1 Legal framework
1.1 What system of jurisprudence applies in your jurisdiction? What implications does this have for litigation?
South Korea is historically a civil law jurisdiction. Generally, South Korea's legal framework and many of its laws are derived from historical German law. However, in recent years, South Korea has aggressively embraced what are seen as the best practices and legal developments of both civil law and common law countries.
In particular, South Korea has adopted a number of court practices that depart from its civil law traditions. For example, while the South Korean courts traditionally followed the civil law practice of only using bench trials with questions of law and fact determined by judges, in 2008 they introduced limited use of juries in certain criminal trials. The South Korean courts have also begun allowing increased use of document disclosure in civil cases, although the scope of such disclosure remains much more limited than that seen in common law courts.
In sum, South Korean jurisprudence generally follows the civil law principles; thus, the statutes and laws enacted by the National Assembly are the most fundamental source of law. In addition to the codified statutes, case law plays an important role in the interpretation of laws. The case law of the Supreme Court is binding on the high courts, the district courts and the Supreme Court with regard to that specific question of law; and in practice, the courts tend to interpret the Supreme Court's findings narrowly rather than broadly.
1.2 What rules govern litigation in your jurisdiction?
In South Korea, law is generally classified as substantive law and procedural law. As regards civil litigation, acts, statutes, regulations and similar on specific subject matter govern the substantive issues and the Civil Procedure Act of South Korea the procedural issues of a civil matter.
1.3 Do any special regimes apply to specific claims?
The Constitution of the Republic of South Korea states that "the courts shall be composed of the Supreme Court, which is the highest court of the State, and other courts at specified levels" (Article 101, paragraph (2)). It further provides that the structure of the Supreme Court and the lower courts will be determined by statute (Article 102, paragraph (3)). In accordance with such provisions, the Court Organisation Act was enacted, which constituted the three-court system comprising the district courts, the high courts and the Supreme Court.
The Court Organisation Act further provides for the following special courts:
- the Patent Court for patent litigation;
- the family courts for family cases;
- the Administrative Court for administrative litigation; and
- the Bankruptcy Court for bankruptcy/insolvency-related cases.
In addition, martial courts hear military-related cases.
Generally, the three-instance trial system applies to litigation in South Korea, although a two-instance trial system or single trial system may apply depending on the type of litigation. Appeals against dispositions of the Fair Trade Commission and administrative appeals against decisions of the Intellectual Property Tribunal are deliberated under the two-instance trial system, which means that the high courts are the court of first instance. Any lawsuits concerning the election of the president and members of the National Assembly are administered under the single-court system, with the Supreme Court as the court of first instance.
1.4 Which bilateral and multilateral instruments have relevance to litigation in your jurisdiction?
The bilateral and multilateral instruments of relevance to litigation in South Korea are as follows:
- the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil and Commercial Matters;
- the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters;
- the Protocol to the International Convention on Civil Liability for Oil Pollution Damage, 1969;
- the United Nations Convention on Contracts for the International Sale of Goods; and
- the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States.
2 Judicial structure
2.1 What courts exist in your jurisdiction and how are they structured?
The types of courts in South Korea are as follows:
- the Supreme Court;
- the high courts;
- the district courts;
- the Patent Court;
- the family courts;
- the Administrative Court; and
- the Bankruptcy Court.
Martial courts, where military officers who are not qualified as judges hear cases, also exist for military trials. The Supreme Court has final jurisdiction over all types of cases according to the Constitution.
2.2 What specialist courts or tribunals exist in your jurisdiction?
In South Korea, there are four specialised courts, as follows.
Patent Court: The Patent Court has original jurisdiction over appeals of decisions of the Intellectual Property Tribunal. Its decisions may be appealed directly to the Supreme Court. Thus, the court operates within a two-tier court system. The Patent Court has technical examiners who have degrees in natural science, technology and other professionally related fields to assist judges with the technical matters of patent and utility model cases by providing consultation and expertise.
Family courts: The family courts have exclusive jurisdiction over domestic relations cases, domestic violence cases, juvenile offence cases and child abuse cases. They are equivalent to the district courts. Each family court has a conciliation committee to handle conciliation proceedings and investigative officers to conduct necessary investigations.
