In order to ensure a proper, expeditious and professional process for the adjudication of major business cases, the Commercial Case Adjudication Act (the “Act”) and its derivative regulations, the “Regulations Governing the Appointment of Lawyers as Agents Ad Litem for Commercial Cases” (the “Regulations”) and the “Guidelines for Payment Rates for Lawyers’ Remuneration as Litigation or Procedural Expenses in Commercial Cases” (the “Guidelines”), became effective on July 1, 2021, and such cases will fall exclusively under the jurisdiction of the Intellectual Property and Commercial Court. Since such cases involve the interests of company shareholders and creditors with the amount of claims possibly in tens of billions, and are pivotal to the future environment of international business, foreign investors’ evaluation of the cost for settling commercial disputes, and the sound and healthy development of the investment market, the future development on these matters is worth our attention. The related provisions are summarized as follows:

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I. Definition of major commercial cases
A major commercial case is defined in Article 2 of the Act and is divided into litigation cases and non-litigation cases. The Regulations and the Guidelines will apply to all major commercial cases in the future.

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Commercial litigation cases refer to:

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1. Disputes of the following nature concerning civil rights and obligations where the price or value of the claim is equal to or more than one hundred million NTD:
(1) Where the responsible person of a company enters into a dispute with other companies as a result of business operations
(2) Securities fraud, presenting false financial reports or financial business documents, failing to deliver a prospectus, providing a false prospectus, making an illegal public acquisition, market manipulation, short-term trading, insider trading, irregular business transactions, or making an illegal loan or guarantee, as prescribed in the Securities and Exchange Act.
(3) Market manipulation, insider trading, fraudulent futures trading, providing a false prospectus or failing to deliver a prospectus, as prescribed in the Futures Trading Act.
(4) Participating in false or deceptive conduct, or conduct that otherwise results in misplaced trust, providing a false prospectus or failing to deliver a prospectus, as prescribed in the Securities Investment Trust and Consulting Act.
(5) Providing a false prospectus or investment prospectus or failing to provide a prospectus or investment prospectus in accordance with the regulations, as prescribed in the Clauses of the Real Estate Securitization Act or Financial Asset Securitization Act.
(6) Disputes arising from matters that are governed by the Company Act, the Securities and Exchange Act, the Futures Trading Act, the Banking Act, the Business Mergers and Acquisitions Act, the Financial Institutions Merger Act, the Financial Holding Company Act, Clauses of the Real Estate Securitization Act, the Financial Asset Securitization Act, the Trust Law, the Act Governing Bills Finance Business, or the Securities Investment Trust and Consulting Act, where both parties agree in writing, that the case shall be adjudicated by a Commercial Court
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2. Cases concerning publicly traded companies:
(1) Disputed cases concerning civil rights and obligations arising between shareholders of publicly traded companies exercising shareholder rights based on their shareholder status and the company or the responsible persons of the company, and complaint cases where institutions protecting securities investors and futures traders petition the court to remove the company's directors or supervisors pursuant to the provisions of the Securities Investor and Futures Trader Protection Act
(2) Disputes over the effectiveness of the resolutions of the shareholders, or boards of directors meetings of publicly traded companies.
(3) Disputes over the effectiveness of the resolutions of the shareholders' or boards of directors meetings of non-publicly traded companies that have control or affiliation relationships with publicly traded companies, and the capital value of the companies is equal to or more than five hundred million New Taiwan Dollars.
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3. Other commercial litigation cases that fall under the jurisdiction of a commercial court pursuant to other laws, or as designated by the Judicial Yuan.

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Commercial non-litigation cases refer to:

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1. Concerning publicly-traded companies: Adjudicating buy-back share prices; petitions to select a temporary administrator, appoint an inspector, and dismiss the said personnel pursuant to the Company Act
2. Other commercial non-litigation cases under the jurisdiction of a commercial court pursuant to legal regulations or as designated by the Judicial Yuan.

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II. Regulations Governing the Appointment of Lawyers as Agents Ad Litem for Commercial Cases – “Parties, or related parties, of a case shall retain a lawyer as an agent ad litem”
The legislative reasons of Articles 6, 7, and 9 of the Act state that, since major commercial cases require a high degree of specialization, they shall be represented by lawyers who are specialized and have practical experience in commercial matters. And the plaintiffs, defendants, and participants shall all be represented by the lawyers appointed as the agents ad litem in all proceedings, including mediation, preservation, litigation, and non-litigation.

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Paragraph 1 of Article 10 of the Act authorizes the Judicial Yuan to enact the “Regulations Governing the Appointment of Lawyers as Agents Ad Litem for Commercial Cases.” The Regulations provide that an agent ad litem shall have practiced law for at least five years and shall not be under any circumstances prescribed in Paragraph 1 of Article 5 of the Attorney Regulation Act and shall not have been disciplined thereunder. For lawyers who have served as a judge or prosecutor, their years of service as a judge or prosecutor are included in the calculation of years practicing law. As to the requirement of persons with specialized expertise and experience in commercial matters, it means one of the following circumstances:
1. Having dealt with commercial cases or major financial criminal cases as a judge or prosecutor as prescribed in Article 2 of the Act.
2. Having acted, as prescribed in Article 2 of the Act, as an agent ad litem for a commercial case, a defense lawyer for a major financial criminal case, an arbitrator or agent for arbitration concerning a commercial case.
3. Having authored a book or a thesis of more than ten thousand words on legal topics related to commercial law matters as prescribed in Paragraph 2 of Article 2 of the Act.
4. Currently serving or having served as a professor, associate professor, assistant professor, or lecturer on commercial law matters as prescribed in Paragraph 2 of Article 2 of the Act, teaching subjects related to commercial cases for more than a year.
5. Having taken credit for courses on commercial law matters as prescribed in Paragraph 2 of Article 2 of the Act or participated in related study courses for more than 180 hours.

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III. “Guidelines for Payment Rates for Lawyers’ Remuneration as Litigation or Procedural Expenses in Commercial Cases”
Paragraph 2 of Article 13 of the Act authorizes the Judicial Yuan to enact the Guidelines for Payment Rates for Lawyers’ Remuneration as Litigation or Procedural Expenses in Commercial Cases. The Guidelines note provides that a lawyer’s remuneration shall be approved by the court, and the court shall consider the complexity of the causes and facts of the case, the number of parties or interested parties involved, whether the action is filed for public interests, and the assistance of the attorney in facilitating the proceedings. In addition, remuneration for lawyers shall be included as part of the litigation expenses and be borne by the party of whom the judgment is not in favor. The Guidelines also provide that the amount stipulated among the lawyer, his/her clients, and the interested parties shall not be subject to the amount approved by the court.

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(Author: Yu-Wei Huang, Intern Attorney)

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