Collective Redress & Class Actions 2022

Last Updated November 08, 2022

China

Law and Practice

Authors



King & Wood Mallesons (KWM) is an international law firm able to practise in the PRC, Hong Kong SAR, Australia, UK, USA and a significant range of European nations. Its presence and resources in the world’s most dynamic economies is profound. Leveraging its exceptional legal expertise and depth of knowledge in the China market, the firm advises Chinese and overseas clients on a full range of domestic and cross-border transactions, providing comprehensive legal services. In the field of securities disputes, KWM’s securities litigation team participated in the Jinzhou Port case, the Wuliangye case, the Dongfang Electronics case and other early cases, establishing a market position with its first-mover advantage. KWM’s securities litigation team has undertaken nearly 100 securities class action cases, including high-profile ones such as the Wuyang Bond Case and the Huaze Cobalt & Nickel case.

In China, cases of collective redress arising from the same or similar facts occur frequently in various fields, and various litigation mechanisms have gradually been established under laws and regulations to resolve such disputes: mainly the joint action mechanism, the ordinary representative action mechanism and the special representative action mechanism.

Joint Action

In 1982, the first Civil Procedure Law (for Trial Implementation) of China was promulgated, which introduced the joint action mechanism. Where a party or both parties to a lawsuit comprise(s) two or more persons, and the subject matter of the litigation is the same or the subject matters of the litigation are of the same type, the court deems that the lawsuit may be tried as a joint action, upon consent by the litigants.

This mechanism has been in use until now, plays an important role in improving the efficiency of the courts and reduces the litigation burden on the parties. The joint action mechanism is currently the most widely used collective redress mechanism in China’s courts.

Ordinary Representative Action

With the “reform and opening-up” and the gradual activation of the market economy in China, the number of collective redress cases arising from same or similar facts has been on the rise, and in some cases the number of parties has reached hundreds or even thousands. In the face of collective redress cases with a large number of parties, some courts in China first carried out an attempt at the representative litigation mechanism in practice. In 1986, the Primary People’s Court of Anyue County of Sichuan Province tried out the representative action mechanism in the trial of a purchase and sale contract case of 1,569 farmers from Yuanba Township and Nuli Township of Anyue County against the Anyue County Seed Company. In this case, some persons were selected as representatives of the 1,569 farmers to participate in the proceedings and express their opinions. Academically speaking, this case is generally regarded as the starting point of the representative action mechanism in China.

Given the positive effects of such practice, after years of proposals and discussions, the Civil Procedure Law (1991), for the first time, provided for the ordinary representative action mechanism, which covers representative actions with a certain number of persons and representative actions with an uncertain number of persons. In 1992, the Supreme People’s Court (SPC) issued the Opinions on Several Issues Concerning the Application of the Civil Procedure Law of the People’s Republic of China, which set out detailed provisions on the procedure of an ordinary representative action. This mechanism is also in use today.

Special Representative Action

After the Civil Procedure Law provided for the representative action mechanism in 1991, the SPC and relevant institutions encouraged China’s courts to apply the representative action mechanism in fields such as environmental protection, consumer rights protection and labour protection. However, for a long time, the mechanism was not widely applied.

In the field of securities litigation, in 2003, the SPC formulated the Several Provisions on Trying Cases of Civil Compensation Arising from Misrepresentation in the Securities Market (the “2003 Judicial Interpretation on Misrepresentation”), stipulating that the joint action mechanism and the representative action mechanism shall also apply to collective redress cases arising from misrepresentation in the securities market.

In the 20 years after the promulgation of the 2003 Judicial Interpretation on Misrepresentation, Chinese courts have tried hundreds of civil claim cases arising from misrepresentation in the securities market, and have gradually accumulated experience in handling such complicated cases. Meanwhile, China’s government has:

  • gradually strengthened its crackdown on illegal conduct such as misrepresentation, insider trading and market manipulation in the securities market:
  • proposed a “zero tolerance” principle for such illegal conduct in the securities market; and
  • gradually, emphasised the function of securities class actions in protecting the interests of small and medium-sized investors.

Against this background, the Securities Law, amended at the end of 2019 and effective as of 1 March 2020, provides for the special representative action mechanism similar to the “opt-out” class action mechanism under US law. On 31 July 2020, the SPC promulgated the Provisions of the Supreme People’s Court on Several Issues Concerning Representative Action in Securities Disputes, setting out detailed provisions on key issues of the special representative action mechanism, such as the implementation procedures, trial methods and validity of judgments.

It should be noted that China’s special representative action mechanism (especially the opt-out mechanism) is set forth by the Securities Law rather than the Civil Procedure Law. Therefore, such litigation mechanism is only applicable to cases of collective redress in the securities market governed by the Securities Law. Furthermore, China’s legislation does not name this mechanism a “class action”; but instead classifies this mechanism as a special category of the representative action mechanism.

Joint Action

The joint action mechanism is essentially a mechanism for the joint trial of several lawsuits arising from the same or similar subject matter, in a manner similar to that set in the civil procedure laws of many other countries.

Ordinary Representative Action

The ordinary representative action mechanism in China has some of its origins in the Japanese litigation mechanism of the “selected litigant”, the representative action mechanism in the UK and the class action mechanism in the USA, but it is also has distinct local characteristics. Experts involved in the formulation of the Civil Procedure Law (1991) point out that the ordinary representative action mechanism in China has the advantages of the class action mechanism and the selected litigant mechanism but is also innovative in content, ultimately forming a representative litigation system with Chinese characteristics.

Generally, the Chinese ordinary representative action mechanism has three important similarities with the British representative action mechanism and the Japanese selected litigant mechanism. First, the litigants must actively choose to participate in the proceedings. Second, one or several parties with common interests must be selected to participate in the litigation as the representatives. Third, the validity of the judgment is to apply to all the represented litigants.

However, there are also obvious differences among the three mechanisms. For example, under the selected litigant mechanism in Japan, when the representative is selected, the other litigants withdraw from the proceedings and lose their status as litigants, and their legal interests only lie in the result of the proceedings. In China’s ordinary representative actions, however, after the representative is selected, the other litigants will not withdraw from the proceedings and will continue to have the status of litigants in the proceedings. Therefore, in China’s ordinary representative actions, the representative’s status is more similar to that of an agent of all the litigants, whose exercise of litigation rights needs to be authorised by those represented, and whose exercise of disposal is subject to the consent of all those represented.

