Ministry of Justice Announces Legislative Notice for Lawyer Act Amendment... Restrictions on Former Officials' Case Acceptance and Strengthened Punishment for Secret Representation

[Asia Economy Reporter Choi Seok-jin] The restriction period for retired lawyers, so-called ‘jeongwan (former officials)’, who have retired from public offices such as courts or prosecutors’ offices, will be extended from 1 year to up to 3 years.

Additionally, penalties for covert litigation acts will be strengthened, and a new fine regulation will be established for public institutions that imply preferential treatment for former officials through connections and promotions.

The Ministry of Justice announced on the 30th that it has publicly notified a bill to amend the Attorney-at-Law Act containing these provisions.

The amendment differentiates the restriction period on accepting cases handled by national agencies where the retired official worked from 1 year before retirement until retirement, which is currently 1 year, to 1, 2, or 3 years depending on the rank of the retired public official.

This measure aligns with the Public Officials Ethics Act, which prohibits retired public officials subject to asset disclosure, other than lawyers, from employment in restricted institutions for 3 years after retirement, and prohibits those subject to employment review based on agency work standards from handling work of the agency where they worked from 2 years before retirement until retirement for 2 years after retirement.

According to the amendment, first-grade public officials subject to asset disclosure under the Public Officials Ethics Act, high court chief judges, chief prosecutors, police commissioners or higher, heads and deputy heads of the Corruption Investigation Office for High-ranking Officials (CIO), etc., will be prohibited from accepting cases handled by the agency where they worked for 3 years prior to retirement for 3 years after retirement.

Second-grade or higher public officials subject to employment review based on agency work standards, senior chief judges of district courts, high prosecutors’ chiefs, deputy chief prosecutors of district prosecutors’ offices, etc., will be prohibited from accepting cases handled by the agency where they worked for 2 years prior to retirement for 2 years after retirement.

For other public officials, as is currently the case, acceptance of cases handled by the agency where they worked for 1 year prior to retirement will be restricted for 1 year after retirement.

Penalties for so-called ‘covert litigation’, where lawyers represent clients without submitting a power of attorney, will also be strengthened.

Under current law, punishment requires the purpose of evading legal restrictions such as tax evasion or acceptance restrictions, making enforcement practically difficult and the penalty level low, resulting in ineffectiveness.

Accordingly, the Ministry of Justice has increased the statutory penalty for covert litigation with the purpose of tax evasion or evading legal restrictions from ‘imprisonment of up to 1 year or a fine of up to 10 million KRW’ to ‘imprisonment of up to 2 years or a fine of up to 20 million KRW’.

Furthermore, a fine of up to 20 million KRW will be newly imposed for simple covert litigation without justifiable reasons.

The statutory penalty for lawyers accepting cases they handled while serving as public officials has also been raised from ‘imprisonment of up to 1 year or a fine of up to 10 million KRW’ to ‘imprisonment of up to 2 years or a fine of up to 20 million KRW’.

Regulations on acts implying ‘preferential treatment for former officials’ by promoting connections with public institutions will also be strengthened.

The current Attorney-at-Law Act limits the prohibition of connection promotion to public officials of judicial and investigative agencies and does not provide separate sanctions for violations.

However, the amended law expands the institutions subject to the prohibition of connection promotion to include agencies responsible for investigative duties such as the Fair Trade Commission, National Tax Service, Financial Supervisory Service, and other agencies designated by Presidential Decree, and allows imposing fines of up to 10 million KRW for violations.

Additionally, the amendment allows imposing fines of up to 20 million KRW and 10 million KRW respectively for false submission and non-submission of work details, similar to false or non-submission of acceptance materials by retired public official lawyers, and introduces joint penalty provisions for employing legal brokers or violating the prohibition on lending lawyers’ names, thereby strengthening the responsibilities of law firms and lawyers.

Earlier, following the 5th Anti-Corruption Policy Council held last November, the Ministry of Justice announced the ‘Measures to Eradicate Special Treatment for Former Officials in the Legal Profession’ in March this year, and after in-depth discussions by the ‘Attorney System Improvement Committee’ composed of experts from academia, courts, the Korean Bar Association, and the Legal Ethics Council, it prepared this amendment bill.