Dispute Resolution - due diligence, litigation and demand letters
Negotiations going nowhere? Have you been wronged by a party in Asia? Need help getting your money back? (Dispute Resolution - due diligence, litigation and demand letters)
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. This document is designed to explain your options for a dispute resolution.
Process & Options (Dispute Resolution)
Before reading the rest of this page, please review the flow chart carefully. It will save you a lot of time and probably answer a lot of your questions.
Demand Letter Service vs. Negotiated Settlement Service vs. Litigation
Jump right to litigation?
Unless you are sure you have an "open & shut case" and all negotiations with the target company have been exhausted, in the interest of time and budget, it is probably not in your best interest to take the target company to court as you next move. However, if you are set on litigation, AsiaBridge Law stands ready and willing to help you.
For the vast majority of cases, the appropriate next step is to engage the Demand Letter Service or have AsiaBridge Law negotiate a settlement. Which option is best? It depends on a number of factors, including but not limited to: strength of your case (from a legal perspective in China), financial position of the target company, your budget & available time frame.
Do you have a strong case from a legal perspective?
Issuance of a Demand Letter is suitable in situations where the client has solid evidence allowing a sound legal case to be built against a real company/individual in China. Demand letters leverage the threat of legal action. If the subject company is not responsive to the demand letter, the case can be taken to court.
The Demand Letter Service is invoiced as a fixed fee and a commission is not applied to the recovered funds. Visit the rate sheet for more information.
What if you have a weak case?
When the case is weak from a legal perspective (usually due to missing documents like signed contracts) a reasonable settlement is still very realistic when leverage is applied using AsiaBridge Law’s proven tools & techniques. This service is called "Loss Recovery: Negotiated Settlement" and is quite different from the demand letter service as the loss recovery process is more similar to debt collection. Thugs aren't hired to break legs, but aggressive tactics are engaged. All tactics used by AsiaBridge Law are in full compliance with local laws.
The "Loss Recovery: Negotiated Settlement" service fee is billed as a percentage of funds recovered. There is also a small deposit to start the process. Access the rate sheet via our "contact us" page to learn more about "Loss Recovery: Negotiated Settlement".
What if you don't know if your case is weak or strong?
If you are unable to choose which loss recovery option is best for you, we recommend to select the “Demand Letter Service” and during the case review if it turns out that your project would be better served by another option, the remaining fees will be credited to your balance or returned to you if AsiaBridge Law is unable to provide the required service.
Demand Letter Service
The goal of the demand letter is to reopen negotiations, help the client settle out of court and ideally gain a resolution that is acceptable to the client.
While AsiaBridge Law will make every reasonable effort 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.
On average, 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 our local law firm followed by a phone call to the party in question from our local lawyer. The remaining 70% of the cases are either moved to litigation, dropped by the client or the client elects to continue negotiations.
Loss Recovery Process When Issuing Demand Letters
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? Who is the actual owner and official representative?
As the local language is the official language of the legal system, it is essential to know the legal name (in local language) of the subject company and key representatives. A demand letter sent to the English name of a Chinese entity, for example, is likely to be ignored.
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!
But if you sure you already know the information above, you may opt to skip the due diligence phase.
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
The demand letter service is not inclusive of ongoing negotiations if the target company’s response to the demand letter is not fully acceptable to client. Client may consider the General Counsel services if they wish to have ongoing support beyond the demand letter.
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 the 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.
What if the demand letter is not successful in ending the dispute to client's satisfaction?
Demand letters fail for a number of reasons, but the most common three are:
- target company has gone out of business, is broke or doesn't care about its brand/reputation.
- target company gambles the client will give up
- client's demands are excessive
Is the demand letter is not successful in meeting the client goals, as part of the Demand Letter Service, AsiaBridge Law will advise on the remaining options available to the client. This report is provided at no additional cost but the fees associated with taking the next step are not included in the initial demand letter service invoicing.
If the demand letter is not successful, a suitable next step will depend on the case, but the following options are available:
A reasonable settlement is still realistic when leverage is applied using AsiaBridge Law’s proven tools & techniques. This service is called "Loss Recovery: Negotiated Settlement" and is quite different from the demand letter service as the loss recovery process is more similar to debt collection. Thugs aren't hired to break legs, but aggressive tactics are engaged. All tactics used by AsiaBridge Law are in full compliance with local laws.
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.
Local police often require a Chinese-speaking local representative as their interface. AsiaBridge Law can serve as your representative and counsel to encourage the police to take action as police efficiency and interest in a given case can vary dramatically from district to district.
Why not start with litigation, police action or negotiated settlement options in the first place?
The simple answer is that those options require a deeper investment in time and money. Demand Letters are far less costly and can be enacted in a matter of days/weeks rather than months/years. While not always successful, they do provide the "most bang for the buck".
FAQ: Dispute Resolution
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