CHINA Law and Practice Contributed by: Siyuan Liu, Wei Wang and Huanhuan Yu, Jingtian & Gongcheng
• defining the scope of right-holders in its announce- ment of the registration of rights based on factual findings, in ordinary representative actions with an uncertain number of plaintiffs and in special repre- sentative actions; • adding parties necessary to the joint actions ex officio in necessary joint actions; • consolidating cases for trial ex officio; • designating representatives in ordinary representa- tive actions with an uncertain number of plaintiffs where the parties fail to elect their own representa- tives; • in exceptional circumstances, under exclusive or centralised jurisdiction rules, the SPC may confer jurisdiction to another court; • reviewing settlement or mediation agreements reached between representatives and defendants, and deciding whether to issue a judicial confirma- tion in representative actions; and • reviewing a representative’s decision to amend or waive claims, admit the opposing party’s claims, or withdraw the action in its entirety, and determining whether to grant approval in representative actions. 3.7 Length and Timetable for Proceedings Pursuant to the Civil Procedure Law and relevant pro- visions, the time limit for first-instance proceedings is generally six months, which may be extended for six to nine months upon approval in special circum- stances. The time limit for appeals is generally three months, which may be extended for three months upon approval in special circumstances. In all kinds of collective actions under PRC law – regardless of whether conducted through joint action, model judg- ment, or representative action – the large number of participants and the complexity of substantive issues often result in proceedings exceeding statutory lim- its. Actual average duration varies significantly due to case type, scale and the complexity of the substantive issues, and it is not possible to identify an average timeframe uniformly applicable to all cases. 3.8 Mechanisms for Changes to Length/ Timetable/Disposal of Proceedings As noted in 3.7 Length and Timetable for Proceed- ings , no uniformly applicable average timeframe exists for collective actions in China. Pursuant to the
Civil Procedure Law and judicial practice, proceedings may be delayed due to the following reasons: • jurisdiction challenges raised by the parties; • judicial review of the scope of right-holders in rep- resentative actions; • the period for right-holders’ registration announce- ment; • court-appointed third-party appraisal, assessment or valuation; • judicial investigation and evidence collection; • settlement negotiations; and • suspension of proceedings pending the resolution of another case that remains undecided. 3.9 Funding and Costs Allocation of Litigation Costs • General collective action: Pursuant to the Meas- ures on the Payment of Litigation Costs, case acceptance fees, property preservation fees, and public announcement fees are prepaid by the plaintiffs when filing the action or applying for property preservation, but are ultimately borne by the losing parties. • Ordinary representative action with an uncertain number of plaintiffs: no case acceptance fees need to be prepaid. Such costs are ultimately borne by the losing parties. • Special representative actions: no case acceptance fees need to be prepaid and these are ultimately borne by the losing parties. If the plaintiffs lose in whole or in part, they may apply for a reduction or deferment of such fees. The court will decide whether to approve the application based on the financial situation and the circumstances of the case. If an investor protection institution, acting as a representative, applies for property preservation, the court may waive the requirement to provide a guarantee. Litigation Funding Third-party litigation funding is, in principle, not per- mitted in the PRC. In practice, however, some plain- tiffs’ attorneys may advance litigation costs for their clients and require no prepayment of attorneys’ fees. The principal resolutions to alleviate cost burdens for plaintiffs include special representative actions initiat- ed by investor protection institutions, support actions
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