At the end of September, the Supreme People’s Court (SPC) issued Implementing Measures for the Pilot Reform of Improving the Positioning of Four Levels of Courts in Terms of Adjudication Levels and Functions (Four Level Court Reform Pilot Measures). The only translation available seems to be behind Westlaw China’s paywall. A quick summary of its backstory, provisions, and implications as related to the SPC follows below. The impact on the lower courts will be significant, but this reform needs to be analyzed together with other current reform documents to see the larger picture.
As the NPC Observer previously wrote, this reform was included in both the 2019 SPC’s fifth five-year court reform plan and the recent Plan for Building the Rule of Law in China (2020–2025). The National People’s Congress Standing Committee granted the authorization for this Pilot Reform in the summer. SPC President Zhou Qiang highlighted the principal reforms in his explanation to the NPC Standing Committee. The Party leadership (the Central Deepening Reform Commission) approved the reform in June, based on submission documents from the SPC. The drafters of the reform stated the proposal (改革方案稿) was based on research and specialist discussions (调研论证, although neither the approval document nor the submissions are available). I surmise that the research draws on earlier work by predecessors of the drafters. The roots of this reform can be seen in the SPC’s fourth five-year court reform plan, for which the SPC issued extended commentary (thankfully for the researcher). SPC research on this issue dates back to the spring of 2012, if not earlier.
This reform is one of many court (and other political-legal system) reforms that the Party leadership approved in January 2019, as part of its Implementing Opinion On the Comprehensive Deepening Reforms of the Political-Legal Sector《关于政法领域全面深化改革的实施意见. That meant that the measures approved in that document became important reform responsibilities (tasks) for the institutions involved (确定的重要改革任务).
The outside analyst of this and another court (and other Chinese legal) reforms is at a disadvantage in seeking to be thorough as might be possible in more transparent jurisdictions. It is not possible to know, for example, what the Party leadership reviews when it considers these submissions (my guess is a detailed executive summary, while responsible aides read more extended reports) and whether the SPC’s submission was approved unchanged.
What It Means for the SPC
The Four Level Court Reform Pilot Measures cover civil, administrative, and criminal cases, with the focus on civil and administrative cases. Among the objectives of the Four Level Court Reform Pilot Measures is to make the SPC a supreme court (with Chinese characteristics), rather than just China’s highest court.
As I wrote in my short article on the U .S.-Asia Law’s website and earlier on this blog, the SPC considers large numbers of retrial applications, primarily in the circuit courts. This document narrows considerably the flow of retrial applications that can be submitted to the SPC, although the new standards incorporate necessary flexibility. (Ironically, I have just written an article on this process).
The intent is for the SPC to focus on a smaller number of more important cases. As stated in Article 1: “the Supreme People’s Court shall focus on supervising and guiding adjudication work at the national level and ensuring the correct and uniform application of the law.”
According to the drafters’ commentary, the intent is for the SPC to focus on (judicial/legal) policy formulation (政策制定) and social governance (社会治理), about which I spoke recently, and is a subject of another forthcoming article. This has been the thinking of the SPC leadership for over five years, if not longer–Judge He Xiaorong, current head of the #2 Circuit Court (and former head of the SPC’s judicial reform office) stated six years ago–when writing about the circuit courts:”
…the center of the work of SPC headquarters will shift to supervision and guidance, primarily trying cases that have a major guiding function in unifying the application of law, that can become guiding cases.”
The drafters of the Four Level Court Reform Pilot Measures state that the intent is to establish a working mechanism in which the Supreme People’s Court judgments are directly transformed into guiding cases and promote relevant judgments to become an important source for optimizing the formulation and content of judicial interpretations, as well as modifying and abolishing judicial interpretations. We will need to wait for further measures from the SPC on this.
Narrowing the Flow of Retrial Cases
The 2021 reforms change the standard of review for civil and administrative cases. The reforms set out a two-branch test: compulsory and permissive jurisdiction. Under Article 14, compulsory jurisdiction includes cases in which:
- the higher court’s ruling or judgment was erroneous and the case has guiding significance in the application of law; or
- in the past three years, higher people’s courts have unresolved major differences in the application of the law in similar cases for which binding judgments or rulings have been rendered by the SPC or different high people’s courts; or
- any other circumstances where the SPC considers it should here the cases.