Administrative Court: There is only one Administrative Court, which is located in Seoul. The Administrative Court has jurisdiction over tax, eminent domain, labour and other administrative matters. An administrative lawsuit may be filed without first resorting to administrative remedies unless otherwise provided by law.
Bankruptcy Court: The Seoul Bankruptcy Court (currently the first and only bankruptcy court in South Korea) presides over major bankruptcy/rehabilitation cases, and provides more effective, specialised and consistent guidance in bankruptcy proceedings.
3.1 What formalities apply before litigation can be commenced in your jurisdiction?
There are no particular formalities that apply in this regard.
3.2 Do any pre-action protocols or similar rules apply prior to the commencement of litigation? What are the consequences of non-compliance?
There are no such pre-action protocols or similar rules that exist.
3.3 What other factors should a party consider before commencing litigation in your jurisdiction?
A party must consider a fair amount of strategy and tactics before litigating in South Korea, including the burden of proof, legal costs and enforcement procedures. Examples include the following:
- With regard to evidentiary submissions, as there is no discovery or disclosure process, there is no obligation on the parties to share any potentially disadvantageous information, unless specifically ordered to do so by the court.
- Regarding the burden of proof in civil litigation under South Korean law, the Supreme Court requires a ‘high degree of probability' or ‘high likelihood' for a plaintiff to meet its burden of proof. This degree, if quantified, would be approximately 70%–90%.
- Regarding legal costs, the actual costs of litigation may vary significantly, depending on the circumstances. Contingency fee arrangements are also allowed in South Korea, except in criminal cases, and are frequently used in practice.
- Regarding interim remedies such as provisional attachments and provisional injunctions, orders on interim remedies are generally granted ex parte without any hearing or notification of the other party. The court decides based solely on evidence presented by the applicant, but does require the applicant to provide a bond by way of a refundable cash deposit and/or security bond. In practice, the bond amount required to apply for an interim order or lift such an order can be expensive and burdensome, and the relevant party must carefully consider all of the options that are legally and practically available to it (see questions 4.6 and 13.1).
4 Commencing litigation
4.1 What rules on limitations periods apply in your jurisdiction?
For most civil claims (eg, breach of contract), the statute of limitations is 10 years. However, shorter periods apply for certain contractual disputes – for example, claims arising from commercial transactions, where the applicable period is five years. The statute of limitations starts to run from the day immediately after the date on which the claim could have been made (ie, the due date of each account receivable or, if the due date is not decided in advance, the day the obligation accrued). Under South Korean law, the parties cannot contractually agree in advance to waive a statute of limitations defence. There is an exception under South Korean property law: no statute of limitations applies where a dispute involves ownership of a property, but the court finds that the ownership of property is clear.
4.2 What rules on jurisdiction and how this is determined apply in your jurisdiction?
A civil claim can be brought before a district court with proper territorial jurisdiction over the defendant's place of residential address. Where the defendant's local residential address is unknown or unavailable, the court at the place where the defendant's assets are located will have territorial jurisdiction.
For civil claims over real estate, the district court at the place where the real estate is located has jurisdiction to hear such claims. For tort claims, the district court at the place where the tort is committed has jurisdiction.
The parties can also separately agree on the court with jurisdiction to hear cases regarding disputes between them, unless another court has exclusive jurisdiction over such matters. For details of the courts that have exclusive jurisdiction over specific issues, see question 2.2. Furthermore, if the claim is a small claims matter (claims up to KRW 200 million), a single-judge panel of the relevant district court has jurisdiction; while if the claim exceeds KRW 200 million, a three-judge panel of the relevant district court has jurisdiction.
4.3 Are class actions permitted in your jurisdiction?
Generally, no. However, an exception to this general rule exists under the Security-Related Class Action Act for claims relating to securities transactions, arising from unlawful acts in securities transactions such as false declarations, insider trading or price manipulation. The following requirements must be met to initiate a class action:
- There must be at least 50 class members;
- The sum of the securities held by the class members must be 0.01% or more of the total number of outstanding securities of the defendant;
- There must be commonality in material questions of law or fact; and
- The action must constitute an appropriate and effective means of realising the rights of the class members or protecting their interests.
4.4 What are the formal requirements for commencing litigation?
There are no formal requirements for commencing litigation, except the plaintiff's obligation to pay stamp duty and service fees.
