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Korea’s Blanket Ban on Criminal Contingency Fees Is Making Things Worse, Not Better: Another Lower Court Pushes Back

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A third lower court has now openly challenged the Supreme Court’s 2015 en banc ruling that made criminal success fees categorically void — finding that the ban has not achieved its stated purpose and has instead distorted the legal fee market in ways that harm clients and new lawyers alike. Here are the key points.

Background: The Growing Rebellion

  • In January 2026, a Seoul Central District Court appellate panel became the first lower court to depart from the 2015 Supreme Court en banc ruling, holding that criminal success fees cannot be voided as a blanket rule and must be assessed case by case (2025나7739). That case is now pending before the Supreme Court.
  • In March 2026, a second lower court reached the same conclusion and enforced a success fee agreement in a separate case (summarized previously on this blog).
  • This latest ruling — issued July 23, 2026 — is a third lower court decision in the same vein, and the most direct in its criticism of what the 2015 ruling has produced in practice.

Facts

  • Client B retained Law Firm A in 2021 for a criminal case at the trial level, paying a ₩20 million retainer and agreeing to pay up to ₩50 million as a “consideration fee” depending on the outcome. B was acquitted at trial.
  • The prosecution appealed. B and Law Firm A entered a new retainer for the appellate stage: another ₩20 million upfront, with up to ₩200 million in consideration fees depending on the result. The appellate court dismissed the prosecution’s appeal, confirming the acquittal.
  • Law Firm A sued for ₩220 million (including VAT) — the full appellate consideration fee plus the trial fee — plus delay interest.

Court Decision

  • Seoul Central District Court (Judge Song Seung-yong) ruled partially in Law Firm A’s favor on July 23, 2026, finding the consideration fee agreements were criminal success fee arrangements and that B was obligated to pay them — but reducing the total to ₩88 million (including VAT) on the basis that the claimed amount was excessive.

In reaching this conclusion, the court articulated pointed criticism of the 2015 ban and what it has produced.

On market distortion, the court observed that rather than cleaning up the fee market as intended, the blanket prohibition has entrenched a different problem: lawyers — particularly those with senior judicial or prosecutorial backgrounds — are now charging large upfront retainers instead, effectively substituting high fixed fees for success fees. This practice has become more entrenched since 2015, not less. Newer lawyers, unable to command high retainers and denied the incentive structure of success fees, are increasingly reluctant to take criminal cases at all.

On the effect on clients, the court found that banning success fees weakens the incentive for lawyers to mount committed and thorough defenses — and transfers that cost and risk entirely onto clients. The intended beneficiary of the 2015 ruling has not been well served.

On the absence of promised improvement, the court noted that more than ten years have passed since the 2015 ruling, and the “rational improvement in how lawyers’ remuneration is determined in criminal cases” that the concurring justices promised has not materialized empirically. The distortion the ban was meant to cure has been replaced by a different distortion.

Key Takeaways

  • Three lower courts have now openly challenged the 2015 Supreme Court en banc ruling on criminal success fees, finding that blanket invalidity cannot be applied without individual case assessment.
  • The courts are not merely tolerating success fees — they are actively criticizing the real-world consequences of the ban, including the rise of high upfront retainers as a functional substitute that disadvantages clients without the protections the ban was meant to provide.
  • Even where a success fee agreement is upheld, courts will reduce the amount if it is disproportionate to the work performed and the outcome achieved. Here, a claimed ₩220 million was reduced to ₩88 million.
  • The ten-year benchmark the 2015 ruling’s concurring opinion set for evaluating market improvement has now been reached — and lower courts are finding the evidence of improvement unconvincing.
  • With the first appellate challenge already before the Supreme Court, a definitive ruling revisiting the 2015 precedent appears increasingly likely.

Why This Matters

The accumulation of lower court challenges to a Supreme Court en banc ruling is unusual in Korea’s hierarchical judicial system, and the pattern carries its own significance. These decisions are not simply refusing to follow precedent — they are building a factual and doctrinal record about what the 2015 ruling has actually produced in the decade since it was handed down. For the Supreme Court, which will eventually have to rule on the pending appeal, that record may prove difficult to ignore. For practitioners, clients, and legal reformers, the question at the center of these cases — whether a blanket ban on contingency fees in criminal matters serves or undermines access to justice — has rarely been examined more directly or more critically by Korean courts than it is being examined right now.

Article: https://www.lawtimes.co.kr/news/articleView.html?idxno=224380

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