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)