Special Representative Action

It is generally believed that the special representative action mechanism in China is mainly borrowed from the class action mechanism in the USA but also learns from the Verbandsklage mechanism and the model action mechanism in Germany and the securities class action mechanism in Taiwan. Like the class action mechanism in the USA, the special representative action mechanism in China also adopts the approach of opting out. Meanwhile, the special representative action mechanism in China limits the litigation representatives to statutory non-profit organisations, which is similar to the altruis-tische Verbandsklage mechanism in Germany and the securities class action mechanism in Taiwan.

Based on the experience of laws of different countries and regions, China’s special representative action mechanism has strong localised characteristics in terms of its applicability, initiation conditions and representative selection.

  • The special representative action mechanism in China is currently only applicable to securities disputes and not applicable to cases in other fields.
  • The conditions for initiating a special representative action in China are relatively strict. The premise for initiating a special representative action is that the court has initiated an ordinary representative action involving an uncertain number of persons. Moreover, other factors, such as the defendants’ solvency and the demonstrative significance of the case, shall be taken into consideration in determining whether the special representative action can be initiated.
  • The representatives in China’s special representative actions shall be non-profit investor protection institutions, rather than litigants in the case.

There is no applicable information in this jurisdiction.

Laws

Article 55 of the Civil Procedure Law of the People’s Republic of China (amended in 2021)provides for the joint action mechanism, Article 56 provides for the representative action mechanism with a certain number of persons, and Article 57 provides for the representative action mechanism with an uncertain number of persons.

The Securities Law of the People’s Republic of China (amended in 2019) is the substantive legal basis for securities disputes. Paragraphs 1 and 2 of Article 95 of the Securities Law restate and specify the representative action mechanism stipulated by the Civil Procedure Law (amended in 202), and paragraph 3 of Article 95 provides for the special representative action mechanism for the first time in China.

Judicial Interpretations and Judicial Opinions

Articles 73 and 74 of the Interpretation of the Supreme People’s Court on the Application of the Civil Procedure Law of the People’s Republic of China (amended in 2022) provide detailed provisions on the joint action mechanism; Articles 75 to 80 provide detailed provisions on the conditions for initiating an ordinary representative action and the method of determining the representative.

Articles 5 to 31 of the Supreme People’s Court on Several Issues concerning Representative Action in Securities Disputes (effective as of 31 July 2020) provide detailed provisions on the ordinary representative litigation in securities disputes; Articles 32 to 41 specify the implementation details of the specific representative action in securities disputes.

Several Provisions of the Supreme People’s Court on Trying Cases of Civil Compensation Arising from Misrepresentation in the Securities Market (effective as of 22 January 2022) (the “2022 Judicial Interpretation on Misrepresentation”) repeals the aforementioned 2003 Judicial Interpretation on Misrepresentation and amends the relevant substantive adjudication rules and introduces some new procedural rules (such as the rule of jurisdiction and the rule of interruption of the limitation of action in representative actions concerning securities disputes) for collective redress cases arising from misrepresentation in the securities market.

Local Judicial Documents

Currently, Shanghai Financial Court and other courts have promulgated local judicial documents concerning the representative action mechanism in securities disputes, providing specific rules on the representative action mechanism in securities disputes within their respective jurisdictions.

Other Relevant Rules

The China Securities Regulatory Commission (CSRC) has promulgated the Notice on Effectively Conducting the Work Relating to the Participation of Investor Protection Institutions in Special Representative Action in Securities Disputes – this provision further stipulates the investor protection institutions that have the right to initiate a special representative action.

The China Securities Investor Service Centre (ISC) has promulgated the Rules on Special Representative Action (for Trial Implementation) and the Administrative Measures for Evaluation of Securities Litigation Cases (for Trial Implementation) – these provisions clarify the rules for the ISC to initiate and participate in a special representative action.

Ordinary Representative Action

Since the ordinary representative action mechanism is directly provided for in the Civil Procedure Law, this mechanism is applicable to all categories of disputes. Based on existing judicial practice in China, the ordinary representative action mechanism is mainly applied in the following fields:

  • collective redress arising from misrepresentation, insider trading, market manipulation, etc, in the securities market;
  • collective redress arising from bond default;
  • collective redress arising from environmental pollution;
  • collective redress arising from product liability;
  • disputes involving the interests of farmers;
  • collective labour disputes involving interests of numerous employees; and
  • disputes arising from false advertising.

Special Representative Action

Currently, the special representative action in China is only applicable to collective redress cases arising from misrepresentation, insider trading, market manipulation, etc, in the securities market. The Kangmei Pharmaceutical Case, as the first case of China’s special representative action mechanism, was concluded in 2021, marking the successful implementation of a Chinese-style opt-out class action mechanism.

Joint Action

The joint action mechanisms stipulated in the Civil Procedure Law include two types: necessary joint actions and ordinary joint actions. A necessary joint action refers to a lawsuit that must be tried concurrently. In this type of case, one or both parties comprise two or more persons and the parties must file or respond to a lawsuit jointly. The core feature of a necessary joint action is that the subject matter of the litigation is the same. An ordinary joint action refers to a lawsuit that the court can manage as a joint trial or as several separate trials. The core feature of an ordinary joint action is that the subject matter of the litigation is of the same type.

Ordinary Representative Action

An ordinary representative action refers to a joint action in which one or more litigants may file or respond to a lawsuit on behalf of all litigants with common interests. The litigation conduct of the representative litigant affects all the represented litigants, and the judgment made by the court shall be binding on all the represented litigants. According to the Civil Procedure Law, ordinary representative actions include representative actions with a certain number of persons and representative actions with an uncertain number of persons. Both categories of litigation are essentially extensions of the joint action mechanism.

Special Representative Action

In a securities collective redress case, on the basis that the court initiates an ordinary representative action with an uncertain number of persons, an investor protection institution entrusted by more than 50 investors may, in accordance with the principle of opting out, participate in the litigation on behalf of the investors who have suffered damage due to the same illegal conduct.

Joint Action

Where one party or both parties comprise two or more persons, and their subject matter of the litigation is the same or of the same type, and the court considers that the case can be tried as a joint action, a joint action may be initiated upon the consent of the parties.

Ordinary Representative Action

In the case of a joint action where one party is comprised of numerous persons, such a party may elect representatives to participate in the proceedings, and the representative action mechanism with a certain number of persons shall be initiated. Where one party is comprised of numerous persons, but the number of persons is not determined at the time of filing the lawsuit, the court may issue an announcement of rights registration stating the facts of the case and the claims, notify the right holders to register with the court within a certain period of time, and initiate the representative action procedure with an uncertain number of persons. Furthermore, right holders registered within the registration period may elect litigation representatives to participate in the proceedings.

