# TREN Jurisdiction Research: China

**Document status:** Research artifact, Stage 0 (`workplans/TREV-WP-0005-enforcement-network-research.md` T06)
**Not legal advice.** Findings drawn from web research (searched 2026-07-29).

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## 1. Contingency fees are permitted but nationally capped on a sliding scale, well below 50%

China's Ministry of Justice, jointly with the National Development and Reform Commission and the State Administration for Market Regulation, issued national rules standardizing and capping contingency ("risk agency") fees by amount in dispute:

| Amount in dispute (CNY) | Maximum contingency percentage |
|---|---:|
| < 1 million | 18% |
| 1–5 million | 15% |
| 5–10 million | 12% |
| 10–50 million | 9% |
| > 50 million | 6% |

This is a **significant reduction from a prior 30% maximum**. Contingency fees are additionally prohibited outright in criminal matters, administrative litigation, state compensation cases, mass/collective litigation, family/inheritance disputes, and cases implicating certain public interests.

**Direct implication for TREN: China is the clearest confirmation yet that a flat global 50% Contingency Share cannot work as a single figure.** Even in the best case (a claim under 1 million CNY), the Chinese statutory ceiling is 18%, dropping steeply as claim value rises — the inverse of what a Licensor might expect (larger, more valuable Enforcement Actions get a *smaller* percentage ceiling, not a larger one). Any EPA template for China must use this sliding scale directly, not attempt to negotiate around it.

## 2. The "risk agency fee" ("no win, no fee") structure is a recognized, separate mechanism

Beyond the percentage-of-recovery contingency fee, Chinese practice also recognizes a distinct "risk agency" fee method where the lawyer is paid nothing (or a reduced fixed amount) if the case is lost, and a fixed amount or percentage (within the same caps above) if won. This is conceptually similar to the German §4a and UK CFA "fee-plus-uplift" patterns found elsewhere in this research program, not a separate legal category requiring new design work.

## 3. Foreign-related contract requirement directly affects EPA design, not just the CUA/License

Chinese law generally requires a contract to be **"foreign-related"** (涉外) for the parties to validly choose a foreign governing law at all — this finding, made primarily for WP-0004's governing-law question, is equally relevant here: an Enforcement Partner Agreement between the Licensor (likely foreign) and Chinese Local Counsel is itself a contract, and its own governing law and fee structure should very likely be drafted under Chinese law and denominated in CNY against the sliding scale above, not assumed to follow whatever governing law the License/CUA use for the underlying Enforcement Action.

## 4. Summary for the WP-0005 feasibility matrix (T10)

| Question | China |
|---|---|
| Direct lawyer contingency fee available? | Yes, but capped on a sliding scale (18% down to 6%), well below 50% at every tier |
| Structured alternative available? | "Risk agency" (no-win-no-fee) fee, same caps apply |
| Litigation funding regulatory status | Not confirmed in this pass — flag as under-researched |
| Recommended TREN structure | Single-role Enforcement Partner at the applicable statutory percentage tier; the EPA itself should likely be governed by Chinese law given the foreign-related contract constraint (§3) |

## 5. Open items for T10 synthesis

- Whether third-party litigation funding (as distinct from the lawyer's own risk-agency fee) is separately regulated in China — not confirmed in this pass.
- Confirm whether an unauthorized-Commercial-Use claim would fall into any of the prohibited case-type categories (mass/collective litigation being the closest concern if many similar violations are pursued together) before assuming the sliding-scale contingency fee applies cleanly.