The Action Mode Of Securities Civil Compensation Lawsuit

Compensation system for the infringements on the securities market is one of themost important mechanisms for protecting the interests of the investors. Althoughcurrent securities laws and regulations have stipulated the civil compensationliabilities of the relevant persons who are held responsible for the fraudulentdisclosure, insider trading, manipulation of the securities market and deceiving theclients,they only have played the role as a "manifesto" in general and are difficult tobe implemented. The reason is that because of the character of "large-scale,small-stakes" of the detriment caused by the securities infringements, the currentindividual litigation, joinder and representative litigation of our country can't satisfythe needs of this kind of cases owing to the following defects: a. the lodgement of therepresentative litigation is strictly prohibited;b. the scale of these actions is difficultto extend;c. the problem of the impartial enforcement of the law;d. limitation of therights of the representative;e. social function of the representative is limited;f. theposition of its function is not rational. So it is imperative to complete our country'smode of the collective action.The capitalism countries , with U.S.A., Japan and Germany as theirrepresentatives, where securities industry is well developed all have their respectiveeffective litigation system of securities civil compensation actions. Learning anddrawing on the experience of these systems will benefit the completion of our actionmode of securities civil compensation litigation. Because America's securities civillegislation and practice is the most advanced in the world, the class action modeadopted by it is worth learning. Despite the advantages of the class action mode, itwill take a long time for our country's adaptation of the class action, because thereexists no soil for it to live in current circumstance of China. The most feasible methodat present is to draw on the experience of the class action to perfect our representativelitigation system.Based on the above discussion, the author put forward the following aspects tocomplete litigation system of securities civil compensation actions: to enhance thelawyers' function to alleviate the disadvantages of the representative litigation;toaccept the rules complying with the needs of the securities market;to formulate pilotrules and regulations on securities class action by the Supreme Court as soon aspossible;to attach great importance to the feasibility of the procedural regulationswhen the pilot rules and regulations are formulated;to complete relevant lawyers'charging system;to consider adopting the litigation assumption system;tocomprehensively deliberate the negative effects possibly brought by securities classaction;to strengthen the function of the court in the process of determining the actionrepresentative;to enhance the supervision of action representative. The author hopethese proposals can provide some references for the completion of our securities civilcompensation litigation system.