Lex Mundi Global Attorney-Client Privilege Guide |
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Korea, Republic of |
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(Asia Pacific)
Firm
Lee & Ko
Contributors Updated 25 Mar 2020 |
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| Is the ACP recognized in your jurisdiction? | Protection of communications between the attorney and client is not formulated as an evidentiary privilege under Korean law. Rather, similar to many other civil law jurisdictions, the protection is primarily regarded as a matter governed by an attorney’s confidentiality obligations, right to refuse to testify, and right to resist seizure. The law has not developed in Korea as an evidentiary privilege because of the limited nature of discovery and document production in Korean court proceedings, especially with respect to party-initiated disclosure requests. A number of Korean practitioners have argued that a US-style attorney-client privilege can be derived from the rights and obligations of counsel, as well as from Article 12(4) of the Korean Constitution, [1] which recognizes the right of a person to prompt assistance of counsel. [2] As such, one Seoul High Court decision attempted to derive a US-style attorney-client privilege based on the “right to counsel” and the fact that jurisprudence from many other jurisdictions, including the U.S. and England, affirm an attorney-client privilege or legal professional privilege.[3] The Seoul High Court's decision, however, was overturned by the Korean Supreme Court, which held that: “In light of the content and intent of Constitution and the Criminal Procedure Act provisions regarding the right to counsel and the scope of confidentiality between attorney and client, the opinion that the privilege of a client for whom criminal procedures such as investigation or trial have not yet commenced and therefore does not constitute a suspect or the accused to refuse disclosure of confidential information contained in legal advice obtained in everyday living relationship as a part of the right to counsel...cannot be accepted. The lower court's presumption that such an attorney-client privilege can serve as a basis for denying admissibility of the Legal Advice as evidence cannot be said to be appropriate.” [4] Therefore, while it is true that attorneys bear confidentiality obligations and certain rights to confidentiality in civil and criminal court proceedings, the Korean courts are not yet prepared to recognize a US-style attorney-client evidentiary privilege. However, there has recently been some renewed interest in this topic. An open forum was held at the National Assembly in 2019 to discuss the possibility of enacting legislation that guarantees a US-style attorney-client privilege for attorneys and clients alike. [5] Notes: [1] Article 12 |
| If the ACP is not recognized in your jurisdiction, are there rules of professional confidentiality or other rules that would enable a lawyer or a client to withhold attorney-client communications or work product prepared by counsel from disclosure... | Yes, and this primary basis for protecting attorney-client communications under Korean law. With regards to confidentiality obligations, an attorney or a former attorney is prohibited from divulging any confidential matter that she has learned in the course of performing her duties unless otherwise required by law (Article 26 of the Attorney-at-Law Act).[6] If an attorney discloses secrets obtained in the course of representing a client, she is punishable by imprisonment, suspension of qualifications, or fines (Article 317 of the Criminal Act). [7] With regards to an attorney’s rights, an attorney may refuse to testify in civil proceedings about any matters that would require the disclosure of secrets the attorney learned about in the course of representing a client, unless the client has waived confidentiality (Article 315 of the Civil Procedure Act). In addition, an attorney may refuse to submit documents to the court on the same ground (Article 344(1), subparagraph 3 of the Civil Procedure Act). In criminal proceedings, an attorney may refuse to testify about any matters for which he obtained confidential knowledge in the course of professional representation unless such testimony is deemed necessary for significant public interest (Article 149 of the Criminal Procedure Act). This public interest exception is interpreted narrowly. Many academics and practitioners consider death, serious injury, or severely serious financial losses to fall under “significant public interest”. [8] In addition to refusing to testify, an attorney may resist seizure of articles that the attorney received in the course of representation that