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Cracking the Blanket Ban: Another Court Rules Criminal Contingency Fees Must Be Assessed Case by Case

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A second lower court has now pushed back against the Supreme Court’s 2015 blanket prohibition on criminal success fees, ruling that such agreements should be evaluated individually rather than voided automatically. With a similar appellate decision already pending before the Supreme Court, the stage is set for a landmark ruling. Here are the key points.

Issue

Are criminal contingency fee agreements automatically void under the 2015 Supreme Court en banc ruling — or should their validity be assessed individually based on the specific circumstances of each case?

Background: The 2015 Ruling and the Pushback

  • In 2015, the Supreme Court’s en banc decision (2015다200111) held that criminal success fee agreements are void as contrary to public policy, on the grounds that they undermine the public nature of the legal profession and risk corrupting the administration of justice.
  • That ruling has since faced growing criticism in lower courts. An appellate decision from Seoul Central District Court (2025나7739) recently departed from the blanket prohibition, applying a case-by-case standard instead. That case is now pending before the Supreme Court, making the high court’s eventual ruling highly anticipated.

Facts

  • Client A paid Law Firm B a success fee of ₩66 million following a favorable outcome in a criminal case.
  • About two months later, A demanded a full refund, arguing the agreement was void under the 2015 en banc ruling.
  • Law Firm B returned half — ₩33 million — but A sued to recover the remaining ₩33 million.
  • A did not appeal the judgment, so it is now final.

Court Decision

  • Seoul Central District Court (Judge Song Seung-hwan) ruled against A on March 27, 2026, rejecting the refund claim in its entirety.
  • The court aligned itself with the appellate decision in 2025나7739, holding that a criminal success fee agreement is not inherently contrary to the public nature of the legal profession, and therefore cannot be voided as a blanket rule. Each case must be assessed on its own facts.

The court also identified three practical harms that a blanket prohibition produces:

  • It entrenches the practice of high upfront retainer fees — particularly among attorneys with prior judicial or prosecutorial experience — which actually undermines the original goal of restoring public trust in the judiciary.
  • It weakens the practical incentive for attorneys to mount a thorough and committed defense.
  • It shifts the resulting burden and risk entirely onto the client.

On the facts, the court found A’s conduct amounted to an abuse of the existing legal framework. A had voluntarily paid the fee after being acquitted — gaining substantial economic benefit in the process — then abruptly denied the agreement’s validity, accepted a partial refund without objection, and only filed suit two and a half years later. The court found this was not a legitimate exercise of legal rights but an exploitation of the blanket invalidity rule as a shield against personal responsibility.

Finally, the court added an alternative holding: even if the agreement were void under Article 103 of the Civil Act, the payment would qualify as an illegality-tainted transfer under Article 746, which bars a party from recovering money paid in connection with an illegal cause. A would therefore be unable to claim a refund on that basis either.

Key Takeaways

  • A growing body of lower court decisions is departing from the 2015 en banc blanket prohibition, calling instead for individual assessment of criminal success fee agreements.
  • The case-by-case standard asks whether the specific agreement, in its specific context, undermines the public nature of legal practice — not whether success fees as a category do so.
  • Voluntarily paying a success fee, accepting a partial refund without protest, and waiting years before suing may constitute an abuse of rights that bars recovery regardless of the agreement’s technical validity.
  • Even where an agreement is void, Article 746 of the Civil Act may independently block a refund claim if the payment is characterized as an illegality-tainted transfer.

Why This Matters

The legal profession is watching closely. Two lower court decisions have now openly challenged a Supreme Court en banc ruling — an unusual development in Korea’s hierarchical judicial system — and the question of whether criminal success fees should be categorically banned or contextually assessed is now squarely before the Supreme Court for reconsideration. The outcome will affect how criminal defense work is structured and priced across the country, and may have broader implications for how Korean courts treat the intersection of attorney compensation, client autonomy, and judicial integrity.

Article: https://www.lawtimes.co.kr/news/articleView.html?idxno=220035

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