The China’s Civil Procedure Law (amended in 2021) contains no specific provisions on the jurisdiction of representative actions. The jurisdiction is usually determined by the type of the dispute and the domicile of the defendant.

Specific Representative Action

China’s special representative action mechanism adopts a “progressive mode” – only after the court has initiated a representative action with an uncertain number of persons and issued an announcement of rights registration, can an investor protection institution initiate the special representative action procedure in accordance with the law. During the period of the announcement, an investor protection institution specially authorised by more than 50 investors can act as the representative and initiate a special representative action in some cases.

According to the judicial interpretation of the SPC, special representative actions shall be subject to centralised jurisdictional rules and shall be under the jurisdiction of the intermediate people’s courts or the special people’s courts at the place of the stock exchanges where the securities involved in the litigation are located, or other national stock exchanges as approved by the State Council involved in the case. Accordingly, the courts that have jurisdiction over special representative actions of the first instance shall, in principle, include the Shenzhen Intermediate People’s Court, Shanghai Financial Court and Beijing Financial Court. If the court that first accepts a separate action, a joint action or an ordinary representative action does not have jurisdiction over the special representative action, it shall transfer the case to the court that has jurisdiction over the special representative action.

Joint Action

If one party or both parties are composed of two or more persons, and the subject matter of the litigation is the same, a necessary joint action shall be initiated. If one party or both parties are composed of two or more persons, the subject matter of the litigation is of the same type and the court considers that the cases can be tried as a joint action, then upon the consent of the parties, an ordinary joint action may be initiated.

Ordinary Representative Action with a Certain Number of Persons

In a joint action with a large number of litigants, such litigants shall have the right to elect representatives and apply to the court for a representative action.

Ordinary Representative Action with an Uncertain Number of Persons

The court may, after conducting preliminary examination, issue an announcement of registration of rights stating the facts of the case and the claims of the existing litigants and notify the right holders who have not participated in the existing litigation to register with the court within a certain period of time.

According to the SPC’s judicial interpretation, in an ordinary representative action with an uncertain number of persons, the main proceedings are as follows.

  • The plaintiffs file a lawsuit by means of an ordinary representative action.
  • The court conducts a preliminary examination of the facts of infringement through inspection of written files, hearing, questioning, etc, and determines the scope of right holders to whom the announcement will be made ; if a litigant opposes the court’s determination regarding the scope of right holders, they have the right to apply to the higher-level people’s court for review once.
  • The court makes an announcement of registration of rights based on the finally determined scope of right holders, notifying other right holders with similar claims to participate in the litigation.
  • After the expiration of the registration period, the court will review the list of registered right holders and determine the scope of the plaintiffs in the representative action.
  • The qualified representative(s) will be elected by the parties through voting or will be appointed by the court.
  • Once the representatives are determined, the court will make an announcement to introduce the representatives; after learning about the representatives, litigants can apply for deregistration and file a lawsuit separately.
  • Cases involving the representatives shall be tried first, while non-representative actions shall be suspended.
  • For cases brought by right holders independently, the court may rule to apply the effective judgment of the representative action.

Special Representative Action

In addition to the proceedings for the representative action with an uncertain number of persons, the proceedings to initiate a special representative action also include the following:

  • the court initiates a representative action with an uncertain number of persons, and issues an announcement of rights registration;
  • during the period of announcement, if an investor protection institution believes it is necessary to participate in the action as a representative, it may accept special authorisation from more than 50 eligible right holders through a public call or other means to initiate the special representative action;
  • the court shall issue an Announcement of Registration of Rights for Special Representative Action, stating the scope of right holders, the right of and the period in which investors can declare that they are opting out, basic information of the investor protection institution, the special authorisation of the investor protection institution, etc;
  • after the above announcement above is issued, the investors have the right to cease to be class member by declaring that they are opting out – otherwise, the investors will be deemed to have agreed to participate in the representative action; and
  • the investor protection institution acting as the representative requests a list of all right holders from China Securities Depository and Clearing Corporation Limited based on the scope of right holders announced by the court, and the court shall include all right holders in the list of plaintiffs and notify them all.

Joint Action

As previously mentioned, if one party or both parties are composed of two or more persons, and the subject matter of the litigation is the same, a necessary joint action shall be initiated. If one party or both parties are composed of two or more persons, the subject matter of the litigation is of the same type and the people’s court considers that the cases can be tried as a joint action, then upon the consent of the parties, an ordinary joint action may be initiated. In such joint proceedings, each party shall directly participate in the litigation and express opinions.

Ordinary Representative Action

According to the Civil Procedure Law (amended in 2021), for a joint action in which one party is comprised of a large number of persons, such a party may elect two to five representatives to initiate an ordinary representative action. The Civil Procedure Law (amended in 2021) does not provide general provisions on the qualifications of the representatives.

According to the judicial interpretation formulated by the SPC, in cases of collective redress in the securities market, the initiation conditions for an ordinary representative action are that:

  • there are more than ten plaintiffs in the proceedings;
  • two to five proposed representatives are specified in the complaint; and
  • the plaintiffs submit the relevant administrative penalty decisions, criminal judgments, materials covering the confession of the defendant, as well as preliminary evidence proving the facts of securities torts such as the disciplinary sanctions or self-discipline measures imposed by the stock exchanges and other national securities trading places approved by the State Council.

In a case of collective redress in the securities market, the representatives must:

  • act as the representative voluntarily;
  • have a certain proportion of interest in the claims;
  • have a certain degree of litigation capability and professional experience (or their attorneys have the aforesaid capability and experience); and
  • be able to faithfully and diligently perform the duty of safeguarding the interests of all the plaintiffs.

In addition, where the plaintiff who applies to act as the representative has an association with the defendant or if there exist any other circumstances that may affect the plaintiff in the performance of their duties, the people’s court shall not approve the application.

Special Representative Action

Pursuant to Article 95 of the Securities Law (amended in 2019), only investor protection institutions are entitled to act as the representatives in a special representative action concerning securities disputes. An investor protection institution is a professional social organisation whose duty is to protect investors. For the time being, it mainly refers to the ISC or the China Securities Investor Protection Fund Corporation Limited (SIPF).

The ISC

Founded on 5 December 2014, the ISC is a non-profit financial institution and is under the direct administration of the CSRC. Its main responsibilities include:

  • providing non-profit publicity and education services for investors;
  • holding securities and other financial instruments in the public interest and exercising rights as a shareholder or securities holder;
  • providing mediation and other dispute resolution services upon entrustment by investors; and
  • providing non-profit litigation support and relevant work for investors.

It was the ISC that filed the special representative action on behalf of 55,326 investors in the Kangmei Pharmaceutical Case, which was the first special representative action case in China.

