China Litigation and Case Acceptance

Though my law firm has been involved in a number of China litigation matters, I was not familiar with how it is that Chinese courts decide what cases to accept.  I know a lot more now, after reading the Chinese Law Prof Blog’s post, Case acceptance in Chinese courts. First off, let me say that I am not aware of any case involving any of my firm’s clients not getting accepted by a Chinese court. It is possible we had a client sued in a Chinese court, but whose lawsuit was rejected and so we never heard of it.

But of the cases we have helped bring in China, none of them were rejected, and it would have shocked me if any of them had been. It would have shocked me because all of them were pretty much your garden variety breach of contract action.

Yet I have read of important cases being “accepted’ or, in some (usually politically charged) cases, being rejected for filing and I never quite understood that. The Chinese Law Prof Blog explains it all quite nicely and does so by distinguishing the “gate-keeping” function of the Chinese courts from those in the United States. To simplify, in the United States, there is pretty much no gate-keeping at all and one can file and have accepted a complaint that says pretty much anything. I could sue someone for not reading this blog often enough and get a complaint to that effect filed. Of course my case would be terrible and the defendant would no doubt get it dismissed in fairly short order and probably get monetary sanctions against me as well. But I would get it filed and the defendant would need to do something to respond.

Hence, the saying that “you can sue anyone for any reason.

It’s not like that in China:

[Y]our complaint “must first pass through a gate-keeping procedure in which a special division of the court (the case filing division [立案庭]) decides whether or not to accept (受理) and docket (立案) the case. According to Art. 108 of the Civil Procedure Law and Art. 41 of the Administrative Litigation Law (the applicable law depends on the kind of case), courts must, unless an exception applies, accept cases that meet the following standards:

    1. The plaintiff has a direct legal interest (a term of art) in the case.
    2. There is a specific defendant.
    3. There are specific claims, facts, and causes of action.
    4. The lawsuit is within the court’s geographical and subject-matter scope of jurisdiction.

The decision to accept or not is a pre-trial procedure that is undertaken on the basis of the complaint and evidence you may be asked to submit; if the court doesn’t accept the case, you never get the chance to prove your claims at trial. Moreover, it’s made in something of a black box without the benefit of adversarial arguments. When the system works as intended, the case filing division makes its own initial determination of the merits, deciding whether there is enough there to warrant going forward. In practice, a court trying to avoid a nettlesome case can use the case filing stage to reject the case.

The big difference then between China and the United States is that in China your case can be rejected without your having had any chance at all to argue why that should not have been the case:

In both of these [United States] gate-keeping proceedings, both parties appear and make arguments, and the court gives a decision that can be appealed. But this is precisely what doesn’t happen in the Chinese case filing stage, and that has led to dissatisfaction and criticism. There are always cases where, for one reason or another, a court won’t want to give a judgment declaring the plaintiff the winner (e.g., powerful people or institutions will be offended), but at the same time doesn’t want to declare it the loser, either (e.g., the evidence in favor of the plaintiff’s case is overwhelming). The best thing to do in these case is simply to avoid taking the case.

This acceptance/rejection system is in many ways the ultimate nightmare for lawyers.  Just imagine you are a lawyer and you have encouraged your client to bring a lawsuit. You then spend weeks/months gathering up the facts and drafting the complaint  for that lawsuit.

You then find local Chinese counsel and pay that lawyer’s retainer/fee. You then pay the filing fees. After all this, you get back a notice that your complaint has been rejected, without even a chance to argue otherwise. I don’t like it.

What do you think?