4.5 What are the procedural and substantive requirements for commencing litigation?
Procedural requirements: The plaintiff or claimant must file a complaint with the competent district court, branch court of the district court or municipal court to initiate a civil action. There is no need for the plaintiff to directly serve the defendant, as happens under the US or the UK court system; in South Korea, it is the court that serves the defendant, typically by registered mail. If, within 30 days of receipt of the complaint, the defendant does not respond, the court may decide in favour of the plaintiff without oral hearings, subject to the court's discretion. If the defendant issues a written response, the court will conduct a trial for ruling.
Substantive requirements: The complaint should include the following information:
- the name and the address of the plaintiff;
- the name of the plaintiff's attorney; and
- the purpose and the cause of the claim.
If an agreement of power of attorney is written in a foreign language, a translated South Korean version must be submitted. If the complaint fails to clearly state the cause or purpose of the complaint, or is not affixed with the requisite stamp, the judge may order the plaintiff to make a correction within a specific period; if this order is not followed, the judge may dismiss the complaint. The cause or purpose of a complaint can be adjusted in the course of adjudication or proceedings in appeal court, but not at the Supreme Court level.
4.6 Are interim remedies available in your jurisdiction? If so, how are they obtained?
Provisional (preliminary) attachments and provisional injunctions are available as interim remedies. In both cases, the applicant must demonstrate a prima facie case that such measures are necessary to prevent irreparable damage or imminent violation of legal rights.
A provisional attachment order is available:
- in order to preserve compulsory execution against movables or immovables in respect of a monetary claim or a claim convertible into money;
- if, without an attachment order, execution of a judgment would be impossible or considerably difficult;
- if the court determines that an order can be made without holding a hearing (ex parte); and
- if the court determines that there is ‘vindication' that the applicant may succeed on the merits. Even where the court finds that the applicant has not proved that its case would succeed on the merits, the court may grant a provisional attachment order if the applicant provides a bond as specified by the court.
A provisional injunction order is available where the party is unable to exercise its rights or there would be concerns about a substantial difficulty in exercising such rights if the existing situation were altered. The procedure for provisional attachments applies mutatis mutandis to the procedure for provisional injunctions.
4.7 Under what circumstances must security for costs be provided?
If a plaintiff is a foreign party with no address or place of business in South Korea, the court may order the plaintiff to provide security to guarantee that it is capable of bearing the court fees at the request of the defendant.
5.1 What rules apply to disclosure in your jurisdiction? Do any exceptions apply to certain types of documents?
There is no official disclosure or discovery process in South Korea similar to that under the common law system. However, the Civil Procedure Act of South Korea (KCPA) provides that in any of the following cases, the court may order the holder of such documents to disclose such information:
- A party states that the opponent holds a certain document which is crucial to the issue of this case;
- A specific law, act or regulation provides that the applicant has the right to ask the holder of the document to transfer or produce such information; or
- The document was prepared for the benefit of the applicant or within the context of a legal relationship between the applicant and the holder of the document.
However, if a document is for the exclusive use of the holder, the holder may refuse to disclose it to the court. Further, even if the document was prepared for the benefit of the applicant or prepared within the context of a legal relationship between the applicant and the holder of the document, the above provisions do not apply to any of the following documents:
- a document on matters concerning the official secrets of a public official or a person who has previously held such office, where consent to produce the document has not been obtained;
- a document which contains information that may cause the prosecution or conviction of the holder or his or her relatives or guardian, or a person under the holder's guardianship, or that may bring disgrace on the holder or such related persons; or
- a document which contains secrets relating to the official functions of an attorney at law, patent attorney, notary public, certified public accountant, certified tax consultant, person engaged in medical care, pharmacist or the holder of another post who is liable to keep secrets under statute, or of a religious post, or a person who used to hold such a post, and any documents which have not been exempted from the confidentiality obligation.
Either party to the lawsuit may file a request for an order to have the holder disclose such document. If the holder fails to comply, the court may presume that the allegations of the applicant regarding the entries described in such document are true.
5.2 What rules on third-party disclosure apply in your jurisdiction?
An order to disclose documents can be made against a non-party to the litigation, subject to the KCPA. A third party that fails to comply with a court order to disclose documents may be ordered to bear any costs and may be subject to an additional fine.
