'Naming and shaming' forces defaulters to honor rulings

Measures to compel guilty parties to comply with verdicts are making their mark. Cao Yin reports. 

Judge Wang Xiangjie could barely contain his excitement last week when a debtor who had defied a repayment order made by Wang's court six months ago finally paid the 400,000 yuan ($60,000) he owed.

However, the defaulter only agreed to pay his debt after being refused tickets for a flight from Kunming, Yunnan province, to Beijing. The travel agency refused to sell the man the tickets because Wang had imposed a nationwide ban that prevented him from purchasing luxury goods such as air travel or high-speed rail services.

"He could afford to pay the debt but he refused to comply with the verdict," said Wang, who has worked for the enforcement department of Dongcheng District People's Court in Beijing for eight years. "My job is to encourage defaulters to obey court orders."

He added that if the ban on luxury goods doesn't prompt a defaulter to comply with the court's verdict, they will be "named and shamed" on a national blacklist online.

Wang praised the blacklist and the ban - both implemented by the Supreme People's Court, the nation's top judicial body - and said the pressure they bring to bear has played a major role in forcing defaulters to comply with verdicts and repay their debts.

The online blacklist was set up in October 2013 to publish the personal details, such as names and ID card numbers, of individuals and legal representatives of companies who ignored court rulings to shame them into complying.

A year later, the top court established a joint platform with banks, financial institutes and government departments, such as the Ministry of Transport and the Ministry of Public Security, to compel defaulters to comply with verdicts by placing restrictions on their daily lives and preventing them from gaining promotion at work.

"Our aim is to push defaulters to abide by the law, help people to avoid the risks posed by dishonest businesses or individuals, and improve the nation's social credit system," said Meng Xiang, head of the enforcement department at the Supreme People's Court.

He added that 2.8 million defaulters have complied with court orders after being placed on the blacklist.

By the end of June, the details of 11.23 million violations of court orders had been posted online, while defaulters had been prevented from taking 12.22 million flights and 4.58 million rail journeys, according to statistics released by the top court.

Li Jinlei, a judge at Chaoyang District People's Court in Beijing, said the list's success should be attributed to the platform that connects judges and judicial officers to banks so they can identify and seize assets owned by defaulters.

Responsibility and challenge

Wang, from the court in Dongcheng, said he feels a great sense of achievement from apprehending people who use every available method to avoid adhering to court rulings.

"It's both a responsibility and a challenge for me," he said. However, he stressed that the courts only blacklist people who are able to pay but refuse to do so, and do not shame those who lose lawsuits but have no redeemable assets that can be used to raise funds.

Last year, he concluded a long-running case in which an investment company had ignored a large debt. In 2009, the court in Dongcheng ordered the company to pay a plaintiff 2 million yuan, but it avoided paying by regularly changing its phone number, relocating its offices and frequently switching bank accounts.

Though court documents showed that the company was based in a room in a hotel in Beijing, it could not be traced.

"No one opened the door when I visited the room," said Wang, who was the third judge to handle the case.

The trail went cold for a while until one day Wang saw a recruitment notice and phone number the company had posted online.

"I was lucky because someone answered the phone," he said. "However, when I asked the woman where they were located, she refused to say."

When he hung up, Wang called 114, the number for directory assistance, and was told the phone number was still registered at the hotel. He immediately headed for the hotel, and after negotiating with members of staff he was taken to a room on a floor that was under repair and supposedly unoccupied.

When he entered the room and explained who he was, the company's employees were shocked, especially the woman who had answered the phone.

"They never thought a judge could find them through such a tiny advert," Wang said, adding that the company quickly paid its debt.

"We never stop tracing those who ignore court rulings and identifying their assets, because it's our duty to uphold justice."

All-out effort

Five years ago, China's authorities decided to redouble their efforts against defaulters because the growing number of complaints about inadequate verdict enforcement was affecting the development of the social credit system, which focuses on four areas: honesty in government affairs; commercial integrity; social integrity; and judicial credibility.

Since then, the Supreme People's Court has put verdict enforcement at the top of its agenda and taken a series of steps to speed up the process.

The top court has also cooperated with a number of government departments to widen the scope of the restrictions.

For example, last month a court in Huian county, Fujian province, informed a defaulter surnamed Lin that his two children could not be educated at an expensive private school because he had consistently ignored a court ruling. The move was in accordance with a regulation issued by the top court.

"We imposed the ban because Lin said he had no money to pay the fine, but we later discovered that he had paid expensive fees for his children's education," said a statement released by the local court, which added that it had suggested the children be transferred to a public school.

The deeper cooperation means defaulters are no longer allowed to become deputies to the National People's Congress, and they are also banned from acting as legal representatives or company executives. Furthermore, they are not allowed to obtain bank loans to set up companies.

"People feel inconvenienced in every field if they aren't credible in one aspect of their lives. That's the aim of these bans," said Meng, from the top court.

Li, from the court in Chaoyang, said the imposition of bans has resulted in the settlement of 10 percent of the court's longest-running cases. He added that the platform for identifying defaulters' assets has also contributed to quicker compliance with verdicts.

Wang echoed that sentiment. "In 2009, I could visit six banks a day by car at most, and sometimes I failed to find any assets. But now, the platform helps me handle dozens of cases every day. It not only helps to identify defaulters' assets, but can also freeze them almost immediately," he said.

Statistics issued by the top court show that the platform has extended its reach from 20 banks in 2014 to 3,800 banks and 16 government departments, including financial regulatory commissions and the Ministry of Public Security. It also enables judges to identify 25 types of asset, such as securities, savings and automobiles.

Criticism

Despite the general success of the system, some criticisms have been leveled.

For example, the restriction preventing defaulters from sending their children to expensive schools has sparked controversy because some people believe it is unfair to the children.

Moreover, some courts have been accused of excessive exposure for providing livestreams or posting footage on popular short-video platforms of judges identifying and seizing assets to explain why a debtor had been placed on the blacklist.

However, Wang said these concerns would not exist if every court were able to clearly distinguish defaulters from those without the immediate means to pay.

"We must only blacklist and ban those people who can afford court-ordered payments but refuse to do so. People who lose lawsuits and have no assets to pay their debts are not our target," he said, adding that judges should be wary of disclosing too many private details when listing defaulters online.

In addition, some legal professionals feel the regulations related to the list and platform must be tightened. Li, the judge at the court in Chaoyang, said the 30 documents released by the top court to regulate the actions of lower-level tribunals lack bite and cohesion.

"What we need most is a more powerful enforcement law that would reduce legal overlaps and prevent confusion," he said.

Song Chaowu, a law professor at China University of Political Science and Law in Beijing, said new legislation should be drawn up as soon as possible so the existing regulations can be clarified and integrated into a single law that would help judges solve problems more easily.

"The basic, fragmented regulations and rules in use at present could lead to confusion or even errors in verdict enforcement," he said.