New Amendment to PRC Civil Procedure Law: An Analysis

by Sheppard Mullin Richter & Hampton LLP

[author: Ling Zhang]

On August 31, 2012, China's legislature, the National People’s Congress, approved an amendment (“Amendment”) to the PRC Civil Procedure Law (“CPL”). The Amendment presents the second time in six months that China’s top legislative body has moved to modify China’s most fundamental laws on procedural justice, following the recent amendment to the PRC Criminal Procedure Law in March.

The Amendment’s sixty articles offer extensive changes covering nearly every chapter of the CPL. The changes introduced by the Amendment primarily address: (1) improving conciliation procedures; (2) protecting civil procedural rights; (3) improving the evidentiary process; (4) improving the summary procedure process; (5) strengthening the supervisory power of the people's procuratorates (the agencies responsible for prosecution and investigation); (6) improving the trial and retrial procedural system; (7) improving the system of execution procedures by incorporating relevant judicial interpretations into the law; and (8) improving the special procedure system.

Many may be surprised as to the scale of the changes introduced by the Amendment, particularly given that the CPL was last amended as recently as 2007. There are several important reasons, however, that likely helped support the changes introduced by the Amendment.

I. Keeping Pace with the Sweeping Changes Taking Place Throughout China

The Amendment was likely introduced in order to keep pace with the sweeping changes taking place throughout China. As law is a tool that is used for mandating social control, it cannot remain static. Good laws require adjustments in order to reflect the changes taking place in any given society.

A. Digital Evidence and Simplified Service of Process. With the development of information technology, more and more people choose to engage in transactions via the internet, or use digital devices to record their data. Accordingly, where there may be a dispute, the concept of digital evidence becomes applicable to civil procedure. Article 12 of the Amendment specifically provides that digital data shall be one type of admissible evidence, which means that the logs of instant message conversations, as well as information contained in blogs or micro-blogs may be admissible.

Moreover, for the same reason, the service of process has become much more convenient. Article 18 of the Amendment provides that (i) people can take pictures to record the delivery of documents, as proper service of process, and (ii) sending select permitted litigation-related documents via fax or email can also be one way to deliver legal documents.

B. Optimizing the Conciliation System. Articles 30, 42 and 52 of the Amendment, among others, provide for an enhanced conciliation system that is better designed to encourage people to choose conciliation to settle their disputes, by (i) urging the court to identify those disputes which can be settled by conciliation before litigation, and thereafter settle such disputes by conciliation, (ii) establishing special procedures to confirm conciliation statements and make them enforceable, and (iii) establishing relief measures for concerned parties where settlements are reached by fraud.

C. Public Interest Litigation. With growing concern over disputes regarding environmental rights and consumer rights, Article 9 of the Amendment for the first time now expressly provides for public interest litigation.

D. Small Claims Procedure. In an attempt to avoid further congestion of the court system, Article 39 of the Amendment provides that small claims judgments shall be final where they do not exceed 30% of the average annual wages of the citizens of a particular province.

II. The Desire to Adopt Select Judicial interpretations

Further, the Amendment was likely introduced, in-part, in order to incorporate the experience and certain developments of China’ judiciary. The Amendment has organized and consolidated select principles derived from judicial interpretations adopted by the Supreme People’s Court, and has incorporated those principles in the Amendment. Among others, Articles 15, 16, 17, 21, 25, 46, 55, 56, 57 and 59 of the Amendment to various degrees reflect relevant provisions that were conceived in judicial interpretations.

III. Enhancing the Protection of Legal Rights

Moreover, the Amendment was likely introduced in order to enhance the protection of legal rights. Notably, (i) Articles 46, 48, 49, 50 and 53 of the Amendment are introduced to strengthen the legal supervision power of the people’s procuratorates, (ii) Articles 43, 44 and 46 of the Amendment are introduced to perfect the system of trial supervision including retrial procedures, (iii) Articles 41, 42, 54, 55, 56 and 57 of the Amendment are introduced to improve enforcement procedures, and also to improve special procedures through the incorporation of relevant judicial interpretations and two types of special procedures, and (iv) Articles 1, 8, 10 and 24 of the Amendment are formulated to reflect and implement the principle of good faith (for example by preventing collusion).

IV. Increasing Transparency

Finally, the Amendment was likely introduced in order to increase transparency. In particular, Article 32 requires written judgments to state clearly the grounds for the application of certain laws. This may indicate longer written judgments in the future, as judges shall not only make reference to the particular laws that are applied in a specific case, but they are now also required to state the reasons why such laws are applied. Further, Article 34 provides that the public can have access to written judgments and court orders, provided that they do not pertain to state secrets, trade secrets or personal privacy. This is a welcomed development, as the public’s ability to inspect judgments and orders will in-turn likely mean that judges will be more cautious when making rulings. Moreover, as the public will have access to judgments and orders, the predictability of the application of laws will likely be enhanced.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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