[1] Whether the “amount of damage inflicted on the victim,” which is the amount payable by the liability insurer pursuant to Article 3(1)1 of the Enforcement Decree of the Guarantee of Automobile Accident Compensation Act, includes both positive and negative and psychological damages (affirmative)

[2] Whether "right to claim damages against a third party by a person receiving benefits" under the main sentence of Article 87 (1) of the Industrial Accident Compensation Insurance Act is limited to the same nature as the insurance benefits paid by the Korea Workers' Compensation and Welfare Service and mutually complementary relationship (affirmative), and whether the Korea Workers' Compensation and Welfare Service may subrogate the victim's right to claim consolation money against the insurer on the basis of the insurance benefits paid under

[3] Whether funeral expenses paid by a victim’s bereaved family member is included in “amount of damage inflicted on the victim” under Article 3(1)1 of the Enforcement Decree of the Guarantee of Automobile Accident Compensation Act (affirmative)

[4] In a case where the Korea Labor Welfare Corporation pays bereaved family benefits and funeral expenses, the amount which can be subrogated to the liability insurer (=the remainder of damages excluding consolation money among the damages actually suffered by the victim within the limit of liability insurance) and the purport of Article 3(1)1 of the Enforcement Decree of the Guarantee of Automobile Accident Compensation

[1] The insurer's liability for compensation under Article 3 of the Guarantee of Automobile Accident Compensation Act (hereinafter "the Automobile Accident Compensation Act") covers all of the legal losses in proximate causal relation with the accident. In the case of an accident of death, the damage subject to compensation includes both active damage, such as medical expenses, and passive damage such as lost income, and mental damage, and the amount to be paid by the insurer to the victim under Article 5 of the Automobile Accident Compensation Act is the amount of damage actually suffered by the victim within the scope of liability insurance under Article 3 (1) 1 of the Enforcement Decree of the Automobile Accident Compensation Act. Thus, the "amount of damage inflicted on the victim" as the amount to be paid by the insurer under Article 3 (1) 1 of the Enforcement Decree of the Automobile Accident Compensation Act shall be construed as including active, passive,

[2] The main text of Article 87(1) of the Industrial Accident Compensation Insurance Act (hereinafter “Industrial Accident Insurance Act”) provides, “Where insurance benefits have been paid due to an act committed by a third party, the Corporation shall subrogate the third party to the claim for damages against the person who received the benefits within the limit of the amount of such benefits.” Here, “the claim for damages against the third party by the person who received the benefits” is limited to those of the same nature as the insurance benefits paid by the Korea Workers’ Compensation and Welfare

However, the consolation money which is the subject of liability for compensation based on the Guarantee of Automobile Accident Compensation Act is not compensated by the insurance benefits as provided by the Industrial Accident Insurance Act, and thus, the Korea Labor Welfare Corporation cannot subrogate the right to claim consolation money against the insurer of the victim based on the insurance benefits paid by the

[3] Article 5(1) of the Guarantee of Automobile Accident Compensation Act provides that where a victim dies, a person entitled to compensation for damage shall be the victim. Thus, funeral expenses damages paid by the victim’s bereaved family shall be included in “amount of damage inflicted on the victim” under Article 3(1)1 of the Enforcement Decree of the same Act.

[4] In a case where the victim exercises a direct claim against the liability insurer pursuant to the Guarantee of Automobile Accident Compensation Act (hereinafter “The Automobile Accident Compensation Act”), the amount to be paid by the liability insurer to the victim is the amount of damages actually incurred by the victim within the limit of the liability insurance amount under Article 3(1)1 of the Enforcement Decree of the Automobile Accident Compensation Act. Thus, in the event that the Korea Workers’ Compensation and Welfare Service pays survivors’ benefits and funeral expenses, the amount to be subrogated to the liability insurer shall be limited to the remainder of the damages excluding consolation money out of the amount actually incurred by the victim within the limit of the liability insurance amount. Article 3(1)1 of the Enforcement Decree of the Automobile Accident Compensation Act provides that where the victim died due to an automobile accident, the amount of damages incurred by the victim is less than 20 million won if the total amount of damages incurred by the victim falls short of 20 million won, it shall not be deemed that the Korea Workers’ Compensation and Welfare Service has the right to claim reimbursement of at least 20,000 won.

