With over 800 million internet users in China, e-commerce disputes can easily clog their courts. In response, China’s judiciary created its first Internet Court in 2017, essentially offering a 24-hour service to file and decide internet-based civil disputes remotely. Plaintiffs and defendants can enter evidence online and present and appear before a judge through video conferencing services.
U.S. lawyers said the Internet Courts are innovative, and could provide a model to improve efficiency in U.S. courtrooms. Still, they note that are many barriers to China’s court innovation being completely replicated in the U.S.
The rise of Internet Courts in China was due in large part to it’s overburden judiciary. According to The Verge, under Chinese civil procedure law, suits against companies must be filed in the city where the company generally operates or is headquartered. That lead to 600 e-commerce cases in 2013 filed in Hangzhou jumping to 10,000 by 2016.
In 2017, China opened its first Internet Court in Hangzhou. Beijing and Guangzhou followed in September of this year.
The procedures and cases tried in Internet Courts are similar, according to news reports. The Internet Courts try civil suits over online shopping disputes, product liability issues, internet service provider contracts, small loans and copyright infringement.
According to China’s judiciary, plaintiffs file a lawsuit online and within 15 days, a mediator reaches out to the plaintiff and defendant. The mediator attempts to reach a settlement with all parties through an online video conference or by phone. If mediation fails, the case goes to trial via a web portal. The plaintiff and defendant, without a lawyer, remotely present their case and evidence before a judge via video conferencing
Appeals of an Internet Court’s decision are heard by an Intermediate People’s Court, then a Higher People’s Court and finally the Supreme People’s Court, which is similar to the U.S. Supreme Court.
Covington & Burling special counsel Robert Williams said the Internet Courts can be useful for addressing online copyright infringement and domain name cyber squatting.
“The Internet Courts provide a useful set of tools to help address these disputes that might otherwise be too burdensome, time-consuming, or expensive to litigate,” Williams wrote in an email.
The Hangzhou Internet Court’s decision to allow blockchain-stored evidence also caught the Covington lawyer’s attention as innovative.
“The Hangzhou Internet Court held recently that an evidence-preservation platform that stores time stamped records on a public blockchain meets the legal standard for reliable digital evidence,” he said. “This case empirically demonstrates that the evidence collection techniques allowed in the Internet Court rules can significantly reduce costs and allow certain infringements to be addressed that may otherwise not have been cost-effective to pursue.” The decision to allow blockchain powered-evidence platforms was later upheld by China’s Supreme Court.
Kory Christensen, a San Francisco-based Polsinelli intellectual property attorney who represents companies based in China, Hong Kong and South Korea, noted China’s Internet Courts requires a plaintiff to pay a litigation fee after mediation fails. He explained it’s a simpler expense for enforcing patents, which can become expensive.
While Christensen called China’s Internet Courts a “nice system,” he didn’t think it would be duplicated in the U.S. China’s Internet Courts, unlike most U.S. civil trials, don’t use juries, he explained. However, he said the courts could be a good model for the U.S. because of the reported speediness of trials.
Indeed, the Chinese judiciary reported the average trial period decreased by 25 percent in its Hangzhou Internet Court when compared to a traditional trial setting. Its one-year-old court accepted 14,233 cases and concluded 11,794 by October, according to the judiciary.