The SIPF

Founded on 30 August 2005, the SIPF is a non-profit financial institution funded by the State Council, subject to the administration of the CSRC. The institution performs statutory duties such as raising and managing securities investor protection funds, monitoring the risks of securities companies, evaluating the protection of investors and responding to investors’ demands. It plays an important role in preventing and mitigating financial risks and safeguarding the legitimate rights and interests of investors.

Joint Action and Ordinary Representative Action With a Certain Number of Persons

Joint actions and ordinary representative actions with a certain number of persons proceed on an opt-in basis. To be able to join the aforesaid actions, the plaintiffs must meet the requirement that the subject matter of the litigation of several plaintiffs is the same or of the same type.

Ordinary Representative Action With an Uncertain Number of Persons

The opt-in rule is also adopted for an ordinary representative action with an uncertain number of persons. After the court issues an announcement of registration of rights, the right holders who meet the requirements may become members of the representative action after applying to join the action within a certain time and having been confirmed by the court.

Special Representative Action

Special representative actions adopt the opt-out principle. Once a special representative action is initiated by the investor protection institution, all investors who meet the requirements for registration of rights and do not opt out will automatically become members of the special representative action.

Limit on Size

There is no upper limit on the number of litigants in any of the aforesaid litigation mechanisms. However, there is a minimum requirement for the number of litigants. For example;

  • there should be more than two persons of one party or both parties in a joint action;
  • there should be more than ten plaintiffs in a securities dispute for which the court adopts the representative action procedure; and
  • in a case where the special representative action procedure is applicable, there should be more than 50 investors entrusting an investor protection institution to participate in the litigation as their representative.

Adding Plaintiffs

Except in special representative actions applying the opt-out principle, a plaintiff who has not yet joined the class action can only join by filing a lawsuit or by applying to join the representative action in other forms of class action. Additionally, in an ordinary representative action in the field of securities disputes, if the right holder fails to register on time within the court announcement period, that person may apply to the court for supplementary registration before the court hearing of the first instance commences, and the legal proceedings completed before such supplementary registration shall be binding on them after the supplementary registration is finished.

Adding Defendants

A litigant may apply to the court to add a defendant, and the court shall decide whether to approve the application after examination.

Adding Third Parties

The Civil Procedure Law classifies third parties into third parties with independent claims and third parties without independent claims. A third party with independent claims refers to a party who has claims different from the plaintiff and the defendant with respect to the subject matter of the litigation and needs to join the action by initiating a lawsuit. A third party without independent claims refers to a party who has no independent claims with respect to the subject matter of the litigation but has interests in the result of the case, or whose participation in the action is conducive to finding out the facts of the case. Such a third party may join the action on its own or on the application of other parties, and the court may also notify such a third party to join the action if it deems necessary.

China’s courts have substantial power in administering the procedure of class actions. Taking a representative action arising from a securities dispute as an example, the court’s management power is reflected in many aspects, including:

  • deciding whether a lawsuit brought by two or more plaintiffs can be tried as a joint action;
  • deciding whether the representative action mechanism can be adopted in joint action cases;
  • deciding whether to issue an announcement of registration of rights if litigants apply to bring an ordinary representative action on behalf of other investors who have the same type of claims and will apply to join the action;
  • determining the scope of right holders in the announcement of registration of rights;
  • examining the qualifications of representatives and appointing representatives when the parties are unable to elect their own representatives;
  • supervise and administering the litigation activities of the representatives – where the representatives change or waive claims, withdraw the action, or admit the claims of the other party, the representatives are required to submit a written application to the court and notify all represented investors, and the court shall decide whether to approve the application; and
  • reviewing the mediation agreement and deciding whether the court shall prepare a mediation document, etc.

According to the Civil Procedure Law (amended in 2021), the trial period of first-instance civil litigation cases is generally six months, which can be extended for six to nine months upon approval in the case of special circumstances. The trial period for appeals is usually three months, and in the case of special circumstances, it can also be extended for three months upon approval.

In an ordinary representative action with an uncertain number of persons arising from a securities dispute, the process of determining the scope of rights holders, issuing a notice of rights registration, examining the list of rights holders, and selecting and determining the representatives takes roughly four to five additional months.

In practice, given the complexity of issues in a representative action, the length of time required for a trial may exceed the above-mentioned periods. Therefore, it is difficult to accurately predict the duration of a representative action, and it will generally last for more than two years if it goes through both the first and second instance.

China does not have mechanisms such as acceleration of claims, summary disposal or delaying of claims, but according to the Civil Procedure Law (amended in 2021) and other provisions, the following mechanisms may delay litigation proceedings:

  • the period taken to deal with jurisdictional disputes;
  • the period of public announcement;
  • initiating the judicial authentication procedure in the course of proceedings;
  • the parties initiating the settlement procedure in the course of proceedings; and
  • statutory suspensions of litigation because, for example:
    1. one party has passed away or lost litigation capacity;
    2. one party cannot participate in the litigation due to a force majeure event; or
    3. the outcome of the case is based on that of another case, but that case has not yet been concluded.

In cases of collective redress for securities misrepresentation, according to the judicial documents published by the SPC, the people’s court may seek opinions from the CSRC and its dispatched offices, stock exchanges, securities self-discipline management organisations, investor protection institutions and other entities with regard to professional issues such as the determination of the disputed misrepresentation conduct and the calculation of damages in the trial. The time taken to solicit opinions shall not be included in the period of trial.

Litigation fees ordered by the courts include case acceptance fees, property preservation fees incurred when a party applies for property preservation, public announcement fees incurred when a party cannot be serviced, etc. Generally speaking, case acceptance fees, property preservation fees and public announcement fees are paid in advance by the plaintiff when the lawsuit is filed or when a party applies for property preservation, and are ultimately borne by the losing party. As for the attorneys’ fees actually incurred by the parties, there are no clear rules on how to allocate such fees. The plaintiff may request that the opposing party bear the attorneys’ fees when filing a lawsuit, but the courts have wide discretion in this regard.

In an ordinary representative action with an uncertain number of persons, no case acceptance fees need to be paid in advance, and the losing party shall pay the case acceptance fees based on the value of the subject matter of the litigation after the case has been concluded. According to the SPC’s judicial interpretation, in representative actions arising from securities disputes, the representatives may request the losing defendants to compensate for reasonable announcement fees, notice fees, attorneys’ fees and other expenses.

