Signals in Supreme People’s Court President Zhou Qiang’s 2018 report to NPC (part 2)

Screen Shot 2018-05-10 at 12.54.58 PMFor those with the ability (or at least the patience) to decode Supreme People’s Court (SPC) President Zhou Qiang’s March, 2018 report to the National People’s Congress, it provides insights into the Chinese courts, economy, and society, and of course politics.  This blogpost will address selected aspects of the second and third parts of the report because of competing time demands.

Report drafting

To most of the world, President Zhou Qiang’s reports to the National People’s Congress (NPC) differ little from year to year.  However to President Zhou Qiang and the team of people tasked with preparing a draft that would not be thrown back in their faces, the challenges in 2018 were more formidable than previously.  This year’s report needed to highlight the SPC’s achievements of the last five years, signal that its work in the next year is harmonized with the post-19th Party Congress New Era, and hit the right notes with NPC delegates, who have in the past voted against court reports in significant numbers.

According to this report, the drafting group, which started work in late October (after the 19th Party Congress),  and as anyone familiar with China today would expect, communicated through Wechat. The high stakes report meant that President Zhou Qiang summoned members for drafting sessions during the Chinese new year holiday. The group submitted 37 drafts to President Zhou Qiang and other senior leaders, and as this blog reported in previous years on this blog, senior court leaders traveled the country to seek the views of NPC delegates and many others.

This means (as I have written before, and I have discussed in greater detail in a forthcoming paper) that the statistics have been specially selected.

The summary below (part 2) is not comprehensive but provides some highlights. It signals that the work of the SPC is perfectly synchronized with national policy.

Judicial protection of human rights

The second section of the speech touched on correction and prevention of “mistaken cases,” a topic mentioned in previous NPC reports, and still an ongoing issue.  Over the past five years,  6747 criminal cases have been reopened and retried. Among the measures the report mentions is:

  • policy documents on preventing mistaken cases;
  • the courts implementing principles of evidence-based judgments; (note that China does not yet have detailed criminal evidence rules, but see Judge Yu Tongzhi‘s remarks at a high profile criminal evidence conference on 19-20 May for the latest thinking of the SPC’s criminal divisions)
  • “no conviction in case of doubt;” (most useful discussions of this are behind academic publishers’ paywalls);
  • strictly implementing the death penalty; (as mentioned in earlier blogposts, there have been calls within China to be more transparent on the numbers, but this  decision likely needs top-level clearance);
  • improving legal aid in criminal cases, piloting in some provinces (including Guangdong) full coverage at all levels; [note Art. 21 of these regulations reveal concern about lawyers stirring up troubles, with language similar to Ministry of Justice regulations (不得恶意炒作案件,对案件进行歪曲、有误导性的宣传和评论);

Courts serve economic policy goals

This section highlighted the SPC’s accomplishments in supporting national economic policy goals.  The statistics are all for the past five years. Many of these topics have been previously discussed on this blog:

  1. Commercial cases:  the Chinese courts heard 16,438,000 first instance cases (in the last five years), up almost 54%;
  2. the SPC promoted bankruptcy trials, including developing a national bankruptcy information platform (limited information available–related blogpost here); issued a policy document on transferring cases from enforcement proceedings to bankruptcy; dealt with zombie enterprises by hearing and closing 12,000 bankruptcy cases (over the last five years); issued a company law judicial interpretation; heard and closed 4,106.000 sales tcontracts and 1,320,000 real estate cases.
  3. The SPC served major economic strategies, through issuing 16 measures related to Chinese companies engaging in foreign trade and investment, and the Belt & Road. It established a coordination mechanism for the Beijing, Hebei, and Tianjin courts (blogpost here).  The northeastern courts have provided judicial services to the region’s rejuvenation (see previous blogposts on some of the many legal and social issues); Guangdong, Fujian, etc. courts have provided services to Free Trade Zones;
  4. In the area of finance-related cases, the courts have prevented and resolved financial risk (a concern of the day) by:
  • issuing a policy document on financial cases (post the 2017 Financial Work Conference, on the Monitor’s to-do list),
  • trying and closing 5,030,000 finance-related cases (including insurance, securities, and financial institution loans),
  • trying and closing 7,059,000 private lending cases, 152,000 internet finance cases;
  • struck at illegal fund-raising etc.  (no statistics).  Expect to see more cases in this area in 2018.

