Abusive litigation in China: comparative insights and practical approaches for reform

Abstract

This article provides a comprehensive examination of abusive litigation in both civil and criminal cases in China, focusing on its forms and impacts. It proposes nuanced regulatory approaches that emphasize the importance of identifying responsible parties and implementing appropriate compensation measures. In the Chinese legal system, abusive litigation varies by context. In civil cases, it often manifests as actions that clog the courts and drain legal resources, raising concerns about lawyer accountability and the financial burdens on victims. Although frequently discussed in Chinese literature, the above topic has seen limited comparative analysis, despite similar problems existing across different jurisdictions and a clear need for mutual learning. The article suggests that, in civil cases, insights from English and Dutch law could assist Chinese regulators in reducing incentives for lawyers to pursue unmeritorious or abusive cases and improving compensation for victims. In the criminal law context, abusive litigation is more prevalent in minor offenses in China, primarily due to issues related to the public power structure. The proposal emphasizes the need to optimize power distribution within the Chinese legal system, thereby safeguarding the integrity of the law and upholding human rights.

Introduction

When regulating abusive claims and considering their impact on society, it is essential to balance access to justice with the efficiency of the legal system. Existing literature often explores the influence of political will on the rule of law in China but overlooks a substantive part of the problem and fails to develop a nuanced approach that addresses the complexities and diversity of the situation.¹ Frivolous claims, also known as unmeritorious claims, are infrequently examined in terms of their causes in existing research. Abusive litigation, which involves more severe legal misconduct, lacks comprehensive classification discussions and comparative studies. This article focuses primarily on abusive litigation, which involves complex accountability issues, necessitating stringent regulation beyond mere cost-shifting rules. China is the primary focus of the research, with the Netherlands and England included as comparative jurisdictions.

There is broad consensus that some level of frivolous litigation must be tolerated to ensure continued access to courts and other dispute resolution mechanisms, thereby upholding the principle of access to justice. However, tolerance for abusive litigation is much lower, with certain instances even leading to tort or criminal liability in some jurisdictions. This article aims to address the research gap by providing a comprehensive examination of abusive litigation in both civil and criminal cases in China. By analyzing its various forms and their impact on the legal system and society, the article seeks to enhance understanding of the complexities surrounding access to justice and the rule of law in the Chinese context. It also updates readers on new developments in the country’s legal system, such as third-party funding in civil cases and the plea leniency system in criminal procedure law, offering commentary on whether these reforms align with China’s goal of strengthening its rule of law. Additionally, it explores whether legal developments abroad can offer insights into addressing abusive litigation issues in China.

Defining abusive litigation is both crucial and challenging, as its manifestations and causes can vary significantly. Interpreting abusive litigation as a violation of the rule of law may also lead to unexpected outcomes. In the civil law context, regulators primarily target cases that lack merit and may involve intentional misjudgment or negligence by lawyers. Such cases are likely to overwhelm the court system and undermine the integrity of the law and the legal profession. To address this issue, an effective and outcome-oriented approach could be the implementation of a cost-shifting rule, which assigns liability and costs for problematic claims to the initiating party.² However, this rule must be balanced against competing principles, which often present complex issues. As a result, the national court struggled to assess the amount of the shifted costs.

Under Chinese law, the recovery of lawyers’ fees is generally not permitted, with only a few narrow exceptions,³ despite legal fees constituting a significant portion of litigation costs. This rule becomes significantly less effective if lawyers, acting as investors in claims, engage in promoting problematic litigation. A recent case, WeAnd v Xuding, illustrates this issue, where a lawyer served as both a third-party funder and a partner of the law firm representing the funded party.⁴ The funding contract was invalidated by the courts for violating public order and good customs (公序良俗), but no liability was assigned to the lawyer. Chinese legislators remain reluctant to expand the scope of lawyers’ contingency fees, despite the evident need for more litigation funding. Recently, they have tightened regulations on lawyer funding by reducing the percentage of final case results that lawyers can share in the event of success.⁵ Consequently, third-party funding agreements may be used as a means to circumvent limitations on contingency fees or the recovery of lawyers’ fees in civil cases.

Around the globe, opinions diverge on how to define and regulate minor abusive litigation and frivolous litigation.⁶ Domestic regulations do not always distinguish between these two concepts, as they are often blurred and lead to similar outcomes. Dutch and English law represent two distinct approaches to addressing these overlapping terms. In the Netherlands, frivolous litigation is considered less problematic due to legal institutions and mechanisms that serve as filters to prevent or eliminate disruptive claims. These include legal constraints on lawyer funding and the court’s role in collective litigation. Consequently, the so-called “litigation culture” appears to remain under control.⁷ In some cases involving abusive litigation, Dutch courts may order legal practitioners to compensate for fraud or malpractice; however, the effectiveness of court decisions as a measure against abusive litigation remains untested.⁸ Reports indicate that, in the Netherlands, the court closely monitors the potential negative impact of third-party funding, particularly when funders may prioritize their own interests over those of the consumers.⁹

English law, on the other hand, has enhanced lawyer liability for claims lacking sufficient legal and factual grounds through the wasted costs rule. It also regulates other participants in the litigation process, such as external funders (litigation funders), either through industry standards set by organizations like the Association of Litigation Funders or through direct court orders. These measures are intended to ensure that the relationships among litigants, lawyers, claim managers, and procedural investors do not undermine the integrity of the rule of law.¹⁰

Examining the legal approaches of the aforementioned jurisdictions—one representing a civil law system and the other a common law system—this article illustrates that, due to shifts in the legal service market, lawyers are increasingly inclined to promote frivolous and unmeritorious but profitable claims. However, the existing legal mechanisms have not proven to be effective deterrents. The Netherlands and England implement different rules for addressing problematic litigation claims, influenced by their respective legal system structures, legal cultures, upheld values, and the development of their legal service markets.

