Category Archives: Court Operations

Chinese bankruptcy courts to become “hospitals for sick companies”

hospital-clipart-hospital3As recent blogposts  (and academic studies) have shown, Chinese bankruptcy courts have been acting as underused morgues rather than hospitals for ailing Chinese companies.  The Supreme People’s Court (SPC) anticipates major changes, because (as highlighted on this blog) the government has decided that a stake needs to be driven through the heart of zombie companies.

This blogpost will focus on the role that courts are to play in clearing up zombie enterprises.  But because the role of the courts in bankruptcy is linked to other government policies, it will also flag some significant ones that have not yet come to the attention of observers outside of China. It appears that behind the scenes, officials have been working on putting together the policy machinery to do so and that the process is ongoing.

In late February, the SPC convened a conference of bankruptcy judges and other officials on dealing with zombie enterprises in Hangzhou, Zhejiang Province, both to transmit the newest judicial policy on bankruptcy and to find out from local judges and other officials what the issues are.

Judge Du Wanhua, a senior SPC judge, has been designated to take the lead on bankruptcy law reforms. The location of the conference is intentional, because (as mentioned in an earlier blogpost), Zhejiang Province has been piloting new approaches to bankruptcy law. The Zhejiang Higher People’s Court has been working with government to promote bankruptcy related policies, but at the same time has emphasized that the courts need to hear cases independently. In 2015, the courts of that province accepted over 600 bankruptcy cases.

According to Judge Du, the “courts are to become hospitals for sick companies.” Listed below is the approach that the SPC is intending for the lower courts to take (with some of my comments).

  • The courts should promote more bankruptcy reorganization and conciliation, and diminish liquidation cases (a contrast to what has occurred in recent years).  (The SPC has promoted this approach through recent reports promoting reorganizations by the courts and is continuing to promote this in its pronouncements. Local governments are adopting policies to promote reorganization of companies.)
  • A market-oriented mechanism should be established which classifies zombie enterprises.  The mechanism should distinguish ones than can be saved through restructuring or conciliation procedures from the ones that should be liquidated.  The classification should fulfil the industrial development goals, targets, and other principles of the central government.  (But, Professor Liu Zhibiao, a leading economist suggested in a recent interview that it should the market to determine this, not government.)
  • The rights and interests of the state, workers, creditors, and investors should be protected (listed in this order).
  • A corporate restructuring bankruptcy information platform mechanism that uses modern information technology tools should be created to promote the greatest degree of success of corporate restructuring, and better use of economic resources.  (This is consistent with government (including SPC) policy promoting the use of information technology tools);
  • A unified coordination mechanism for bankrupt enterprises needs to be created under the local Party committee’s strong leadership and support of the relevant government departments to ensure cases are handled in an orderly manner. (However, in the fall of 2015, Ma Jian of the SPC’s research office pointed to local government interference in the acceptance, and trial of bankruptcy cases, as being an major issue.
    • A local court judge writing recently described a judge’s role: “bankruptcy involves the vital interests of many people, and directly affects social harmony and stability. Thus the social dimension of bankruptcy cases determines that the court can not ” go it alone” in bankruptcy cases. Some local governments do not want companies to go bankrupt for statistical , performance, maintenance of stability and other considerations.  [According to Professor Liu, it can have a negative effect on the performance evaluation of local officials.] The court should actively seek the support of the local government where the debtor is located, to provide good placement of workers of bankrupt enterprises, payment of wages, disposal of plant or other fixed assets disposal.  By communicating with relevant departments, policy support can be provided to help pay taxes , apply for transfer [of property], coordinate the interests of creditors, debtors , investors, employees and others) ;
  • Orderly mechanisms should be established to deal with wages, state tax, and the priority and realization of secured claims, unsecured claims.
  • Local courts should establish bankruptcy divisions and provide bankruptcy judges with better bankruptcy law training;
  • Procedures should be established to consolidate related bankruptcy proceedings in different courts;
  • Procedures for bankruptcy administrators should be drafted and their status should be improved;
  • Special funds should be established to pay for bankruptcies and bankruptcy administrators.

Related to this are the following government initiatives:

  • Local governments, such as Guangdong, are starting to issue policy programs on “supply-side reforms.” The Guangdong program, issued on 28 February, contains a section on bankruptcy. The policies reiterate and further detail the principles Judge Du enounced (and merit further analysis).
    • The Guangdong policies mention separate databases for bankrupt state-owned and non state owned enterprises, mentioning that special policies would be forthcoming for state owned enterprises and that courts would be given the “green light” to deal with the bankruptcy of zombie companies. Reflecting policies seen elsewhere, the Guangdong government is seeking to encourage private enterprises to assist in reorganizing state-owned zombie enterprises and is considering establishing special funds to assist companies to upgrade.
  • The central government is also looking to simplify procedures by which companies with no debts can be closed.  During 2015, the State Administration of Industry and Commerce announced that it was piloting reforms in a number of locations, first designating Shenzhen, the Pudong district of Shanghai, and several other locations, and subsequently expanded the locations.
  • Training sessions on bankruptcy law, either within the courts or with related government agencies and institutions. In late February, the Changsha (Hunan) Intermediate People’s Court held a training session with experts from the SPC (First Circuit Court) and professors of bankruptcy law from Beijing, while the local government in Quanzhou organized cross-institutional training.
  • Local courts (such as this one in Quzhou, Zhejiang Province) are providing reports to local government/Party Committees on what the courts can do.

But what are bankruptcy judges really doing?  If a recent message on Wechat is any indication, they are reaching out to their fellow judges for guidance and creating a chat group on how to deal with the many legal and social complexities that bankruptcy cases pose.

Can bankruptcy court “doctors” save zombie enterprises and their millions of employees?  It is very early days. What can safely be said is that bankruptcy and zombie enterprise related policies merit close monitoring by lawyers, the business community and others.

 

 

Another Chinese judge killed

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The Chinese legal community is mourning Judge Ma Caiyun, who served in a tribunal of the Changping District Court, in suburban Beijing, is understood to have been killed outside her home by two men, one of whom was a party to a divorce property settlement case. (They have committed suicide.)  Her husband, a court policeman, was wounded.

Details recently released indicate that the two men attacked the husbands of their former wives, killing the husband of one, before killing the judge.  This domestic violence tragedy, seen elsewhere in the world, has occurred a few days before China’s new Domestic Violence Law goes into force.

Official commentary took over 24 hours to be released, as was pointed out in these caustic remarks (“what is the wait?) by a former judge.

One announcement by the Supreme People’s Court (SPC), found here, initially stressed that she settled almost 400 cases each year and had received awards for her work, but has now been supplemented by an article linking her tragedy to earlier cases of violence against judges.

A article on the case posted on Wechat on 27 February by one of the prominent legal Wechat public accounts (CU检说法) was viewed almost half a million times in four hours before being removed and received almost 700 comments.

Today (28 February), many articles are being published on Wechat without being removed, so it appears that there has been a change in policy. Local court Wechat accounts have posted articles about the tragedy (always with one from the SPC), and many other legal public accounts have done so as well.  One of Judge He Fan’s (of the SPC) postings has received over 100,000 age views.

This tragedy is the latest in a series of violent attacks against judges, and like some of the earlier cases, was carried out by a man upset by the property settlement in his divorce case.

Donations are being collected by some former judges to give to the family of Judge Ma.

 

 

 

 

Why is assigning responsibility for wrongful convictions in China so difficult?

d397e647d9fea2da22ef78a1f4a2ecc6At least two recent articles in the Chinese media provide some answers to the question of why assigning responsibility (within the courts) in wrongful conviction cases (known in China as “mistaken cases”) is so difficult. ( A recent  New York Times article has previously discussed the question as well and provided commentary by several well known authorities.) This brief blogpost looks at these two recent articles, which provide additional insight.

  1.  “Russian doll” system of committee decisions

The first response can be found in an article in the official Chinese press, published 20-21 February,  entitled “China’s judicial reform stepping into a deep water area facing people, power, and money.” The article sets out a response to the dissatisfaction of the public (and experts), which captures, in officialese, the core of the reason–decisions in high profile court cases are made in through a “Russian doll” (Matryoshka, the Russian nested doll) set of committee decisions.

Russian nesting dolls (from Wkipedia)
Russian nesting dolls (from Wikipedia)

“For a long time, Chinese judicial organs [referring both to courts and procuracy] have internally formed an administrative work system.  For example internally, in the courts, cases are approved and checked on by division chiefs and heads of courts level by level, and it is the person with the highest administrative position who has the final say, which created the situation in which the persons hearing the case do not decide it, and those deciding the case do not hear it.  This not only affects judicial efficiency and justice, it also makes it difficult to pursue responsibility for mistaken cases.”

