Andrew got fired from his hagwon for something he did not do. He wants to fight for unfair dismissal and is sure he can win. Unfortunately, his boss is about to close his hagwon and move somewhere else. It will take a few months for Andrew to get a judgment stating that the boss is liable for a certain amount of compensation. In this case, how can Andrew ensure that he receives his compensation?
Refusal to pay back a debt, a promised amount of money, or administrative (labor board or similar) compensation requires some form of enforcement—such as seizure or collection—to prevent contracts or legal judgments from becoming worthless pieces of paper. This column will provide an overview of the three steps used to enforce an administrative judgment: (1) pre-suit asset seizure, (2) suit and judgment establishing debt, and (3) collection.
People who are being or will be sued commonly try to hide or dispose of their assets. Preliminary seizure (gaapryu), which can occur before a lawsuit even starts, prohibits the defendant from withdrawing money from their bank account, selling real property (i.e., land and buildings), or otherwise transferring their ownership interests until the suit is completed.
But of course not every suit ends with the defendant losing, and the inconvenience of losing the ability to withdraw money or sell property is significant. So to protect the defendant, the person requesting the freeze must also pay the court a deposit (kongtakgeum) equal to a certain percentage of the property value. Typical values are 10 percent of the value seized for real property, 80 percent for personal possessions, and 40-50 percent for bank accounts. As these sums can be quite high, the courts also sometimes allow plaintiffs to purchase insurance in lieu of paying a cash deposit. If the defendant is successful, he may countersue and seize the deposit or insurance policy to secure his rights.
There are three main types of lawsuit for collection: civil suits, order to pay suits, and small claims suits. A small claims suit is limited to sums under 20 million won. Orders to pay involve only paper trials (i.e., they do not include testimony) and are limited to cases where liability is clear (e.g., the presence of a written contract or administrative judgment). The deposit required for a preliminary seizure is also smaller for a suit seeking an order to pay, and the market rates for attorneys are often much cheaper.
During trial, both sides present documentary evidence and (except for order to pay suits) witness testimony. Orders to pay can become normal civil suits if the court believes the matter is inappropriate for an order to pay suit (e.g., documents are lacking or witnesses are needed). In a small claims suit, the ability of attorneys to represent is limited. Otherwise, either an attorney or a person representing himself can appear in court, present evidence, and argue.
After the suit, if the defendant is found liable, he has two weeks to appeal. If property was seized beforehand, then after two weeks, this preliminary seizure becomes final and the property changes hands or goes to a forced sale. If the debtor pays, the forced sale can be cancelled upon court order after the debtor has proven there is no credit left on the property. If there is an appeal, the property remains seized but execution is held until the final court judgment.
So according to the steps described above, Andrew can have any of his boss’s assets, such as his house, car, rental deposits, or savings, legally seized. After this, Andrew can instigate a lawsuit and receive a judgment. Assuming the judgment is in Andrew’s favor, he can receive his compensation through the forced sale of the assets seized before the lawsuit.
Yuna Lee is an English-speaking Korean attorney with the firm Seowoo Minyul, located in Seoul, and blogs at askakoreanlawyer.blogspot.com. She represents non-Koreans and Koreans in litigation and transactional matters and also provides pro bono legal counseling at Seoul Global Center on a regular basis. If there is an area of law you would like to see discussed, write to email@example.com and include “column” in the subject line.