Research On The Litigation System Of Special Representative

The illegal cases in China’s capital market have intensified in recent years,which not only damages the legitimate rights and interests of investors,but also shakes the stable development of the securities market.However,securities civil disputes are damaged,and the number of investors is large and widely distributed.Although the subject amount of securities civil disputes is usually large,because the investment amount of a single investor is usually small,it is very easy to fall into the dilemma of "collective action".Due to the cost of safeguarding rights,the vast majority of small and medium-sized investors do not want to resort to litigation or arbitration to protect their legitimate rights and interests.Therefore,they will give up the damage claims against the relevant responsible persons,resulting in the inconsistency between the illegal acts of the relevant responsible persons and the legal consequences.With the revision of the securities law in 2019,China’s securities market has gradually changed from the audit system to the registration system.The relaxation of the "beginning" needs the "tightening" of the supporting process,otherwise it will usher in the "disastrous defeat" of the outcome.How to fully protect the legitimate rights and interests of the majority of small and mediumsized investors and make the illegal subjects and their relevant responsible persons bear the corresponding costs? This deserves a comprehensive reflection and discussion.The newly revised Securities Law in 2019(hereinafter referred to as the "new securities law")solves the above problems to a certain extent.Based on the uncertain representative litigation system(Article 54 of the Civil Procedure Law),it constructs a new system in which the litigation representative is an investor protection institution,and innovates the rule of "implied accession and explicit withdrawal" under this system.The birth of the special representative litigation system has brought many potentially damaged investors into the scope of protection,which undoubtedly gives a powerful "booster" to the capital market.Starting from the special representative litigation system,this paper introduces the basic contents of the special representative litigation system,analyzes the problems exposed by the special representative litigation provisions at present,draws lessons from the long-standing experience of the collective litigation system abroad,and clarifies the reform direction of the special representative litigation system,so that the special representative litigation system can better protect the rights and interests of the majority of small and mediumsized investors,Put forward suggestions to improve the operation of the special representative litigation system.The concept of the special representative litigation system is "securities civil litigation in which the investor protection institution is entrusted by more than 50 investors and participates as a representative".Its basic characteristics include the special qualification of the representative,the special starting procedure,the special jurisdiction court,the special way for investors to join,the burden of litigation costs,etc.after going through the brewing stage,birth stage,optimization stage and the first practice-Kangmei pharmaceutical case,It not only implements the new system,provides a good demonstration effect,but also helps to enhance the confidence of investors and promote the stable development of the capital market.Although the application of the special representative litigation system has received good market feedback,there are still many problems in the system itself,including the irrationality of the case selection mechanism and the preposition of administrative punishment.In terms of case selection mechanism,the specific provisions on case selection are formulated by the CSI small and medium-sized Investor Service Center(hereinafter referred to as the Investment Service Center);As a public authority to a certain extent,the investment service center is the only legal representative in the special representative litigation system,which leads to the integration of rule formulation and rule implementation;The litigation system of special representative takes the announcement issued by the court as the premise,which limits the litigation rights of the parties and the autonomy of investor protection institutions to a certain extent;The standards of major cases are not clear,which can easily lead to selective law enforcement and corruption;The selection criteria of cases in which the defendant has the ability to pay compensation has no legal principle,which is easy to lead to the situation of pre-trial judgment,which violates the basic principle of judicial justice.In the aspect of the preposition of administrative punishment,although the system can improve judicial efficiency,prevent the prevalence of indiscriminate litigation and enhance the enthusiasm of regulatory authorities,it infringes on the basic right of action of citizens in jurisprudence,and there is no correlation between civil litigation and the preposition of administrative punishment.Moreover,this provision will prolong the litigation time,which is not conducive to the timely compensation of investors.Therefore,in order to make the litigation system of the special representative run better,it is suggested to reform from the following four aspects: first,optimize the case selection criteria,including separating the formulation and implementation of rules,refining the case selection rules,and abolishing the standard that the defendant has the ability to pay compensation;Second,abolish the provision of administrative punishment in advance,and conform to the direction of judicial reform;Third,join the incentive mechanism to improve the power of the investment service center to protect the rights of small and medium-sized investors;Fourth,introduce the pre litigation mediation and reconciliation mechanism to improve the efficiency of the special representative litigation system.