At a public hearing on the class action act being pushed by the Democratic Party of Korea, the ruling and opposition parties differed over "retroactive application." The Democratic Party of Korea said the class action act should apply to cases up to three years ago in light of past damage cases. The People Power Party, by contrast, said retroactive application would cause lawsuits to surge exponentially.
The National Assembly's Legislation and Judiciary Committee held a full session at the National Assembly on the morning of the 22nd and convened a public hearing on the enactment of the class action act. At the hearing, four experts — Associate Professor Kwon Yong-su of Konkuk University KU Global Innovation College, Special Professor Byun Woong-jae of Kangnam University, Professor Choi Kyung-jin of Gachon University's Department of Law, and Attorney Han Kyung-su — attended as witnesses and presented views on the class action act.
A class action is a system under which, in cases with large-scale damage, if even one victim sues and wins against the state or corporations, the judgment effect applies to all victims. In Korea, it has been applied only to the securities sector since 2005, but the recently introduced bills would expand it across the board.
The ruling and opposition parties clashed over "retroactive application" on this day. Of 14 related bills submitted by the pro-ruling camp including the Democratic Party of Korea, retroactive clauses are included in a total of nine bills, including the bill by Democratic Party of Korea lawmaker Park Kyun-taek, which is effectively the government's bill. The idea is to apply to class actions the statute of limitations for a claim for damages under the Civil Act (three years from the date the damage became known and 10 years from the date of the act).
Democratic Party of Korea lawmaker Kim Gi-pyo said, "Making a party pay to the extent of the harm caused and the right to be compensated for harm are fundamental principles of capitalism and the Civil Act, but in reality, there are many cases where people suffer enormous damage yet cannot sue," adding, "Amounts not compensated even though corporations caused harm are unjust enrichment and are not property rights worthy of protection."
Lawmaker Jeon Hyun-hee of the same party said, "In cases of quasi-retroactivity where the factual and legal relationships have not yet ended even now, recognition is necessary," adding, "Since the Supreme Court has also recognized this, I do not think there is a constitutional issue."
People Power Party lawmaker Yoon Sang-hyun said, "Behind the rapid acceleration of the debate on the class action act were personal data leak incidents involving SK Telecom and Coupang. I agree with the basic legislative intent, but application should be phased," stressing, "If retroactive application is included here, corporations will have to shoulder even a 'no-questions-asked lawsuit risk.'"
Na Kyung-won, a lawmaker from the same party, also said, "I suspect the Democratic Party's target is Coupang. When introducing a class action system, we need to look at the interests of consumers and victims alongside the interests of shareholders and workers," adding, "If retroactivity is applied indiscriminately while aiming at Coupang, it could even escalate into a diplomatic issue."
Expert opinions were also divided. Special Professor Byun Woong-jae of Kangnam University said, "In the era of AI and the platform economy, the class action system is not optional but essential," adding, "If lawsuits involving tens or hundreds of thousands of participants become a reality, it is rather necessary to manage them within the institutional framework." Attorney Han Kyung-su also emphasized, "When large-scale damage occurs, such as in personal data leaks, individual lawsuits impose excessive expense burdens on victims," adding, "A deterrent mechanism is needed to block corporations' 'profitable business' structure."
Associate Professor Kwon Yong-su of Konkuk University, by contrast, said, "While I acknowledge the need, excessive litigation could undermine corporations' predictability and negatively affect shareholders and workers," pointing out, "It is important to design for legal stability, and we should be especially cautious about retroactive legislation." Professor Choi Kyung-jin of Gachon University said, "We should first introduce the system by specifically listing sectors where structural harm is clear, then gradually expand it."
Some experts also urged caution regarding opt-out. Opt-out means that, unless a person separately expresses an intention to refuse to sue, they receive compensation even without participating in the lawsuit.
Professor Choi said, "If we adopt an opt-out approach, as seen in U.S. cases, the problem of abuse and misuse of the class action system could be serious," adding, "Both sides (opt-out and opt-in) have stark pros and cons. We should pursue legal stability along with efficiency."
Professor Kwon said, "If class actions occur as in the United States, I have doubts about whether this is at a manageable level," adding, "If we introduce the system in principle, an opt-in approach is appropriate, and if we do opt-out, we should limit the sectors."