Supreme Court: Victims of Past Cases Who Received Compensation Can Also Claim Damages from the State

"No Preclusive Effect of 'Dismissal' Ruling Based on Unconstitutional Provisions"
After Partial Unconstitutionality Decision on Article 18(2) of the Democratic Compensation Act
Claim for Damages Possible Without Additional Evidence Submission

[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The Supreme Court has ruled that victims who received compensation under the Democratization Compensation Act and for whom a judicial settlement was deemed to have been established can still claim damages from the state for mental suffering following the Constitutional Court's ruling that "the effect of deeming a settlement established does not apply to mental damages."

This ruling means that the res judicata effect of a dismissal judgment based on the provision deeming a judicial settlement established in lawsuits for damages against the state filed before the Constitutional Court's unconstitutional ruling cannot extend beyond the ruling.

Res judicata refers to the legal effect in litigation law that binds subsequent courts from making contradictory judgments on matters already decided by a final judgment, even if the case is refiled.

Supreme Court in Seocho-dong, Seoul. Photo by Asia Economy DB

The Supreme Court's Third Division (Presiding Justice Oh Seok-jun) announced on the 15th that it overturned the lower court's dismissal ruling in the appeal case where Mr. A and Mr. B, who suffered harsh treatment and imprisonment on charges of violating the National Security Act and received compensation under the Democratization Compensation Act, each claimed 600 million KRW and 800 million KRW in mental damages against the state, and remanded the case to the Seoul High Court.

The court stated, "Even if the plaintiffs previously agreed to the compensation payment decision under the Democratization Compensation Act, after the unconstitutional ruling in this case, there is no basis to consider that a judicial settlement was established between the plaintiffs and the defendant (Republic of Korea) regarding mental damages caused by illegal acts of public officials belonging to the defendant." It added, "Therefore, in this case where the plaintiffs seek state compensation for mental damages, the defect of 'lack of interest in protecting rights' identified in the prior dismissal judgment is considered remedied, so the plaintiffs do not need to submit additional factual evidence to remedy such a defect in procedural requirements. Ultimately, this lawsuit cannot be considered to still be subject to the limitation of res judicata effect based on the prior dismissal judgment."

Furthermore, the court said, "Nevertheless, the lower court denied the plaintiffs' interest in protecting their rights solely based on the res judicata effect of the prior dismissal judgment (a final judgment dismissing the case due to procedural defects) and ruled this lawsuit as inadmissible," adding, "This lower court ruling contains an error that affected the judgment by misunderstanding the effect of the unconstitutional ruling and the legal principles concerning the res judicata effect of litigation judgments."

Mr. A and Mr. B were arrested without a warrant around 1981 on charges including joining the anti-state organization National Democratic Workers' League and suffered harsh treatment such as being beaten while detained.

They were prosecuted for violating the National Security Act and other charges, convicted, and served their sentences before being released in 1983. In 2005, they agreed to the decision to pay living support funds under the "Act on the Restoration of Honor and Compensation for Persons Related to the Democratization Movement" (Democratization Compensation Act) and received compensation of 33 million KRW and 50 million KRW respectively.

They filed for retrial in 2009 and were acquitted in 2012. Subsequently, in 2013, they filed lawsuits against the state seeking damages for illegal acts including harsh treatment.

However, the courts dismissed the lawsuits, reasoning that since compensation had already been received under the Democratization Compensation Act, which had the effect of establishing a judicial settlement with the state, they no longer had the right to claim damages, rendering the lawsuits inadmissible.

At that time, Article 18, Paragraph 2 of the Democratization Compensation Act contained a provision deeming a judicial settlement established, stating, "When the applicant agrees to the decision to pay compensation under this Act, it shall be deemed that a judicial settlement has been established regarding the damages suffered in relation to the democratization movement under the Civil Procedure Act."

However, in August 2018, the Constitutional Court ruled this provision unconstitutional, stating that "the part concerning mental damages caused by illegal acts among the 'damages suffered in relation to the democratization movement' violates the Constitution."

Based on this Constitutional Court ruling, the two filed lawsuits again in January 2019 against the state seeking compensation for mental damages.