5.3 What rules on privilege apply in your jurisdiction? Does attorney-client privilege extend to in-house counsel?
The KCPA states that the holder of "a document in which contains the secrets of official functions of an attorney-at-law, patent attorney, notary public, certified public accountant, certified tax consultant, persons engaged in medical care, pharmacist, or a holder of other post liable for keeping secrets under statutes, or of a religious post, or a person who used to be in such post, and any documents which have not been exempted from the confidentiality obligation" may refuse to disclose such document.
The Attorney at Law Act also regulates the obligation of attorneys to preserve the confidentiality of their clients' confidential information. It provides that no attorney at law or former attorney at law may disclose any confidential matter that he or she has learned in the course of performing his or her duties. As this clause imposes only an obligation to preserve the confidentiality of such information, this does not grant the same privilege as attorney-client privilege in the common law system.
In South Korea, the confidentiality obligation of an in-house counsel is still a matter of debate among legal professionals, because an in-house counsel is considered both an employee and a compliance officer of the company. As an attorney who is bound by the Attorney at Law Act, an in-house counsel has a confidentiality obligation regarding the company's confidential information; thus, an in-house counsel may refuse to disclose confidential information in documents that he or she has prepared while under a confidentiality obligation. Further, as prescribed under the KCPA, anyone – including an in-house counsel – may refuse to disclose any document that contains trade secrets (eg, a legal memorandum prepared by an in-house counsel).
5.4 How have technological advances affected the disclosure process in your jurisdiction?
The Act on the Use of Electronic Documents in Civil Litigation, etc sets out the procedures relating to electronic disclosure, such as the investigation of electronic documents and evidence pursuant to the following categories:
- letters, symbols, drawings, pictures and similar; and
- voice or video information.
If an electronic document falls under the first category, the court must examine it using monitors or screens. If an electronic document falls under the second category, the court must examine it by listening to or watching it. Given the latest technological advances, whether an electronic document is in the form of text, audio or video, the South Korean have computer programs and other devices and methodologies that can effectively process electronic information to facilitate electronic disclosure.
5.5 What specific considerations should be borne in mind during the disclosure process, for both plaintiff and defendant?
As the South Korean legal system does not recognise discovery – a pre-trial procedure in which both parties have a mutual obligation to share documents and evidence – the parties should carefully consider their respective burden of proof. At trial, the plaintiff has the burden of proof to submit and produce evidence, including the existence of documents held by the defendant. If the plaintiff is unaware of evidence that is held by the defendant, it may be unfairly prejudiced; this must therefore be taken into consideration when strategising.
Moreover, it is difficult to enforce the disclosure of information by a third party because a third party is subject only to a fine if it fails to comply with an order for non-party disclosure. Therefore, it is necessary to carefully consider the optimum strategies for the collection of evidence in a case when contacting third parties (whether persons or institutions).
6.1 What types of evidence are permissible in your jurisdiction?
As the jury system is generally not available for civil cases in South Korea, the court has the full discretion in the admission and determination of facts. As a general rule, the plaintiff bears the burden of proof; but where specific acts, laws and regulation so require, the burden of proof may be shifted to the defendant.
Fundamentally, any type of evidence is admissible if it is relevant and has the capacity to make a fact more or less probable than it would be without the evidence in a civil case in South Korea. However, the court may exclude relevant evidence if its probative value is outweighed by unfair prejudice, confusion of the issue, undue delay, time wasting and so on.
6.2 What rules apply to expert evidence in your jurisdiction? What specific considerations should be borne in mind when preparing and presenting expert evidence?
There is no expert evidence procedure driven by the litigants in South Korea which is similar to that in the common law system; however, the litigants may apply to the court to appoint an expert (eg, a surveyor). The Civil Procedure Act contains rules governing court-appointed experts. A court-appointed expert must be neutral and independent, and submit a written analysis or give oral testimony before the court to assist and supplement the court's understanding of specific laws or its assessment of certain facts. Although the courts are not bound by the assessments or conclusions of such experts, in practice they seldom completely overlook the findings of such experts.
