Collective action

Collective action led by an eligible civic organization (단체소송) is a specific action authorized by a consumer protection law, in which an authorized group in lieu of the affected consumers is allowed to file a lawsuit for the benefit of consumers themselves, i.e., prohibition and suspension of the infringement of consumers’ rights and interests.

When there is a number of consumers suffering from products with the same defects in the process of manufacturing and circulation, but the damage of each consumer is so small that an individual consumer cannot file a suit with the court owing to the cost and inconvenience involved, what shall be done?

Under the Korean Civil Procedure Act, there are some useful proceedings such as co-litigation (공동소송) or appointed party litigation (選定당사자소송). As witnessed in the recent collective lawsuits regarding massive data breach incidents, however, there are considerable inconveniences to the plaintiffs and the court.

How can the victims with small damage join the lawsuit and take part in the compensation with ease? To this end, a class action, in particular, regarding product liability, and a collective action for consumer protection have been allowed in the United States and Germany, respectively. In England, a group litigation is allowed.

In Korea, so far a class action has been allowed for securities fraud cases, while a collective action for consumer protection. The main difference is the representative plaintiff: the former is represented by a member of the alleged victims, while the latter is represented by a consumer protection group.

Key words
collective action, class action, group litigation, data protection, consumer protection

Merits of Collective Action
Why are those countries adopting the collective action led by an eligible civic organization? It's because:
 * A dispute arising out of common incidents can be settled in a short period of time.
 * Considerable saving of legal costs is possible.
 * Thanks to the increase of the value of lawsuit, a specialized in-depth legal advice is available from professional lawyers.
 * The bigger a case may be, the larger influence or impact could be placed against the counterparty.

Under the Framework Act on Consumers
The Framework Act on Consumers (소비자기본법, the "Consumer Act") provides for a general rule and procedure as follows:

Standing
Article 70 (Objects, etc. of Collective Action)
 * If an enterpriser infringes directly on the rights and interests of consumers relating to their lives, bodies or property in violation of Article 20 and the infringement continues, the organization which falls under any one of the following subparagraphs may file an action with a court to prohibit and suspend the infringement of consumers’ rights and interests (hereinafter referred to as the "collective action"):
 * 1. A consumer organization which is registered with the Fair Trade Commission pursuant to Article 29 and meets all the requirements provided for in the following items:
 * (a) An organization which is aimed mainly at the promotion of con sumers’ rights and interests pursuant to its articles of association;
 * (b) An organization the number of whose regular members is not less than one thousand; and
 * (c) An organization for which three years have passed since it was registered pursuant to Article 29;
 * 2. The Korea Chamber of Commerce and Industry under the Chambers of Commerce and Industry Act, the federation of small and medium enterprise cooperatives under the Small and Medium Enterprise Cooperatives Act, and the nationwide economic organization as prescribed by the Presidential Decree; and
 * 3. A non-profit and non-governmental organization under Article 2 of the Assistance for Non-profit, Non-governmental Organizations Act (비영리민간단체지원법) which meets all the requirements provided for in the following items:
 * (a) An organization which is requested by fifty or more consumers who suffered legally or factually identical damages to institute a collective action;
 * (b) An organization which has the actual results of activities for the last three or more years according to the purpose of promoting the rights and interests of consumers specified in its articles of association;
 * (c) An organization the number of whose regular members is not less than five thousand; and
 * (d) An organization which is registered with a central administrative agency.

Jurisdiction
Article 71 (Exclusive Jurisdiction)
 * (1) A collective action lawsuit shall be under the exclusive jurisdiction of the collegiate panel of a district court having jurisdiction over the place where the defendant’s principal office or business place is located, and if the defendant has no principal office and business place, the domicile of the person principally in charge of the defendant’s duties is located.
 * (2) In case where paragraph (1) applies to a foreign enterpriser, the forum shall be determined pursuant to his/her principal office or busi ness place, or the domicile of the person principally in charge of his/her duties, which is located in the Republic of Korea.

Procedure
Article 72 (Appointment of Attorney)
 * The plaintiff in a collective action shall appoint a lawyer as his/her attorney.

Article 73 (Application for Permission of Action)
 * (1) An organization which seeks to institute a collective action shall submit to a court an application for the permission of the action specifying the matters provided for in the following subparagraphs, along with a written complaint:
 * 1. The plaintiff and his/her attorney;
 * 2. The defendant; and
 * 3. The scope of the infringement of consumers’ rights and interests by the enterpriser concerned, which requires the prohibition or suspension.
 * (2) An application for the permission of the collective action under para graph (1) shall be accompanied by the materials referred to in the fol lowing subparagraphs:
 * 1. Materials proving that the organization which institutes the collective action meets the requirements provided for in any subparagraph of Article 70; and
 * 2. Documents requested by the organization which institutes the collective action pursuant to Article 74 (1) 3 and the written opinion thereon presented by the enterpriser concerned: Provided, That if the enter priser gives no response within a period fixed under the said sub paragraph, the enterpriser’s written opinion may be omitted.

Article 74 (Requirements, etc. for Permission of Action)
 * (1) A court shall permit a collective action, by its ruling, only in cases where all requirements as referred to in the following subparagraphs are met:
 * 1. That there is any public need for permitting such collective action in the light of the protection of consumers’ rights and interests and the pre vention of any damage to them, because the goods, etc. concerned cause or might cause any danger or injury to consumers’ lives, bodies or property;
 * 2. That there is no defect in the matters entered in the application for the permission of action under Article 73; and
 * 3. That fourteen days have passed since the organization instituting the action asked the enterpriser concerned, in writing, to prohibit and suspend the infringement of consumers’ rights and interests.
 * (2) An immediate appeal may be raised against the ruling to permit or not to permit the collective action.

Effect of Judgment
Article 75 (Effect of Final and Conclusive Judgment)
 * When a judgment to reject a request made by a plaintiff became final and conclusive, any such other organization as referred to in Article 70 may not a collective action with regard to the same matter: Provided, That this shall not apply to a case falling under any one of the following subpara graphs:
 * 1. When a new research result or evidence is found by an institution, which is established by the State or a local government, with respect to the rejected case after the judgment became final and conclusive; and
 * 2. When the judgment of rejection is found to have been caused by any intentional act of the plaintiff.

Article 76 (Application of Civil Procedure Act, etc.)
 * (1) Except as otherwise prescribed in this Act, the collective actions shall be governed by the provisions of the Civil Procedure Act.
 * (2) When a decision to permit a collective action is made pursuant to Article 74, the preservative measures provided for in Part Ⅳ of the Civil Execution Act may be taken.
 * (3) Necessary matters regarding the procedures of collective actions shall be prescribed by the Supreme Court Regulations.

Under the Personal Information Protection Act
For the levelled-up protection of data subjects, the Personal Information Protection Act newly enacted in 2011 has adopted the collective action which was initially introduced by the Framework Act on Consumer. The provisions have been inserted in parallel with the Consumer Act as regards to the standing to sue, jurisdiction to adjudicate the collective action, general procedure and other proceedings.

The effect of court ruings is limited to the prohibition or suspension of an infringement on data subjects' rights, and prevents a subsequent lawsuit from being filed against the same case.