4. SPC has improved judicial protection of entrepreneur’s property rights by issuing 17 policy documents (the number may indicate the depth of the problem) (see related blogposts).

5. SPC has supported national innovation policy through issuing an outline on judicial intellectual property (IP) protection, hearing and closing 683,000 IP cases,  working on strategies to deal with the issue for both Chinese and foreign IP holders that in China, IP infringement is low cost but protecting IP rights is high cost, trying the Jordan case and the Huawei v. IDC case.

6.  In the area of environmental protection, the SPC has issued an interpretation on public interest litigation, and concluded 487,000 environmental civil cases, with 11,000 cases of compensation for ecological environmental damages, 1,383 cases of environmental public interest litigation initiated by the procuracy (one of my students is looking into this), and 252 environmental public interest litigation cases were filed by social organizations.

7. In foreign-related cases, the Chinese courts concluded 75,000 foreign-related commercial and civil cases (note they account for a tiny proportion of cases in the Chinese courts).  Although the SPC says that more and more foreign parties have agreed to settle disputes in the Chinese courts, Professor Vivienne Bath’s research has shown that foreign parties are often dragged into the Chinese courts because of principles in Chinese law leading to parallel proceedings.   The protection of “judicial sovereignty” has multiple implications (some explained in the linked article).  This year, after several years of drafting, the SPC has issued a set of three judicial interpretations on the judicial review of arbitration. Supporting the national strategy of increasing its maritime power, the Chinese courts have heard 72,000 maritime first instance cases.  The SPC describes the maritime courts as effectively safeguarding the country’s maritime security and judicial sovereignty.

9. On foreign judicial exchanges, the SPC has handled 15,000 international judicial assistance cases (in fact both Chinese and foreign practitioners complain about how long assistance takes); and the SPC has used international conferences to promote its international role, particularly vis a vis Belt & Road countries.

Signals in Supreme People’s Court President Zhou Qiang’s 2018 report to NPC (part 1)

Screen Shot 2018-05-10 at 12.54.58 PMFor those with the ability (or at least the patience) to decode Supreme People’s Court (SPC) President Zhou Qiang’s March, 2018 report to the National People’s Congress, it provides insights into the Chinese courts, economy, and society, and of course politics.  This blogpost will address selected aspects of the first part of the report because of competing time demands.

Report drafting

To most of the world, President Zhou Qiang’s reports to the National People’s Congress (NPC) differ little from year to year.  However to President Zhou Qiang and the team of people tasked with preparing a draft that would not be thrown back in their faces, the challenges in 2018 were more formidable than previously.  This year’s report needed to highlight the SPC’s achievements of the last five years, signal that its work in the next year is harmonized with the post-19th Party Congress New Era, and hit the right notes with NPC delegates, who have in the past voted against court reports in significant numbers.

According to this report, the drafting group, which started work in late October (after the 19th Party Congress),  and as anyone familiar with China today would expect, communicated through Wechat. The high stakes report meant that President Zhou Qiang summoned members for drafting sessions during the Chinese new year holiday. The group submitted 37 drafts to President Zhou Qiang and other senior leaders, and as this blog reported in previous years on this blog, senior court leaders traveled the country to seek the views of NPC delegates and many others.

This means (as I have written before, and I have discussed in greater detail in a forthcoming paper) that the statistics have been specially selected.

The summary below (part 1) is not comprehensive but provides some highlights.

Executive summary (SPC section)

The English language Xinhua report on Zhou Qiang report drew on the introductory section, which was an executive summary of the work of the courts in the last five years, but this section will focus on the summary of SPC’s accomplishments

The SPC heard about 82,383 cases and closed about 79,692 ones, up 60.6 percent and 58.8 percent over the previous five-year period respectively. Much of this caseload is attributable to the circuit courts. For those interested, SPC court hearings (that are being heard openly) are streamed or are saved in a video library on the SPC website: (http://tingshen.court.gov.cn/). (The Supreme People’s Monitor can be seen attending a hearing here).

As mentioned previously, some SPC proceedings, including capital punishment review  and review of lower court rulings not to enforce foreign or foreign-related arbitral awards, are not considered “court hearings.”)

According to a Xinhua report on 10 May, the six circuit courts of the Supreme People’s Court (SPC) accepted 2,922 (and concluded 1909) civil, administrative and criminal cases in the first three months of 2018, accounting for 67.2 percent of the total cases of these types accepted by the SPC.  It is possible to view circuit court hearings on-line on the SPC website.

