Exploring Legal Issues Related to Fabrication of Evidence in Civil Litigation

Introduction

Since Amendment (IX) of the Criminal Law of the People's Republic of China (“Amendment (IX)”) introduced the crime of a “false lawsuit” in 2015, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security and the Ministry of Justice have been cracking down severely on false lawsuits, penalising a large number of litigants, lawyers, witnesses and other participants who have infringed the rights of others through false lawsuits.

However, false lawsuits and malicious litigation continue to occur frequently, with cases involving significant amounts and becoming increasingly diverse, even permeating into the daily lives of ordinary people. A common occurrence is debtors using false lawsuits to evade paying debts; the Supreme People's Court released a series of typical criminal cases involving false litigation to evade debts at the end of 2023, highlighting the typical methods of evading debts through false litigation in practice.

Due to the professional expertise of legal services, lawyers possess a thorough understanding of legal provisions and civil litigation procedures. However, some lawyers have intentionally engaged in and facilitated false lawsuits by leveraging their legal expertise. In a typical case published by the Jiangsu High Court in 2022, lawyer Zhang colluded with the parties to fabricate a mortgage agreement, which led to an objection to enforcement and a flawed court judgment, resulting in the suspension of the frozen property. Ultimately, this lawyer was sentenced to one year and nine months in prison and fined CNY100,000.

In response to lawyers engaging in evidence forgery and false litigation, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security and the Ministry of Justice jointly issued the “Opinions on Further Strengthening the Punishment of False Litigation Crimes” (hereinafter referred to as the “Opinions on False Litigation”), emphasising the need to hold lawyers strictly accountable for false litigation crimes in accordance with the law.

In significant and complex family disputes, it has become common for one party to avoid the division of marital property by fabricating evidence. Common forms include:

• forging unilateral gift contracts or wills to classify property received as gifts or inherited from parents as personal property;
• falsifying company financial statements to devalue company equity; and
• forging loan contracts to fabricate debts or to legitimise the transfer of funds to others.

Legal analysis of the crime of false lawsuit committed by fabricating evidence and making false statements

Article 307(1) of the Criminal Law stipulates:

“Whoever brings a civil action by fabricated facts, disturbs judicial order or seriously infringes upon other persons' legitimate rights and interests, shall be sentenced to fixed-term imprisonment of not more than 3 years, criminal detention or public surveillance and shall also or only be fined; if the circumstances are serious, he shall be sentenced to fixed-term imprisonment from 3 to 7 years and shall be fined.

“Where an entity commits the offence in the preceding paragraph, it shall be fined, and the person directly in charge and the other directly liable persons shall be penalised according to the preceding paragraph.

“Whoever has an act in the first paragraph and illegally possesses others' property or evades lawful debts, and commits other offences in the meantime shall be convicted and imposed a heavier penalty according to the provisions on the heavier penalty.

“Judicial officers who use their authority to commit the offences in the preceding three paragraphs jointly with others shall be imposed a heavier penalty within the range of relevant penalties; if other offences are also constituted, they shall be convicted and given a severer punishment according to the provisions on the heavier penalty.”

Before false lawsuits were criminalised, PRC courts typically dealt with false lawsuit behaviour by dismissing the claim and other means. Some cases of serious false lawsuit behaviour were subject to civil sanctions in accordance with Article 114 of the Civil Procedure Law, while others were handled as crimes. The lack of provisions in the Criminal Law reduced the cost of false litigation, leading to an escalating trend of false litigation in some areas.

Amendment (IX) came into effect in 2015 and introduced the crime of a “false lawsuit”, consisting of four provisions.

• The first provision specifies the elements of the offence and the sentencing standards for false litigation crimes – ie, initiating civil litigation with fabricated facts that disrupt the judicial order or seriously infringe on others' legitimate rights can result in imprisonment of up to seven years and a fine.
• The second provision stipulates that a dual punishment system is to be implemented for corporate offenders, punishing the unit as well as its directly responsible executives and other directly liable persons according to the provisions of the false litigation crime.
• The third provision states that a heavier punishment will be imposed if a false lawsuit is conducted for the purpose of illegally possessing others' property or evading legitimate debts and if it constitutes other crimes, based on the stricter provisions, without cumulative punishment.
• The fourth provision specifies that judicial personnel who collaborate with others to commit false litigation using their authority will face severe punishment. If such behaviour also constitutes other crimes, a stricter punishment will be imposed based on the more severe provisions.

Subject matter

If the provision of Article 307(1) of the Criminal Law is interpreted literally, it will be found that only the party “filing a civil lawsuit” – namely the claimant in the original action or counterclaim – can constitute the crime. However, in judicial practice, if the claimant colludes maliciously with the defendant, agent or third party, attempting to harm the legitimate interests of others through false litigation, the defendant or third party acting as an accomplice to the claimant can also be guilty of this crime.

