By Richard W. Wigley King & Wood Mallesons’ IP Litigation Group
Under the Civil Procedure Law of the P.R.C. (“CPL”), Articles 53-56 of the current CPL define requirements for filing a “joint litigation”, including those suits where said joint litigation may involve “one party with numerous litigants”. To this latter scenario, Article 55 of the CPL notes that where “one of the parties has numerous litigants, but the exact number of litigants is uncertain when the lawsuit is filed, the People’s Court may issue a public notice to explain the nature of the case and the claims of the litigation and inform those persons who are entitled to the claim to register their rights with the People’s Court within a fixed time period.” Article 55 goes on to provide that the litigants may elect “representatives” and further defines the binding nature of the Court’s ruling on not only the “representative”, but upon all litigants. Finally, Article 56 of the CPL defines a third party right to join the litigation when said party has an independent claim to the subject matter or that the outcome of the litigation may impact the party’s legal interests.
Further to whether standing is afforded the Plaintiff, Article 108 of the CPL provides that “[t]he plaintiff must be a citizen, legal person, or an organization having a direct interest with the case”. In short, Articles 53-56 and 108 of the CPL provide a framework which allows for what is referred to in certain overseas courts, such as those of the United States, as “class-action lawsuits”.
One of the issues with the current view of the P.R.C. courts in regards to which entities have standing to bring such “class-action lawsuits” under the CPL, relates to lack of clarity on whether certain “non-governmental organizations” (“NGOs”), such as a private, non-commercial enterprise, would have such standing to bring such a suit before a P.R.C. court. There have been to date, class-action suits brought in P.R.C. courts by certain entities in order to protect the public interest with respect to environmental safety and food safety. However, there have been no clear rules in the CPL which afford standing in such suits to NGOs/private, non-commercial enterprises, though allowing standing for governmental organizations and “Social Groups”, the latter as when duly registered and “affiliated to an administrative organ in most cases, a government agency”.
It has been reported that the coming Amendment to the CPL, which would come into effect on January 1, 2013, would provide for “related organizations” to have standing in such suits where the public health and/or public safety is at risk. As such, from said reports it appears that certain NGOs and private non-commercial enterprises may qualify as “related organizations” and, as appropriate to the facts of the case, then be deemed to have standing to bring suit in the public interest in the P.R.C. in such environmental/public safety-related class-action suits. Though the term “related organization” is still rather vague in nature and, as such, allowing the Courts certain discretion in determining whether the organization at issue is indeed representing the public interest and having a “direct interest” in the case, the reported amendment does appear to provide a broader range of plaintiffs eligible to bring “class action”-type suits in environmental protection and food safety cases, which may ultimately help lead to better protection of the environment of the P.R.C. and, also, better protection of the Chinese consumer.
Note: this publication is for informational purposes only and it does not in any way constitute a legal opinion.