'Class Action System' Gains Momentum After 'Coupang Incident'... President Lee Also Stresses Importance

Compensation for All Victims, Including Non-Participants in Lawsuits
Bills Pending in the 22nd National Assembly... Higher Likelihood of Legislation
"Meticulous System Design Needed" and Continued Opposition from the Business Community

In the wake of a massive personal information leak at Coupang, there is a growing call for the introduction of a class action system in the area of personal data protection.

Active Discussion on Introducing 'Class Action System' Following 'Coupang Incident'... "Necessary for Consumer Relief and Preventing Recurrence of Corporate Incidents"

On December 14, Yonhap News reported that discussions on introducing a class action system have become more active following the recent Coupang personal information leak. The class action system allows a ruling in favor of a group of plaintiffs to apply to all affected individuals, ensuring that all victims receive compensation. While countries such as the United States and the United Kingdom have adopted class action systems, South Korea has only implemented it in the securities sector since 2005.

Currently, large-scale lawsuits related to personal information leaks are conducted as "joint lawsuits," meaning only those who are named as plaintiffs in the lawsuit can benefit from the court's ruling.

Attorney Lee Sanghee of Jihyang Law Firm emphasized, "Among OECD countries, only South Korea and T?rkiye have not introduced a class action system." He stressed that the system should be implemented not only for consumer relief but also to prevent the recurrence of corporate personal information breaches.

Kim Jooyoung, managing partner at Hannuri Law Firm, explained, "In the Coupang case, several law firms are gathering plaintiffs and proceeding with lawsuits, but different courts may reach inconsistent conclusions, and there will be disparities between those who participate and those who do not." He added, "If a class action system is introduced, compensation can be consolidated into a single lawsuit, ensuring that all victims are compensated efficiently and preventing a waste of judicial resources."

Coupang Rocket Delivery vehicles are lined up in a row. Photo by The Asia Business Daily

Repeated Failures Due to Strong Opposition from Business Circles, Pending in the National Assembly... "Thorough Preparation Needed, Including Introduction of Discovery System"

In South Korea, legislative discussions on the class action system have taken place several times, but each attempt has failed due to strong opposition from the business community. In 2020, the Ministry of Justice announced a draft bill to expand the class action system from the securities sector to all sectors, but it was withdrawn amid fierce opposition from business groups, who argued that "an increase in lawsuits would harm companies and the national economy." In the 22nd National Assembly, several bills proposing the introduction of class actions in all areas of personal data infringement, such as the "Class Action Act" (sponsored by Assemblywoman Baek Hyeryeon), the "Consumer Class Action Act" (Assemblyman Park Jumin), and the "Personal Data-Related Class Action Act" (Assemblyman Jeon Yonggi), have been submitted and are currently pending.

The National Assembly Research Service pointed out in a report last month that, for a class action to proceed, it must be possible to identify all members affected by the ruling, and those members must have the opportunity to opt out of the binding effect of the judgment. The report noted, "Due to the nature of the system, the requirements for a lawsuit are strict and the procedures may be prolonged, which should be recognized as a limitation."

The report also emphasized that a sufficient notification process must be established to ensure that class members are clearly informed that if they do not opt out, they cannot file a separate lawsuit regarding the same facts once the judgment takes effect.

Some argue that when victims are fully compensated through a class action, there is little legal basis for imposing additional fines, so adjustments to existing sanctions are necessary to avoid imposing fines when a class action system is introduced.

Attorney Kim further stated, "Most evidence is held by the defendant companies, but under Korea's Civil Procedure Act, there are limited means to obtain evidence from the opposing party. This has resulted in low filing rates in the securities sector due to the risk of losing from lack of evidence." He added, "The discovery system (a pre-trial procedure where the court can order the opposing party to submit documents) should be introduced in all civil litigation, and if that is difficult, at least in class action cases."

President Lee Also Addresses the Issue... "Considering Introduction of Class Actions, Stronger Sanctions Against Companies Leaking Personal Data"

Meanwhile, on December 12, President Lee Jaemyung ordered a prompt revision of related systems to impose stronger sanctions on companies that leak personal information. In response, the Personal Information Protection Commission announced that it is pursuing a plan to impose punitive fines of up to 10% of sales on companies that repeatedly leak personal data. President Lee also remarked, "All citizens are victims, but unless each person files a lawsuit, compensation is not provided," adding, "We must also consider introducing a class action system."