Handling intersecting criminal and civil cases

Intersecting criminal and civil cases are often encountered in judicial practice in China. They refer to situations such as the following: When accepting and trying a civil dispute case or in the enforcement procedure for a civil case, the People’s Court discovers that the civil case additionally involves a suspected crime, where the legal facts of the civil and criminal case intersect and overlap such that, in terms of procedural handling and bearing of liability, the criminal and civil produce mutual effects. The issue of how to fully use the rules for handling intersecting criminal and civil procedures, and understanding the most recent developments to achieve claims that safeguard one’s own lawful rights and interests, is one deserving of in-depth exploration.

Q: What causes the intersection of the criminal and civil?
A: It can be traced to the partial or complete overlap of the legal facts that give rise to the criminal and civil cases. The major elements that go towards making up a legal fact include the author and victim of the act, the way in which the act is carried out, and the outcome of the act. More specifically, the overlap of legal facts means that one entity is both a criminal suspect and civil relationship entity; the property in question is both the target of the crime and the subject matter of the civil relationship; the criminal act is simultaneously a civil tort or contracting act; and the criminal act and civil law act may cause the same property loss or personal injury.

Q: Procedurally, what are the special rules for handling the intersection of the criminal and civil?
A: The principles of “criminal first, then civil”, of “criminal and civil in parallel” and “civil first, then criminal” have long existed in judicial practice in China. These rules were concretely manifested in the Notice on the Prompt Investigation and Handling of Economic Crimes Discovered in the Course of Economic Dispute Cases (repealed on 19 August 1985), the Notice on the Mandatory Prompt Transfer of Economic Crimes Discovered in the Course of the Trial of Economic Dispute Cases (repealed on 11 March 1987), and the Opinions on Several Issues Concerning the Application of the Law in the Handling of Criminal Cases of the Illegal Raising of Funds, the Several Issues Concerning the Trial of Certificate of Deposit Dispute Cases, the Provisions on Several Issues Concerning Suspected Economic Crimes Involved in the Trial of Economic Dispute Cases, the Civil Procedure Law, and the Provisions on Several Issues Concerning the Application of the Law in the Trial of Private Lending Cases of the Supreme People’s Court, etc.

Q: How is the principle of “criminal first, then civil” to be used to safeguard the lawful rights and interests of the concerned party to the civil case?
A: “Criminal first, then civil” means that, when criminal and civil cases intersect, the judicial authority should first try the criminal case, and once such trial is concluded, proceed to the trial of the civil case. This principle can be fully used by the concerned party in at least two ways.

First, to obtain relevant evidence supporting the civil claims through the prior criminal investigation. The evidentiary standard of beyond reasonable doubt applies to criminal procedures, whereas in civil procedures the preponderance of evidence rule and high probability rule apply. Accordingly, the evidence gathering requirements and evidentiary standards for criminal facts in criminal procedures are clearly more stringent than those in civil procedures. In ascertaining the facts of a case, the criminal authorities can bring to bear a number of investigative means to conduct a more accurate ascertainment, thereby providing plentiful evidentiary support for the claims raised by a party in a civil procedure, and assisting him or her in efficiently meeting the burden of proof.

Second, to make up for the property loss incurred in civil rights and interests. Pursuant to the Guiding Opinions of the Supreme People’s Court on the Weighing of Sentences for Common Crimes (issued on 23 December 2013), “where the stolen goods are returned or restitution is paid, the baseline penalty may be reduced by up to 30% in light of the nature of the crime, the extent to which the return of the stolen goods or the payment of restitution can make up for the result of the damage, the amount of the stolen goods returned or restitution paid, and the degree of voluntariness involved … where the economic loss of the victim is proactively compensated for and his or her forgiveness is secured, the baseline penalty may be reduced by up to 40% in light of the nature of the crime, the amount of compensation, compensation capacity, as well as the extent of the admission of guilt and remorse; where the economic loss of the victim is proactively compensated for but the victim’s forgiveness is not secured, the baseline penalty may be reduced by up to 30%.” In other words, the party whose rights and interests were harmed may use the above-mentioned provisions to elect to fully communicate with the criminal suspect, or his or her family, and the judicial authorities, and have the criminal suspect’s criminal penalty reduced by way of the return of the stolen property or payment of restitution and thereby promptly make up the property loss incurred as a result of the criminal act.

Q: What are the most recent developments in the intersection of criminal and civil cases?
A: In recent years, due to frequent revisions of the Criminal Law, the dynamic adjustment of social relationships has sharply increased; private investment, financing and capital markets have rapidly developed. The internet, due to such features as its virtual nature and lack of borders, has enabled the easy establishment of civil law relationships between entities that do not know each other.

Such features of finance as its capital nature and lack of substantiveness have resulted in the occurrence of illegal fund raising, and because the entities involved in such cases are extremely wide ranging and government pressure to maintain stability is quite large, the intensity of judicial intervention has increased, etc.

Such factors have resulted in huge disputes and prominent contradictions in trial practice, procedural handling and the substantive issues relating to intersecting criminal and civil cases, making the balancing of the interests of various parties difficult.

Xia Yibin is a partner, and Wang Yuansheng and Ma Yue are associates at AnJie Law Firm