Litigation In China Research Articles

Abusive litigation in China: comparative insights and practical approaches for reform

This article provides a comprehensive examination of abusive litigation in both civil and criminal cases in China, focusing on its forms and impacts. It proposes nuanced regulatory approaches that emphasize the importance of identifying responsible parties and implementing appropriate compensation measures. In the Chinese legal system, abusive litigation varies by context. In civil cases, it often manifests as actions that clog the courts and drain legal resources, raising concerns about lawyer accountability and the financial burdens on victims. Although frequently discussed in Chinese literature, the above topic has seen limited comparative analysis, despite similar problems existing across different jurisdictions and a clear need for mutual learning. The article suggests that, in civil cases, insights from English and Dutch law could assist Chinese regulators in reducing incentives for lawyers to pursue unmeritorious or abusive cases and improving compensation for victims. In the criminal law context, abusive litigation is more prevalent in minor offenses in China, primarily due to issues related to the public power structure. The proposal emphasizes the need to optimize power distribution within the Chinese legal system, thereby safeguarding the integrity of the law and upholding human rights.

Can information transparency strengthen authoritarian accountability? An empirical study of open-government-information litigation in China (2008–2018)

China’s 2008 national regulation on open government information (OGI) triggered a new wave of administrative litigation against governments calling for their release of classified information. Many scholars have debated the effects of OGI regulation and litigation on government accountability. Thus, this study examines 19,076 first instance OGI cases from 2008 to 2018 and proposes a typology of accountbility to explore whether and how information transparency can strengthen authoritarian accountability in China. The data suggests that information transparency boosts the amount of litigation and increases the plaintiffs’ winning rates against the state, which seems to fit the conventional-wisdom However, the interpretation of such patterns needs to incorporate two contingent conditions. First, China’s OGO litigation centers around urbanization-related disputes, such as housing demolition and land acquisition. The data futher reveals that urbanization stimulates OGI litigation but decreases the plaintiffs’ winning rates, and information transparency also has no impacts or even negative association with their winning rates, suggesting that OGI litigation mainly serves as a channel to release public grievances (as pressure-releasing accountbility). Second, our data also shows that plaintiffs’ winning rates are much higher when citing procedural clauses than content clauses in the OGI Regulation, suggesting authoritarian accountability is more procedural than substantive. Our findings offer a nuanced discussion on authoritarian information governance and accountability.

Royalty rate determination in standard essential patent litigation in China - from regional rate to global rate

Standard essential patent (SEP)-related disputes frequently involve parallel litigation cases in various jurisdictions in the world. With the rapid advancement of the telecommunication industry, Chinese companies are more and more embroiled in such global dispute, particularly with the issue of fair, reasonable, and non-discriminatory (FRAND) rate determination by the courts. Chinese courts are actively asserting jurisdiction over global FRAND disputes. It is important to note that within the framework of Chinese court practice, the court should further improve its trial procedures to ensure that parties have reasonable expectations regarding rate determination result on the merits and the procedural due process. This article reviews the judicial practice in China regarding the cases of FRAND rate dispute, summarizing the characteristics and recent development in the court practice. The article outlines how Chinese courts apply comparable license and top-down approach to calculate the FRAND rate. Notably, Chinese courts have taken a more flexible and pragmatic approach when addressing this issue, tailoring their decisions based on the circumstances in individual case. Additionally, it discusses the possibility of Article 24 in the Judicial Interpretation II as the legal basis for determining the global FRAND rate, as well as how the requirement for good-faith negotiation is interpreted by the court and whether the regional discount is reasonable in the context of the global FRAND rate. Consequently, the article argues that the courts should consider harmonizing its practice with prevailing norms in international jurisdictions. Several recommendations for optimizing the trial procedure also proposed, thereby ensuring scientific rigor and transparency of the rate calculation.

