Business circles oppose introduction of class-action suits

The nation¡¯s business circles made clear their negative stance toward the introduction of class-action suits, claiming that the new system will result in investors¡¯ abuses of lawsuits, thus imperiling normal corporate activities and negatively affecting the development of the capital market. An official of the Federation of Korean Industries asserted that the introduction of the new system is premature given Korea¡¯s current economic environment, since it will boost lawsuit cases and paralyze corporate activities. Also, with the new system, local firms will likely be reluctant to go public, consequently limiting the development of the capital market.

¡°It is unreasonable to introduce the system without considering the overall civic lawsuit system, since the abuse of the system will trigger a chain of bankruptcies of local companies and accounting firms,¡± he claimed. On the other hand, large conglomerates are showing confidence, insisting that the new system will have little impact on them since they have already implemented transparent management led by boards of directors. But they did not disguise their concern over possible side effects of the system such as excessive lawsuits. A staff member of a large conglomerate expressed concerns over damages that would be incurred by a company in the process of a lawsuit.