South Korea

Korea lacks a general class action system comparable to the U.S. Federal Rule of Civil Procedure 23; the Securities-Related Class Action Act (SCAA), enacted in 2004, remains the only statutory class action regime, limited to capital markets disputes.

Despite multiple legislative efforts since 2016 to expand class actions to other sectors — including a comprehensive 2020 proposal by the Ministry of Justice — all such initiatives have failed due to significant pushback from business lobbies.

As of 2026, collective redress outside securities continues to rely on multi-party litigation under the Civil Procedure Act, with policy focusing on incremental reforms in specific areas (e.g., consumer protection, competition law, data privacy) rather than adopting a broad class action framework.

Since 2005, only a small number of securities class actions have been filed (based on publicly available information, only 11 class actions were filed between 2005 and 2023). Strict certification thresholds, substantial cost burdens and procedural complexity have discouraged the adoption of class action litigation. Most large-scale disputes in Korea arise through multi-plaintiff joint litigation or representative litigation rather than statutory class actions. Typical mass-claim areas include:

• product liability;
• public disaster and state liability claims;
• data breach and privacy incidents;
• cartel and competition damages; and
• financial consumer disputes.

The Securities-Related Class Action Act (SCAA) is the only statute in Korea that provides a true class action mechanism. It applies exclusively to securities-related misconduct (false disclosure, accounting fraud, market manipulation, insider trading, and related investor losses). There are other collective mechanisms (non-class actions), including the following.

Article 53 of the Civil Procedure Act allows multiple persons with common interests to appoint one or more individuals to litigate on their behalf through a mechanism known as representative or appointed-party litigation. Unlike the class action model, participation in this process is strictly opt-in only. This requirement means there is no automatic inclusion of absent parties and only those who explicitly grant power of attorney are bound by the legal outcome.

Joint litigation, or multi-plaintiff actions, occurs when multiple plaintiffs file together in a single lawsuit because their claims arise from common factual or legal grounds. This remains the principal tool for mass-claim litigation in Korea today. It allows for the aggregation of individual claims while maintaining the distinct party status of each participant within the proceedings.

Moreover, for instances of major disasters or systemic harm, the National Assembly sometimes moves beyond traditional litigation by enacting special compensation statutes. These laws establish administrative relief funds to provide faster redress, as seen in the 2011 humidifier disinfectant case (a public health disaster in which toxic chemicals in household humidifier sterilizers caused severe lung injuries and deaths in Korea, predominantly among infants and pregnant women) and the 2014 Sewol Ferry case (a maritime disaster in which a passenger ferry capsized and sank, killing 304 people, most of whom were high-school students on a school trip). These special statutes serve as a legislative alternative to the court system by creating dedicated financial pools for victims outside of standard civil litigation.

The scope of the SCAA is limited to specific securities damage claims (Article 3 of the SCAA). Securities-related class action may be filed only for damage claims linked to the following Articles of the Financial Investment Services and Capital Markets Act (FSCMA):

• Article 125 (false description in registration statement and investment prospectus-related liability);
• Article 162 (false description in business report, excluding audit report, related liability);
• Articles 175, 177, and 179 (use of material non-public information, market price manipulation, unfair trading); and
• Article 170 (auditor’s liability).

Regarding issuer limitation, claims must arise from trading/transactions of securities issued by a stock-listed corporation as defined in the FSCMA (Article 3(2) of the SCAA).

Outside of securities, mass claims are typically brought through opt-in, multi-plaintiff litigation as described under Section 2.1, above. 

Under the SCAA, a “securities-related class action” is defined as a lawsuit for damages filed by one or more representative parties on behalf of a group to seek relief for collective losses arising specifically from the course of trading securities on the Korea Exchange (Article 2(1)). The term “class” refers to the collective group of all victims who share common interests in claiming compensation for losses incurred during securities transactions (Article 2(2)). A “class member” is an individual victim who comprises the larger class group (Article 2(3)). A “representative party” or lead plaintiff is a class member or members who conduct the litigation proceedings after obtaining the necessary permission from the court (Article 2(4)). Korean law does not provide a general statutory definition of “class action” beyond the SCAA securities context.

The following procedure applies to securities class actions under the SCAA.

Step 1 — filing. A person seeking to become a representative party or a lead plaintiff must file a complaint and an application for permission to use class action with the competent court (Article 7(1)).

Step 2 — court notice of filing. Within 10 days of receipt, the court gives public notice of:

• the fact that the action has been filed;
• the alleged scope of the class;
• a summary of alleged claims; and
• a notice that any class member who intends to be the lead plaintiff should file an application within 30 days from the notice (Article 10(1)).

Step 3 — appointment of representative party. Within 50 days from the date of public notice, the court appoints a person deemed to be the most appropriate person to represent the interests of the class as a representative party or lead plaintiff. The representative party may be either: the person who initially filed the complaint under Step 1; or a person who subsequently applied to serve as a representative party in response to the court’s public notice under Step 2.

