As discussed in our previous newsletter, the Korean Ministry of Justice is sponsoring a bill which will establish a plaintiff-friendly class action system in Korea. Further, the bill makes the class action system retroactive, applying to any act which occurred prior to enactment. As companies may question how this will impact pending litigations, we address some of these scenarios below, subject to changes during the legislative process.
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Individual plaintiffs in a pending case will be considered to have opted out of a class action if their separate claim (on the same cause of action) remains pending at the end of the class action opt-out period (Article 28 (3)). This means that current plaintiffs must withdraw their claims by the opt-out deadline to join the class action (Article 37). However, plaintiffs in appeal cases cannot join a class action since Korean law bars a new claim on the same cause of action for which a judgment has already been issued (Civil Procedure Act Article 267).
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Pending “collective lawsuits” (with multiple plaintiffs) are not automatically converted to class actions. However, these plaintiffs can also withdraw by the opt-out deadline to join the class action.
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Prior court decisions on the same cause of action will not bar a class action. That is, even if a company has successfully defended against litigation claims, other plaintiffs will still be able file a class action on the same cause of action.
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Statute of limitations (“SOL”) tolled for six months to allow class actions. If a current plaintiff drops their claim to join a class action, any SOL will be deemed tolled as long as the new class action is filed within 6 months of dropping the prior claim. However, this will have no impact on potential plaintiffs whose SOL have already expired.
We expect the above features of the bill to increase the pool of potential class action plaintiffs, seeking to benefit from the new plaintiff-friendly procedural rules and potential punitive damage awards.
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