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The People’s Republic of China (PRC) has a civil law system that is largely based on statutory law rather than case law. Under the civil law system, the courts are not usually bound by judicial precedents. In order to unify the interpretation of laws, the Supreme People’s Court (SPC) is to issue judicial practice notices to guide the lower courts when interpreting the laws.

Although the PRC has a civil law system, it is noteworthy that the PRC has also been implementing a series of efforts to reform its judicial system. In order to fill any potential gaps between codified laws and judicial practice, the use of case precedents has been emphasized in the legal reform. The SPC issued its Provisions on Case Guidance in 2010, setting out how the precedents might be taken into consideration when the courts decide cases.

On July 27, 2020, the SPC issued new guidance, titled Guiding Opinion Concerning Strengthening the Search for Similar Cases to Unify the Application of Law (for Trial Implementation) (New SPC Guidance), which has taken effect from July 31, 2020. When the courts decide cases, judges will have to carry out relevant research and follow the precedents if the conditions are met. Hence, judicial precedents will play an increasingly important role in Chinese legal practice in the future. Lawyers will have to assist the courts or arbitration tribunals in respect of legal precedents in the PRC.

Authors: Lianjun Li Eric Lin Cheryl Yu Megan Wang Arthur Lam Leah Lei

Discussion of the New SPC Guidance and its practical implications

It should be stressed that the issuance of the New SPC Guidance does not mean that the PRC has become a “case law” jurisdiction. As part of the PRC’s judicial reform, the SPC aims to fill the gaps between legislation and judicial interpretations by advocating the practice of following the legal principles derived from prior cases. In this respect, the New SPC Guidance is in accord with, and gives weight to, most of the existing judicial practices of the PRC courts. 

(1) Definition of “similar cases” and required circumstances  (articles 1 and 2)

The application of case precedents in the civil law jurisdiction is rather limited in scope and carries no direct legal binding force. According to article 1 of the New SPC Guidance, the term “similar cases” refers to those cases which have already been adjudicated and are similar to the pending case in terms of the basic facts, the focus of the dispute, and the application of law. 

“Similar cases” may only be referred to in significant, difficult, or complex cases. According to article 2 of the New SPC Guidance, there are four situations in which a search for and/or reference to a similar case is required: 

a. When a case is proposed to be submitted to a judges’ meeting or adjudication committee for discussion

b. When the relevant judicial principles or rules are unclear or conflicting 

c. When the court president or division head requires such a search under his supervision

d. When another relevant situation requires such a search