the attorney continues to hold in his custody or possession (Article 112 of the Criminal Procedure Act). In addition, the Korean Attorneys’ Code of Ethics prohibits attorneys from disclosing communications with clients, or documents or items obtained from clients, in connection with the performance of her duties. The Code also includes a prohibition on divulging or unfairly using confidential information that the attorney acquired while representing a client, or disclosing documents, memos, and other such material prepared in the course of the representations (Article 18 of the Korean Attorneys’ Code of Ethics). Attorneys have a limited right to disclose confidential information in cases where there is a significant public interest, or if the client consents, or to the extent necessary to defend the attorney’s own rights (Article 18(4) of the Korean Attorneys’ Code of Ethics). Notes: [6] Article 26 (Duty to Maintain Confidentiality) |
| Is a distinction made in applying the ACP or professional confidentiality rules in civil and criminal proceedings? May government authorities require disclosure of attorney-client communications and legal work product? | In most cases, the provisions in the Civil Procedure Act and the Criminal Procedure Act are nearly indistinguishable regarding the scope of rights an attorney may exercise to refuse to testify or disclose documents or other evidence. However, as set forth above, there is a public interest exception that applies in criminal cases, though this exception has been narrowly construed. Regarding the power of government authorities to compel disclosure, it is not unusual for prosecutors and officials from the Fair Trade Commission, the National Tax Service, the Financial Supervisory Service, and other agencies to exercise search and seizure powers in the course of their investigations.[9] To the extent that the authorities seize memoranda and other communications between the attorney and client, there is no evidentiary privilege that would preclude use of those materials in a legal proceeding. In one widely publicized case, the prosecutors even conducted search and seizure at a law firm. This action was widely criticized by scholars and practitioners, leading to outcries that laws should be enacted explicitly recognizing attorney-client privilege.[10] Apart from their search and seizure powers, the authorities generally do not have the power to compel disclosure of documents through the rules of civil procedure or the rules of criminal procedure. Notes: [9] Chae, Jong-Won and Sung, Seung-Hoon. “Overuse of search and seizure regarding law firms and legal departments... ‘Companies stripped of right to defense?’”, Maeil Business Newspaper, January 7, 2019. Accessed January 28, 2020. https://www.mk.co.kr/news/society/view/2019/01/13399 (in Korean). |
| In the corporate context, what test is applied to determine who within a corporation is considered the client for the purposes of the ACP? (e.g., in the U.S.: the Upjohn approach, control group test, etc.) | We are not aware of any laws, regulations, or court decisions regarding tests or criteria applied to determine who within a corporation is considered the client for the purposes of the ACP. Some practitioners suggest referring to the Upjohn approach in interpreting privilege under Korean law.[11] Notes: [11] Choi, Seung-Jae. “A Study of In-House Counsel Systems in Various Countries and the Current Status of Korean In-House Counsel”, 2015 Ministry of Justice Research Commission (2015): 63-64. |
| Is in-house counsel expected to meet a higher burden than outside counsel in order to establish that privilege applies to in-house counsel’s communications? | We are not aware of any laws, regulations, or court decisions regarding whether in-house counsel is expected to meet a higher burden than outside counsel with regards to privilege. However, some practitioners argue that if an administrative authority requests submission of certain documents, in-house counsel cannot refuse submission citing privilege because the recipient of such request is the company, not the in-house counsel. [12] Notes: |
| Civil Law Jurisdictions: May in-house counsel assert privilege or professional confidentiality? | As examined above in I.A.2., all attorneys bear confidentiality obligations under the Attorney-at-Law Act and are entitled to rights to refuse disclosure of certain confidential information in civil and criminal court proceedings under the Civil Procedure Act and the Criminal Procedure Act. Since there are no provisions limiting the scope of such confidentiality obligations or rights in relation to in-house counsel, in-house counsel may assert the same privilege or professional confidentiality as that of outside counsel. As seen in I.A.3., however, legal departments of companies are sometimes subject to search and seizure by governmental authorities. Due to the limited nature of the privilege afforded to attorneys in Korea, it is difficult for in-house counsel to assert privilege in such cases. |