In a special representative actions, no case acceptance fees are to be paid by the plaintiff in advance, and the losing party shall pay the case acceptance fees based on the value of the subject matter of the litigation after the case has been concluded. If the losing or partially losing claimants apply for a reduction of or exemption from litigation costs, the court shall decide whether to approve the application based on the economic situation of the claimants and the circumstances of the trial of the case. Where an investor protection institution, as a representative, applies for property preservation in the litigation, the court may waive the requirement of providing a guarantee.

There are no explicit evidence disclosure rule in Chinese civil procedure, and there is no obvious difference between the evidence rules applying to joint actions and representative actions and those applying to separate actions.

In a Chinese civil action, a court will prescribe a time period for the parties to submit evidence, and the court will organise the exchange, presentation and cross-examination of such evidence. Such exchange of evidence may take place separately before the hearing or concurrently during the hearing. If the evidence is in the possession of the other party to the litigation or a third party, the main measures that may be taken by the court include:

  • obtaining the evidence ex officio;
  • issuing an investigation order to a party’s attorney to obtain the evidence;
  • confirming an adverse presumption where a party refuses to submit evidence under its control without justifiable reasons, and where the party bearing the burden of proof considers that the evidence is unfavourable to the controller;
  • issuing an order demanding that a party submit documentary evidence if that evidence is under the control of that party and if the party bearing the burden of proof applies for such an order; and
  • confirming the authenticity of the documentary evidence as alleged by the claimant if the party controlling the documentary evidence does not submit it without justifiable reasons.

In China, witnesses giving testimony is not commonly seen, and there is no rule of privilege for witnesses. In accordance with Chinese law, citizens are obliged to testify truthfully to the court. However, Chinese lawyers enjoy certain privileges. According to the Lawyers Law, Chinese lawyers shall not divulge their clients’ private information or relevant conditions and information that their clients or other persons are unwilling to disclose.

There is no difference between the remedies obtained through collective redress/class actions and separate actions. Collective redress/class actions in China are usually applicable to tort disputes or contract disputes, where the remedies mainly include cessation of infringement, compensation for damages, removal of obstruction, elimination of danger, and return of property.

In addition to litigation, the parties may settle their disputes through reconciliation, mediation or other alternative dispute resolution mechanisms.

For example, in the field of securities disputes, China is gradually building a diversified dispute resolution mechanism for securities disputes. In addition to judicial mechanisms such as separate actions, joint actions, supportive actions, model judgment and representative actions, there are also non-litigation dispute resolution mechanisms such as reconciliation, industry mediation, professional mediation, and compensation in advance.

In practice, the dispute resolution mechanism of “model judgment + professional mediation” has been adopted in a number of cases. Under this mechanism, the court first selects typical cases with common factual and legal issues in dispute as model cases to be tried and judged first. The model judgment may be a separate action, a joint action or a representative action. After the model judgment takes effect, the court can guide the resolution of other parallel cases through mediation, reconciliation or a simplified trial based on the standards for the factual determination and legal application established in the model judgment.

In joint actions and ordinary representative actions with a certain number of persons, the judgment shall be binding on all parties concerned. In ordinary representative actions with an uncertain number of persons, the effective judgment shall be binding on all registered right holders. Besides, if right holders who have not been registered file a lawsuit within the limitation of actions, the people’s court may directly rule to apply the aforesaid effective judgment. In special representative actions, the judgment shall be binding on all right holders who have not declared that they are opting out of the case and other parties concerned.

The time limit for performance of the losing party’s obligations will be specified by the court in the civil judgment in China. If the losing party fails to perform its obligations within the specified time limit, the entitled party may apply to the court for enforcement, and the obligations of the losing party shall be mandatorily enforced by the court.

Enhancing the Co-operation between Securities Regulatory Authorities and Courts in Securities Class Actions

Since China’s collective redress mechanisms, especially the special representative action mechanism, are mainly applicable to securities dispute cases, and the securities regulatory authorities usually have stronger power to investigate securities torts and are likely to have a better understanding of the facts related to the cases due to its administrative enforcement procedures, it is China’s policy to encourage co-operation between the securities regulatory authorities and the courts. The securities regulatory authorities may provide more support for the courts’ fact-finding and advise the courts on professional issues in the securities field. The SPC has issued a special judicial document to regulate such co-operation.

Encouraging the Application of Expert Opinions and Loss Assessment by Professional Third-Party Institutions in Securities Class Actions

The determination of loss in the securities dispute is a professional and complicated issue. Currently, China’s policy encourages parties/courts to apply for/appoint a professional third-party institution to provide expert opinions and calculate the investor’s loss.

Encouraging the Application of the Collective Action Mechanism in Other Fields Such as Consumer Protection

China’s policy also encourages the application of the collective action mechanism in other fields. For example, the General Office of the State Council issued the Opinions on Further Unleashing Consumption Potential and Promoting Consumption Recovery in April 2022, which explicitly proposes to explore the establishment of a consumer collective action mechanism. In local documents, The High People’s Court of Chongqing Municipality and the Chongqing Consumer Protection Commission jointly issued the Implementing Opinions on Establishing a Working Mechanism for Governing the Litigation Source of Consumer Disputes in 2022, encouraging people’s courts and consumer protection commissions at all levels in Chongqing to jointly explore the establishment of a consumer collective action mechanism.

On 21 January 2022, the SPC promulgated the 2022 Judicial Interpretation on Misrepresentation, repealing the 2003 Judicial Interpretation on Misrepresentation. For cases of collective redress in the field of securities misrepresentation, the 2022 Judicial Interpretation on Misrepresentation makes the following revisions.

Removal of the Pre-procedure for Class Redress Cases Arising From Securities Misrepresentation

The 2003 Judicial Interpretation on Misrepresentation clearly stipulates the pre-procedure for filing a lawsuit arising from securities misrepresentation, which means the plaintiff must submit the relevant administrative penalty decision or criminal judgment for the misrepresentation when filing a lawsuit. However, the 2022 Judicial Interpretation on Misrepresentation has removed this pre-procedure, and the plaintiff only needs to submit preliminary evidence to prove the existence of misrepresentation.

However, the pre-procedure for special representative actions still exists. According to the relevant provisions of the CSRC, when filing a special representative action, an investor protection institution shall choose a case in which the relevant authority has issued an administrative penalty decision or a criminal judgment. Such pre-procedure is conducive to the prudent initiation of special representative actions by the investor protection institution.

