Back to Category » Understanding Litigation for the Chinese Business Community in the Bay Area
When things cannot be resolved by private negotiations and discussions, litigation may be your last resort. Many Chinese people are reluctant to sue others because the latter are his or her friends, business partners, or even relatives. It’s true that people don’t want to “lose face” or to be blamed for not considering other’s feelings. However, you must consider if a particular relationship is more important than your personal assets and legitimate legal rights. Especially where you are faced with someone whose actions or demands are clearly unreasonable, if you begin by fighting hard and showing that you can win the case, lawsuits can give the other side some pressure to help you expedite and smooth future negotiation and settlement.
When you feel some disputes might happen between you and others, you should always keep in mind one very important concept: the “statute of limitation”. If you wait too long to file a lawsuit, you might lose the right to claim your rights and damages forever. Thus, you should talk to lawyers as soon as a dispute occurs or is threatened, so that you know well before the “statute of limitation” expires. The statute begins to run when it is deemed you should have known there was a problem and it can be much shorter than you might imagine. Similarly, you should move quickly because memories fade and documents can be lost which might be helpful if a lawsuit becomes necessary.
- What if I am sued?
Even though you choose not to sue others, you might be sued. Though you may believe the plaintiff lacks a good foundation for bringing a lawsuit against you, you cannot just ignore the complaint. Some people who are not used to the American legal system might try to ignore such allegations with the hope that they will not have any impact on them. However, a lawsuit is not like the normal cold which will go away on its own. It is more like a cancer, that can cause serious damage if not immediately dealt with, using the best medicines in the right amounts. Chinese people may not believe they can be sued because they did not do anything wrong. Sadly, baseless lawsuits are filed all the time. If you don’t establish your innocence according to applicable law, you can be held liable even if you are innocent.
More importantly, the law does not give you much time to respond. Usually you have to answer the complaint or raise other objections within 30 days from the day the complaint was “served” upon you. Sometimes a complaint is given to an individual defendant or a company officer directly, but sometimes it is left with someone at a business or home address. Those persons must be made aware that the person responsible to handle such matters must be advised of the service immediately. After 30 days with no response, a default may be entered against you and, if a default judgment (a separate but related proceeding) is obtained, you can be held liable for whatever the plaintiff claimed in the complaint. Your real property, bank accounts, automobiles can be applied for the purpose of enforcing the default judgment. Thus, you should see a lawyer immediately when you are sued.
Cautionary Reminder. This article contains some general information as to the American legal system. It is not meant as legal advice. It is always important to consult lawyers and other professionals before making important business and legal decisions.
Copyright. Law Offices of John A. Kithas. Tel: (415)788-8100