    长期以来,中国司法机关内部形成了一套行政化的工作机制,比如法院内部,案件由厅长、院长层层审批把关,由行政职位高的人说了算,造成审者不判、判者不审的局面,不仅影响司法效率和公正,也难以追究错案责任。

What this means in plain English is that Chinese courts exercise an administrative system in which all cases are approved by division chiefs or higher.  For major cases, as well as cases in which the death penalty is proposed to be imposed, the case is forwarded to the judicial committee of the court.  As I wrote over one year ago, although this has not been mentioned, judicial committees must have approved the original decisions in a number of cases recently revealed to have mistaken, such as:

the 1996 execution of Huugjilt, in Inner Mongolia;
The 1995 conviction of Tian Weidong, Chen Jianying and others in Hangzhou, Zhejiang.

One layer of the Russian doll is the judicial committee. In that December, 2014 blogpost, I described how judicial committees operate (and some proposals for judicial committee reform).  Court legislation states that these committees “practice democratic centralism” and that their task is to “sum up judicial experience and to discuss important or difficult cases or other issues relating to judicial work.”

The reason that the panel that hears the case must follow the decision of the judicial committee is that judicial committees are designated as the “highest judicial organ” within a court and implement the principle of democratic centralism.  Wang Bin, a Nanjing judge whom I quoted in that blogpost,  stated that judicial committee members [made up of the court leadership] have neither the opportunity nor the time and energy to learn more about the specific circumstances of each case.Members are not required to state their view and rationale before voting.  Decisions are made by a simple majority.   Additionally, as I implied, during judicial committee consideration, members are aware of their bureaucratic rank vis a vis the court president and vice presidents.  As Professor He Xin of City University noted in his study of judicial committees, since the decision is made collectively [by the judicial committee], no single committee member is held personally responsible.”

What is implied by the administrative system described by the statement in the official media is that the local political-legal committee or other Party authorities may liaise with the court leadership concerning high profile cases.  That is the next layer of the Russian doll, and may involve higher level Party authorities.

Professor He’s study found that judicial committees had in many cases succumbed to external influences, while my own (more limited sample) found that external pressure was sometimes resisted.  Pressure by local political-legal committees was likely involved in some of these mistaken cases, but liability is not pursued, for a similar rationale as Professor He’s–since the decision is made collectively, no one is held personally responsible.

What effect will the 2015 regulations aimed at reducing official interference in court cases have on this practice?  As noted in this earlier blogpost, one of those regulations does not require the recording of certain types of guidance–that of “Party and government organs, professional associations, social public interest organizations and public institutions with administrative functions in accordance with law retained or permitted by people’s courts to follow the working procedures to submit consultative opinions in cases of national interest or societal public interest, may be not entered into information archive on prying, but relevant materials shall stored in the case file for future reference.”  But will documents issued by Political Legal Committees at various levels really be placed in case files and made accessible to lawyers?

2.  Why does affixing responsibility in mistaken cases take so long?

The author of the second article,  published in a popular legal Wechat public account highlighted earlier, suggests reasons that it often takes 10 or more more years for mistaken cases to be redressed, and proposes that the SPC and SPP increase their staffs to review mistaken cases:

Ten years is the time it takes for two terms of the [local] Party Committee and the heads of the court and procuracy.  That means that the heads of the Party Committee and court/procuracy have changed at least once or twice… [Why won’t it take less time?] It is because when the leaders who have had the final say still have their positions,…if they reverse the mistaken case and one can well imagine that they will not want to overturn a case in which they had the final say…There is hope …only when the leaders have retired, have become old or passed away, and a new leader is in position and takes the matter seriously.

 

 

Supreme People’s Court upgrades its database

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This short blogpost is just to bring to the attention to the world outside of China that the Supreme People’s Court (SPC) has substantially upgraded its case database, enabling users to search by keyword, cause of action, party, court, lawyer, law firm, full text (or facts, headnotes).  The database can be accessed here.  The SPC has required higher, intermediate courts and some basic level courts to upload their judgments on its database (with certain exceptions). The military courts are an exception, although senior military legal academics are advocating greater transparency for the military courts.

Basic level courts in the more developed coastal regions have gone first, with other areas following as they have the technical ability to do so.  The higher people’s courts issue their own implementing regulations to guide their local courts (see regulations mentioned by an Inner Mongolian court). Local courts issue their own guidance in implementing the SPC system, such as this guidance from an Inner Mongolian county court, where the court leadership (court president/Party secretary and the other Party group members (the leaders of divisions of the court)  is leading  the implementation.

Although judgments in sensitive cases are often not uploaded,  for the vast majority of cases (that do not fall into that category), the SPC database remains a rich source of understanding how the Chinese court system is operating, through (for example) a focused search of a  specific type of case, from rape to breach of contract to challenge of public security penalties, to enforcement of arbitral awards.

Update on case filing reform and other challenges for Chinese courts and judges

Case filing hall in a Jingdezhen court
Case filing hall in a Jingdezhen court

In late November, the Supreme People’s Court (SPC) held a press conference on case filing (docketing) reforms to announce a 32% increase in civil and administrative case filings, year on year, putting a positive spin on what is a highly stressful situation for frontline judges, but a generally positive development for litigants and their lawyers. There are many stressful factors for Chinese judges and the Chinese courts, leading many judges to leave or contemplate suicide, and others to vote with their feet.  This blogpost will look at some of the recent developments:

  • Large number of cases;
  • Increasing fraudulent litigation;
  • Dysfunctional performance indicators that refuse to die.

The three issues are interrelated.

Case filing (docketing) reforms

On the case filing reforms, through the end of September, civil cases are up almost 23%, and administrative cases up 76%, while private prosecutions of criminal cases are up 60%,The most litigious provinces are ones with highly developed economies: Jiangsu (608,000 cases), Zhejiang, Shandong, Guangdong (558,000 cases).  The Supreme People’s Court caseload was up as well, with 6852 cases accepted through September, up 58%, estimated to reach 15,000 cases by year end.

Fraudulent litigation

Fraud of all sorts is a growth industry in China, especially with the worsening economy. Creative thinkers have come up with ways to use the court system to defeat or at least delay or avoid creditors.  In recent years, the Chinese courts have been faced with an increasing amount of fraudulent litigation, now criminalized on one of the unnoticed provisions in the 9th Amendment to the Chinese Criminal Law (new Article 307-1).  However, the law does not set out a definition, although some provincial court have issued guidance.  Usual factors include litigation based on: fabricated facts, fabricated arbitration award, or notarized documents, or collusion between the parties  or third party to use fabricated facts, false evidence, false documents, destruction of evidence, provide false documents, expert opinion and other means to avoid debt or improperly gain assets.

With the reform to the case filing system (described in this earlier blogpost), fraudulent litigation on the increase. For this reason, the SPC recently issued its first ruling on fraudulent litigation, imposing a penalty of 500,000 RMB on two Liaoning companies, to signal to lower court judges that they need to monitor case filings for indications of fraud.  Fraudulent litigation can be found in various types of cases, and in the maritime as well as local courts.

On fraudulent litigation in the maritime courts, an experienced maritime judge provided the following typical scenario: because the Chinese shipping industry is in a downturn (see these articles, for example), a ship owner who is unable to repay their debts (and finds that the size of the mortgage is more than the value of the ship) will conspire with their employees to bring a claim for unpaid wages, because under the Special Maritime Procedure Law, those claims take priority over the mortgage.  The employees and shipowner will split the proceeds from the claim, shortchanging the bank and other creditors.

According to Zhou Qiang’s report to the NPC, about 3400 cases of fraudulent litigation were discovered in 2014.  According to studies done by provincial courts in recent years,  104 cases were found in 2011-2012 in Jiangsu, and 940 in selected courts in Guangdong during 2001-2009.

With the case filing reforms and soft economy, these numbers are likely to rise. Readers (of Chinese) interested in diving further into this topic should read this article.

Dysfunctional  performance indicators

Writing in People’s Daily, Judge He Fan, head of one of the departments of the SPC’s Judicial Reform Office, highlighted that “some leading cadres” wanting to achieve year end “pretty data”  are still imposing unrealistic year end performance targets, forcing front line judges to work unreasonable hours (and also  diminishing case quality). These performance targets were abolished in 2014, as highlighted in this blog.

As for why Chinese judges are leaving in such numbers and why they are so unhappy, that will be the subject of another blogpost.

 

Educating Chinese judges for new challenges

National Judges' College
National Judges’ College

Buried in the depths of documents issued in the course of this year are the outlines of the way the Supreme People’s Court (Court) intends to create a corps of judges in which litigants, domestic and foreign, have faith will provide justice.  The many measures set out in the 4th Five Year Judicial Reform Plan raise the competency bar for judges.  A more litigious and rights conscious public, the increasingly complex economy and greater number of cross-border transactions and interaction, as well as smaller number of judges to hear more cases means that judicial training is an important part of of preparing Chinese judges for the new normal.