A party may submit an expert report from a party-appointed expert; however, this report will be treated as a documentary exhibit and not as expert testimony. Expert witnesses appointed by the parties do not have a similar obligation of independence as court-appointed expert witnesses. In general, the weight given to the opinion of a privately retained expert will be limited in comparison to that of a court-appointed expert/appraiser.
6.3 What other factors should be borne in mind when preparing and presenting evidence in your jurisdiction?
The following factors regarding evidence should be taken into consideration:
- In practice, witnesses normally provide oral testimony at the hearing, although in some cases the court may allow a witness to provide his or her testimony in writing.
- During the oral testimony of a witness, counsel for the testifying party will first conduct a direct examination relying on a written list of questions submitted to the court. In principle, leading or irrelevant questions during direct examinations are prohibited.
- During the opposing party's cross-examination of a witness, the opposing counsel is not required to submit a written list of questions prior to the testimony; the questions can be raised and submitted to court at the time of the cross-examination. Cross-examination questions must be limited to the scope of the direct examination.
7 Court proceedings
7.1 What case management powers do the courts have in your jurisdiction?
The South Korean courts have very broad case management powers throughout the trial, from the commencement of legal proceedings to their termination. The main case management powers of the courts are as follows:
- examining and ordering the correction of complaints;
- deciding or changing the hearings and/or trial dates;
- managing the trials and/or hearings and the investigation of evidence presented;
- deciding on the restriction, separation or consolidation of issues;
- transferring cases;
- closing and re-commencing cases;
- dismissing any arguments or defences filed by a party if that party has intentionally or by gross negligence filed late;
- prohibiting statements by a person that does not obey the orders of the presiding judge; and
- recommending settlements.
A court may make any judgments or orders as to its case management powers for the purposes of the fairness, swiftness and economic efficiency of legal proceedings.
7.2 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?
In general, all hearings, trials and rendering of judgments are open to the public. However, if there is any possibility that the opening of hearings to the public could impair national security or public peace and order, or be contrary to good morals, the court may decide to close the hearings and trials to the public. In either case, the rendering of judgments must be open to the public under all circumstances.
7.3 How is the applicable law determined? What happens in the event of a conflict of laws?
The Act on Private International Law sets out rules on how to determine jurisdiction and governing law in case of cross-border disputes, including those concerning property, contract, tort, family, inheritance, check and note, maritime issues and others.
7.4 What rules apply to the joinder of third parties?
The common law concept of joinder of third parties is broadly categorised in South Korea. Generally, additional plaintiffs, defendants or claims may join an existing claim if those claims arise from the same transaction or occurrence. The most common types of joinder of parties are compulsory joinder and permissive joinder.
A court may permit compulsory joinder if the additional party is necessary to provide complete relief for the parties or if harm might be caused to that additional party (depending on the outcome of the suit). A court may permit permissive joinder if the claim of the additional party is based on the same transaction or occurrence.
7.5 How do the court proceedings unfold in your jurisdiction? What specific considerations should be borne in mind at each stage of the process, for both plaintiff and defendant?
The court will serve the complaint on the defendant together with a guide on how to respond to the claim. The defendant then has a period of 30 days to submit a reply. Usually, after the reply has been filed, the court will hold a preparatory hearing to:
- determine future dates and schedules for pleadings, submissions and hearings, and general case management issues; and
- determine the factual and legal issues relevant to the dispute, and whether the parties are willing to enter into settlement or conciliation proceedings.
The court has broad discretion in this regard, and the schedule will depend on the nature and complexity of the case and the surrounding circumstances. During the course of these hearings, the parties may submit all evidence in the form of written submissions and exhibits, and such petitions for fact and expert witnesses as may be needed for testimony at the hearing.
With regard to evidence, the parties (unlike in the common law system during discovery or disclosure) have no obligations to submit documents or other evidence that is contrary to their interest, unless ordered to do so by the court (see question 5.1). Each party submits its evidence and the documents that it wishes to use to support its case.
In the course of the hearing, the evidence is mostly presented in written form; and even where witnesses testify orally, the questions are usually limited and a list must be supplied in advance of the hearing as to what questions will be posed to the witnesses. If an expert is needed, a party may apply to the court to appoint one.
Once the hearing has closed, the court will make a decision on the case, usually within four to six weeks of closing.
