Regulatory Bills Such as the Yellow Envelope Act and Commercial Act Amendments Expected to Pass
Stronger Response to Serious Accidents, Fair Trade, and Tax Issues
Legal Market Poised for Major Upheaval
Just one week after the launch of the new administration, three special prosecutors (hereinafter "special prosecutors") have been launched simultaneously, and as various regulatory bills?including amendments to the Commercial Act and the Capital Markets Act, as well as the so-called "Yellow Envelope Act" amending the Trade Union Act?are on the verge of passing the National Assembly, law firms are growing increasingly busy. Companies are flooding law firms with inquiries regarding changes in government policy and legislative trends in the National Assembly following the inauguration of President Lee Jae Myung (61, 18th Judicial Research and Training Institute). At the same time, they are showing signs of nervousness over investigations initiated by special prosecutors, seeking advice from law firms on how to respond to criminal cases. In the industry, there is a growing sense of anticipation, with many saying, "The market is about to open," as they prepare for a surge in demand for legal services.
President Lee Jae Myung is speaking at the Cabinet meeting held on June 5 at the Yongsan Presidential Office Building in Seoul. Photo by Yonhap News
As the new administration and the ruling party have announced plans to swiftly process amendments to the Commercial Act that strengthen directors' fiduciary duties to shareholders, as well as the Yellow Envelope Act that would allow subcontractor unions to engage in collective bargaining with parent companies, large and mid-sized companies are preparing to seek practical solutions by consulting law firms. An attorney at a major law firm said, "With sweeping reforms expected in corporate governance and HR/labor policies, companies are highly interested in the government's key policies and legislative trends, and we are receiving many inquiries. Once the appointments of ministers and vice ministers and the policy directions of major ministries are finalized, we expect a significant increase in demand for legal advice."
When President Lee, just two days after taking office on June 5, emphasized a "mutually beneficial economy" and highlighted the need to increase staff at the Fair Trade Commission, dedicated fair trade teams within law firms immediately went into response mode. With President Lee having pledged to enact a law on fair online platforms, there is also talk of establishing a "Platform Bureau" within the Fair Trade Commission. A fair trade specialist at a major law firm commented, "Although the previous administration also maintained strong regulations by the Fair Trade Commission, the new administration is expected to be even more stringent. As platform regulation bills are being pushed in the National Assembly, investigations by the Fair Trade Commission into unfair practices by large domestic and foreign platforms are likely to intensify."
Alongside platform regulation, there is also speculation about possible reforms to distribution structures. On June 9, President Lee instructed his administration to come up with measures to address the prices of processed foods, saying, "Is it true that a single packet of ramen now costs 2,000 won?" In response, a mid-sized law firm attorney noted, "If the government is aiming for price stability, it is highly likely that this will lead to investigations into price collusion or distribution structures, which is making companies nervous."
There is also growing attention on changes in the new administration's approach to serious industrial accident cases. On June 6, Chief Presidential Secretary Kang Hoon Sik stated regarding the death of a worker at the Taean Power Plant, "We will handle this strictly under the Serious Accidents Punishment Act and take measures equivalent to special labor supervision." President Lee also remarked on June 5, "We must assign competent personnel to areas concerning the lives and safety of the people, and hold those responsible strictly accountable for preventable accidents." An attorney at a major law firm warned, "In the past, many serious industrial accident cases ended without indictment, but under the new administration, investigations and indictments are expected to be strengthened. If similar accidents recur, such as the worker fatality at SPC Samlip’s plant early in the administration, the government may launch exemplary investigations." He added, "Although courts have recently issued not-guilty verdicts and legal interpretations are being refined, the government and ruling party are likely to pursue institutional improvements, and the prosecution’s dedicated investigative units are expected to be expanded."
With the unprecedented simultaneous launch of three special prosecutors, a "climate of investigation" is expected to continue through the end of the year, keeping criminal and litigation teams at law firms busy. The three special prosecutor bills were passed at the Cabinet meeting on June 10. An attorney who previously served as a prosecutor commented, "The Kim Keon Hee special prosecutor could lead to investigations into corporate affairs. Any company even slightly involved in 'business interests' will inevitably have to scramble to prepare countermeasures."
Hong Yoonji, Law Times Reporter
Han Suhyeon, Law Times Reporter
※This article is based on content supplied by Law Times.
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