Class Action Reform in China

date: 07/05/2012

China has been somewhat of a miracle in certain respects. When President Nixon and Secretary of State Henry Kissinger formulated the plan to engage China and help them towards becoming an open society, there were predictions that it would take China decades to catch up to the West. It has, however, only taken them a few short decades. There are predictions that China’s economic output will soon outpace that of the United States.

With all the advancements China has made in regards to technology and economic output, its legal system has yet to catch up. While China’s businesses have been experiencing boon times, there have also been numerous reports about contaminated products and horrendous working conditions for employees.
The legal recourse for Chinese workers is a tough hurdle to overcome. Several articles have been published which detail this reality. For example, the International Commission of Jurists, based in Switzerland, published an article titled Access to Justice: Human Rights Abuses Involving Corporations –China. In this article they describe class actions and public interest litigation being non-existent in China.
There have been several articles detailing the need for China to reform their legal system, especially in the class action field. It has been established that China lacks political and legal reform, and with its market reform way ahead of the previous two, there has been a ripe opportunity for corporations to exploit this gap.
Articles as far back as 1998 in the Harvard Law Review show authors writing about the need for legal reform. One article, titled Class Action Litigation in China, explains the benefits class actions would provide to the people and society as a whole in China. In one law review article published in the Columbia Journal of Asian Law titled Reforming China’s Securities Civil Actions: Lessons from US’s PSLRA Reform and Taiwan’s Government Sanctioned Non-Profit Organization, the authors explain China’s need to reform its securities civil actions. They describe the public interest’s effect on the justice system and how it needs to be balanced.
In the article Class Action Litigation in China, the authors explain that China has only allowed people to file class action lawsuits since 2002. They mention a specific situation with Sanlu Milk where many people suffered from contamination and some even died. The people affected were allowed to pursue actions against the company and its officials. The articles also touch on other topics, including how bankruptcy would affect claimants’ rights in China and a lawyer’s responsibility to the state and their victims.

Class action reform is necessary in China, because as a society advances, people need a way to have recourse against corporations who do them harm. The more the middle class grows, the more it will be up to the marketplace and ordinary citizens to provide justice to the average person. A legal system that is one step behind the market is one that will have many victims of abuse and no way for the victims to get justice or fight back.

About the Author:

Lulaine Compere is a writer and research analyst for RD Legal Funding, a leading provider of lawsuit settlement funding solutions to attorneys and the plaintiffs they represent.

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