Class Action Development in Korea and Its Future ― With analysis of nine bills of the 20th National Assembly ―

Abstract

The Securities Related Class Action Act was carefully laid out in 2004 as a first collective redress method in Korea. Despite many worries about misuse or abuse of it, there have been only 10 cases filed during the last 13 years and 10 months. There is a criticism that the complex and lengthy procedure of the Act discourages potential plaintiffs from bringing class actions lawsuits. For example, it has taken two to three years just to receive a final permission or dismissal decision after filing. In addition to this criticism, as Korea recently experiences an increasing number of large-scale matters that affect rights of many people, many scholars and practitioners began arguing for expansion and amendment of the current class action law. In this situation, many class action law bills were introduced during the last several years, but I summarize and evaluate in this article the nine bills introduced from the beginning of the 20th National Assembly until October of 2018. The proposed changes of the nine bills can be categorized as change in scope of application and procedural change. There is a wide range in terms of scope among the bills. In the one end, there are bills for general class action law that will basically cover all areas. In the other end, there are relatively simple bills that retain the current scope of securities trading area. I am in the opinion to expand scope of the current law to include consumer protection and fair trade areas. Since many procedural changes are also proposed, I think our appropriate step at this time is to accept many of the proposed procedural changes and make a limited expansion of the scope. Most of the proposed procedural changes are to ease the cautionary measures of the current Securities Related Class Action Act. I support many of these changes including no mandatory attorney appointment for defendant, simplification of jurisdiction requirement for class action filing, no restriction on number of cases for plaintiff's counsel, and limitation of time period for a court to render permission/dismissal decision. However, deleting appeal provision for permission decision while leaving immediate appeal for dismissal decision would go against the fairness principle of the litigation system. Rather than deleting the appeal process, it seems more proper to limit the time period for a court to render permission or dismissal decision, and make the proceeding not be automatically stopped at the appeal. Also regarding litigation cost payment extension for representative party, additional guidance should be provided to the court. With appropriate changes in scope of application and procedure, I expect that class action will be a good method to resolve large-scale disputes in Korea.