Revisiting the stock market reactions to the private securities litigation against informational misconducts in China

The recently revised Securities Law in December 2019 and subsequent judicial interpretations issued by the Supreme People's Court (SPC) improved the efficiency of private securities litigation in China. Such a milestone legal reform is also reflected by Chinese courts awarding historically high amount of damages to aggrieved investors. These events are used as the sources of exogenous shocks to both de jure and de facto private enforcement intensity, and the stock market reactions to these events are examined. To control for potential self-selection bias, a sample of “culpable” listed companies is employed. Our sample companies react most significantly to the first game-changing court decision in “Wuyang Judgment”, in which the defendants were ordered to pay more than 1 billion damages. Such effects are observed in addition to the previous changes of “on-the-book” laws of private securities litigation. Finally, the magnitude of the estimated abnormal return is positively correlated with the local judiciary quality proxied by the percentage of cases disclosed, which suggests that the market expects that listed companies in regions with high-quality adjudication should be liable to pay higher damages.

The anti-suit injunctions in patent litigation in China: what role for judicial self-restraint?

Abstract Starting from 2020, the Chinese courts have actively participated in the jurisdictional battles for the standard essential patent (SEP) disputes, a pivotal development marked by the Supreme People’s Court’s inaugural SEP-related anti-suit injunction (ASI) in Huawei v Conversant. Subsequently, lower courts in China have emulated this approach by issuing ASIs targeting SEPs in the domain of information and communication technology. The present study highlights the features of the Chinese ‘act preservation measures’ by comparing them with the typical ASIs originally developed in the common law jurisdictions. This comparison reveals significant divergence in the factors considered by Chinese courts issuing ASIs, particularly in the context of cross-border patent litigation. The study aims at elucidating potential defenses that the respondents in SEP litigation may employ to contest the issuance of ASIs in Chinese judicial proceedings, with particular attention accorded to the principles of comity and public interest. The article concludes that the invocation of international comity and public interest in SEP litigation will encounter a formalistic assessment by the Chinese judiciary due to potential conflicts with statutory provisions and the lack of a more context-specific analysis. As a result, in the absence of supra-national mechanisms that would address the problem of parallel litigation, there appears to be little room for judicial self-restraint.

A critical examination of environmental public interest litigation in China - reflection on China’s environmental authoritarianism

Environmental public interest litigation is an innovative legal mechanism for humanity to address environmental crises. It not only addresses the tragedy of the commons in environmental crises but also serves as a crucial means for protecting the rights of environmentally vulnerable groups and upholding environmental justice. Over the past decade, the development of China’s environmental public interest litigation system has been promising. Thousands of such cases are filed each year, making a significant contribution to curbing the further deterioration of China’s environmental crisis. However, China still does not allow individual citizens to initiate environmental public interest litigation, and there are significant hurdles for environmental NGOs to file such lawsuits. As a result, the vast majority of environmental public interest litigation cases in China are initiated by procuratorates, which appears to be another important manifestation of China’s environmental authoritarianism. This institutional setup severely restricts the ability of China’s environmental vulnerable groups to protect their rights and masks many environmental issues that truly need improvement, hindering the realization of environmental justice. From a comparative perspective, compared to countries like the United States with more mature experiences in environmental public interest litigation, China’s system suffers from narrow subject qualifications, extensive restrictions on environmental NGOs, and excessive litigation costs. Even compared to India, another developing country, China’s environmental public interest litigation system appears conservative. Therefore, China’s environmental public interest litigation system urgently needs further reform and improvement.

Reforming private securities litigation in China: Does private enforcement by minority shareholders matter to corporate fraud?

Leveraging the pilot initiative on the diversified resolution mechanism for private securities litigation in China, our study explores the impact of private securities litigation by minority shareholders on corporate fraud. Employing a difference-in-differences analysis over the period 2010–2018, we observe a substantial reduction of 16.4 % in corporate fraud. This effect is particularly pronounced in companies with political connections and those characterized by weaker internal governance structures. Further analysis indicates a diminishing gap in corporate fraud between pilot and non-pilot firms after the nationwide expansion of the pilot program. These findings carry significant policy implications, particularly for emerging markets seeking to enhance protection for minority shareholders.