China has various litigation participants who can be held accountable when addressing the problem of abusive litigation and could impose harsh penalties. It already shares similarities with the aforementioned two jurisdictions. For example, Chinese law, like English law, defines the crime of false litigation.¹¹ The top judiciary in China has issued guidelines that include a list of civil cases likely to be associated with false litigation crimes. Tort or criminal liability for malicious prosecution of a civil suit is a long-standing topic in common law jurisdictions. Offenses such as maintenance and champerty can result in legal outcomes similar to those of the false litigation crime described in China.

In the above context, this article is structured as follows: section “Understanding abusive litigation” analyzes the nature of frivolous claims, provides examples of their escalation into abusive litigation, and discusses the need for regulation. Section “Comparative study: the causes and governance of abusive litigation” offers a comparative study of regulations on abusive litigation. Section “China’s way forward: a nuanced approach to regulating abusive litigation” proposes approaches for China to address abusive litigation, suggesting measures to better hold lawyers accountable for abusive practices in civil cases while considering potential risks to the integrity of the legal system. Additionally, it outlines plans to address unreasonable elements in the restructuring of criminal procedure and judicial power. For the crime of false litigation, the application should be self-restrictive and targeted, while exploring the establishment of a punitive compensation system to adequately compensate victims for their losses.

Understanding abusive litigation

This section takes a nuanced approach to studying the nature of abusive claims, including discussions categorized by jurisdiction and procedural characteristics. First, it offers a theoretical analysis, followed by case studies that illustrate the various forms and causes of abusive litigation.

Concepts and impacts of abusive litigation

In civil cases, the connotations of frivolous or abusive claims and the extent to which these claims are problematic are subjects of ongoing debate.^12,13Access to justice is fundamental to a modern, civilized state, as it relates to the realization of human rights and the integrity and efficiency of the entire rule of law system.¹⁴ Considering access to justice, increased litigiousness is not necessarily negative.¹⁵ However, the proliferation of legal claims can place an unbearable burden on the legal system. When frivolous litigation disrupts the system’s order, more stringent regulations become necessary.

The level of vigilance toward frivolous claims varies across legal jurisdictions. In common law systems, litigation proceedings that deviate from the law’s primary objectives may be labeled with various terms, and certain actions can result in wasted costs orders against lawyers or their law firms.¹⁶ In some cases, promoting problematic claims can lead to criminal liability. Under English law, for instance, the doctrines of maintenance and champerty have largely fallen into disuse but can still result in tort or criminal liabilities under certain circumstances. A recent development in China, introduced in 2021, expanded criminal liability for both parties and other litigation participants by incorporating the crime of false litigation into the criminal code. In other civil law jurisdictions, however, no equivalent term exists, and the role of a lawyer in promoting such claims is often overlooked by self-regulation institutions or the courts. With the rise of the concept of access to justice, condemning this role becomes increasingly challenging (Mulheron 2022).

In criminal cases, abusive litigation takes on a distinct form. Based on materials from China, the contributing factors may extend beyond the legal realm. China’s criminal litigation framework differs from the adversarial system. Chinese judges are mandated to conduct active investigations as part of their constitutional duties. However, in practice, the authority of the courts has been diminished by that of prosecutors during the trial stage, leading to negative non-cooperation and resistance emotions and a power imbalance within the judiciary. Conflicts between the courts and prosecutors can ultimately result in abusive litigation, burdening defendants with unnecessary lawsuits and undermining judicial order. Despite numerous efforts to enhance the role of courts in trials, recent developments have overshadowed these achievements, leaving the role and status of courts in criminal procedures less than ideal.¹⁷ It should be noted that the scope for comparative study in criminal cases is limited because criminal law is largely territorial and closely related to local situations and needs. It is also associated with the socio-legal framework within which the law operates.

From an economic perspective, as often discussed by scholars, a case is considered frivolous when it has a negative expected value for the plaintiff.¹⁸ This approach is particularly problematic in areas where access to justice is crucial and where the rights in question are novel. A probability-based approach is sometimes used to assess frivolousness, defining a claim as frivolous if the plaintiff has a low probability of winning. This presumes that the plaintiff was, or should have been, aware of the claim’s low chances of success.¹⁹ This definition could also be challenged because it conflates meritless claims that, under the law, should be tolerated.²⁰ Arguably, cases that appear to have limited factual and legal grounds could play a key role in advancing beneficial legal developments.²¹

Abusive litigation, as argued earlier in this article, refers to claims that are not only frivolous but also involve misconduct and accountability issues, thereby necessitating careful regulation. The article does not attempt to draw an absolute distinction between frivolous and abusive litigation; rather, it emphasizes the need for a case-by-case assessment to differentiate between these similar concepts and determine the appropriate legal liabilities based on the specifics of the litigious behaviors.

Lawyer liability plays an essential role in establishing results-oriented definitions. Professor Charles M. Yablon argued that “a frivolous case is one that any lawyer who conducted a reasonable amount of investigation would realize had no merit.”²² Jurisdictions adopting this definition may hold lawyers liable for compensating those unjustly burdened by frivolous litigation, though lawyers may not be the only ones held accountable. However, national laws vary in their approach to the extent, nature, and severity of lawyer liability.

In China, punitive measures against lawyers are often rare and lenient unless there is compelling evidence of litigation abuse or contempt of court. The assumption is that lawyers are self-regulated and disciplined, thus requiring less court oversight. Regulation against abusive litigation typically places responsibility on the parties involved rather than on the lawyers themselves. Consequently, the likelihood of successful claims for compensation against lawyers is low.

In September 2016, the Supreme People’s Court issued “Several Opinions on Further Promoting the Division of Complicated and Simple Cases to Optimize the Allocation of Judicial Resources.” Article 22 states: “Where a party engages in obvious improper behavior such as abusing the right to litigate or delaying the fulfillment of litigation obligations, resulting in direct losses to the opposing party or a third party, the People’s Court may, depending on the specific circumstances, support reasonable requests for compensation of attorney fees and other legitimate demands made by the innocent party according to law.” However, lawyer accountability is not emphasized in this provision or elsewhere in the judicial guidance, leaving the parties to bear the consequences of abusive litigation.

