CHINA Law and Practice Contributed by: Chuanhong Long, Ji Liu and Xiao Jin, CCPIT Patent and Trademark Law Office
11.2 Factors Considered When Awarding Costs When determining the award of costs to the winning party in a lawsuit, Chinese courts take into account several factors. These include the nature of the lawsuit, the actual workload under- taken by the attorneys involved in the case, the amount of expenses actually incurred, and the recommended scale of attorney fees within the jurisdiction. 11.3 Interest Awarded on Costs There is no regulation on interest when award- ing costs. 12. Alternative Dispute Resolution (ADR) 12.1 Views of ADR Within the Country Arbitration Arbitration is a popular alternative dispute reso- lution (ADR) mechanism in China. Mediation Parties can choose to mediate disputes inde- pendently. Successful mediation culminates in a mutually agreed and signed agreement. The effectiveness of this process largely depends on the skills and efforts of the attorneys facilitating the mediation. Mediation can also be conducted and organised by judges. When a lawsuit is filed, judges often inquire if the parties are willing to settle. If they reach an agreement, the court can issue a legally binding settlement agreement. This practice is encouraged by Chinese courts to conserve judi- cial resources. People’s mediation committees operate at the grassroots level, such as in villages, residential
blocks, or companies. These committees are particularly adept at handling everyday, non- critical disputes, leveraging their understand- ing of local issues and community dynamics. A considerable number of minor disputes can be effectively resolved through these commit- tees, offering a practical and community-centric approach to dispute resolution. 12.2 ADR Within the Legal System To optimise judicial resources, Chinese courts actively encourage dispute resolution through settlement. Before proceeding to trial, judges usually inquire whether the parties are interest- ed in settling the case. If there is an inclination towards settlement from at least one party, the court typically allocates a specific period for the parties to engage in discussions and negotia- tions. It is important to note that court-mediated mediation is voluntary; parties face no penalties for declining a settlement proposal. For labour disputes, parties are required to seek arbitration before they can file a lawsuit. 12.3 ADR Institutions In addition to judicial mediation, people’s media- tion committees play a significant role in dispute resolution at the grassroots level in communities and within governmental organisations. Enter- prises also have the option to establish such committees. Participation in mediation before these committees is not compulsory, and parties are free to accept or reject mediation proposals. This form of mediation is valued for its flexibil- ity, speed, and cost-effectiveness compared to lawsuits. For example, each side can elect one mediator in the panel while the mediation can be conducted in private so that the dispute can be resolved discreetly.
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