Civil Procedure System In Korea

Transcription

1 Civil Procedure System In Korea Lee JinMan, Judge and Executive examiner of civil policy in Judicial Administration Office at Supreme Court Civil Law in Korea basically follows the principles of the Continental Law system and therefore, the most important foundation is the statutes and laws enacted by the National Assembly. In the Korean legal system, a precedent plays a significant role in interpretation of law and particularly. The precedent decided by the Supreme Court has a great influence in decisions by High Court, District Court as well as Supreme Court, but the principle of precedent is not recognized in Korea as it is in UK or US. I will talk about the Korean Civil Procedure system today, and also briefly touch upon not only the procedural law but also the substantive law, because I believe an overview about the Civil Law will broaden your perspectives into the Korean Justice system. With this in mind, it is quite important to introduce which subject should be addressed first between the procedural law and substantive law. Normally, most legal departments of universities in Korea offer a curriculum in which the substantive law class is placed first, followed by procedural law just like other countries adopting the Continental Law system. To the contrary, it is more typical that the law schools in the US, which is the Common Law country, offer the civil substantive law and procedural law classes simultaneously. Let me start with the procedural law. As you are experienced judges, I think

2 it will be more useful for you to have an overview of the civil lawsuit procedures to understand the Korean Civil Law system. Although I do not have much knowledge about the Civil Law of Azerbaijan, mutual understanding of civil law system of two countries will enable us to help each other. So, during this lecture, I hope that you will identify and present similarities and differences between the civil law of two countries. As I proceed, please feel free to interrupt me if you have a question or comment. I will appreciate any questions and comments and give my best effort to answer your question. Then, let me talk about the Civil Procedure Law of Korea. The most fundamental law of the civil action procedures in Korea is Civil Procedure Law. After continuous revisions, the Korean Civil Procedure Law was substantially amended in January 26 in The Supreme Court takes the initiative in amendments with an aim to reduce presence at court by a litigant or attorney-in-fact and establish a civil procedure that can proceed in a timely and efficient manner for truth discovery. Let me first explain adjudication procedure, which is the civil action procedure in a narrow sense and then additional and special procedures, which is the civil action procedure in a broad sense. 1. Jurisdiction A civil lawsuit begins at a district court. Basically, the district court at the place of address of the defendant is a competent jurisdiction court. A civil lawsuit over real estate is under the jurisdiction of the district court in the place where the real estate is located and a civil lawsuit over a tort is under the

3 jurisdiction of the district court in the place where the tort is committed. Of course, a lawsuit can be filed at a district court elsewhere based on agreement by the litigants. The scope of judgement at district court is defined in the statute formulated by a three-judge panel and single judge. Basically, the value of a suit exceeding 100 million Won is brought to a three-judge panel while a suit of up to 100 million Won or under is by a single judge. 2. Civil Action (1) Complaint A civil action is initiated upon receipt of a complaint submitted by the plaintiff. A complaint can be received by district courts, branch courts of the district court or municipal courts.. Upon receipt of the complaint, the court sends it to the defendant. The complaint is typically served in registered mail by court, unlike US or UK where it is known that the plaintiff directly sends the complaint. Within 30 days from the receipt of the complaint by defendant, if there is no written replay by the defendant, court decides in favor of plaintiff without oral arguments. If the defendant issues a written reply, court conducts a trial for ruling. A complaint should contain the name and address of the litigant, name of an attorney at law, purpose and cause of the claim. If the power of attorney is denied, a written power of attorney should be notarized and submitted. If an agreement of power of attorney is written in foreign language, a translated Korean version should be submitted. If the complaint fails to clearly states the cause or purpose of the complaint,

