[Contingency Fee Ban Backfires]③ "A Stepping Stone Linking Ordinary People and Lawyers Has Been Broken"

Cho Sunyeol, President of the Seoul Regional Bar Association


Contingency Fees Are a 'Postpaid Retainer System'

Nullification Ruling Traps the Vulnerable in the Justice System

Collapse of Compensation Structure... Decline in Quality of Defense

Flexible Operation of 'Reasonable Agreements' Needed

Cho Sunyeol, Chairman of the Seoul Regional Bar Association, is giving an interview with The Asia Business Daily. Photo by Yoon Dongjoo

"Contingency fees are not a sign of lawyers' greed. They are a form of 'postpaid retainer system' entered into with lawyers to relieve the injustice suffered by ordinary people who lack large sums of money and are falsely accused. When the Supreme Court put an end to this stepping stone, it undermined the right to defense for the vulnerable in the justice system."

On March 27, Cho Sunyeol, President of the Seoul Regional Bar Association, described the Supreme Court's 2015 ruling that nullified contingency fee agreements in criminal cases as "a decision trapped in idealism that has damaged the reality of judicial welfare" during an interview with The Asia Business Daily.

President Cho stated that the prohibition of contingency fees in criminal cases has harmed the working class. He said, "When contingency fees were blocked, former high-ranking prosecutors and large law firms simply raised their upfront retainers significantly. Wealthy individuals can still pay high retainers and receive quality legal support, but ordinary people who cannot afford this are left with no choice but to appoint a public defender or forgo legal representation altogether."

He added, "In particular, young lawyers, unable to raise their retainers, listen to the desperate circumstances of their clients and agree to contingency fees. However, after winning the case, there are countless instances in which clients refuse to pay, claiming the agreement has no legal effect, resulting in fraud against the lawyer." As a result, young lawyers facing declining profitability are now avoiding criminal cases altogether, which means the 'healthy ladder' that both helps the vulnerable and rewards results has essentially disappeared.

He also pointed out a decline in the quality of defense. President Cho said, "Looking at the types of disciplinary and grievance cases submitted to the Seoul Regional Bar Association, the overwhelming complaint is that lawyers have neglected their efforts in criminal cases. Now that the system for performance-based compensation has collapsed, there is a rise in moral hazard, with lawyers only collecting the retainer and failing to fulfill their duties diligently. The harm, in turn, falls squarely on the clients."

President Cho emphasized, "Japan recognizes contingency fees for criminal cases, while the United States and the United Kingdom have established hourly rate systems that ensure lawyers are fairly compensated for their labor. Germany guarantees the right to defense through a mandatory attorney system. In contrast, our country has only declared contingency fees in criminal cases 'invalid' without any alternative mechanisms, deepening the structural distortions in our judicial field."

As a solution, he proposed post-control through 'reasonable guidelines.' The idea is that courts should operate flexibly by only partially invalidating contingency agreements when the fees are excessively high, considering the complexity of the case, the time invested, and the significance of the outcome.

President Cho argued, "Recognizing the value of a lawyer's work when they secure acquittal or exoneration is a basic principle of capitalism. While unethical acts such as unfairly high fees must be thoroughly regulated by lawyers' associations, 'reasonable agreements' that allow ordinary people easier access to legal representation should once again be encouraged."

This content was produced with the assistance of AI translation services.