CHINA Trends and Developments Contributed by: Michael Ma, Dacheng Law Offices
liable persons shall be penalised according to the preceding paragraph. “Whoever has an act in the first paragraph and illegally possesses others’ property or evades lawful debts, and commits other offences in the meantime shall be convicted and imposed a heavier penalty according to the provisions on the heavier penalty. “Judicial officers who use their authority to com - mit the offences in the preceding three para - graphs jointly with others shall be imposed a heavier penalty within the range of relevant pen - alties; if other offences are also constituted, they shall be convicted and given a severer punish - ment according to the provisions on the heavier penalty.” Before false lawsuits were criminalised, PRC courts typically dealt with false lawsuit behaviour by dismissing the claim and other means. Some cases of serious false lawsuit behaviour were subject to civil sanctions in accordance with Arti - cle 114 of the Civil Procedure Law, while others were handled as crimes. The lack of provisions in the Criminal Law reduced the cost of false litigation, leading to an escalating trend of false litigation in some areas. Amendment (IX) came into effect in 2015 and introduced the crime of a “false lawsuit”, con - sisting of four provisions. • The first provision specifies the elements of the offence and the sentencing standards for false litigation crimes – ie, initiating civil litigation with fabricated facts that disrupt the judicial order or seriously infringe on others’ legitimate rights can result in imprisonment of up to seven years and a fine.
• The second provision stipulates that a dual punishment system is to be implemented for corporate offenders, punishing the unit as well as its directly responsible executives and other directly liable persons according to the provisions of the false litigation crime. • The third provision states that a heavier punishment will be imposed if a false lawsuit is conducted for the purpose of illegally pos - sessing others’ property or evading legitimate debts and if it constitutes other crimes, based on the stricter provisions, without cumulative punishment. • The fourth provision specifies that judicial personnel who collaborate with others to commit false litigation using their authority will face severe punishment. If such behaviour also constitutes other crimes, a stricter pun - ishment will be imposed based on the more severe provisions. Subject matter If the provision of Article 307(1) of the Criminal Law is interpreted literally, it will be found that only the party “filing a civil lawsuit” – namely the claimant in the original action or counterclaim – can constitute the crime. However, in judicial practice, if the claimant colludes maliciously with the defendant, agent or third party, attempting to harm the legitimate interests of others through false litigation, the defendant or third party act - ing as an accomplice to the claimant can also be guilty of this crime. In addition, under this provision, a “civil lawsuit” includes: • counterclaims filed by defendants; • third-party actions for annulment and objec - tions to enforcement, public notice proce - dures, special procedures and summary procedures;
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