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Successful Modification of Collateral for a Provisional Attachment to Ease the Burden of Cash Deposit

Successful Modification of Collateral for a Provisional Attachment to Ease the Burden of Cash Deposit

Successful Modification of Collateral for a Provisional Attachment to Ease the Burden of Cash Deposit
Table of Contents

1. Overview of the Case

In this case, the client provisionally attached the employer's deposit claim in order to preserve the worker's wage claim, and the court ordered the provision of security before granting the provisional attachment. The security provision order initially issued was structured partly as a cash deposit and partly as a guarantee insurance, a structure that could impose a financial burden. Accordingly, considering legal stability and practical efficiency, the client sought to change the method of providing security to a full guarantee insurance arrangement.

2. Key Issues and Response

The initial order was structured partly as a cash deposit and partly as guarantee insurance, and the issue was whether it was possible to unify it into a full guarantee insurance method in order to reduce the burden of this mixed arrangement. Although the method of security under the Civil Execution Act allows for discretion, in practice there remains a tendency to give priority to cash deposits, so it was important to persuade the court of the stability and legal effect of guarantee insurance.

In response, Your Legal Team adopted the following strategy.

  • Emphasizing the creditor's economic circumstances

The client had originally, at the debtor's request, gone unpaid for a portion of wages over a long period, and as a result remained financially constrained, making a cash deposit practically impossible. This concrete factual background was conveyed to the court. This was not a mere plea of circumstances but a core argument supporting the background of the case and the client's situation.

  • Proposing an alternative consistent with the substantive purpose of providing security

It was pointed out that security is a means of compensating for the damage the debtor may suffer due to the provisional attachment, and that a cash deposit is not the only method. In fact, since the court had already permitted guarantee insurance for half the amount, the legal justification was emphasized that there was no reasonable ground not to permit the same method for the full amount.

  • Requesting an extension of the performance period and a change in the security method

In the written opinion, along with an extension of the performance period of the security provision order, a clear request was made that performance be permitted for all amounts by submitting only a payment guarantee entrustment contract, and, if unavoidable, an alternative proposal was made to at least reduce the proportion of the cash deposit. This was a response that took into account both substantive relief of rights and procedural reasonableness.

  • Highlighting the public interest and preventing procedural abuse

By concisely clarifying that this provisional attachment was based on the public-interest purpose of preserving the worker's wage claim, it was emphasized that an excessive demand for security should not become an obstacle to the realization of rights.

3. Result and Significance

The court accepted the written opinion on security provision that we submitted and changed the initial security provision order (partial cash deposit + partial guarantee insurance) to a full guarantee insurance method. As a result, the client was able to achieve the substantive purpose of preserving the worker's claim while maintaining the effect of the provisional attachment without tying up funds.

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