On 24 December 2021, the 32nd session of the 13th Standing Committee of the National People's Congress (“NPC”) of the People's Republic of China ("PRC") approved amendments to the PRC Civil Procedure Law (“CPL Amendments”). The CPL Amendments came into effect on 1 January 2022.
The CPL Amendments consist of 7 new provisions and 26 amended provisions. The necessity of the CPL Amendments has been triggered mainly by the Pilot Reform of Civil Proceedings for the Separation of Complicated Cases from Simple Ones (in Chinese: 民事诉讼程序繁简分流改革试点) which was decided by the NPC on 28 December 2019 (effective as of 29 December 2019) and has been implemented by the Supreme People's Court of the PRC ("SPC") since 15 January 2020.
The CPL Amendments mainly touch upon 5 topics under the Current CPL and the PRC civil procedure law regime, i.e. online litigation, single-judge trials, small claim procedure, summary procedure and judicial confirmation procedure.
Below, please find an overview on the CPL Amendments,
1. Encouragement of Online Litigation
The CPL Amendments have newly added that subject to the consent by all parties concerned civil proceedings can be conducted online through an information platform ("Online Litigation"). Civil proceeding activities conducted through Online Litigation shall have the same legal effect as civil proceeding activities conducted offline.
Online Litigation is not a new topic in the PRC judiciary. The SPC already released the Online Litigation Rules of People's Courts on 16 June 2021 with effect as of 1 August 2021. These rules contain more detailed provisions on promotion and regulation of Online Litigation with the purpose to ensure impartial and efficient trial of civil cases. Now, Online Litigation has found its explicit legal basis in the CPL.
2. Expanded scope of electronic means for service of litigation documents
According to the CPL Amendments, subject to the consent of the recipient of a litigation document, a People's Court may serve the document by electronic means, if it can confirm the receipt thereof by the recipient. Compared with the related provision in the Current CPL, the CPL Amendments have, literally speaking, expanded the scope of electronic service of litigation documents from “by fax, e-mails, etc.” to a more general term “by electronic means”. With the rapid development in information technology and mobile applications in the PRC, it is very likely that this new term has been adopted to explicitly allow more modern communication means for service of litigation documents, such as WeChat messages or WeChat Official Accounts for litigation services. In fact, several People's Courts, such as Shanghai Hongkou District Basic People's Court, Shenzhen Intermediate People's Court, Beijing Higher People's Court, etc., have already launched their WeChat Official Accounts equipped with certain functions for litigation related services.
Not directly relevant to the electronic service of litigation documents, the CPL Amendments have shortened the period of time for service of litigation documents by public announcement from 60 days under the Current CPL to 30 days. I.e. litigation documents shall be deemed to have been served 30 days upon the date of the public announcement.
3. Expanded application scope of single-judge trials
The CPL Amendments have expanded the scope of civil cases where single-judge trials may be applied. According to the Current CPL, civil cases to which the Summary Procedure is applied shall be tried by a single judge alone. The CPL Amendments have now added that for a civil case of first instance tried by a Basic People's Court in which the basic facts are clear and the relationship of rights and obligations is definite, such case may also be tried by a single judge alone even if the Summary Procedure is not applied.
According to the Current CPL, "Summary Procedure" may in general be applied by a Basic People's Court for simple civil cases where the basic facts are clear, the relationship of rights and obligations are definite, and the disputes are minor. Cases tried through the Summary Procedure shall be concluded within 3 months upon case establishment according to the Current CPL. According to the CPL Amendments, this period of time may, however, be extended by 1 month under special circumstances and upon approval by the president of the handling court.
Further, according to the Current CPL, second instance civil cases shall be tried by a collegiate bench of judges ("Collegiate Bench"), i.e. such cases are not allowed to be tried by a single judge. The CPL Amendments now stipulate that for a civil case of second instance where the first instance trial has been concluded through the Summary Procedure or for which an appeal is brought up due to dissatisfaction with the ruling, if the basic facts are clear and the relationship of rights and obligations is definite, the relevant Intermediate People' Court handling such second instance case may also decide to have the case tried by a single judge alone upon consent of the parties.
Under some specific circumstances, however, the cases shall not be tried by a single judge alone, as newly added in the CPL Amendments i.e.
- where the case involves the interests of the State and the public;
- where the case involves a mass dispute which may affect social stability;
- where the case is of great public concern or with other major social effect;
- where the case is of a new type, or is a difficult or complex case;
- where the case shall be tried by a Collegiate Bench as required by law; or
- where single-judge trial is not appropriate.
In addition, when trying a case, if a People's Court finds that it is not appropriate to apply single-judge trial, it shall rule that the case should be tried by a Collegiate Bench instead. If a party concerned holds that the application of single-judge trial in a case violates the law, it may raise an objection to the People's Court. The People's Court shall examine the objection raised by the party concerned and rule that the case shall be tried by a Collegiate Bench if the objection is tenable, or the People's Court shall reject the objection if it is untenable.
4. Lowered thresholds for Small Claim Procedure
According to the Current CPL, when a simple civil case is subject to the Summary Procedure and when the subject amount of such case is below 30% of the average annual salary of the employees of the relevant provincial region in the previous year, the judgement of first instance shall be final in such case.