Step 4 — permission (certification) decision. The court grants permission for class action only if the following requirements under Articles 3, 11, and 12 are met:

• there should be at least 50 class members with the sum of the securities held by the class members being at least 1/10,000 of the total number of the outstanding securities of the defendant corporation at the time of conduct at issue;
• there should be a material legal or factual issue for a claim that is common to all class members;
• class action should be a suitable, efficient and appropriate means to protect the interests of the class members; and
• there should be no defects on each entry of permission application and accompanying documents.

The court may adjust the class scope and then grant permission (Article 15(3)).

Step 5 — post-permission notice and opt out. Once permission becomes final, the court must notify class members of key details, including the opt-out period and method, and the binding effect if they do not opt out (Article 18). Notice is also published in nationwide daily newspapers (Article 18(3)). Opt-out notices should be filed in writing within the notified period (Article 28). After the class certification and permission stage, the case will proceed to the trial stage.

Step 6 — trial court proceedings and judgment. The court can investigate evidence ex officio (Article 30), examine class members and the representative party (Article 31), and order document submission (Article 32). Damages are generally calculated as the difference between the actual transaction price and the price that would have existed without the unlawful activity (e.g., fraud, market manipulation). Only monetary damages are acknowledged. Damages may be calculated using sampling, average or statistical methods where exact calculation is impracticable (Article 34(2)). Final judgment binds all class members who did not opt out (Article 37).

Step 7 — distribution of monetary damages. Once the amount of damages is determined by the court, the amount is distributed to class members via a separate procedure under supervision by the first-instance court (Article 39). A distribution administrator who is responsible for overseeing the allocation of the awarded damages to class members is appointed by the court (Article 41). The administrator prepares a distribution plan (Article 42) and distributes under court supervision. The SCAA provides detailed rules governing this distribution process, including procedures for verifying the eligibility of class members to receive payment, mechanisms for class members to raise objections to the distribution plan or their individual allocations, and provisions addressing the handling of residual amounts that remain undistributed (Articles 49–55).

In Korean litigation, plaintiffs must pay stamp fees when filing a complaint, which are calculated based on the value of the claim. For class actions under the SCAA, where the aggregate claim value can be significant, the law provides a cost reduction — stamp fees are calculated at half the usual rate, and there is an upper cap of KRW 50 million (Article 7(2)). When granting certification (permission) for the class action to proceed, the court orders the plaintiffs to pay certain costs in advance, including costs for:

• public notices/announcements;
• appraisal (e.g., expert valuations for damages); and 
• other incidental costs required for the proceedings (Article 16).

After successful judgment, when the awarded damages are distributed to class members, the distribution administrator is authorized to deduct certain costs from the total recovery before distribution. These deductions include:

• lawsuit costs and attorneys’ fees;
• costs of exercising rights (e.g., expenses related to enforcing the judgment or pursuing the recovery); and
• distribution costs (including the distribution administrator’s fee) (Article 44(1)).

The SCAA does not set out a dedicated third-party litigation funding regime. In practice, third-party funding is less developed in Korea compared to common-law jurisdictions such as the U.S., where it has become a significant feature of class action litigation.

The overall duration of SCAA class action proceedings varies depending on the complexity of the case. Based on past cases, the litigation can take up to seven to nine years from initial filing to final resolution. The lengthy duration is attributable to the two-stage structure of Korean class actions. First, the permission/certification process itself may go through several levels of court review and add months to the timeline. Second, the merits proceedings (liability, causation, damages) often extend to years, particularly if appeals are pursued. Moreover, the distribution procedures (administrator appointment, plan, verification, objections, receiving period, deposits) can add additional time after the court’s final judgment.

The SCAA defines a class member as any “victim” suffering damage in securities trading/transactions within the class definition (Article 2(2)–(3)). It also states that a representative party or lead plaintiff must be a class member and obtain court permission (Article 2(4)), and must be able to represent class interests “fairly and appropriately,” such as being the person likely to obtain the largest economic benefit among class members (Article 11(1)). There is a limit on repeat players: no one who has engaged in at least three securities-related class actions as a representative party or representative party’s attorney during the preceding three years shall serve as a representative party to any securities-related class action or the plaintiff’s attorney, respectively (subject to court discretion) (Article 11(3)).

As explained under Section 3.1, above, there is a minimum class size and shareholding threshold that must be met in order to obtain permission for class action from the court. Further, class members may opt out by submitting a written opt-out notice within the court-notified opt-out period (Article 28(1)). A person who files an individual lawsuit before the opt-out period expires is deemed to have opted out (subject to withdrawal exceptions) (Article 28(2)). Final judgment binds class members who do not opt out (Article 37).

The SCAA’s “litigation-permission” (certification) procedure is seen as inconsistent with Korea’s existing civil procedure framework, which lacks such a gatekeeping mechanism. This certification stage has become a major procedural bottleneck, as parties can appeal certification decisions through multiple court levels, adding years before the merits are even addressed. As a result, unlike typical Korean civil litigation where parties drive the proceedings, SCAA class actions require judges to assume an active managerial role — including modifying the class scope, appointing or removing representative parties, overseeing notices to class members, and supervising the distribution of damages — placing the court in a central supervisory position from certification to final relief.

