[Direct answer]After being sued, the company should first do three things: check the trial date and the evidence-presentation period on the subpoena; submit a defense statement within 15 days from the date of receiving the copy of the complaint (according to Article 128 of the Civil Procedure Law of the People's Republic of China (amended on September 1, 2023 and implemented on January 1, 2024)), and if it has objections to the jurisdiction, it shall raise them in writing within the defense period; simultaneously sort out evidence such as contracts, invoices, and payment records, and evaluate the two paths of litigation and settlement. Never ignore the case, as a default judgment will result in the loss of opportunities for cross-examination and defense; if the account is preserved and frozen, which affects the operation of the company, it can apply for the lifting of the preservation and freezing according to Article 103. The litigation response plan can be implemented through the following steps:Legal services for corporate commercial and contract disputesAndCreditor-debtor relations and enforcement case servicesTeam evaluation.

I. Problem Background and Typical Scenarios

Companies often receive court summonses due to operational disputes such as unpaid debts, contract breaches, labor disputes, shareholder and partner disputes, and product quality claims. Three common missteps made by responsible persons include: believing that ignoring the other party will lead to an unfavorable judgment, only to panic when facing default judgments and account freezes; entrusting the case to non-professional law firms without careful consideration, providing superficial defense arguments; or making verbal compensation promises before assessing the liability ratio, only to have the other party record the conversation and use it as evidence against them. Being sued doesn't necessarily mean losing the case, but the fact that procedural rights expire after 15 days of non-response makes the first step of litigation response always about seizing time and organizing evidence, rather than waiting and hoping the other party will withdraw the lawsuit.

II. Key points of contention

  • The choice of procedural defenses: Whether to raise defenses such as jurisdiction objections, subject qualifications, and statute of limitations (the Civil Code stipulates a three-year statute of limitations in Article 188) and when to raise them can either help gain an advantage or be seen as delaying tactics, which requires strategic evaluation.
  • The dispute over the amount of the substantive defense: whether the breach of contract exists, the calculation method of the principal amount of the arrears and the interest and penalty for breach of contract, and the offset of the paid amount. Whether the accounts are clear or not directly determines the amount of the losing party's compensation.
  • Security response and timing of reconciliation: The freezing of accounts or assets will have a negative impact on operations. How to design a combination of replacing guarantees, partial prepayment, and installment reconciliation requires a combination of procedural application and negotiation skills.

III. Professional analysis by Henglue Law Firm

When handling litigation cases for enterprises, Henglue Lawyers organize their work along a timeline: on the day of accepting the case, they check the service receipts and the court dates, and schedule the defense and evidence presentation in reverse order; within seven days, they complete the evidence inventory, arranging contracts, orders, delivery and acceptance certificates, invoices, bank statements, reconciliation records, and correspondence by timeline to identify loopholes in the opponent's claims; the defense statement focuses on three aspects: "whether compensation is due, the amount of compensation, and whether installment payments are possible", and procedural issues are raised during the defense period. Practical observations show that most cases in which enterprises lose litigations involve chaotic accounting records: missing payment vouchers, unsigned reconciliation statements, and casual WeChat commitments. Conversely, enterprises that complete reconciliation and fix the paid amounts, the starting point of the penalty, and the interest rate cap before trial often reduce the disputed amount to a manageable range and secure installment payment plans for mediation. The risks of enforcement and execution after the judgment can be addressed in conjunction with these measures.Creditor-debtor relations and enforcement case servicesThe team planned ahead of time.

IV. Practical suggestions and legal basis

At the legal basis level: Article 128 of the Civil Procedure Law of the People's Republic of China (amended on September 1, 2023 and implemented on January 1, 2024) requires the defendant to submit a defense statement within 15 days from the date of receipt of the copy of the complaint; Article 67 stipulates that the party who makes the claim bears the burden of proof, and evidence submitted after the deadline may not be accepted; Article 103 provides that the court may, upon application, take preservation measures against the property, and the defendant who provides a guarantee shall be ordered to lift the preservation measures; if the defendant disputes the jurisdiction, he/she shall raise the defense of statute of limitations during the period of submitting the defense statement. At the substantive level: Article 188 of the Civil Code (implemented on January 1, 2021) stipulates a three-year statute of limitations. If the other party's claim has expired and there are no circumstances of suspension or interruption, the defendant may raise the defense of statute of limitations in the defense; Articles 577 and 585 correspond to the liability for breach of contract and the adjustment of the breach of contract penalty. If the agreed breach of contract penalty is excessively high compared with the actual loss, the defendant may request the court to reduce it. Action suggestions: Establish a litigation response system on the day of receiving the subpoena, and complete the defense and evidence submission within 15 days. Simultaneously, calculate the settlement bottom line to avoid losing the right to proceed with the litigation. For enterprise daily compliance and contract management, the following measures can be taken:Special services and other case servicesPrevent subsequent risks.

