Lawsuit

Lawsuit (소송) is a civil action brought in a court in which a plaintiff (원고), a party who claims to have incurred loss as a result of a defendant's actions, demands a legal or equitable remedy. The defendant (피고) is required to respond to the plaintiff's complaint.

If the plaintiff is successful, judgment will be given in the plaintiff's favor, and a variety of court orders may be issued to enforce a right, award damages, or impose a temporary or permanent injunction to prevent an act or compel an act. A declaratory judgment may be issued to prevent future legal disputes.

A lawsuit may involve dispute resolution of private law issues between individuals, business entities or non-profit organizations. A lawsuit may also enable the state to be treated as if it were a private party in a civil case, as plaintiff or defendant regarding an injury, or may provide the state with a civil cause of action to enforce certain laws.

The special issue of Dispute Resolution 2011 carries an article on the "litigation in Korea", written by Shin & Kim attorneys, Benjamin Hughes, Beomsu Kim and Seungmin Lee from the perspective of 'comparative law' as follows:

Key words
dispute resolution, litigation, civil court, evidence, remedy, enforcement

Structure of Court system
The Korean civil court system is divided into three levels: district courts of first instance, high (appellate) courts and the Supreme Court. Subdivisions within the district and high courts are responsible for civil, criminal, family, juvenile, administrative, patent and bankruptcy matters.

The number of judges sitting on a civil case at the district court level will depend on size of the claims. Where the claim amount is less than 100 million Korean won, the case will be heard by a single judge. Where the claim amount is 100 million Korean won or more, the case will be heard by a panel of three judges. In the high courts, all cases are heard by a panel of three judges. Most cases before the Supreme Court are heard by a panel of three justices, but where the Court deems the case to be of high importance the case will be heard by all 13 justices.

In addition, there is an independent Constitutional Court, which reviews the constitutionality of laws and acts of the government and hears cases involving disputes between government entities. There are nine justices on the Constitutional Court.

Judges but no juries
Compared to judges in common law jurisdictions, judges in Korea, in principle, have a more passive role in civil proceedings. In practice, however, the role of judges can vary greatly depending on the nature of the case, the presence or absence of counsel representing the parties and the personal tendencies of the presiding judge.

There are no juries in civil cases in Korea.

Limitation issues
The statute of limitations for bringing civil claims varies depending on the nature of the claim. For most civil claims, such as breach of contract claims, the statute of limitations is 10 years, but shorter periods apply to certain contractual relationships. Tort claims must be brought within 10 years from the date the tort was committed, or three years from the date on which the plaintiff became aware of the damage and the identity of the tortfeasor, whichever is shorter.

A party may waive its right to raise a statute of limitations defence only after such right has accrued (ie, after the statute of limitations has expired); the parties may not contractually agree in advance to waive this right. In addition, while the statute of limitations may be tolled where exceptional factors (ie, force majeure) prevented the plaintiff from filing the claim, the parties may not agree in advance to alter the statutory conditions for suspending or tolling the statute of limitations.

Civil Procedure
Civil proceedings commence with the filing of a written complaint by a plaintiff with the competent district court. The complaint must name the parties and set forth the facts upon which the claim is based, and demand relief. Where a written complaint lacks any of these elements, the court will order the plaintiff to amend the complaint within a reasonable period fixed by the court, and dismiss the complaint if the defects are not remedied within such period. In small claims cases (under 20 million Korean won), a written complaint is not required, but a court clerk will make a record of the complaint.

Timetable
A civil case commences upon the filing of a written complaint by the plaintiff in the district court of competence. If the court is satisfied that the complaint satisfies the pro forma statutory requirements for a civil complaint described above, the court will serve the complaint to the defendant, whereupon the defendant has 30 days to submit his or her response. This 30-day period is frequently extended by the court upon request by the defendant. After this first round of submissions by each party, the court will hold the first hearing, and subsequent pleadings, exchanges of written submissions and hearings will follow. The schedule and time limits for these subsequent procedures will be decided by the court at its discretion, depending on the nature and complexity of the case and other factors.

Discovery and Evidence – documents
The parties do not have a duty to preserve documents or other evidence pending trial. Generally, a party has no obligation to share documents that are contrary to its interest, as there is no common law-style discovery in Korea. Each party will submit documents in support of its case, and the court is not permitted to consider evidence that has not been submitted by a party, even where the court may have independent knowledge of a determinative piece of evidence.

However, certain documents must be produced if requested by the opposing party and ordered by the court. These include documents quoted during the course of the pleadings, documents that the requesting party has the statutory right to inspect, documents that were created for the benefit of the requesting party or documents directly relating to the legal relationship between the parties. Where a party in possession of such documents destroys or refuses to submit them, the court may draw adverse inferences against the party with respect to the issue for which the documents were requested.

Evidence – privilege
Korean civil procedure does not recognise the concept of attorneyclient privilege as found in common law jurisdictions. However, certain provisions of the Korean Civil Procedure Act do provide some protection for certain attorney-client communications. However, Articles 317 and 318 of the Civil Procedure Act provide that if the court nevertheless orders an attorney to testify after having invoked Article 315, he or she must testify or face penalties.

