Study On The Improvement Of The Shareholders’ Representative Litigation System

Since the company Law was amended in 2005,the shareholder representative litigation system has experienced more than ten years of development in China,which has been continuously modified and improved through judicial interpretation,and finally presents the system framework.However,from the judicial practice of more than ten years,the operation of the system is not good,which is contrary to the original intention of introducing the system,and the system of shareholder representative litigation has not yet found a way of localization that is really conducive to the protection of shareholders’ interests.In order to give full play to this system in practice to protect the interests of the company and shareholders,it is necessary to perfect it,to moderately relax the application conditions of the system that is not well run,to reduce the difficulty of litigation,so that it can really support shareholders when they cannot protect the interests of the company through other means.According to the development of litigation,the main reasons for the poor implementation of the shareholder representative litigation system are reflected in three aspects,namely,before formally entering the litigation process,the criteria for determining the exemption of the procedural prerequisites are not clear;during the litigation process,the burden of proof is not allocated properly.Balanced;after the litigation is over,the rules for bearing litigation costs are not perfect.Removing the above-mentioned obstacles faced by plaintiffs and shareholders in shareholder representative lawsuits will play an extremely important role in the smooth localization of the system and the real use of its system value.As far as Procedural Prerequisites are concerned,the exemption rule is only applicable to cases under special circumstances,and it is not appropriate to break the balance between encouraging litigation and preventing indiscriminate litigation.The"urgent situation" in the exempted situation should follow the dual standards of time urgency and irreparable loss.Although the Company Law and related judicial interpretations do not provide for exemptions other than "urgent situation",the"National Court of The provisions of the Minutes of the Commercial Work Conference make it clear that there is still the possibility of exemptions in addition to "urgent circumstances".The Procedural Prerequisites exemption in the case of "non-emergency"can be abstracted into two situations: it is objectively impossible to perform the Procedural Prerequisites and it is meaningless to perform the Procedural Prerequisites.The scope of application of the exemption rule is clarified in this way,which enhances the suitability of shareholder representative lawsuits.In terms of burden of proof,the application of the general principle of "he who claims,he who proves" in shareholder representative litigation deprives minority shareholders with weak ability of proof of the right of action,but the practice of burden of proof inversion is too light distribution of plaintiff burden of proof,which is suspected of abuse of litigation,and does not comply with the provisions of the existing legal system.Under the general rule of burden of proof,it is more desirable to clarify the burden of the defendant to the defense of the burden of proof,and to apply the rule of "documentary order" reasonably.As for the litigation cost bearing rule,it is obvious that only compensating the winning shareholder for the litigation cost leads to insufficient incentive,and it is necessary to clear the obstacles on the theoretical basis in the theory of causeless management theory to compensate the losing shareholder for the litigation cost,and indeed compensation is necessary in practice.The court should be given the right to decide whether to make compensation.Reasonable expenses should at least include the legal costs and attorney’s fees of the case.In general,the compensation should be in full amount,but it should not exceed the earnings of the company because of litigation,so as to maintain the moderate incentive of shareholders and prevent the company from suffering losses.