A total of 8,355 petitions were handled by the circuit courts (in the first 3 months of 2018), accounting for 78.92 percent of petitions handled by the SPC. It is clear two of the goals of establishing the circuit courts (the SPC near your home (“家门口的最高法院”) are being achieved: 1)moving the hearing of many cases to the circuit courts; 2) moving the processing of most petitions to the circuit courts.  It is not clear from these statistics how many petitioners sought to petition the circuit courts (and SPC headquarters) –there are likely many more petitioners who visited than petitions accepted.  As was discussed earlier on this blog, the SPC is seeking to involve lawyers in the criminal petitioning (collateral appeals) process.

The SPC highlighted that in the past five years it had issued 119 judicial interpretations (some of which have been discussed on this blog, many translated by Chinalawtranslate.com) and issued 80 guiding cases (link to cases and analysis) (as Jeremy Daum has written, and Mark Cohen has also noted, the statistics show they are not often used by the courts), but did not release numbers on the other types of documents it had issued (this blog has discussed some of them) or the number of model cases or other cases issued by SPC divisions (this blog has recently focused on ones issued by the criminal divisions).

1. Criminal cases

As is usual, President Zhou Qiang discussed criminal cases first, the topics reflecting their political priority. A total of 6.07 million suspects were convicted in first instance trials of 5.49 million criminal cases. (During that period the Chinese courts heard almost 89 million cases, so criminal cases are clearly a small proportion of the cases heard.)

In keeping with the current political priorities, President Zhou Qiang said the courts “resolutely protect the nation’s political security, in particular the security of the state power and the political system.” Similar to last year, no statistics were given for the number of national security cases heard. He does mention the normative document the the SPC issued jointly with other authorities on religious extremism and terrorism (discussed here).

President Zhou Qiang then discusses corruption-related offenses, mentioning the  asset recovery interpretation discussed last year on this blog.  Thereafter he focuses on property and personal safety-related crimes, mentioning this year’s organized crime normative document (this blog discussed it earlier this year), as well as (among others) its accomplishments relating drug cases and medical violence.

He then discussed cases involving violence against women and children (130,000 cases over the past 5 years, food safety (42000) and environmental protection crimes (88,000), and telecommunications crime. Local court white papers have posted detailed statistics concerning many of these crimes (see a Ningbo court white paper on sexual assault cases against minors and a Shanghai district’s court white paper on environmental protection crimes).

In the concluding paragraph, President Zhou Qiang discusses SPC participation in comprehensive security management. President Zhou Qiang mentions implementing an additional responsibility system on judges of publicizing the law (普法).  This is further to a 2017 notice of the Central Committee and State Council’s General Offices Opinion on State Organs implementing “whoever enforces the law publicizes the law” law publicity responsibility system (关于实行国家机关“谁执法谁普法”普法责任制的意见) that imposes responsibility on state organs enforcing the law (administrative and justice) to publicize the law.  Judges are to use court documents, open hearings, circuit courts, streaming of court cases, and posting legal documents on-line to promote the use of cases to explain the law. It is clear that the SPC is taking the circuit court responsibility system seriously, as the SPC’s #2 Circuit Court has been posting a series of articles on its circuit visits around the Northeast (see here).  This adds somewhat to judges’ workload, but this type of responsibility is not as great a concern as the more general responsibility system.

 

 

 

 

Signals in Zhou Qiang’s 2017 report (Part 2)

This blogpost continues the analysis in Part 1, which analyzed the first several sections of Zhou Qiang’s work report to the National People’s Congress, concerning court caseload, social stability and criminal punishment, and the courts serving to maintain the economy.

Most people who have commented (outside of China) on Supreme People’s Court (SPC) President Zhou Qiang’s March, 2017 report to the National People’s Congress (NPC) didn’t have the patience to read (or listen) much beyond the initial section, which mentions the conviction of Zhou Shifeng as indicating that the courts are doing their part to crack down on state subversion.  It appears to be another in a series of colorless government reports.  But for those with the ability (or at least the patience) to decode this report, it provides insights into the Chinese courts, economy, and society.

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The report, which went through 34 drafts, is intended to send multiple signals to multiple institutions, particularly the political leadership, in the months before the 19th Party Congress.