Studying the above situation requires considering that the self-regulatory system for the Chinese legal profession lacks strength. Additionally, market factors often fail to provide sufficient incentives for lawyers to reject frivolous claims.²³ The new regulatory method aims to reduce the portion of revenue (success fees under risk representation agreements) that lawyers can obtain from the final proceeds of a case, with the intention of preventing diversion from effective legal representation.²⁴ However, this approach may have unintended consequences, potentially discouraging not only unmeritorious cases but also meritorious ones, thereby compromising citizens right to access justice. Additionally, it could lead to lawyers circumventing limits on contingency fees.

In criminal cases, abusive litigation manifests in various ways and has multiple causes. China’s Criminal Procedure Law governs the entire process of criminal cases—from initiation and investigation to prosecution, trial, and execution—regulating the roles of public security authorities²⁵, prosecutors, judges, and lawyers. Unlike civil proceedings, a notable characteristic of criminal proceedings is that prosecutors act as plaintiffs. Since the establishment of the prosecutor system in China, prosecutors have held a unique position between judges and investigative authorities (police or “public security authorities” under Chinese law). They exercise a dual role: protecting defendants from arbitrary judgments by judges and safeguarding them from police arbitrariness. In both China and other jurisdictions, a primary method to prevent prosecutorial abuse is the prosecution review process, where judges scrutinize the charges filed by prosecutors. However, a unique aspect of the Chinese system is that courts and other branches of the judicial system do not hold high political status. This diminishes their actual influence compared to their constitutional mandate, and their authority is unstable, often subject to political changes.²⁶

Prosecutors’ discretion in bringing charges varies significantly among jurisdictions due to different underlying principles, resulting in primarily two approaches: statutory prosecution and prosecutorial discretion. Statutory prosecution mandates law enforcement agencies to investigate all criminal activities with sufficient factual basis and requires prosecutors to initiate prosecution if evidence is adequate. In contrast, prosecutorial discretion, also known as prosecutorial opportunism, allows prosecutors to decide not to prosecute even when evidence meets the conditions for prosecution if they deem it unnecessary. The key distinction lies in whether prosecutors can exercise discretion to avoid prosecuting cases that meet the criteria for prosecution.

Chinese law predominantly combines these approaches, with statutory prosecution being the primary method. However, uncertainties or potential abuses of power may arise when interactions and collaborative relationships among various public authorities are suboptimal.²⁷ Additionally, the relationship between criminal law and policy, as well as the overemphasis on certain public authorities, further complicates these issues.²⁸ Regulation of the legal profession is no longer the main focus in addressing abusive litigation within China’s criminal law context. Instead, efforts should concentrate on the allocation and accountability of public authorities and the protection of defense rights for lawyers. Discussions must be driven by and accommodate the protection of human rights.

Examples of abusive litigation

These examples highlight the challenge of defining abusive litigation, or its lesser form, often termed frivolous litigation. They also illustrate that regulating such issues involves considerations of law, politics, and values. The forms of abusive litigation are too varied to list exhaustively; this section includes only typical cases that are valuable for reference in China’s judicial reform.

Abusive litigation in civil cases

The two cases below demonstrate different approaches to defining and addressing what could be considered abusive claims. One involves a debatable case in the Netherlands that could impact many commuters who rely on peak-hour trains. It illustrates the Dutch approach to balancing access to justice with maintaining judicial integrity, often prioritizing access to justice despite potential risks. Although the judges found the claims frivolous or problematic due to the external funder operating in gray or unregulated areas of Dutch law, they chose not to impose punitive measures on the parties, lawyers, or other participants. In contrast, a similar case in China involved an external funder supporting an individual case rather than collective litigation. The Chinese court deemed the funding arrangement a threat to the legal order and declared it an abusive act, rendering the agreements in question invalid.

The first case came out in 2017. Nationale Spoorwegen (NS), the operator of the Dutch national train system, faced a lawsuit because numerous passengers were unable to find seats during busy hours. Prior to the lawsuit, certain legal experts and attorneys in the Netherlands cautioned that Consumenten Claim, a firm specializing in managing and financing large-scale disputes, had minimal chances of success. This was due to the terms and conditions outlined in the NS train ticket, which stated that passengers were not guaranteed seating. ConsumentenClaim proceeded with the lawsuit regardless. In this particular case, ConsumentenClaim represented over 10,000 travelers and the total damages claimed amounted to €5.7 million.

As expected, the court held that the lawsuit was unfounded because the terms and conditions of the train ticket guaranteed only the right to transportation, not the right to a seat during busy periods.²⁹ As part of the court’s ruling, NS received partial compensation for expenses incurred in defending the case. External funding on the plaintiffs’ side was found to have no negative impact on the procedure, outcome, or judicial order. In other words, the court did not find the claims sufficiently frivolous to warrant full compensation or punitive measures. In other reported cases, particularly collective litigation, the involvement of third-party funders and their potential status as primary beneficiaries have been overlooked but not denied by the court.³⁰

In the case WeAnd v. Xuding in China, disputes arose from the funding agreement, leading the funder to bring the case to court. The Jing’an District Court in Shanghai and its superior court, the Shanghai No.2 Intermediate People’s Court, ruled against the validity of the funding agreement, stating in their decisions that this agreement violated public order and good customs (公序良俗) and disrupted judicial order. The court’s ruling expressed significant concerns about the integrity of the lawyers involved, highlighting as unacceptable the fact that the former head of the funding organization, WeAnd (为安), also served as a partner at the law firm representing the funded party.