[1] Articles 3 and 5 of the Guarantee of Automobile Accident Compensation Act, Article 3 (1) 1 of the Enforcement Decree of the Guarantee of Automobile Accident Compensation Act / [2] Article 87 (1) of the Industrial Accident Compensation Insurance Act, Articles 3 and 5 of the Guarantee of Automobile Accident Compensation Act / [3] Article 5 (1) of the Guarantee of Automobile Accident Compensation Act, Article 3 (1) 1 of the Enforcement Decree of the Guarantee of Automobile Accident Compensation Act / [4] Articles 3, 5, and 10 of the Guarantee of Automobile Accident Compensation Act, Article 3 (1) 1 of the Enforcement Decree of the Guarantee of Automobile Accident Compensation Act, Article 87 (1) of the Industrial Accident Compensation Insurance Act, Article 7

[1] Supreme Court Decision 2004Da4942 Decided August 19, 2005, Supreme Court Decision 2013Da42755 Decided October 11, 2013 (Gong2013Ha, 2073) / [2] Supreme Court Decision 2000Da45419 Decided April 12, 2002 (Gong2002Sang, 1083) (Gong2014Da23626 Decided September 24, 2015)

Korea Labor Welfare Corporation

Samsung Fire and Marine Insurance Co., Ltd. (Law Firm Gyeongpyeong, Attorneys Jeon Sung-jin et al., Counsel for the plaintiff-appellant)

Daejeon District Court Decision 2016Na111001 Decided April 28, 2017

1. The judgment of the court of first instance is reversed and the judgment is modified as follows.

A. The Defendant shall pay to the Plaintiff 19,44,698 won with 5% interest per annum from June 19, 2013 to April 28, 2017, and 15% interest per annum from the following day to the date of full payment.

B. The plaintiff's remaining claims are dismissed.

2. 10% of the total costs of the litigation shall be borne by the Plaintiff, and 90% by the Defendant, respectively.

1. Factual basis

A. On April 2012, Nonparty 1, etc.: (a) opened the instant trading company and purchased fivet truck (hereinafter “instant vehicle”); (b) concluded a comprehensive insurance contract with the Defendant for business cars with respect to the liability for damages arising from the instant vehicle’s accident (hereinafter “instant insurance contract”) from May 21, 2012 to May 21, 2013 with respect to the liability for damages arising from the instant vehicle’s accident.

B. At around 09:36, January 30, 2013, Nonparty 2, an employee belonging to the instant commercial company, caused the death of the victim Nonparty 3 (hereinafter “victim”), who was engaged in separation work on the lower side of the said vehicle, by cutting down the compressed vinyl (weight 135 kilograms), which was loaded on the instant vehicle, while being engaged in the process of screening waste vinyl and plastics loaded onto the instant vehicle in a storage of the instant business site using a sticker (hereinafter “the instant accident”).

C. As a legal entity that is entrusted by the Minister of Employment and Labor with the industrial accident compensation insurance business, the Plaintiff paid KRW 62,515,700 as bereaved family benefits pursuant to the Industrial Accident Compensation Insurance Act (hereinafter “Industrial Accident Insurance Act”), and KRW 9,300,770 as funeral expenses.