According to a report on how the report was drafted, the drafting group (which communicated through a Wechat group to avoid time-consuming bureaucratic procedures) faced the issue of how to summarize the work of the People’s Court in 2016 correctly.  The guidance from President Zhou on the report–it must:

  1. fully embody the upholding of Party leadership, that court functions (审判职) must serve the Party and country’s overall situation;
  2. embody the new spirit of reform, showing the (positive) impact of judicial reform on the courts and show the ordinary people what they have gained;
  3. not avoid the mention of problems, but indicate that they can be resolved through reform.

Underneath these political principles, the operation of a court system with Chinese characteristics is visible.

Guaranteeing people’s livelihood rights & interests

The following section is entitled  “conscientiously implement people-centered development thinking, practically guarantee people’s livelihood rights and interests.” It summarizes what the courts have been doing in civil and administrative cases, but it also signals their perceived importance in this national report.

Civil cases

President Zhou Qiang noted that the Chinese courts heard 6,738,000 civil  (民事) cases, an increase of 8.2%.  Although he did not define what he meant by civil cases, under Chinese court practice, it refers to the type of cases under the jurisdiction of the #1 civil division (see this earlier blogpost):

  1. Real estate, property and construction;
  2. Family;
  3. Torts;
  4. Labor;
  5. Agriculture;
  6.  Consumer protection; and
  7. Private lending.

On labor cases, the report mentioned that the courts heard 473,000 labor cases. This is a slight decrease from 2015 (483,311) (although the report did not do a year on year comparison). The report signalled that the SPC is working on policy with the labor authorities on transferring cases from labor mediation, labor arbitration, to the courts. This was signaled previously in the SPC’s policy document on diversified dispute resolution.  Articles on both the SPC website and local court websites have signaled the increasing difficulty of labor disputes, and the increase in “mass disputes.”

As explained in this blogpost, labor service disputes, relate to an “independent contractor,” but more often a quasi-employment relationship, governed by the Contract Law and General Principles of Civil Law, under which the worker has minimal protections. This year’s report did not mention the number of labor service cases. In 2015, the Chinese courts heard 162,920 labor service cases, an increase of 38.69%.

There was no further breakdown on the number of other types of civil cases, such as private lending or real estate cases.  For these statistics, we will need to await any further release of big data by the SPC. As blogposts in recent months indicate, private lending disputes are on the rise in economically advanced provinces and bankruptcy of real estate developers remains a concern.

This section also mentions criminal proceedings against illegal vaccine sellers, although the topic may be more appropriately be placed with the rest of the criminal matters, but likely because it is an issue that drew widespread public attention.

Family law

Echoing language in recent government pronouncements, the section heading mentions protecting marriage and family harmony and stability. The report mentions that the courts heard 1,752,000 family law cases in 2016, with no year on year comparison with 2015.  The report mentions that the SPC has established pilot family courts (as previously flagged on this blog).

Administrative disputes

First instance administrative disputes totaled 225,000 cases, a 13.2% increase over 2015, but a tiny percentage of cases in the Chinese courts. The report highlights developments in Beijing and Shanghai (they are being implemented in Shenzhen, although not mentioned), to give one local court jurisdiction over administrative cases.  According to the statistics (in Beijing, at least), this has led to a sizeable increase in administrative cases.  The report also mentions the positive role that the courts can play in resolving condemnation disputes (this blogpost looked at problems in Liaoning).

Hong Kong/Macao/Overseas Chinese cases

As mentioned by Judge Zhang Yongjian, the report mentions that the courts heard 19,000 Hong Kong, Macau, Taiwan, Overseas Chinese related cases, and handled 11,000 judicial assistance matters with the three greater China jurisdictions.  The report also mentions the recently signed arrangement between the SPC and Hong Kong judiciary on the mutual taking of evidence, a development that seems to have escaped the notice of the Hong Kong legal community.

Military related disputes

Unusually, the report mentioned that the local courts heard 1678 military-related cases and have developed systems for coordination between the civilian and military courts.  These developments have been analyzed further in a blogpost on the Global Military Justice Reform blog.

Strictly governing the courts and institutional oversight

The following two sections of the report give a report on how the courts are upholding Party leadership, increasing Party construction within the courts, internal Party political life, and political study, all of which are in line with recent developments. Although these are stressed, this does not mean that professional competence is less valued.  The increasing caseload,  higher expectations of litigants, particularly in commercial cases, and increasing technical complexity of cases means that the SPC is in fact taking measures to improving professional capacity of the courts.  This section also mentions courts and individual judges that have been praised by central authorities and 36 judges who have died of overwork.

