Research On The Incentive Mechanism Of Shareholder Derivative Litigation Funds

The original intention of the shareholder derivative litigation system is to expect shareholders to act as the initiator of the litigation.When the internal checks and balances mechanism fails,the shareholders are willing to file a lawsuit against the company's interests,thus achieving the dual effects of rights supervision and equity relief.However,in judicial practice,shareholders are reluctant to prosecute due to the high imbalance between high cost,uncertain risk and expected return,which makes the implementation of the derivative system greatly reduced.In the past,the research on the incentive mechanism for shareholder derivative litigation focused on the relaxation of the plaintiffs shareholder's prosecution restrictions,ignoring the motivation of shareholders to file a lawsuit.Judging from the practice of law-raising in recent years,it has become a new trend to solve the problem of insufficient incentives for shareholders to sue through the establishment of an effective fund incentive mechanism.Therefore,this paper starts from the problems existing in the incentive mechanism of the current shareholder-derived litigation funds in China,and compares the beneficial experiences and successful models of each country horizontally to provide exploration ideas for the reform of the derivative litigation system in China.This article is divided into the following four parts:The first part is an overview of the incentive mechanism for shareholder derivative litigation funds.Explain the basic scope of the derivative litigation system,analyze the necessity of establishing the incentive mechanism of the system,and the principles to be followed when conducting financial incentives for shareholders who filed a derivative lawsuit.The second part is the status quo of the incentive mechanism for the shareholder's litigation funds.By sorting out the evolution of China's legislation and the trend of judicial practice,it is concluded that there are three main problems in China's derivative litigation.First,the method of collecting case acceptance fees is unreasonable;second,the compensation for litigation costs is unclear;third is the distribution of winning interests.The plaintiff shareholders are unreasonable.The third part is the comparison and evaluation of the incentive mechanism for foreign shareholders' derivative litigation funds.From the three aspects of fee collection method,cost compensation rule and victory incentive method,it is concluded that the foreign successful model is worthy of reference in China.The fourth part is the proposal to establish an incentive mechanism for shareholder-derived litigation funds in China.Combine the extra-territorial success model with the judicial reality of our country,improve the litigation cost sharing method and compensation system,and give the plaintiff shareholders direct repayment in certain circumstances.Based on the future,we can also learn from and explore the non-profit organization-led shareholder derivative litigation model.