Bless Korean Prosecution but Watch Out!

Tom Coyner

By Tom Coyner

Each morning I look forward to reading my newspaper over tea, taking in Korea's scandal du jour. Most outrages deal with business and government corruption, and as such, I find myself rooting for the Prosecutor's Office. My wife sometimes hear my mumbling, ``Go Prosecutors!''

Prosecutors are from the top of their academic classes and most are passionate about justice with a genuine desire to improve Korean society. My incidental encounters with prosecutors have consistently been positive. Not only are they bright, but also as a group, they can be quite fair and even broader minded than their counterparts in other countries. The apparent reason is that most prosecutors are more concerned about overall justice than the mechanics of the law.

This approach to justice can surprise many foreign business professionals unfamiliar with Korea. For example, many expats have wondered why does the Korean prosecution arrest people without charging them, as with the case involving the chairman of Hyundai Motor, and then released them on bail two months after being arrested? Answer: In face-saving Korea, the public perceives the arrest as an initial punishment, and the prosecution takes it as the start of its investigation.

So, we are working within a very different paradigm that generally works quite well. But like all systems anywhere, the Korean legal system is not without its unique issues. These differences can create critical ``gotchas'' for the unaware foreign businessperson.

Consider what actually happens when the prosecutors' spotlight falls on an individual.

The first move is to take suspects into custody. Prosecutors can hold suspects for 30 days before indicting them. After indictment, they can continue to investigate defendants and witnesses. Under Anglo-Saxon law, suspects are usually released on bail. This doesn't happen here.

Summons for investigations are delivered whenever prosecutors feel like it. And if one is really unlucky, they will alert the press cameramen to one's imminent arrival, thus ensuring one being first tried in the court of public opinion.

Under interrogation, the suspect is often alone. Customarily, defense lawyers have not been allowed to attend investigations of their clients. Recently, some aggressive legal firms have insisted on this right, which is guaranteed by law.

Historically, confession has been the prime source of evidence. The idea that one has a right not to have to incriminate oneself is foreign for Korean prosecutors. Questioning sessions can be lengthy, repetitive and highly stressful.

In Korea, there is no attorney-client privilege. Any communication between lawyer and client is subject to seizure.

If by western standards some of these practices and means may seem a bit excessive, one needs to put the system into its cultural context.

Like Japan, for the prosecutors, getting a guilty verdict can be more about saving face and career than about justice. If they lose a highly published case, because they have simply presented no credible evidence, those involved may face an adverse impact on their future promotions or may be sent off to a provincial post.

The bright side is that a good prosecutor will only take to court those cases he or she believes are fully winnable. At the same time, the prosecutors can display a remarkable amount of sympathy and indulgence for first time lawbreakers ― provided the guilty shows sufficient remorse and contriteness. It is not unusual for a prosecutor to let someone go ``this one time'' if the prosecutor feels the citizen has learned a lifelong lesson.

So, one might say some foreigners are too quick to judge the Korean legal system when they learn of the 95 percent conviction rate. But many of these critics fail to grasp the informal, often compassionate actions by prosecutors who settle many cases without going on to court.

And the Korean legal system continues to evolve.

For example, the police and prosecutors are struggling over investigation rights. In several countries, the police have criminal investigation departments. In Korea, that role is taken by the Special Investigation Division of the prosecutor's office. Currently, there is a strong movement by the police force to gain certain investigation rights, but it is being strongly resisted by the prosecution.

There is also a struggle between judges and prosecutors. In the past, judges used to issue arrest warrants requested by prosecutors virtually as a matter of course. Currently, the Seoul District Court denies some 40 percent of arrest warrants.

In the past, lawyers did not resist the prosecutors. Now, they fight back. As Korean lawyers become more westernized, their voices in court are getting louder. At the same time, there is an increasing number of NGOs adding to the chorus of demands for improvement. As a result, a lot of cases, which would have been judged guilty as a matter of course, are now being found not guilty.

Interestingly enough, many of today's prosecutors feel that they are the enforcers of public opinion. This may seem strange to a foreigner since public opinion can be both whimsical and, on many issues, such as who can buy a bank, be very amateur. But, if the press and public are pushing them, some prosecutors feel they must respond.

So, what does this all mean for the foreign business professional? How does one keep oneself and one's business safe in this kind of legal environment?

Here are some suggestions:

― Compliance in Korea is weak. But the multinational executive needs to make sure your compliance is stronger than what is normal for local companies. Don't simply trust local employees who say, ``Don't worry about this law or that regulation; I have spoken to our lawyers about it.''

― If a lawyer says something like the above to you or your staff, it is absolutely essential that you get a written opinion.

― Remember: there is no attorney-client privilege, so be discreet in your communication. That includes being very careful with all documentation _ even e-mail.

― Don't expect government officials to follow through on a verbal promise by another department or by a predecessor. Make sure you get promises in writing.

― When meeting on sensitive issues, tape the meetings and keep records. Even when meeting government officials, this is critical.

― When hiring a law firm, be sure to hire one that is prepared, if necessary, to fight the prosecution. Some firms will do this ― but others will not. This prosecution-court struggle even plays out within individual law firms. The former prosecutors at a firm are likely to say, "Oh, let's work with the prosecution on this," but the former judges and lawyers are more likely to fight.

― Consider the old axiom of ``when in Rome, do as the Romans do'' may not be the best strategy for preparing a legal defense. Korean companies are often too quick to compromise, even when they are clearly innocent. They do this due to overriding political and potential legal liabilities. Foreign companies operate with some inherent disadvantages. But one advantage an expatriate executive should leverage is that foreign companies are not necessarily expected to act like Korean companies. Consequently, you should mount your legal defense as one would in one's own country ― even should your Korean staff advise otherwise. Foreign companies can ― and have ― pushed back at the prosecutors, causing the prosecution to reassess their targeting.

Of course, when guilty, foreigners can be indicted like anyone else. They can also undergo severe difficulties when prosecutors and tax officials investigate simply in response to negative public opinion.

Bottom line: consider your public relations efforts to be much more than simply good marketing. A good public image could be one of your best legal defenses.

Tom Coyner is president of Soft Landing Korea, a consulting group focusing on sales and human resources issues. He is co-author of Mastering Business in Korea: A Practical Guide.

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