The Korean Ministry of Justice recently introduced a bill to establish a strong class action system in Korea (to cover all damage claims). We think this bill has a high chance of becoming law due to the government’s support and the current progressive mood in Korean society. Taken together with the recent bill to increase punitive damages (up to five times of actual damages), this newly introduced bill is likely to raise significant implications for companies doing business in Korea.
Below are some of the main features of the bill:
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Class actions will be possible for any type of civil litigation, with 50 plaintiffs being required for the court to grant class certification.
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This will be retroactive (i.e., for any act which occurred before the law becomes effective) and provide an opt-out mechanism.
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A new pre-trial discovery procedure (e.g., litigation holds to preserve documents) will be established, along with stronger penalties for breaching document production orders.
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Challenging the court’s class certification is not allowed.
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The class action will be tried before a jury, unless the plaintiff representative objects or the court intervenes.
Aside from implications such as the proliferation of consumer claims, this bill has the potential to overhaul the Korean consumer litigation landscape. In particular, the opt-out mechanism, trial by jury and punitive damages (being pursued through a separate bill) can expose companies to a different quantum of damages than previously seen in Korea.
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