4 or is not affixed by a required stamp, the judge orders the plaintiff to make a correction within a specific period, and if such order is not followed, the judge dismisses the complaint. The cause or purpose of a complaint can be adjusted in the course of adjudication or proceedings in appeal court, but not in the Supreme Court. (2) Court Fee If the plaintiff is a foreigner who has no address or place of business in Korea, court may order the plaintiff to provide security to guarantee that he/she is capable to bear court fee at the request of the defendant. As the Republic of Korea being the signatory to the Hague Service Convention, a lawsuit can be filed against a defendant residing in the signatory nations to the Convention by sending a complaint in accordance with the Convention. (3) Fee Waiver In order to ensure the litigation rights for a person who lacks or is short of financial capability to pay legal fees, court may defer advanced payment of the court fees at the request of the plaintiff or in its authority. In such case, if the court ruling finds a person who bears the court fee to be the other party, the fee is charged to the other party. (1) Preparation and oral proceedings If a complaint is filed, the presiding judge directs a preparation process for oral arguments prior to the first date of oral argument to initiate proceedings in a timely manner and to clearly identify issues, except for a specific circumstance where faster proceedings are required or issues are simple. The involving parties prepare and submit briefs and other documentation, exchange them each other, or apply for evidence to prove their argument. During the course, which is led by

5 a presiding judge, commissioned judge or entrusted judge, the evidence to be present in court is examined and decided, and the parties may be asked to present on the designated pre-argument date, if it is deemed necessary to collect arguments and evidence. In a nutshell, during the preparation procedure, court specifies the cause of a complaint, what are at issue between the parties, a witness or evidence to be present in court, and how to proceed with oral argument going forward. The evidence to be used in the litigation is decided in consideration of the relevance to the issues. Upon completion of the preparation of oral proceedings, the oral argument date is provided in an open court, where anyone can sit in. The parties may appoint an attorney for the preparations for arguments as well as actual oral arguments but, if the case is presided over by a single judge, the power of attorney can be granted to a person other than a legal counsel with permission of the presiding judge. But, in the case adjudicated by a three-judge panel, power of attorney can only be authorized to a legal counsel. (2) Trial Principle of Oral Arguments As the principle of arguments, Civil Procedure Law adopts principle of public trial, principle of orality, principle of fact-finder's own examination, principle of concentration of trial. At the same time, an alternative to complement limitations is in place. The case in point include private trial over a violation of public order and conventions, documentation to prepare for oral arguments and renewal of oral argument. (3) Evidence Since the jury system is not being practiced in Korea, it is all up to judges to recognize and determine facts. In principle, the plaintiff bears burden of

6 proof, but in some cases, it is shifted to the defendant. Such shift of obligation is mainly in accordance with laws. However, in the environmental or medical cases, they have been the cases where burden of proof was passed over to the defendant based on precedents. There are cases where no proof is necessary. For example, common knowledge that a person until 60 of age has the labor capacity in human accident case, or when confession is determined to be true without dispute made by the other party. The precedents of the Supreme Court rules those aforementioned cases involving foreign law in the same manner in domestic law on the ground that the party does not need to make allegation or proof. In a real situation, a notarized opinion letter by a foreign attorney is used. If the confession is determined to be true in the course of a trial, it will legally bind the court which can not recognize the opposing fact. The party can not withdraw the confession made before, if withdrawal is needed, he/she must prove prior confession does not match objective fact and it was made by mistake. However, confession is only recognized as fact-finding but not as the basis for legal evaluation. In addition to proof by a written document and witness, the verification of evidence by a judge is also frequently used. Such verification is recorded in detail in protocol. Professional appraisal is also popular. (4) Special Procedure Regarding Micropayment Case As a noteworthy special procedure, there is a micropayment case, which refers to a civil claim that involves the payment of monetary value worth 20 million Won or less. Such case is brought to district court, branch court of district court or a single judge at municipal court.