7.6 What is the typical timeframe for the court proceedings?
The overall procedure normally takes:
- between eight and 14 months at first instance;
- between six and 12 months in the high courts; and
- between one and two years in the Supreme Court.
However, this may differ depending on the subject matter and the nature of the specific case, as the case may be.
8 Judgment and remedies
8.1 What types of judgments, orders and other remedies are available in your jurisdiction?
A judgment takes effect through the pronouncement thereof and the court may not render any judgment on matters which have not been claimed by the parties.
The types of judgments issued in South Korea are as follows:
- Final judgment: After completion of the trial, the court will render a final judgment;
- Partial judgment: Where it has completed a trial on part of the lawsuit, the court will render a final judgment on such part; and
- Interlocutory judgment: If a trial on the means of an independent offence or defence or on any other intermediate contest is conducted, the court will render an interlocutory judgment.
Other remedies include:
- an order recommending a settlement;
- a judicial conciliation order; and
- a court order for payment.
9.1 On what grounds may a judgment be appealed in your jurisdiction?
An appeal aims to seek the reversal or modification of a judgement rendered by the lower court before it becomes final and conclusive. An appeal can be filed against the decision in the first trial, followed by a final appeal to the Supreme Court. The appellate courts can newly consider not only legal issues, but also factual matters; but the delayed submission of new allegations or evidence by the appealing party may be restricted. The Supreme Court can consider legal issues only.
9.2 What is the appeals process? Is the judgment stayed while the appeal is pending?
The losing party in the first trial can file an appeal within two weeks of service of the judgement. Although there are some exceptional cases, a small claims case which has been heard by a single judge of a district court is generally appealed to a three-judge panel of the same district court; while a decision of a district court is appealed to the high court. Whether the prior appellate court was a district court or the high court, the third and final appeal will be brought to the Supreme Court. A notice of appeal must be in writing.
A judgment does not become final and conclusive during the period in which an appeal may be filed or if an appeal is properly filed within such period.
9.3 What specific considerations should be borne in mind during the appeals process, for both plaintiff and defendant?
The appeals process at the Supreme Court is similar to that at the high court. The same procedural considerations as in the initial trial apply to the appeals process for both the plaintiff and defendant. The procedural considerations and trial records from the initial trial are valid in the appeal, including any self-incriminating testimony. However, if a party successfully proves that such testimony is not truthful or erroneous, the testimony can be invalidated by the appellate court.
Because the scope of judicial review of the Supreme Court is limited to matters of law, the Supreme Court decides only on the basis of the written briefs and does not hear oral arguments, with very few exceptions. Thus, if there are sufficient grounds for appeal, both the plaintiff and the defendant need only submit written briefs to present their case to the Supreme Court.
10.1 How are domestic judgments enforced in your jurisdiction?
The civil execution procedure includes both a compulsory execution procedure and a foreclosure procedure.
Compulsory execution is a procedure whereby a creditor obtains satisfaction of its claim, with the assistance of the state, from the property of a debtor which does not voluntarily perform its obligations, even though a judgment has been rendered against it. Executive titles other than the judgment – such as a payment order or a notarial deed – can also be the basis for execution. The property of the debtor which may be subject to execution includes real property, ships, automobiles, construction equipment, aircraft, movable property and bonds. The court will enforce the compulsory execution on most property. However, in the case of movable property, the marshal will enforce the compulsory execution.
The most common compulsory execution procedure is an execution sale of real property, whereby the court seizes and sells real property of the debtor through an open tender. The proceeds are then distributed among the creditors.
Foreclosure is a legal procedure instituted by the lender (the mortgagee) to force a sale of the mortgaged property in order to satisfy the unpaid debt secured by the property. The foreclosure procedure is similar to that of an execution sale of real property.
10.2 How are foreign judgments enforced in your jurisdiction?
In South Korea, as in most jurisdictions, one must approach the South Korean court for recognition and enforcement of a foreign judgment. The Civil Procedure Act of South Korea sets forth the following requirements for a foreign judgment to be recognised:
- The foreign judgment must be final (conclusive) and non-appealable;
- The foreign court must be recognised to have jurisdiction over the dispute pursuant to the laws and statutes of South Korea;
- Proper service of process (which should also satisfy the South Korean law rules on proper service) must have been made on the parties;
- The foreign judgment must not be contrary to the public policy or morals of South Korea; and
- There must be reciprocity between the country of the foreign judgment and South Korea, in that a South Korean judgment would similarly be recognised and enforced in the foreign country.