The broad outlines of the Court’s plans for judicial training are set out in the following documents:

  • the Court’s latest 5 Year Training Plan, for 2015-2019, issued in June, the framework document;
  • the September 17, 2015 Communist Party Central Committee/State Council document on the open economy, calling for improving foreign-related competence in the judiciary; and
  • the September 25 White House press release, in which the  United States and China commit to conduct high-level and expert discussions commencing in early 2016 to provide a forum to support and exchange views on judicial reform and identify and evaluate the challenges and strategies in implementing the rule of law.

The training plan

The training plan is linked to the 4th Plenum and 4th Five Year Judicial Reform Plan Outline, the Communist Party Central Committee’s five year training plan for Party cadres (as stated in the plan itself, which means that judges are treated as a type of Party cadre), the Court’s regulations on judicial training,  as well the Court’s 2013 policy document on creating a new judicial team (队伍) in the new situation. Team (or work team) derives from “classical” Party terminology (as Stanley Lubman highlighted in an article last year)).

The Training Plan stresses ideological, ethical, and professional training, for judges and other judicial personnel.  Ideological education is required to be a part of the required training described below, so that judges will comply with Party discipline (a modern day counterpart to Confucian cultivation of virtue) and oppose the osmosis of mistaken Western values (抵制西方错误思想观点的渗透).

Who’s being trained

The focus of the training is:

  • Court leadership, particularly at the basic level. The training plan requires senior personnel of lower level courts to participate in training organized by the the Court and higher people’s courts, with newly appointed basic level and intermediate court management to participate in training session within their first year in office, and higher people’s courts to organize training for at least 20% of lower court senior management annually;
  • Front-line judges, particularly those in the basic level courts:  continuing legal education, with a minimum of 10 days a year,  and in the 2016-2018 period, a new training program is to be implemented, including the heads of people’s tribunals (branches of basic level courts dealing with minor disputes). Training materials are to be compiled by the Court.  The second aspect of the training program is to pilot a  judicial training program (apparently drawing from the practice in Taiwan and Japan) for new judges in designated areas for judicial reforms (as highlighted in point 50 of the judicial reform plan).
  • Professionally outstanding judges: the Court is to continue its program of cooperating with certain universities and research institutes to provide master’s and doctoral training (the Chinese University of Political Science and Law seems to be one of the Court’s partners); the National Judges College is to run training programs for outstanding young/middle aged judges for a minimum of one month.  Additionally, a corps of outstanding judicial trainers at the provincial level is to be created.  The September, 2015 measures to improve foreign-related competence in the judiciary are likely linked to this, as are some of the programmatic outcomes from the US-China initiative on judicial reforms.
  • Judges bilingual in Mongolian, Tibetan, Uygur, Kazakh, Korean, Yi and Zhuang.  This target was mentioned  in the Fourth Plenum and Fourth Five Year Judicial Reform Plan, and is linked to an arrangement by the State Ethnic Affairs Commission, Organizational Department of the Communist Party Central Committee, and the Supreme People’s Court to train 1500 bilingual judges by 2020.  This will also involve more and higher quality translation of legal materials into local languages. Press reports from Uighur and Tibetan areas, for example, describe civil litigants who do not understand Mandarin and find the justice system inaccessible for resolving business disputes, as well as criminal defendants who are unable to understand criminal proceedings, such as a Tibetan who did not understand what a “suspended death sentence” was.  In Xinjiang, for example, only 40% of judges described themselves as bilingual.

How training will be implemented

Judicial training is to focus on active and practical methods, including the case method (no less than 30%), moot courts, and other interactive methods.  The intellectual influence of exchange and training programs with offshore counterparts is apparent from the more interactive methods required.  Previous training programs (often funded by foreign NGOs) have enabled judges from the Supreme People’s Court and other Chinese courts to receive training in China with noted international experts while others have received training outside of (mainland) China.  Will this continue under the new normal?

The language of architecture of the courts, mainland China and Hong Kong

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Supreme People’s Court building, Beijing
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#1 Circuit Court building, Shenzhen
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Jinan Intermediate Court building

I had the opportunity to visit the Supreme People’s Court #1 Circuit Court in Shenzhen recently (thank you to all involved for arranging the visit, about which I will discuss further in another post).  The visit, recent events in China and a recent article in Hong Kong’s South China Morning Post (by my friend and former student, Simon Ng, of the University of Hong Kong)  on the newly renovated Court of Final Appeal building in Hong Kong (over one hundred years old, and one of the first purpose-built British court buildings in Asia) got me to thinking about the language of architecture, in particular the steel gates around Chinese courts. The #1 Circuit Court, as all Chinese courts I have visited or seen, has steel gates surrounding it and police protection.

Among the reasons for the steel gates is incidents such as the one detailed in this article in the English language version of Caixin.  A factory worker in the city of Shiyan, Hubei Province attacked four judges, angry about the outcome of his case against his employer.  This case is not exceptional–in a 2010 case, reported here, three judges were killed and several others injured in Hunan province, by a man disgruntled by the property settlement in his divorce case. Professor Bi Yuqian of  the Chinese University of Political Science and Law commented on the Shiyan case: “The public authority of judges has not yet been founded in China… It is not shocking that a judge is stabbed in China.”

For that reason, the Fourth Plenum Decision sets as a goal: raise judicial credibility…strive to have the people feel fairness and justice in every judicial case.”

The architecture of modern Chinese courts borrows some elements from the traditional architecture of a yamen, while the language of the architecture of the courts of Hong Kong  is very different.yamen

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Court of Final Appeal building

Simon Ng recently published the following comments about the Hong Kong’s Court of Final Appeal Building, “It is an icon of Hong Kong’s judicial independence, which has been practised for over a century and is preserved under the solemn pledge of “one country, two systems”.

The blindfolded Themis standing right above the royal coat of arms is a visual reiteration of the centuries-old ideal of rule of law that even the sovereign must be subject to the law and reason. The administration of justice under the dome has to live up to that spirit.

Over the years, the architecture has helped to shape public understanding and expectations of the legal system. Fairness and impartiality, as symbolised by Themis, are the legal values that people treasure most.

With the reoccupation by the Court of Final Appeal, the building will continue to convey the meaning of rule of law across time through its language of architecture, the practice of judicial independence, and the upholding of justice and equality.”

The language of architecture conveys the status of the judiciary at this time and public expectations of the  legal system.  We can only hope that some day, the steel gates surrounding Chinese courts will be unneeded.

(©Court of Final Appeal building, SCMP; Jinan, Getty images; SPC, BBC)

Official interference or leadership?

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Interference in cases forbidden!(©Xu Jun, Xinhua)

In late August, the Supreme People’s Court (Court) issued a pair of regulations, aimed at reducing the phenomenon of officials, within and outside a court, involving themselves in cases.

Translations of the regulations are available, thanks to Chinalawtranslate.com: (the Chinese originals are available on the Court’s website here and there):

  • Implementing Measures for People’s Courts Carrying Out the ‘Provisions on Recording, Reporting and Pursuing Responsibility of Leading Cadres Interfering with Judicial Activities or Tampering with the Handling of Specific Cases (Leading Cadres Measures); and
  • Implementing Measures On Pursuing Responsibility In Cases Of Internal Judicial Personnel Prying Into Cases (Judicial Prying Measures).

This blogpost takes a quick look at the first one.

What do the Leading Cadre Measures say?

The Leading Cadre Measures (which implement State Council/Central Committee (General Office) regulations issued in March are directed at officials outside the judiciary who seek to influence court decisions, and require judges (who are other subject to penalties for not doing so) to  record all communications relating specific cases made by entities and individuals other than those in courts, and retain the relevant materials. These Measures implement language in the 4th Plenum Decision (Establish a system for recording, reporting, and investigating the responsibility of instances wherein leading cadres interfere in judicial activities or get involved in the handling of certain cases.)  The reports are to be submitted to the local political legal committee (or next higher political legal committee, depending on the status of the offending individual) and the next highest court, generally on a quarterly basis. If the conduct is serious, and might cause unjust, false and wrongfully decided cases or other “serious consequences,” the court is directed to report immediately.

Article 7 of the Leading Cadre Measures lists some of the most frequently used techniques, many of which have a economic, rather than political motivation:

The Leading Cadre Measures place the views of certain organizations in a different category:

“Party and government organs, professional associations, social public interest organizations and public institutions with administrative functions in accordance with law retained or permitted by people’s courts to follow the working procedures to submit consultative opinions in cases of national interest or societal public interest, may be not entered into information archive on prying, but relevant materials shall stored in the case file for future reference.”