7 There are various exceptional procedures in the micropayment cases. For example, court can decide that the defendant accept and execute the claim of the plaintiff as it is. If the defendant protests the decision, oral argument will be followed. However, many cases are closed by the court's decision on execution recommendation. Another exception is that a family member can be power-in-fact without permission of court. Furthermore, court need not specify the rationale for its decision in a document of judgement and it is rare to do so. Unlike general civil cases, judgement can be rendered on the spot immediately following the first oral proceedings. The special procedure aims to settle the case involving a small sum of money in a speedy and effective manner. Appeal in a micropayment case is as low as 2%. When oral arguments are concluded, a judgement is pronounced. In judgement, the text of a judgement and rationale as to how such judgment has been rendered are specified. Only if the judgement has becomes final and conclusive, compulsory execution can be initiated. Once a judgement is rendered, original copy of the judgement is served to the parties involved. Exercising the compulsory execution of a judgement is delegated to an execution officer, whose position is similar to that of public officer. Compulsory execution is governed by Civil Execution Act. Any act of obstructing the performance of official duty by an execution officer is subject to criminal charge. 3. Appeal Appeal can be lodge, seeking a reversal or modification of a judgement by

8 the lower court before it becomes final and conclusive. Appeal can be made against the decision in the first trial, followed by final appeal to Supreme Court. The losing party in the first trial can file appeal within 2 weeks from service of the document of judgement. Although there are some exceptional cases, the case which has been ruled by a single judge can be appealed to a court with a three-judge panel while a decision made by district court is appealed to High Court. Whether the prior appellant court was district court or High Court, the 3rd final appeal is brought to Supreme Court. A notice of appeal should be in writing. An appeal court can newly consider not only legal issues but also factual matters, but the delayed submission of new allegations or evidence by the appealing party can be restricted. Appealing to Supreme Court is limited to legal issue. 4. Retrial Retrial refers to the procedure in which the party seeks a reversal of a judgement to the same court after the judgement becomes final and conclusive. A retrial is different from an appeal in that the retrial is against the judgement which has been final and conclusive. Retrial system exists to recognize the validity of each case, rather than security of legal system. Civil Procedure law allows a retrial for a limited circumstances of a material defect. Except for a specific cases including a deficiency of power of attorney, a retrial should be filed within 30 days from awareness of the validity of a retrial and can not be filed after 5 years of the final judgement. Trial procedures and rule governing each level of courts are applied to a retrial procedure. 4. Other Procedures (Additional and Special Procedure)

9 Compulsory execution is ordered to realize the right recognized by judgement. It also includes the forceful execution of the court judgement as well as the distribution of proceeds arising from compulsory disposal of a collateral. In other words, in the event of default of a debtor who borrowed money by establishing mortgage on the property he/she owns such as land or building, the creditor initiates repayment of outstanding debts by forcefully liquidating the mortgaged property. As this procedure takes a similar effect to compulsory disposal of the property of the debtor based on a court decision, it is governed by Civil Execution Act. Other important execution procedures include asset disclosure and defaulter registration. The asset disclosure is the order by court to reveal the debtor's asset at the request of the prevailing creditor. In this procedure, since the debtor takes an oath before the submission of an asset list, the effect of compulsory execution is very powerful. Defaulter registration is an oder by court to register a debtor who has failed to perform the judgement at the request of the creditor. Provisional attachment and disposal procedures are initiated to prevent a debtor to sell off his/her property before the judgement becomes final and conclusive in order to perform compulsory execution. If court orders the provisional attachment or disposal, the debtor is not allowed to sell his/her property or, if he/she does, such act has no effect. Once the judgement becomes final, the provisional attachment is converted to formal attachment procedure, so that compulsory execution begins.

