Record High in Corporate Dispute Mediation...Due to Economic Downturn

Number of Cases Filed Surpasses 4,000
Noticeable Increase in Platform and Construction Subcontracting Sectors

Last year, the number of corporate dispute mediation cases filed increased for the second consecutive year, including in the online platform and construction sectors. This is attributed to the worsening business conditions due to the economic downturn.

According to the "2024 Dispute Mediation Status" announced by the Korea Fair Trade Mediation Agency on the 23rd, the total number of dispute mediation cases filed last year was 4,041, a sharp increase of 16% compared to the previous year (3,481 cases). The total number of dispute filings has increased for two consecutive years following 2023 (23%), setting a record high this year.

By sector, the fair trade sector accounted for the largest number with 1,795 cases. This was followed by the subcontracting transaction sector with 1,105 cases, the franchise business transaction sector with 584 cases, and the terms and conditions sector with 457 cases.

In the fair trade sector, the number of cases filed in the online platform sector significantly increased by 45% to 333 cases. In the terms and conditions sector, applications for adjustment of excessive penalty clauses due to mid-contract cancellations in online advertising agency contracts and rental contracts (221 cases) increased, and in the franchise business transaction sector, cases related to excessive penalty claims due to mid-contract cancellations (143 cases) were the most frequently filed.

Due to the worsening construction market, the subcontracting transaction sector saw a significant increase in the construction subcontracting field (660 cases), up 8% from the previous year and 34% compared to two years ago.

The total number of disputes resolved last year was 3,840, a 22% increase from the previous year (3,151 cases). Among these, 1,450 cases were successfully mediated, a 13% increase compared to the previous year (1,278 cases).

The direct compensation amount for damages was 121.062 billion KRW, and the total direct and indirect compensation amount, including saved litigation costs, was estimated at 128.086 billion KRW.

The Mediation Agency stated, "This year as well, disputes will continue to increase in various sectors such as online platforms and construction subcontracting due to the worsening construction market and acceleration of the digital economy, and the types of unfair trade practices will become more complex and diverse. We will expand face-to-face mediation between parties and actively propose mediation plans to actively resolve unfair trade damages suffered by small and medium-sized businesses."