An empirical study of marine environmental civil public-interest litigation in China: Based on 216 cases from 2015 through 2022

This article examines marine environmental civil public-interest litigation landscape in China based on a comprehensive empirical study of 216 cases adjudicated from 2015 through 2022. Marine environmental civil public-interest litigation is under robust development in China with the number of cases increasing and high-profile cases emerging. Many cases were built upon related criminal and administrative proceedings and the procuratorate, as a qualified plaintiff, has led in initiating litigation. The liability system is maturing with flexible remedies and a high plaintiff win rate. First-instance judgments were rendered effectively and alternative dispute resolution was used. Besides the notable progress deserving attention, there are still several obstacles yet to be overcome, such as the divergence in the categorization of cases, the application of law and the attitude towards the standing of environmental NGOs. Besides, the number of cases initiated by marine environmental supervision and management departments is relatively small and jurisdictional matters also need to be further clarified. A feasible approach to overcome these obstacles is to come up with a set of systematic and coordinated rules in this field either by releasing specialized judicial interpretations on marine environmental public-interest litigation or by revising the existing Marine Environmental Protection Law when appropriate. By this means, it could potentially optimize the system of marine environmental civil public-interest litigation and enhance its efficacy in protecting the marine environment and resources.

Statute of limitations rules in patent infringement litigation in China

Abstract This article examines the statute of limitations applicable to patent infringement actions in China, highlighting open questions that will require legislative and judicial clarification over the coming years. In 2020, the fourth amendment to the Chinese Patent Law introduced a 3-year limitation period, resolving the pre-existing discrepancy with the Civil Code. However, several issues remain open to interpretation and in need of further clarification. These include the commencement of the limitation period, proof of actual or constructive knowledge of the infringement and of the identity of the infringer(s) and the applicable statute of limitations for acts of infringement occurred before the 2020 amendment.

Administrative Litigation in China: Assessing the Chief Officials’ Appearance System

Abstract The Chief Officials’ Appearance System (COAS), introduced in 2015, requires government leaders to appear in court and explain their actions. Unlike other post-2014 legal reforms aimed at reducing political influence in administrative litigation, the COAS uniquely actively involves political officials. This approach is based on the belief that increased participation will help officials to gain a better understanding of public concerns and improve administrative litigation quality. However, few studies have examined the system's effectiveness, and existing research relies on anecdotal evidence with limited analysis. To address this gap, we conducted a systematic empirical inquiry using 1,551 administrative litigation cases filed in a Beijing local court and extensive field research in 12 other provinces. Contrary to official expectations, we found the system reproduced the administrative grievances it was tasked with resolving. Moreover, when chief officials appear in court, administrative litigation is characterized by a renewed triad of apathetic state agencies, increasingly agitated plaintiffs and strategically empowered courts.

Application of information technology in judicial field: The development model of online litigation in China

Applying communication technology to the judicial field can improve litigation efficiency and reduce judicial costs, which is the direction of judicial system development. China's online litigation has achieved rapid development in recent years, establishing a nationwide unified online litigation platform and putting it into practical operation. However, it also faces some questions and challenges. This article analyzes the construction mode of China's online litigation platform “Mobile Micro Court” and the fairness of access to the online court based on its actual operation. This article argues that when building online litigation platforms and setting up online litigation rules, it is necessary to adhere to the parties-oriented approach, making it the primary goal of online litigation to facilitate access to justice and prevent online litigation from being alienated as a tool for courts to improve work efficiency. The analysis of the development model of online litigation in China can provide a reference for other countries to develop online litigation systems.Online litigation; Access to justice; Information technology; Mobile micro court; Parties-oriented

The requirements for filing a consumer public interest litigation in China

The requirements for filing a consumer public interest litigation in China

The dilemma and improvement of anti-suit injunctions in standard-essential patent litigation in China

