The People Power Party held a forum criticizing the class action bill being pushed by the ruling party. Claims were raised that, because of the "retroactive application" and "opt-out" provisions in the class action bill proposed by the Democratic Party of Korea, lawsuits against corporations would be filed excessively.
Kwak Gyu-taek, a People Power Party lawmaker on The National Assembly's Legislation and Judiciary Committee, held a forum titled "Legal issues in the proposed class action act and measures to prevent abuse" with the Center for Free Enterprise at the National Assembly on the afternoon of the 27th.
The supplementary provisions of the class action bill proposed by Park Kyun-taek, a Democratic Party lawmaker, explicitly allow retroactive application by stating that it "shall apply (class actions) to claims for damages arising from causes that occurred before the law takes effect." As opinions emerged that the scope of retroactive application is broad, the Ministry of Justice has presented an alternative that recognizes retroactivity for up to three years. This appears to reference Article 766 of the Civil Act, which specifies the "statute of limitations on claims for damages."
Choi Joon-sun, an emeritus professor at Sungkyunkwan University Law School, said, "If a retroactive bill passes, even the state would find it difficult to handle class actions in cases such as COVID-19 and the deadly crowd crush in the nightlife district of Itaewon," adding, "Once retroactive legislation opens the floodgates, retroactive legislation will continue, raising considerable concerns about legal confusion."
There were also concerns that the opt-out system could increase the burden on corporations. Opt-out means that unless individuals separately report that they wish to withdraw, they are automatically included in the lawsuit and bound by the judgment. In this case, the point is that some victims could be included in the lawsuit without fully understanding it, potentially infringing on their right to a trial.
Han Seok-hoon, an adjunct professor at Yonsei University Law School, said, "The opt-out system is a high-cost, long-term litigation structure and will instead become an incomplete remedy for victims," adding, "In particular, the United States protects corporations' autonomous management through the business judgment rule while protecting consumers through the ex post regulation of class actions, but we are repeatedly borrowing only strong regulations from the United States without even introducing the business judgment rule."
In his opening remarks, lawmaker Kwak Gyu-taek said, "The class action bill being pushed by the ruling party emphasizes only the pretext of victim relief while indiscriminately adopting foreign systems in disregard of consistency with our legal framework," adding, "Such legislation could not only dampen investment by corporations but also trigger a vicious cycle in which the damage is passed on to workers and consumers."