Foreigners in China: you pay your own lawyer even if you win, but court costs shift. Exceptions: contract, IP, arbitration. Must use Chinese lawyers.
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If you are a foreigner considering filing a lawsuit in China, you have probably asked yourself: "If I win, will the losing party have to pay my legal fees?"
The Short Answer is: in most cases, you pay your own lawyer—even if you win.
Regarding Legal fees, China follows a mixed system. While certain court fees shift to the losing party, attorney fees generally do not.
What the Losing Party Does Pay
The good news is that several litigation costs are recoverable from the losing party. These include:
*Court filing fee
*Application fees(for property preservation or enforcement)
*Witness, expert, and interpreter compensation
*Inspection, verification, and evaluation costs
*Translation costs
These expenses are considered official "litigation fees" under Chinese law. You typically advance them during the case, but if you win, the court will order the losing party to reimburse you.
Why Your Attorney Fees Usually Stay With You?
Chinese law does not classify attorney fees as recoverable litigation costs in ordinary civil cases. Courts view hiring a lawyer as a party's voluntary choice rather than a mandatory expense.
A 2005 article in China Lawyer journal noted that while there are growing calls for "loser pays" attorney fees in China, the system has not adopted this approach broadly. The rationale? Legal services were traditionally viewed as a "luxury" rather than a necessity—though this view is evolving as Chinese law becomes more complex.
The Three Exceptions (When You CAN Recover Attorney Fees)
1. If Your Contract Says So (The Most Important Exception)
Chinese courts respect party autonomy. If your contract includes a clear clause stating that the breaching party must pay legal fees, courts will typically enforce it.
Sample clause language: "In the event of any dispute arising from or in connection with this contract, the breaching party shall bear all reasonable costs and expenses incurred by the non-breaching party in enforcing its rights, including but not limited to attorney fees, translation fees, notarization fees, and court costs."
2. Specific Statutory Cases
Chinese law explicitly allows attorney fee recovery in certain types of cases:
*Intellectual property infringement(copyright, trademark, patent)
*Unfair competition cases
*Certain tort cases(like personal injury, where fees may be treated as damages)
3. Arbitration (A Strategic Alternative)
If your dispute goes to arbitration rather than court, the rules change. Major arbitration institutions in China—such as CIETAC, SHIAC, and SCIA—generally allow tribunals to award reasonable legal fees to the prevailing party, regardless of whether the contract includes a fee-shifting clause.
For international contracts, arbitration may be your best option for recovering legal costs.
What Foreigners Need to Know Before Suing in China
1. You Must Use Chinese Lawyers
Foreign lawyers cannot represent you in Chinese courts. Under China's Civil Procedure Law, foreigners must retain licensed Chinese lawyers for court representation.
2. Budget Realistically
Since attorney fee recovery is uncertain, budget as if you will bear your own legal costs regardless of outcome.
3. Evidence is Critical
Chinese courts require proper documentation for any costs you seek to recover:
- Legal fee invoices
- Translation service receipts
- Notarization and authentication certificates
- Proof of payment
4. Consider the Contract First
The most effective protection is preventive. Before signing any commercial contract with a Chinese party, ensure it includes:
- A clear attorney fee recovery clause
- Consideration of arbitration as the dispute resolution method
This means careful contract drafting and strategic choice of dispute resolution forum are essential tools for managing legal risk in China.
Tips:
1.China's approach to legal costs differs from many Western systems. While court fees and translation expenses shift to the losing party, attorney fees generally do not—unless your contract says otherwise or your case falls within specific exceptions.
2. Consult a Chinese lawyer early. They can assess your chances of recovering costs and help structure your claim accordingly.
This guide provides general information only and does not constitute legal advice. Laws and regulations may change. You should consult with qualified legal professionals regarding your specific situation.
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