Similar necessary class actions apply in majority debtor actions

Author: Ni Haili Gu Xiwei

Unit: Nantong Intermediate People's Court

Source: [People's Court Daily]

In the case of joint and several debts or not genuine joint and several debts, the realization of the substantive rights of the creditor depends on the choice of joint litigation procedure, and the mainland currently adopts the dichotomy of joint litigation and ordinary joint litigation. In judicial practice, it is necessary to file a joint lawsuit for joint infringement, but for other litigation procedures for joint and several or not genuine joint and several debts, it is necessary to determine according to the substantive norms, and the principle of separate litigation or ordinary joint litigation is adopted. In the author's opinion, a similar model of necessary joint litigation can be adopted to build a buffer zone between ordinary joint litigation and necessary joint litigation, so as to alleviate the procedural tension caused by the simplification of necessary joint litigation.

1. Procedural mitigation of similar necessary joint litigation to inherently necessary joint litigation

A joint lawsuit is a combination of entities in which one or both parties are two or more persons in the same litigation process, and the subjects of the lawsuit are merged. Article 55 of the Civil Procedure Law stipulates two types: necessary joint litigation in which the subject matter of the litigation is common and ordinary joint litigation in which the subject matter of the litigation is of the same kind. According to the general theory, the necessary joint litigation in this article refers to an indivisible lawsuit, and the parties must sue or respond to the lawsuit together when filing a lawsuit, and there is no right to choose, and at the same time, the conclusion must be determined together, in fact, it is necessary to file a joint lawsuit; In practice, in order to simplify the trial procedures of individual cases, ordinary joint litigation is generally litigated by the parties separately and independently. For joint and several debts with the same subject matter, the joint litigation mode shall be adopted, while the Civil Procedure Law only stipulates that joint litigation is necessary, but articles 178 and 518 of the Civil Code give creditors the right to choose the joint debtor. On this issue, most scholars advocate that the interpretation of necessary joint litigation should be expanded, distinguishing between necessary joint litigation and similar necessary joint litigation, which must be sued together and determined in a unified judgment, while similar necessary joint litigation means that each person can sue or be sued separately, but if several people sue or are sued, the form of joint litigation must be adopted, and the conclusion should be determined together. The significance of similar necessary class litigation is that it alleviates the tension between the inherent need for class action and the requirement that all class litigants sue and respond to the lawsuit together. Similar necessary class actions are divided into plaintiff type or defendant type, while defendant-type similar necessary class actions are not completely subject to the express provisions of the substantive law, and are mainly formed and expanded in response to the need for one-time settlement of disputes, and mainly exist in the field of payment lawsuits. The defendant type is similar to a necessary class action, such as a joint and several debt lawsuit, if the plaintiff sues only some of the defendants, its res judicata does not fully extend to the defendants who did not actually participate in the litigation.

When the parties file a lawsuit, they may choose to sue only part of the debtors, and the court will only conduct a formal examination and enter the trial stage. In other words, although the mainland does not provide for similar necessary joint litigation, the interpretation of the necessary joint litigation procedure has essentially established the rules of similar necessary joint litigation procedure.

2. The application of similar necessary joint actions to tortious debts and joint and several debts

Article 2 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Personal Injury Compensation Cases (hereinafter referred to as the "Judicial Interpretation") amended in 2020 continues the provisions of Article 5 of the original Interpretation, which states that joint tortfeasors insist on the necessity of a joint litigation model, that is, all joint debtors must be sued together, and if the infringed party only sues some of the joint debtors, the court shall add other debtors as defendants. If the infringed party waives its claim against some debtors in a lawsuit, the other joint infringers shall not be liable for the infringer's share. However, this provision is formally contrary to the option of creditors in joint and several debt litigation, and there is a view that the option of joint tortfeasors should be exercised at the enforcement stage.

Some scholars also disagree with this view, because Article 13 of the original Tort Liability Law provides that the victim may claim rights against all or part of the jointly and severally liable persons, and Articles 178 and 518 of the Civil Code also provide for this. The infringed party exercises the right of choice over the jointly and severally liable persons, and implements the party doctrine rather than the authority doctrine. Substantive rights are the rights of the parties, and the expression of intent to waive rights cannot be presumed. Although creditors have the right to choose the procedure, once they are selected as co-defendants, the result must be determined together, which is similar to a necessary class action, and there is also a view that it is an ordinary class action. In any event, there are a variety of circumstances in which multiple infringers may be jointly and severally liable, and not all such cases must be regarded as "absolutely inseparable" and necessary to bring a joint action.

