Typical Dispute Resolution Project Steps
Step One: Confirm if you are dealing with a scam or a legit entity
If it’s a scam, your options depend on the amount of money involved
- If over $30,000, it makes sense to engage a private investigator. Most law firms don’t provide this service, but I would be happy to make introductions for any readers who need an investigator.
- If under $30,000, because of the costs involved to retain the services of an investigator, may not make economic sense to move forward. But if you are looking for a moral victory, the investigators are willing to help on any size project, so long as their fees are covered.
If it’s a legit company, your lawyer will ask you to send the key documents and they will conduct an initial review then offer a quotation for their service.
If you are not sure if the individual/company is a scam or legit, due diligence can be conducted to confirm.
Step Two: Dispute Resolution
Projects roll out as follows:
- Quotation and Service Fee presented to client for review.
- Upon receipt of signed service agreement and payment, the project officially starts.
- Case is reviewed in detail & demand letter drafted
- Demand Letter & Strategy is presented to client for confirmation
- Demand Letter issued
- Follow up call given (if needed)
- Client updated on results. Project completed.
At the law firm where I serve on the board of advisors, 30% of cases are closed to client’s satisfaction before moving to litigation. The most effective technique involves a well-crafted demand letter from the law firm followed by a phone call. Both are done in Chinese from a respected Chinese lawyer.
Introduction to Litigation
Litigation in China is actually fairly straight forward and affordable compared to the US and Europe. Overseas companies can indeed win against local firms and individuals when they have the right lawyers and a solid case.
It is important to find a local lawyer who understands the nuances of the legal system of the particular jurisdiction (at city or province level).
Perhaps even more important is to be well prepared in advance. Lawsuits are quickly settled when you can show the court Chinese language contracts which included pre-agreed penalty clauses.
Litigation Step One: Initial Case Review
In order to assess the validity of your case from a Chinese court’s perspective, please provide Lawyer with the following information:
- Overview of the situation including the root cause of the conflict.
- Supporting documents such as: copies of the signed contracts & agreements/ proof of transactions (bank slips)/ website & contact details of the Chinese party (we will not contact them but will use this information to review the Chinese entity)
If you have a strong case, project moves to step two.
If you have a weak case from a legal perspective, the lawyer will offer opinions on your best next step.
Litigation Step Two: Verify Financial Assets
In addition to a moral victory, most plaintiffs also seek financial compensation. Specialized 3rd party investigators are engaged by Lawyer to discreetly obtain information about ownership, assets and financial status to help determine the defendant’s ability to pay damages should the plaintiff prevail in the courts.
If the defendant is not in a position to pay damages, going to court may not prove cost effective and the lawyer will offer opinions on your best next step.
If the defendant is in a position to pay damages, and the case is strong, the lawyer will offer a detailed proposal outlining the plan for litigation and costs involved.
Next in the series
Dispute Resolution: Fee Structure (Negotiations, Demand Letters & Litigation) (Part 16)
Having a lawyer on retainer: Costs and Coverage (Part 17)
About the author: Mike Bellamy
Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center (www.ChinaSourcingInfo.org). Author of “The Essential Reference Guide to China Sourcing” and founder of PassageMaker Sourcing Solutions.