Professor He Haibo of Tsinghua University explains what this means:

the courts must accept these materials, and it gives those organizations a chance to participate and speak; placing the materials in the case file gives the other party as well as possibly the public an opportunity to understand and evaluate them. This is consistent with the requirements of due process…

Will documents issued by Political Legal Committees at various levels really be placed in case files and made accessible to lawyers?

How do officials and judges interact?

The patterns of behavior that these regulations are aimed at changing are long-standing. From Doing Business in China, a leading book for practitioners (chapter by Harry Liu, Meg Utterback, Yu Simin):

Informally, judges are occasionally given instructions by political leaders on individual cases. Intervention by Party leaders in individual cases remains acceptable…The forms of interference vary: sometimes oral instructions are given, or sometimes the instructions are incorporated into official documents, with a requirement that the judge report back on the outcome. As to the content, the instructions may (1) tell courts to emphasize a case or handle a particular case “according to law,” (2) express an opinion on certain aspects of the case, or (3), recommend certain action to the court in lieu of dictating the outcome.

Professor He Haibo of Tsinghua University School of Law, writing in the People’s Court Daily–the line between “coordination in accordance with law” and interference with judicial activities is very hard to draw (什么是“统筹协调依法处理”、什么是“干预司法活动”,界限似乎难以划得清清楚楚)。

Comments from an unscientific sampling of judges

  • How the regulations work out in practice will depend to a large extend on how the officials undue intervention recorded will affect their future career or have legal liability.  If yes, the leaders will refrain from intervening. It will also depend on whether the judges would suffer from recording the intervention, particularly if he institutions are not administratively or financially independent from the agencies the officials represent or are able to influence.  In the latter case, judges wold be reluctant to record the intervention. It is likely that court leaders will interfere less frequently and with less success.
  • It will be of some help, when the interference is from strangers. But if from old friends, direct leaders, those won’t be reported, because it would betray the relationship.

More autonomy under Party leadership

The Leading Cadre Measures are not a magic bullet that will change the way the Chinese courts operate. The intent is to reduce the involvement of local officials in court cases to achieve fairer outcomes, while maintaining central policy leadership (and recognizing current reality by having a framework for Party officials to provide their views “for consideration”).

How well will the Measures work during the transitional period that the local judiciary remains under the control of local authorities? And how should the line be drawn between interference, leadership, and coordination?

A model case?

In late August, the Jinhua Intermediate Court (Zhejiang province) used the March regulations to call the attention of the press (and higher authorities) to a local official who threatened a judge with physical harm, when local courts ruled against the official’s wife in a shareholding dispute, although the case led one Zhejiang University law professor to comment that it wasn’t typical of official interference. According to the latest reports, the Jinhua Intermediate Court has withdrawn the notice, and both the judge and official in question are being investigated by the relevant CCDI organization.  A local Jinhua lawyer was quoted as saying that the local court staff had erred in making the matter public at this point.

The Jinhua case, while perhaps not a typical interference case, is typical of the widespread lack of civility confronting Chinese judges (and doctors), that in too many cases means a threat to their physical safety, and could indicate how difficult it will be to actually implement the Leading Cadre Measures.

Supreme People’s Court and “One Belt One Road”

Judge Luo Dongchuan. chief judge,#4 civil division
Judge Luo Dongchuan. chief judge,#4 civil division, at the OBOR Opinion press conference

On 7 July the Supreme People’s Court (the Court) issued an opinion (意见) policy document on how the courts should provide services and protection to “One Belt One Road” (OBOR Opinion) (关于人民法院为“一带一路”建设提供司法服务和保障的若干意见). This blogpost explains why the Supreme People’s Court issued it, what the policy document provides and what it means for legal professionals. The typical (model) cases issued at the same time include the Sino-Environment case, subject of an earlier blogpost  (and deserve closer analysis).

Why was the One Belt One Road document issued?

One Belt One Road (OBOR) is a major government strategic initiative.  As a central government institution, the Court must do its part to support OBOR.  Major SOEs contemplating investing in OBOR projects or trading with companies on OBOR recognize that their interests are best protected through legal infrastructure and the Court has an important role in this. MOFCOM and other related regulatory agencies realize this as well. Local courts linked to the Belt or the Road, are dealing with new demands because of OBOR and are looking to the Court for guidance.

The OBOR Opinion was drafted with input from these regulatory agencies and certain legal experts, but was not issued for public comment.

What the OBOR Opinion covers

The OBOR Opinion covers cross-border criminal, civil and commercial, and maritime as well as free trade zone-related judicial issues.  It also deals with the judicial review of arbitration.

Criminal law issues: the lower courts are requested to improve their work in cross-border criminal cases, and the courts are to do their part in increased mutual judicial assistance in criminal matters.  The focus is on criminal punishment of  those characterized as violent terrorists, ethnic separatists, religious extremists, and secondarily on pirates, drug traffickers, smugglers money launderers, telecommunication fraudsters, internet criminals, and human traffickers. It also calls on courts to deal with criminal cases arising in trade, investment, and other cross-border business, and deal with criminal policy and distinguishing whether an act is in fact a crime, so that each case will meet the test of law and history.  The political concerns behind criminal law enforcement issues are evident in this.

Much of the focus in the OBOR Opinion is on civil and commercial issues, including the exercise of jurisdiction, mutual legal assistance, and parallel proceedings in different jurisdictions and in particular, improving the quality of the Chinese courts in dealing with cross-border legal issues. These issues are explained in more detail below

One of the underlying goals set out in the OBOR Opinion, is to improve the international standing and influence of the Chinese courts and other legal institutions.

What does it mean for legal professionals

The OBOR Opinion signals that the Court is working on a broad range of practically important cross-border legal issues.  Some of these issues involve working out arrangements with other Chinese government agencies and are likely to require several years to implement.  The OBOR Opinion mentions that the Court:

  • seeks to expand bilateral and multilateral mutual judicial assistance arrangements, for better delivery of judicial documents, obtaining evidence, recognition and enforcement of foreign court judgments.
  • supports and promotes the use of international commercial and maritime arbitration to resolve disputes arising along One Belt One Road.  China will promote the use of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) between countries on One Belt One Road and encourage countries that have not yet acceded to the Convention to do so.
  • supports and promotes the use of various types of mediation to resolve OBOR related cross-border disputes.
  • it signals that the Court will become more involved in Chinese government initiatives such as the Asian Infrastructure Investment Bank, the conference of supreme courts under the Shanghai Cooperation Organization, and other international or regional multilateral judicial cooperation organizations.
  • is signalling the lower courts that they should limit the range of cross-border contracts being declared invalid or void.
  •  sets out the new thinking on the issue of reciprocity in the enforcement of foreign judgments, in particular that Chinese courts can take the initiative in extending the reciprocity principle to parties from other jurisdictions.  This is practically significant for foreign parties and their counsel, and has been discussed repeatedly by both practitioners and academics (such as these);
  • will improve Chinese legal infrastructure on overseas evidence, overseas witnesses giving evidence, documenting the identity of overseas parties, “to better convenience Chinese and foreign parties. ”  This would involve evolving from the current system embedded in Chinese legislation of requiring notarization and legalization of many documents (because mainland China is not yet a party to the Hague Convention on the Abolishing the Requirement of Legalization of Foreign Public Documents. This is a positive sign;
  • The Court has on its agenda further legal infrastructure on the judicial review of arbitration (as signalled at the end of last year), involving foreign/Hong Kong/Macau/Taiwan parties, aimed at supporting arbitration and having a unified standard of judicial review on the following issues:
    • refusing enforcement of arbitral awards; and
    • setting aside arbitral awards.
  • has on its agenda judicial legal infrastructure for supporting the resolution of bilateral trade, investment, free trade zone and related disputes.
  • Reflecting language in the 4th Plenum, it calls for China to be more greatly involved tin the drafting of relevant international rules, to strengthen China’s voice concerning issues of international trade, investment, and financial law.
  •  mentions that an improved version of the Court’s English language website and website on foreign-related commercial and maritime issues is forthcoming.  Specific suggestions can be emailed to supremepeoplescourtmonitor@gmail.com.

The Supreme People’s Court and interpreting the law, revisited

Marriage law judicial opinion
Marriage law judicial opinion

The topic of the Supreme People’s Court and the interpretation of law is one that vexes many, legal practitioners and academics alike.  Although the Chinese constitution vests the power to interpret law with the Standing Committee of the National People’s Congress (NPC SC), the Supreme People’s Court (the Court) and the Supreme People’s Procuratorate (SPP) actively issue interpretations of law. The Court more so than the SPP, because it deals with a broader range of legal issues.  These interpretations of law are critical to the operation of the Chinese legal system because national law tends to set out broad principles that require additional legal infrastructure to be workable and the courts, in particular, need that legal infrastructure to decide cases.

