Financial services litigation—South Korea—Q&A guide
Financial services litigation—South Korea—Q&A guide

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Financial services litigation—South Korea—Q&A guide
  • 1. What are the most common causes of action brought against banks and other financial services providers by their customers?
  • 2. In claims for the mis-selling of financial products, what types of non-contractual duties have been recognised by the court? In particular, is there scope to plead that duties owed by financial institutions to the relevant regulator in your jurisdiction are also owed directly by a financial institution to its customers?
  • 3. In claims for untrue or misleading statements or omissions in prospectuses, listing particulars and periodic financial disclosures, is there a statutory liability regime?
  • 4. Is there an implied duty of good faith in contracts concluded between financial institutions and their customers? What is the effect of this duty on financial services litigation?
  • 5. In what circumstances will a financial institution owe fiduciary duties to its customers? What is the effect of such duties on financial services litigation?
  • 6. How are standard form master agreements for particular financial transactions treated?
  • 7. Can a financial institution limit or exclude its liability? What statutory protections exist to protect the interests of consumers and private parties?
  • 8. What other restrictions apply to the freedom of financial institutions to contract?
  • 9. What remedies are available in financial services litigation?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to financial services litigation in South Korea published as part of the Lexology Getting the Deal Through series by Law Business Research (published: June 2020).

Authors: Kim & Chang—Cheolhee Park; Jin Yeong Chung; Sungjean Seo

1. What are the most common causes of action brought against banks and other financial services providers by their customers?

As is the case in many other jurisdictions, banks and financial services providers have a general duty under article 46 of the Financial Investment Services and Capital Markets Act (FSCMA) to protect their customers when selling financial products or managing financial products on their behalf. Actions most commonly brought against banks and other financial services providers by their customers are claims for damages based on allegations of a breach of that duty. Before making sales, financial services providers are required under article 46-2 of the FSCMA to provide questionnaires to their customers to ascertain their investment experience and goals, which they are required to analyse to determine their suitability. Article 47 of the FSCMA also requires banks and financial institutions to explain the terms and risks of the relevant financial products by providing sufficient information on the products, including the investment prospectuses. Numerous legal actions have been brought by customers alleging that the questionnaires and investment prospectuses that were provided to them were mere

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