In previous cases, well-defined standards for addressing frivolous or abusive litigation are lacking in China. The case of Foxconn v. Journalists highlights this issue. In 2006, Foxconn, a major electronics manufacturer in Shenzhen, China, filed a RMB 3 million libel lawsuit against two journalists from a local business daily who reported on poor working conditions and low wages at some Foxconn factories.³¹ The lawsuit raised suspicions when Foxconn reduced the damages sought from 3 million yuan RMB to 1 yuan RMB after initiating the claim. This reduction led to doubts about the intention of the lawsuit and the existence of real damages. The Shenzhen Intermediate People’s Court accepted the case and, at Foxconn’s request, froze the journalists’ assets during the initial stage of the procedure. However, Foxconn later withdrew the claims, citing respect for press oversight of businesses. Many viewed the lawsuit as an unacceptable form of harassment against journalists, but the Chinese courts do not have unified and clear standards to make relevant assessments and decisions. Had the case occurred after 2016, when the Supreme People’s Court issued guidelines on allocating litigation costs based on litigants’ behavior, the outcome might have been different. The court could have held Foxconn responsible for the opposing parties’ costs and for wasting judicial resources. However, it is unlikely that Foxconn’s lawyers would have faced direct legal consequences for supporting the claims.

In developing systematic and consistent standards for assessing situations that could involve abusive litigation, English law has been more effective than Chinese law. The former includes wasted costs order rules to address abusive litigation, in addition to tort and criminal liabilities for problematic conduct. The underlying belief is that England does not endorse the US style of litigiousness, characterized by excessive enthusiasm for litigation.³² Under English law, issuing a wasted costs order against lawyers must be carefully balanced with other procedural factors (Henderson, 2000). These include whether the lawyer acted under their client’s instructions and if the aggrieved party raised concerns about the lawyer’s conduct in a timely manner. If concerns were not raised promptly, the principle of good faith could serve as a legal barrier to applying a wasted costs order. R (on the application of C) v Salford City Council [2010] A.C.D. 6 (QBD (Admin))³³ is an illustration.

In the above case, individual C made a renewed application for permission to proceed with a judicial review claim against local authority (D).³⁴ On the first day of the hearing, the solicitor for C abandoned the legal basis for his claims, and the judge adjourned the hearing to another day. At the adjourned hearing, the judge dismissed C’s arguments and found that, even in the amended form, the claims were not reasonably arguable. D sought a costs order against C’s solicitor, arguing that the initial formulation of the claims was fundamentally flawed, resulting in wasted costs for the first hearing and preceding expenses. In reaching its decision, the court carefully considered all aspects of the case and acknowledged that the solicitor had pursued claims that were hopeless or frivolous, grounded on provisions that were not applicable, potentially leading to cost liabilities. However, the court noted that D had not raised these concerns in any pre-action correspondence, despite the obviousness of the mistake. Therefore, the court invoked the principle of good faith, concluding that C’s solicitor should not be held responsible for the wasted costs claimed by D.

English case law contains numerous standards for applying wasted costs orders. For example, in leading cases such as Ridehalgh v Horsefield and Medcalf v Mardell, it is established that the wasted costs order should be proportionate to the sum claimed. It is also emphasized that proving professional misconduct is necessary for a wasted costs order against lawyers. In Medcalf v Mardell³⁵, the court addressed lawyer misconduct, particularly focusing on a barrister’s fraudulent actions that violated professional conduct codes. In this instance, the court opted for summary procedure rather than pursuing complex professional negligence actions. In summary, English legislators and judges take a more proactive approach to tackling abusive litigation. However, their measures sometimes appear uncoordinated. For instance, English law’s approach to external funding for lawsuits does not necessarily reflect a more conservative stance on preventing the risks of abusive litigation.

Abusive litigation in criminal cases

Abusive litigation in criminal cases is rarely discussed in either Chinese or English literature. In China, this issue is often attributed to misinterpretation of the law or abuse of power. However, a deeper examination reveals underlying issues related to state power allocation and social governance in the country. These aspects are often overlooked in English literature due to a lack of understanding of the distinctive characteristics of the Chinese situation. Such lacking has particularly hindered past research from connecting abusive litigation with non-legal factors, and from generating comprehensive and effective recommendations for comparison or problem-solving. This section will present two examples of abusive litigation in criminal procedures: one arising from the misinterpretation of the law and the other from conflicts involving public powers.

In August 2021, Liu (born in 1962), a resident of a rural area in Shandong Province with a low level of education, was prosecuted by authorities for aiding in fraud, based on Article 287(2) of the Chinese Criminal Law. The court found that the defendant Liu, for personal gain, provided his own identity information to another person (Liu’s relative) to register a company and opened a corporate bank account in November 2019. Subsequently, Liu handed over the company’s business license and authorized the use of the corporate account to others. Investigation revealed that the account was used for settling funds related to online fraud, with a settlement amount of 204,299 yuan RMB. The prosecution authority charged Liu with the crime of aiding information network crimes and recommended sentencing him to six month’s imprisonment, suspended for one year, and imposing a fine of one thousand yuan RMB. The court adopted the prosecution authority’s recommendation on conviction and sentencing.

The court’s decision in the above case lacks key details regarding the defendant’s life experiences, educational background, behavior patterns, and relationship with both the recipient of the information and others. It solely relies on the fact that the defendant’s personal information was improperly used by others to presume the defendant’s subjective malice. This approach to applying the law fails to align with China’s criminal law principles and judicial interpretations, which emphasize the importance of distinguishing “neutral assistance” behaviors. Despite this, no one has been held liable. The situation highlights the issue of arbitrary interpretation of Article 287(2) of China’s Criminal Law, which addresses the crime of aiding information network crimes.³⁶ The above case occurred within the context of China’s extensive efforts to combat fraud crimes for legitimate purposes. The issue is that the public security authority, which holds both administrative and investigative powers and enjoys high political status, exerts undue influence through its crime control policies. This has led to an unreasonable expansion of criminal liability.³⁷

The second case, heard by the courts in Beijing, demonstrated inappropriate interactions between the courts and prosecutors, leading to abusive litigation.³⁸ The People’s Procuratorate of Mentougou District, accused the defendant, Yu Jinping, of drunk driving on June 5, 2019, which resulted in the death of Song. After the accident, Yu fled the scene in his vehicle. The following day, he voluntarily surrendered to the public security authorities and confessed to his crime. On June 17, Yu’s family compensated Song’s relatives for their losses, amounting to 1.6 million yuan RMB, and obtained forgiveness from them. Yu Jinping voluntarily pleaded guilty and accepted punishment. Under the supervision of his lawyers, he signed a document agreeing to the sentencing proposal put forward by the People’s Procuratorate of Mentougou District, which suggested a three-year suspended sentence with a four-year probation period.