In addition, under this provision, a “civil lawsuit” includes:

• counterclaims filed by defendants;
• third-party actions for annulment and objections to enforcement, public notice procedures, special procedures and summary procedures;

• requests by the claimant to increase claims;
• litigation requests related to the case made by third parties with independent claim rights; and
• judicial supervision procedures (only including actions initiated by third parties during the enforcement process, which, as they do not usually involve new claims, makes it difficult to establish the crime of false lawsuit), corporate bankruptcy procedures and enforcement procedures.

Parties

Faced with debt pressure or for other motives, some parties may resort to false lawsuits to create fictitious creditor-debtor relationships in order to avoid debt obligations, which not only harms the legitimate rights of creditors but also disrupts the normal economic order. Furthermore, in matrimonial and succession cases, some parties may launch false lawsuits in an effort to obtain more property.

For example, in a case in Beijing, Cao filed a lawsuit at the Fengtai Court against his son Y, seeking to have all the properties in the name of his deceased wife Qi transferred to himself, citing a dispute over statutory inheritance. Cao submitted fabricated materials on the “time of Qi's death and the situation of the children” to the police station. On the day of the trial, Cao and a young man holding Y’s ID, claiming him to be Y, appeared at the Fengtai Court for the hearing. Cao reached a settlement agreement with the young man, leading the court to make a civil order. The court considered that Cao had initiated civil litigation with fabricated facts, disrupted the judicial order and infringed on the legitimate rights of others, thereby constituting the crime of false lawsuit, and sentenced him to nine months in prison and a fine of CNY5,000.

In the case of Li and Wang's false lawsuit, Wang and his ex-wife Xuan reached an agreement on divorce in March 2015. In 2017, Xuan sued Wang at the Dunhua Court for the division of post-divorce property. Wang, along with his lawyer Li, conspired to avoid dividing a Land Rover with Xuan by falsely creating joint marital debts and informed a third party, Zhang, of this plot. They jointly forged a vehicle mortgage agreement and promissory note, allowing Zhang to sue Wang and Xuan at the Dunhua Court, claiming CNY800,000 for the fictitious joint marital debt involving the vehicle. Zhang later applied to withdraw the lawsuit, which was granted by the Dunhua Court on the same day. The Dunhua Court found that Li and Wang had committed the crime of false litigation as accomplices and sentenced them to two months of detention and one year of probation, respectively.

Lawyers

According to Article 6 of the “Interpretation on False Litigation”, if litigation agents, witnesses, appraisers and other participants in litigation conspire with others to initiate false civil litigation, provide false testimony intentionally or issue false appraisal opinions, jointly engaging in the behaviours specified in the first three clauses of Article 307(1) of the Criminal Law (ie, behaviours constituting false lawsuit crimes), they shall be convicted and punished according to the provisions on joint crimes.

Therefore, lawyers who provide false evidence or make false statements in civil litigation may also be found to have committed the crime of false litigation as joint offenders. For example, in a typical case published by the Supreme People's Court, Du, who was acting as a lawyer in civil litigation, forged evidence and made false statements four times between 2017 and 2019 to fabricate civil legal relationships and disputes, leading to the court issuing and enforcing four civil mediation documents based on fabricated facts. Du was ultimately sentenced to one year and three months in prison for the crime of false lawsuit and fined CNY30,000.

In another case handled by the Hongkou Court in Shanghai, Yuan (a legal worker at a law firm) collaborated with one party to forge agreements and fabricate facts to initiate false litigation against a company, ultimately obtaining over CNY3 million through the enforcement. Yuan was sentenced to two years in prison for the crime of false litigation and fined CNY20,000.

Apart from criminal offences, lawyers involved in false litigation are also likely to face administrative penalties. Article 25 of the “Opinions on False Litigation” emphasises that lawyers, legal service workers, notaries and others involved in fabricating or participating in false litigation may be issued judicial suggestions to relevant administrative authorities or industry associations to urge timely administrative penalties or industry disciplinary actions. Article 59 of the Administrative Litigation Law stipulates: “If a litigation participant or other person engages in any of the following behaviours, the people's court may, depending on the severity of the circumstances, give a warning, order them to repent and correct their ways, impose a fine of not more than 10,000 yuan, or detain them for not more than 15 days; if the act constitutes a crime, criminal responsibility shall be pursued according to law: ... (2) forging, concealing, destroying evidence or providing false evidence, obstructing the people's court in hearing cases ...”

Therefore, lawyers suspected of forging evidence or making false statements will face administrative penalties. For instance, a lawyer who made false statements in representing a labour case and later encouraged the parties to delete WeChat messages to destroy evidence was fined by the Zhongshan Second People's Court, and a judicial recommendation letter was sent to the Foshan Judicial Bureau. Similarly, in a case where Shaanxi lawyer Fu learned that multiple signatures on several documents were forged and shareholders did not actually contribute capital, which constituted false litigation, Fu advised the parties to make false statements in court to conceal the truth. Fu was sentenced to two years and six months in prison for the crime of false lawsuit by the Chang' an Court, a decision upheld by the Xi'an Intermediate Court on appeal. After the criminal judgment was made, the Shaanxi Department of Justice imposed an administrative penalty on Fu by revoking his lawyer's practice certificate.

