CHINA Law and Practice Contributed by: Siyuan Liu, Wei Wang and Huanhuan Yu, Jingtian & Gongcheng
2. Legal Framework 2.1 Collective Redress and Class Action Legislation Joint Action Mechanism The joint action mechanism, currently provided in Arti- cle 55 of the Civil Procedure Law of the PRC (2023, Civil Procedure Law) and Articles 73–76 of the Inter- pretation of the Supreme People’s Court on the Appli- cation of the Civil Procedure Law of the PRC (“Civil Procedure Judicial Interpretation”). Model Judgment Mechanism In May 2016, the SPC and the CSRC issued the Pilot Programme of Diversified Dispute Resolution Mecha- nisms. In November 2018, they issued Diversified Dis- pute Resolution Mechanisms. In May 2024, the CSRC further promulgated the Work Plan on Improving Diversified Dispute Resolution Mechanisms for Secu- rities and Futures and Deepening Litigation Source Governance. In addition, courts in Beijing, Shanghai, Guangdong, Zhejiang, Jiangsu and other regions have gradually issued local judicial guidelines and opinions on applying the model judgment mechanism in securi- ties disputes. Ordinary Representative Action Mechanism Article 56 of the Civil Procedure Law provides for representative actions with a certain number of plain- tiffs, while Article 57 addresses those with an uncer- tain number of plaintiffs. Articles 75–80 of the Civil Procedure Judicial Interpretation establish the basic framework. Article 95 of the Securities Law, Article 33 of the Mis- representation Judicial Interpretation, and Articles 5–31 of the Provisions by the Supreme People’s Court on Several Issues Concerning Representative Actions for Securities Disputes (“Representative Actions Pro- visions”) set out specific rules for applying the ordinary representative action mechanism in security disputes. Special Representative Action Mechanism Articles 32–41 of the Representative Actions Provi- sions provide special representative actions in securi- ties disputes. Shanghai, Nanjing, Xiamen, and Fuzhou courts have issued local judicial documents and guidelines to implement the mechanism.
In addition, the China Securities Investor Services Centre (ISC), designated as the authorised body to initiate special representative actions, has promul- gated the Special Representative Actions Rules (Trial Implementation) and the Administrative Measures for Assessing Securities Litigation Cases (Trial Imple- mentation), which serve as important regulatory ref- erences. 2.2 Scope of Areas of Law to Which the Legislation Applies Joint Action Mechanism The joint action mechanism, as a general mechanism established under the Civil Procedure Law, is applica- ble to all categories of civil disputes. Model Judgment Mechanism In contemporary judicial practice, the model judgment mechanism is applied primarily in collective redress arising from securities, financial products (such as funds, asset management products and trusts) and consumer protection. Ordinary Representative Action Mechanism The ordinary representative action mechanism, as a general mechanism established under the Civil Pro- cedure Law, is applicable to all categories of civil dis- putes. In practice, it has been applied in the following areas: • collective redress arising from misrepresentation, insider trading and market manipulation in the securities market; • collective redress arising from environmental pol- lution; • collective redress arising from product liability; • contract disputes affecting multiple parties, includ- ing rural land contracts, property management contracts, prepaid consumption contracts, and lease agreements; • construction payment disputes; • collective labour disputes involving large numbers of employees; and • disputes arising from false advertising. Special Representative Action Mechanism Currently, the special representative action mecha- nism is only applicable to securities collective redress
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