The language of #3 is familiar language to anyone who spends time reading Chinese legislation.
Article 11 sets forth conditions under which applicants can apply to the SPC for retrial, but the SPC has flexibility in accepting the cases:
- applicants consider that the higher people’s court applied the law erroneously, but do not object to the facts determined, principal evidence, and procedures of the higher people’s court, or
- if the court’s judicial (adjudication) committee considered the case.
Article 13 authorizes the SPC to remand a case back to the higher people’s court if it considers that there are unclear facts or procedural errors, or alternatively, the higher people’s court erred in applying the law, but the issue does not merit SPC consideration.
Applicants must make an undertaking when applying for reconsideration that they undertake not to object to the above matters, and are directed to focus their application on the disputed issues and the grounds for their argument. At this point, detailed implementing measures have not yet been issued.
One issue that the drafters mentioned in their commentary is inconsistent judgments or rulings made by different divisions of the SPC. In practice, that issues relating to the same body of law may be determined by different divisions of the SPC or different teams of SPC judges in the circuit courts and headquarters. They arise either through litigation or court administrative-type procedures. While SPC judges (as I understand it) search for similar cases, it is inevitable that different people have different views on legal issues. An example of this arose recently in the area of arbitration law, in which the SPC’s Intellectual Property Court ruled that the arbitration agreement in a software contract providing for foreign arbitration was invalid, because the dispute lacked a “foreign element,” while the SPC’s #4 Civil Division has upheld arbitration agreements providing for foreign arbitration between two Chinese parties.
In that earlier blogpost I wrote that, unlike some other legal systems, the SPC has not evolved an en banc or enlarged panel of judges, but the Four Level Court Reform Pilot Measures illustrates that someone involved with court reform has looked to other jurisdictions and borrowed but not transplanted the concept. For the avoidance of doubt, borrowing legal concepts from abroad is consistent with Xi Jinping Legal Thought. The Plan for Building the Rule of Law in China (2020–2025) includes among its main principles: “learn from the useful experience of foreign rule of law (借鉴国外法治有益经验).”
Articles 18 and 19 set forth two options for resolving cross-division differences in views on legal issues. Article 18 involves the creation of an enlarged collegial panel with five or more members from different divisions. Consistent with the SPC’s administrative nature, the divisions (circuit courts, or intellectual property court) must apply to the SPC’s Trial Administration Office, which in turn must seek the approval of the SPC President. The President may designate a Justice (SPC Vice President) to sit as the presiding judge. The alternative set out in Article 19 is to apply to the Trial Administration Office to establish a cross-division specialized judges committee (its functions discussed here). I surmise that the second alternative will be used more frequently.
What to expect?
I surmise that there will be a transition period, as the cases accepted under the old retrial system are processed by SPC headquarters and circuit courts. So my guess is that 2022 will see fewer cases than 2021 and 2020, and 2023 will see even fewer cases. I expect that the SPC’s Intellectual Property Court to continue to have a large number of cases (over 3000 in 2020). In 2020, the greatest proportion of their cases were civil and administrative appeals. My uninformed guess is this trend will continue.
It is possible that as a consequence of this reform, the China International Commercial Court will hear more cases than before. But as I said and wrote earlier this year, I surmise that they will continue to pick their cases carefully, focusing on those which raise issues in which existing law and judicial interpretations are unclear and involve issues that frequently arise in practice. These CICC principles are consistent with those in the Four Level Court Reform Pilot Measures.
As for the other divisions of the SPC, my guess is that they will be able to find enough major cases to keep themselves busy while also spending more time on judicial policy and judicial interpretations, not to mention other matters. The principles in this reform do not affect long-standing mechanisms of the SPC, such as death penalty review or the prior review of arbitration-related decisions by the #4 Civil Division. As I hinted in a recent blogpost, I believe that in the next year or two, a great deal of time will be invested in issuing judicial interpretations to fill out the broad principles of the Civil Code, but the interpretations will themselves be issued in a codified fashion.