Three lawyers with a law firm have been ordered by a Beijing-based court to provide compensation of 8 million yuan (US$967,300) and return attorney fees of 1 million yuan (US$120,000) to a client for breaching their legal duties.

The amount was the biggest compensation award ever against domestic lawyers, the Beijing Evening News reported.

A total of 100 million yuan (US$12 million) was swindled from the lawyers' client, the Hebei Sanhe Yanhua Company, because of the lawyers' neglect of their duties, said sources with the Beijing No. 2 Intermediate People's Court, which passed the judgment

The three lawyers, Wei Di, Ling Hui and Wang Fangmin have disagreed with the judgment and are appealing the ruling to the Beijing High People's Court, sources with the Beijing Municipal Lawyers' Association said.

In 2001, the Yanhua company hired the Beijing Jiahua Law Firm to investigate the Beijing Jinsheng Real Estate Development Company before the two were to cooperate in construction of a residential district in the capital city, according to sources with the court.

The law firm, with Wei, Ling and Wang as partners, concluded later that the real estate project was in fact owned and operated by the Jinsheng Company.

Following the investigation, the Yanhua Company paid 100 million yuan (US$12 million) to the Jinsheng Company to buy the real estate project.

The law firm was paid 1 million yuan (US$120,000) for lawyers fees.

Client

But the lawyers' client, the Yanhua Company found in 2002 that the Jinsheng Company was not the owner of the real estate project at all, and the 100 million yuan (US$12 million) had been swindled.

It was later proved by court that the real estate project had been transferred to other companies before the Jinsheng Company sold it to the Yanhua Company.

Liu Guoli, with the Jinsheng Company, has been investigated by the Beijing Municipal Bureau of Public Security for the alleged crime of contract fraud.

The Yanhua Company has returned over 21 million yuan (US$2.5 million) to local police but the rest of investment is still unaccounted for.

The court believes that the lawyers are at fault in the case.

"The law firm failed to fulfill its duties to examine the condition of the land used by the real estate project and the quality of the Jinsheng Company," the judgment said.  

(China Daily December 23, 2004)