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1. Legal Infrastructure and Development: Dispute Resolution in South Korea
Lisa Blomgren Bingham, J.D.
Keller-Runden Professor of Public Service
Director, Indiana Conflict Resolution Institute
2. Overview Disclaimers (many, many)
Definitions (private dispute resolution, legal infrastructure)
Categorizing dispute systems by who controls their design
Korea: some background
Changing infrastructure: dispute resolution in the courts, labor relations, and the environment
Implications for economic development: Reunification of North and South Korea
3. Definitions Legal infrastructure
Substantive property, contract rights
Civil rights, democracy
Institutions for enforcing rights and resolving disputes, public AND PRIVATE
Private dispute resolution: Resolution by those who are not judges, courts, or administrative agencies, even if court-annexed
4. Control over Dispute System Design Private ordering: The parties design it together (international commercial arbitration, labor relations, diamond dealers, cotton industry).
Private ordering: One party designs it alone and imposes it on the other (adhesive or mandatory arbitration in US, designed unilaterally by employers and businesses, enforced under FAA, preemption)
Public institution-building: Third parties design it for disputants (governments, courts, agencies, or NGOs like Court of Arbitration for Sport)
Control over DSD affects rules and outcomes of system. More of a problem for arbitration than for mediation programs (Bingham 2004).
5. South Korea: Some Background The flowering of democracy in past decade
Economic crisis 1997-1998 (500% leverage)
Chaebol corporate structures: massive conglomerates closely held de facto if not de jure
Top 30 control 41% of economy
Legal infrastructure improvements in substantive law in response to crisis
More transparency, accountability on corporate boards, but still problems
South Korea rates lower than other industrial economies on international indices of corruption and bribery (Transparency International)
Reunification desired: 2-10 years
6. Private Ordering: DSD by The Parties in Korea Limited use and experience with ADR
Board of Commercial Arbitration 300 cases a year
No courses in law or business schools on ADR
No negotiation skills training; interest-based negotiation is a novelty.
De facto limits on disputing through cultural traditions and chaebol interdependent conglomerate structures
Contrast US: CPR Institute, Fortune 500 sign CPR Pledge
Impulse comes from corporate counsel within companies to limit transaction costs
7. Private Ordering: One Party Dispute System Designs absent in Korea There appears to be no precedent for this
No equivalent to the FAA permitting adhesive arbitration and enforcing awards
Suppression of conflict within organizations
Mandatory adhesive arbitration viewed as a means to manage risk and reduce exposure to jury awards
Mediation viewed by a few enlightened firms as possible new high performance work system practice
8. Third Party Designs: Innovation in Koreas Institutional Infrastructure Paradigm shift underway
Courts, National Labor Relations Commission
Public Policy and Environmental Disputes
New substantive laws
President is former union lawyer
Government agencies gearing up to comply
Institutional infrastructure is weak or absent
Knowledge economy, beginning to benchmark
9. Courts Korean Supreme Court Task Force on Civil Justice Reform
Overseeing move toward common law from civil code tradition through experiment with jury system
Undertaking dispute system design for entire national court system to implement ADR
10. Current Institutional Structure in Koreas Courts Civil code system
Dramatic growth in caseload, increasing individualism with improvement in economy and democracy
No tradition of independent mediation practice, limited use of arbitration
Judges mediate their own cases; concerns about confidentiality and appropriateness of dual roles
Concerns about efficiency of courts as dispute system
11. Courts Questions Training and qualification of neutrals
Are mediators court employees or outsiders?
Who pays and how much?
Are mediation and arbitration outcomes enforceable in the courts? How?
What kind of ADR? What timing?
Relation of courts to labor arbitration?
What might court need to fund that parties will not pay for?
Where is ADR held? What is relation of court to ADR? Rules on confidentiality?
12. Implications for Economy Legislative mandate for juries framed as public participation in governance
Implicitly, concerns about economic competitiveness
Reducing transaction costs
They wanted to know what evidence there is of benefits: The Galanter Vanishing Trial Study was persuasive.
13. Korean National Labor Relations Commission Convened first ever national conference
Attended by 80 people from NLRC and all its regional offices
Chairman is at level of a cabinet minister
President has pursued legislation that will
Permit government workers to form unions
Permit contract and temporary workers to file complaints of discrimination with NLRC
NLRC anticipates dramatic growth in caseload
14. Current Institutional Structure of NLRC National office and regional offices
11 percent rate of private sector unionism
Increasingly adversarial labor relations
Wall to wall units capable of shutting down entire industry in a strike
Evaluative mediation style
Descriptions sound more like advisory arbitration
Proud of their settlement rates
15. NLRCs Questions Benchmarking dispute system designs
What is USPS system? (Bingham 2003)
How does mediation work?
What evidence is there of its outcomes?
Models of training? Interest-based negotiation? Mediation training? Sources?
16. Implications for Economy Making substantive changes in legal infrastructure concerning individual worker job security
Moving in direction of more flexible hiring and firing
Political quid pro quo is discrimination law for temporary and contract workers
Want to make it work efficiently - not have excessive transaction costs
Building on existing institutions to enforce new rights
17. Public Policy and Environmental Conflict New substantive proposed law:
Conflict Assessment OR Conflict Impact Assessment (which is unclear)
Deliberative Polling (Fishkin)
Korea Environmental Institute (assessment)
Institute for dispute resolution skills training in government
National law for every agency; will need capacity to mediate
18. Governments Questions Commission on Sustainable Development funded KDI School & MIT to hold comparative conflict resolution studies conference
Benchmarking comparative legal infrastructure for public conflict resolution
Benchmarking practice infrastructure, how to develop a profession of mediation and dispute resolution
Korea Environmental Institute: What is US practice in environmental conflict resolution?
19. Implications for Economy Having difficulty getting major public development projects done
Buddhist nun on hunger strike stops major highway
First ever environmental mediation of Han-tan River Dam project turns into binding arbitration and then one stakeholder group repudiates award. Project halted.
Need projects to build hard infrastructure for economy: flood control, water quality, transportation of goods.
20. Implications continued Legislation touted as democracy-building, on same theme of public participation as jury system
Object is to anticipate and either avert or resolve conflict in major development projects
21. The Future: Reunification Commentators are planning for it; some propose a hybrid of German reunification, Polands privatization, with limited elements from Russian and Czech privatization experiences
North Korea will likely inherit South Koreas legal infrastructure
Corporate law reforms will aid transition
With reunification could come another wave of disputing: claims for natural restitution of nationalized property by heirs in North or South
22. More on Reunification Restructuring North Koreas state-owned businesses will require more flexibility in hiring and firing workers
Could see new wave of North Korean unionism coming out of socialist history
Will need major hard infrastructure development, transportation system, environmental restoration
23. Conclusion (Remember disclaimers) No data.
In South Korea, legal infrastructure followed both economic growth and a period of economic crisis.
South Korea is developing its legal and institutional infrastructure in anticipation of needs for future economic growth.
The process is a dynamic complex system.
Current econometric models are underspecified.