Cost and Fee Allocation Rules in Korean Civil Procedure

Abstract

Korea is one of the most litigation-prone societies on earth. The overall increase of court filings in civil cases in Korea is the result of external costs which are borne by the parties from outside the courts and internal costs which the parties generate as they directly utilize the courts. The external costs may include the increase of the number of disputes resulting from the rapid growth of Korean economy and the increasing weakness of dispute resolution mechanisms such as families, churches, and neighborhoods. The internal costs may include litigation costs. In this regard, this Article will mainly explore costs and fees borne by both parties as an effort to improve Korean civil procedure by eliminating frivolous lawsuits and encouraging meritorious ones. At the outset, the Article explores the basic rules and their exceptions and modifications as to who pays fees and costs in a lawsuit.

Secondly, the Article explains fee and cost allocation rules which encourage or discourage

litigation. In the third place, the Article delves into the determination of fees and costs incurred by both

parties to a lawsuit. Afterwards, the Article discusses special Issues including success-oriented fees, sale of claims, class actions, and litigation insurance in terms of fee and cost allocation rules. In Conclusion, I propose that Filing Fees Act in the context of civil procedure be incorporated to the Act on Costs for Civil Procedure, and Filing Fees Rules for civil procedure and Rules regarding Attorney Fees included in Litigation Costs be incorporated to Rules of Costs for Civil Procedure. Afterwards, I make some comments on contingent fee arrangements as follows: (i) that contingent fee arrangements should not be permitted in criminal cases in Korea because those cases are related to public interests; and (ii) that contingency fee arrangements for domestic relation cases should not be allowed

because it can encourage the dissolution of family relation. In addition, the Article points out that pro se actions can encourage a court to heavily rely on appropriateness in the concrete rather than legal certainty. In other words, appropriateness in the concrete sometimes preempts legal certainty in Korea because applying law by the court is limited by pro se litigation. The Article goes on to mention that this problem will be somewhat solved by the legal aid, the increase of the number of attorneys, and legal service insurances.