| Civil Law Jurisdictions: Is in-house counsel allowed to be active members of your jurisdiction’s bar? | In general, in-house counsel bear the same obligations and have the same rights as other attorneys under the Attorney-at-Law Act. However, the Attorney-at-Law Act does require an attorney to obtain permission from the local bar association if the attorney wishes to become an executive partner, director or employee of a for-profit corporation (Article 38(1) of the Attorney-at-Law Act). On another note, the Seoul Bar Association and other regional Bar Associations limit the number of litigation proceedings that an in-house counsel may appear in as counsel. This is currently limited to ten per year (Article 6(1), subparagraph 1 of the Seoul Bar Association Concurrent Office Permission and Report Rules). |
| Is the common interest doctrine recognized in your jurisdiction? | We are not aware of any laws, regulations, or court decisions recognizing the common interest doctrine in Korea. Since clients are not entitled to attorney-client privilege under Korean law, it is unlikely that information shared between claimants or defendants with common interest would be regarded as privileged. |
| How is the doctrine articulated in your jurisdiction? | Please see the above. |
| Must a common interest agreement be in writing? | Please see the above. |
| Is litigation funding permitted in your jurisdiction? Are there any professional rules in this respect? | We are not aware of any laws, regulations, or court decisions directly addressing the legality of litigation funding in Korea. Whether litigation funding is permissible has been a subject of recent discussion, especially in the Korean international arbitration community. Prof. Ahn of Daejeon University notes that there could be some debate regarding whether litigation funding is compatible with Article 34(5) of the Attorney-at-Law Act, which prohibits non-attorneys from sharing in any “fees and other profits earned through services that may be provided only by attorneys-at-law.”[13] Prof. Ahn opines that whether a litigation funding arrangement would violate the Attorney-at-Law Act would need to be determined on a case-by-case basis, depending on factors such as the parties to the arrangement, the specific terms of the arrangement, and the funder’s degree of participation in the litigation or arbitration. [14] Article 6 of the Korean Trust Act, which forbids a trust arrangement where the main purpose of the trust is to enable the trustee to proceed with legal actions in the place of the trustor, is another provision that may be an issue depending on how a funding mechanism is structured.[15] There could be an Article 6 issue in litigation funding structures that require the funded party to assign the underlying claim to the funder. Notes: [13] Ahn, Keon-Hyung. “Third-Party Funding in Claims - Focusing on New Convergence Derivatives Arising out of the Mixture of Business and Jurisprudence”, Korea Trade Review, vol. 38 no. 1 (2013). |
| Have the courts in your jurisdiction addressed whether communications with litigation funders may be protected by the ACP or the work-product protection | We are not aware of any court decisions addressing whether communications with litigation funders may be protected by attorney-client privilege or the work-product protection. |
| Is the crime-fraud exception recognized in your jurisdiction? | A form of crime-fraud exception can be observed in Korean law, as examined below. The Attorney-at-Law Act allows for exceptions to attorneys’ confidentiality obligation if prescribed in other laws. The Korean Attorneys’ Code of Ethics is not a law, but we examine exceptions allowed under the Code as a matter of reference: for “significant public interest”, with the client’s consent, or if necessary for defending the attorney’s own rights (Article 18(4) of the Korean Attorneys’ Code of Ethics). Attorneys’ rights to refuse testimony, submission of documents, or to resist seizure are considered waived if necessary for “significant public interest” or if the client consents (Articles 315 and 344(1), subparagraph 3 of the Civil Procedure Act and Articles 112 and 149 of the Criminal Procedure Act). |
| What statutes or key court decisions articulate the crime-fraud exception in your jurisdiction? | Please see the above. Practitioners acknowledge that there is a lack of discussion regarding how to interpret “significant public interest” under the provisions examined above. [16] Notes: [16] hn, Sik. “Legalization of Attorneys' Rights to Confidentiality Necessary”, Korean Bar Association Open Forum Regarding Attorneys' Rights to Confidentiality (2017): 4. |
