Cost and Fee Allocation in Civil Procedure: China National Report

AuthorXiao Jianguo and Tang Xin
XIAO & TANG (DO NOT DELETE) 12/3/2012 7:51 PM
Xiao Jianguo and Tang Xin
This article discusses the practice of allocation of litigation cost in the Peoples Republic of
China. It examines the basic rule under which the losers pay all, as well as the exceptions
thereto. The article also discusses the social background for self-representation in China. In
addition, it evalutes the effectiveness of legal aid in alleviating the parties f inancial
burden. By evaluating the acceptance charges and the manadatory pre-ation procedures, the
article also studies the legislative altitude towards litigation.
In China, litigation costs include court costs and party expenses,
but generally, attorneys fees are not included in the latter. The
following is included in litigation costs: charges for accepting the
case; application fees; travel/accommodation expenses, and
compensation for forgone wages of witnesses, experts, translators
and adjustors; and costs incurred in the litigation process for
verification, public announcement, inspection and examination,
translation, evaluation, auction, sale, storage, custody, transportation,
and vessel supervision.1 According to the Measures on Payment of
Litigation Fees promulgated and implemented by the State Council
on April 1, 2007, the overarching principle for allocation of litigation
costs is that the loser pays all.2 However, since attorneys fees are
excluded from the scope of general litigation costs, they are allocated
pursuant to a scheme different from that for litigation costs.
Generally, in China, attorneys fees are borne by the parties on
their own accounts separately, and neither party can get
reimbursements from the counterparty. There are a number of
justifications for such an arrangement. First, as the losing party is not
required to reimburse the counterpartys attorneys fees, litigation
Xiao Jianguo, Professor, Renmin University School of Law, China; Tang Xin, Associate Professor,
Tsinghua University School of Law, China. In preparing the report, we received excellent research and
translation assistance from Huang Zhongshun, Panhua and Cai Qinghong. This paper is the China
National Report for the topic of “Cost and Fee Allocation in Civil Procedure” for the 2010 Congress of
the International Academy of Comparative Law which was held in Washington D.C. in July of 2010.
1 See Susong Feiyong Jiaona Banfa (诉讼费用交纳办法) [M easures on Payment of Litigation
Fees] (promulgated by the St. Council, Dec. 19, 2006, effective Apr. 1, 2007).ST. COUNCIL GAZ., Feb.
10, 2007, at 4,, art. 6 (China) [hereinafter Measures on Payment of Litigation Fees].
2 See id. art. 29.
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costs are generally low, which brings greater convenience and
accessibility for people to litigate, thereby furthering the virtue of
making the judiciary closer to the people. Second, if the losing
party has to pay for the winning partys attorneys fees, the poor may
not be willing to sue to protect their rights owing to fear of losing the
case. Third, there is uncertainty in the outcome of civil actions; no
person should be punished merely for suing or defending. Fourth, a
heavy burden will befall the court in verifying the attorneys
expenses in determining a reasonable amount, and furthermore,
lawyer independence may be impaired if the court were to determine
the attorneys fees. Fifth, representation by a lawyer is not
mandatory in China; treating attorneys fees as part of litigation costs
and requiring the losing party to bear the attorneys fees is not in
accordance with the principle of self-representation.
Despite the aforementioned overarching principle of loser pays
all, in China, such arrangement is limited both legally and
practically. First, as discussed above, the losing party is not
mandated to bear the winning partys attorneys fees. Second, the
winning party bears any fees incurred for verification carried out by
a third-party entity without the consent of the losing party or the
courts approval. Third, as for the travel and accommodation
expenses, and compensation for forgone wages of the witnesses, the
losing party only pays for a reasonable portion thereof,3 and the
court has the discretion to decide whether the amount is reasonable
based upon various factors such as the extent of the local economic
development and the parties economic affordability. Fourth, travel
and accommodation expenses, and compensation for forgone wages
of the witnesses, experts, translators and adjustors employed by the
winning party with the courts approval are included in the litigation
costs, and shall be borne by the losing party in accordance with
laws. Note that in practice, unless the plaintiff specifically demands
that the defendant pays such costs and fees, and provides receipts,
invoices or other relevant evidentiary documentation to demonstrate
the actual expenditures, the court will not impose such costs on the
losing party.4
3 See Zuigao Renmin Fayuan Guanyu Mingshi Susong Zhengju de Ruogan Guiding (最高人民法
院关于民事诉讼证据的若干规定) [Provisions regarding Evidence in Civil Litigation of the Supreme
People’s Court] (promulgated by the Sup. Peoples Ct., Dec. 21, 2001, Apr. 1, 2002) SUP. PEOPLES CT.
GAZ., Jan. 1, 2002, at 19, art. 54, § 3 (China).
4 See generally Liu Guoqiang (刘国强), Woguo Zhengren Chuting Zuozheng Zhidu Lifa Quexian
de Yuanyin (我国 证人出庭 作证制度立 法缺陷的原 ) [Cause of the Legislative Defects in the
Chinese System of Witness Testimony], NANDU XUETAN (南都学坛) NANDU ACADEMIC FORUM, Nov.
10, 2004, at 96 (explaining the historical background of the current testimony system).

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