The guilty plea was made within the plea leniency system, which is currently used to settle the majority of criminal cases in China, with the procedure largely dominated by prosecutors. The country’s criminal law system was known as investigation-centered³⁹, and the introduction of this plea leniency system has made it even more so. The intended goal of this system is to enhance the efficiency of criminal proceedings and thereby ensure the fairness of punishment. However, in practice, it has the side effect of exacerbating tensions between the courts and the procuratorates, while potentially diminishing the role of the court.

In the above case, the Mentougou District People’s Court conducted a summary procedure in the first trial and made a decision that was deemed inappropriate by the People’s Procuratorate at the same level. Specifically, the court considered the suggested sentence by the procuratorate too lenient. After the first-instance judgment imposed a heavier sentence, Yu filed an appeal, and the Mentougou District People’s Procuratorate lodged an official objection. On December 30, 2019, the First Intermediate People’s Court of Beijing, as the appellate court, imposed a harsher punishment than the first-instance ruling. This decision disregarded several factors cited in the initial ruling for leniency, such as Yu’s voluntary surrender, without providing a comprehensible explanation.

The case raises several complex issues, including whether the first-instance court could modify the prosecution’s sentencing proposal, whether the prosecution’s appeal sought to increase or decrease the severity of the sentence, whether the appellate court violated the principle of not increasing penalties on appeal, and whether Yu Jinping’s denial of the collision affects the elements of voluntary surrender. Additionally, if voluntary surrender is not established, does the case still fall under the new plea leniency system? These questions, reflecting the power struggle between the prosecution and the court over sentencing discretion, will be discussed in detail in the next section.

Comparative study: the causes and governance of abusive litigation

This section provides a comparative perspective, arguing that the English and Dutch approaches cannot be directly replicated in China. While the problems may appear similar, their underlying causes may differ in some respects. Effective solutions depend significantly on each state’s legal culture and political structure, which vary considerably across jurisdictions. However, in terms of balancing the efficiency of the judicial system with competing principles and values, these jurisdictions share common ground with China, facilitating mutual learning and the exchange of best practices.

The role of lawyers as gatekeepers cannot be understood in isolation; it must be analyzed within the context of the evolving legal service market and the specific circumstances of each case. We are currently in a period where domestic legal reforms aim to enhance and ensure the quality of the justice system. However, the system faces financial constraints and is transitioning from a purely legal institution to a more business-oriented entity.⁴⁰ Lawyers, particularly those working on a contingency basis, may prioritize their financial interests over their legal obligations. The situation worsens when lawyers involve new participants, such as third-party funders, in the process. Regulators are divided on whether these funders should be involved in the first place.⁴¹ Jurisdictions permitting third-party funding typically emphasize access to justice and recognize the importance of developing dispute resolution as a profitable industry.

While the state prioritizes the quality of legal services, many lawyers focus more on maintaining their economic monopoly on service provision. This lack of accountability within the legal profession contributes to the prevalence of abusive litigation. In China, the importance of ethical dialog between lawyers and clients has not been adequately recognized. Although the court is relatively weaker in power compared to the prosecutorial and public security authorities, it still plays a central role in the trial stage. There is no evidence to suggest that China aspires to adopt the adversarial system.

Differences in how the judicial system is conducted, particularly regarding an adversarial system, may explain why England is more diligent than its civil law counterparts in regulating lawyers’ misconduct and discouraging frivolous claims.⁴² As mentioned earlier, England and the Netherlands have significantly different approaches to addressing frivolous litigation. In England, judges often take an interventionist stance, whereas in the Netherlands, judges rarely deem a litigation procedure frivolous. Even when they do, they typically refrain from imposing the costs of excessive procedure on lawyers unless there is a serious violation of the professional code of conduct. Dutch regulators primarily intervene when new developments threaten vulnerable procedural designs, such as in collective consumer litigation, where parties’ interests could be easily compromised. This nuanced regulatory approach could be instructive for China and will be explored in detail in the section “China’s way forward: a nuanced approach to regulating abusive litigation”.

Although adopting the Dutch approach to managing abusive litigation may seem reasonable for China, a civil law jurisdiction, it is crucial to account for the unique characteristics of the Chinese legal system. Under Chinese law, lawyers are obligated to serve their clients’ interests and derive benefits from their cases. At the same time, they owe a duty to the court, meaning they cannot simply conduct a cost-benefit analysis of the law. Chinese lawyers, like their counterparts elsewhere, are trained to distinguish between cases with a reasonable probability of success and those without. Their duty to the court mandates that they meticulously investigate and evaluate the merits of claims before initiating legal proceedings. In certain practical scenarios, the role of Chinese lawyers may not be given the serious consideration it deserves. China does not have a long history in the legal profession, and in criminal cases, there have been consistent problems in safeguarding defense lawyers’ interests. Discussions about protecting lawyers’ rights often overshadow proposals for monitoring lawyers and punishing improper professional conduct at this stage.