Amendment Made as to the Courts Having Jurisdiction for Class Redress Cases Arising From Securities Misrepresentation

According to the 2022 Judicial Interpretation on Misrepresentation, cases of collective redress for securities misrepresentation shall, in principle, be under the jurisdiction of the intermediate people’s court which is in the seat of the provincial government where the issuer is domiciled. Even if the plaintiff does not list the issuer as the defendant, the case arising from the issuer’s securities misrepresentation shall still be subject to the aforesaid jurisdiction rule. Meanwhile, the 2022 Judicial Interpretation on Misrepresentation stipulates that the higher people’s court of a province, autonomous region or municipality may, according to the actual situation in its jurisdiction, designate other intermediate people’s courts to have jurisdiction over first-instance cases arising from securities misrepresentation. However, the centralised jurisdiction rule shall still apply to special representative actions.

Clarifying the Rules on the Commencement and Interruption of the Limitation of Actions

The 2022 Judicial Interpretation on Misrepresentation provides that the limitation of actions for such cases shall commence from the date when the obliged person with regards to the information disclosure corrects the misrepresentation or the misrepresentation is first publicly exposed on the media.

In ordinary representative actions with an uncertain number of persons, the litigation conduct of some investors has the effect of interrupting the limitation of actions for all other right holders with the same claims. For the investors who fail to register their rights with the people’s court, the limitation of actions shall commence anew upon the expiration of the period of rights registration. For the investors who apply to withdraw the registration of rights after registration with the people’s court, the limitation of actions shall commence anew on the day following the withdrawal of the registration of rights.

Improvement of the Substantive Adjudication Rules

The 2022 Judicial Interpretation on Misrepresentation also has provisions on many substantive issues involved in collective redress for securities misrepresentation, which provides the institutional basis for the detailed trial of such disputes.

Brexit has not yet had any notable impact on the implementation of China’s class action mechanisms.

COVID-19 has not yet had any notable impact on the implementation of above litigation mechanisms, but it may affect the progress of individual cases. For example, a court, a party concerned or a litigation representative may be unable to attend a hearing as scheduled when they are in an epidemic prevention and control area. In this regard, China’s courts are promoting and applying online court hearing technologies so as to ensure the normal progress of litigation proceedings.

King & Wood Mallesons

18th Floor, East Tower, World Financial Center
1 Dongsanhuan Zhonglu
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Beijing, 100020
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+86 10 5878 5588

+86 10 5878 5566

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Trends and Developments


Authors



King & Wood Mallesons (KWM) is an international law firm able to practise in the PRC, Hong Kong SAR, Australia, UK, USA and a significant range of European nations. Its presence and resources in the world’s most dynamic economies is profound. Leveraging its exceptional legal expertise and depth of knowledge in the China market, the firm advises Chinese and overseas clients on a full range of domestic and cross-border transactions, providing comprehensive legal services. In the field of securities disputes, KWM’s securities litigation team participated in the Jinzhou Port case, the Wuliangye case, the Dongfang Electronics case and other early cases, establishing a market position with its first-mover advantage. KWM’s securities litigation team has undertaken nearly 100 securities class action cases, including high-profile ones such as the Wuyang Bond Case and the Huaze Cobalt & Nickel case.

Summary of the Past 12 Months

Joint action and representative action mechanisms still mainly apply to securities disputes

Currently, the main class-action mechanisms in China mainly include the joint action mechanism and the ordinary representative action mechanism stipulated in the Civil Procedure Law (amended in 2021) as well as the special representative action mechanism stipulated in the Securities Law (amended in 2019). There is no limitation on what type of cases the joint action mechanism and the ordinary representative action mechanism may apply to. However, the special representative action mechanism shall only apply to cases of securities disputes governed by the Securities Law (amended in 2019).

In the past 12 months, the aforesaid class-action lawsuits have continued to mainly apply to securities disputes, especially class redress cases arising from securities misrepresentation, which is consistent with judicial practice in the past few years.

The newly amended judicial interpretation on misrepresentation has come into effect

In recent years, the Chinese government has continuously strengthened its efforts to combat securities market violations and has further emphasised the importance of civil compensation for punishing illegal conduct in the securities market and protecting the interests of small and medium-sized investors. Meanwhile, the number of collective redress cases taken on by securities lawyers against securities torts is on the rise. There have been actions of collective redress against issuers of stocks, corporate bonds, inter-bank bonds, ABS, and relevant intermediaries. The above relevant factors have together contributed to China’s legislative progress in the field of securities litigation.

In terms of procedure, the Securities Law, amended at the end of 2019 (effective 1 March 2020), introduces the special representative action mechanism, similar to the class action mechanism under US law. Under this mechanism, the investor protection institutions in China act as the representatives of securities investors, and all investors eligible for the claims, except for those who state that they cease to be class members by declaring that they are opting out, can directly participate in the action. Currently, this mechanism is the only one in China under which a party may participate in a lawsuit without application or express consent.

In terms of substantive law, on 21 January 2022, the Supreme People’s Court (SPC) issued Several Provisions on Trying Cases of Civil Compensation Arising from Misrepresentation in the Securities Market (the “New Judicial Interpretation”) after a lapse of 20 years, which made extensive amendments to the Judicial Interpretation promulgated in 2003 (the “Former Judicial Interpretation”). The New Judicial Interpretation removes the pre-procedure for filing a lawsuit arising from misrepresentation, modifies the jurisdiction of these cases, and sets out new provisions on a number of substantive issues involved in these cases. In general, the New Judicial Interpretation summarises the experience of the courts in handling such cases in the past 20 years and provides new rules in accordance with the current policies on combating securities market violations, marking a milestone in the development of securities tort jurisprudence in China.

Pre-procedure for collective redress cases arising from securities misrepresentation has been removed

For the past 20 years with the application of the Former Judicial Interpretation, Chinese courts’ acceptance of cases arising from securities misrepresentation was subject to the restriction of pre-procedure. That is, if the defendant, such as the securities issuer or the listed company, had not been subject to administrative penalties or had not been found guilty of criminal offences, the court should not accept the plaintiff’s suit. Since around 2015, this restriction of pre-procedure has been relaxed, but it had not been explicitly removed. Now, the New Judicial Interpretation has explicitly removed the restriction, which will further encourage securities investors to claim compensation for potential securities torts that have not been discovered by securities regulatory authorities.

The number of courts that can accept collective redress cases arising from securities misrepresentation has increased

According to the Former Judicial Interpretation, first-instance cases of securities misrepresentation shall be under the jurisdiction of the intermediate people’s court (i) of the city where the people’s government of the province, municipality or autonomous region is located; (ii) of the city directly under state planning; or (iii) of the relevant special economic zone. Therefore, in the past 20 years, no courts in China other than the above-mentioned ones have accepted any collective redress cases for securities torts.

