Thread by @ChinaLawTransl8

This misstatement by Global Times might indicate that China secretly loves the frenzy surrounding its social credit system, but more likely indicates that the poor folks at GT's Twitter don't understand Social Credit any better than western media (thread).

https://twitter.com/globaltimesnews/status/1212619040193048576

China's Highest Court issued a new document on the enforcement of court rulings. This includes rules (article 14-21) on the use of it's Judgment Defaulter List- a list of people who 'have the ability to perform on active judgments but refuse to do so' chinalawtranslate.com/en/civilized-e…

The defaulter list is often confused with the entire 'Social Credit System' but is actually a fairly unique part of it. The list is where the more interesting penalties, including spending limits, come from, but for willful judgment defaulters, not amorphous 'dishonest' conduct.

The new authority tries to address some of the biggest concerns about the defaulter list but probably doesn't go far enough. I'll go through each of the major items:

1. NOTICE- one of the biggest concerns has been that people have been placed on the list unknowingly. The rules make clear that the decision to list someone must be delivered to them, even though it technically becomes effective upon its signing.

2. Grace periods- courts are authorized to give a 1-3 month grace period before list information is made public or spending restrictions take effect.
This gives extended notice and encourages performance on judgments. Satisfying judgments is the goal of the list after all.

3. Exclusions from listing and spending restrictions.
Some of the major concerns about the list have concerned whether its punishments are excessive in individual cases, so the court has added a few clear areas where punishments shouldn't be used:

3a- the court has already taken control of enough assets to cover the debt in the unperformed obligations.

b- the judgment defaulter is a student in a full-time school, with debts arising from discouraged 'campus loans' which are often predatory loans to students.

c. Interestingly, courts are also told that certain high-level managers of listed entities are not to be publicly blacklisted for companies' debts. While they might still have spending restrictions as a result, they are spared the shaming penalty.

As for the spending restrictions, the rules also add that these managers can avoid the penalties in so far as they are using their own assets for personal purposes, but need to offer proof.
This is a nod to recognizing the punished corporate entity's distinct legal existence.

Another such nod, is calling for the de-listing of managers who are no longer in their position with the defaulting company. The courts will still conduct a review, however, to make sure the removal was only in name so as to avoid the consequences.

A more meaningful exception to travel restrictions (planes and better trains) is an emergency exception for illness, funerals, even taking important tests; allowing courts to authorize a suspension of the bans for up to 1 month upon receiving proofs.

4. Remedies. The rules for managing the default list give courts 15 days to review complaints about wrongful listings. The new rules repeat this timeframe and extend it to review of complaints on spending restrictions.

Courts are also expected to affirmatively find errors.

5. Name Clearing. Another concern has been that list information is not taken down when the obligations are satisfied.
The rules give 3 working for removals and further threaten liability not just for taking longer, but also for taking 3 days when it could be quicker.

6. Kids. One of the most controversial spending restrictions has been on 'high' tuition for defaulters' kids' as the kids have done nothing wrong themselves.
The rules recognize this and encourage efforts to protect children's' rights and minimize negative impact.

While not clearly defining when tuition becomes 'high' the courts make clear that not every private school is meant to be included, but only those with tuition exceeding normal standards- which aren't defined here.

Most of the stories about problems with this tuition restriction have ultimately been disproven, the reasons for concern are real.

Hopefully, it can be removed entirely at the next revision of the rules on spending restrictions. chinalawtranslate.com/en/supreme-peo…

7. Proportionality. Finally, the new provisions suggest making a system of punishments that distinguishes more based on specific case types, having a hierarchy or categories of enforcement measures, based on the specific judgment defaulted on.

This is only a suggestion for now, but would help resolve some major concerns with the list's use of a one-size-fits-all approach to enforcing judgments.
Judges already have the discretion to select among spending restrictions, but a more organized system is a positive step.

These changes make positive steps in a few issues of public concern, but are not as clear or detailed as they need to be. Local courts will have to continue to explore the issues within this framework.

Other key issues remain untouched, such as detailed procedures allowing parties to question their ability to perform on a judgment and showing they are not willfully refusing to perform.

There is still a lot of work to be done.

The courts seek to improve enforcement in order to increase their credibility, by demonstrating that their judgments are enforceable and offer effective remedies for disputes. At the same time, procedures and methods must be seen as fair, or all credibility will be undermined.