[1] The meaning of "expenses for prevention of damage" under Article 680 (1) of the Commercial Code, and whether the necessary and beneficial expenses incurred by the insured from an emergency act for prevention of damage are applicable under the condition that it is not proved whether the insured is legally responsible at the time of occurrence of the insured event (affirmative)

[2] The meaning of "defense cost" under Article 720 (1) of the Commercial Code, and whether the necessary cost which is clearly expected to have been paid or to be disbursed by the victim in response to the lawsuit filed by the insured and the insurer in the event of the occurrence of the insured constitutes the necessary cost under Article 720 (1) of the Commercial Code

[3] Whether a lawyer's fee corresponding to defense costs under Article 720 (1) of the Commercial Act is null and void against Article 663 of the Commercial Act prohibiting disadvantageous changes to the terms and conditions of the contract that the insurer is not liable to compensate without the insurer's consent in advance (affirmative)

[1] Expenses for prevention of loss under Article 680 (1) of the Commercial Act refers to expenses necessary or beneficial to prevent the occurrence of damage or the expansion of damage in the event of an insured accident secured by the insurer, which is, in principle, premised on the occurrence of an insured accident. Thus, in the case of a non-life insurance which is a class of a non-life insurance, the insurer is not liable for prevention of damage in respect of an accident for which the insurer is not liable for compensation, and as such, the insurer's burden of expenses, etc. shall not occur. However, if the insured commits an emergency act to prevent the expansion of damage without legal liability of the insured at the time of the accident, it is reasonable to interpret that the expenses necessary or beneficial to the occurrence of the accident shall also be borne by the insurer under the above law.

[2] The "defense expenses" stipulated in Article 720 (1) of the Commercial Code refers to the expenses incurred for the defense of the insured in cases where the insured suffered from personal and material damage caused by the insured as an insured accident and claims for compensation against the insured. In principle, defense expenses are premised on the occurrence of the insured accident. Thus, with respect to an accident excluded from the scope of the insured accident, the insurer can escape from the liability for compensation from the victim only by asserting his or her exclusion or exemption from liability. Thus, defense expenses incurred by the insured are merely for his or her own defense unrelated to the insurer, and thus, it cannot be claimed against the insurer. However, if the insured and the insured have spent the necessary expenses other than judicial or court proceedings in order to defend him or her, even if it is not proved that the legal liability of the insured are not established, the defense expenses incurred by the insured cannot be claimed against the insurer under the latter part of Article 720 (1) of the Commercial Code as well as the defense expenses actually incurred by the insurer under the latter part of the Commercial Code.

[3] Article 4(2) of the General Terms and Conditions concerning a business indemnity insurance contract provides that insurance proceeds shall be paid only when the insured paid out of the costs of lawsuit, attorney's costs, arbitration, reconciliation, or adjustment costs paid by the insured with the insurer's prior consent. Such a limitation is interpreted to fully deny the insured's defense costs without the insurer's prior consent, and such a clause constitutes an unfavorable modification to the insured under Article 720(1) of the Commercial Act, which generally recognizes the insured's defense costs as included in the subject-matter of the insurance. Therefore, the above limitation clause is deemed null and void against Article 663 of the Commercial Act.

[1] Article 680 (1) of the Commercial Act / [2] Article 720 (1) of the Commercial Act / [3] Articles 663 and 720 (1) of the Commercial Act

[1] Supreme Court Decision 91Da42777 delivered on January 12, 1993 (Gong1993Sang, 687), Supreme Court Decision 94Da1663 delivered on September 9, 1994 (Gong1994Ha, 2616), Supreme Court Decision 94Da27076 delivered on December 8, 1995 (Gong1996Sang, 325 delivered on December 8, 1995) / [2] Supreme Court Decision 94Da27076 delivered on December 8, 1995 (Gong196Sang, 325 delivered on May 25, 1990) / [3] Supreme Court Decision 89Da17591 delivered on May 25, 1990 (Gong1990, 1364) 29Da279399 delivered on December 29, 195 (Gong1964)

Plaintiff (Law Firm Down, Attorneys Kang Jong-soo et al., Counsel for the plaintiff-appellant)

Samsung Fire and Marine Insurance Co., Ltd. (Law Firm Sejong, Attorneys Kim Chang-joon et al., Counsel for the plaintiff-appellant)

Seoul District Court Decision 2001Na58930 delivered on March 13, 2002

The appeal is dismissed. The costs of appeal are assessed against the defendant.

1. Judgment on ground of appeal No. 1

A. According to the reasoning of the judgment of the court below and the judgment of the court of first instance, the plaintiff, who operated the above fishing place, concluded an insurance contract for the above fishing place with the defendant on September 16, 1998 with the plaintiff as the insured. The plaintiff, who was ordinarily engaged in the above fishing place from March 8, 199 to September 9, entrusted the deceased non-party 1 with usual work around the above fishing place and dredging work (hereinafter referred to as "the above work of this case") 200,000 won per day among the maintenance and repair work of the above fishing place and the above fishing place, and the plaintiff was not liable for damages of the non-party 2 for damages of the plaintiff 90,000 won per day. The plaintiff was not liable for damages of the non-party 1 to the non-party 2 for the above 90,000 won, and the defendant was not liable for damages of the non-party 1 to the non-party 2 at the above 90,000 won.

