October 31, 2006
Enforcement of judgments still a big problem
In a recent speech, Supreme People's Court president Xiao Yang (肖扬) reported that despite a year of concentrated effort, the problem of unexecuted judgments remained basically unresolved, with over 800,000 unexecuted judgments still out there. This seems like a big number, but it's always hard to know quite what to make of these statistics. First, they include, for example, judgments not executed because the defendant is broke - disappointing for the plaintiff, to be sure, but not an indication of anything wrong with the court system (unless the defendant has illicitly transferred funds to a connected party that the court is unable or unwilling to find or enforce against). Second, China is a big country with a lot of people; even minor phenomena can look huge when you have a multiplier like that. Finally, we don't have a good way of knowing what a good rate of execution would be, and therefore what the right number is. We don't even have good information on execution rates in other countries (I tried to find this out several years ago in connection with an article I was writing on enforcement of judgments in China - short version available here).
The news report on Xiao Yang's speech is available, with relevant links, here.
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I think you raise some very good points. From my own experience, I can say that the views of Chinese lawyers seems to be about equally split between those who claim enforcing judgments is difficult but not impossible, to those who say it is nearly impossible. I would like to tell you that these views are divided geographically or based on the size of the business, or on some other such discernable measure, but they are not. We have a non-China client who managed to use China's court system to collect on a very large (more than $10 million) arbitration award
against a very large Chinese company. However, it took way more time and money to get this done than it should have and it was touch and go all the way, even though the Chinese company had no legitimate defense to enforcement.
Posted by: China Law Blog | Oct 31, 2006 11:17:41 PM
One trick I have been using in the United States is to put the judgment online for the world to see. A website named www.manageyournews.com allows a judgment creditor to put a copy of the judgment online (for $20) for the world to see. So if the judgment is put on the website and someone googles the name of the judgment creditor [DC: you mean "judgment debtor", right?], then the judgment will show up. In my case, this embarrassed the judgment creditor [DC: same comment as before] into paying! Just an idea.
[DC: I seem to recall reading about this kind of system being set up in various places in China, but don't have a specific reference handy.]
Posted by: Farber | Jun 14, 2008 8:48:55 PM