A 1981 decision by the NPC SC delegated to the Court the authority to interpret law relating to questions involving the specific application of laws and decrees in court trials, while the Supreme People’s Procuratorate (SPP) was delegated authority to interpret law relating to questions involving the specific application of laws and decrees in procuratorial work.  The Organic Law of the People’s Courts re-iterates the delegation of authority to interpret law to the Court. Oddly enough, the principle is not in the Organic Law of the People’s Procuratorates. Interpretations by both the SPP and the Court are known as “judicial interpretations.”

In 2015, the Legislation Law, which had previously not addressed interpretation of law by the Court and the SPP, addressed the issue in Article 104.  This article is taken as intended to codify existing practice, because the explanation of the law recognizes the practical necessity of judicial interpretations:

  • “Interpretations on the specific application of law in adjudication or procuratorate work issued by the Supreme People’s Court or Supreme People’s Procuratorate shall primarily target specific articles of laws, and be consistent with the goals, principles and significance of legislation.”
  • It requires the Court (or SPP) in the situation described in the second paragraph of Article 45 of the Legislation Law (where the NPC SC  gives interpretations of national law), to submit a request for a legal interpretation, or a proposal to draft or amend relevant law, to the NPC SC.

(The explanation of the law  (legislative history) provides further background).

The process for drafting Court interpretations described in the 2007 regulations requires that the views of the relevant special committee or department of the NPC SC be solicited during the drafting process, and there would be pushback from the NPC SC if it was considered that the judicial interpretation had gone ‘too far.’

What types of judicial interpretations are there?

The 2007 Court regulations on judicial interpretations (linked here)  limit judicial interpretations to the following four types:

Those 2007  regulations set out various procedures for drafting and promulgating judicial interpretations, including a requirement that they be approved by the Court’s judicial committee and be made public.  As discussed in earlier blogposts, broad public consultation may be done if it affects the “vital interests of the people or major and difficult issues. These regulations also provide that judges may cite judicial interpretations as the basis for a court decision or ruling. Article 23 of the 4th Five Year Court Reform Plan mentions reform of judicial interpretations:

Improve the Supreme People’s Court’s methods of trial guidance, increase the standardization, timeliness, focus and efficacy of judicial interpretations and other measures of trial guidance. Reform and improve mechanisms for the selection, appraisal and release of guiding cases. Complete and improve working mechanisms for the uniform application of law.

As discussed in earlier blogposts, the Court also issues other documents with normative provisions that do not fit the above definition.  Those will be discussed separately.

New docketing procedures come to the Chinese courts

local court case filing office
local court case filing office

New docketing procedures (case filing) (立案) have come to the Chinese courts.  Chinese courts have a separate case filing divisions, which up until 1 May of this year acted as gatekeepers to courts.  They exercised their approval authority over cases in a non-transparent manner, which meant for litigants in Chinese courts that their cases could be and were rejected without having the opportunity to argue why they should be accepted.  Case filing divisions also were known to put troublesome filings aside, without issuing a rejection, or repeatedly asked for supplementary documents, seeking to drive away litigants by repeated formalistic demands.

More background is given in these blog posts and law review article.  It has been an ongoing problem for many years, provoking endless complaints and articles by ordinary people, lawyers, academics, and NGOs, and has been one of the issues driving petitioners to the streets.

The Supreme People’s Court (Court) leadership identified case filing as one of the needed reforms (and as one of the many contributing factors to the low prestige of the Chinese judiciary), even before the Third Plenum. Because of that, the Communist Party’s 4th Plenum Decision and the 4th Five Year Court Reform Plan flagged this as a priority.  (Unsurprisingly), the language in the two documents is almost identical:

  • Reform systems for courts’ acceptance of cases, change the case filing review system to a case filing registration system, and in cases that should be accepted by the people’s courts, ensure parties procedural rights by requiring filing when there is a case, and requiring acceptance where there is a lawsuit.
  • Change the case filing review system into a case filing registration system, making it so that for cases that should be accepted by the people’s courts, where there is a case it must be filed, and where there is a suit it must be accepted; safeguarding the parties’ procedural rights.
Litigants in line at the #1 Circuit Tribunal

In late April, the Court issued case filing regulations which address many of the longstanding problems that litigants and their lawyers faced:

Case filing divisions

  • refusing to accept complaints;
  • refusing to issue notices rejecting complaints;
  • repeatedly asking for supplementary materials.

The new rules require case filing divisions to accept filings of civil and criminal private prosecution cases (brought by the victim of a crime if the state refuses to prosecute, generally relating to minor crimes) on the spot if possible, provide templates for frequently used types of cases, and to respond within statutory deadlines.  Case filing divisions are directed to make requests for supplementary materials once. (The new administrative litigation law judicial interpretation, described in this earlier blogpost, contains similar provisions.) Litigants who encounter noncompliant behavior can file a complaint with the relevant court or the court above it.

Cases that the courts must refuse:

  1. Matters that endanger national security;

Rights activists have likely noticed that these carveouts are broad and flexible enough to keep out some cases that they might want to bring.

The take-up on the reform: some “Big Data”

According to Court statistics, in the first month since the regulations went into effect, there was a 30% jump in the number of cases accepted,(1.13 million), with most of them accepted immediately. The Jiangsu, Zhejiang, and Shandong courts accepted over 80,000 cases, with Beijing, Hebei, and other areas accepting over 40,000.

In particular:

  • the number of civil cases was up about 28%.
  • the number of administrative cases accepted was up 221% in comparison to last year (starting from a low base), with Tianjin cases up 752.40%,Shanxi, 480.85%,and Shanghai 475.86%, reflecting both the new case registration and new Administrative Litigation Law going into force.
  • Courts in Zhejiang found that fewer litigants were mediating their cases before filing suit (down 17%), and the success rate of mediation was down by 14%.  Does this mean a better outcome for litigants?  Closer analysis is needed.

Much of the press coverage has been about litigants filing cases themselves, rather than with the assistance of a lawyer or other legal personnel, but I haven’t seen statistics that address this.

Some more detailed data from Jiangsu province:

download 1
Case filings in Jiangsu Province, by city
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Civil 60791, enforcement 25438, administrative 1980, private prosecution 256, state compensation 56
1115572603_14339164566661n
May, 2015 cases accepted, by location

An evaluation after six weeks

Some thoughts about the case filing reform

  • It will mean more cases in the courts and greater stress for fewer judges and other judicial staff, to assist the many pro se litigants.
  • It should reduce the dissatisfaction level of some proportion of litigants with the court system, such as the anonymous staff from a Guangzhou car finance company quoted in a press report.
  • Violence against court personnel (like medical personnel), is another factor driving qualified and experienced people away, as described in these recent articles.  Will the reforms reduce the level of frustration of ordinary people with the court system, and reduce physical and verbal attacks on judicial personnel?  It is early days to say.
  • It does not resolve underlying issues such as local courts not wanting to offend local government or locally state-owned enterprises.  The 4th 5 Year Court Reform Plan identifies cross-jurisdictional courts as a solution, and pilot projects have started on this in various locations, including Beijing, but a comprehensive framework is not yet in place.
  • For the numerically small number of foreign litigants in the system, it does not change all the documentary requirements needed, such as notarization and legalization of documents and powers of attorney. It should make it easier for foreign invested companies to litigate.
  • As a Court spokesman suggested,  the rejection of many cases could come later, leading to greater pressure on the courts later on, from appeals, more requests for cases to be re-tried, and not ultimately reduce the number of petitioners.
  • It will inevitably lead to abuse of process and frivolous cases, such as the over-publicized case of a Shanghai man suing because of the stare of a TV star caused him spiritual damage. The Court is working on rules to address this.

Supreme People’s Court president says court reforms in “deep water area”

566929On 12 March 2015, Zhou Qiang, president of the Supreme People’s Court (Court) delivered his work report to the NPC, putting the best face on where the Chinese courts are and where they’re going. He described court reforms as being in a “deep water area” (深水区)(a high risk area).  This blogpost will highlight issues that other commentators (outside of China) have so far missed:
  • the mismatch between the focus of the work report and the work of the courts;
  • what the work report (on other than criminal cases reveals); and
  • the challenges to the Court leadership in the year ahead.

What is the mismatch?

charts for SPC
© Tiantong & Partners; charts illustrating SPC report
The primary focus of the work report (as always) is law and order, as seen from the perspective of Communist Party leadership, particularly state security related offenses (including terrorism and “splittism”) as well as ordinary crimes.  A big difference in this year’s report is that President Zhou Qiang apologized for previous miscarriages of justice and highlighted efforts to prevent future ones.  Other commentators have already focused on these both of these important developments and and other issues related to the criminal justice system.
2014 cases in chinese courts
bar chart: 2010-2014 increase in cases resolved by courts (in 10K) Pie chart: civil/commercial/IP; admin; re-trial/govt compens/enforcement/; parole; other/criminal

What the work report reveals is that most cases heard in the Chinese courts are not criminal and that the number of cases heard by the courts is rising.

