese lawyers on how to
file a suit against Mattel in a US court.
If a Guangdong toy company wants to sue Mattel, the bureau will
provide it legal assistance.
Hao Junbo, a lawyer with Beijing-based Lehman law firm, urged
domestic toy manufacturers to file a complaint against Mattel in a
US court because only by doing so they can redeem their losses.
But Chen said: "The plan is still under discussion because a lot
of preparatory work has to be done if we really need to file
charges against Mattel following US judicial procedures. I do not
know when a real suit can be filed."
A Lida Plastic Toy Co manager surnamed Xie said: "A lawsuit may
help us reclaim part of our loss resulting from Mattel's actions.
But it will be a long-term process. We prefer to resume our
business before filing any such case."
The Foshan-based company has been making toys for Mattel for a
long time and is the biggest victim of Mattel's recalls because it
has been forced to suspend production.
Since Mattel has already apologized, a lawsuit may necessarily
have to seek financial compensation.
The cumulative amount of compensation will probably run into
billions of dollars, said Chen Beiyuan, a senior lawyer in
Guangzhou-based Bohao Law Firm. Hence, the preparations have to be
foolproof.
(China Daily November 6, 2007)