| Is there a statute or rule that protects information obtained or prepared in anticipation of litigation from disclosure in legal proceedings? (In the U.S.: What state rule is your jurisdiction’s analog to FRCP 26(b)(3)?) | We are not aware of any laws, regulations, or court decisions that protect information obtained or prepared in anticipation of litigation from disclosure. However, this is not surprising given that there is no discovery or broad document disclosure in Korean civil proceedings. As there is no duty to disclose, there has not been a need to develop a doctrine to protect attorney work product from disclosure. |
| What are the elements of the protection in your jurisdiction? | Please see the above. |
| Does your jurisdiction recognize an accountant-client privilege? | Similar to the rights and obligations that apply to attorneys, certified tax accountants and former certified tax accountants bear confidentiality obligations and are entitled to certain rights in civil and criminal court proceedings in relation to confidential information obtained in performing their professional duties. However, as in the case of attorneys, there are no express provisions acknowledging a US-style accountant-client privilege or affording clients protection or rights regarding accountant-client communication. More specifically, certified tax accountants and former certified tax accountants also bear a confidentiality obligation regarding information learned in the course of performing his/her duties (Article 11 of the Certified Tax Accountant Act). Articles 315 and 344(1) of the Civil Procedure Act and Articles 112 and 149 of the Criminal Procedure Act regarding the rights to refuse testimony at civil or criminal courts, refuse to submit documents to civil courts, and to resist seizure of articles in relation to confidential information, are also applicable to current and former certified tax accountants. Notes: [17] Designation of accountants according to the Human Resources Development Service of Korea. |
| Does your jurisdiction recognize a mediation privilege? | Various laws and regulations recognize a mediation privilege with respect to mediation conducted in courts or by dispute mediation committees. As of date, there are no official provisions or case law acknowledging a general mediation privilege with respect to ad hoc mediation, but it is a widely shared view that mediation proceedings should be kept confidential, and the parties usually sign confidentiality agreements before commencing mediation. In case of mediation conducted in court by a judge or by conciliation commissioners under the Judicial Conciliation of Civil Disputes Act, those conducting mediation may elect to keep the proceedings non-public (Article 20 of the Judicial Conciliation of Civil Disputes Act).[19] Further, a person who is or has been a conciliation commissioner is prohibited from revealing the contents of the proceedings or disclosing, without justifiable grounds, any confidential information obtained in performing his/her duties (Article 41 of the Judicial Conciliation of Civil Disputes Act). Other laws and regulations stipulate rules of confidentiality in relation to mediation conducted by various individual dispute mediation committees, such as the Personal Information Dispute Mediation Committee, Construction Dispute Conciliation Committee, Korea Medical Dispute Mediation and Arbitration Agency, and many others (Article 60, subparagraph 3 of the Personal Information Protection Act,[20] Article 78-3 of the Framework Act on the Construction Industry,[21] Article 32 of the Act on Remedies for Injuries From Medical Malpractice and Mediation of Medical Disputes[22] ).
[19] Article 20 (Non-Publicity) |
| Does your jurisdiction recognize a settlement negotiation privilege? | We are not aware of any laws, regulations, or court decisions that recognize a settlement negotiation privilege. |
Lex Mundi Global Attorney-Client Privilege Guide
Protection of communications between the attorney and client is not formulated as an evidentiary privilege under Korean law. Rather, similar to many other civil law jurisdictions, the protection is primarily regarded as a matter governed by an attorney’s confidentiality obligations, right to refuse to testify, and right to resist seizure. The law has not developed in Korea as an evidentiary privilege because of the limited nature of discovery and document production in Korean court proceedings, especially with respect to party-initiated disclosure requests.
