hankyoreh

A member of the Korean Federation for Environmental Movement holds a one-person demonstration in Gwanghwamun Square in central Seoul

A Missouri court ruled on May 3 to order the company Johnson and Johnson to pay US$55 million (around 64.3 billion won) in damages in a suit filed by family members of a woman in her sixties who contracted ovarian cancer after using its products. The total amounted to US$5 million in compensation and US$50 million in punitive damages.

But while the death toll in South Korea’s humidifier disinfectant case had passed 500 and over five years have passed since the problem first came to light, victims have yet to receive proper compensation.

What accounts for the difference? Experts said the situation shows the urgent need for South Korea to adopt class action lawsuit and punitive damage systems that would provide an option for quickly assigning heavy responsibility in cases involving serious misconduct with large numbers of victims.

Under a class action system, a successful suit by some of the victims in cases where wrongful actions by companies related in large-scale damages results in restitution for other victims without requiring additional legal action from them. A punitive damage system awards amounts far in excess of actual damages in cases of offenses determined to be particularly severe.

“Under the current [South Korean] judicial system, a victim who was blinded because of disinfectant user would only receive around 50 million won [US$42,800] in compensation beyond the legal damages,” attorney and Seoul Bar Association human rights committee chairman Oh Yeong-jung explained on May 10.

The class action and punitive damage systems, Oh added, are “implemented in places like the US because they increase the ability of the victims [consumers], who are more vulnerable in societal terms than the offenders [companies], which allows them to win compensation more easily and is effective in preventing the same violations from happening again.”

People’s Solidarity for Participatory Democracy and 15 other civic and social groups held a press conference at Gwanghwamun Square in central Seoul on May 10 to declare a boycott of products by Oxy - makers of the sterilizer in question - and demand introduction of the class action and punitive damage systems.

South Korea previously introduced a class action system for securities in 2005. But difficult conditions placed on litigation have resulted in just six suits actually being filed to date. A punitive damage system was introduced in 2011 for unfair practices by large corporations according to the Subcontracting Act, but a reluctant judiciary has yet to apply it.

During her 2012 campaign, President Park Geun-hye pledged to introduce both systems for cases involving collusion and other violations of the Fair Trade Act, but failed to follow through after meeting with objections from business interest groups.

As the opposition party in the 19th National Assembly, the Minjoo Party of Korea (TMPK) presented several related bills. Lawmaker Seo Young-kyo sponsored a consumer class action suit built that would apply the system in cases where consumers suffered damages as a result of illegal manufacturing, advertising, price-fixing, or sales practices by companies. Two other lawmakers, Woo Yoon-keun and Kim Gi-juhn, respectively sponsored a bill to insert special class action terms in the Civil Procedure Act and an amendment to the Securities Class Action Act that would loosen the current system’s litigation conditions. Baek Jae-hyun proposed an amendment to the Product Liability Act that would allow for punitive damages of up to 12 times the compensation for cases involving product defects.

None of the bills passed the 19th National Assembly, where it was stymied by objections from the administration, ruling Saenuri Party, and business community citing concerns over the increased burden on companies and a possible proliferation of legal action.

But with the then-opposition parties now forming a new majority after campaigning successfully on pledges to beef up both systems in the Apr. 13 general elections, hopes for the 20th National Assembly are higher.

“To encourage use of the class action system, we need to place the burden of proof on the alleged offender rather than the victim and institute mandatory disclosure by court order for evidentiary materials possessed by the offender,” suggested Economic Reform Research Institute senior researcher Wi Pyung-ryang.

Wi also advised that the ceiling for punitive damages be raised to up to ten times the amount of actual compensation.

By Kwak Jung-soo, business correspondent

Please direct questions or comments to [english@hani.co.kr]