Preparing for Legal Action in China

Lawsuits and arbitrations in China are costly and time-consuming – isn’t it everywhere? Before you making a decision on how to settle a dispute, you ought to have a clear picture of possible alternatives.

There are definitely other more efficient and effective ways to settle a dispute rather than taking the case to court. For example, well-written Chinese Lawyer Letters are often underestimated, yet are overwhelmingly successful for solving most commercial disputes before they escalate.

I am going to show you how and what you should do in dealing with potential legal actions in China. Either as a possible plaintiff or a defendant, before approaching a trial lawyer, do the following:

  • Gather documentation of everything that happened from the very beginning of the dispute (if your case is a contract dispute, you ought to at least provide the contract in dispute);
  • Ask how much the attorney charges per hour for legal consultation. (Pursuant to Shanghai Bar Assn’s guideline 2009, a licensed Chinese lawyer’s hourly rate ranges from RMB 200 to RMB 3000).

In the first legal consultation meeting, do the following especially as you were advised to pay the un-refundable consultation fee:

  • Provide background information of the case, showing case related documentation for examining;
  • Ask if there are alternative resolutions besides taking legal action, such as if the attorney could issue a Lawyer Letter to the opposing parties to claim rights and/or clear some misunderstandings.
  • Ask if the attorney could help to set up negotiation meeting(s) with opposing parties;
  • Ask the possible outcomes of the case if it goes to People’s Court, in accordance with relevant Chinese law; and
  • Request a written legal analysis report that must include the validity of existing evidence, and any new evidence that needs to be discovered or produced etc.

When the attorney you consult with satisfies the above conditions, it is time to ask about the fee structure. Quite often, most commercial litigation is charged not by the hour, but by the amount in dispute. Detailed attorney fee structures are stipulated clearly in the Legal Service Agreement.

Once you have decided to retain the counsel, only one responsibility remains: Trust and reveal all significant facts to your counsel. Only by knowing the whole truth that your counsel can possibly be of real assistance!

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