B. Article 680(1) of the Commercial Act provides that expenses for the prevention of loss refers to expenses necessary or beneficial to prevent the occurrence of damage or the expansion of damage in the event of an insured accident secured by the insurer, which is, in principle, premised on the occurrence of the insured accident. Thus, even in the liability insurance which is a class of non-life insurance, the insurer shall not be liable for prevention of damage, and as such, the insurer shall not bear the burden of the insurer's expenses. However, if the insured commits an emergency act to prevent the expansion of damage without proof of legal liability of the insured at the time of the accident, it shall be interpreted that the insurer bears the burden of expenses necessary or beneficial to the accident pursuant to the above law (see Supreme Court Decisions 91Da4277, Jan. 12, 1993; 94Da1663, Sept. 9, 194; 207Da7674, Dec. 7, 1995, etc.).

In addition, "defense costs" under Article 720 (1) of the Commercial Act refers to the cost of judicial or extra-judicial costs incurred for defense in cases where the victim suffered human and material damage as an insured accident and filed a claim for damages against the insured. In principle, defense costs are premised on the occurrence of the insured accident. Thus, with respect to an accident excluded from the scope of the insured accident, the insurer can escape from the liability for compensation from the victim only by asserting his or her exclusion or exemption from liability. Thus, defense costs incurred by the insured are merely for his or her own defense unrelated to the insurer, and thus, it cannot be claimed against the insurer. However, if the insured and the insured have spent the necessary costs other than judicial or extra-judicial costs in order to defend the claim of the victim under the circumstance that it is not proved that the legal liability of the insured and the insurer is not established, the defense costs incurred by this defense costs are the same as the defense costs incurred by the insurer as part of the defense activity for the purpose of escape from liability of the insurer immediately, and such defense costs are actually expected under the latter part of the Commercial Act.

C. According to the above facts and records of the court below, although the defendant notified the plaintiff that he would deny the plaintiff's liability for damages and the defendant's liability for compensation, it was not clear that the plaintiff's liability for damages was not established in the contents of the accident until the judgment was rendered in the lawsuit brought by the bereaved family members. Since the accident in this case occurred during the repair, remodeling, and new construction of facilities, and the damage of the deceased is not caused by ordinary maintenance and repair work, and it is unclear whether the defendant's damage falls under the scope of "damage not covered by the insurance" under the special terms and conditions of the owner of the insurance in this case, it was still unclear, and it was difficult to eliminate the possibility of recognizing the plaintiff's liability for damages and the defendant's liability for compensation, the insurer, from the principle of pleading unless taking effective defense measures against the lawsuit in this case, it is clearly anticipated that the plaintiff's attorney's payment of attorney's fees will be done, and it constitutes the defense expense under the above provision of this case, and the emergency measure expenses in this case also constitute the defendant's liability for compensation.

2. Judgment on ground of appeal No. 2

Article 4 (2) 3 of the General Terms and Conditions concerning the Insurance Contract of this case provides that insurance proceeds shall be paid only when the insured has paid the insurance proceeds with the consent of the insurer in advance, among the costs of lawsuit, attorney's cost, arbitration, reconciliation, or mediation paid by the insured. Such limitation provisions are interpreted to completely deny the insured's defense costs in any case without the insurer's prior consent. This clause constitutes an unfavorable alteration to the insured under Article 720 (1) of the Commercial Act, which generally recognizes the insured's defense costs as included in the subject-matter of the insurance. Accordingly, the above limitation clause is null and void against Article 663 of the Commercial Act. The judgment below is just, and there is no error in the misapprehension of legal principles as alleged.

3. Judgment on the third ground for appeal

According to the reasoning of the judgment of the court below, the court below held that the above attorney's fee shall be the total amount of 22 million won is the cost necessary for defense stipulated in the above Article 5 of the Act, in consideration of various circumstances, such as the standard of fees under the rules on the inclusion of the attorney's fees, the rules of the affiliated attorney's fee, the amount set as the retainer, the value of the subject matter of lawsuit, the difficulty of the case, the process of litigation, the degree of effort, the result of the judgment, etc., that the attorney's fee shall be paid in full within the limit of the amount of compensation under the insurance contract, and the fact that the plaintiff's appointment of the attorney as the attorney is not an accident secured by the insurance contract, and the defendant's refusal to appoint the attorney for the reason that he was not an accident secured by the insurance contract and notified the plaintiff to respond to the lawsuit. In light of the records of the judgment of the court below, the above decision of the court below is acceptable, and there is no error in the misapprehension of legal principles

4. Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Jae-in (Presiding Justice)