While the New Judicial Interpretation revises the above jurisdictional rule, it also provides that the higher people’s court of a province, autonomous region or municipality may, according to the actual situation in its jurisdiction, designate other intermediate people’s courts to have jurisdiction over first-instance cases arising from securities misrepresentation, and shall report the designation to the SPC for the record. After the New Judicial Interpretation came into effect, the high people’s courts of several provinces have issued new jurisdictional provisions. For example, the High People’s Court of Zhejiang Province has stipulated that in addition to Hangzhou Intermediate People’s Court (Hangzhou is the capital city of Zhejiang Province) and Ningbo Intermediate People’s Court (Ningbo is a city directly under central government control), the intermediate people’s courts of Wenzhou, Huzhou, Shaoxing and Jinhua may also accept such lawsuits. More intermediate people’s courts are expected to accept collective redress cases arising from securities misrepresentation in the future.

Judgment has been made in the first case applying the special representative action procedure

Kangmei Pharmaceutical Co., Ltd. (“Kangmei”) was subject to administrative penalties imposed by the China Securities Regulatory Commission (CSRC) for misrepresentation in 2020, and 11 investors filed a lawsuit with the Guangzhou Intermediate People’s Court at the end of 2020. The Guangzhou Intermediate People’s Court ruled, based on the plaintiffs’ application, that the case should be tried under the ordinary representative action procedure and issued a public announcement of rights registration. On 8 April 2021, the China Securities Investor Services Centre (ISC) was specially authorised by the 56 plaintiffs to act as the representative in the lawsuit, and the case authorised to be tried under the special representative action procedure. After initiating the special representative action procedure, nine investors declared their withdrawal from the lawsuit, and a total of 55,326 investors participated in the litigation.

On 12 November 2021, the Guangzhou Intermediate People’s Court rendered a judgment, ordering Kangmei to compensate investors for their losses of about CNY2.46 billion in total and ordering relevant directors, supervisors and senior executives as well as accounting firms and accountants to bear joint and several liability, in varying proportions, for compensation. After the first-instance judgment was made, no party filed an appeal, and the judgment has come into force and been enforced.

Up to now, this case is the only one in China that has applied the special representative action procedure. It marks the first successful application of the special representative action mechanism in China’s judicial practice, which is of historic significance in the field of securities disputes and collective redress in China.

Judgments have been made in a number of ordinary representative actions

As early as 2003, the Former Judicial Interpretation explicitly stipulated that the ordinary representative action procedure could be applied to collective redress cases arising from securities misrepresentation. In the Securities Law amended at the end of 2019, it was emphasised again that securities disputes could be handled under the ordinary representative action mechanism. Against this backdrop, the “Wuyang Bond Case” and the “Feilo Acoustics Case” were successively concluded under the ordinary representative action mechanism.

In September 2021, the Shanghai High People’s Court rendered a judgment in the Feilo Acoustics Case. This is the first time that the ordinary representative action procedure has been applied in a case arising from securities misrepresentation in the stock market. The court ultimately ruled that the listed company (Feilo Acoustics) compensate 315 plaintiffs with a total amount of CNY123 million. During the same period, the High People’s Court of Zhejiang Province made an effective judgment in the Wuyang Bond Case. This is the first ordinary representative action concerning a bond dispute, and the court ruled that the defendants shall bear a total compensation liability of more than CNY600 million. In addition to the cases above, the ordinary representative action procedure has been initiated in several other cases, including the Lanfeng Biochemical Case in the Nanjing Intermediate People’s Court and the Zhongchuang Environmental Case in the Xiamen Intermediate People’s Court.

The aforesaid cases become the leading cases for the ordinary representative action mechanism in the field of securities disputes, providing valuable experience in promoting the settlement of collective redress arising from securities disputes and strengthening the protection of small and medium-sized investors, as well as serving as reference examples for the implementation of the representative action mechanism in the future.

Outlook for the Future

In general, at a time when the Chinese government is implementing a strict regulatory policy against illegal conduct in the securities market and investors are increasingly willing to protect their rights, collective redress cases for securities torts seem likely to remain highly active in the near future, which will provide a good opportunity for the further improvement of the mechanism for the protection of small and medium-sized investors. However, given the impact of the COVID-19 pandemic and the international situation on the world’s major economies, economic growth and recovery is in some doubt. Therefore, whether it is appropriate to require China’s listed companies or issuers, intermediaries, etc, to bear heavier liability at this time is an important issue. The next step for legislators and courts in China is to consider how to maintain an appropriate balance between the interests of investors and those of listed companies or issuers, intermediaries, etc, in cases of collective redress arising from securities torts and how to handle such disputes in a way that is satisfactory to all parties.

Possibly prudent application of the special representative action procedure

It has been nearly three years since the Securities Law amended in 2019 came into force, but the special representative action mechanism introduced by this law has been applied in only one case (the aforementioned Kangmei Case). In our view, this does not mean that the special representative action mechanism will become a mechanism exists in name only in the future; what this reflects is that the mechanism of special representative action mechanism should be applied prudently.

As far as its effects are concerned, the compensation brought by the special representative action mechanism to listed companies or issuers is unprecedented in China. The compensation of CNY2.46 billion in the Kangmei Case is the highest of its kind in China. Moreover, the Kangmei Case also has some special aspects. Kangmei has entered the bankruptcy reorganisation procedure, so the liability for compensation decided by the court can be resolved in the reorganisation plan. However, it would be difficult for most other listed companies or issuers to afford such high compensation. The purpose of the special representative action mechanism should not be to bring down listed companies or issuers involved in collective claims .

Therefore, the Rules for Special Representatives (for Trial Implementation) and the Administrative Measures for the Assessment of Securities Litigation Cases, which have been released by the ISC as the lawful representative of securities disputes, clarify that the ISC may consider initiating the special representative action procedure only when the case meets the following conditions:

  • the relevant regulatory authorities or courts have already made administrative penalties or criminal judgments on the securities tort involved in the case;
  • the case has a major public influence and has an exemplary role in the field; and
  • the defendants are expected to have the ability to afford the compensation and the enforcement of the judgment after the plaintiffs win the case can be ensured.

In addition, before accepting the authorisation, the ISC need to study the case and hire experts to initiate the evaluation mechanism of major cases. The ISC have to consider all the above factors before deciding whether to initiate a special representative action.

It is foreseeable that in the future, there will certainly be cases where the special representative procedure will be applied in China. However, it is also highly likely that the cases to which such procedure will apply will be cautiously assessed. On the one hand, such mechanism will become a sword of Damocles for listed companies or issuers, intermediaries, etc, alerting them to the costs of violations such as misrepresentation. On the other hand, the courts and related institutions will also carefully evaluate the cases to prevent the mechanism from being improperly applied for indiscriminate lawsuits.

