The Right Of Consent Of The Non-party Shareholder During Shareholder Representative Action

It’s not rare that plaintiff(s) of the shareholder representative action fertilize(s) the actionto gain personal interest against those of the company involved. The only way to secure thecompany’s interest in the liked situation is to supervise and bond the act of the plaintiff(s).Besides adding the company as a third party in the shareholder representative action,conferring the right of consent to the non-party shareholder may be a wroth try. The word“non-party shareholder” refers to the shareholder excluding the shareholders as plaintiff(s)and defendant(s) in the shareholder representative action. The right of consent means, in termsof some situation, the plaintiff shareholder shall ask for consent from the non-partyshareholder in advance.This article consists of the following three parts excluding introduction:The first part analyzes the right of consent with respect of jurisprudence. Firstly, it givesthe reasons why the concept “consent” shall be chose to named such right by which thenon-party shareholder exert to supervise and bond the act of the plaintiff shareholder.Secondly, it explains why the right of consent shall be award to the non-party shareholderinstead of the company involved. Finally, defects of the current Shareholder RepresentativeAction System have been summarized therein so as to releve the necessities for establishingthe right of consent in our country edgewise.The second part enumerates qualifications of enjoying the right of consent. It is knownthat not all the non-party shareholder shall be entitled to making consent on the plaintiffshareholder’s act. To ensure justification and effectiveness of the shareholder representativeaction, there are at least four conditions a non-party shareholder shall meet, that is, holdingshare while the tort happened and during the whole shareholder representative action, filed,subject to the Clean-hand Rule and may represent the company involved fairly andcomprehensively. The non-party shareholder shall meet both these four conditions in themeanwhile in order to be the “qualified non-party shareholder”. Otherwise, the act orintention of such non-party shareholder to exercise the right of consent may be null and void.The third part discusses the subject matters of the right of consent, and the procedure ofmaking consents, as well as the results of the action after the non-party shareholder hasexerted their right of consents. Upon criticizing the now-existing opinion of some scholars, the subject matters of the right of consent have been limited to four: the agreement ofcompromise, the agreement of meditation, nolle prosequi and termination of action followinga discussion on the nature of such subject matters. Then it creatively put forward an overallprocedure on how to exert the right of consent on the part of the company involved, theplaintiff(s), the court and the non-party shareholder, filling up the blank on this aspect andenriching the content of the right of consent in the shareholder representative action system.That includes the procedure of notification from the company involved, the plaintiff(s) andthe court to the non-party shareholder when the aforesaid subject matters arises, the procedureof application by the qualified non-party shareholder for exercising the right of consent, theprocedure of shareholder meetings especially for the exertion of the right, and the procedureof filling the court with the result of the meetings.The results of the action after the non-partyshareholder has exerted their right of consents have been demonstrated at the end of thisthesis.