Review and Analysis of the Path of Collective Compensation Scheme for Victims

2025-11-25

Abstract:

In this article, we analyse and compare the feasibility and respective advantages and disadvantages of two potential paths for achieving collective compensation in the Lantian Gerui case: one dominated by UK judicial proceedings and the other dominated by administrative mechanisms (including government negotiations and mutual legal assistance). We consider that although a UK judicially-led path offers procedural transparency and formal fairness, it also entails significant risks, including limited access to evidence, duplicative verification of Chinese victims’ identities and losses, procedural inefficiency, and the potential preclusive effect of judicial res judicata. By contrast, an administrative path may enhance the Chinese side’s ability to shape the process and outcome, leverage existing Chinese judicial findings to improve efficiency, and reduce the costs and burdens associated with cross-border claims; however, such a path is likewise subject to uncertainties arising from bilateral relations and other international political factors. We take the view that the Chinese side should not passively follow the path predetermined by the UK, but should, within the limited time window available, proactively assess the overall implications of each option and explore whether alternative paths may better serve the collective interests of the Chinese victims.

Preface

Following "A Cool-headed Reflection on the 'Rights Protection Fever' in the Lantian Gerui Case (Part One)," this article continues to explore other rights protection paths for victims in the Lantian Gerui case.

According to relevant media reports, recently, the UK prosecutors have proposed establishing a collective compensation scheme for Chinese victims in this case, but the details of the scheme have not yet been finalized and still require review and approval by the UK court.

Some reports even further speculate that the UK High Court will appoint a civil recovery trustee nominated by the Crown Prosecution Service to take over the assets, manage, and execute the aforementioned compensation scheme.

Additionally, according to relevant reports, the UK prosecutors and the representing lawyers of some victims have even begun discussions on details such as the compensation standards in the relevant compensation scheme.

From the content of the current relevant reports and discussions, they are more focused on some specific technical details of the relevant compensation scheme, yet lack exploration and thinking about other rights protection paths.

Here, we have no intention of blindly opposing the aforementioned proposal by the UK prosecutors; what we hope to remind is that before all parties are busy paying attention to and discussing the details of the aforementioned collective compensation scheme, it seems advisable to first conduct a holistic review to avoid prematurely falling into trivial discussions on relevant detail issues, while neglecting the grasp of the general direction of the rights protection paths, and ultimately falling into the situation of "seeing only the trees but not the forest."

Based on our current research results, we judge that whether (and how) the Bitcoin assets involved in this case are compensated to Chinese victims after being recovered or forfeited (according to UK domestic legal procedures) belongs to the subsequent distribution issue of the aforementioned assets.

Regarding such "compensation fund distribution" issues, although relevant UK laws reserve institutional space for the path "dominated by judicial procedures," "judicial procedure dominance" is not the only solution path for such issues.

Assuming our aforementioned judgment is accurate, then it is completely necessary at present to analyze and compare different rights protection paths, and select the most suitable path to strive for maximizing the legitimate interests of Chinese victims.

ONE、Analysis of the Path "Dominated by UK Judicial Procedures to Achieve Collective Compensation"

（One）Institutional Space for "Dominated by UK Judicial Procedures to Achieve Collective Compensation"

According to Section 266 of the UK's Proceeds of Crime Act 2002 (hereinafter referred to as "POCA"), when making a civil recovery order, the UK court can not only rule to recover the property and transfer it to be held by the civil recovery trustee, but also attach conditions to the way the civil recovery trustee handles the aforementioned property, thereby constraining the subsequent distribution and operations.

We understand that it is precisely the content of the aforementioned legal provisions that reserves institutional space for "the UK prosecutors proposing to establish a collective compensation scheme, seeking court approval, and then having the civil recovery trustee implement the court-approved compensation scheme" in this case.

