Ministry of Justice's 'Class Action Expansion'... Opposition Party Says "Timing Is Very Bad"

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[Asia Economy Reporter Lee Ji-eun] The Ministry of Justice's move to expand class action lawsuits and punitive damages has drawn criticism from opposition parties, who say "the timing is very bad." Amid concerns from the business community over the ruling party's push for the 'Fair Economy 3 Acts,' there are worries that these measures could deal a blow to companies already struggling due to the novel coronavirus disease (COVID-19). Former lawmaker Lee Sang-don also stated that "the opposition should not accept this."

A member of the People Power Party, who requested anonymity, told Asia Economy on the 24th, "The timing is very bad," adding, "Now is the time to focus on supporting businesses and stimulating the economy to overcome the COVID-19 crisis, so policies unrelated to crisis recovery should be postponed."

Another lawmaker said in a phone interview, "Individuals are having a hard time, and the government is providing emergency disaster relief funds, so how could companies be in a good situation?" He pointed out, "Companies are on the brink of collapse, so trying to pass laws regulating businesses all at once is wrong."

Members of the People Power Party on the Legislation and Judiciary Committee, which oversees the class action bill, expressed a stance of "careful review." One lawmaker said, "It is inappropriate to express an opinion before the bill is even submitted," adding, "However, since there are valid arguments from both the perspective of corporate management and victim relief, we plan to review it very carefully." Another opposition member of the Legislation and Judiciary Committee said, "I have not seen the bill yet, so I cannot speak prematurely, but both class action lawsuits and punitive damages have necessary aspects," and added, "Once the bill is submitted, we will review it."

Former lawmaker Lee Sang-don criticized the government's proposed class action system as being excessively exaggerated and said, "The opposition should not accept it." On the same day, Lee appeared on MBC Radio's 'Kim Jong-bae's Focus' and said, "I have studied litigation law, including class actions, but the ruling party's proposal seems too extreme," adding, "Class actions and punitive damages have dual aspects. While they have positive sides, they are systems with a very high risk of abuse, so most countries do not adopt them." He advised, "Accepting the current system is something the opposition should not do. They need to make selective choices."

Within the opposition, voices have also emerged criticizing the ruling party-led 'Fair Economy 3 Acts' for issues related to defense of management rights. On the same day, People Power Party lawmaker Yoon Young-seok appeared on KBS Radio's 'Kim Kyung-rae's Strongest Current Affairs' and said, "The Fair Economy 3 Acts submitted this time are quite regulatory toward companies," expressing concern that "while large conglomerates like Samsung Electronics face limited management rights attacks from foreigners, small and medium-sized enterprises and mid-sized companies could be vulnerable to foreign management rights challenges."

Meanwhile, Kim Tae-nyeon, floor leader of the Democratic Party of Korea, emphasized that he would complete legislation within the regular session despite business community opposition to the 'Fair Economy 3 Acts,' saying, "They are overly concerned."

At a policy coordination meeting held at the National Assembly that morning, Floor Leader Kim said, "Discussions on the Fair Economy 3 Acts have been ongoing for a long time. When the government proposed the bill, it was made reflecting sufficient opinions from various sectors."

He stated, "Economic democratization and chaebol reform were common pledges of both ruling and opposition parties in the 2012 presidential election," adding, "During the Park Geun-hye administration, a revision to the Commercial Act was announced, but after meetings with the heads of the top 10 conglomerates, economic democratization disappeared from the Park administration and the Saenuri Party, the predecessor of the People Power Party."

He continued, "Issues such as large corporations' governance problems, private interests of the heads' families, and unfair transactions that harm a fair market economy still remain," emphasizing, "We cannot delay legislation to create a sustainable and fair economic ecosystem."

Floor Leader Kim added, "The business community is expressing excessive concerns that the Fair Economy 3 Acts will strangle companies," and said, "Fair economy is the foundation for making the country good for business and investment. To overcome COVID-19, we must change the economic structure and resolve unfairness."

Regarding the separation election of audit committee members and the abolition of the exclusive prosecution system, which the business community claims are toxic provisions, he said, "These concerns are close to groundless." Floor Leader Kim explained, "The threat to management rights from introducing the separation election system for audit committee members in the Commercial Act amendment is close to groundless. It has already been established and is operating smoothly in the financial sector," adding, "Strengthening the board of directors' supervisory function over the audit committee will also enhance corporate competitiveness."

He also pointed out, "Concerns about rampant lawsuits against companies due to amendments to the Fair Trade Act are groundless," noting, "Even if the exclusive prosecution system is abolished, lawsuits will be limited to certain hard-core collusion acts, such as price bid rigging, which cause significant consumer damage."

He said, "We will carefully create alternatives and supplement the bill during the legislative review process in response to reasonable concerns from the business community," adding, "The party will also gather opinions from various sectors centered on the Policy Committee and have sufficient discussions with lawmakers from relevant standing committees."

Nevertheless, he reiterated, "I would like to emphasize again that we intend to complete legislation within this National Assembly session."

This content was produced with the assistance of AI translation services.