Supreme Court: "Responsibility for Huge Tax Waste in Yongin Light Rail Can Be Challenged Through Resident Lawsuit"

[Asia Economy Reporter Kim Hyung-min] Despite the significant amount of tax money invested, the Yongin Light Rail Transit (LRT) project, which faced controversy over its hasty execution, can now have its liability for damages contested through a residents' lawsuit.

The Supreme Court's First Division (Presiding Justice Kwon Soon-il) announced on the 29th that it overturned the lower court's ruling, which partially dismissed the plaintiffs' claims in the residents' lawsuit filed by the 'Residents' Lawsuit Group for Yongin LRT Damage Compensation' against three former Yongin mayors including Kim Hak-gyu and related parties, and remanded the case to the Seoul High Court.

The Supreme Court ruled that it is sufficient for a residents' lawsuit to be related to a request for audit and that it does not need to be identical, finding the lower court's judgment to be incorrect.

It also stated that the liability for damages of the Korea Transport Institute, which submitted a flawed service report, is related to the "financial accounting acts" specified as subject to residents' lawsuits, thus confirming it as a target of the residents' lawsuit.

A Supreme Court official explained, "Since the introduction of the residents' lawsuit system through the revision of the Local Autonomy Act in January 2005, this is the first case where matters related to private investment projects implemented by local governments have been subject to residents' lawsuits," highlighting its significance.

The lawsuit group evaluated, "It was ruled that responsibility can be pursued against (former Yongin mayor) Lee Jung-moon and the Korea Transport Institute," and described the Supreme Court's decision as a progressive ruling that declared new legal principles.

A residents' lawsuit is a lawsuit filed by residents to recover damages caused by illegal financial accounting acts of local governments.

It is effective not only against the parties involved but also for all residents of the local government, including those who did not participate in the residents' lawsuit.

The Yongin LRT was completed in June 2010, but due to disputes between Yongin City and the implementing company, Canadian Bombardier, over the Minimum Revenue Guarantee (MRG) and other issues, it only opened in April 2013.

Yongin City lost an international arbitration case against the implementing company and paid over 850 billion won including interest. Additionally, operating and personnel costs amounting to 29.5 billion won had to be paid until 2016.

However, the daily ridership of the LRT fell far short of the Korea Transport Institute's predictions, leading to financial difficulties for Yongin City.

In response, outraged citizens filed a residents' lawsuit in October 2013, claiming 1.0032 trillion won in damages against then-Mayor Kim and Park, who was his policy advisor at the time.

The first trial dismissed or rejected most of the claims. The second trial recognized more fault on Park's part, increasing the damages to 1.025 billion won, but, like the first trial, did not accept the residents' lawsuit claims.

This content was produced with the assistance of AI translation services.