證券關聯 集團訴訟의 分配節次에 관한 考察

A Review on the Procedure for the Distribution of Proceeds from Securities Class Actions

As stock investment becomes more popular in Korea, a number of individual investors with small holdings, as a class, are frequently injured by publicly traded companies illegal acts, such as misrepresentations or unfair transactions. Under the conventional civil procedure rules, however, it is often impractical for such investors to seek compensation for the numerous, yet, small individual claims. The investors cannot be a match for the offending big businesses on individual basis, because an individual investor cannot afford time, efforts, and expenses, and often powerless against the offending big businesses. Therefore, most individual investors injured by big businesses used to abandon their legitimate claims. Securities class action has been designed to overcome such shortcomings of individualized procedure. It refers to the type of civil actions where one individual belonging to the group of injured investors brings an action, and his or her success in the action will have automatic effect on other investors who do not participate in the litigation itself. In securities class actions, however, because the amount of damages are calculated and determined on class basis, there should be a distribution process to distribute the proceeds to the members of the class. When the members are numerous, the problem of determination and distribution of the damages becomes a tough one as it is often difficult to determine whether one particular individual investor actually belongs to the class at issue. As a result, the Korean securities calss action law has a unique legislated method of distribution, which is different from the American system. The Korean system does not specify the class members during litigation, but determines the damages for the whole class via sampling, average, and/or statistical methods. It then distributes the adjudicated proceeds through distribution manager to whom the class members are to report their individual claims. However, it is rather unusual, from the view point of Korean conventional system, to distribute damages through a separate distribution system after the underlying litigation is over. It is also inappropriate to adopt the American system as it is a different from our system. It is therefore expected that they would be a number of errors and problems in implementation of the distribution system. In order to have a smooth implementation of the system, this papers reviews and considers the basic structure and the detailed contents of the distribution system, then identifies the potential problems in application, and proposes solutions to the identified problems.