Shareholder Derivative Litigation Abuse V. Prevention Mechanism Studies

After our country's new Company Law had introduced the system of shareholder derivative action, the imperfections of both the law and the supporting system have resulted in the emergence of a phenomenon in which more and more people try to abuse derived right to appeal. In order to play the shareholder derivative action's role in protecting the interests of minority shareholders better, we need to take preventive measures before, in and after action procedure, and what's more, to design a system regulate abusing behaviors. This thesis intends to explore this issue in three parts.In the first part, I will illustrate what the abuse of shareholder derivative action is, and enumerate its forms. By doing this, I want to reveal the loopholes and shortcomings in China's current system of shareholder derivative action.In the second part, I will illustrate the necessity to prevent some people from abusing the system of shareholder derivative action. I will take this issue in three aspects, which refer to the defects of shareholder derivative action, the needy of protecting the interests of companies and the needy to perfect our legislations. By doing this, I want to indicate the necessity and urgency to prevent the behaviors of abusing derivative action.In the Third part, I will explain the measures which we can take to prevent the abuse of shareholder derivative action. This part is also the focus of this thesis. It can be divided into three small parts. The first one is about the preventive measures before the shareholder derivative action, including limiting the plaintiff eligibility, limiting the scope of defendant and setting the pre-procedure. The next one is about the preventive measures in the shareholder derivative action, including the system of action guarantee, the calculation of the cost in action, controlling the procedure of compromise and the system of dismissing the lawsuit. The last one is about the preventive measures after the shareholder derivative action, mainly including the burden distributions when the plaintiff win or lost the action. All these parts referring measures have included the main ideas in national legislation and the academic community; they also include the controversies of our country's scholars on this issue. In this way, I hope to put forward my own more reasonable proposition on this basis, and thus improve our shareholders derivative action system in order to play its positive role.