A number of Korean practitioners have argued that a US-style attorney-client privilege can be derived from the rights and obligations of counsel, as well as from Article 12(4) of the Korean Constitution, [1] which recognizes the right of a person to prompt assistance of counsel. [2] As such, one Seoul High Court decision attempted to derive a US-style attorney-client privilege based on the “right to counsel” and the fact that jurisprudence from many other jurisdictions, including the U.S. and England, affirm an attorney-client privilege or legal professional privilege.[3]
The Seoul High Court's decision, however, was overturned by the Korean Supreme Court, which held that: “In light of the content and intent of Constitution and the Criminal Procedure Act provisions regarding the right to counsel and the scope of confidentiality between attorney and client, the opinion that the privilege of a client for whom criminal procedures such as investigation or trial have not yet commenced and therefore does not constitute a suspect or the accused to refuse disclosure of confidential information contained in legal advice obtained in everyday living relationship as a part of the right to counsel...cannot be accepted. The lower court's presumption that such an attorney-client privilege can serve as a basis for denying admissibility of the Legal Advice as evidence cannot be said to be appropriate.” [4]
Therefore, while it is true that attorneys bear confidentiality obligations and certain rights to confidentiality in civil and criminal court proceedings, the Korean courts are not yet prepared to recognize a US-style attorney-client evidentiary privilege. However, there has recently been some renewed interest in this topic. An open forum was held at the National Assembly in 2019 to discuss the possibility of enacting legislation that guarantees a US-style attorney-client privilege for attorneys and clients alike. [5]
Notes:
[1] Article 12
(4) Any person who is arrested or detained shall have the right to prompt assistance of counsel. When a criminal defendant is unable to secure counsel by his/her own efforts, the State shall assign counsel for the defendant as prescribed by Act.
[2] Han, Aera. “A Study on the Attorney-Client Privilege and its Improvement”, Korean Lawyers Association Journal, vol. 68 no. 4 (2019): 251.
[3] Seoul High Court Decision No. 2008No2778 dated 26 June 2009.
[4] Supreme Court Decision No. 2009Do6788 dated 17 May 2012. The Supreme Court did, however, ultimately deny admissibility of the legal advice on other grounds.
[5] Shin, Jong-Chul. “Attorney Byeong-Hwa Lee: If the confidentiality privilege is legislated, [it would be preferable to use] the term ‘clients’ right to protection of confidential information”, Law Leader, July 11, 2019. Accessed January 28, 2020. http://www.lawleader.co.kr/news/articleView.html?idxno=2757 (in Korean). Attorney Byeong-Hwa Lee noted that the right to refuse disclosure of confidential communication between attorney and client has yet to be legislated in Korea.
Yes, and this primary basis for protecting attorney-client communications under Korean law. With regards to confidentiality obligations, an attorney or a former attorney is prohibited from divulging any confidential matter that she has learned in the course of performing her duties unless otherwise required by law (Article 26 of the Attorney-at-Law Act).[6] If an attorney discloses secrets obtained in the course of representing a client, she is punishable by imprisonment, suspension of qualifications, or fines (Article 317 of the Criminal Act). [7]
With regards to an attorney’s rights, an attorney may refuse to testify in civil proceedings about any matters that would require the disclosure of secrets the attorney learned about in the course of representing a client, unless the client has waived confidentiality (Article 315 of the Civil Procedure Act). In addition, an attorney may refuse to submit documents to the court on the same ground (Article 344(1), subparagraph 3 of the Civil Procedure Act). In criminal proceedings, an attorney may refuse to testify about any matters for which he obtained confidential knowledge in the course of professional representation unless such testimony is deemed necessary for significant public interest (Article 149 of the Criminal Procedure Act). This public interest exception is interpreted narrowly. Many academics and practitioners consider death, serious injury, or severely serious financial losses to fall under “significant public interest”. [8] In addition to refusing to testify, an attorney may resist seizure of articles that the attorney received in the course of representation that the attorney continues to hold in his custody or possession (Article 112 of the Criminal Procedure Act).
In addition, the Korean Attorneys’ Code of Ethics prohibits attorneys from disclosing communications with clients, or documents or items obtained from clients, in connection with the performance of her duties. The Code also includes a prohibition on divulging or unfairly using confidential information that the attorney acquired while representing a client, or disclosing documents, memos, and other such material prepared in the course of the representations (Article 18 of the Korean Attorneys’ Code of Ethics). Attorneys have a limited right to disclose confidential information in cases where there is a significant public interest, or if the client consents, or to the extent necessary to defend the attorney’s own rights (Article 18(4) of the Korean Attorneys’ Code of Ethics).
