CHINA Law and Practice Contributed by: Siyuan Liu, Wei Wang and Huanhuan Yu, Jingtian & Gongcheng
Ordinary Representative Action Mechanism Representative actions are divided into those with a certain number of litigants and those with an uncer- tain number of litigants. Jurisdiction is determined in principle under the Civil Procedure Law, unless special rules apply. Representative actions with an uncertain number of plaintiffs have special characteristics. The competent court may, at its discretion, apply the mechanism. The court may issue an announcement of registration of rights stating the facts of the case and the claims of the existing litigants, and notify right-holders who have not yet participated in the litigation to register with the court within a certain period. Right-holders may elect representatives, but if they fail to do so, the court may appoint representatives after consulta- tion with the right-holders, or designate directly where consultation fails. Non-registered plaintiffs may initi- ate a separate lawsuit, but in principle, representative actions take precedence, and parallel cases are sus- pended. Common factual findings and legal interpre- tations established in the representative judgment are directly binding on parallel cases. Special Representative Action Mechanism A special representative action must be precondi- tioned on and transferred from an ordinary represent- ative action with an uncertain number of plaintiffs. Specifically, after the court announces the eligible right-holders, an investor protection institution which may accept special authorisation from more than 50 plaintiffs, may apply to convert the case into a special representative action. Special representative actions apply exclusively in securities litigation. Jurisdiction is strictly limited to the intermediate people’s courts, specialised financial courts, courts where securities exchanges or other national stock exchanges approved by the State Council are located. Except where the Supreme Peo- ple’s Court assigns otherwise, such actions are in practice confined to the Shenzhen Intermediate Peo- ple’s Court, the Shanghai Financial Court, and the Beijing Financial Court.
cases arising from misrepresentation, insider trading and market manipulation. As of September 2025, only four cases have been filed: the Kangmei Phar- maceutical case (before the Guangzhou Intermediate People’s Court), the Essence Information Technology case (before the Shanghai Financial Court), the Jin Tong Ling Technology case (before the Nanjing Inter- mediate People’s Court), and the Misho Ecology & Landscape case (before the Shenzhen Intermediate People’s Court). 2.3 Definition of Collective Redress/Class Actions The mechanisms of representative action and model judgment discussed in this report epitomise judicial practice and academic research, and are not neces- sarily prescribed with official or exclusive definitions in statutes or judicial interpretations. Refer to 1.1 History and Policy Drivers of the Legislative Regime and 2.1 Collective Redress and Class Action Legislation for the definition and applicable rules. 3. Procedure for Bringing Collective Redress/Class Actions 3.1 Mechanisms for Bringing Collective The joint action mechanism, as a general mechanism established under the Civil Procedure Law, is appli- cable to all categories of civil dispute. The jurisdiction of the joint action is determined pursuant to the Civil Procedure Law. Issues in “necessary joint action”, such as consolidation, are determined ex officio by the court, not subject to the parties’ choice. Conversely, “ordinary joint actions” may be consolidated if the court deems this appropriate and the parties agree. Model Judgment Mechanism The competent court may, at its discretion, apply the model judgment mechanism and designate a model case. Jurisdiction is usually determined in accordance with the Civil Procedure Law and the nature of the dis- pute, unless special rules apply (such as in securities misrepresentation disputes). Redress/Class Actions Joint Action Mechanism
76 CHAMBERS.COM
Powered by FlippingBook