Anti-corporate sentiment rises and becomes a trial of public opinion... A company that doesn't win even if it wins

Class action lawsuit, right or power (3)
Indiscriminate lawsuits for minor offenses
Black consumers targeted for large settlements
The company is hit hard just by being sued.
Claims and compensation amounts that go beyond social norms
The court is not accepting it

The advantage of class action lawsuits is that they allow legal issues to be raised at relatively low cost. On the other hand, as the threshold for litigation is low, concerns about abuse have been consistently raised. Therefore, concerns are raised that if a balance is not found in the process of promoting the class action system, there may be a series of 'black consumer lawsuits' targeting large settlement amounts. The United States, where class action lawsuits are active, is a representative precedent.

According to the legal community on the 29th, cases in which the plaintiff's claims or claims in class action lawsuits are evaluated as excessive can be confirmed through precedent.

In the Tongyang Securities (now Yuanta Securities) class action lawsuit called the 'Tongyang Incident' in April last year, the court rejected the claims of class action participants demanding compensation and ruled in favor of the company. This lawsuit was triggered by suspicions that Dongyang Group caused enormous losses to investors in 2013 by selling corporate bonds despite its inability to repay. About 1,200 victims filed a claim for damages against Tongyang Securities, but the court did not acknowledge responsibility, saying, "It cannot be said that there was a false or omitted entry of important information in Tongyang Securities' securities report." The court's judgment was that 'a reasonable investor would have been able to recognize the risk.' This ruling was confirmed upon dismissal of the appeal by the Supreme Court. However, as the legal battle continued for 10 years, both the class action parties and the company suffered losses.

The Nate and Cyworld server hacking incidents are similar. At the time, Chinese hackers stole the personal information of 34.9 million people, and about 20,000 of them filed a lawsuit against SK Communications, demanding compensation of 300,000 won per person. However, in 2018, the Supreme Court ruled that the plaintiff lost, saying, "Considering that the company was operating an intrusion prevention system at the time, it cannot be said that it did not take protective measures to the extent that could reasonably be expected in accordance with social norms."

A lawsuit filed by 299 iPhone users against Apple for damages related to unauthorized collection of location information continued for seven years, but the Supreme Court confirmed the plaintiff's defeat in 2018. The Supreme Court ruled that the collected information cannot identify a specific device or user, and that the information collection bug was a 'trial and error' that occurred during the technology settlement process.

A judge from a large law firm pointed out, "If class action lawsuits are abused, even unwanted people can be dragged into the lawsuits," and added, "It has long been recognized as an anti-corporate system."

The United States, which is considered to have strong consumer protection laws, has a well-developed class action system. Because of this, class action lawsuits in which multiple consumers sue companies are also common. Banks, retailers, and technology companies are their main targets, and tens of thousands of lawsuits are reported each year. However, there is a side effect that such black consumer lawsuits are filed excessively or lawsuits over minor issues are also filed excessively. There is also criticism that litigation costs and settlements lead to a financial burden on companies, which may eventually be passed on to rising consumer prices. A lawyer at a large law firm said, "As the number of plaintiffs increases, the burden on companies increases. Currently, the plaintiffs' claims are different, so it is difficult for the judiciary to proceed with the trial."

However, there is also a counterargument that the possibility of Namso is not high. Attorney Ji Min-hee of Daeryun Law Firm countered, "It is difficult to view the 'excessive filing' of lawsuits as necessarily harmful, and the excessive litigation that may occur in the early stages of introducing the system can be seen as a process of establishing legitimacy and limits through judicial review."

At the Ministry of Justice's public hearing on the class action system in December 2020, the Korea Federation of Small and Medium Businesses argued, "There is a lot of room for small and medium-sized businesses to be included in class action lawsuits, and 'black consumer lawsuits' may also increase," and added, "Even if we win in trial, consumer trust will be weakened just by being accused."

Reporter Choi Eun-sol (scottchoi15@fnnews.com)

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Anti-corporate sentiment is riding on public opinion... A company that doesn't win even if it wins (Shortcut)