What are cases are the Chinese courts hearing?

The pie chart (distributed as an attachment to President Zhou Qiang’s report at the NPC), illustrates that over 63% of the cases heard in the Chinese courts are civil cases (including commercial, family law and intellectual property cases), not criminal. Criminal cases (including parole related cases) account for something over 10% of cases (as others have discussed, many minor offenses are handled as administrative, rather than criminal offenses).

A closer look at civil cases in the Chinese courts

 A bit of arithmetic reveals (unfortunately the authors of the Report did not set out a corresponding chart), that 34% of civil cases (2,782,000) in 2014 were commercial cases (up 8.5% year on year), while 66% were what classified as civil cases (in the narrow sense, described below).

Commercial cases:

(These cases are illustrated in the chart to the left that has the ¥ sign.)
1. Finance cases (824,000)(a broad category including various types of loans, credit cards, securities, futures, insurance etc.).
2.  Sales contracts disputes (664,000).
3.Intellectual property (110,000, up 10% year on year)(I  the detailed analysis of this can be found here, by my fellow blogger, Mark Cohen, at the ChinaIPR blog);
4. Corporate disputes (12,000) (shareholder, merger and acquisition, creditor initiated bankruptcy);
5. Maritime cases (12,000).
Foreign-related cases (5804), )these, although a focus of foreign law firms alerts and the press, are a tiny drop in the sea of Chinese civil cases.  Many cases involving foreign companies actually involve their China incorporated subsidiaries.
The number of finance cases suggests a large number of disputes relating to loans by financial institutions.

Civil cases

(These cases are illustrated in the chart that has two people standing next to one another and the pie chart below.)
2014 civil cases in the Chinese courts
2014 civil cases in the Chinese courts
In 2014,  5,228,000  civil cases were heard in the Chinese courts (up almost 6% year on year):
1.  Family law cases (1,619,000),(this category includes  contested divorces, inheritance, support cases), accounting for about 30% of civil cases. The chart above 13% year on year increase in inheritance cases (showing an increasing number of people have assets worth fighting in court over, and perhaps also inadequate estate planning).
2.  Loan cases not involving financial institutions (between individuals, company and individual, or two companies) (1,045,600), accounting for almost 20% of civil cases. (The categorization has changed, making a year on year comparison not easily possible).
3. Labor cases (374, 324), accounting for 7.16% of all civil cases.  These include appeals from labor arbitration as well as cases that can be directly brought in the courts).
4.  Environmental tort cases (3331) (up 51% year on year).
5. Product liability cases are up 44%, but the base or total number for 2014 is not set out.
6.  Cases involving rights of rural residents (219,00)(rights to rural residential land, transfer of contracted land) migrant laborers seeking unpaid wages).
7.  Construction disputes are up almost 18% (base or total number for 2014 not set out).
These numbers speak to:
1. changes to the Chinese family;
2. a large number of loans that are under the radar of the financial authorities;
3. employees who are increasingly rights conscious;
4. continued litigation risk for foreign companies doing business in China (including through subsidiaries), because as perceived “deep pockets”, Chinese litigants often target them in product liability cases.

Administrative cases

 First instance administrative cases (companies or individuals suing the government) (131,000) continue to be a tiny number, although up 8.3%, and it remains to be seen whether the amended Administrative Litigation Law (Administrative Procedure Law) will lead to an increase in cases.

 Enforcement cases

Enforcement cases (compulsory enforcement of court judgments or orders, arbitral awards, etc) account for 3,430,000, a 14% increase year on year.  This suggests that fewer people (companies) are complying with dispute resolution voluntarily.
10% increase in cases accepted (will be a challenge to the courts if this trend continues because the intent is to cut the number of judges), amount in dispute is up 15%.

Court reforms already in a “deep water area”

Zhou Qiang highlighted that court reforms are already in a “deep water area” (high risk area) and the courts:
  • need to penetrate interest group barriers;
  • have the courage to move their own “cheese”;
  • need to use “the knife” against itself (presumably to cut out corrupt, poorly or non-performing judges);
  • deal with many deep-seated problems;
  • make progress on a long list of reforms:
    • continue and expand pilot reforms on changing the financing and personnel appointments of the local courts to all provinces/directly administered cities;
    • implement hearing-centered litigation reforms;
    • make progress on case filing reforms (to resolve the long term problem of litigants facing obstacles when they file suit);
    • put in place a system with dealing with assets seized and confiscated by the courts (to avoid violation of property rights and further judicial corruption in this process);
    • implement the prohibition against defendants wearing prisoner’s garb in court;
    • further implement judicial reforms related to petitioning;
    • promote alternative dispute resolution, such as arbitration, people’s mediation, administrative mediation etc.
    • continue work on pilot projects on expedited criminal procedures (for minor matters);
    • improve the people’s assessors system.

All of these reforms create tremendous challenges for the courts.  The number of cases accepted by the courts in 2014 (15,651,000) was up about 10%.  The judicial reforms to petitioning and other reforms will channel more disputes into the court system. Planned personnel reforms are leading to an exodus of young judges.  Many of the planned judicial reforms are intended to the way the courts operate internally and interact with other institutions. The 4th Five Year Court Reform Plan sets out target dates for accomplishing certain major judicial reforms.  The salary gap between what an experienced lawyer in private practice in a major law firm and a counterpart in the judiciary is large, leading many talented people to prefer the greater financial benefits and professional flexibility that comes with being a lawyer.

The political leadership has approved the 4th Five Year Court Reform Plan.  Issuing it raises expectations among ordinary people as well as those in legal profession. The pressure is on for the Court leadership to deliver on the promised judicial reforms.

Supreme People’s Court’s 4th Five Year Reform Plan sees the light of day

IMG_0877
February, 2015 photograph of the SPC building

The Supreme People’s Court’s 4th Five Year Reform Plan has finally been released to the public (linked here). An English translation will be forthcoming here.  Some of the issues highlighted have been discussed in earlier blogposts (as linked) and it builds on the principles released in July, 2014 and in the 4th Plenum Decision. It is critical to the development of the Chinese legal system and has its international implications as well. Some of the highlights:

  • Basic principles (Party leadership is a given): independence of judicial power (审判权的独立性); neutrality (中立性), procedurality 程序性), finality(终局性) (all distinguished from “Western style” judicial independence).

Among the specific measures are:

  • Specific deadlines for reforms or structures for reforms to be put in place (some by end 2015, others by end 2016, 2017, 2018);
  • Greater transparency in a broad range of areas, ranging from the parole of prisoners, assignment of judges, to the handling of property seized or confiscated by the courts;
  • Measures to cut back on local protectionism, such as cross jurisdictional and circuit courts, focusing in particular on major administrative cases, environmental cases, bankruptcy cases, food safety cases and others, by changing jurisdictional provisions in administrative cases, environmental cases, and others);
  • Details on what the Court means about “hearing centered procedure,” and imposes a goal of end 2016 to establish a hearing centered system, as having evidence presented and reviewed at the hearing, both parties being given a chance to be heard, requiring witnesses and experts appear at hearings; assumption of innocence, exclusion of illegally obtained evidence (and establish systems for determining and excluding such evidence), all of which involves a greater role for lawyers;
  • In the area of criminal justice, provides better protection to defendants and their counsel, such as prohibiting criminal defendants from being forced to wear prison clothing, shackles, etc., idea that the prosecution and defense have equal status in the criminal process, better judicial review of individuals whose freedom is restricted;
  • In civil cases, requiring evidence to be reviewed at trial and major disputed evidence must be highlighted in the judgment or ruling and whether the court is relying upon it;
  • Improving the status of lawyers in both criminal and civil litigation;
  • Reforming jurisdiction in environmental cases;
  • Improving jurisdictional provisions in public interest cases (which at this time means environmental and consumer cases);
  • Changing the docketing process from a substantive review to a registration procedure (which in the past has meant that “inconvenient” cases were not accepted);
  • Reforming internal court procedures and roles, particularly that of the court president, members of the judicial committee, and heads of division, requiring documentation of communications with the judge or judges handling the cases, as well as focusing the judicial committee on legal questions (external pressure on these court leaders has been a significant factor in the miscarriages of justice now being revealed);
  • Distinguishes the functions of courts at first and second instance (as well as re-trial and judicial supervision) stages;
  • Changes the current performance indicator system, and gets rid of league tables for courts;
  • In appeal cases, the court should set out the issues in the case at first instance;
  • Changes the relationship between the higher and lower courts so that they operate independently;
  • Prevents judicial corruption in a variety of ways, such as improving the judicial auctioning process, confiscation of property, and much more transparency;
  • Calls for establishing a system of integrating Party disciplinary systems (in anti-corruption cases) with court punishment systems;
  • Highlights providing greater openness to the press and others to attend court hearings;
  • Calls for establishing a more professional personnel system for judges and a transitional system from the current one.
  •  a judicial selection system;
  • More details on having local judges appointed at the provincial level;
  • Setting up a system for preventing interference in court cases by requiring notes, etc. from leaders to be retained in the file and made available to parties and their counsel;
  • Improving the military courts.

