October 13, 2020

Fight over punitive damages is brewing in Korea

Punitive damages are primarily an American concept.  They are permitted only to a very limited extent (if at all) in most other countries.  In recent years, South Korea started to dip its toes in the waters, permitting punitive damages for willful patent infringement and products liability cases.  Now they are proposing to expand the availability of punitive damages to all cases in which the defendant is a business.  

If adopted, the law will permit punitive damages upon a showing of intentional or grossly negligent conduct.  Korea is also considering a law to expand the use of class actions, which are currently limited to securities cases.  Both proposals are described in more detail here.

The Korea Herald reports that the Korean business community is opposing both proposals, saying they will increase expenses for businesses and benefit only lawyers and not consumers, citing the U.S. legal system as an example.

Even if the law is adopted, don't expect to see news reports of California-style punitive damages awards coming out of Korea.  The proposed law would limit punitive damages to five times actual damages.