A district court has found that contract disputes lied at the heart of 90 percent of the civil lawsuits filed between non-State-owned companies in Huangpu district last year, local media reported on Sunday.
The finding, the results of an analysis by Huangpu District People's Court, illustrates a widespread ignorance or disregard for the law among some local companies. "It reflects that many Chinese entrepreneurs ignore the spirit of the law," said Bo Haibao, a lawyer who also heads the Institute of Political Science and Law at Shanghai Finance University.
The analysis found that lawsuits filed by private companies accounted for 78 percent, or 794 cases, of the district court's total civil caseload in 2011, according to a report in Laodong Daily.
Bo chalked up the problem to owners' lack of experience with the rules of a market economy and a poorly regulated marketplace that had allowed them to disregard the law in the past.
In one case the court report cited, a local trade company in its ignorance sent a salesperson to represent the company in court for a contract dispute with a home appliance company. The salesman's lack of legal expertise made the court's mediation difficult and left the trade company at a disadvantage, causing it to partially lose the lawsuit.
The report suggests that mid-sized and large companies either set up or expand their own legal departments, while smaller firms ought to create positions to collect and analyze potential legal disputes.
However, Bo believes it is more important to step up enforcement of companies who disregard the law. "In fact, many private entrepreneurs already know when they are breaking the law, but the situation is very common," he told the Global Times.
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