Yoon Byung-chul Kim & Chang lawyer

By Yoon Byung-chol
Kim&Chang

As businesses increasingly conduct international transactions, it has become more important for multi-national corporations to carefully consider, not only the different laws of various jurisdictions, but the different ethical standards or codes of conduct of lawyers that may apply in one country but not another.

Understanding the relevant varying ethical standards at the outset is essential for a multi-national corporation as these standards can substantially affect the corporation’s overall strategy in defending or bringing a claim against another entity.

One example of ethical issue which often arises when dealing with multi-national corporations is in the context of interviews of corporate employees by an opposing party in a dispute.

In the United States, attorneys may not conduct interviews of an opposing party’s current employees.

In fact, one New Jersey federal court found that ex parte interviews by opposing counsel of not just current employees were off limits but so were interviews of former employees.

In Korea, on the other hand, the restriction on interviews by counsel of an opposing party’s employees is limited to representative directors or officers who have authority to act for the company.

Contact with lower level managers and employees are not prohibited, still less former employees. Yet an attorney will need to keep in mind that an employee who is approached by the opposing party may potentially be vulnerable to prosecution for criminal breach of fiduciary duty depending on the nature of information disclosed to the opposing attorney.

Thus, if a dispute arises between an American corporation and a Korean corporation, complications may arise when a Korean attorney representing a Korean company seeks to interview employees the American counterparty.

The American attorneys representing an American corporation are restricted substantially under their ethical standards.

The Korean attorneys, who may seek to interview employees of the American corporation, on the other hand, will not be as restricted in their ability to conduct fact-finding. Such variations may raise issues of fairness and may be dealt with from the outset, such that attorneys from different jurisdictions are on the same page and agree to a fair, uniform standard.

On the face, it appears that there are ethical issues in collecting evidence by allowing the interviews with employees of opposing corporation.

However, there are reasons for every difference in ethical rules of each jurisdiction. For instance, in the United States which is a common law jurisdiction and permits broad discovery of documents, it is possible to have extensive access to the opposing party’s documents.

Accordingly, evidence collection is not particularly impeded by the restriction on interviews of former employees in most cases.

On the contrary, in Korea, where the scope of discovery of documents is much narrower compared to the United States, it is understandably important to grant a party access to lower level employees or former employees of its opposing party and to permit it to make use of them as witnesses.

Ultimately, the information that can be obtained in Korea may be similar to the information one can obtain in the United States, only the method is a different.

Therefore, corporations conducting international transactions or disputes need to consider the ethical standards of each country expected of attorneys as well as the norms and standards of the legal procedure of the relevant country in which the corporation is doing business.