10 Insolvency procedures aim to promote equal satisfaction among multiple creditors when a debtor is incapable of performing his/her obligation and paying off all and entire debts out of what he/she owns. The procedures include reorganization, bankruptcy, and personal debt recovery system. As relevant law to govern such procedures, Debtor Rehabilitation and Bankruptcy Act was enacted in March 31 in Payment demand procedure is an order by court to the debtor to make payment in a claim filed to secure payment. Payment order is issued without interrogation of the debtor, but if the debtor protests the order, a formal civil action procedure will proceed. If the debtor does not protest, the payment order has the same effect as final judgement. 5. Alternative Dispute Resolution Widely known as ADR(Alternate Dispute Resolution), mediation, arbitration and conciliation system play a critical role in Korean Civil Procedure. Mediation is the method by which a third party facilitates settlement among involved parties. The mediation committee is formed by socially reputable people and the method takes advantage of expertise and experience to mediate the case. Conciliation is the method by which both parties make a concession for each party to conclude the trial. In reality, this method is less popular than mediation. Arbitration is another ADR method in which a third party plays a role of court. Arbitration decision has the same effect for parties involved as final judgment by court. In Korea, such organizations as the Korean Commercial Arbitration Board and Copyright Commission mainly deal with arbitration procedure while court support that the final arbitration decision can be executed.

11 Court continuously promotes the wider use of arbitration, which is contributing to civil procedure system with support by Supreme Court. Let me move on to substantive law of Civil Law system. The fundamental law of Civil Law system is Civil Code and Commercial Code is most notable as special law. Following the tradition of German Continental Law, German Civil law has the sub-categories: general provisions applying to entire civil laws, real right law stipulating rights of real property and movable property, claim right law governing contracts and torts and family law. Core categories of Commercial Code include corporation law pertaining to commercial acts and insurance law and marine law. I will focus on basic civil laws first and move on to real rights, but will not touch on contract law and tort law today. 1. Real Estate According to Article 99 of Civil Law, land and a structure built on the land is real property and all objects excluding real property is movable property. The difference between real property and movable property is that real property is subject to registration system. The registration of land and structure on the land is governed by Real Estate Registration Act and registration division in district courts and registry offices. 2. Registration System According to Article 186 of Civil Law, transfer of right of real estate does not have any force unless it is registered. This means that in the event of a

12 transaction of real estate, the ownership is transferred from the seller to buyer upon registration. This is quite different in the system in which ownership transferred is established only by entering into a contract among the parties involved and registration only matters for a transaction with a 3rd party. However, the registration of real estate without a real transaction is not sufficient to lawfully transfer the ownership. There must be a lawful transaction between the seller and buyer. The fact that registration itself does not establish ownership may cause a complex legal issue if registration takes place based on wrong substantive relationship. As I explained earlier, the registration system is governed by court and is administered by registration division in court administration department at Supreme Court. Land and building registers are separately maintained and an entry is made into the register after administrative procedures including final inspection upon the completion of construction. Normally, land and building ledgers are completed for taxation purpose and then the respective registers are prepared. 3. Ownership Ownership is one of the most typical real rights. A person who has ownership can use and dispose of an object including real and movable property in its own right. The scope of ownership of land, for example, not only includes the surface of the land, but also the subsurface and air. However, the minerals buried under the surface belong to a separate ownership subject to mining right. If a mineral is discovered by a person other than the owner, the land owner may not access the land to mine the mineral without permission of the owner with mining right and vice versa. Agreement is needed between the two parties. Ownership lasts permanently and thus does not lapse with time.

13 If a property owner loses in a lawsuit involving monies, the prevailing party may execute the judgement by liquidating the property of the losing party. This is the compulsory execution procedure that I described earlier. Ownership is accompanied by a powerful authority called real right claim. A property owner has not only the right to claim the return of the property against the person who occupies the property, but also may claim removal or prevention of any obstruction against a person obstructing or likely to obstruct his/her ownership in any forms. The most typical way to acquire ownership is to purchase real or movable property through a purchase contract. Though it is quite unusual, Article 246 of Civil Law stipulates that a person who has occupied real property peacefully for 20 years can acquire the ownership by registering the property. As for movable property, occupying for 10 years is sufficient for ownership acquisition pursuant to the same provision of Civil Law. Such stipulation is useful when people have to prove their ownership. 4. Right to Use Real Estate In the Korean Civil Law, property ownership is distinguished from the right to use the property. For instance, air rights are the right to use the land to own a structure on the land owned by another party. Equitable servitude (or easement) refers to granting a right to use real property to another party. Another popular use right is the right to lease on a deposit basis in which a tenant of the property deposits a certain amount of security deposit to the owner to gain the right to use the property. The right to lease on a deposit basis only take effect upon registration. This right may not last more than 10 years but it is renewable. A lease contract may not need registration but it can not be enforced to a

