Consumer class actions against Korean companies would become easier as they will not require court review and permission under a revised bill sought by the antitrust authority.

The Korea Fair Trade Commission (KFTC) said Monday that it has proposed to revise the Framework Act on Consumers to allow consumers to file a collective lawsuit without court warrant.

Under the current law, a class suit can be filed by Korea Consumer Agency, groups registered as consumer organizations, and business groups such as the Federation of Korean Industries and the Korea Federation of SMEs. But they need to get permission from the court in advance, which could sometimes take years.

It also plans to introduce the right that will allow consumers to request prohibition or prevention of future damages if they expect a serious violation on their rights. Germany and Japan grant the right to consumers to prevent damages.

The antitrust watchdog has proposed to add Korea National Council of Consumer Organizations to the list of organizations that can file a class-action suit on behalf of consumers.

Businesses would not face a sudden surge in lawsuits immediately after the revisions pass the National Assembly because consumers still need to go through the designated organizations to take class action and there are various other channels for them to receive compensation. But companies are worried that the bills could deal a harsh blow to small and mid-sized companies.

The FTC said it is too much of an exaggeration to say that the revised bills would lead to a barrage of lawsuits because there were only eight class action suits over the past 15 years and consumer organizations must shoulder the litigation cost if they lose.

By Baek Sang-kyung and Choi Mira

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]