Allocating jurisdiction and harmonizing anti-suit injunctions (ASIs) in concurrent litigation is a challenging task due to the complex and transnational nature of standard essential patent (SEP) licensing concerns. Notably, in the case of Huawei v. Conversant, the supreme people's court (SPC) of China demonstrated ingenuity by applying the act preservation system to issue the country's first ASI. This was done using a “five-factor framework” that considered the fairness and necessity of preservation measures, the parties’ interests, the public interest, and international comity. Chinese courts have subsequently utilized this framework in several cases to issue ASIs with more extensive and varied scopes. This shift indicates China's transition from a passive recipient to an active participant in ASI matters. Nevertheless, it is important to note that China lacks a legal foundation that explicitly permits the use of ASIs, necessitating further clarification regarding their circumstances of application.This article argues that directly applying the act preservation system to the ASI system lacks sufficient justification or may be constrained by the law, thereby granting judges greater discretion. By comparing Chinese ASI with traditional Western ASI, it becomes apparent that the impact of act preservation does not extend to international litigation and is more akin to an “injunction,” restricting the parties’ tort. Consequently, China should adopt a construction model of the act preservation system, incorporating the guiding principles of the ASI system, as well as the supporting appeal and retrial system, into its Civil Procedure Law. Additionally, providing judicial interpretation to elucidate the specific conditions for ASI application would be beneficial. These efforts have the potential to foster the development of a more predictable and stable international patent system. This, in turn, would benefit both patent owners and implementers, promote innovation, and facilitate global economic development.

Board gender diversity and corporate litigation: evidence from China

PurposeThis study aims to examine the effect of board gender diversity on corporate litigation in China’s listed firms. The key questions this study addresses are: what are the effect of board gender diversity on corporate litigation in terms of both the frequency and severity of consequence, is there any heterogeneous effects of the relationships across firm performance?Design/methodology/approachA sample consists of 25,668 firm-year observations from over 3,340 firms is examined using logistic regression analysis and negative binomial regression analysis. The authors also use event study method and ordinary least square (OLS) regression to explore female directors’ effects on reducing the negative consequences of litigation. The logistic regression and OLS regression are reestimated with interaction terms when examining the firm performance heterogeneity.FindingsThe authors document that firms with greater female representation on their boards experience fewer and less severe corporate litigations. Moreover, in high-performing firms, board gender diversity plays a more potent role in reducing the frequency and consequences of corporate litigation than low-performing firms.Originality/valueThis study is among the first to examine the relationship between board gender diversity and the comprehensive corporate litigations under Chinese context. It sheds new light on China’s boardroom dynamics, offering valuable empirical implication to Chinese corporate policymakers on the role of female directors.

Protecting the Habitats of Endangered Species Through Environmental Public Interest Litigation in China: Lessons Learned from Peafowl Versus the Dam

Abstract Green Peafowl stands as a landmark lawsuit in China where environmental NGOs successfully halted a project threatening habitat of endangered species. By examining this case, this analysis evaluates the promise and limitations of China’s civil environmental public interest litigation (EPIL) in protecting habitat. Under civil EPIL’s broad and flexible framework, environmental NGOs can convince the courts that a government-approved project would destroy the ‘biological habitat’ for endangered species and hold project developers accountable. By arguing that the environmental impact assessment (EIA) institution is jointly liable by preparing a flawed report, environmental NGOs can also use civil EPIL as an alternative avenue to challenge the quality of an approved EIA report. However, the timing of judicial intervention, uncertainties of litigation outcomes, the scope of protection, and the court’s attitude towards EIA claims limit the effectiveness of civil EPIL. This analysis highlights the need to address regulatory failures revealed by Green Peafowl.

