The government and the ruling party are moving quickly to pass legislation that would expand class action lawsuits, until now limited to securities cases, to every industry. Prime Minister Han Seong-sook told the 17th Consumer Policy Committee meeting on the 8th that the government would "build a comprehensive system that guarantees consumer rights with no blind spots" and "introduce class actions across all consumer sectors." The remarks formalized the government's support for a class action law that the Democratic Party of Korea has been pushing. Fourteen related bills are already pending in the National Assembly, and the Democratic Party is considering applying the law retroactively to cases that arose within three years before it takes effect.
The aim of strengthening consumer remedies is understandable. What is doubtful is whether lawmakers have weighed the risks that companies will have to bear. Even large corporations would struggle, and the burden would be devastating for small and mid-sized firms with limited capacity to defend themselves in court. The government also plans to create a system allowing courts to order businesses to hand over documents. That would make it easier both to file class actions and to gather evidence. If the retroactive provision now under discussion is adopted, cases already settled by final rulings or through completed compensation could be reopened as class actions. That is why there are concerns about strategic litigation that bundles old cases nearing the statute of limitations into new class actions.
Overlapping regulation is another problem. In the antitrust field, government agencies can already investigate and impose administrative sanctions such as corrective orders and fines, while the Personal Information Protection Act allows punitive damages of up to five times the harm. If class actions expand across all industries, it will be hard to avoid stacking penalty upon penalty for a single violation. In the United States, a litigation-heavy market, one study found that the cost of defending class actions more than doubled, rising to $4.53 billion in 2025 from $2.17 billion in 2011. Higher litigation costs are ultimately passed on through product prices and come back to consumers as harm.
Against this backdrop, the launch of a Grand Economic Leap Committee by the National Assembly and the business community on the 9th is timely. Now that a standing body for cooperation exists, the two sides should meet often and show results by translating what companies say on the ground into legislation. The class action bill deserves a fresh review. At a minimum, the conditions for filing suits should be clearly defined, including limits on which sectors are covered and how far back the law reaches. An opt-in approach that includes only those victims who declare their intent to join, as in Europe and Japan, also merits consideration. Otherwise, it will be difficult to avoid repeating the course of the so-called Yellow Envelope Act, which has unsettled workplaces because the scope of labor disputes it covers remains ambiguous.