On anti-corruption in the courts, the report mentions that 769 senior court officials have been held responsible for ineffective leadership, 220 have been punished for violations of the Party’s Eight Point Regulations. The SPC itself had 13 persons punished for violations of law and Party discipline (offenses unstated), 656 court officials were punished for abusing their authority, among whom 86 had their cases transferred to the procuratorate.

On institutional oversight, the report signals that the SPC actively accepts supervision by the NPC, provides them with reports, deals with their proposals, and invites them to trials and other court functions. On supervision by the procuratorate, the report revealed that the SPC and Supreme People’s Procuratorate are working on regulations on procuratorate supervision of civil and enforcement cases, a procedure sometimes abused by litigants.

2016 and 2017 judicial reforms

2016

On 2016 judicial reform accomplishments, the following were highlighted:

  1. circuit courts;
  2. case filing system;
  3. diverse dispute resolution;
  4. judicial responsibility;
  5. trial-centered criminal procedure system;
  6. separation of simple from complicated cases;
  7. people’s assessors‘ reform;
  8. greater judicial openness;
  9. more convenient courts;
  10. improving enforcement (enforcement cases were up 31.6% year on year), including using the social credit system to punish judgment debtors.

2017

The report mentions that among the targets for the courts is creating a good legal environment for the successful upcoming 19th Party Congress.  That is to be done through the following broad principles:

  1. using court functions to maintain stability and to promote development (for the most part mentioning the topics reviewed earlier in the report);
  2. better satisfying ordinary people’s demands for justice;
  3. implementing judicial reforms, especially those designated by the Party Center;
  4. creating “Smart” courts; and
  5. administering the courts strictly and improving judicial quality.

This last section mentions implementing recommendations required by the recent Central Inspection Group’s (CIG) inspection and Central policies applicable to all political-legal officials, before focusing on the importance of more professional courts, and improving the quality of courts in poor and national minority areas.

A few comments

It is clear from the above summary that the content of President Zhou Qiang’s report to the NPC is oriented to the upcoming 19th Party Congress and the latest Party policies. It appears that no new major judicial reform initiative will be announced this year.

It is likely too, that the selective release of 2016 judicial statistics in the NPC report also relates to messaging in line with the upcoming 19th Party Congress, although we know that the SPC intends to make better use of big data.  We can see that overall, the caseload of the courts is increasing rapidly, including institutionally difficult cases (such as bankruptcy and land condemnation), which put judges and courts under pressure from local officials and affected litigants. In the busiest courts, such as in Shanghai’s Pudong District, judges will be working extremely long hours to keep up with their caseload, and the impact of new legal developments. It appears (from both the report and the results of the CIG inspection) that judges will need to allocate more time to political study.  How this will play out remains to be seen. We may see a continuing brain drain from the courts, as we have seen in recent years.

 

Signals in Zhou Qiang’s 2017 NPC Report (Part 1)

Most people who have commented (outside of China) on Supreme People’s Court (SPC) President Zhou Qiang’s March, 2017 report (on 2016 work) to the National People’s Congress (NPC) didn’t have the patience to read (or listen) much beyond the initial section, which mentions the conviction of Zhou Shifeng as indicating that the courts are doing their part to crack down on state subversion.  It appears to be another in a series of colorless government reports.  But for those with the ability (or at least the patience) to decode this report, it provides insights into the Chinese courts, economy, and society.

imgres-14

©

The report, which went through 34 drafts, is intended to send multiple signals to multiple institutions, particularly the political leadership, in the months before the 19th Party Congress.

According to a report on how the report was drafted, the drafting group (which communicated through a Wechat group to avoid time-consuming bureaucratic procedures) faced the issue of how to summarize the work of the People’s Court in 2016 correctly.  The guidance from President Zhou on the report–it must:

  1. fully embody the upholding of Party leadership, that court functions (审判职) must serve the Party and country’s overall situation;
  2. embody the new spirit of reform, showing the (positive)impact of judicial reform on the courts and show the ordinary people what they have gained;
  3. not avoid the mention of problems, but indicate that they can be resolved through reform.

Underneath these political principles, the operation of a court system with Chinese characteristics is visible.

A partial decoding of the report reveals the points listed below (to be continued in Part 2).