The Dutch approach takes a more relaxed stance on lawyer liability concerning abusive claims, partly because it incorporates other mechanisms that serve similar purposes. For instance, Dutch law can filter out some frivolous claims before they are filed, rather than punishing lawyers after the fact. Additionally, the country has established a disciplinary council to address breaches of behavioral rules for lawyers. This council examines the Dutch Code of Conduct for Lawyers to determine whether the lawyer acted with the care expected of a reasonably competent professional under the circumstances.⁴³ Although the Dutch Code of Conduct does not explicitly prohibit abusive or frivolous litigation, such practices would be contrary to the spirit of several of the code’s provisions.⁴⁴ Breaches of these rules rarely result in a lawyer’s liability in court procedures, but claims based on the Dutch Lawyer’s oath are more likely to succeed.⁴⁵ Overall, compared to the English court, the role of the Dutch court in dealing with this issue is limited.

Wasted costs orders were originally intended as a safeguard to ensure the fair and effective functioning of the judicial system, serving the interests of both the parties involved in litigation and the broader public. They complement the disciplinary jurisdiction exercised over English lawyers. Unlike disciplinary sanctions, these orders are issued on a compensatory basis rather than a punitive one.⁴⁶ A wasted costs order is commonly utilized when a party experiences misconduct from the opposing party’s lawyers, but it can also be issued against the party’s own legal representatives.⁴⁷ This highlights for China that a key objective of rules addressing abusive litigation is to ensure adequate compensation for victims. These rules should be nuanced. When a wasted costs order is issued by English courts, it is crucial to differentiate between a breach of the duty outlined in the Civil Procedure Rules—to assist the court in furthering the overriding objective of safeguarding the integrity of the justice system—and merely pursuing a case with a slim chance of success. The rules should also accommodate procedural principles. In England, to apply for a wasted costs order, the applicant must promptly present the court with sufficient evidence to demonstrate that costs were incurred due to deficient conduct.⁴⁸

Numerous objections to the wasted costs order in England arise, primarily from concerns about balancing private rights and public interests. Critics argue that lawyers should not be deterred from advocating for their clients’ interests due to the prospect of personal liability.⁴⁹ In existing law, the specific circumstances for liability remain unclear. The English court plays a pivotal role in determining the nature and extent of the alleged “error” and the corresponding liability. Lawyers are held accountable if the court determines they have committed an error that no reasonably competent lawyer could have made.⁵⁰ Examples of problematic behavior often include encouraging unnecessary claims, implying threats of a winding-up petition, and unreasonably prolonging proceedings.⁵¹ For the court, distinguishing between a hopeless case and an abuse of process is not always straightforward. Despite warnings about the risk of failure, parties retain the freedom to decide whether to pursue litigation and how to proceed. When issuing wasted costs orders, the court often considers the party’s instructions. Lawyers should not be penalized for assisting parties unless it is clear that they knowingly facilitated malicious claims.⁵²

The potential risk also includes side effects of investigating and penalizing lawyers’ misconduct for judicial efficiency. For example, in Ridehalgh v Horsefield, the wasted costs hearing lasted fourteen days and cost £150,000, far exceeding the amount originally at stake in the proceedings.⁵³ In England, while the court may consider the costs of a request relative to the amount sought before issuing an indemnity order, it is not required to do so.⁵⁴

Another challenge to wasted costs orders is the tension between such orders and professional privilege, particularly when the request is made by the opposing party. Investigations into potential lawyer misconduct often involve information protected by lawyer-client privilege, and it is difficult to predict whether the party will choose to waive this privilege.⁵⁵ In the case of CMCS Common Market Commercial Services AVV v Taylor⁵⁶, for example, the client declined to waive privilege, leaving the court with no option but to give the defendant solicitor the “benefit of the doubt.” It remains uncertain whether the court would have reached the same conclusion had privilege been waived. This uncertainty surrounding the impact of the rules governing wasted costs orders has created significant ambiguity.

Additionally, wasted costs orders may conflict with lawyer immunity. Common law jurisdictions differ in their views on whether this immunity should be upheld. Recent English law cases have shown a more antagonistic stance towards immunity for both barristers and solicitors. The rationale is that laws addressing abuse of process, protecting judicial decisions from collateral attack, and other mechanisms sufficiently safeguard advocates and the administration of justice. English legislators believe that immunity should be subordinated to the administration of justice, requiring courts to distinguish between “errors of judgment” and “genuine negligence.”

With the above being said, a comprehensive approach to addressing abusive litigation in China must extend beyond merely limiting private parties and their lawyers’ misconduct. Criminal cases reveal that prosecutorial negligence can lead to cases lacking sufficient legal and factual bases. China’s regulations should therefore broaden their definition of “misconduct” beyond procedural law. Effective reform requires the involvement of various public authorities and a nuanced, coordinated approach supported by an adjusted political power framework.

China’s way forward: a nuanced approach to regulating abusive litigation

China should avoid a coarse management approach to abusive litigation because, as previously discussed, the issue involves complex and competing principles and values, and regulatory rules could trigger multiple risks.⁵⁷ This section proposes a nuanced approach tailored to China’s specific context, distinguishing between civil and criminal cases, and employing differentiated methods and regulatory focuses.

Regulation in civil cases

Since the nationwide implementation of the case registration system on May 1, 2015, the protection of people’s right to sue in civil cases has been effectively ensured. However, this has also led to a rise in abusive litigation, which has become an increasingly prominent issue.⁵⁸ This issue in the civil and commercial fields, which concerns Chinese courts, involves not only the unreasonable use of judicial resources but also the disruption of litigation order. However, the courts have not consistently applied punitive measures against parties or lawyers in cases identified as posing a risk to the judicial system.⁵⁹ On one hand, determining litigation misconduct involves a high threshold with somewhat ambiguous standards. On the other hand, parties and their lawyers are not always to blame.

