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      집단소송법에 대한 사이 프레 법리 도입방안 = Importing the Cy Pres Doctrine to the Korean Class Action Act

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      The Ministry of Justice, on September 28, 2020, announced the legislative notice of the Class Action Bill(“Bill”). The Bill, like the Securities-related Class Action Act, requires that the left-over fund be reverted to the defendant.
      Is this desirable? In the United States, the view is that reversion to the defendant is undesirable as it diminishes deterrence. Instead, in many US class action settlements, the left-over funds are given to third parties under the cy pres doctrine. This paper examines the US cy pre doctrine and proposes a method for handling left-over funds appropriate to the situation in Korea.
      First, since the purpose of the Bill is to compensate for damages, the paper recognizes that the provision of reverting the left-over fund to the defendant is an appropriate means for that purpose. However, if the Bill is intended to add deterrence as its purpose, then the cy pres doctrine modified to fit the Korean jurisprudence is preferable.
      Specifically, I propose that law should be that (1) the parties should choose the recipient, and the court shall only decide whether to allow it, (2) the court shall permit the settlement if the recipient is an organization similar to the member of the case, (3) if the recipient is related to the defendant in the case or the judge, the settlement should not be allowed, (4) if the judgment is finalized without an agreement between the parties, the balance shall be returned to the State; (5) if the plaintiffs’ attorney fee should be reduced for the portion paid to the third party or the State.
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      The Ministry of Justice, on September 28, 2020, announced the legislative notice of the Class Action Bill(“Bill”). The Bill, like the Securities-related Class Action Act, requires that the left-over fund be reverted to the defendant. Is this desir...

      The Ministry of Justice, on September 28, 2020, announced the legislative notice of the Class Action Bill(“Bill”). The Bill, like the Securities-related Class Action Act, requires that the left-over fund be reverted to the defendant.
      Is this desirable? In the United States, the view is that reversion to the defendant is undesirable as it diminishes deterrence. Instead, in many US class action settlements, the left-over funds are given to third parties under the cy pres doctrine. This paper examines the US cy pre doctrine and proposes a method for handling left-over funds appropriate to the situation in Korea.
      First, since the purpose of the Bill is to compensate for damages, the paper recognizes that the provision of reverting the left-over fund to the defendant is an appropriate means for that purpose. However, if the Bill is intended to add deterrence as its purpose, then the cy pres doctrine modified to fit the Korean jurisprudence is preferable.
      Specifically, I propose that law should be that (1) the parties should choose the recipient, and the court shall only decide whether to allow it, (2) the court shall permit the settlement if the recipient is an organization similar to the member of the case, (3) if the recipient is related to the defendant in the case or the judge, the settlement should not be allowed, (4) if the judgment is finalized without an agreement between the parties, the balance shall be returned to the State; (5) if the plaintiffs’ attorney fee should be reduced for the portion paid to the third party or the State.

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