1. Caseload on the rise

The caseload in the Chinese courts continues to rise significantly, at the same time that headcount in the courts is being reduced.  Diversified dispute resolution (the jargon outside of China is alternative dispute resolution) is being stressed.

  • SPC itself is dealing with a massive increase in its cases, 42.6% higher than 2016, and that number was significantly higher than 2015.
    Screen Shot 2017-03-16 at 4.07.25 PM.png

    2016, SPC cases accepted 22,742, up 42.3%, concluded 20151, 42.6%, Circuit Cts #1 & 2 accepted 4721 cases in last 2 yrs, resolved 4573 cases

     

The statistics on the SPC’s caseload are not broken down further, but are understood to be mostly civil, commercial, and administrative.  It appears from a search of one of the case databases that not all of the SPC judgments or rulings have been published (a search of one of the judgment databases showed 6600+, and only some of the death penalty approvals). It seems also that the database does not include SPC cases such as the judicial review of certain foreign and foreign-related arbitration awards.

Although the report does not focus on the reasons for the massive increase in SPC cases, careful observation reveals the following reasons:

  • establishment of the circuit courts, hearing more cases and ruling on applications for retrials;
  • increase in the number of civil and commercial cases with large amounts in dispute;
  • SPC itself has implemented the case registration system; and
  • changes in law giving litigants rights where none previously existed.

The report also mentioned that 29 judicial interpretations were issued (some analyzed on this blog) and that 21 guiding cases were issued.  Model cases and judicial policy documents were not separately set out, although some were listed in the appendix to the SPC report distributed to delegates.

Lower courts

23,030,000 cases accepted by lower courts, up 18%, cases resolved, 19,773,000; amounts in dispute up 23%

The pie chart below sets out the statistical distribution of cases heard by the Chinese courts:

 

Screen Shot 2017-03-16 at 9.59.06 PMThe pie chart of cases heard, enforced and closed in 2016 shows:

  • about 60% of those cases were civil, commercial, or intellectual property cases;
  • 6.41% criminal cases,
  • 3.40% parole, sentence reduction cases;
  • almost 26% enforcement cases,
  • .03% state compensation cases,
  • petition or application for retrial, .91%;
  • and 1.66% administrative cases.

Although the stress in Zhou Qiang’s report is placed on law and order, in fact many more cases in the Chinese courts are civil and commercial rather than criminal.

2. Social stability, public order, law & order are major concerns

Criminal cases have a prominent place in the report, although the data reveals a slight increase in the number of cases  (1.5%), involving the conviction of 1,220,000 people, down 1%. (Note that many minor offenses are punished by the police, with no court procedures).

Although the report mentioned the Zhou Shifeng case (state security) and criminal punishment of terrorist and cult crimes, it did not release statistics on the number of cases of any of these crimes heard.  Corruption cases totaled 45,000 cases, involving 63,000 persons.  Violent crimes (murder, robbery, theft) cases 226,000. Drug cases: 118,000, a significant decrease from 2015. 2016 cases of human trafficking and  sexual assault on women and children totaled 5335, while telecommunications fraud cases in 2016 totaled 1726.  Only 213 cases involving schoolyard bullying were heard and the SPC revealed that the drafting of a judicial interpretation on the subject is underway. The report highlighted some of the well-known criminal cases, including the insider trading case against Xu Xiang and the Kuai Bo obscenity cases to illustrate and criminal law-related judicial interpretations to signal that the courts are serving policy needs in punishing crime.

The same section described what has been done in 2016 to correct mistaken cases, highlighting the Nie Shubin case (reheard by Judge Hu Yuteng and colleagues) as an example.  The report revealed that the local courts retried only 1376 criminal petition cases, likely a tiny fraction of the criminal petitions submitted.

3. Maintain economic development

As President Zhou Qiang indicated, the way that the Chinese courts operate is Party/government policy-driven (they must serve the greater situation). Serving the greater situation meant, in 2016, that the Chinese courts heard 4,026,000 first instance commercial cases, a 20.3% increase year on year.  He also mentioned the 3373 bankruptcy cases analyzed in an earlier blogpost. Of those 4 million commercial cases, 1,248,000 involved securities, futures, insurance, and commercial paper and 255,000 real estate cases and 318,000 rural land disputes. Other implications are discussed below.

This section of the report devoted a paragraph to a topic discussed last year on this blog: the courts serving major government strategies, including One Belt One Road, the Yangtze River Belt, and Beijing-Tianjin-Hebei coordinated development.

