The costs you need to pay mainly include three items: Chinese court costs, Chinese attorney’s fees and the cost of notarization and authentication of some documents in your country.
1. Chinese court costs
If you bring a lawsuit to a Chinese court, you need to pay legal fees to the court at the time of filing.
The court costs depend on your claim. The rate is set on the scale of rates and denominated in RMB.
Roughly speaking, if you claim USD 10,000, the court cost is USD 200; if you claim USD 50,000, the court cost is USD 950; if you claim USD 100,000, the court cost is USD 1,600.
If you win as a plaintiff, the court costs will be borne by the losing party; and the court will refund the court cost you paid previously after receiving the same from the losing party.
2. Chinese attorney’s fees
Litigation lawyers in China generally do not charge by the hour. Like the court, they charge attorney’s fees according to a certain proportion, usually 8-15%, of your claim.
However, even if you win the case, your attorney’s fees will not be borne by the losing party.
In other words, if you request the Chinese court to order the other party to bear your attorney’s fees, the court will generally not rule in your favor.
That being said, however, there exist some exceptional circumstances where the losing party shall cover legal fees.
If both parties have agreed in the contract that the breaching party should compensate the opposing party by covering his attorney’s fees in litigation or arbitration, and they have clearly stated the calculation standard and confines of attorney’s fees, the court is likely to support the payment request of the winning party. However, at this point, the court will require the prevailing parties to prove they have actually paid the fees.
3. Costs of notarization and authentication of some documents in your country
When you sue, you need to submit relevant documents to the Chinese court, such as your identity certificate, power of attorney, and pleadings.
These documents need to be notarized in your country, and then authenticated by the Chinese embassy or consulate in your country.
The rate of this charge is up to your local notary and the Chinese embassy or consulate. Usually, it costs you hundreds to thousands of dollars.
The Cross-border Trade Dispute 101 Series (‘CTD 101 Series’) provides an introduction to China-related cross-border trade dispute, and covers the knowledge essential to cross-border trade dispute resolution and debt collection.
* * *
Do you need support in cross-border trade and debt collection?
CJO Global's team can provide you with China-related cross-border trade risk management and debt collection services, including: (1) verification and due diligence; (2) trade contracts drafting; and (3) dispute resolution and debt collection.
If you need our services, or if you wish to share your story, you can contact our Client Manager Susan Li (email@example.com).
If you want to know more about CJO Global, please click here..
If you want to know more about CJO Global services, please click here.
If you wish to read more CJO Global posts, please click here.
Original Link: Sue a Company in China: How Much Does It Cost?
Contributors: Meng Yu 余萌