Notes:
[6] Article 26 (Duty to Maintain Confidentiality)
No attorney-at-law or former attorney-at-law shall divulge any confidential matter that he/she has learned in the course of performing his/her duties: provided, that the same shall not apply to cases where such disclosure of confidential matters is especially prescribed otherwise by Acts.
[7] Article 317 (Occupational Disclosure of Other's Secrets)
(1) A doctor, dentist, herb doctor, pharmacist, druggist, midwife, lawyer, patent attorney, certified public accountant, notary, scrivener or his/her assistant or any person formerly engaged in such profession who discloses another's secret which has come to his/her knowledge in the course of the practice of his/her profession, shall be punished by imprisonment or imprisonment without prison labor for not more than three years, suspension of qualifications for not more than ten years or a fine not exceeding seven million won.
[8] Rho, Hyeok-Joon. “Obligations to Report Suspicious Transactions under the FATF Recommendation and Legal Professional Privileges in Korea”, Journal of Legislation Research, vol. 56 (2019): 199-200.
In most cases, the provisions in the Civil Procedure Act and the Criminal Procedure Act are nearly indistinguishable regarding the scope of rights an attorney may exercise to refuse to testify or disclose documents or other evidence. However, as set forth above, there is a public interest exception that applies in criminal cases, though this exception has been narrowly construed.
Regarding the power of government authorities to compel disclosure, it is not unusual for prosecutors and officials from the Fair Trade Commission, the National Tax Service, the Financial Supervisory Service, and other agencies to exercise search and seizure powers in the course of their investigations.[9] To the extent that the authorities seize memoranda and other communications between the attorney and client, there is no evidentiary privilege that would preclude use of those materials in a legal proceeding.
In one widely publicized case, the prosecutors even conducted search and seizure at a law firm. This action was widely criticized by scholars and practitioners, leading to outcries that laws should be enacted explicitly recognizing attorney-client privilege.[10]
Apart from their search and seizure powers, the authorities generally do not have the power to compel disclosure of documents through the rules of civil procedure or the rules of criminal procedure.
Notes:
[9] Chae, Jong-Won and Sung, Seung-Hoon. “Overuse of search and seizure regarding law firms and legal departments... ‘Companies stripped of right to defense?’”, Maeil Business Newspaper, January 7, 2019. Accessed January 28, 2020. https://www.mk.co.kr/news/society/view/2019/01/13399 (in Korean).
[10] Kim, Jin-Ju. “Search and seizure easily crossing the thresholds of law firms… [Should] investigation of truth be prioritized? What about rights to confidentiality?”, Hankook Ilbo, July 10, 2019. Accessed January 28, 2020. https://www.hankookilbo.com/News/Read/201907101629766817 (in Korean).
We are not aware of any laws, regulations, or court decisions regarding tests or criteria applied to determine who within a corporation is considered the client for the purposes of the ACP. Some practitioners suggest referring to the Upjohn approach in interpreting privilege under Korean law.[11]
Notes:
[11] Choi, Seung-Jae. “A Study of In-House Counsel Systems in Various Countries and the Current Status of Korean In-House Counsel”, 2015 Ministry of Justice Research Commission (2015): 63-64.
We are not aware of any laws, regulations, or court decisions regarding whether in-house counsel is expected to meet a higher burden than outside counsel with regards to privilege. However, some practitioners argue that if an administrative authority requests submission of certain documents, in-house counsel cannot refuse submission citing privilege because the recipient of such request is the company, not the in-house counsel. [12]
Notes:
[12] Jung, Hyung-Keun. “A Legislative Study on the Legal Status of In-house Counsel”, Korean Lawyers Association Journal, vol. 62 no. 11 (2013): 197-198.
As examined above in I.A.2., all attorneys bear confidentiality obligations under the Attorney-at-Law Act and are entitled to rights to refuse disclosure of certain confidential information in civil and criminal court proceedings under the Civil Procedure Act and the Criminal Procedure Act. Since there are no provisions limiting the scope of such confidentiality obligations or rights in relation to in-house counsel, in-house counsel may assert the same privilege or professional confidentiality as that of outside counsel.
