Research On Civil Litigation Arising From False Statement In China's Securities Market

False statement not only destroys the order of the securities market,but also leads to the loss of numerous investors.In recent years,there has been a surge in the number of civil litigations and plaintiffs arising from false statements in China's securities market,along with increasing filing rate and considerable compensation rate.However,there are still three major problems to be resolved.First,the dilemma of collective action still exists because of investors' insufficient knowledge about their legal rights,lack of continuity in exercising rights and low willingness to appoint lawyers.Second,high cost of litigation,including money cost,time cost and information cost.Third,low judicial efficiency resulting from the fact that procedural prerequisite has not been substantially cancelled and the principle of priority of civil compensation lacks procedural guarantees.These three major problems in civil litigations arising from false statements in securities market are not only attributed to investors' insufficient motivation,but also related to chronic lack of litigation modes that can efficiently resolve mass securities disputes.Among the existing litigation modes,joint litigation is mostly split into “single independent cases and combined trials” by the courts,and the effectiveness of representative litigation seems doubtful.Neither of them can break through the dilemma of collective action,reduce litigation costs,or achieve judicial economy.The China Securities Investor Services Center(CSISC)carries out support litigation so as to improve investors' motivation and abilities to file a lawsuit with its nonprofit nature and professionalism.Nevertheless,support litigation also encounters development bottlenecks due to weak theoretical foundations,unclear elements of litigations,single prosecution subject,insufficient information disclosure,and time-consuming preparation before litigations.Meanwhile,the pilot work of test action has just begun and judicial documents vary from place to place.The advantages and disadvantages of test action have yet to be tested in practice.Solving the dilemma of collective action,reducing litigation costs,and improving judicial efficiency are also seemed as the value orientation by other countries and regions when designing civil litigation modes and systems for false statements in securities market.Therefore,we can learn from other countries and regions' experience to promote the transformation of support litigation and the operation of test action in mainland.As for the dilemma of collective action,a “selective incentive mechanism” is built in American class action by market approach,while Taiwan group litigation takes a non-governmental and non-market path based on the “self-governance theory”,granting non-profit organizations the right to sue.Regarding litigation costs,both German test action and the Taiwan group litigation have lengthy litigation cycle.However,Taiwan group litigation has set up a series of preferential measures for plaintiffs,which has reference value.With regard to judicial efficiency,the withdrawal system implemented in the American class action can realize judicial economy,but cannot take into account procedural justice,while electronization of litigation procedures in German test action,and the improvement of supporting mechanisms in Taiwan group litigation can be used as a reference for the mainland.To improve the civil compensation litigation system for securities false statements,on the one hand,the restrictions on litigation modes and procedural prerequisite should be cancelled.On the other hand,we should improve litigation modes and supporting mechanisms.First,as for test action,we should build a “selective incentive mechanism” for the plaintiffs,promote the electronization of litigation procedures as well as strengthen and standardize professional support.Second,to promote the transformation of support litigation to group litigation,eligible groups should be granted the right to sue so as to solve the dilemma of collective action.At the same time,we should introduce competition mechanism,clarify the litigation requirements,explore the mode of cooperation between non-profit organizations and government,and train professional public interest lawyers or hire private lawyers so as to overcome “spontaneous failure”.What's more,preferential measures for eligible groups ought to be set up to reduce litigation costs.Judicial efficiency can be realized by grant of right to sue before the litigation,registration of claims during the litigation and the extensional validity of judgement after the litigation.Third,we should improve the supporting mechanism by the establishment of litigation information disclosure and sharing mechanism,the establishment of investor compensation funds,and the improvement of a multiple disputes settlement mechanism.The article is divided into four chapters.The first chapter is an empirical analysis of the civil compensation litigation arising from securities false statements in China.Firstly,it introduces the background of China's securities misrepresentation civil litigation and explains why the civil litigations arising from securities false statements is selected as the object of study.Secondly,a vertical analysis of the number of cases and plaintiffs,the filing rate and compensation rate is made to summarize the current situation of civil litigation arising from securities false statements.Last but not least,it points out that there are still three major problems,namely the dilemma of collective action,high litigation costs and low judicial efficiency.The second chapter demonstrates the necessity of reforming the existing civil litigation modes.Aiming at the aforesaid three major problems,the pros and cons of joint litigation,representative litigation,support litigation,and test action are analyzed in order.In addition,it also explains the specific reasons why the existing litigation modes cannot resolve the aforesaid three major problems.The third chapter discusses the reference value of civil litigation modes of other countries and regions.Firstly,it demonstrates the necessity of studying American class action,German test action and Taiwan group litigation.Secondly,it analyzes the pros and cons of the aforesaid three different civil litigation modes.Thirdly,it sums up experience and lessons of other countries and regions.The fourth chapter puts forward specific proposals for improving the civil litigation modes for securities false statements and supporting mechanism.First of all,the overall idea is determined as "breakthrough and innovation".Secondly,two approaches are proposed for the improvement of the civil litigation modes.One is to promote the test action,the other is to transform from support litigation to group litigation.Finally,the supporting mechanism for civil litigation should be improved by establishing litigation information disclosure and sharing mechanism,setting up investor compensation funds and promoting multiple disputes settlement mechanism.