In the spirit of greater openness, the document states that reforms by lower courts are to be reported to the Court before being launched and major reforms need to be reported to the Party central authorities before being launched [apparently to ensure Party leadership to prevent the political authorities from being unpleasantly surprised].

The changes relating to basic court institutions will affect all types of cases, whether they are environmental, intellectual property, or foreign-related ones.

The drafting of this document required countless hours of work and negotiations.  The real work is ahead, in implementing its principles, and in particular changing patterns of behavior as well as institutional and political culture formed over several decades.

Supreme People’s Court‘s sunshine cure for corruption in commutation and parole procedures

20140221112449_2571
Prisoner choosing commutation & parole options from corrupt jail official

 

Before Chinese new year, the Supreme People’s Court held a news conference  to highlight its accomplishments in reforming parole procedures. The previous procedures (or lack of them) (as described below) appeared to have been a money-spinner for prison officials. The reform in parole procedures highlights the value that current Chinese legal policy places on Justice Louis D. Brandeis’s wisdom (without citing him):

“Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants…”

The change in parole procedures also are a good example of how results of investigations by the Central Commission for Discipline Inspection (CCDI) and Central Political and Legal Committee policy documents are eventually are translated into improvements in legal procedures.

The reforms to parole procedures include:

  • The Court’s August, 2014, Provisions On Commutations And Parole(最高人民法院关于减刑、假释案件审理程序的规定) (translation can be found here), requiring much more transparency;
  • November, 2014 procedures issued by the Court along with the Ministry of Justice, Ministry of Public Security, Supreme People’s Procuratorate, and National Health and Family Planning Commission on medical parole and related issues (暂予监外执行规定), establishing stricter guidelines.
  • Establishing an internet platform on the Court website to make public (provide sunlight) parole/commutation matters: acceptance of applications, notice of court hearings,and court rulings;
  • Establishing a filing system under which decisions relating to officials of county level (or section (处) need to filed with provincial high courts and provincial department (bureau level(局)) need to be filed with the Court;
  • Model cases on parole and commutation, to guide lower court judges in their work, and inform the public on these reforms.

    ________.x_large
    Axe labeled “power”, “money”

The background

With flexible provisions and limited transparency on medical parole, commuting sentences, and parole procedures, in recent years apparently underpaid Chinese prison officials caught the entrepreneurial spirit and (like the Monopoly game that many of us grew up playing), sold “get out of jail cards” to those who could afford to pay.  Those were generally made up the wealthy and (formerly) powerful, particularly those who had committed the following crimes:

  • duty crimes (including taking bribes and abusing authority);
  • organized crimes;
  • financial crimes.

An August, 2014 press report mentioned that over 700 prisoners  nationwide had improperly secured early release.  Other reports cited that prison officials in Guangdong were particularly entrepreneurial, arranging for the improper release of approximately 140 in Guangdong, primarily former officials, including:

  • Wang Ju, former vice mayor of Shenzhen;
  • Zhao Yuchun, former head of Shenzhen customs;
  • Huang Shaoxiong, former deputy head of the Guangdong United Front Work Department; and
  • Lin Chongzhong, former deputy mayor of Jiangmen.

CCDI investigations and Central Political Legal Committee policy document

It appears that these reforms can be traced back to CCDI investigations in 2013 (and possibly earlier), because in August, 2013, the CCDI website carried a summary of a speech by Xi Jinping at a CCDI conference in which he calls for reforms to parole procedures. At about the same time reports of  investigations into prison officials were released by CCDI, such as one of a Hunan Province Justice Department (the Justice departments run the prison) official who was found to have almost USD 2 million (12 million RMB) in assets disproportional to his income.  Many other prison officials in other provinces have also been investigated.

In January, 2014, the Central Political Legal Committee issued a policy document outlining the policy framework for the reforms, which began with the frank admission that society was incensed by the rich and powerful who had been sentenced to prison who often served relatively short sentences because they had their sentences commuted or were given parole, directing special restrictions prisoners convicted of the above three types of crimes. (The Supreme People’s Procuratorate has issued its own regulations to implement the policy document.)

Going forward

Reducing corruption in the justice system and giving Chinese people more confidence in it is a multi-faceted process, with greater transparency needed across many areas.  These reforms to parole and commutation procedures are likely to be one of the accomplishments that President Zhou Qiang will be able to point to when he gives his report to the National People’s Congress next month, particularly as the August, 2014 regulations are listed as one of one of the Court’s 10 major policy accomplishments of 2014.

Additionally, the internet platform also serves as a window into criminal activity in China, such as the recent application by a Han native of Xinjiang, convicted in Beijing of dealing in drugs, but who was permitted by the Chaoyang District Court to serve his sentence outside of jail for the next six months, because he has AIDs.

 

 

 

When will the Supreme People’s Court become a tourist destination?

800px-Supreme_peoples_court_chinaI had the good fortune to have a meeting with some judges of the Supreme People’s Court last week in the main building of the Supreme People’s Court.  The rules are now such that photographs of the gate (and nameplate of the Supreme People’s Court) are forbidden, a contrast to 20+ years ago, when I was able to ride my bicycle along the road fronting the Court.  As the Supreme People’s Court guides the courts towards more transparency and public access, I look forward to the day when it can become a tourist destination and its hearings more  open to the Chinese and foreign public.

I wish all my readers all the best for the Year of the Sheep  祝大家新春快乐,身体健康,万事如意!

Supreme People’s Court interprets the Civil Procedure Law

2On 4 February the Supreme People’s Court (Court) issued a comprehensive interpretation of the 2012 Civil Procedure Law, with 552 articles, longer than the 294 articles in the law itself.  It creates a much more sophisticated body of civil procedure law.  The Court has been working on this interpretation for over two years. As is usual, the Court held a press conference to explain its significance. The text of the press conference, in which the Court spokesman and Judges Du  Wanhua and Sun Youhai spoke, is also available on the Court’s website. A few of the highlights of the interpretation:

  • More detailed section on evidence, including recordings, reflecting the longer term work underway to draft an evidence code.
  • A new section on public interest litigation, in relation to environmental, consumer cases and other such cases.  The organization must show prima facie evidence of harm to the public interest. Other organizations and administrative agencies can apply to be joint plaintiffs.
  • Much longer section on foreign related issues, including provisions concerning foreign language evidence (translations should be provided), and if the parties disagree on the translation, they should agree on a third party translation agency.
  • Permission of the court is required to tape, video, or provide live posting on social media.
  • Many provisions relating to divorce of [former] Chinese citizens who have settled outside of China.
  • Section on small claims procedure.

More analysis to follow.

Supreme People’s Court: new regulations on legal representation in death penalty review cases

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complex where death penalty review undertaken

On 29 January, the Supreme People’s Court issued regulations on legal representation in death penalty cases, Measures for Considering the Views of Defense Lawyers in Death Penalty Review Cases (最高人民法院关于办理死刑复核案件听取辩护律师意见的办法) (translation available here).  This blog previously flagged that the Court was drafting them and that they were meant to be issued by the end of the year.  They will become effective on February 1.  They  were accompanied by a brief question and answer session with a “responsible person” from the Court’s #1 Criminal Division. presumably the head or deputy head.  These brief regulations provide important protections to those sentenced to death, and are part of the Court’s efforts to minimize mistaken cases.

The regulations permit defense lawyers to review the defendant’s file, provide additional evidence and have a hearing with the judges handling the case, although not a formal court hearing. The Court has created a room for lawyers to use to review death penalty review materials. The transcript of the hearing (as signed off by the defense lawyer) is to be included in the case file.  However, defense counsel has only two weeks to submit its additional opinion in the case.  Presumably this deadline can be extended if counsel provides justification.

The regulations set out the telephone numbers of the Court’s criminal divisions, which review death penalty cases.  This blogpost translated a chart drafted by the Chinese magazine Southern Weekend setting out jurisdiction of the various divisions.

This is an important step forward in protecting the rights of criminal defendants and is the product of many years of law reform efforts.