As seen in I.A.3., however, legal departments of companies are sometimes subject to search and seizure by governmental authorities. Due to the limited nature of the privilege afforded to attorneys in Korea, it is difficult for in-house counsel to assert privilege in such cases.
In general, in-house counsel bear the same obligations and have the same rights as other attorneys under the Attorney-at-Law Act. However, the Attorney-at-Law Act does require an attorney to obtain permission from the local bar association if the attorney wishes to become an executive partner, director or employee of a for-profit corporation (Article 38(1) of the Attorney-at-Law Act).
On another note, the Seoul Bar Association and other regional Bar Associations limit the number of litigation proceedings that an in-house counsel may appear in as counsel. This is currently limited to ten per year (Article 6(1), subparagraph 1 of the Seoul Bar Association Concurrent Office Permission and Report Rules).
We are not aware of any laws, regulations, or court decisions recognizing the common interest doctrine in Korea. Since clients are not entitled to attorney-client privilege under Korean law, it is unlikely that information shared between claimants or defendants with common interest would be regarded as privileged.
Please see the above.
Please see the above.
We are not aware of any laws, regulations, or court decisions directly addressing the legality of litigation funding in Korea.
Whether litigation funding is permissible has been a subject of recent discussion, especially in the Korean international arbitration community. Prof. Ahn of Daejeon University notes that there could be some debate regarding whether litigation funding is compatible with Article 34(5) of the Attorney-at-Law Act, which prohibits non-attorneys from sharing in any “fees and other profits earned through services that may be provided only by attorneys-at-law.”[13]
Prof. Ahn opines that whether a litigation funding arrangement would violate the Attorney-at-Law Act would need to be determined on a case-by-case basis, depending on factors such as the parties to the arrangement, the specific terms of the arrangement, and the funder’s degree of participation in the litigation or arbitration. [14]
Article 6 of the Korean Trust Act, which forbids a trust arrangement where the main purpose of the trust is to enable the trustee to proceed with legal actions in the place of the trustor, is another provision that may be an issue depending on how a funding mechanism is structured.[15] There could be an Article 6 issue in litigation funding structures that require the funded party to assign the underlying claim to the funder.
Notes:
[13] Ahn, Keon-Hyung. “Third-Party Funding in Claims - Focusing on New Convergence Derivatives Arising out of the Mixture of Business and Jurisprudence”, Korea Trade Review, vol. 38 no. 1 (2013).
[14] Ibid, 250.
[15] Article 6 (Prohibition of Trust Aimed at Lawsuit)
Any trust, the main purpose of which is to have the trustee to proceed with litigation, shall be null and void.
We are not aware of any court decisions addressing whether communications with litigation funders may be protected by attorney-client privilege or the work-product protection.
A form of crime-fraud exception can be observed in Korean law, as examined below.
The Attorney-at-Law Act allows for exceptions to attorneys’ confidentiality obligation if prescribed in other laws. The Korean Attorneys’ Code of Ethics is not a law, but we examine exceptions allowed under the Code as a matter of reference: for “significant public interest”, with the client’s consent, or if necessary for defending the attorney’s own rights (Article 18(4) of the Korean Attorneys’ Code of Ethics).
Attorneys’ rights to refuse testimony, submission of documents, or to resist seizure are considered waived if necessary for “significant public interest” or if the client consents (Articles 315 and 344(1), subparagraph 3 of the Civil Procedure Act and Articles 112 and 149 of the Criminal Procedure Act).
Please see the above. Practitioners acknowledge that there is a lack of discussion regarding how to interpret “significant public interest” under the provisions examined above. [16]
Notes:
[16] hn, Sik. “Legalization of Attorneys' Rights to Confidentiality Necessary”, Korean Bar Association Open Forum Regarding Attorneys' Rights to Confidentiality (2017): 4.
