News & Insights
Latest news and legal insights from HANBYOL LAW LLC.
[Herald Square] We need to improve the legal fee guarantee system.
Mr. Lee explained that the client he represented was sued for obviously frivolous reasons and applied for security for litigation costs under Article 117 of the Civil Procedure Act, which the court rejected. Even though the client won the first and second trials and received a decision confirming the costs, he was unable to recover the costs due to the other party's inability to pay, raising the issue of the system's ineffectiveness. He pointed out that the current law does not apply in practice except in cases where the plaintiff does not have an address in Korea.
Based on his experience in the United Kingdom, the lawyer explained that if the plaintiff is an overseas resident or a corporation and there is doubt about its ability to pay costs in the event of a loss, or if there is a suspicion of bad faith litigation behavior, such as hiding assets, the system is effective not only at the beginning of the case but also during the proceedings and on appeal. The practice of calculating the amount of collateral based on the estimated costs in appeals contributes to discouraging "don't ask, don't tell litigation" and improving the likelihood of cost recovery.
However, the lawyer emphasized the need for caution in introducing and operating the security system, as the expansion of the security system may unduly restrict the right to a fair trial or the right to appeal. At the same time, he suggested that it should be actively considered as a realistic alternative to prevent unreasonable litigation when combined with other measures to improve the judicial system, such as enhancing the integrity of the first instance proceedings.

