As bills to expand the scope of the class action system are being introduced one after another, small business groups voiced concern.
Korea Federation of Micro Enterprise (KFME) issued a statement on the 27th, calling it "a harsh measure that pushes small business owners to the front lines of lawsuits."
It added, "We agree with the legislative intent of remedying harm to many consumers, but we express serious concern about the claim to expand the class action system—previously discussed mainly for large corporations—to small business owners without sufficient safeguards."
The class action system is a method in which a group representative conducts litigation when multiple victims arise from a specific case. The effect of the ruling applies to the entire group. Victims do not have to file individual lawsuits and go through procedures to receive damages. It is currently operated mainly in the securities field under laws such as the Securities-Related Class Action Act.
In the National Assembly, bills are recently being introduced to broaden the scope of class actions for consumer protection. Kim Nam-geun of the Democratic Party of Korea on Oct. 14 introduced as the lead sponsor a "Consumer Class Action Bill" centered on allowing consumer groups to file liability confirmation suits against businesses, and if liability is confirmed, to receive damages.
KFME said, "Unlike large corporations that can cope with prolonged legal battles, livelihood-driven small business owners face a heavy burden just to cover attorney appointment expense," adding, "If even one class action is filed, normal operations for small business owners will become virtually impossible due to document production, legal responses, media coverage, and consumer distrust, even before actual liability is confirmed."
It continued, "Industries that serve many consumers, such as restaurants, food retail, and beauty services, have no choice but to be exposed defenselessly to the risk of excessive lawsuits," adding, "Imposing lawsuit risks on small business owners at the same level as large corporations runs counter to fairness and proportionality."
They also cautioned against discussions to retroactively apply grounds for class actions back to before the law takes effect. The reason, they said, is that it could shift new risks onto business operators who made hiring and investment decisions based on current laws and administration. They projected that instability on the ground would make it difficult to expand new businesses.
KFME explained, "Consumer protection and small business protection are not an either-or issue," adding, "Balanced legislative policies are essential to prepare practical remedies for consumers' harm while ensuring the right to survival and normal economic activity for small operators."
It also strongly urged the political sphere to prioritize establishing measures to stabilize small business management over expanding the class action system.