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Split Into Three Cases, Charged Three Times: Court Orders Law Firm to Refund ₩9.9 Million in Excessive Fees

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A Korean court has confirmed that a law firm must return nearly half of the fees it charged a client, after finding that three separately billed cases could reasonably have been handled as a unified matter — and that the total fee bore no reasonable relationship to the actual work performed. Here are the key points.

Issue

Where a law firm splits what is essentially one dispute into multiple separate retainer agreements and charges accordingly, can the excess fees be recovered as unjust enrichment — even absent proof of deliberate fraud or breach of contract?

Facts

  • Client A retained Law Firm B in connection with a real estate defect dispute, signing three separate retainer agreements covering: a civil damages claim against the seller, a criminal complaint against the broker, and an additional criminal complaint against the seller. Total fees paid: ₩18.7 million.
  • The civil case resulted in a court-recommended settlement under which the seller agreed to pay A ₩30 million in installments — but no payment was ever made. Both criminal complaints were closed without referral to prosecutors.
  • A argued that the lawyer had failed to properly explain the litigation process and the option to object to the settlement recommendation, and had artificially split what was essentially one matter into three to generate additional fees. A claimed ₩18.7 million in financial damages plus ₩5 million in non-economic damages.

Lower Court Decisions

  • The trial court dismissed A’s claim entirely, finding insufficient evidence of intentional or negligent wrongdoing by the law firm or its attorney.
  • The appellate court partially agreed with A. It found no basis for breach of contract or fraudulent misrepresentation — but approached the matter differently, asking whether the total fee was proportionate to the actual work done.
  • The appellate court found that the two criminal complaints were substantially identical in their factual basis, evidence, and the content of the complaint documents filed. The criminal case work amounted in practice to little more than drafting complaint documents and attending one police interview — significantly less demanding than the civil work. A’s primary purpose in filing the criminal complaints was not punishment of the wrongdoers but leverage to pressure them into paying the civil damages.
  • Taking all factors into account — the nature, difficulty, and actual scope of work across all three matters — the appellate court assessed the fair total fee at ₩8 million (₩8.8 million including VAT). The excess of ₩9.9 million was held to constitute unjust enrichment, as it was received without legal basis.
  • The court limited the refund obligation to the law firm itself, not the individual attorney, since the retainer contracts and fee entitlements belonged to the firm.

Supreme Court Decision

  • The Supreme Court dismissed A’s further appeal on April 16, 2026, confirming the appellate decision. The court found the appeal fell outside the permissible grounds for further review under the Small Claims Litigation Act.

Key Takeaways

  • A law firm’s fee is not automatically justified by the existence of a signed retainer agreement. Where the total fee is grossly disproportionate to the actual work performed, the excess may be recovered as unjust enrichment — without any need to prove fraud or breach of contract.
  • Splitting overlapping matters into separately billed cases — particularly where the underlying facts, evidence, and documents are substantially the same — can be found to violate the principles of good faith and equitable dealing, even if each individual engagement was formally valid.
  • Courts will assess a reasonable fee by reference to actual work done: the complexity of the matter, the extent of legal work performed, and the results achieved — not simply the number of retainer agreements signed.
  • The unjust enrichment claim runs against the law firm as the contracting party, not against the individual attorney who handled the work.
  • A client’s underlying purpose in pursuing parallel criminal complaints — leverage rather than prosecution — is a relevant factor in assessing what fee was reasonable for that component of the work.

Why This Matters

This ruling is a significant development for fee transparency in Korean legal practice. It establishes that even without misconduct, a law firm can be ordered to refund fees that a court finds were excessive relative to the work actually done — and that artificially fragmenting a unified dispute into multiple billed matters may cross the line into unjust enrichment. For practitioners, it is a prompt to ensure that fee structures are proportionate and defensible on a work-done basis, not merely formally documented. For clients, it confirms that signing a retainer agreement does not foreclose a later challenge to fees that bear no reasonable relationship to the services received.

Article: https://www.lawtimes.co.kr/news/articleView.html?idxno=221060

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