Green development , intellectual property (IPR), property rights (of private entrepreneurs), serving maritime and major country strategy, socialist core values, judicial solutions to new problems and cross-border assistance also merited mention in this section.

  1. The courts heard 133,000 environmental and natural resources cases, with Fujian, Jiangxi and Guizhou courts designated as experimental environmental courts.  While public interest environmental and procuratorate brought (environmental) cases were mentioned, statistics were not set out.
  2. First instance IPR cases totaled 147,000, with several cities (Nanjing, Suzhou, Wuhan, and Chengdu) establishing IPR divisions to take cases across administrative boundaries. This section mentioned the Jordan trademark case and the IPR courts.
  3. On protection of property rights, the report mentioned some of the documents intended to protect private entrepreneurs discussed on this blog, as well as 10 model cases.
  4. On maritime and cross-border cases, the report mentions the judicial interpretations on maritime jurisdiction (discussed in this blogpost), intended to support the government’s maritime policy, including in the South China Sea.  The Chinese courts heard only 6899 commercial cases involving foreign parties (this means that of the 2016 19,200 civil and commercial cases mentioned by Judge Zhang Yongjian, most must have been civil) and 16,000 maritime cases. The report again mentions making China a maritime judicial center, further explained in my 2016 article.
  5. On the relevance of socialist core values to the courts, that is meant to incorporate socialist core values into law (although they should be understood to have always to be there) and to give the Langya Heroes special protection under China’s evolving defamation law.
  6. Judicial solutions to new issues included internet related issues, including e-commerce cases, internet finance cases, and theft of mobile data; the first surrogacy case, and judicial recommendations to Party and government organizations.
  7. In the section on international cooperation, President Zhou Qiang revealed that fewer than 3000 cases involving mutual judicial assistance were handled. The bureaucratic and lengthy procedures for judicial assistance in commercial cases has long been an issue for lawyers and other legal professional outside of China.  This is likely to change (in the long run, as Chinese courts increasingly seek to obtain evidence from abroad).  US-China dialogue on bankruptcy issues and cooperation with One Belt One Road countries (cases involving these countries are increasing significantly), were also mentioned here.

TO BE CONTINUED

 

Takeaways from the Supreme People’s Court 2015 work report

20160313104344_51387The Supreme People’s Court (SPC)’s 2015 work report has many takeaways for different audiences.  The apparently formulaic report took five months to draft, involving comments and input by many within and outside of the SPC (this article  describes the process, as did my earlier blogpost), most likely involving clearance by the Central Leading Group on Judicial Reform.  It was drafted to show certain accomplishments, send certain signals–show that judicial reform is on the right path and is successful, particularly that the court leadership and the courts are doing their part to fulfil the tasks set for them by the Party/state leadership.  This year’s report has three sections, rather than the usual two, with one section summarizing judicial reform accomplishments. This post will focus on highlights of the overview of 2015, and leave judicial reforms and tasks for this year for another day.

In a sign that the diminished attention spans have come to China, the SPC has come up with graphic and even musical versions of the report.

Statistics to convey current message

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This short book, explaining how statistics are used to convey certain messages, was originally published in the 1950’s and translated into Chinese about 10 years ago (and given to me when I was 11 by my parents). It is a useful reference when puzzling out what SPC court statistics are saying and mean, because as this  Wall Street Journal article noted, the categories used in the annual reports often shift from year to year, making comparisons difficult, and breakdowns of specific categories are generally missing. The reason for that is the report (including the statistics) are meant to harmonize with the latest government/Party policies and be on message. The SPC is reforming judicial statistics and seeking to make better use of big data, but the fine details are not in this report.

Takeaway #1–Caseload Up Significantly

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The caseload of all levels of courts were up significantly, primarily because of the docketing reforms implemented last year (mentioned here).  Civil (family, inheritance, private lending) and commercial cases account for most of the growth.

Cases heard at the Supreme People’s Court were up 42.6% compared with 2014 (accepted 15985, concluded 14,135). with most of those heard at headquarters in Beijing rather than the two circuit courts.    The local people’s courts heard 19,511,000, and concluded 16.714 million cases, with large increases  in the amounts in dispute, an increase of 24.7%, 21.1% and 54.5%, respectively. This seems to exclude cases heard in the military courts.

Performance target reforms mean that judges are no longer under enormous pressure to conclude cases by year end (although some local court officials may not been on message).