（Two）Analysis of the Rights Protection Path "Dominated by UK Judicial Procedures to Achieve Collective Compensation"

1.Motivations for the UK Side to Take Relevant Measures

The aforementioned collective compensation scheme proposed by the UK side, in form, indeed demonstrates an attitude of willingness to broadly compensate Chinese victims, and in this regard alone, it is a positive signal.

At the same time, we understand that the aforementioned actions by the UK side may also have potential motivations including hoping to leverage relevant judicial procedures to enhance the transparency and formal fairness of the cross-border return work of the assets involved in the case (including the relevant collective compensation scheme), in order to address potential questions and challenges.

2.Difficulties and Challenges That the UK Side May Face

(1) Difficulties That May Be Faced in Grasping Evidence and Information

The number of victims involved in this case reaches over 100,000, and the situations of the relevant victims may not be identical; if it is necessary to formulate a collective compensation scheme with broad applicability for the victim group, the collection and grasp of evidence and information involved in the case is a necessary prerequisite.

If the relevant collective compensation scheme is blindly formulated without fully grasping the relevant information and evidence, it may lead to the scheme being detached from reality, losing feasibility, and ultimately causing doubts about its fairness.

Since the UK is not the place where the fraud in this case occurred and does not possess first-hand case materials and information, in this regard, although the UK side can obtain partial evidence and information through ways such as some victims (or their legal representatives) providing evidence and information, and judicial cooperation between governments, the evidence and information obtained through the aforementioned channels may be overall limited, and in this aspect, the UK side may need to face considerable difficulties.

(2) The Inherent Difficulty in Designing the Relevant Compensation Scheme

The aforementioned collective compensation scheme usually involves complex processes such as victim rights declaration, qualification review, loss calculation, objection handling, fee and cost deduction, tax handling, cross-border fund remittance, etc., and also needs to coordinate possible rights conflicts and procedural conflicts (for example: rights claims proposed by some victims under POCA s.281), avoid duplicate compensation, ensure procedural transparency, facilitate victim participation, and other issues.

How to design a collective compensation scheme that meets the aforementioned needs and has operability within a limited time is itself an extremely challenging task.

(3) Challenges and Questions Regarding Repetitive Work, Judgment Conflicts, Procedural Efficiency, etc.

From the content of relevant media reports, under the aforementioned collective compensation plan, it is not excluded that the UK side may need to review and determine the victim identities and losses one by one.

And this case has already undergone long-term and extensive investigations by the Chinese side, and even basically completed the domestic judicial procedures in China, with the identities and losses of most victims basically having been determined; in this situation, if it is necessary to review and determine the victim identities and losses one by one again under the aforementioned collective compensation plan, not only is there obvious repetitive work and resource waste, but it may also produce potential conflicts with Chinese judicial judgment results.

Additionally, due to the enormous number of victims reaching over 100,000, if the method of reviewing and determining one by one is adopted, the enormous workload brought about by this is also very likely to cause delays and prolongations in the relevant compensation efficiency and work cycle.

3.Difficulties and Challenges That the Chinese Side May Face

(1) Inconveniences and Difficulties That May Be Caused to Victims

Participating in the aforementioned collective compensation scheme dominated by the UK side, facing complex processes such as rights declaration, qualification review, loss calculation, objection handling, tax handling, etc., under the cross-border compensation procedures, Chinese victims not only need to overcome language barriers, but may also need to incur relevant expenses for this (for example: notarization and certification fees for evidence and other materials, fees for hiring lawyers and other intermediary institutions), and may need to bear additional communication costs and even risks of unfavorable processing results brought about by differences in laws of different countries (including evidence review and determination standards).

If the aforementioned issues are too prominent, it may even cause some victims to be deterred by this.

(2) Lack of Control over Relevant Procedures and the Risk of Res Judicata

Whether for individual Chinese victims or even the Chinese government, they are not very familiar with the relevant UK domestic judicial procedures and UK relevant legal rules.

In this situation, attempting to leverage the game in UK judicial procedures to strive for results favorable to one's own side in processes such as the design and execution of the relevant collective compensation scheme is undoubtedly a severe challenge for the Chinese side.

