On The Lessons Drawn From The Class Action Of The US For The Civil Cases In China's Securities Market

To guide the acceptance and hearing of civil compensation cases arising from the false statement in securities market, the Supreme People's Court promulgated the Notice on Related Issues Concerning the Acceptance and Hearing of Civil Cases and Infringement Dispute Cases Arising from False Statement in Securities Market on January 15, 2002. Clause 4 of the Notice exclude the form of class action from being applied to civil compensation cases arising from false statement, and stipulates that separate action and joint action should be the form for such cases. Pursuant to Clause 12 of the Stipulations of Supreme People's Court About the Trial of Civil Compensation Cases Arising from False Statement in Securities Market which was promulgated on January 9, 2003, any plaintiff is entitled to file a lawsuit in the form of either separate action or joint action. The promulgation of such a regulation has caused considerable influence on China's securities civil law suit system and numerous individual investors.The two judicial interpretations both exclude the form of class action, due to the special situation of China's securities market and its current legal system. However, we should realize that the objective of civil litigation in securities market is to give play to the civil liability's function in remedying and compensating investors' losses in securities market. In order to attain the goal efficiently, it's particularly important to choose the form of action. Whether it's able to give full play to the deterrent function of the whole civil compensation system by the design of action form in securities-related civil lawsuit will play a key role in exerting securities-related civil compensation system's predictive and guidance function. Only if we take a reasonable dispute settlement pattern in theform of group, can the related goals of securities-related civil suits be successfully achieved. Furthermore, the two provisions have many defects and shortcomings in practice, as a rational and efficient form in civil compensation cases, is adoptable. This article analyzes and assesses of the class action system of the US in an adequate way, and further comes up with some suggestions on how to improve the form of action adopted by our country's civil compensation cases in the securities market.This article is divided into four parts. The first part is foreword, which briefs the background of the forms of action adopted by China's securities market in the civil compensation suits, and points out the necessity to make a further study on the issue.The second part introduces the class action system of the US in detail, assesses the actual effect of the form in securities-related civil compensation cases, and makes an analysis with legal principle.The third part describes the current situation of the forms of action of the securities civil lawsuit system in China and reveals the advantages and defects of existing action forms.The fourth part expounds the superiority of class action in solving the problems arising from the civil compensation suits in China's securities market, and raises some recommendations and suggestions on how to build and adopt the form of class action in China in the future.