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A Study on the Limitation of Liability related to the Class Action Lawsuit of Investors

  • DONG-A LAW REVIEW
  • 2013, (61), pp.337-374
  • Publisher : The Institute for Legal Studies Dong-A University
  • Research Area : Social Science > Law

조상규 1

1경북대학교

Accredited

ABSTRACT

In a class action lawsuit, calculation of damage is not a simple question because of a large number of plaintiffs and a small amount of their claims. In order to make a compensation to be substantial, all the process of lawsuit from collecting evidences to limitation of liability for damages should be under a prudent policy. The outcome of litigation largely depends upon a presentation of supporting evidence. In case of demage claim suit by investors, investors take a burden of onus probandi. Because of an information asymmetry between defendants and plaintiffs, investors are faced with difficulties collecting supporting materials, basis of calculating damages. As most of the evidence is under a control of perpetrators, in case that they resist to obey a court order to submit documentations, compellable legal sanctions are requested. Plus, as investigation by financial supervisory is taken place prior to the investor-class action lawsuits, ‘Request for forwarding authenticated records’ is to be an effective way of collecting evidences. Therefore, in order to mitigate the investors’ burden of proof by activating these two types of requests, legislation imposing obligation to submit documents is urgently needed. As to estimate liability ratio in Korea, where the proportionate liability has not been introduced yet, the mistake set-off method which considers plaintiff’s mistake based on principle of equity is used to judge the defendant party’s liability appropriately under the untruthful joint responsibility. However, following the precedent, a defendant party’s liability tends to be set off excessively, comparing with a plaintiff's slight negligence. Furthermore, liability setting-off ratio is easily changed at a judiciary discretion in an appellate trial, without any specific legal ground. The judicial system should be reorganized by providing concrete criteria on the mistake set-off method, at a level of weighing an offense at a criminal case. Under ‘Civil Act’, joint tort liabilities are considered as untruthful joint responsibilities. And investors’ negligence should be counted against the several perpetrators together, not by the single separated basis but by the total basis. Only when responsibility ratio between perpetrators is substantially different, the mistake set-off method by the single separated basis should be restrictively allowed.

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