Expert Legal Reviews Gain
Prominence In China's Courts

By KARBY LEGGETT
Staff Reporter of THE WALL STREET JOURNAL
May 29, 2003

When the prison doors swung shut on Jude Shao in 1999, the U.S. businessman vowed to wage war for his freedom.

Convicted of tax fraud and sentenced to 16 years in prison, the 41-year-old naturalized U.S. citizen launched a search for new evidence to prove his innocence. Working from the confines of his prison cell on the outskirts of Shanghai, Mr. Shao wrote dozens of letters to Chinese judicial authorities, foreign lawyers and journalists. Last year, he even appealed directly to President Bush for help. None of it worked.

Now, four years into his sentence, lawyers for Mr. Shao, who was the subject of an April 2002 Wall Street Journal article, say he might be on the cusp of an important breakthrough -- one that has wide implications for China's judicial system. His case also could have consequences for foreign investors here, who, caught in disputes with their Chinese partners, have started taking their grievances to court.

In an unusual development, a panel of six prominent Chinese legal scholars -- including a former official of China's Supreme People's Court -- recently agreed to review Mr. Shao's case at the request of his American lawyers. After spending a week poring over case documents provided by Mr. Shao, they reached a unanimous conclusion in uncharacteristically direct language: Mr. Shao's conviction was deeply flawed.

"The determination that Jude Shao is guilty [of tax fraud] is absent of sufficient evidence," the scholars said in their report, a copy of which was reviewed by this newspaper. "The Supreme People's Court should retry the case."

It is unclear how the review will influence the Supreme People's Court, where Mr. Shao is petitioning for a retrial. Yet whatever the outcome, lawyers say the mere emergence of these reviews could for the first time add an impartial voice to a judicial system in which facts often take a back seat to the interests of powerful officials.

"This is one of the most interesting developments in the legal system since 1978," when China began rebuilding its legal system following the Cultural Revolution, says Jerome A. Cohen, a New York University law professor who is assisting Mr. Shao with his case.

China's judicial authorities in recent years have quietly begun accepting such expert legal reviews. At the People's University in Beijing, some 30 legal scholars, including several of the country's best-known law professors, have set up a new expert panel and started offering their services in criminal cases to Chinese attorneys. Similar to the system in the U.S., where expert testimony can be submitted as evidence in court, lawyers then pass the panel's conclusions on to Chinese judges and sometimes even the Supreme Court.

It is impossible to know how widespread this system has become. Because there are no regulations regarding the use of such expert panels, official data don't exist. Yet demand is clearly growing rapidly, and across a wide range of legal disputes.

A year and a half ago, a Chinese soccer club tried to sue the Chinese Football Association after it was fined for "violating the spirit of fair play." But when a Beijing court refused to hear the case -- court officials said there was no legal framework to sue the CFA -- the club turned to attorneys at the Duebound Law Offices in Beijing, which hired an expert panel to review the case. The experts determined the CFA could indeed be sued, and the club refiled the suit, which is now pending, lawyers involved in the case say.

China's legal industry has boomed in the two decades since economic changes were introduced. Starting from scratch in the late 1970s, the country now has more than 200,000 judges, 100,000 lawyers, 10,000 law firms and 400 law schools.

Even so, the system remains deeply flawed. Many Chinese judges come from military backgrounds and have little legal training. Government prosecutors often lack basic skills in evidence discovery and collection. Chinese lawyers, meantime, can face imprisonment if they argue that confessions made by their clients were coerced.

Litigation in China, and demand for legal services, is soaring. During the past two years, Chinese stock investors have begun suing publicly traded companies in record numbers. There are even signs some Chinese may sue the government over its handling of the severe acute respiratory syndrome outbreak.

"I'm thinking about this right now, but lawyers tell me the courts might not accept SARS cases against the government," says Meng Chunying, a 27-year-old flight attendant who contracted SARS on a Chinese flight last month. Against this backdrop, some of China's most prominent legal scholars and lawyers are bringing about change.

"Seeking experts' opinions in individual lawsuits was unthinkable in earlier years," says Zhao Bingzhi, vice dean of the law school at People's University and a member of the 30-person legal panel. "But now it's becoming accepted that legal experts can also help" interpret complicated legal issues, he says.

Mr. Shao learned of the growing use of expert panels one day in his prison cell in Shanghai when he came across an article detailing the role one panel had in a recent court decision. He told family members in Shanghai about it. They then contacted lawyers at Duebound, which hired the expert panel at People's University to review the case for a fee of about $10,000.

Mr. Shao's case is vastly complex -- and politically sensitive, in part because Mr. Shao is a U.S. citizen. Members of the People's University's expert panel say they took Mr. Shao's case because of the intricate nature of the alleged crime: fraud in value-added tax receipts, a major problem for the Chinese government.

A graduate of Stanford University's business school in California, Mr. Shao was charged and convicted in 1999 of fraud relating to some $400,000 in taxes that prosecutors said he failed to pay or illegally claimed back from the government. The fraud charges came after Mr. Shao says he refused a request by a Shanghai government auditor to pay a $60,000 "special audit bond."

Mr. Shao says his legal rights were compromised at nearly every turn. Among the problems, Mr. Shao says in a letter he wrote to The Wall Street Journal, he was held incommunicado for months and wasn't allowed to see a lawyer until shortly before his case went to court -- a violation of Chinese law. Mr. Shao's original lawyer confirms the matter.

While Mr. Shao was being held, his family members say they were asked to pay a bribe to unnamed officials, who said they could expedite Mr. Shao's release. Officials at the Shanghai Justice Bureau declined to comment on the case.

Mr. Shao continues to maintain his innocence, and says he has recovered payment records to prove it. Even so, Mr. Cohen, the law professor, says securing a new trial for Mr. Shao will be an uphill battle. Despite signs of change, China wants to "avoid any public recognition that its judicial system has made a mistake," says Mr. Cohen.

Write to Karby Leggett at karby.leggett@awsj.com