The form of joint and several liability for joint infringement is more complex, and under the circumstance that the joint tortfeasors can be ascertained, it is necessary to adopt the joint litigation model at the litigation stage, which has no impact on the rights of the victim and is also conducive to the one-time settlement of the dispute. However, in the case of joint infringement, where some of the infringers are unknown, there is an obstacle that it is not possible to add all the defendants. However, the subject matter of joint infringement litigation is the same, which is different from ordinary joint litigation, and it is a legitimate way to solve this problem by expanding the necessary joint litigation into two types of inherent and similar necessary joint litigation, and differentiating the application of litigation procedures according to the different types of joint infringement. For joint tort or joint dangerous acts provided for in Articles 1167 to 1169 of the Civil Code, the necessary joint litigation procedures are generally applicable, and for the torts of aggregate causation as provided for in Article 1170 of the Civil Code, similar necessary joint litigation procedures are generally applied, but it may also be established for reasons such as the identity of the subject matter of the litigation and the prevention of conflict of judgments. If some of the joint tortfeasors cannot be found, a similar necessary class action applies, and the victim sues the known joint tortfeasor, and the court should allow it.

3. The application of similar necessary joint actions to contractual debts, joint and several debts

In accordance with Article 518 of the Civil Code, a lawsuit for joint and several debts arising from contractual debts shall be handled as a similar necessary joint lawsuit, and the parties shall have the right to choose to sue separately or together, but joint litigation is necessary for joint and several debts between partners, persons with no capacity for civil conduct, persons with limited capacity for civil conduct, and guardians. In short, in order to protect the victim's right to choose the procedure and minimize the burden of litigation, it is generally more reasonable for other joint and several debts to adopt similar necessary joint litigation, except for joint and several debts arising from joint infringement or collective joint debts.

The creditor has the right to claim payment with multiple choices, and the debtor who is requested may not pass the buck on the grounds that there are other debtors. There is no question of the need for a joint action if a creditor claims or sues one or more of the debtors, individually or jointly. Therefore, after the creditor obtains a judgment in favor of some debtors and applies for enforcement, it can sue the other debtors again within the unpaid amount. There is a view that the introduction of similar necessary joint litigation is closely related to joint and several debts, which leads to the improper expansion of the system, which violates the principles of substantive law and procedural law, and that the litigation of joint and several debts should be established as ordinary joint litigation, but the subject matter of joint and several debts is the same, which is different from the same type of debt with competing claims, and does not conform to the characteristics of ordinary joint litigation. However, even if the effect of the parties suing only some debtors is not as effective as that of other joint debtors (similar to a necessary joint action requiring the extension of res judicata to other joint debtors), when the creditor sues other joint debtors, the determination of facts and reasons for the judgment in the previous case have the effect of being in dispute, and the subsequent case is bound by this, and in essence, the conclusion of the judgment of the previous case and the subsequent case is determined together, which can be interpreted as an indirect expansion of the res judicata. As mentioned above, there are different types of joint and several debts in substantive law, including joint and several debts based on common intent, which may be necessary joint litigation, and joint and several debts caused by non-common intent, such as joint and several liability where the acts of each tortfeasor are sufficient to cause damages, which belong to the same type of litigation and may be similar necessary joint litigation. An action arising out of joint and several debts may not be a necessary class action, and it is more appropriate to treat it as a similar necessary class action.

4. The application of similar necessary class actions in the case of non-genuine joint and several debts

For example, in a personal injury lawsuit caused by a defect in product quality, the victim can sue the seller for tort or breach of contract, the producer for tort liability, and the seller and the producer at the same time. With regard to the choice of litigation procedures, there is a view that non-genuine joint and several debts are in fact the coexistence of different claims, and the creditor may sue several debtors together or choose to sue for ordinary joint litigation; In the author's opinion, there is no need to seek the consent of the parties in a joint action that does not have a real joint and several debt, and there is no need to apply an ordinary joint action. As for the plaintiff's claim for infringement or breach of contract by the defendant, it is only a difference in legal relationship, which does not affect the determination of the identity of the "facts of dispute", that is, the necessary joint litigation procedure is not applicable to the real joint and several debts, because the plaintiff can choose to sue separately or together, and it should be a similar necessary joint action.

