For the past several decades, class actions in the U.S. have become almost synonymous with lawsuit abuse. Unfortunately, South Koreans may soon get this experience first-hand. The U.S.-Korea Business Council and the Federation of Korean Industries (FKI) recently held an event to discuss these developments and their ramifications, at which U.S. Chamber Institute for Legal Reform President Harold Kim spoke.
Lawmakers there are considering legislation that would expand class action litigation to all areas of law on an opt-out basis and would include deeply troubling provisions like retroactive application. This means that disputes from years ago can be revived into massive class actions, which will almost certainly lead to an explosion of costly and lengthy litigation filings. The law also significantly expands the punitive damages structure, jury trials, and pre-suit discovery, all of which provides incentives for lawyers to sue over almost anything in the hunt for a big payday. As we’ve sadly learned in the U.S., plaintiffs aren’t the main beneficiaries of this system. The lawyers are.
Though South Korean legislators seem to want to go down this path, they ought to pause and seriously assess the impact that this new legislation would have on the business environment in Korea and try to include meaningful safeguards while it is still possible to prevent abuse.
Harold, quoting Churchill, told the group that those who fail to learn from history are doomed to repeat it. South Korean lawmakers should learn from our experience with class actions.