In recent years, China’s highest judiciary has implemented measures to increase penalties for false and meritless litigation. One such measure includes reversing lawyers’ fees. According to official definitions, false litigation involves parties fabricating facts, constructing false legal relationships, forging evidence, or maliciously colluding to induce the court to make judgments based on inaccurate or incomplete information, thereby harming others’ legitimate rights or disrupting social order.⁶⁰ Malicious litigation involves litigants abusing their legal right to sue to disrupt judicial order, exert pressure on the opposing party, or harm the legitimate interests of the opposing party.⁶¹ Meritless or frivolous litigation occurs when litigants, despite knowing their claims do not meet legal prerequisites or have already been adjudicated, persistently pursue litigation. This protracted and incessant behavior can lead to various legal consequences. Under Chinese law, the imposition of court costs on the losing party does not necessarily indicate misconduct. However, when a party is required to cover the entirety of the opposing party’s legal fees, it may indicate the presence of misconduct.

In civil cases, several factors contribute to the occurrence of the aforementioned litigation misconduct. Firstly, the growing awareness of rights among citizens is a positive development. However, in China, there is a contradiction between this increasing awareness and the relatively low level of legal knowledge among individuals involved in civil matters.⁶² The average level of legal practice among lawyers also needs improvement. Secondly, despite the introduction of the case registration system, which mandates courts to register all lawsuits meeting formal requirements, there might be numerous subsequent court rulings rejecting or dismissing lawsuits, thereby resulting in the inefficient use of judicial resources.⁶³ Addressing abusive litigation from the above two perspectives is challenging. Although “access to justice” is not explicitly stated in Chinese law⁶⁴, reforms have been made towards achieving this goal.⁶⁵ There is broad consensus that efforts to address frivolous litigation should not unjustly compromise citizens’ rights to litigation.

The inadequacy of specific legal mechanisms for preventing and regulating frivolous litigation also deserves attention. Article 51 of the Constitution of the People’s Republic of China stipulates that, when exercising their freedoms and rights, Chinese citizens must not infringe upon the interests of the state, society, the collective, or other citizens’ lawful freedoms and rights. Therefore, holding litigants accountable for abusive litigation has a constitutional basis.⁶⁶ In the Law of the People’s Republic of China on Lawyers (hereinafter referred to as the “Law on Lawyers”), Article 2 defines a lawyer as a professional who has acquired a lawyer’s practicing certificate in accordance with the law. Such professionals are tasked with accepting appointments or designations and subsequently providing legal services to parties involved. This provision underscores the formal qualifications and responsibilities required for individuals operating within the legal sphere in China. One of the fundamental responsibilities of a lawyer is to safeguard the legitimate rights and interests of the parties involved. Lawyers are bound by the principle of client autonomy, which mandates that they cannot exploit their position within the client relationship to encroach upon the client’s autonomy. This principle highlights the ethical obligation of lawyers to respect the agency and decision-making authority of their clients, thereby maintaining the integrity of the attorney-client relationship.

Lawyers have their own self-governing organizations, while also being subject to supervision by administrative authorities in China. The Ministry of Justice formulates regulations such as the “Regulations on the Administration of Lawyer Practice” and the “Measures for Punishing Illegal Acts of Lawyers and Law Firms” in the form of departmental regulations. Additionally, the Lawyers Association on the national-level has established the “Norms of Professional Conduct for Lawyers” and the “Rules for Disciplinary Actions Against Members of Lawyers Associations (Trial)”, thus forming a dualistic pattern of norms for lawyer professional behavior. In academic discussions, the designation of the Lawyers Association as an extension of state power, capable of imposing disciplinary measures on lawyers for misconduct, has been extensively explored in terms of its rationale.⁶⁷ Furthermore, the nature of the Association’s regulatory measures and whether they are subject to litigation remain uncertain.

The “Norms of Professional Conduct for Lawyers” serve as crucial “fundamental rules” within the regulatory system of the Lawyers Association and are closely related to this context. This regulation was first implemented after being approved by the Ninth Executive Council of the Fifth National Lawyers Association and was subsequently revised by the Second Executive Council of the Seventh National Lawyers Association. These “Norms” serve as a guide for lawyers in practicing their profession, establishing industry standards for evaluating lawyer conduct, and functioning as a self-imposed code of conduct. Article 41 of this regulation stipulates that lawyers shall accept cases in accordance with relevant regulations and must not deceive or instigate parties to file lawsuits, create or escalate conflicts, or affect social stability for the purpose of soliciting business. In addition to these rules, the Lawyers Association has regulations such as the “Regulations on the Promotion of Lawyer Services (Trial),” which help lawyers and law firms advertise within the boundaries permitted by law.

Despite over forty years since the restoration of the law system in China, significant progress has been made in both the quantity and standardization of the legal profession, though several issues persist within this system. As previously discussed, there remains ongoing debate surrounding the nature and function of the Lawyers Association. While it is emphasized as a social legal entity with voluntary membership, it is also mandated as compulsory for lawyers, leading to confusion. This confusion not only clouds understanding of the nature and function of the Lawyers Association but also undermines its authority, hindering the effective implementation of association rules. Reforming the Lawyers Law is imperative to redefine the Lawyers Association and its functions. The Association should represent the state in managing lawyers, with regulatory power derived from state authorization. This reform necessitates addressing legal issues such as the legal effect of behavioral rules established by the Lawyers Association and the specific legal implications of the association’s management actions.

China could benefit from the Dutch experience in building an efficient and transparent system of lawyer regulation. The Dutch approach includes mechanisms such as the Disciplinary Council to address breaches of behavioral rules and regulate lawyers’ fees to ensure reasonableness. However, the reform plan must recognize that while courts can support the identification of lawyers’ misconduct, relying solely on the judiciary may increase its workload and prove impractical. Furthermore, to effectively deter lawyers from promoting abusive litigation, the Dutch limit market factors in setting service fees and enhance government oversight. These strategies could also be adopted by Chinese regulators. Last but not least, the court may have a vital role to play in ordering compensation for victims of abusive litigation while also promoting lawyers’ procedural rights, as it is in the best position to do so.

Regulation in criminal cases

China’s criminal procedure law is fundamentally shaped by the principle of authority, complemented by the principle of equality between prosecution and defense. However, in practice, this structure is often distorted, leading to limitations on the role of lawyers.⁶⁸ Abusive litigation in criminal cases often involves misconduct by prosecuting and law enforcement agencies rather than by lawyers. Therefore, addressing these issues requires a focus distinct from that applied to civil cases.

