Unfortunately there is no Better Business Bureau in most parts of Asia where you can take your grievances. Unless your loss is very large, you will find very little support from government agencies and local police. A carefully crafted message and/or demand letter from a reputable local law firm in the local language may be the solution.
Process & Options
Demand Letter Expectations
30% of cases are closed to client’s satisfaction during the demand letter phase. The most effective technique involves a well-crafted demand letter in local language from a local law firm followed by a phone call to the party in question from a local lawyer. The remaining 70% of the cases are either moved to litigation, dropped by the client or the client elects to continue negotiations.
Step One: Formal Case Review
A paralegal will collect the case file and a local lawyer will review the details and suggest a strategy.
Step Two: Due Diligence
Is the company or individual in question real? Are you dealing with a scam artist operating under false identity? Do you know the official name of the subject company in local language?
As the local language is the official language of the legal system, it is essential to have the legal name (local language name) of the subject company.
Due diligence is affordable and effective. It gives the client the transparency they need to make a decision about moving forward with the case. The subject company will not know due diligence is taking place!
Step Three: Demand Letter
Assuming the due diligence report indicates the target company is real and has assets, the next logical step is to issue a demand letter. Here is the typical process:
- Quotation and Service Fee presented to client for review
- Upon receipt of signed service agreement and payment, the project officially starts
- Case is reviewed in detail & demand letter drafted
- Demand Letter & Strategy is presented to client for confirmation
- Demand Letter issued
- Follow up call made the subject company
- Client updated on results
- Project phase completed
Step Four: Litigation (if needed)
Litigation in many parts of Asia is actually fairly straight forward and affordable compared to the US and Europe. Overseas companies can indeed win against local firms and individuals when they have the right lawyers and a solid case. Here is the typical litigation process:
If you have a weak case from a legal perspective, AsiaBridge Law will offer opinions on your best next step.
If you have a strong case, the next step is to confirm the status of the subject company and their assets.
Verification of Subject Company’s Assets
In addition to a moral victory, most plaintiffs also seek financial compensation. Specialized 3rd party investigators are engaged by AsiaBridge Law to discreetly obtain information about ownership, assets and financial status to help determine the defendant’s ability to pay damages should the plaintiff prevail in the courts.
If the defendant is not in a position to pay damages, going to court may not prove cost effective and AsiaBridge Law will offer opinion on alternative options.
If the defendant is in a position to pay damages, and the case is strong, AsiaBridge Law will offer a detailed proposal outlining the plan for litigation and costs involved.
Important Note: Potential Refunds During The Dispute Resolution Process
In the event the case review indicates a demand letter will not be an effective option, our legal team will offer suggestions for Client and the fees for the Due Diligence and Demand letter will be returned to the client.
In the event the due diligence indicates that the target company has no assets and/or no longer in business, the fees for the Demand letter will be returned to the client.
Managing Expectations About Demand Letters
While ABL will make every reasonable effort, per the service agreement, to resolve the dispute on behalf of client, there is no guarantee that the demand letter will succeed in recovering some or all of the client’s loss. As mentioned above, after conducting the case review, if the legal team feels a demand letter or litigation will not be successful, remaining fees will be returned to the client.
FAQ: Dispute Resolution
Is it possible to pay for dispute resolution services after funds have been recovered?
Some debt collection agents work like that, but they generally charge a one time “case fee” of 500 USD + up to 30% of the recovered funds. At AsiaBridge Law, our lawyers charge by the workload rather than the amount of the funds in question. Sending a demand letter for 1 million USD is the same work load as a demand letter for 1 USD. AsiaBridge Law policy is to charge our fees upfront, but I think you will be happy to know the following:
- Our flat fee for a demand letter is much lower that the % a debt collection agency would charge.
- If the initial case review concludes you have a small chance of victory, the due diligence and dispute resolution fees will be returned to you.
- If the due diligence shows the company is broke or closed, the service fees for the dispute resolution are returned to you.
If the due diligence checks find that the target company is still operating, does the demand letter ensure that we will recover our loss?
While the demand letter is usually the better alternative than going right to court, even with a sound case, there is no guarantee that the demand letter will get all of your money back. The goal of the demand letter is to reopen negotiations, settle out of court and ideally gain a resolution that is acceptable to the client.
If the due diligence checks shows that the target company has closed, where do we stand?
Unless there was criminal negligence (very rare in commercial disputes) or you will willing to spend the time/money to go to court in hopes of putting a court ordered lien against any assets that may still remain at the target company, then the best option in most cases, I am afraid, is to cut your losses and not spend more money on the case. Some lawyers would probably advise you otherwise, but that could be viewed as simply a lawyer taking advantage of your situation. AsiaBridge Law doesn’t operate like that!
We have been trying to contact the target company and it seems that the phone lines do not connect and our emails are being ignored. What does this mean?
Phone lines and emails are easy to change. But if the seller was a real company with a real business licenses (we can find out using the due diligence) then you have a chance of tracking down the target entity where ever they may be located. The due diligence will confirm if the business license is active but tracking down individuals who have gone into hiding is outside the scope of due diligence.
Having said all that, the case review, due diligence and demand letters are affordable and effective next steps. Keep in mind that case review shows your case is not strong, or if the due diligence shows the company has no assets, then the remaining service fees are returned to you. . Most lawyers bundle the three together and don’t offer to return any of the funds if the case is weak. At AsiaBridge Law, we charge a fair fee for a transparent service that respects our clients.
Should I share with the lawyer all of my emails to/from the subject company?
In most cases the best option is to provide a summary of the situation and offer a few key emails in original form as supporting evidence. If the lawyer is requested to review a large case file of irrelevant emails, it will significantly increase the workload for the lawyer and the result in a higher than necessary expenses for the client.