[EDITORIALS]Go Slow With Class-Action SystemHere was another case of the administration setting the date of an initiative without proper preparation out of its bad habit. The government has several times publicly pledged that it will implement a class-action system next year, making the introduction almost certain. As if it was not enough, the chief presidential secretary for economic affairs, Lee Ki-ho, fixed the timetable Friday by saying that class-action suits for securities-related cases would be allowed next March. Heated debates followed as the business circle voiced opposition whether a full resistance to the initiative or a demand for a complementary device was needed. It seems that the government will pursue its plan in stages. For instance, the government is likely to confine the companies that are subject to the system to large corporations or securities firms first. Even though it is not a time for the introduction of such system, and the implementation of the initiative that could bring about much repercussion as class-action suits should be decided after collecting opinions from those who oppose the idea. We think it is wrong for the government to have hastily set the time of the introduction without holding a public hearing. Once implemented, a system is hard to discard.
We believe that allowing a collective legal action by investors has merits, such as preventing corporations' shoddy accounting practices. It is necessary to introduce the system as far as it does not restrict management activities. But today, corporations are shackled by many regulations, such as special monitoring of the top 30 groups, which dispirits entrepreneurs. Some companies argue that measures that can boost, not depress, their morale is necessary now. Thus, it is not timely to hastily introduce the class-action system.
Preceding measures to enhance corporate management, such as outside directors system, have not yet taken root. So, it would not be too late to make a decision on the introduction of the system after taking some time to watch how the new measures work and what impact those systems bring about. And complementary measures of reducing abusive legal actions should be studied before the introduction.
with the Korea JoongAng Daily
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