Justice, efficiency and the new Civil Procedure Law
November 01, 2012 | BY
clpstaff &clp articles &The latest amendments to China's Civil Procedure Law are a response to the increase in civil and commercial litigation. In an exclusive analysis article for China Law & Practice, Ariel Ye and Yu Song assess what affect the amendments will have on case rejections, public interest litigation and the rights of litigants
On August 31 2012, the Standing Committee of the National's People Congress passed the revised PRC Civil Procedure Law (中华人民共和国民事诉讼法), which will come into effect on January 1 2013. This is the third revision of the Law since 1982, when a draft was first enacted as a trial. It was revised comprehensively in 1991 and partially in 2007.
The NPC Law Committee started its revision in 2010. The amendments respond to key problems in judicial practice which have emerged since the implementation of the last revision in 2007. In the past five years, professionals have called for improvements to civil procedure. In particular, the rights of litigants, clarifying the rules of evidence and strengthening adjudication supervision. The aim of the recent amendments is to institute procedures that have proven to be effective at addressing these kinds of concerns.
“The key policy objectives of the amendments are to provide justice while guaranteeing efficiency” |
The key policy objectives of the amendments are to provide justice while guaranteeing efficiency, in particular avoiding prolonged civil procedure resulting in so-called “delayed justice”. It also ensures the efficient use of judicial resources while respecting the procedural rights of the disputing parties. Finally, a key objective is to reinforce the courts' independence from the government and strengthen adjudication supervision by the People's Procuratorates.
|Improving efficiency
Since the last revision, China's economy has experienced another five years of rapid development. During that time, the number of first instance civil and commercial cases handled by the courts has also grown exponentially. In 2011, that number reached 4.9 million cases. Parties involved in civil and commercial disputes are now more willing than ever to turn to the courts for remedies. However, judicial resources remain limited and there is a lot of pressure for civil procedure legislation to perform.
Small claims simplified
The last revision first introduced summary procedure, offering small claimants a shorter and simpler process. However, substantial abuse of the right to appeal first instance judgments has obstructed claims processed using summary procedure. A large number of small claims judgments have been appealed, sometimes maliciously, and in some cases delaying the final judgment for over a year.
Justice delayed is justice denied. The new Law establishes that in a simple civil trial where the amount claimed is below 30% of the average annual salary of urban employees in the preceding year, the ruling in the first instance shall be final (Article 157).
Summary procedure avoids delays
In addition to small claims litigation, the latest revision expands the scope of summary procedure. The 2007 revision only allowed courts to decide whether to apply summary procedure, while the latest amendments allow parties to choose summary procedure if there is mutual consent. However, if the court deems summary procedure inappropriate, it may later revert to ordinary procedure.
In some commercial disputes where time is short, the right to choose summary procedure could eliminate damage caused by delays. It is unclear what criteria judges will use when reverting to ordinary procedure for cases. A wait and see approach will have to be employed to determine which cases are not suitable for summary procedure.
Learning to mediate
Article 122 of the new Law requires parties to first attempt mediation before filing a lawsuit. Parties must consent to this pre-filing mediation, so it does not interfere with their rights to initiate a lawsuit. In practice, this Article means that courts now have a legal basis to facilitate pre-filing mediation, if the parties are so inclined.
The recent amendments also allow parties to apply for judicial confirmation of a mediation agreement within 30 days of the agreement becoming effective (Article 194). This rule is expected to considerably encourage settlement, because it grants indisputable enforceability to a mediation agreement that has been judicially confirmed.
|Litigants' rights
Legal professionals have witnessed developments in protecting people's litigation rights over the past 20 years since the implementation of the Civil Procedure Law. Amendments to retrial and enforcement procedures made in 2007 represented a milestone in this regard. However, current pre-trial hearing and enforcement procedures still face a number of issues when it comes to litigants' rights.
Accepting claims
The courts' reluctance to accept certain cases has been widely criticised in the past. Typical examples are when a sensitive case is before the court, like a dispute involving a government agency as the defendant or when courts are under pressure to achieve a certain closed case rate at the end of each year. For these cases, the courts tend to become much stricter, especially during pro forma examination before accepting a claim. The fact that courts are often reluctant to deliver a written rejection for refusals makes the situation worse. The Law never required the courts to do so, leaving the claimants no basis to appeal, even when the decision not to accept was unfair.
Article 123 of the new Law may address this problem to a certain extent. Under this Article, the court must now issue a written ruling within seven days if it rejects a case filing against which an aggrieved claimant may appeal. This also gives practitioners a solid legal basis to request a written ruling when a court refuses and allows stricter supervision over court practice.
Interim relief expanded
Offering a more complete system of interim remedies, Chapter 9 of the new Law introduces the possibility of obtaining pre-suit or pre-judgment injunctions. In the 2007 revision, interim measures were only applicable to property, preventing the courts from restricting or prohibiting certain pre-suit or pre-judgment misconduct. But in many circumstances it is essential for claimants to obtain interim protection of interests other than property before the judgment is issued or before a claim has been filed. For example, a party whose trademark is infringed may need the court to prohibit the infringement pending judgment. In some cases the amount of damages awarded were higher because an interim injunction was not available to prevent the damage from occurring. The latest revision now explicitly provides that the court may order specific performance or prohibit certain conduct on its own initiative or upon the request of a party.
Third party cancellations allowed
As well as being unjust, malicious or artificial lawsuits can harm a third party's interests. A typical example is when a debtor has an associate sue against their property, which avoids enforcement by a genuine creditor. Using civil procedure to serve illegal purposes seriously undermines people's faith in the law.
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