[1] The meaning and application limit of "defense cost" under Article 720 (1) of the Commercial Code

[2] The meaning of "expenses for prevention of damage" under Article 680 of the Commercial Code

[1] Article 720 (1) of the Commercial Code provides that "defensive costs" refers to the cost of judicial or extrajudicial costs incurred for the defense in cases where the victim has filed a claim against the insured for damages caused personal and material damage as an insured event. Therefore, if there is no claim for damages from the victim, defense costs may not be recognized, but defense costs cannot be acknowledged only when the victim has filed a judicial claim. However, insofar as the victim did not have filed a claim as well as a judicial claim against the insured, the attorney's cost cannot be deemed as included in the defense costs stipulated in Article 720 of the Commercial Code on the ground that the victim filed a lawsuit against a third party.

[2] The cost of preventing loss under Article 680 of the Commercial Act refers to expenses necessary or beneficial to the act performed with the aim of preventing the occurrence of loss or the expansion of loss in the event of an insured incident secured by the insurer, as well as to prevent the spread of loss. Article 680 of the Commercial Act provides that the insurer shall bear the expenses, even if the insured or the insured, who is the person liable for the prevention of loss, exceeds the insured amount, necessary and beneficial expenses paid for the prevention and mitigation of loss.

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

[1] [2] Supreme Court Decision 91Da42777 delivered on January 12, 1993 (Gong1993Sang, 687)

1. The term “the term” means “the term” means “the term “the term” means “the term” means “the term” means “the term.

Korean Automobile Insurance Co., Ltd. (Attorney Jeon Jae-soo, Counsel for defendant-appellee)

Seoul High Court Decision 93Na43875 delivered on April 22, 1994

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

The grounds of appeal are examined.

1. According to the reasoning of the judgment below and the reasoning of the judgment of the court of first instance cited by the court below, on October 16, 1987, the plaintiff company entered into a comprehensive automobile insurance contract with the defendant company as to the bus owned (vehicle registration number omitted). During the insurance period, the non-party 1, who is an employee of the plaintiff company, injured the non-party 2 (English name 1 omitted) and the non-party 3 (English name 2 omitted) who entered into a contract with the plaintiff company for technical assistance with the plaintiff company on November 8, 1989, and the non-party 1 and the non-party 4 company's parent company sustained the above 0 U.S. dollars damages claim against the non-party 1 and the non-party 1 company's non-party 4 company's insurance company's insurance company's non-party 1's non-party 1's insurance company's non-party 1's insurance company's non-party 1's insurance company's insurance damages claim against the plaintiff 2's family members.

2. The cost of defense stipulated in Article 720 (1) of the Commercial Act refers to the cost of defense incurred in a case where the victim has filed a claim against the insured as an insured accident against human and material damage caused to the insured, and the cost of defense is not acknowledged if the victim has not yet filed a claim for damages. However, the cost of defense is not recognized only when the victim has actually filed a claim for damages. However, as in this case, as long as the victim did not file a claim against the Plaintiff as well as a judicial claim, it cannot be deemed that the cost of defense is included in the cost of defense stipulated in Article 720 of the Commercial Act. Thus, the conclusion of the court below that the cost of defense does not constitute the cost of defense under Article 720 (1) of the Commercial Act, which is the insurer, is just, and so long as the cost of defense does not constitute the cost of defense under Article 720 (1) of the Commercial Act, as pointed out in the grounds for appeal, the court below did not err by misapprehending Article 720 (1) and (3) of the Commercial Act.

3. Article 680 of the Commercial Act provides that the insurer shall bear the expenses incurred in preventing the loss caused by the insured event in the event that the insured event is secured by the insurer, as well as in preventing the occurrence of the loss or the expansion of the damage, and Article 680 of the same Act provides that the policyholder or the insured, who is the person liable to prevent the loss, shall bear the expenses even if the expenses incurred in order to prevent the loss and reduce the loss exceed the insured amount. However, according to the facts duly established by the court below, the attorney's expenses paid by the Plaintiff company, in a lawsuit that is not meaningful to determine the obligation to compensate for the loss caused by the insured event of this case, shall be deemed expenses paid by the Plaintiff as its intervention and to reduce the loss. Therefore, even if the court below did not actively determine whether the expenses are the expenses for preventing the loss, it cannot be said that such error affected the conclusion of the judgment. The part of the grounds for appeal pointing this out cannot be accepted.

4. Therefore, the appeal is dismissed and the costs of appeal are assessed against the plaintiff who is the appellant. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-chul (Presiding Justice)