[July 2016] Yoonah Kim, Lex Korea News on a Major Supreme Court Case from the Latter Half of 2015
On July 23, 2015, the Supreme Court of Korea (hereinafter “the Court”) rendered an en banc decision, invalidating the long-held practice of paying contingency fees, also widely known as “success fees,” to lawyers based on results in criminal cases(2015Da200111).
Summary of the En Banc Decision
The Court banned contingency fee agreements in criminal cases because they violate Article 103 of the Civil Code. The Court reasoned that contingency fees in criminal cases infringe upon “moral custom and social order,” as in the aforementioned Article, by further aggravating public distrust in the judiciary system and by undermining the public role of lawyers, who are entrusted with a mission to advocate fundamental human rights and social justice and to uphold the rule of law.
Acknowledging that “moral custom and social order” are such ever-changing conceptual values, the Court ruled that whether a legal act violates these values is determined by comprehensively weighing the following factors: the aftermath of validating the legal act at issue, the need to guarantee free trade and to restrain trade, the extent to which the legal act at issue is socially stigmatized, and the balance of the interests of both parties.
On the other hand, the Court still allowed making contingency fee contracts for civil cases, reasoning that it does not violate such legal principles as private autonomy and the liberty of contract.
The practice of paying contingency fees in criminal cases has been a main culprit behind publicdistrust in the Korean criminal justice system. Furthermore, it has become a prevailing norm that former judges or prosecutors, who have then turned lawyers, wield influence on sitting judicial officers to conveniently sway results in their clients’ favor. Undoubtedly, such ex-judicial officers have received excessively handsome contingency fees. Henceforth, the widely used saying: “Those with money are not guilty, while those withoutare.”
Therefore, public confidence in the legal system will be restored, only when money is prevented fromtipping the scales of justice. Amid public outcry for eradiating corruption in the judiciary, banning contingency fees will likely serve as the quintessential catalyst for the much-needed reforms in the legal industry.