Demystifying China’s trade secrets law in action: a statistical analysis

This article attempts to conduct a detailed empirical study on trade secrets litigation in China. In a nutshell, using 33 coding criteria, this article studied 2810 judicial documents published between 2013 and 2021 related to trade secrets litigation. Of the 2810 documents, 745 concerned substantive trade secret issues, with 885 trade secret claims addressed by Chinese courts. The article mainly aims to fill two research gaps in the current literature. First, it is unclear whether, during the past two decades, China indeed provided inadequate trade secrets protection in practice because of its ‘defective’ statutes, as alleged by the US government. Empirical evidence is needed to test whether the previous US criticisms conformed with the working situation of China’s trade secrets litigation. Second, the enforcement level of trade secrets law in books in China remains a myth. The argument that China has adopted a strict trade secret law in books similar to the US has little practical value if China did not enforce the trade secrets law in practice. Empirical evidence is required to demystify the enforcement situation of trade secrets law. This article, thus, fills these two gaps by presenting empirical findings on trade secrets litigation from 2013 to 2021 in China.

Developing Chinese Private International Law for Transnational Civil and Commercial Litigation: The 2024 New Chinese Civil Procedure Law

On 1 September 2023, the Standing Committee of the National People’s Congress amended the Chinese Civil Procedure Law which will come into effect on 1 January 2024 (‘the 2024 CPL’). The 2024 CPL brings significant changes to the entire procedure of transnational civil and commercial litigation in China covering jurisdiction, service of process, the taking of evidence abroad, and the recognition and enforcement of foreign judgments. It is critical for foreign states, courts, and parties which conduct business in China to understand this new legal development and to prepare for the changes. Adopting comparative-law and empirical research methods, this commentary aims to explain the new provisions for transnational civil litigation in the 2024 CPL and how they may be implemented in practice.

Development dilemma and solutions to online civil litigation in China: Kyrgyzstan experience

Development dilemma and solutions to online civil litigation in China: Kyrgyzstan experience

Punitive damages in consumer public interest litigation in China: an empirical study

With litigation socialisation development, an increasing number of civil litigation cases have taken on social functions. Against this background, a punitive damages system involving social interests has developed. Since the implementation of China’s consumer public interest litigation system in 2013, the number of cases involving punitive damages filed by procuratorates or consumer associations has steadily increased. These cases have mainly concerned the fields of food and medicinal product consumption. Regarding punishment and deterrence, Chinese judges generally hold a positive attitude towards a plaintiff’s request for punitive damages, which has no obvious correlation with plaintiff type, consumption type, or claim scale. In China, the calculation of punitive damages is related to the consumption field involved in the case. Most judges determine punitive damages in fields of food and medicinal product consumption as ten times the defendant’s total sales amount, and in the general consumption field, three times the defendant’s sales amount, but some judges choose to decide the specific amount at their discretion to avoid excessive punishment and ensure that damages are paid. Additionally, most judges believe that there is no relationship between punitive damages and administrative or criminal fines, or they only consider the defendant’s criminal or administrative punishment as a discretionary circumstance for determining punitive damages. Only a few judges believe that there is a correlation among the three, and advocate punitive damages and administrative or criminal fines to offset each other. Chinese judges have two main tendencies in judging the ownership and management of punitive damages; that is, punitive damages are handed over to the state treasury or allocated to special accounts. In view of judges’ understanding of the social attributes of punitive damages and the influence of the guidance of national documents in recent years, allocating punitive damages to special accounts for safekeeping and use, is becoming a growing trend.

A Cross-Country Examination: Administrative Litigation in China and Romania

Background: In this article, we have analysed the way in which the balance between public interest and private interest is achieved in administrative litigation in Romania and China. The research aims to highlight the distinct ways of solving the specific problems of this legal institution by the legislator and capitalise on the positive aspects.Methods: The article uses the historical method of analysing the evolution of administrative litigation in the two countries diachronically and the comparative method that explains the similarities and differences existing at the regulatory level in the two systems. The comparison will be based on the law that regulates administrative litigation in each state and on doctrinal and jurisprudential interpretations. Results and Conclusions: Despite adopting the first administrative litigation law in China in 1989, and Romania in 1990 after the r evolution of 1989 and the return to democracy, both countries have made remarkable progress in the last decades. This progress provides assurance for the protection of fundamental human rights in the adoption of administrative decisions and their subsequent judicial control.