SOUTH KOREA Law and Practice Contributed by: Jin Yeong Chung, Inhak Lee and Seung Hyeon Lee, Kim & Chang
2.2 Third-Party Funding: Lawsuits See 2.1 Third-Party Litigation Funding . 2.3 Third-Party Funding for Plaintiff and Defendant See 2.1 Third-Party Litigation Funding . 2.4 Minimum and Maximum Amounts of Third-Party Funding See 2.1 Third-Party Litigation Funding . 2.5 Types of Costs Considered Under Third-Party Funding See 2.1 Third-Party Litigation Funding . 2.6 Contingency Fees Except in criminal cases, conditional or contin- gency fee arrangements are allowed in South Korea, and are frequently used in practice. Vari- ous legal fee structures including, but not limited to, hourly rates and task-based billing can also be used. However, if the court determines that the amount of an agreed-upon legal fee is unreasonably excessive, it can reduce a legal fee otherwise payable to counsel, as per the arrangement between counsel and the client, to an amount as deemed “fair and reasonable” by the court. 2.7 Time Limit for Obtaining Third-Party Funding See 2.1 Third-Party Litigation Funding . 3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct In general, there are no pre-action procedures in place in Korea.
However, in certain proceedings, there are pre- conditions for filing a lawsuit that must be met in accordance with the relevant provisions of the law. Examples are as follows: • when initiating a class action relating to secu- rities, the representative plaintiff must obtain the permission from a court in advance; and • in order to file a tax revocation lawsuit, the plaintiff must exhaust their remedies by undergoing a tax administrative trial. 3.2 Statutes of Limitations The general statute of limitations under the Korean Civil Code is ten years. A shorter peri- od applies to claims arising out of commercial transactions in accordance with the Korean Commercial Code, which is, in principle, five years. In addition, the Korean Civil Code, the Korean Commercial Code and other special laws stipulate the special statute of limitations applicable to certain types of claims. The statute of limitation starts on the day immediately following the date the claim could have been exercised (namely, the due date of each account receivable or, if the due date is not decided in advance, the day the obligation accrued). For claims regarding breach of agree- ments, the statute of limitation starts to run from the date of such breach. Tort claims must be brought within the following periods (whichever ends earlier): • within ten years from the date the tort was committed; and • within three years from the date the claimant becomes aware of damages suffered and the identity of the tortfeasor.
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