Ministry of Justice Announces Legislative Notice for the "Collective Litigation Act" Draft, Undergoing 40 Days of Public Consultation...

[Asia Economy Reporter Bae Kyunghwan] The main framework of the 'Collective Litigation Act' and the 'Commercial Act Amendment' scheduled to be announced by the Ministry of Justice on the 28th is to expand the collective litigation system to all fields with more than 50 victims and to hold companies that committed illegal acts liable for damages up to five times the actual damage.

The collective litigation system was first introduced in the securities sector in 2005. However, as large-scale victim cases such as Volkswagen's diesel car emissions manipulation and humidifier disinfectant incidents occurred consecutively, there were calls to expand the applicable fields, and this legislative notice reflects such demands.

The Ministry of Justice explained the legislative background, stating, "While sufficient compensation was provided to victims in countries like the United States and Germany, which recognized collective litigation during the diesel car emissions manipulation case, compensation for domestic consumers was not properly made."

Punitive damages, which hold companies that committed malicious illegal acts liable for up to five times the actual damages incurred, will also be expanded. Starting with the Subcontracting Act in 2011, it has been sporadically implemented in 19 individual laws such as the Product Liability Act and Patent Act, but by codifying it in the superior law, the Commercial Act, it means it will effectively apply to almost all commercial transactions.

The Ministry of Justice plans to announce the amendment on the 28th and then collect opinions through public hearings for 40 days. Afterwards, following review by the Ministry of Government Legislation and the State Council, it is expected to be submitted to the National Assembly as a 'government bill' as early as the end of the year.

However, considering that it is a ruling party's general election pledge and a national agenda, there is a high possibility that it will be submitted to the National Assembly as originally proposed even after the opinion collection process. A Ministry of Justice official stated, "The amendment and enactment were promoted to secure deterrence against malicious illegal acts regardless of the field, and after following the prescribed legislative procedures, the government bill will be immediately submitted to the National Assembly."