Suing in China Gets an Ambiguous Boost

One of my favorite quotes since I’ve been in China I heard from a middle-aged woman who told my girlfriend “in China we don’t trust the legal system, if we need something taken care of we just hire some thugs.” I thought it very well summarized the very well justified distrust the Chinese have for the legal system, and the nasty consequences it has for business at the bottom level (and political stability in general).

The government is trying to change this attitude, most recently by passing a comprehensive tort law. It will take the place of some patchwork legislation, which obviously wasn’t working very efficiently:

Tort cases dominate the civil litigation system, but compensation is usually low. Damages in China are severely limited, mostly due to established thinking, not because of the laws themselves: Chinese courts just don’t view the loss of a hand as being worth that much, says another US lawyer who asked not to be named.

It’s hard to think of this in principle being a bad thing, but color me suspicious, it’s hard to believe that this is a strong step towards establishing rule of law in the country.

Better than goons

I have been told, by actual lawyers, that you can sue in China, and it’s generally a better first recourse for resolving problems than thugs (or contacting the local embassy), but the reasons why people would be suspicious are fairly obvious:

1. In a one party state an independent judiciary is impossible. The FT essentially acknowledges this in its piece, stating “In China, politicians decide which disputes get into court. A new law alone cannot change that.” Without an independent judiciary the new laws can and will be used to enforce corporate favoritism. I find it completely reasonable to expect that certain companies will be off-limits (companies that build schools in Sichuan, etc.).

2. We’ve been down this road before, the anti-monopoly law, which was referenced in the FT story, and was thought to be a first step in defending private enterprises from state-owned enterprises, but did nothing of the sort. Instead it attacked microsoft.

3. Civil courts and criminal courts are obviously separate, but the fact that criminal courts have a 99% conviction rate doesn’t give one confidence in the fairness of the system.

Grassroots

The last point is a fairly big deal. The best thing that could come of this law is that Chinese people begin to see legal recourse for their day to day interactions with questionable business practices, and irresponsible people. Things such as getting kicked out of the house they are renting because the landlord wants to hand it over to his friend, getting hit by a car, or just general breaking of contracts, needs to be punishable in court. If the average Chinese person started seeing enforcement of law not as something up to the whims of local police officers of questionable morality, then it could make a large impact on general savings – buying a flat would be less necessary, SMEs would require less rainy day money, and savings for health care could even be effected. We could dream that it would make Chinese SMEs more responsible regarding pollution, safety, and honest advertising.

Besides that a burgeoning rule of law culture could help put into effect the Economist magazine’s recent suggestion, that the world, instead of pushing China to meet international legal norms, could simply push it to follow its own laws. As the article points out, the majority of China’s problems come less from a lack of regulations than a lack of enforcement.

China’s human rights would improve overnight if the authorities paid more heed to their own laws: whether environmental rules, worker protections, or laws designed to safeguard against abuse by corrupt local officials. If lawyers were allowed to signal legal abuses, or police were held to account for brutality, life would improve for thousands of Chinese. Local entrepreneurs as well as foreign companies would benefit from better intellectual-property protection (piracy has killed off many Chinese software firms).

I’m sure to some liberal leaning members of China’s political elite, the new legal flurry has the specific intention of strengthening rule of law in the country, so even the government is held responsible, but in practice, the laws are only enforceable at the governments discretion. If the first few big cases reenforce a positive image of the law among Chinese people, then it might fulfill its goals. But until then there is plenty of room for pessimism.