In a joint and several guarantee relationship, the debtor and the guarantor are not truly jointly and severally liable in nature, and have external joint and several effect vis-à-vis the creditor, but only the internal guarantor can recover from the debtor in one direction. It is generally believed that the joint litigation of a guarantee contract dispute is similar to a necessary class action. In a general guarantee action, the plaintiff may sue the principal debtor separately or at the same time. When the plaintiff sues the principal debtor alone, the lawsuit formed at this time is a similar necessary class action, and the court may not compel the addition of the guarantor as a co-defendant; It can be seen that in the litigation of general guarantees, whether it is a similar necessary joint action or a necessary joint action depends on the choice of the defendant by the parties.

In the case of joint and several guarantees, after the creditor sues the debtor, it may separately sue the guarantor of the joint and several debts for the part that the debtor cannot perform during the guarantee period. According to Article 126 of the original Interpretation of the Supreme People's Court on Several Issues Concerning the Application of the Security Law of the People's Republic of China, a creditor of a joint and several liability guarantee may file a lawsuit against the debtor or the guarantor as a separate defendant, or the debtor and the guarantor as co-defendants. Under the current classification framework of class litigation in mainland China, similar necessary joint litigation procedures should be classified, because each claim is established on the same dispute facts, the court should make a unified and determined judgment, and the adoption of similar necessary joint litigation is conducive to promoting the close connection between substantive law and procedural law, and the logic is consistent.

V. Procedural construction similar to necessary joint litigation in judicial practice

Although there are many controversies in the litigation procedures for joint and several debts, and the Civil Procedure Law and relevant judicial interpretations have not explicitly introduced a similar necessary joint litigation system, in practice, similar necessary joint litigation can be achieved through the connection between ordinary joint litigation and inherently necessary joint litigation, except for the Judicial Interpretation on Compensation for Personal Injuries Except for the necessary joint litigation procedures for joint infringement due to the need for litigation efficiency, other joint and several debts are in principle similar to necessary joint litigation, except that indivisible joint and several debts or coordinated debts are still inherent necessary joint litigation.

In order to alleviate the tension between an ordinary joint action and an inherently necessary joint action, in a joint and several debt lawsuit, in addition to the statutory necessity of joint action, other joint and several debt lawsuits may sue some joint debtors separately, and the court may, in order to clarify the facts of the case, explain to the parties that other debtors are added as co-defendants, and if the parties agree to do so, they shall be tried together, and the judgment results must be determined together, and in this case, the parties shall have the right to choose similar necessary joint litigation; if the parties do not agree to add the defendants, the court may add the other debtors as third parties without independent claims in order to ascertain the facts of the caseIn order to resolve the dispute at one time, the judge may explain to the parties whether to waive the rights against other joint debtors, and if so, it will be handled in accordance with the inherent necessity of joint litigation. For non-genuine joint and several debts, although most judicial practices are based on joint and several debts, non-genuine joint and several creditors have the right to choose when suing, and it is more appropriate to identify them as similar necessary joint litigations. In this way, the substantive rights of creditors and the right to choose procedures are fully guaranteed, and it does not affect the court's decision after ascertaining the facts of the case in accordance with the law.

【Related Laws】

Civil Code of the People's Republic of China

Article 178.1 Where two or more persons bear joint and several liability in accordance with law, the rights holder has the right to request that some or all of the persons jointly and severally liable bear responsibility.

Article 518.1 Where there are two or more creditors and some or all of the creditors may request the debtor to perform the debt, it shall be a joint and several obligation;

Civil Procedure Law of the People's Republic of China

Article 55.1:Where one or both parties are two or more persons, and the subject matter of the litigation is common, or the subject matter of the litigation is of the same type, and the people's court finds that it may be tried together with the consent of the parties, it is a joint litigation.

Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Personal Injury Compensation Cases

Article 2: Where the compensation rights holder sues some of the joint infringers, the people's court shall add the other joint infringers as co-defendants. Where the person entitled to compensation waives its claims against some of the joint infringers in litigation, the other joint tortfeasors shall not be jointly and severally liable for the share of compensation that the defendant whose claims have been abandoned. Where the scope of liability is difficult to determine, it is presumed that the joint tortfeasors bear equal liability.

The people's court shall inform the person entitled to compensation of the legal consequences of the waiver of the litigation claim, and explain the circumstances of the waiver of the litigation claim in the legal documents.

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