 

A new audience for US Supreme Court Chief Justice Roberts’ 2014 Year-end Report

imgresChief Justice John Roberts of the US Supreme Court may be surprised to learn that (an edited and translated version of ) his year-end report (linked here), is being read by tens of thousands of Chinese judges and lawyers. The reason is a translation by the Institute for Applied Legal Studies, affiliated with the Supreme People’s Court (Court), was published on the Supreme People’s Court website and distributed through its social media channels (Wechat and Weibo), as well by the social media feeds of local Chinese courts.

What relevance does Justice Robert’s report have for the Chinese judiciary?  It reflects how the Court considers foreign legal models as it seeks to reform the Chinese courts. Some of the “take-aways” are highlighted below.

Borrowing foreign legal models

Referring to or “borrowing”  foreign legal models has been a important part of China’s legal modernization, particularly in technical areas of law, but it remains politically sensitive.

The official position on borrowing/referring to foreign legal models is set out in the 4th Plenum Decision: “Draw from the quintessence of Chinese legal culture, learn from beneficial experiences in rule of
law abroad, but we can absolutely not indiscriminately copy foreign rule of law concepts and models.”

Earlier this month, an official of the Communist Party’s Central Political-Legal Committee, writing in the Communist Party’s journal Qiushi (Seeking Truth)  warned:

We want to study and borrow from the world’s best achievements of legal civilization, but studying and borrowing does not mean simply “take-ism (grab-ism)” [this phrase is the title of a 1934 essay by the famous Chinese writer Lu Xun  to mean that China should learn what it needs from Western culture through a process of selection].

 What are the takeaways for the Chinese courts?

The following excerpts from Justice Roberts’ report clearly resonated with the Supreme People’s Court leadership, as they consider court reforms that can be successfully adopted in China’s current political, legal and cultural environment:

  • The courts understandably focus on those innovations that, first and foremost, advance their primary goal of fairly and efficiently adjudicating cases through the application of law.
  • Courts are simply different in important respects when it comes to adopting technology, including information technology. While courts routinely consider evidence and issue decisions concerning the latest technological advances, they have proceeded cautiously when it comes to adopting new technologies in certain aspects of their own operations.
  • For 225 years, since the enactment of the Judiciary Act of 1789, the federal courts in each state have exercised a fair degree of operational independence to ensure that they are responsive to local challenges, capabilities,and needs. The individual courts have had considerable latitude to experiment with new technologies, which has led to some courts initiating local innovations. When the Administrative Office plans a nationwide initiative, such as Next Generation CM/ECF [electronic case filing and case management], it must devote extensive resources to conferring with judges, court executives, and lawyers across the country, examining what has worked on a local basis, and identifying features that should be adopted nationally.
  • The federal courts, however, also face obstacles that arise from their distinct responsibilities and obligations. The judiciary has a special duty to ensure, as a fundamental matter of equal access to justice, that its case filing process is readily accessible to the entire population, from the most techsavvy to the most tech-intimidated. Procedural fairness begins in the clerk’s office.

 

Case law Chinese style–where is it going?

1343124282_12_dqgeOn 6 January 2015, case law Chinese style (案例指导制度) made the headlines of the People’s Court Daily and the Supreme People’s Court’s (the Court’s) websites, because the Supreme People’s Court president, Zhou Qiang provided an introduction to a book that the Court is publishing on guiding cases. Universities such as Yale, Stanford, and the City University of Hong Kong as well as institutions such as the European Union have held training programs with Court staff on the case method. Numerous academic conferences have been held on the topic in China.  The Communist Party leadership expressed its approval for case law in the 4th Plenum Decision in the following phrase:

  • Strengthen and standardize judicial interpretation and case guidance, and unify standards of applicable law (加强和规范司法解释和案例指导,统一法律适用标准).

As discussed in this blogpost, the Court’s October, 2013 judicial reform plan flagged the importance of case law in this phrase:

  •  “Expand fully the important role of guiding cases and cases for reference”.

This blogpost will look at how the Court leadership understands Chinese “case law” and how it sees case law to be useful to the judiciary.

Waving the flag for case law

President Zhou Qiang’s introduction incorporated both guiding cases, as designated by the Supreme People’s Court under its 2010 regulations, and model/typical cases.

He highlighted the following benefits of case law as:

  • summarizing trial experience;
  • strengthening supervision and guidance [of lower courts by higher courts]
  • unifying the application of law;
  • improving the quality of adjudication,
  • helping establish a judicial system with Chinese characteristics
  • assisting  in resolving the problem of similar cases decided differently;
  • controlling judges’ discretion.

Zhou Qiang did not go into the specifics of the case law system, which Hu Yunteng, the head of the Court’s Research Office,  set out in a January, 2014 article, addressing:

  • distinction between guiding cases and other cases issued by the Court or lower courts;
  • how judges should refer to guiding cases;
  • issues facing the guiding case system.

Judge Hu Yunteng clarifies the point that many other commentators and I have made, that cases selected as guiding or model cases are not the entire judgements, but have been curated and edited.

The distinction between guiding cases and other cases

Judge Hu distinguishes guiding cases (Stanford Law School’s Guiding Case Project translates and comments on them) from model cases published in the Supreme People’s Court Gazette, by the Court itself, and individual tribunals of the Court. (Examples of model cases can be found here and here.)

Judge Hu points out that the title, document number, method of selection and approval, and most importantly, the authority of guiding cases is different.  Guiding cases, unlike model or typical cases issued by the Court or lower courts, must be referred to by all courts in similar cases, and lower courts may refer to guiding cases in the reasoning section of their judgments.

How judges should refer to guiding cases

Chinese judges must focus on the important points of guiding cases, which have been approved by the judicial committee of the Supreme People’s Court, and secures their unifying role in the Chinese court system.They must only be used in similar cases.  Judge Hu distinguishes Chinese guiding cases from Anglo-American precedent, because guiding cases can only be issued by the Supreme People’s Court.  He says that judges may refer to guiding cases in their judgments and distinguish the case before them from a relevant guiding case.

Issues facing the guiding case system

Judge Hu identifies the following issues:

  • The relationship between judicial interpretations and guiding cases, and in which cases guiding cases rather than judicial interpretation should be relied upon is unresolved.
  • Second, the issues in the guiding cases generally are not breakthrough cases and are more “damp squibs.” Judge Hu suggests that the guiding case system address more controversial cases.
  • Third, it is unclear to the lower courts when guiding cases must be used, and the consequences if a lower court fails to use a guiding case on point.
  • Fourth, he admits that too few guiding cases have been issued and suggests that the Court issue a number of guiding cases equal to judicial interpretations.

Comments from the market

An opinion piece in Caixin, reporting on a late December conference at Renmin University on case law, set out comments from some Chinese legal professionals on the case system:

Renmin University Professor Huang Jingping–“very few judges refer to guiding cases”

Peking University Professor Liang Genlin–“the position of guiding cases in the legal system and how they can be distinguished from other cases is chaotic”–clearer rules are needed.

Li Guifang, partner, Deheng Law Office–guiding cases are needed.

Closing comments

It is likely that guiding cases and model/typical cases issued by the Supreme People’s Court will continue to be used to accomplish several goals:

  • Publicize the accomplishments of the lower courts.
  • Distributed as political education or have political purposes.
  •  Convey to the lower courts, lawyers, and the general public the correct position on a substantive issue but also have a political purpose;
  • Provide guidance for judges and lawyers on substantive legal issues;
  • Provide models of correctly decided cases.

Finally, it appears likely that the issue of the authority of guiding cases vs. other types of cases will be set out in regulations at some point.

Supreme People’s Court overhauls judicial performance indicators

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Jincheng Shanxi court evaluation meeting

The 27 December headline story in the People’s Court Daily and the national court website is the decision by the Party Committee of the Supreme People’s Court (the Court), issued to the entire court system, to:

  • cancel court performance rankings;
  • Except for those targets for resolving cases that according to law are compulsory, the remaining targets should become reference data for analyzing judicial operations.
  • oppose the practice of avoiding accepting cases at year end with the excuse that it would bring down the court’s case resolution index.

This is the result of its own fieldwork, as well as criticism from the lower courts, NPC delegates, academics, and lawyers. Chinese courts avoid accepting new cases close to year end if the case will not be resolved until the next year, because these cases will pull down a court’s performance indicators, even though the rights of litigants can be sacrificed.

Chinese and foreign academics have highlighted the negative consequences of judicial performance performance targets for many years.

He Fan, a Court judge on the staff of the research office, while applauding the change, pointed out in his blog that despite the change of policy by the Court, some lower court judges remain under pressure by local court leadership to work overtime to resolve cases.

What indicators will replace them?

The reports do not link to the underlying Court document and so it remains unclear what performance indicators will replace the ones that have been abolished, or which indicators fall into the second category.  The judicial reforms anticipate having a smaller number of judges handling an increasing number of cases.  If judges find the new performance evaluation system unacceptable, this may lead to an even greater outflow of judges than is already occurring.