14 third party. If a property owner has sold his/her property, the tenant may not claim the effect of the lease contract he/she entered into with the prior owner against the current owner (buyer). If he/she does, the new owner may forcefully evict him/her out of the property. A person who has the right to lease on a deposit basis can claim the effect of such right against a third party, and therefore, even if the owner has sold the property to a third party, the tenant may use the property and make a profit hereon during the period the right to lease on a deposit basis exists. There is a special law established to protect tenants who enter into a lease agreement regarding a residential house or commercial building. According to the law, the tenant may claim his/her right against a third party without registration the lease right if certain conditions are met. The same law further protects those who lease the property on a small sum of money (up to a statutory limit) and so, they can retrieve their rental deposit in the event of compulsory execution of the residential house or commercial building. Such stipulation was adopted to protect and support sustainable dwelling and livelihood. 5. Mortgage It is very popular to borrow money on real estate as security. In Korea, real property is most frequently used as security. A lender establishes a mortgage lien on the property of a borrower when lending money. Even if the creditor established a mortgage on the property, the owner of the property retains the right to use and make a profit of the property. This means that security interest is limited only to the right to have the mortgaged property as security. In the event of default of a borrower, a creditor can exercise its mortgage lien for foreclosure of the property and enjoy priority repayment claims out of

15 proceeds from the foreclosure. This procedure is quite similar to the compulsory execution initiated by the prevailing party following judgement by court. Civil Execution Act basically prescribes compulsory execution procedures after court ruling, but the Act also provides the procedure of exercising mortgage from similar perspectives. Since land and structure thereon are stipulated separately in Civil Law, the owner of such can be different accordingly. If the ownership of land and the structure thereon belongs to different persons as the property is foreclosed, it is deemed that land owner of the structure establishes air rights. This is called legal surface right. The precedents by Supreme Court indicate that the scope of the legal surface right is getting wider than what is recognized in Civil Law. 6. Claim A claim is the right of an obligee to ask an obligor to do something. THe most frequently used claim is the right to demand payment. If the obligor fails to perform his/her obligation, the obligee may demand performance of the obligation or file a suit in court. In the event of non-performance of the obligation, the obligor is subject to compensation for damages. Article 393 of Civil Law classifies the scope of damages into ordinary and extraordinary damage the obligee may incur. The obligor must compensate for the ordinary damage at all times but compensate for extraordinary damage when he/she was aware of the damage or failed to be aware of it due to negligence. A claim right is exercised when torts are committed. One can claim damages against any torts. Torts are constituted in event of the violation of the rights as well as fair interests of another party. The precedents by Supreme Court decide that three kinds of damages from

16 torts must be compensated; first, reduction of assets of a person who has incurred loss; second, a person who has incurred loss was not able to increase his/her asset because of the tort; lastly, the money for mental affliction caused by the tort. 7. Special Civil Law Commercial Code is the most significant in Special Civil Law, which is further classified into different laws. Recently, laws to protect intellectual property rights such as patent law, trademark law, copyright law are gaining more importance. So far, I have introduced an overview of Civil Law of Korea including civil procedures. I admit that I was not able to explain in more details as I try to cover a broad subject under the time constraint. However, I hope that my lecture offers you a valuable opportunity to understand civil law systems of Korea. In closing, I would like to thank you for your attention for about two hours and I sincerely hope that you will have a wonderful time in Korea.