More South Korean companies are bracing for the possibility of securities class-action lawsuits now that a legal grace period has expired.

South Korea adopted securities class-action legislation in 2004 that was modeled in part on U.S. laws. However, the Korean legislation contained various hurdles that have deterred class claims. The law exempted firms with less than 2 trillion won ($2 billion) in assets from lawsuits over conduct before Jan. 1, 2007. "Now that the grace period has ended, all [listed] companies should prepare for a possible class action," attorney Chung Dong-yoon warned in a recent article in The Korea Herald.

Based on U.S. litigation trends, the attorney estimates that Korea’s 1,600 listed firms could face about 30 securities class-action suits each year. So far, no successful class suits have been filed.

The Korean law still contains other requirements that discourage lawsuits. To file a class suit, an investor must assemble a group of 50 shareholders who collectively hold at least .01 percent of a firm’s outstanding shares.