Recent legal developments in China have increased the complexity and demands of regulation. For example, the 2018 amendment to China’s Criminal Procedure Law introduced the plea leniency system, effectively incorporating a new subsystem into the existing procedural framework. This alteration has changed the positions and relationships of the original participants in criminal proceedings.⁶⁹ This has led to an increased risk of abuse of the right to appeal and heightened tensions between the courts and the procuratorates.⁷⁰ Section “Comparative study: the causes and governance of abusive litigation” discusses the case of Yu Jinping as a representative example. This section proposes a nuanced approach, focusing on the following factors: Firstly, legal reform should target abusive litigation in minor offenses. While serious violent crime cases in China have decreased, minor crime cases have risen steadily. Currently, over 85% of criminal cases result in sentences of less than three years’ imprisonment or non-prosecution.⁷¹ The relationship between crime control and convicting minor offenses does not necessarily benefit social management. The country’s crime rates often surge after convictions, such as in cases of dangerous driving or aiding in fraud, even though the penalties for minor crimes have become increasingly severe.

Secondly, China faces significant issues with the lack of separation between investigation and adjudication and the imbalanced political status of various involved public authorities. Public security authorities and prosecuting authorities possess independent litigation procedural powers during the investigation and prosecution stages. However, the political empowerment of these agencies often leads to the arbitrary and unreasonable expansion of their statutory powers. The situation does not remain static. For example, in 2015, recognizing that the simultaneous appointment of provincial-level Political and Legal Affairs Committee secretaries as directors of public security departments was unreasonable, all 31 provincial-level Political and Legal Affairs Committee secretaries ceased to concurrently hold the position of public security department director.⁷² The Political and Legal Affairs Committee secretary is responsible for coordinating the public security, procuratorates, and courts but cannot directly exercise their powers or intervene in individual cases. This is generally considered a positive change.

During the investigation and prosecution stages, the courts, as the primary bodies of criminal litigation, face challenges in effectively supervising other authorities, which is concerning. When public security authorities and procuratorates act as both accusers and semi-adjudicators while holding elevated positions within the political apparatus, criminal suspects are left vulnerable. Discontent with the current power allocations among various authorities can lead to power struggles that jeopardize individual rights, as evidenced in the case of Yu, or, at the very least, reduce procedural efficiency.

In light of the above situation, the proposed nuanced approach includes reforms in both legal and political power structures. While political reform in China is often seen as impossible due to perceptions of a centralized and rigid governance regime, the reality is more dynamic. The ongoing and effective anti-corruption efforts, particularly those aimed at improving the quality of the political and legal workforce, demonstrate this. Therefore, allowing judges to intervene in pre-trial investigation procedures and conduct judicial reviews of criminal cases is both necessary and practical to ensure fairness and justice throughout the criminal procedural process and to safeguard the legitimate rights of suspects and defendants.

Furthermore, the exercise of power by public security organs should be subject to more diligent supervision. Since the enactment of the Criminal Procedure Law in 1979, it has stipulated that “the people’s courts, people’s procuratorates, and public security organs shall divide their responsibilities, cooperate with each other, and mutually restrict each other to ensure the accurate and effective implementation of the law.” The initial goal of this provision was to ensure consistent cooperation among the three organs to jointly combat crime, protect the public, and maintain social stability.⁷³ Establishing specific rules to ensure the realization of this constitutional structure should be the focus of any future legal reform in criminal law.

When prosecuting authorities choose not to prosecute criminal suspects, it does not absolve these individuals of all legal responsibilities. In such cases, authorities may issue wafarrnings or require expressions of remorse, apologies, or compensation for losses. They may also impose administrative penalties or disciplinary actions as deemed necessary. If administrative penalties or confiscation of illegal gains are warranted, prosecuting authorities should issue prosecutorial opinions, transfer the case to the relevant competent authorities, and monitor the implementation of these measures.⁷⁴

The abuse of prosecutorial powers in criminal cases subjects defendants to unnecessary legal burdens and increased litigation costs, while also threatening the fundamental principle of separating investigation from adjudication in modern criminal procedural law. The court should take a proactive approach to address this issue, which could be further enhanced by the aforementioned adjustments to the power structure.

Conclusion

This paper explores abusive litigation in China and advocates for a review of legal regulatory tools informed by international experiences. In civil cases, it suggests enhancing lawyers’ liability for abusive litigation while carefully considering the potential impacts on court workload, lawyer-client relationships, access to justice, and other relevant factors. The aim is to ensure that lawyers are obligated to pursue only genuinely debatable claims under Chinese law. The court should play a more proactive role in compensating victims of abusive litigation, drawing from the English legal experience with wasted costs rules.

In criminal cases, the causes and resolutions of abusive litigation vary and are influenced by China’s unique political-legal system. The structure of China’s criminal procedure law, which is largely shaped by the principle of authority, restricts the role of lawyers and limits the court’s functions. Abusive litigation in this context often involves misconduct by prosecuting and public security agencies rather than by lawyers, necessitating a different regulatory focus compared to civil cases. New legal developments, such as the plea leniency system, have introduced additional complexities in addressing abusive litigation.

Currently, addressing the problem of minor offenses should be prioritized, alongside reforms in the power structure. Despite the overall increase in criminal case volume, a singular focus on convicting offenders or imposing improper sentences may undermine human rights protections and exacerbate judicial pressure and resource shortages. The court’s role is pivotal, highlighting the need for judges to proactively intervene and investigate problematic conduct by prosecutors. However, the lack of separation between investigation and adjudication presents significant challenges, resulting in the absence of the court’s role in the pre-trial stage. Moving forward, elevating the political status of the courts in China is key to restoring their role and preventing the undue empowerment of public security organs and procuratorates, thereby ensuring the effective implementation of new rules, such as the plea leniency system.