Adaptation of Activity-Based Costing (ABC) to the Legal Hypothesis on Reduction in Litigation Costs by the Recognition of Foreign Judgments: A Case Study of Lao People’s Democratic Republic and Thailand

Abstract

               This research aims to 1) study the Thai laws which recognize the choice of jurisdiction and enforcement of foreign judgments to analyze the problem arising from the fact that Thailand does not have a law generally applicable to the recognition of foreign judgments, causing repetition of legal costs when the winning plaintiff in a foreign court enforces the foreign judgment against the defendant’s assets in Thailand because the plaintiff must commence fresh proceedings in the Thai court against the same defendant; this contrasts with the Lao People’s Democratic Republic ( Lao PDR ) which has the Civil Procedure Act (2012) recognizing the foreign judgments. And, 2) to study and adapt the key qualitative and quantitative research methods, namely, activity-based costing (ABC) and in-dept interview as well as other research methods to prove, in terms of monetary and numerical values, the hypothesis of this research that the litigation costs to be incurred in the enforcement of the foreign judgments could be reduced if there is a law on the recognition of foreign judgments.

               The result suggests that such legal hypothesis can be a subject of the research. By adapting ABC to the case study of the enforcement of a judgment of Thai Court in Lao PDR, it is found that the time spent on the enforcement of the Thai judgment in Lao PDR pursuant to the recognition provisions under Lao PDR’s law is shorter than the case where the creditor brings the same source of obligation as per the Thai judgment to a court in Lao PDR by filing of a fresh lawsuit. Therefore, procedures of the case are the significant variables directly affecting the legal cost and cost drivers which result in reducing the litigation costs substantially.