The Litigation Cost Problems On Shareholder’s Derivative Action

Shareholder’s derivative action system is adapt to the needs of protect minorityshareholder’s rights by the modern company legislation, will be helpful for protecting therights and interests of minority shareholders’, supervision and management standard toperform functions and powers, making up the company autonomy structural defects. Amongthem, the litigation cost problem is influence shareholder’s derivative action start key factorsand, at the same time, encourage proper derivative action and resistance but maliciousderivative action, a powerful lever to shareholder’s derivative action system value plays animportant role into full play. However, our shareholder’s derivative action system is still in itspreliminary establishment stage, including litigation costs, many procedural problems inlegislation still belongs to a blank, how to establish a reasonable standard, the fees for thelitigation cost compensation mechanism in order to stimulate the enthusiasm of the plaintiffshareholders sued, whether to set up the cost of litigation guarantee to prevent maliciousderivative action malicious derivative action, have not been clear answered. Shareholder’sderivative action breaks through the principle of "legal personality independence","themajority of capital "in company law, and "proper plaintiff principle" in civil procedural law,the particularity of the litigation cost sharing should not only applied to the generaldistribution principle of civil litigation cost. Shareholder’s derivative action system wasacknowledged by the company law, but fail to comply with the reform of the civil procedurelaw, make our country’s related laws and regulations did not have much operability at present,it is difficult to make shareholder’s derivative action system play its due role. In view of this,firstly, this paper analyzes theory foundation of the cost-sharing on shareholder’s derivativeaction, from the point of substantive law and procedural law, it is concluded the principlesand value orientation that derived litigation cost sharing should follow. Secondly, in thehorizontal comparison to other countries derived litigation cost problem on the basis of law,then, carry on the analysis of derivative action’s practice in foreign and the current situationof our country. At the last, provide some beneficial legislative suggestions for China’s perfectregulations on derivative litigation costs.In the content, the article is divided into four parts.The first part: this paper discusses the theory foundation of litigation cost problems onshareholder’s derived action. This problem is the combining product of shareholder’s derivative action system and the civil litigation cost system. Therefore, in the cost-sharingmechanism design, should not only consider the particularity of the shareholder’s derivativeaction, and will guarantee the right of appeal in exercise of the right of appeal and preventmalicious action, and meet the "the accessibility of civil judiciary" requirements. In a word,on a value orientation to protect the rights of minority shareholders, adhere to encourageproper action and to prevent malicious action. In reference to foreign advanced experience onthe basis of the domestic legal system and the coordination of the cost sharing mechanism.The second part: comparative analysis of the relevant laws and regulations aboutlitigation costs on shareholder’s derivative action in well-developed countries. This part centreon two main line: encourage proper derivative action and resistance but malicious derivativeaction. The horizontal contrast in Britain, the United States, Germany, Japan, South Koreaand China Taiwan region legislation respectively, on the basis of the related law incentiveproper derived lawsuit cost provision and resistance but malicious derived lawsuit cost,provide some beneficial reference for China’s perfect regulations on derivative litigation costs.The third part: Firstly, to our country, the problems in the derivative action cost-sharing atpresent and their causes were analyzed, and provide enlightenment practice to improve ourcost-sharing on derivative action. Secondly, puts forward some legislative proposal about tosolve the litigation costs problems on shareholder’s derivative action. To encourage theplaintiff prosecutions, practice acceptance fee preferential policy in shareholder’s derivativeaction, based on the plaintiff shareholder litigation cost compensation mechanism, as well asset up litigation insurance in derivative action, and so on. To prevent shareholders abusederivative litigation, puts forward to establish appropriate litigation cost guarantee, as well asthe provisions of the malicious plaintiff’s liability to pay compensation on the company, thedefendant’s litigation cost. In order to solve the shareholder’s derivative action practicedifficult problem, at the same time, avoid our country’s derived lawsuit be abused like otherdeveloped countries.