More importantly, considering the uncertainty of the final results of relevant UK judicial procedures, if all relevant parties agree to choose the path "dominated by UK judicial procedures to achieve collective compensation," once the UK court makes a legally effective judgment on the aforementioned collective compensation scheme, at that time, even if the Chinese side has any dissatisfaction with the aforementioned judgment result of the court, due to the influence of the res judicata of judicial judgments, it is very likely to lead to the Chinese side no longer having the opportunity to seek other rights protection paths (for example: government negotiations) for the same matter to strive for better results.

TWO、Analysis of the Path "Dominated by Administrative Paths to Achieve Collective Compensation"

（One）Possibility of the Path "Dominated by Administrative Paths to Achieve Collective Compensation"

As mentioned earlier, according to Section 266 of POCA, when making a civil recovery order, the UK court "may" attach conditions to the way the civil recovery trustee handles the property, issuing clear instructions on "how to distribute the recovered property."

But we note that the above legal provision stipulates that the UK court "may" make such instructions, but not "must" make them.

And we understand that in the case where the UK court does not issue clear instructions on "how to distribute the recovered property," how to distribute the recovered property in the subsequent process (especially those that have been incorporated into the government management system through recovery procedures) is mainly a process of administrative decisions.

If our aforementioned understanding is correct, the above rules undoubtedly reserve institutional space for the path "dominated by administrative paths to achieve collective compensation" in this case.

And from practical situations, prior to this, the UK government and the Federal Government of Nigeria had, in 2016, reached an agreement through signing a memorandum of understanding on returning assets confiscated by the UK (assets stolen from the Nigerian people by relevant criminal suspects and recovered by the UK), and facilitated the return of 4.2 million pounds to Nigeria.Such precedents also confirm the feasibility of achieving cross-border return of proceeds of crime through administrative paths such as government negotiations.

Therefore, we understand that in this case, although the UK side is currently recovering the Bitcoin assets involved through civil recovery procedures, after completing the aforementioned recovery procedures, by leveraging institutional frameworks such as criminal judicial assistance, adopting administrative paths such as government negotiations to strive for achieving cross-border return of the assets involved (and collective compensation dominated by the Chinese government), also has its feasibility and institutional space.

（Two）Analysis of the Rights Protection Path "Dominated by Administrative Paths to Achieve Collective Compensation"

1.Enhancing the Chinese Side's Control over Relevant Procedures and Results

Achieving cross-border return of relevant assets through administrative paths relies more on forces such as negotiations and games between governments, international treaties, international public opinion, etc.

Generally speaking, there are more or less mutual benefit needs between countries, coupled with constraints from national treaties, international public opinion (including universal moral standards), etc., all of which help both sides to obtain as equal negotiation positions as possible (although it is usually difficult to achieve absolute equality), and this will have obvious help for both sides (especially the Chinese side) to strengthen control over relevant procedures and results.

More importantly, the aforementioned asset cross-border return procedure advanced in the form of government negotiations is a process of mutual consultation and gradual advancement.In theory, if any party in the negotiations is dissatisfied with the current negotiation results, they can continue to negotiate until both sides reach an agreement.

In this way, it can effectively avoid the drawback of "under the judicial-dominated mode, due to the influence of judicial res judicata, leading to one side definitively losing the opportunity to seek other better results when facing unfavorable results."

2.Enhancement of Relevant Work Efficiency

This case has already undergone long-term and extensive investigations by the Chinese side, and even basically completed the domestic judicial procedures in China; if this case can achieve cross-border return of the assets involved through administrative paths such as government negotiations, and advance collective compensation under the dominance of the Chinese government (including Chinese judicial institutions), by leveraging existing work mechanisms and previous work results, it will help to quickly achieve the implementation and execution of the relevant collective compensation scheme, not only avoiding repetitive work, but also helping to improve the efficiency of relevant compensation work and shorten the relevant work cycle.