Possibly wider application of the ordinary representative action mechanism

Compared with the strict special representative action mechanism applying the opt-out principle, the ordinary representative action mechanism adopting the opt-in rule seems more acceptable. China’s courts also have more experience applying this mechanism. Moreover, judicial practice in recent years shows that China’s courts are generally willing to adopt the “Model Judgment Mechanism” for securities disputes. In other words, the court first selects one or several representative cases from many accepted cases for trial and judgment, and then applies the principle of the “model judgment” to other parallel cases which have common factual and legal issues with the model cases. Such mechanism is more consistent with the characteristics of the ordinary representative action procedure. Therefore, with the Chinese government’s overall policy to crack down on securities-related violations, there will possibly be wider application of the ordinary representative action mechanism.

Possibly more specific standards for determining the responsibility of intermediaries

Under the Securities Law (amended in 2019), intermediaries (including sponsors, underwriters, accounting firms, law firms, asset appraisal institutions and credit rating institutions) at fault for misrepresentation shall bear joint and several liability for all losses that the listed company/issuer should compensate, unless they can prove that they are not at fault. In recent years, investors have tended to include all intermediaries related to misrepresentation as co-defendants in order to better secure the realisation of their rights. For example, accounting firms have been named as co-defendants in cases of misrepresentation in annual reports, and sponsors have been named as co-defendants in cases of misrepresentation in prospectuses.

This above trend has led to a surge in compensation pressure faced by intermediaries. In some cases where the listed company/the issuer is bankrupt and the intermediaries are ordered by the court to bear joint and several liability for compensation, it is even the intermediaries instead of the listed company/the issuer that actually compensates the investors in the execution procedure. Although such a phenomenon has protected small and medium-sized investors’ rights, it also puts intermediaries in a dilemma.

In the past two years, China’s courts have begun to determine different intermediaries to bear joint and several liability, in varying proportions (“proportional joint and several liability”). For example, a securities company is ordered to bear joint and several liability to the extent of 25% of investors’ losses in one case, and a law firm is ordered to bear joint and several liability to the extent of 5% of investors’ losses in another case. This way allocating liability can distinguish more clearly the faults and causes that shall be attributed to intermediaries and to securities issuers respectively, and can relieve the excessive compensation pressure faced by intermediaries to some extent. However, it is still necessary to further study questions such as how courts could adopt more specific standards to examine intermediaries’ proof of their own “innocence” and how to determine the extent of the intermediaries’ faults in a fairer manner.

Possibly more specific standards for determining the responsibility of directors, supervisors, senior executives and other persons

Directors, supervisors and senior executives of securities issuers/listed companies are faced with similar compensation pressure to the intermediaries mentioned above. The Securities Law (amended in 2019) also stipulates that the directors, supervisors or senior executives at fault for misrepresentation shall be jointly and severally liable for compensation, unless the person can prove that they are not at fault. In recent years, the people’s courts have also adopted the “proportional joint and several liability” approach to determine the scope of liability of directors, supervisors or senior executives. However, such a high liability is still unaffordable for most individuals.

Now, the CSRC and the SPC have proposed a policy that the primarily responsible person shall bear the heaviest liability. For example, if the actual controller misappropriates the issuer’s capital, or intentionally conceals the misrepresentation, the court is encouraged to order the primarily responsible person to bear the heaviest liability, relieving the compensation pressure faced by other directors, supervisors and senior executive to some extent. In the future, more specific trial guidelines should be developed to assess whether directors, supervisors and senior executive have fulfilled their duties of loyalty and diligence.

More listed companies or issuers, intermediaries and other entities that have not been subject to administrative penalties will be ordered to bear compensation

As mentioned above, the New Judicial Interpretation effective from 2022 has explicitly removed the pre-procedure for China’s courts’ acceptance of collective redress cases arising from securities misrepresentation. Currently, in the case of Investors v China Security Co., Ltd, the Shanghai High People’s Court has already ordered a securities company, which has not been subject to administrative penalties, to pay compensation. Such cases are expected to increase gradually in the future.

Provisions on other types of civil claims will be issued gradually

Currently, most cases of collective redress for securities torts are cases arising from misrepresentation and the SPC has only issued a judicial interpretation on misrepresentation. In practice, several courts have already handled some cases of collective redress arising from insider trading, market manipulation and other securities torts. However, no judicial interpretation has been issued to guide the trial of such cases. Given the increasing number of such cases, the SPC is likely to draft judicial interpretations on insider trading, market manipulation and other securities torts in order to provide a more detailed legal basis for the people’s courts to handle relevant claims.

In addition, with the practice of the ordinary representative action mechanism in securities disputes, the courts are likely to promote the application of this mechanism in other fields, such as consumer protection and environmental torts.

King & Wood Mallesons

18th Floor, East Tower, World Financial Center
1 Dongsanhuan Zhonglu
Chaoyang District
Beijing, 100020
PRC

+86 10 5878 5588

+86 10 5878 5566

kwm@cn.kwm.com www.kwm.com
Author Business Card

Law and Practice

Authors



King & Wood Mallesons (KWM) is an international law firm able to practise in the PRC, Hong Kong SAR, Australia, UK, USA and a significant range of European nations. Its presence and resources in the world’s most dynamic economies is profound. Leveraging its exceptional legal expertise and depth of knowledge in the China market, the firm advises Chinese and overseas clients on a full range of domestic and cross-border transactions, providing comprehensive legal services. In the field of securities disputes, KWM’s securities litigation team participated in the Jinzhou Port case, the Wuliangye case, the Dongfang Electronics case and other early cases, establishing a market position with its first-mover advantage. KWM’s securities litigation team has undertaken nearly 100 securities class action cases, including high-profile ones such as the Wuyang Bond Case and the Huaze Cobalt & Nickel case.

Trends and Development

Authors



King & Wood Mallesons (KWM) is an international law firm able to practise in the PRC, Hong Kong SAR, Australia, UK, USA and a significant range of European nations. Its presence and resources in the world’s most dynamic economies is profound. Leveraging its exceptional legal expertise and depth of knowledge in the China market, the firm advises Chinese and overseas clients on a full range of domestic and cross-border transactions, providing comprehensive legal services. In the field of securities disputes, KWM’s securities litigation team participated in the Jinzhou Port case, the Wuliangye case, the Dongfang Electronics case and other early cases, establishing a market position with its first-mover advantage. KWM’s securities litigation team has undertaken nearly 100 securities class action cases, including high-profile ones such as the Wuyang Bond Case and the Huaze Cobalt & Nickel case.

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