Local Governments Miss Chance to Reduce Compensation by Not Appealing "Suspicious Insurance Estimate" Case

Seoul Central District Court. / Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Daehyun] In a subrogation claim (technical fee) lawsuit filed by Samsung Fire & Marine Insurance against Goyang City regarding car accident repair costs, the first trial court's awarded amount was deemed insufficient, leading to an appeal. However, the appellate court actually calculated an even lower amount.

According to the court on the 8th, the 12th Civil Appeals Division of the Seoul Central District Court (Presiding Judge Kim Seonggon) recently ruled that the first trial's judgment, which excessively calculated the compensation amount Goyang City must pay in the subrogation claim lawsuit filed by Samsung Fire & Marine Insurance against Goyang City, was unjust.

Nevertheless, considering that unlike Samsung Fire, Goyang City did not appeal, the court issued a 'dismissal' ruling. If Goyang City had appealed, the compensation amount could have been reduced, but the court could not overturn the judgment itself due to the civil procedure law principle that "an appellate court cannot change the first trial's judgment to the detriment of the appellant."

Earlier, in April 2020, at a parking lot in Ilsanseo-gu, Goyang City, a bulletin board installed by Goyang City collapsed and fell onto nearby vehicles. Samsung Fire, the insurer of the damaged vehicle owner, paid the owner 6.81 million KRW for repair costs. Subsequently, Samsung Fire claimed subrogation fees from Goyang City, pointing to safety management responsibility.

The first trial sided with Samsung Fire. However, considering that the damage was caused by natural phenomena such as strong winds, only about 3.4 million KRW of the claimed amount was recognized. Samsung Fire appealed, arguing the recognized amount was insufficient, but Goyang City did not appeal.

However, in the second trial, an even smaller amount was recognized. The court stated regarding the parts cost of 854,000 KRW and labor cost of 6.16 million KRW, "Even considering the severity of the damage, the labor cost is very high," and "It is highly questionable whether it is appropriate to separately calculate labor costs for each part." In fact, the estimates commissioned by Goyang City and Samsung Fire differed by about three times.

The court pointed out, "Even considering differences in the experience and repair skills of automobile workshop workers, it is hard to accept such a large discrepancy in labor costs between first-class automobile workshops," and "There is considerable doubt whether the insurance review was sufficiently conducted." Furthermore, "The damage amount due to vehicle damage is 854,000 KRW for parts and 3.08 million KRW for labor," and limited Goyang City's responsibility to 80%.

Although the compensation amount could have been reduced from the 3.4 million KRW recognized in the first trial, since Goyang City did not exercise its right to appeal, the first trial judgment was upheld as is.

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