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The Securities Class Action Act, which is from American Securities Class Action has had effect since Jan. 1. 2005. with the cons and pros with the legal purpose of the compensation for damage of unspecified multitude and the transparency of company management, but no action has been sued yet. Even though the Securities Class Action is sued by part of the victims under stock transaction, the rules in the Securities Class Action affect the persons who have not participated in the action, so that the compensation for damage of those who don't take part in the action can be easy but, if abused, it may disturb the rights of companies and those who don't take part in the action. Therefore, there are two problems of the activation and the prevention of abuse of the system. Unlike general civil actions, there are many related parties, no clear declaration of intention between the two kind of plaintiffs, those who take part in the action and those who don't(potential plaintiff), and may be serious problems when the action is finished with the settlement.
In this study, therefore, the ways to activate the Securities Class Action and prevent abusing it are shown with the recognition that parties and related persons who operate the system play a very important part.
To stabilize this new Securities Class Action properly and effectively, not only representative parties but also the plaintiffs including lawyers, those who don't take part in the action, and institutional investors, the defendants including companies, directors and auditors, and the related persons including courts, governmental organizations and civil groups should play an appropriate role. Persons who don't take part in the action but are influenced from the rule need to be protected and three sided and balanced structure is needed for the plaintiff, the defendant and the related persons
The consumer class action coming into operation from January 1, 2008 has a potential problem of excessive litigation because there are many consumer institutes who are eligible for bringing this action. In this regard, in order for being utilized as a public litigation, it needs some practical ways to cut down the litigation costs and make up for the insurance system.