The bar chart below compares 2014 and 2015 numbers for criminal, civil, commercial, administrative, and enforcement cases respectively.Screen Shot 2016-03-15 at 7.16.13 pm

Criminal and Commercial cases up–Takeaway #2

Just briefly on the criminal cases, as the overview graphic of commercial cases is linked to criminal cases-criminal cases are up by 7.5%. Significantly, criminal cases involving refusal to pay wages were up 58%, with last year’s report revealing that 753 persons were convicted, which means that 2015 convictions were close to 1200. a\Analysis of  the statistic of 1419 persons convicted of state security and terrorist crimes can be found here.

e8fade90gw1f1v665sc3uj209i0ugq6mCommercial cases were up 20% (3,347,000, with 120,000 intellectual property cases (up from 110,000 in 2014).  This is likely linked to the new intellectual property courts, but I will cede further analysis on this to my fellow blogger Mark Cohen of Chinaipr.com.  Again, tiny numbers of foreign-related (6079), but up from last year (5804) and Hong Kong, Macau, and Taiwan-related cases.  Cases involving subsidiaries of foreign companies are not in this category–this is a commercial case with a foreign party. The maritime courts heard 16,000 cases, the large increase apparently also attributable to the case registration system.  The language in the speech (making headlines) about making China an international maritime judicial center reflects language in previous speeches Zhou Qiang gave in China (analyzed here), but unnoticed until the NPC report.

Private lending disputes up significantly

The courts heard 1,420,000 private lending disputes, up from 1,045,600 in 2014.  Further background on private lending disputes can be found in my previous articles for the Diplomat. Last year the private lending disputes were categorized with the civil cases, rather than commercial cases.

SPC doing its part for greater government policy

The SPC issued policy documents on One Belt One Road (see this analysis of its implications), the Beijing/Tianjin/Hebei area, and Yangtze River Economic Belt to implement government policies. Those strategic projects are priorities for government.

Takeaway #3 Commercial disputes

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In 2015, 1,053,000 financial disputes were heard and 100,000 insurance disputes, as well as 4238 securities fraud and insider trading cases, compared with 824,000 financial disputes in 2014, a number which included insurance cases.  This speaks to the weakness in the Chinese economy.

The bar chart to the left illustrates percentage increases in product liability (in 2014 there was also a large increase), reputation, real estate development (see this blogpost), loans, sales contracts, labor (up 21%!), and rural residential land disputes. The report flags 1400 bankruptcy cases and highlights pilot projects.

In another indication of problems with the real estate sector, Zhou Qiang mentioned “mass real estate disputes” and the expert handling by the Jinan court (in coordination with the government) of a large villa project in Jinan that encountered financial difficulties in 2008 (see this description) and led 2000 purchasers to petition in Beijing and even surround the Jinan Party Committee, Shandong Party Committee, and the Central Inspection Group that was on site. In 2014, the Shandong government decided to use “legal thinking” to involve the Jinan intermediate court.

An area for commercial lawyers to monitor is unfair competition and anti-monopoly, where the regulators are working on a stream of regulations. Last year the Chinese courts heard 1802 cases.

Takeaway #4– Big jump in civil disputes

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The pie chart on left shows the distribution of first instance civil cases–26% family (1,733,000), 1.5% inheritance, 5% ownership disputes, 17% personal rights (privacy, portrait, reputation), 22.8% private lending, 7.32% labor disputes, including 300,000 migrant worker wage arrears (and other cases related to rural residents rights (拖欠农民工工资等涉农案件 30 万件).  Consumer, education, housing and employment accounted for 720,000 cases.

For environmental cases, 78,000 civil cases were concluded, along with 19,000 criminal cases.

 

Takeaway #5 Big jump in administrative cases

The amendment of the Administrative Litigation Law last year, the docketing reforms, and the decision to push disputes off the streets and into the courtroom has been a large increase in administrative disputes, although the baseline was very low.  In 2015, 241,000 first instance administrative cases were accepted, up 59% from the year before, with 199,000 concluded.  Reforms have been undertaken to move administrative cases outside of the area in which they arise, which is another reason that some persons or entities have been willing to file.  The bar chart has the percentage increase in different types of administrative cases, with an 176% increase in education cases. The remaining categories (from the left are: public security, trademark, pharmaceutical, construction, transportation, energy, and the environment.

(Black & white charts from SPC work report, thanks to Josh Chin of the Wall Street Journal).

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