Research On The Application Of China’s Securities Special Representative Litigation System

With the development of the modern securities capital market,the number of securities group disputes is on the rise.Because of its large scale,large number of people involved and high professionalism,the original way of civil litigation is difficult to deal with calmly.Under this background,the securities representative litigation system came into being.Article 95 of the new "Securities Law" sets up two ways to solve disputes among securities groups,of which the contents stipulated in paragraphs 1 and 2 are the rewriting of representative litigation in civil litigation.The most innovative paragraph 3,Special Representative Litigation,is based on American class action.After a lot of academic discussions and arguments,and twists and turns,in order to avoid the disadvantages of American class action and cater to the litigation environment in China,a lot of adaptive adjustments have been made.Finally,the "dual-track" securities representative litigation system was established.The construction of litigation of special representative of securities disputes not only has realistic consideration to respond to the needs of judicial practice,but also has realistic necessity to protect the legitimate rights and interests of investors and promote the stable and orderly development of China’s securities market.Although the litigation system of special representative of securities has not been established for a long time,there have been some applicable cases like Kang Mei Pharmaceutical Case in practice.In order to make this system play its due role in future judicial practice,it is necessary to further improve the existing system.At present,there are still many problems in the application of the litigation system of special representative of securities disputes in China.First of all,the start-up procedure of the system is unreasonable,which is mainly reflected in the structural contradiction between ordinary representative litigation and special representative litigation,as well as the selection criteria of the investment service center.Secondly,as for litigants,there are differences in the identification of the nature of investor protection institutions and the lack of corresponding coordination mechanism,which leads to the limited effectiveness of investor protection institutions in actual operation.Thirdly,the procedure for determining the scope of the oblige has caused some disputes in its application because of its special setting of "inversion".Finally,investors’ exercise of the right to withdraw is due to the lack of corresponding rules and constraints,so that the boundary of exercise is blurred and it is difficult to accurately judge.On the basis of the purpose of system design and the preset effect,it is suggested to learn from the securities class action represented by the United States,group action and investor demonstration action represented by Germany,and improve the litigation mechanism of securities dispute representatives in China from the aspects of optimizing the starting procedure,enhancing the role of investor protection institutions,defining the procedure for determining the scope of rights holders and the right to withdraw.Specifically,with regard to the internal and external relations of the system,in the internal relations,on the premise of clarifying the relationship between ordinary representative litigation and special representative litigation,we should refine the criteria for selecting cases of investor protection institutions and optimize the procedures for determining the scope of investors.In external relations,coordinate the connection and application of the litigation system of special representative and the model judgment system of securities.As for the litigant participants,for the representative,that is,the investor protection institution,the nature of its public welfare institution should be clarified,and competition,incentive and supervision mechanisms should be added to assist it in performing its functions.For the representative,that is,the injured investor,refine the rules for his withdrawal,and ensure the full exercise of his rights while preventing the abuse of litigation.