By Lee Kyung-min
Lawyers are up in arms over a recent ruling to ban contingency fees in criminal cases.
They claim the Supreme Court’s ruling infringes on their right to do business.
In a unanimous ruling Friday, the court said that the contract between a lawyer and a client for contingency fees in a criminal case was invalid.
It is customary for a client to pay the lawyer a contingency fee for a result in favor of the client, including a reduced jail term or suspended sentence. It is usually much larger than a retainer fee, which is paid when the lawyer takes the case.
In Korea, lawyers have been able to take contingency fees for both civil and criminal cases, while some countries allow fees for civil cases only.
There has long been criticism that some lawyers, who were high-profile prosecutors or judges, charge fees of hundreds of millions of won after winning cases by using their connections with sitting judges.
The court said that contingency fees link the investigation or trial results with money and thus damage public trust in the judiciary system.
“Criminal cases are where the state exercises its right to punish criminals, so they require lawyers’ ethics. Such cases are also related to the fairness and trust of the judiciary system,” the court said.
“In criminal cases, success means avoiding indictment or arrest, or having a reduced jail term. Offering and receiving money in return for such success is against social ethics.”
The ruling has caused a huge stir among lawyers, as it means their income will drop significantly because unlike major law firms that charge their clients by the hour, most small- to medium-sized law firms or individual law offices charge such fees.
A lawyer who refused to be named said that he usually receives millions of won in retainer fees and about 10 times that amount in contingency fees after the case is over.
“Many lawyers may now ask for larger retainers at the beginning to maximize profit. But it would not be as large as the contingency fee,” he said. “The Supreme Court practically introduced a new law for lawyers.”
In response, the Korean Bar Association (KBA) filed a complaint with the Constitutional Court, Monday, claiming the ruling infringes upon their right to pursue monetary interest.
“Only a handful of former prosecutors are able to charge millions of won in contingency fees. The ruling unduly restricts the rights of lawyers, most of whom are without such high-profile backgrounds,” the association said in a statement. “Removing the contingency fee would result in unnecessary retainer hikes,” it added.
The group said the new rule will aggravate “polarization” among lawyers, as people will prefer large law firms that have some star lawyers with high rates of winning cases.
On the other hand, Dongkuk University law professor Kim Sang-kyum said the contingency fee ban reflects decreasing public trust in the justice system.
“There’s a widely known phrase: those with money are not guilty while those without are,” Kim said.
“Chaebol executives, who can pay huge contingency fees, receive suspended sentences, or have their terms suspended for health reasons. Do you think ordinary citizens that are unable to pay large fees enjoy the same treatment?”
Kim said the lawyers’ protests are only to protect their own interests. “Restoring public trust in the judiciary system is much more important than protecting lawyers’ personal interests.”