By Kang Seung-woo
The nation’s anti-trust watchdog has raised a conflict of interest issue over a major law firm’s recent defense of life insurers’ price rigging.
In response, the law firm has rebutted the claim.
It is unlikely to face any penalty because the involved insurance companies do not intend to press charges against the firm.
According to the Fair Trade Commission (FTC) Monday, Bae, Kim and Lee, represented three life insurers ― Korea Life Insurance, Shinhan Life Insurance and Tong Yang Life Insurance ― in a price-fixing case, where the FTC in October fined 12 life insurers a combined 365.3 billion won ($319.27 million) for colluding to rig interest rates for years.
Korea Life, which was penalized 48.6 billion won at the time, was exempted 12.1 billion won for cooperating with the investigation, while Shinhan and Tong Yang, which denied colluding, were handed 3.3 billion won and 2.4 billion won in fines respectively.
The ethical code stipulates that one lawyer should not defend multiple clients whose interests clash.
“It is not clear to call our case a conflict of interest,” said Oh Keum-seok, the partner in charge of the anti-trust practice department in Bae, Kim and Lee.
“Before the life insurance companies hired us as their representative, they had already understood that we would defend all of them.
“But the case for each side was prepared independently.”
The Korean Bar Association (KBA) is set to review the case if the two life insurance companies take issue with the law firm.
The involved insurers are not set to appeal.
“Although one law firm defended three companies, we heard it was not of any concern because there were separate teams for each side,” said an official of one life insurer.
Last year, when the FTC fined a total of 19, local and foreign freight service providers a combined 120 billion won for their association in years-long price-fixing practices, the law firm Yulchon was at the center of the whirlwind after defending entities that voluntarily reported to the FTC and others that did not.
“Although no laws were broken, it is controversial in terms of ethics,” said an FTC official.
“The KBA needs to draw up a code of ethics or way to resolve the situation on their own.”