The current evidence system in Korea was not designed with collective litigation in mind and tends to disadvantage plaintiffs, particularly in class actions where key evidence is typically held by corporate defendants. Disclosure is primarily managed through document production orders under the Civil Procedure Act, which places the burden of initiation on the parties rather than the court. Courts frequently deny these production orders if requested materials involve internal business documents or trade secrets, or if they are deemed to impose an excessive burden on the defendant. Furthermore, the system is constrained by a lack of an overarching attorney–client privilege doctrine, leaving legal protections fragmented across individual statutes and judicial precedents.

While the general framework remains restrictive, certain sectors utilize “relaxed” disclosure rules to mitigate evidentiary asymmetry — where corporations hold all the key evidence — in damages actions. In areas such as competition law, special statutory rules allow for broader evidentiary submission than standard civil suits to address the fact that evidence of wrongdoing (e.g., price fixing or market manipulation) is often concentrated within corporations. Despite these sector-specific exceptions, the concentration of evidence within corporations remains a structural barrier to the growth of large-scale class actions in Korea.

Recent legislative trends suggest a move toward a “Korean-style discovery” model aimed at assisting plaintiffs and minority shareholders by mitigating the current evidentiary asymmetry. These proposals seek to introduce a discovery regime that helps plaintiffs access internal corporate materials, addressing the imbalance where key evidence is held solely by the corporate defendant. However, these potential reforms are currently under intense scrutiny by the business community due to concerns regarding the increased exposure of sensitive internal corporate data. The outcome of these reform efforts is expected to have a significant impact on the future development of class action practice in Korea.

Under the SCAA, the primary remedy available is monetary damages. Non-monetary relief such as injunctions or declaratory judgments is not available through class actions. In certain statutory areas — including product liability, competition law, and data privacy — punitive damages of up to three times actual losses may be awarded for intentional or grossly unlawful conduct. Overall, Korea’s collective dispute resolution system focuses on ex-post monetary compensation rather than structural or institutional corrective measures, distinguishing it from U.S.-style class actions that often serve as tools for broader reform.

Korea does not have a dedicated procedural framework specifically designed for settling class actions or resolving collective disputes through ADR. Instead, settlements and mediations proceed under the general Civil Procedure Act. In securities class actions, any settlement must receive court approval and be notified to class members in order to bind them. In practice, Korean judges — well-accustomed to settlement and mediation procedures under the general Civil Procedure Act — tend to actively encourage parties to settle rather than proceed through complex litigation and difficult damages calculations.

Unlike the U.S., Korea does not use a centralized, court-administered fund to collect and distribute damages to class members. Instead, compensation flows directly to individual plaintiffs, with damages calculated on a per-person basis to reflect specific losses rather than a pro rata share of a lump sum. Under the SCAA, any unclaimed funds remaining after distribution — whether due to uncontactable members or accrued interest — must be returned to the defendant. This is a controversial requirement that critics argue undermines full compensation and weakens deterrence compared to the U.S. cy-près doctrine, which directs residual funds to public-interest organizations.

In securities class actions, final judgments bind all class members within the defined class who have not opted out. This means that class members are bound by the outcome even if they did not actively participate in the litigation. In joint litigation, by contrast, res judicata and enforceability extend only to the parties who actually participated in the lawsuit. Each plaintiff must pursue enforcement individually in these cases. While liability may be determined collectively, enforcement remains individualized.

Recent large-scale privacy data incidents have catalyzed a shift in public and political opinion toward a broader class action mandate in Korea. The primary driver for expanding these actions beyond the securities sector was a massive personal data breach at Coupang — a major e-commerce company in South Korea — in late 2025 that reportedly affected nearly 33.7 million accounts. The President of South Korea, Lee Jae-Myung, has argued that the current individual lawsuit structure creates a systemic failure by failing to provide relief for every citizen affected by corporate misconduct. This current environment results in a deterrence gap where companies treat minor fines as a mere cost of doing business.

In response to these incidents, the ruling Democratic Party introduced reform proposals on December 31, 2025, to reshape the litigation landscape. These legislative efforts, led by lawmakers, seek to expand the scope of class actions to include personal information and consumer disputes. The proposed bills would allow authorized consumer organizations representing at least 100 victims to file liability confirmation lawsuits against large corporations. Furthermore, the legislation introduces punitive damages of up to five times the actual losses for cases of intentional misconduct or delayed relief. A pivotal feature of these bills is the introduction of a “Korean-style discovery system,” which is a court-controlled disclosure mechanism requiring corporations to submit internal materials to mitigate the evidentiary asymmetry faced by consumers and minority shareholders.

Given that these proposed changes would represent a significant departure from the current framework, the proposal is expected to require substantial further deliberation. It will therefore be necessary to closely monitor the progress of the legislative process.