2. The judgment of the court below

The Plaintiff may, within the scope of insurance benefits paid to the victims and their bereaved family members, subrogate the perpetrator of the victims and their bereaved family members or the insurer of the damage claims corresponding to the same nature as the insurance benefits. In addition, according to Article 3(1)1 of the Enforcement Decree of the Guarantee of Automobile Accident Compensation Act (hereinafter “instant provision”), the insurance proceeds of liability insurance (hereinafter “liability insurance proceeds”) to be purchased by a motor vehicle owner is determined as “the amount of damage incurred to the victim within the extent of KRW 1.50 million in cases of death” per victim per victim: Provided, That the amount of damage is less than 20 million if the amount of damage is less than 20 million won, the amount of damage incurred to the victim shall be determined as KRW 20 million in cases where the victim exercises a direct right to claim against the Defendant who is the insurer, as well as the Plaintiff’s subrogation who exercises such right.

Meanwhile, when calculating the lost income loss of a victim based on the above factual basis, the amount shall be KRW 17,344,698 (24,778,140 won from lost income x comparative negligence 0.7). Funeral expenses shall be KRW 2,100,000 (3,00,000 x comparative negligence x 0.7). However, the above lost income loss suffered by the victim who died is less than KRW 20,000,00. As such, the Plaintiff may claim for reimbursement of KRW 20,00,000 within the limit of KRW 62,515,700, the amount of bereaved family's benefits paid to the victim. Since funeral expenses are not directly incurred to the victim but directly incurred to the bereaved family, it may not be deemed as included in the "amount of damage incurred to the victim" under the proviso of this case. Thus, the Plaintiff may claim reimbursement for funeral expenses within the limit of KRW 9,30,700,00 for funeral expenses paid to the bereaved family.

3. Judgment of the Supreme Court

A. (1) Article 3 of the Automobile Loss Act provides, “Where a person who operates an automobile on his/her own behalf has killed or injured another person due to the operation thereof, he/she shall be liable to compensate for the damage therefrom.” Article 5(1) of the Automobile Loss Act provides, “The owner of an automobile shall subscribe to liability insurance or liability mutual aid to the victim (referring to a person who has the right to receive compensation for damage in cases of death or injury of another person due to the operation of an automobile) who is liable to pay the amount prescribed by Presidential Decree to the victim (referring to a person who has

However, the insurer's liability for compensation under Article 3 of the Automobile Loss Compensation Act is the whole legal damage in proximate causal relation with the accident. In the case of an accident of death, the damage subject to compensation includes both active damage such as medical expenses, etc. and passive and mental damage such as lost income (see, e.g., Supreme Court Decision 2013Da42755, Oct. 11, 2013). The amount to be paid by the insurer to the victim pursuant to Article 5 of the Automobile Loss Compensation Act shall be the amount of damage actually suffered by the victim within the scope of the liability insurance amount under the Enforcement Decree of the Automobile Loss Compensation Act (see Supreme Court Decision 2004Da4942, Aug. 19, 2005). Thus, the "amount of damage suffered by the victim", which is the amount to be paid by the insurer pursuant to Article 3 of the instant provision, shall be interpreted to include active, passive and mental damage.

(2) The main text of Article 87(1) of the Industrial Accident Insurance Act provides, “Where insurance benefits have been paid due to an act committed by a third party, the Service shall subrogate the third party to the claim for damages against the recipient of the benefits within the limit of the benefits.” Here, “the claim for damages against the third party by the recipient of the benefits” is limited to those of the same nature as the insurance benefits paid by the Korea Workers’ Compensation and Welfare Service, which are in a mutually complementary relationship (see Supreme Court Decision 2000Da45419, Apr. 12, 2002).

However, given that consolation money subject to liability for compensation pursuant to the Automobile Loss Compensation Act is not compensated by insurance benefits prescribed by the Industrial Accident Insurance Act, the Korea Workers’ Compensation and Welfare Service cannot subrogate the victim’s right to claim consolation money against the insurer based on insurance benefits paid by the Korea Workers’ Compensation and Welfare Service pursuant to the Industrial Accident Insurance Act (see Supreme Court Decision 2014Da233626, Sept. 24, 2015, etc.)