3.Convenience for Chinese Victims

If the aforementioned path can be leveraged to achieve collective compensation advanced under the dominance of the Chinese government (including Chinese judicial institutions), it can effectively reduce or eliminate the language barriers, expense expenditures, and costs and risks brought about by differences in laws and evidence standards of different countries that Chinese victims face when participating in cross-border compensation procedures, which will undoubtedly greatly enhance the convenience of rights protection for Chinese victims.

4.Possible Difficulties and Challenges

Achieving cross-border return of relevant assets through administrative paths (including government negotiations) is overall also a highly game-theoretic work, and may be influenced by international political factors such as bilateral relations and other factors, with its final results also having strong uncertainty.

Furthermore, the transparency of relevant work and the fairness of results may also encounter questions.

Additionally, such intergovernmental negotiations may also require considerable time and may need to go through complex administrative processes, which may cause delays in the relevant work cycle.

THREE、Relevant Work Suggestions

(I) It Is Advisable to Weigh the Advantages and Disadvantages of Different Rights Protection Paths, Think Prudently, and Actively Make Choices

Above, we have conducted a brief analysis of the two different rights protection paths: "dominated by UK judicial procedures" and "dominated by administrative paths."

Objectively speaking, the above two paths each have their advantages and disadvantages, and also face their respective risks and challenges.

For the Chinese side, when selecting rights protection paths, it is necessary to comprehensively consider multiple factors such as "controllability of relevant procedures and results," "efficiency and convenience," "expected compensation amounts that can be obtained," etc.

We are not blindly opposing or endorsing any of the rights protection paths; what we oppose is blindly following the path set by the UK side without thinking, yet lacking a holistic view and the awareness of actively choosing rights protection paths.

For the rights protection work of Chinese victims, on such a major issue as "the choice of basic rights protection paths," it should be a "subconscious" choice after proactive thinking and careful weighing of the advantages and disadvantages of various paths.

Due to the limited information we currently possess, here, we are not prepared to hastily express tendentious suggestions on this issue, but for the choice of basic rights protection paths, the Chinese side must have clear thinking and the awareness of active choice.

（II）It Is Advisable to Actively Explore Whether There Are Other Better Rights Protection Paths

"Dominated by UK judicial procedures" and "dominated by administrative paths," the above two types of rights protection paths actually have some common drawbacks.

For example, the above two types of rights protection paths both require prior deduction of relevant fees and costs, and the overall compensation amounts that victims can obtain and the average "recovery rate" will be diluted and thinned thereby.

Additionally, such cross-border return of assets and collective compensation essentially belong to the competition and distribution of relevant interests among all parties; the more compensation amounts given to the Chinese side, the less amounts the UK side can obtain.

Especially, according to relevant UK systems, recovered or forfeited property generally enters the UK's financial departments and relevant law enforcement agencies through the Asset Recovery Incentivisation Scheme (ARIS), but funds used for victim compensation are not included in the aforementioned ARIS (need to be deducted first), which means that in this case, "the compensation amounts given to Chinese victims" and "the amounts that UK relevant departments can obtain according to the asset recovery incentivisation scheme" also have a direct competitive relationship of "one increases, the other decreases."

It is foreseeable that in this case, in the competition process for such enormous asset interests, no matter which of the above rights protection paths is adopted, it will inevitably need to face considerable pressure from the UK side (previously relevant media had reported that UK relevant departments in this case had also expressed plans to retain most of the Bitcoin assets), and increase the uncertainty of results.

Comprehensively considering the influences of various factors, we estimate that no matter which of the above rights protection paths is adopted, a considerable portion of the value of the Bitcoin involved in the case may ultimately be retained by the UK side.

For Chinese victims, whether there are other better rights protection paths, we are also currently researching, and when conditions are mature, we will discuss together with everyone.