Crime of false lawsuit – mens rea

The subjective aspect of this crime manifests as direct intent, meaning that the perpetrator, knowing full well that they are fabricating facts and preparing to initiate civil litigation based on this fabrication, actively pursues the occurrence of this result despite the potential disruption of the normal judicial order or severe infringement of the legitimate rights of others. In this context, negligence is not sufficient.

In civil cases, the claimant in the original action or counterclaim actively seeks court support for their litigation claims by fabricating facts, forging evidence or making false statements. The direct intent behind their false lawsuit behaviour is often self-evident. Whether the actions of the defendant, other litigation participants or even bystanders constitute a crime depends directly on whether such parties colluded with the claimant. If they are merely passively involved or caught up in the claimant's fabricated litigation without subjective intentional behaviour, they should not be considered accomplices to this crime.

Crime of false lawsuit – actus rea

When discussing the objective aspect of the behaviour of “filing civil litigation based on fabricated facts”, the most crucial point is to delve into the term “fabrication”. Article 1 of the “Interpretation on False Litigation” enumerates the following seven situations of “fabricating facts”:

• collusion between one spouse and the third party, fabricating the joint marital debts;
• collusion with others and the fabrication of creditor-debtor relationships and agreements involving debt settlement through the exchange of goods;
• collusion with the legal representatives, directors, supervisors, managers or other executives of a company or enterprise, and the fabrication of the company's or enterprise's debts or guarantee obligations;
• fabrication of intellectual property infringement or unfair competition relationships;
• falsely declaring debts during bankruptcy proceedings;
• collusion with the debtor and the fabrication of creditor rights or priorities over seized, impounded or frozen assets; and
• unilateral fabrication or collusion with others in fabricating identities, contracts, infringements, inheritances and other civil legal relationships.

Initiating civil litigation in the People's Court while concealing the fact that the debt has been fully paid off, and demanding others to fulfil the debt, falls under the category of “filing civil litigation based on fabricated facts”.

Applying for the enforcement of arbitration awards based on fabricated facts, objecting to the enforcement or applying to participate in the distribution of executed property based on fabricated facts also fall within the scope of the crime of “filing civil litigation based on fabricated facts”, as stipulated in Article 307(1) of the Criminal Law.

Whether the crime of false lawsuit is limited to instances of “creating something out of nothing” or also includes situations of “a mixture of truth and falsehood” has indeed sparked widespread controversy in the theoretical discussion and judicial practice of false litigation crimes.

According to the “Interpretation on False Lawsuit”, the crime is limited to acts of creating something out of nothing, fabricating civil legal relationships and disputes. Cases of “a mixture of truth and falsehood” do not constitute a crime, particularly “partial alteration type” false litigation behaviour where the objective existence of civil legal relationships and disputes is acknowledged, and the individual only exaggerates or conceals specific facts regarding the litigation subject amount or the method of performance.

Some scholars argue that the social harm brought about by “partial alteration type” false lawsuits may be even greater but this view is not currently accepted by the judicial practice, and “partial alteration type” false lawsuits would normally not be prosecuted. For instance, in a case in Zhejiang province, the judgment debtor Jin intended to avoid the enforcement of his assets so partially altered the loan agreement jointly with other debtors and sued under the name of another person (the altered “lender”); ultimately, the court did not find sufficient evidence of fabricating creditor-debtor relationships, so did not convict Jin of false litigation but sentenced him for the crime of “refusing to comply with judgments or orders”.

The “Interpretation on False Litigation” reflects the law's stern stance against false lawsuits while ensuring the accurate application of this charge in judicial practice. It is important to note that, although legislation and scholarly interpretations define the scope of the crime of false litigation, in specific judicial practice comprehensive assessments based on the circumstances of each case are necessary. For cases involving a mixture of truth and falsehood in false lawsuits, judicial authorities should conduct careful analysis to ensure that criminal behaviour is appropriately addressed without expanding the scope of the charge.

Conclusion

This article delves into fabricating evidence, concocting facts and making false statements in civil litigation, exploring their classification as false lawsuit crimes in China. The crime of false lawsuit under Amendment (IX) marks a significant advancement, providing clarity and tools to combat such behaviours. It reinforces accountability and upholds ethics, ensuring judicial fairness. Fabricated evidence challenges judicial equity, affecting case outcomes. While Article 305 of the Criminal Law defines the crime of perjury, its confinement to criminal proceedings has left acts of perjury in civil and administrative litigation unaddressed, fostering a perception of impunity that undermines social justice and equality. It would be suggestive to draw insights from the legal provisions and practices of common law jurisdictions on contempt of court.

Recognising that challenges are there, lawyers acting for the parties should enhance their insight into the authenticity of evidence and ensure that the evidence they submit can withstand strict legal scrutiny. Lawyers should develop keen discernment skills and master various evidence rules to adeptly handle complex evidence challenges during legal proceedings, protecting the legitimate interests of their clients.

Meticulously comparing multiple pieces of evidence can uncover discrepancies and falsifications, aiding in the pursuit of justice and truth in legal disputes.