B. We examine the judgment of the court below in light of the above legal principles.

First of all, the lower court determined that funeral expenses paid by the surviving family members are damages of the surviving family members, and thus cannot be deemed as included in the “amount of damages incurred to the victim” as stipulated in the instant provision. However, Article 5(1) of the Automobile Loss Compensation Act provides that the surviving family members shall be the victim if the surviving family members died, and thus, it is reasonable to view that funeral expenses paid by the surviving family members shall be included in the “amount of damages incurred to the victim” as stipulated in the instant provision.

Next, the lower court determined that the amount of liability insurance prescribed in the proviso of the instant provision is equally applicable to the Plaintiff who subrogated the right to claim as well as when the victim exercises a direct right to claim against the Defendant who is the insurer. However, the Korea Workers' Compensation & Welfare Corporation that has paid insurance benefits pursuant to the Industrial Accident Insurance Act may subrogate only to the victim's claim for damages of the same nature as insurance benefits and has mutual complementary relations with each other. As such, the Korea Workers' Compensation and Welfare Corporation may not subrogate the victim's claim for consolation money in cases where the victim has paid survivors' benefits and funeral expenses. In addition, in cases where the victim exercises a direct right to claim against the liability insurer pursuant to the Automobile Loss Compensation and Compensation Act, the amount to be paid by the liability insurer to the victim shall be deemed as the amount of damages actually suffered by the victim within the limit of the liability insurance amount. The proviso of the instant provision provides that the amount of subrogation against the liability insurer shall be limited to the remainder, excluding consolation money, within the limit of the amount of damages actually suffered by the victim. However, even if the victim is less than the amount of active damage claim for damages to the victim.

The lower court determined that the amount of damages of the lost income suffered by the victim due to the instant car accident was KRW 17,344,698 (24,778,140 x comparative negligence set-off 0.7) and funeral expenses damages were KRW 2,100,00 (3,000,000 x comparative negligence set-off 0.7). According to the lower court’s determination, the amount that the Plaintiff could recover within the limit of KRW 62,515,70,000, totaling KRW 17,344,698,698, and funeral expenses paid within the limit of KRW 9,30,770,000, totaling the amount of damages of funeral expenses actually suffered by the victim, and KRW 19,44,698,698.

Nevertheless, the lower court determined otherwise on the grounds stated in its reasoning that the actual income of the victim was less than KRW 20 million, and thus, pursuant to the proviso of this case, the lower court held that the victim is liable for paying KRW 22,100,000,000, including the total of KRW 20,000,000 and funeral expenses KRW 2,10,000,000, which is the amount of the insurance payable upon death pursuant to the provision of this case. In so doing, the lower court erred by misapprehending the legal doctrine on the scope of exercise of the right to indemnity under Article 87(1) of the Industrial Accident Insurance Act and the scope of the liability insurance amount under Article 87(1)

4. Conclusion

Therefore, the judgment of the court below is reversed, and this case is sufficient for the Supreme Court to directly render a judgment, and therefore, it is decided to do so pursuant to Article 437 of the

According to the foregoing recognition, the Plaintiff is obligated to claim reimbursement of KRW 19,444,698, which is the sum of KRW 17,344,698, and KRW 2,100,00,00 for funeral expenses of the bereaved family based on the bereaved family’s benefits, within the limit of the insurance benefits paid pursuant to the Industrial Accident Insurance Act. Accordingly, the Defendant is obligated to claim reimbursement to the Plaintiff for reimbursement of KRW 19,444,698, as the amount of reimbursement, and damages for delay calculated at the rate of 15% per annum as stipulated in the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings, from June 19, 2013 to April 28, 2017, which is the date of the lower judgment that deemed reasonable for the Defendant to dispute the existence or scope of the obligation to perform.

The plaintiff's claim of this case is justified within the scope of the above recognition, and the remaining claims are dismissed as it is without merit. Since the judgment of the court of first instance is unfair in conclusion, it is so modified as well and it is decided as per Disposition by the assent of all participating Justices on the bench.

Justices Ko Young-han (Presiding Justice)