We are not aware of any laws, regulations, or court decisions that protect information obtained or prepared in anticipation of litigation from disclosure. However, this is not surprising given that there is no discovery or broad document disclosure in Korean civil proceedings. As there is no duty to disclose, there has not been a need to develop a doctrine to protect attorney work product from disclosure.
Please see the above.
Similar to the rights and obligations that apply to attorneys, certified tax accountants and former certified tax accountants bear confidentiality obligations and are entitled to certain rights in civil and criminal court proceedings in relation to confidential information obtained in performing their professional duties. However, as in the case of attorneys, there are no express provisions acknowledging a US-style accountant-client privilege or affording clients protection or rights regarding accountant-client communication.
More specifically, certified tax accountants and former certified tax accountants also bear a confidentiality obligation regarding information learned in the course of performing his/her duties (Article 11 of the Certified Tax Accountant Act). Articles 315 and 344(1) of the Civil Procedure Act and Articles 112 and 149 of the Criminal Procedure Act regarding the rights to refuse testimony at civil or criminal courts, refuse to submit documents to civil courts, and to resist seizure of articles in relation to confidential information, are also applicable to current and former certified tax accountants.
Notes:
[17] Designation of accountants according to the Human Resources Development Service of Korea.
[18] Article 11 (Strict Observance of Confidentiality)
No current or former certified tax accountant or his/her current or former clerk shall divulge any confidential information he/she has learned in the course of performing his/her business, except as otherwise expressly prescribed by other Acts and subordinate statutes.
Various laws and regulations recognize a mediation privilege with respect to mediation conducted in courts or by dispute mediation committees. As of date, there are no official provisions or case law acknowledging a general mediation privilege with respect to ad hoc mediation, but it is a widely shared view that mediation proceedings should be kept confidential, and the parties usually sign confidentiality agreements before commencing mediation.
In case of mediation conducted in court by a judge or by conciliation commissioners under the Judicial Conciliation of Civil Disputes Act, those conducting mediation may elect to keep the proceedings non-public (Article 20 of the Judicial Conciliation of Civil Disputes Act).[19] Further, a person who is or has been a conciliation commissioner is prohibited from revealing the contents of the proceedings or disclosing, without justifiable grounds, any confidential information obtained in performing his/her duties (Article 41 of the Judicial Conciliation of Civil Disputes Act).
Other laws and regulations stipulate rules of confidentiality in relation to mediation conducted by various individual dispute mediation committees, such as the Personal Information Dispute Mediation Committee, Construction Dispute Conciliation Committee, Korea Medical Dispute Mediation and Arbitration Agency, and many others (Article 60, subparagraph 3 of the Personal Information Protection Act,[20] Article 78-3 of the Framework Act on the Construction Industry,[21] Article 32 of the Act on Remedies for Injuries From Medical Malpractice and Mediation of Medical Disputes[22] ).
Notes:
[19] Article 20 (Non-Publicity)
Conciliation proceedings may be not disclosed publicly: provided, that a conciliation judge may allow other persons to attend conciliation proceedings, if deemed appropriate, even if such conciliation proceedings are not open to the public.
[20] Article 60 (Confidentiality)Any person who performs or has performed the following affairs shall not divulge any confidential information acquired in the course of performing his/her duties to any third party, nor use such information for any purpose other than for his/her duties: provided, That, the same shall not apply where specific provisions exist in other Acts:
3. Dispute mediation of the Dispute Mediation Committee established under Article 40.
[21] Article 78-3 (Non-disclosure of Procedures for Conciliation)
Procedures followed by the Committee shall not be disclosed: provided, that where the majority of the members of the Committee give consent, the Committee may disclose such procedures.
[22] Article 32 (Closed Mediation Proceedings)
No mediation proceedings by a mediation panel shall be open to the public: provided, that proceedings may be open to the public, if the mediation panel resolves to do so by the affirmative vote of a majority of mediators.
We are not aware of any laws, regulations, or court decisions that recognize a settlement negotiation privilege.