South Korea
The litigation landscape in South Korea is characterized by a proactive regulatory environment, a strong emphasis on ADR, and a commitment to adapting to global legal trends. Recent developments and amendments to the Arbitration Act and the introduction of the Arbitration Promotion Act aim to enhance the reliability and efficiency of arbitration proceedings, making South Korea a competitive venue for resolving international disputes.
In addition, over the forthcoming years, several key trends are expected to continue to shape the litigation landscape in South Korea. It is anticipated that there will likely be an increase in antitrust litigation as South Korea continues to enforce strict competition and anti-competitive laws. The Korea Fair Trade Commission (KFTC) is expected to remain vigilant in pursuing anti-competitive practices, likely leading to more disputes in this space. With the rapid advancement in technology, data privacy and cybersecurity litigation is expected to rise as companies grapple with more stringent data protection laws.
A hub for innovation, it is expected that South Korea will experience a significant rise in IP litigation as companies take steps to protect patents, trademarks and copyright. The insurance litigation market is also anticipated to rise with the evolving market and challenges faced by insurers and policyholders alike.
1. Is third party funding permissible for disputes?
In South Korea, third-party funding for disputes is not explicitly regulated or prohibited by law. This means that while there are no specific legal frameworks governing it, there are also no outright bans against its use.
Third-party funding is relatively new in South Korea and has not yet been directly addressed by Korean courts. However, it is gaining traction, especially in the context of international arbitration.
2. Are lawyers able to work on a contingent basis in the jurisdiction and are there any restrictions?
Yes, lawyers in South Korea can work on a contingent basis, and this practice is quite common, especially in civil and commercial cases. Here are some key points and restrictions to be aware of:
Contingency Fee Arrangements
- Permissibility: Contingency fee arrangements are allowed and frequently used in South Korea.
- Types of cases: These arrangements are typically used in civil, commercial, and some administrative cases. However, they are not permitted in criminal cases.
Restrictions
- Ethical considerations: Lawyers must adhere to ethical guidelines to avoid conflicts of interest and ensure fair representation.
- Fee structures: Various fee structures can be used, including hourly rates and task-based billing, in addition to contingency fee.
3. Can the court or tribunal order one party to pay the other’s legal costs?
Yes, in South Korea, courts and tribunals can order the losing party to pay the legal costs of the winning party. This is a common practice in civil litigation and is intended to compensate the successful party for the expenses incurred during the legal process.
The costs that can be awarded typically include:
- Court fees: Fees paid to the court for filing and processing the case.
- Expert fees: Costs for any expert witnesses or technical analysis required during the trial.
- Service fees: Costs for serving documents and other necessary services.
However, the awarded costs usually do not cover the full amount of the winning party’s attorney fees. The court has discretion in determining the amount and scope of the costs to be reimbursed.
4. Is insurance available to protect against adverse outcomes for funded litigation?
Yes, insurance is available in South Korea to protect against adverse outcomes in court proceedings. This type of insurance is often referred to as “After the Event” (ATE) insurance. ATE insurance can cover various litigation costs, including court fees, expert fees, and other expenses incurred if the case is lost.
ATE insurance is particularly useful for mitigating the financial risks associated with litigation and is becoming more recognized in South Korea, especially in the context of international arbitration.
Contact
Joaquin Terceño Partner
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