10.3 What specific considerations should be borne in mind during the enforcement process, for both plaintiff and defendant?
Prior to enforcing a judgment, it is recommended to check the details of the debtor's assets. To this end, a creditor can file a request for specification of the debtor's property, or a request for inquiry of the property under debtor's title, with the court. Simultaneously, the creditor can file a request with credit agencies to investigate the debtor's property and assets.
If the debtor has realisable assets such as real property and vehicles, the creditor can apply to court for a writ of seizure and sale and collect the proceeds from the auction of seized property. In case of debt enforcement, the creditor can ask the court to issue an order for the seizure and collection of claims in order to collect the judgment debt.
If the investigation into the debtor's property reveals no assets of the debtor and the debtor continually fails to pay the judgment debt, the creditor can register the judgment by filing a request for the entry of the debtor on the Defaulter's List. This is a public register that shows that there is an unpaid judgment debt against the debtor, which will have a significant detrimental effect on its credit scores and borrowing capabilities.
11 Costs, fees and funding
11.1 What costs and fees are incurred when litigating in your jurisdiction?
Litigation costs include:
- stamp duties;
- fees for service of process;
- costs incurred in the examination of evidence; and
- attorneys' fees.
Litigation costs are borne by the losing party. However, depending on the circumstances, the court may charge the winning party with all or part of the costs arising from:
- any acts unnecessary for the extension or defence of its rights; or
- any acts necessary for the extension or defence of the other party's rights.
11.2 Are contingency fees and similar arrangements permitted in your jurisdiction?
In South Korea, contingency fee arrangements are allowed in civil cases. However, in criminal proceedings, contingency fees and/or similar arrangements are prohibited.
11.3 Is third-party funding permitted in your jurisdiction?
There is no law or regulation that expressly prohibits the funding of a lawsuit by a third party. However, Article 6 of the Trust Act provides that third-party funding should not constitute the entrustment of a lawsuit. Further, the Attorney at Law Act prohibits non-attorneys from introducing or referring a party to a case to a specific attorney in exchange for money; and states that any fees and other profits earned through services that may be provided only by attorneys must not be shared with anyone who is not an attorney at law.
11.4 What other strategies should parties consider to mitigate the costs of litigation?
A fee paid or to be paid by a party to an attorney at law who is representing the party in litigation may be admitted as part of the litigation costs within the limit of the amounts prescribed by the Supreme Court Regulations in order to mitigate the costs of litigation.
12 Trends and predictions
12.1 How would you describe the current litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
Amendments to the Civil Procedure Code will come into force on 1 January 2023, which should make it easier for the general public to search for and access court cases.
13 Tips and traps
13.1 What would be your recommendations to parties facing litigation in your jurisdiction and what potential pitfalls would you highlight?
Foreign parties facing litigation in South Korea should be aware of the following potential pitfalls:
- In South Korea, preliminary injunction proceedings and provisional attachment orders are generally granted ex parte; thus, once granted, it is difficult to lift these orders other than by paying a bond to the court for the claim amount or a significant portion thereof.
- In South Korea, there is no limit on the number of submissions that can be made by the parties in civil litigation; thus, it is advisable to expect numerous submissions throughout the course of the litigation.
- For valid service of process on a South Korean party to a dispute originating in another jurisdiction, South Korean law on service must be complied with. For example, in some jurisdictions, service made to the address of a party's domicile will suffice for the court to render a default judgement (to be enforced in South Korea); whereas proper service under South Korean law would require personal service on such party in order for a South Korean court to enforce the judgment. To enforce a foreign judgment, due service must have taken place according to South Korean law.
- The burden of proof required in civil litigation under South Korean law is different from the common law principle of the balance of probabilities/preponderance of evidence, as the South Korean Supreme Court requires a ‘high degree of probability' or ‘high likelihood' for a plaintiff to meet its burden of proof. This degree, if quantified, would be approximately 70% to 90%.
Co-Authored by Ms. Kyeong (Catherine) Kim
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.