New forms of false litigation a big concern

Chinese procuratorates handled 3,186 cases involving false litigation in the first half of 2026, down 18.6 percent year-on-year, indicating that the once-rampant practice has been curbed to some extent, the Supreme People's Procuratorate said recently.

False litigation refers to the use of fabricated facts, legal relationships or evidence to obtain court judgments, mediation agreements or enforcement orders for unlawful purposes.

Despite progress achieved through coordinated enforcement, prosecutors have identified new forms of false litigation that threaten not only individual rights but also State assets, financial markets, public administration and social welfare, the SPP said.

According to the SPP, some managers of State-owned enterprises or collective organizations have colluded with related parties to fabricate disputes over loans, sales or guarantees before using civil proceedings to misappropriate or transfer public funds, land or other State assets.

In one case, a company inflated the value of structures on a parcel of land and filed a lawsuit based on fabricated facts, seeking more than 200 million yuan ($27.9 million) in State compensation. Prosecutors in Tianjin recommended a retrial, preventing loss of State assets.

False litigation also remains prevalent in the financial sector, the SPP said. Some professional lenders attempt to legitimize debts arising from predatory lending schemes by inflating loan amounts and fabricating bank records.

In the Inner Mongolia autonomous region, prosecutors found that key clauses in a loan agreement had been left blank when it was signed and that the borrower had received far less than the lender later claimed in court. The lender's company was not licensed to issue loans but had repeatedly engaged in predatory lending. Following a recommendation by prosecutors for a retrial, the court declared the contract invalid.

The insurance sector has also become a target for false litigation, with some unscrupulous claims agents fabricating insurance claims for profit, increasing insurers' risk-control burden.

Prosecutors in Shanghai and Zhejiang province uncovered groups that altered patients' medical records, fabricated follow-up examination records and encouraged false statements to obtain fraudulent appraisal reports. The groups then filed lawsuits seeking inflated insurance payouts and collected agency fees. Prosecutors supervised the cases and issued recommendations to address weaknesses in insurance claims procedures.

The SPP said false litigation frequently occurs during the implementation of public policies, including national and regional regulatory measures. Some offenders exploit fabricated lawsuits to circumvent regulations and profit from policy loopholes. Such cases are often highly concealed, involve multiple participants and undermine judicial credibility as well as the effectiveness of regulatory policies.

In one case, Beijing prosecutors found that a group led by an individual surnamed Wei had fabricated loan relationships on 89 occasions. The group used judicial confirmation of mediation agreements and court enforcement procedures to help others illegally withdraw housing provident funds.

The SPP also warned that dedicated funds for pensions and work-related injury insurance have become common targets of false litigation. Such cases divert resources intended for essential social protections, undermine fairness and integrity and hinder the effective implementation of social welfare policies.

In Henan province, 66 purported employees sued the same department store over a two-year period and won every case, while another 61 people had previously prevailed in labor arbitration against the company. Prosecutors determined that the cases had been fabricated and identified thousands of similar leads nationwide.

The SPP said procuratorates will strengthen coordination across criminal, civil, administrative and public interest litigation, expand the use of big data supervision models, improve cooperation with other authorities in transferring case leads and conducting joint investigations, study emerging risks and promote comprehensive, source-based governance of false litigation.