Attorney Qiang Lyu: What Types of Cases Do Attorneys Typically Refuse?
When sourcing from Guangzhou, overseas companies should consider not only the contract itself but also the type of local supplier, the surrounding supply chain and the nature of the goods or services involved. Guangzhou is a major commercial and manufacturing center in southern China with diversified export industries. Understanding this background can help a buyer identify potential problems at an earlier stage.
Some foreign clients may find it difficult to find a Chinese attorney to handle their disputes with Chinese companies, sometimes searching for three to six months without success. Based on my experience, there are three main reasons:
What Foreign Buyers Should Know About Guangzhou Suppliers
The Guangzhou market includes businesses involved in automotive, machinery, consumer goods, electronics and export manufacturing. Common commercial problems can include quality disputes, OEM disputes, delivery problems, contract disputes and payment claims. In a dispute, documents such as contracts, purchase orders, technical specifications, inspection records, invoices, payment records and correspondence may become important evidence.
The city’s position within Guangdong and its connection with a large manufacturing, trading, logistics and international-business ecosystem can also provide useful context when evaluating a supplier relationship. Local business characteristics do not determine the outcome of a dispute, but they can help explain the commercial setting in which the transaction took place.
First, the client expects the attorney to guarantee a win or provide a specific percentage chance of success. Such clients would be better off turning to an insurance company, because their real goal is to shift their own business risks onto the attorney. In China, attorneys are not permitted to make absolute promises about case outcomes.
Second, even if the case is won, it may be very difficult to actually recover money. For example, the dispute may involve a relatively small amount but highly complex issues. The attorney might win the first instance, but the other party may appeal, leading to a second trial. Even after winning the second trial, enforcement may reveal that the opposing company has no remaining assets to seize. As a result, the client may end up spending more than they recover, or the legal fees may consume most of the compensation, leaving the client with less than what they paid in legal costs.
Third, the client requests a “risk-based fee arrangement” — i.e., paying little or no upfront fee, with the attorney receiving a percentage of the recovery only if the case is won or enforced. Attorney Qiang Lyu has consistently opposed this model because it easily leads to conflicts. If the case is successful, the client may feel the attorney is taking too large a share, even though a written agreement was made. As the case develops or the relationship between the parties shifts, the client may become dissatisfied, thinking, “Why should the attorney take such a large portion when their effort was not that great?” This mindset is especially common under full risk-based fee arrangements, often causing disputes and making attorneys reluctant to take on such cases.
Before Taking Action Against a Supplier in Guangzhou
For an overseas buyer, the first practical step is usually to identify the correct Chinese contracting party and preserve the evidence showing what was ordered, what was paid and what was delivered. Depending on the contract and dispute, the next step may involve a demand, settlement negotiations, arbitration, litigation or enforcement.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Laws and legal procedures may vary depending on the specific facts and applicable jurisdiction. No lawyer-client relationship is created by reading this article or contacting us through this website. For advice regarding a specific matter, please consult a qualified lawyer after a formal engagement has been established.
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Qiang Lyu
His practice also includes China company law, intellectual property matters, and commercial contract disputes involving foreign-invested businesses and cross-border commercial activities.