Originally from Handbook on Third-Party Funding in International Arbitration

1.1.   TPF Regime in South Korea

1.1.1. Is TPF commonly used in your Jurisdiction? If yes, since when (is it a new trend or a well-established practice)? 

TPF is still a relatively new concept in South Korea. We made informal inquiries to the largest Korean law firms and the Korean Commercial Arbitration Board (KCAB), but nobody reported any direct knowledge of any Korean litigation or arbitration case that proceeded with funding from TPF. However, the authors recently received and inquiry from a well-known Third-Party Funder requesting an independent evaluation for a Korean litigation case it was considering funding. The funder reports that it sees great potential for the development and expansion of litigation funding in South Korea. There are signs that funders are ready to test the viability of TPF in Korea, and we expect that the law of TPF will develop quickly once funders enter the market. 

1.1.2. Please shortly describe the TPF market in your Jurisdiction. Is it dominated by local or international Funders, which type of Funders are active, which cases get typically funded? Is there any source on Funders (like the overview published by the German Bar)?

There are no TPF companies organized and based in South Korea. As set forth in the response to the first question, there are no known cases of TPF funding for any Korean litigation matters or arbitration cases at the Korean Commercial Arbitration Board. At the present time, there is no reporting requirement for TPF funding and no reliable single source of information or data for TPF activities in South Korea.

1.1.3. Are there any statutes or case law dealing with TPF or regulating Funders? If yes, please address these. 

There are no statutes in South Korea that specifically address TPF. There is no case law in South Korea that specifically addresses TPF.

1.1.4. Are there any legal restrictions? 

a) To what extent do common law concepts like champerty, maintenance, barratry, or comparable civil law concepts as usury or prohibition of pactum de quota litis affect TPF? 

We are aware of one scholarly paper that addresses the legality of TPF from a Korean law perspective. The author is Prof. Keon Hyung Ahn, a former official at the KCAB and currently a professor at Daejeon University. There are two other essays on the subject of TPF in relation to international investment arbitration, one co-authored by Prof. Ahn and two other KCAB officials, and another written by Prof. Dae Jung Kim of Donga University, but these essays did not address the legality of TPF from a Korean law perspective.