The CPL Amendments have now adopted the term of "Small Claim Procedure" for the civil proceeding applicable to the above-described cases and increased the current threshold of 30% to 50%. In addition, both parties may also agree on the application of the Small Claim Procedure if the threshold is above 50% but below 200%. Therefore, the CPL Amendments have lowered the thresholds for People's Courts or concerned parties to apply the Small Claim Procedure.
For cases subject to the Small Claim Procedure, the CPL Amendments have added that such cases may be concluded after one case hearing and the judgement may be rendered in court immediately after the hearing. In any case, such cases shall be concluded within 2 months upon case establishment. This period of time may be extended by 1 month under special circumstances and upon approval by the president of the handling court.
(A Small Claim Procedure is, therefore, a further simplified type of Summary Procedure. The major differences are, e.g. (1) a Small Claim Procedure shall be concluded within maximum 3 months, while a normal Summary Procedure shall be concluded within maximum 4 months; (2) the judgement of a Small Claim Procedure is final, while appeal can be filed against the judgement rendered in a Summary Procedure.)
The CPL Amendments also newly stipulate a list of the following civil cases for which the Small Claim Procedure shall not be applied even if they meet the relevant criteria:
- where the case involves determination of personal relations and property rights;
- where the case is a foreign-related case;
- where the case requires evaluation or appraisal, or in which objection is raised against a pre-litigation evaluation or appraisal;
- where the whereabouts of one party concerned are unknown;
- where one party raises a counterclaim; or
- where it is inappropriate to apply the Small Claim Procedure.
When trying a case, if a People's Court finds that it is inappropriate to apply the Small Claim Procedure, it shall apply other provisions of Summary Procedure (e.g. as mentioned above, the total trial period can be longer and appeal can be filed against the judgement of a Summary Procedure), or rule on the case to be tried through ordinary procedures. If a party concerned holds that the application of the Small Claim Procedure in a case violates the law, it may raise an objection to the People's Court. The People's Court shall examine the objection raised by the party concerned and shall try the case by applying other provisions of a Summary Procedure or rule on the case to be tried through ordinary procedures if the objection is tenable, or the People's Court shall reject the objection if it is untenable.
5. Expanded scope of mediation agreements entitled for application for judicial confirmation
According to Article 33 of the People's Mediation Law and Article 194 of the Current CPL, for an application for judicial confirmation of a mediation agreement reached through mediation by the civil mediation committee, the parties shall, within 30 days upon effectiveness of the material mediation agreement, jointly file an application with the Basic People's Court where the civil mediation committee is located. The People's Mediation Law defines "civil mediation committees" as mass organizations established in accordance with the law for mediating disputes. Villagers' committees and residents' committees shall establish civil mediation committees, while enterprises and public institutions may establish civil mediation committees if necessary.
The above laws and regulations have been modified in the CPL Amendments. Accordingly, judicial confirmation can now be applied for not only for mediation agreements reached through mediation by the civil mediation committees, but also for mediation agreements reached under mediation by a lawfully established mediation institution. There is, however, no definition in the CPL Amendments or other clarification from the PRC legal perspective for “a lawfully established mediation institution”. It is likely that the mediation made by social groups such as the Disabled Persons' Federation, the Women's Union and the Consumer Rights Protection Association can also be submitted for judicial confirmation.
The CPL Amendment have further clarified the competence of the relevant People's Courts for judicial confirmation of mediation agreements. I.e. (1) where a People's Court invites a mediation institution for prior mediation, the application for judicial conformation shall be submitted to the People's Court making such invitation, (2) where a mediation institution conducts mediation independently, the application for judicial confirmation shall be submitted to the Basic People's Court where the party, the subject matter or the mediation institution is located (but where the mediation agreement involves any dispute subject to the jurisdiction of an Intermediate People's Court, such application shall be submitted to the corresponding Intermediate People's Court).
With the effectiveness of the CPL Amendments, civil cases, in particular those on monetary claims, can be subject to different civil proceedings as now explicitly stipulated in the CPL Amendments. Taking the civil proceedings on monetary claims as an example, there can be the following scenarios:
- Scenario 1: where both parties in dispute recognize the facts of the claim with valid evidence accepted by both parties in proving so and do not dispute their material rights or obligations, but the defendant is just unable to pay – such dispute shall be subject to the Summary Procedure by one single judge;
- Scenario 2: where the defendant recognizes the facts of the claim, but both parties cannot agree on certain material obligations (such as the method and time of repayment), such dispute can still be tried by one judge, however, it should normally be subject to ordinary procedures;
- Scenario 3: where the defendant does not recognize the facts of the claim, or where both parties are in a material dispute whether the claim has been repaid, or where the defendant claims that such case shall be subject to other legal relationships, such dispute shall be subject to ordinary procedures and tried by the Collegiate Bench.
As mentioned above, in practice, all amendments according to the CPL Amendments have already been in pilot programs for around 2 years. Therefore, the release of the CPL Amendments is mainly important from a legislative perspective and has provided a clear legal basis for the relevant issues and topics that have already been implemented in the PRC judicial practice.
Nevertheless, legal professionals and parties (to be) involved in civil proceedings are recommended to become aware of the general tendency in the PRC judiciary towards more diversified and efficient civil proceedings. They should timely get familiar with and digest the CPL Amendments in order to, when necessity arises, adopt the correct and most efficient civil procedural strategies to solve legal disputes.