(III) Seize the Time Window, Actively Intervene, and Proactively Communicate

At present, the relevant civil recovery procedures in this case are advancing rapidly in the UK court, and the collective compensation plan recently proposed by the UK prosecutors may also be on the agenda, and it is not excluded that relevant procedures have been formally initiated.

And according to relevant media reports, a hearing will be held in this case in January 2026, and will discuss the ownership and distribution scheme of the relevant assets involved.

Assuming the aforementioned situation is true, no matter which rights protection path the Chinese side ultimately decides to adopt, the relevant time window currently reserved for the Chinese side is already very limited, and it is advisable to take action in a timely manner to avoid the loss of relevant opportunities.

Specifically:

If the Chinese side is willing to accept the rights protection path "dominated by UK judicial procedures to achieve collective compensation," during this period, it is advisable to further strengthen sharing with the UK side in terms of case evidence and information, and intervene as early as possible in tracking and communicating the collective compensation scheme proposed to be established by the UK side, to strive for ultimately obtaining a collective compensation scheme that is overall friendly and practically feasible for Chinese victims;

If the Chinese side hopes to adopt the rights protection path "dominated by administrative paths to achieve collective compensation" (or other rights protection paths), it is necessary to clearly propose it to the UK side as early as possible, and through methods such as procedural coordination, reserve paths for the aforementioned rights protection paths, especially to avoid making effective court judgments on the collective compensation scheme (or similar fund distribution issues) in the existing UK judicial procedures, thereby blocking the possibility of handling the aforementioned matters through other paths.

FOUR、Conclusion

In cross-border rights protection and asset return cases similar to this one, the procedures are often complex and the interest games are intense; a slight carelessness can easily lead to losing the thread and deviating from the main line.

In this process, compared to the details of relevant rights protection schemes, whether the choice of basic rights protection paths is appropriate often has a more holistic impact; if there is a lack of proactive thinking on such key issues, simply blindly following paths set by others is very likely to ultimately lead to "one careless move loses the whole game."

Therefore, as we stated in the article, before being busy paying attention to and discussing the details of relevant rights protection schemes, it is necessary to first conduct clear thinking and "subconscious" choice on the basic rights protection paths.

Although, considering realistic factors such as the oppositional conflicts of interest positions of all parties, the strength comparison of game forces of all parties, constraints of relevant legal systems and cultural backgrounds, etc., the choice rights and choice spaces of any party may be more or less constrained, but under permissible conditions, choosing rights protection paths that are as favorable as possible to oneself (or even favorable to both sides), or actively creating conditions to push the rights protection paths toward the direction expected by one's own side, is work that we can strive to attempt (and worth attempting).

At the same time, it is undeniable that for such rights protection work, to achieve ideal rights protection effects, it is also inseparable from careful design and meticulous polishing of relevant details.

For example, whether the rights protection party has preset clear and appropriate work goals, whether it possesses good game means and strategies, such issues also determine the final rights protection effects to a considerable extent.

We will continue to discuss the above issues in subsequent articles.

Special Statement:

The above content is only for reference, study, and discussion by all parties; it should not be regarded as formal legal opinions issued by us.

Due to the limited case materials and information we currently possess, and given that it involves a large amount of application and judgment regarding UK legal rules, although we have made great efforts within our capabilities to minimize possible deviations, the viewpoints in the article may not be entirely mature or accurate; if there are any errors or omissions, we welcome readers to point them out;

Considering the professionalism and complexity of the relevant issues, and that a significant portion of the readers of this article may not be legal professionals, to facilitate readers' quick understanding and grasp of the core content we wish to convey, we have appropriately simplified or popularized some parts of the article (especially some legal rules); if relevant parties need to formally use the related content mentioned in the article, please note to verify it themselves first;

The above content extensively involves the understanding and application of UK legal rules; when judging and handling issues involving UK law, relevant parties are advised to consult relevant UK legal professionals;

If readers have related questions about the content in the article or are interested in this topic, they can contact us according to the contact information attached at the end of the article.

For questions that everyone is interested in and that are representative, we will provide unified answers in due course.

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