Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Civil Public Interest Actions Concerning Consumer Rights(Mainland China)

James Cheng
On April 24, 2016, the Supreme People’s Court promulgated the Interpretation of on Issues Concerning the Application of Law in the Trial of Civil Public Interest Actions Concerning Consumer Rights (hereinafter, the “Interpretation”) to thoroughly promote the public interest consumer actions in order to safeguard the lawful rights and interests of consumers and establish a harmonious, fair and trustworthy market order. The Interpretation went into effect on May 1, 2016.
The Interpretation primarily specifies the plaintiff standing, scope, the types of consumer domain and public interest, the competent court, the restrictions on the plaintiff’s disposal right, the connection between public interest actions and private interest actions, types of claims, the allocation of liabilities and res judicata in public interest consumer actions.
The Interpretation maintains an appropriate level of openness in the plaintiff’s standing by stipulating that in addition to the China Consumers Association, consumers associations set up in provinces, autonomous regions and direct municipalities under the direct jurisdiction of the State Council, as well as agencies and social organizations authorized by law, the National People’s Congress and its Standing Committee, are all eligible to bring an action. The Interpretation expands the actionable scope and allows an action against any act that “threatens the personal and property safety of consumers” and undermines the public interest; no actual harm is required. The Interpretation defines public interest in the consumer domain as the common interest of many nonspecific consumers, and it stipulates five circumstances in which the public interest is undermined as reference for the judge. The Interpretation further clarifies the connection between public interest actions and private interest actions and provides that private interest actions may “tag along” with public interest actions. Pursuant to Article 16 of the Interpretation, the fact-finding of a decision in an action concerning consumer public interest does not need to be proven again by the plaintiff or the defendant in a related private action. Not only is the fact-finding of a decision in a consumer public interest action have a binding effect on private interest actions, the reasoning regarding the subject of the action and the issues at dispute are also binding as well. Meanwhile, to demonstrate the support for public interest actions, Articles 17 and 18 of the Interpretation stipulate that a people’s court may provide corresponding support, based on actual circumstances, with respect to the reasonable costs incurred by the plaintiff in taking appropriate preventive and coping measures to stop infringement, remove obstructions and eliminate dangers, as well as the costs (including appraisal costs and attorneyÕs fees) incurred by plaintiff his/her attorneys for investigating the subject matter and collecting the evidence. In addition, the Interpretation also manifests the link to administrative power. In particular, Article 6 provides that after a people’s court has accepted a consumer public interest action, it must within ten days after the case file has been set up notify the relevant administrative agencies in writing of the matter. Article 14 provides that within ten days after a judgment in a public consumer public interest action becomes effective, the people’s court shall also inform the relevant administrative agencies of the decision and may provide judicial recommendations. The above provisions are intended to create a synergy in protecting fair competition in the consumer market through strengthening the connection between administrative power and judicial power.