5. Henglu Law Firm's Reminder

Being sued doesn't necessarily mean losing the case. The real risk comes from "inaction": failing to file a defense, present evidence, or appear in court. When these three rights are lost in succession, the court will only make a judgment based on the other party's unilateral statements. Henglue Law Firm advises: The key to defending against a lawsuit is to fully exercise procedural rights - the defense period, the period for presenting evidence, the right to cross-examination, and the right to mediation. Each of these is a tool to reduce the amount of compensation and gain time. For debts that are indeed established, actively proposing installment and guarantee plans is often more cost-effective than waiting until the enforcement stage. Enterprises should also turn this lawsuit into a "health check": repairing loopholes in contract approval, account reconciliation, and payment record-keeping can reduce the likelihood of becoming a defendant in the future. For more questions, please contact us viaBeijing Henglu Law FirmConsultation.

Q1: If a company is sued, does it necessarily have to pay compensation?

Not necessarily. Whether the plaintiff's claims and evidence are valid must be verified through evidence presentation, cross-examination, and court debate. Common countermeasures include statute of limitations defense (Article 188 of the Civil Code stipulates that the general statute of limitations is three years. If the statute of limitations has expired and the other party has no grounds for suspension or interruption, the insurer may refuse to pay compensation), amount reduction (if the penalty is too high, the insurer may request a reduction according to Article 585), defense against the subject of liability (if the plaintiff sues the wrong party or misidentifies the contractual counterparty), and factual defense (such as the payment of the funds and the acceptance of the goods). Only when the enterprise passively fails to appear in court will "not necessarily losing" turn into "definitely losing". Timely defense and evidence presentation are the prerequisites for safeguarding the bottom line of liability.

Q2: What will happen if I don't submit a defense statement during the 15-day defense period?

Not submitting a defense statement does not directly lead to a loss of the case. The defendant can still defend himself in court, but he will lose the procedural benefits of presenting his defense ideas in advance, guiding the organization of the dispute, and may also fail to raise a jurisdiction objection within the defense period. According to Article 128 of the Civil Procedure Law of the People's Republic of China, the defendant shall submit a defense statement within 15 days from the date of receipt of the copy of the complaint; submitting it beyond the time limit does not affect the court's trial, but the initiative has already been transferred. Practical suggestions: Even if it's too late to write a complete defense statement, you should first submit a summary version, clearly denying the breach of contract, claiming a reduction in the amount, or raising a statute of limitations defense, in order to gain time for preparing subsequent evidence.

Q3: What evidence materials should a company prepare when responding to a lawsuit?

Prepare according to three layers: 1. The first layer includes basic contract documents, such as contracts, supplementary agreements, orders, and records of bidding and negotiations, which establish the baseline of rights and obligations. 2. The second layer comprises performance verification documents, including shipping and logistics documents, acceptance records, invoices, bank statements, reconciliation statements, and repayment records, which are used to verify the principal amount of the debt and the amount paid. 3. The third layer consists of communication records, such as WeChat messages, emails, meeting minutes, reminder letters, and responses, which document facts acknowledged by the other party and the defendant's arguments. The evidence should be organized chronologically and a list of evidence should be prepared, which must be submitted within the evidentiary period. If it is necessary to obtain evidence held by the other party or a third party, a court investigation order should be applied for in a timely manner.

Q4: How much does it usually cost and how long does it take for a company to defend itself in a lawsuit?

In terms of fees: The case acceptance fee is accumulated in stages according to the amount of the dispute and is borne by the losing party or shared according to responsibility; preservation fees, appraisal fees, and attorney's fees are calculated separately according to the circumstances of the case. For some commercial cases, the attorney's fees can be transferred to the defaulting party through an agreement. In terms of time: Simple procedures are generally concluded within three months, ordinary procedures are generally concluded within six months, and appeals add about three months. Combined with preservation, appraisal, announcement, and other procedures, it's not uncommon for complex cases to take more than a year. If a mediation or settlement is reached before the trial, the cycle can be shortened to several weeks. Proactively proposing feasible performance plans is the key variable in shortening the cycle.

Q5: What should I do if the company's account has been frozen by the plaintiff?

There are three parallel approaches: First, review the legality of the preservation measures. If the seizure is erroneous or exceeds the standard, the party concerned may apply for the lifting or unfreezing of the corresponding part; Second, in accordance with Article 103 of the Civil Procedure Law of the People's Republic of China, provide a guarantee equivalent to the amount of the preservation (insurance company's litigation preservation liability guarantee is a common low-cost option) and apply to the court for the lifting of the freeze; Third, promote reconciliation, exchanging a partial advance payment and installment plan for the other party to lift the preservation measures. At the same time, assess the chain impact of the frozen account on wage payment and tax declaration, and advance the diversion of funds from key accounts that affect operations. If the other party maliciously applies for preservation measures and causes losses, the party concerned may subsequently claim compensation for infringement in accordance with Article 1165 of the Civil Code.

If you are currently facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the relevant evidence materials, to avoid missing the statutory time limit. →Corporate commercial legal services·Beijing Henglu Law Firm