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No discovery? Then business owners must maintain evidence

Most court proceedings in the U.S. involve the discovery procedure. Discovery occurs before the trial—or alternative dispute resolution process. It allows parties to obtain evidence that supports their claim by way of conducting interviews or requesting records from the other party. 

However, most courts in China do not include or require a process like discovery in their legal proceedings. Therefore, companies doing business in China must be proactive to prepare themselves if they face legal disputes overseas. 

1. Understand the burden of proof

Usually, the business who files a complaint or a lawsuit has the responsibility to provide clear evidence that the other party violated the law. They must prove their claim is valid, and not simply speculation.

However, the burden of proof in Chinese legal proceedings is not as strict as it is in the U.S. Therefore, it is often up to the business facing the complaint to prove their case against that claim.

2. Keep detailed and organized records

Business owners understand the importance of maintaining business records. However, this is even more important when companies expand their business overseas. It may sound tedious, but business owners should create and continually update their records, including records of:

  • All transactions
  • All financial documents
  • Company policies
  • Contract information
  • Information about products
  • All business licenses

It also might be helpful to have translated copies of these records in Chinese.

Without a discovery process, legal disputes in China often move quickly. Having these records readily available could make all the difference in how effectively businesses handle legal issues.

3. Companies might not be able to obtain evidence from the other party

Remember, without a specific discovery process, U.S. businesses might not be able to recover evidence from the other party in Chinese legal proceedings. It is still possible for businesses to request evidence, but they will likely not receive it. 

This is yet another reason why it is critical for businesses to keep extensive records of their own.

4. Important: Chinese courts prefer documented evidence

Being proactive and keeping clear records could give U.S. businesses a great advantage in the Chinese legal system. Most Chinese courts prioritize documented evidence over any other kind of evidence, including expert testimony.

Maintaining and protecting their records can help businesses stay one step ahead if they face legal disputes in China. 

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