Moreover, Article 315 addresses the attorneys only, and does not create an attorney-client privilege that can be invoked by a party to avoid the production of documents. Under Article 349 of the Korean Civil Procedure Act, if a party fails to produce a document after being ordered to do so by the court, the court may make adverse findings against such party.

There is also a duty to maintain confidentiality under the Korean Attorney Act. Article 26 of the Attorney Act provides that an attorney may not disclose any confidential information learned in the course of performing his or her duties. However, where statutory provisions such as Articles 317 and 318 of the Civil Procedure Act require the disclosure of such information, they prevail over the attorney’s obligations under the Attorney Act.

Whether advice from an in-house lawyer could be protected by these provisions of the Civil Procedure Act would depend entirely on the circumstances of the case and the determination by the court as to whether a party should be ordered to disclose such advice.

Evidence – trial
Evidence is presented either by submissions to the court (for documentary evidence) or in the form of oral testimony (for experts and other witnesses). Experts and other witnesses provide oral testimony during direct examination by the party requesting the appearance of such witness, after which the opposing party is given the opportunity to crossexamine. Redirect examination may be allowed with permission from the presiding judge. With the court’s permission, and subject to objection by the opposing party, witness testimony may also be presented in the form of written witness statements.

Remedies
Korean courts may order three main types of remedies: money damages or performance, declaratory relief and constructive relief. Punitive damages are not available under Korean law. For money judgments, interest accrues from the date of delivery of the written complaint to the defendant, at the interest rate stipulated in the underlying contract or at the statutory default interest rate under applicable law. The statutory interest rate under the Civil Act is 5 percent. For certain commercial transactions to which the Commercial Code applies, the statutory interest rate is 6 percent. In addition, the court may apply a default interest rate of up to 20 percent per annum from the day following the date of service of the judgment to the defendant until the actual date of payment.

Interim Remedies
The two most common types of interim measures available in Korea are preliminary attachments and preliminary injunctions. In both cases, the applicant must make a prima facie showing that it will be irreparably harmed if the injunctive relief is not granted. These remedies are available in support of foreign court proceedings and arbitrations that are currently pending or about to be commenced. A party to a foreign proceeding may apply for injunctive relief to the Korean court having jurisdiction over the subject property. Search orders are not available in civil proceedings in Korea.

Enforcement
Korean courts do not have contempt powers and generally cannot sanction a party for disobeying a court order. However, the court may impose fines (up to 5 million Korean won) or even detention (up to seven days) for witnesses who fail to appear to testify under oath. In addition, a witness who makes false testimony under oath may be punished by imprisonment of up to five years and a fine of up to 10 million Korean won. Finally, where applicable, the court may draw adverse inferences against a party refusing to comply with a procedural order such as an order to produce documents.

Public Access
All civil case hearings are open to the public, except where the court determines that a public hearing would be detrimental to national security, social order or social morals. Court documents such as pleadings and witness statements are generally not available to the public, and are generally considered confidential.

Costs
The final judgment should include a decision on the allocation of costs of the proceedings. Litigation costs include stamp duties (based on the claim amount), fees for service of process, costs incurred in examination of the evidence (ie, witness expenses, expert appraisal fees, etc.) and attorneys’ fees. It should be noted that attorneys’ fees are reimbursed only to the extent permitted by the Supreme Court regulations. As such, full recovery of attorneys’ fees is not normally possible.

Litigation costs in principle are to be borne by the losing party. In a partial victory, the court has the discretion to decide the ratio or amount of litigation costs that the respective parties must bear.

Also, the court may order the prevailing party to bear all or part of the litigation costs if such costs are incurred due to the unnecessary acts of the prevailing party or are otherwise attributable to the prevailing party. Where a plaintiff has no domicile, office or place of business in Korea, the court may order the plaintiff to provide security for the litigation costs upon request by the defendant.

Lawyers and clients are free to enter into contingent or conditional fee arrangements, including ‘no win, no fee’ agreements, or any other fee arrangements that are not prohibited under Korean law. There is no prohibition under Korean law against the use of third-party funding, or the sharing of the risks or proceeds of litigation.

Appeal
The losing party may appeal to the high court on either the facts or interpretation of law of the judgment rendered by the district court.

The appeal must be made within 14 days from the date of service of the judgment. Once this time period has elapsed, the judgment becomes final and binding. The high court will review the district court’s decision de novo, may re-examine the evidence and witnesses and is not bound by any factual or legal conclusion drawn by the lower court.

Following judgment by the high court, further appeal may be made to the Supreme Court, which is the court of last resort. Notably, the Supreme Court does not have certiorari powers to reject an appeal, which accounts for its large backlog of cases. However, the Supreme Court only reviews cases in which the interpretation of the law is in question, and generally will not revisit the evidence unless the issue on appeal relates to the misapplication of the rules of evidence by the court.