The first trial court recognized that they had the right to claim damages for mental suffering. The defendant state argued that the Constitutional Court's ruling was a limited unconstitutionality decision that only declared the interpretation and application of a specific part of the law unconstitutional and thus did not bind the court. However, the court ruled that "the Constitutional Court's ruling is a partial unconstitutionality decision that separates 'damages' under the Democratization Compensation Act's settlement-deeming provision into active/passive damages and mental damages, declaring the mental damages part unconstitutional, and therefore binds the court."

However, the first trial court dismissed the claims on the grounds that the statute of limitations for their claims had already expired, ruling against the plaintiffs. The plaintiffs argued that there was a "legal obstacle" preventing them from claiming damages until the Constitutional Court's ruling, but this was not accepted.

The court considered that ▲ victims who directly filed constitutional complaints with the Constitutional Court are also limited to filing retrial lawsuits within "30 days from the day they became aware of the retrial reason" under the Constitutional Court Act and Civil Procedure Act, ▲ the effect of the Constitutional Court's unconstitutional ruling is basically prospective, and ▲ no measures were taken to suspend the statute of limitations after the prior dismissal judgment, concluding that the statute of limitations could not be considered suspended until the Constitutional Court's ruling.

The second trial court's judgment differed.

Before making a substantive judgment on whether to recognize the claim for damages, the second trial court dismissed the case on the grounds that the plaintiffs lacked "interest in protecting their rights" due to the res judicata effect of the prior dismissal judgments they had received.

The two had previously received dismissal judgments due to procedural defects, and since there was no factual evidence supplementing those defects, the court held that the Constitutional Court's unconstitutional ruling on the settlement-deeming provision alone could not challenge the effect of the prior final judgment.

The court stated, "The effect of this unconstitutional ruling applies to this case, which was filed after the ruling for the same reasons, but it is not denied that the retroactive effect is limited by the different legal principle of res judicata, and in such cases, indirectly limiting the retroactive effect of the unconstitutional ruling is rather required by the principle of the rule of law."

The Supreme Court found this second trial court judgment to be incorrect.

The court held that unlike the second trial court, the unconstitutional ruling by the Constitutional Court eliminated the effect of deeming a settlement established for mental damages, so the defect of "lack of interest in protecting rights" as a procedural requirement should be considered automatically remedied, and there is no need to submit additional factual evidence to remedy such defects.

For these reasons, the court concluded that the res judicata effect of the prior dismissal judgments received by Mr. A and Mr. B before the Constitutional Court's ruling cannot be considered to extend beyond the ruling.

A Supreme Court official said, "In so-called 'past history-related state compensation claim' cases, there had been no unified view among lower courts on whether dismissal judgments based on the effect of deeming a settlement established before the Constitutional Court's unconstitutional ruling prevent subsequent state compensation claims. This ruling explicitly confirms that even if victims in past history cases agreed to compensation payment decisions and received dismissal judgments in prior lawsuits, the unconstitutional ruling by the Constitutional Court removes the basis for deeming a settlement established for mental damages, allowing state compensation claims without being limited by the res judicata effect of dismissal judgments."

Meanwhile, the Supreme Court's First Division (Presiding Justice Park Jeong-hwa) affirmed the lower court's ruling in favor of plaintiff Mr. C, who was detained and interrogated at the Central Intelligence Agency's Busan branch and imprisoned for 366 days on charges of violating Emergency Measure No. 9 (spreading false rumors) while serving as an army sergeant in 1976.

The court stated regarding the interest in protecting rights, "This unconstitutional ruling binds the courts, and even if compensation is received under the Democratization Compensation Act, there is no basis to consider that a judicial settlement was established regarding mental damages caused by illegal acts. Therefore, this lawsuit cannot be considered to be subject to the limitation of res judicata effect based on the prior dismissal judgment."

Regarding the statute of limitations, the court said, "At the time of filing this lawsuit, the plaintiff still had an obstacle preventing him from exercising his rights against the defendant due to illegal acts arising from a series of state actions based on Emergency Measure No. 9, so the statute of limitations had not expired."

The court cited as grounds for this judgment ▲ the existence of Supreme Court precedents that generally limited state compensation claims for illegal acts even after the unconstitutional and invalidation rulings on Emergency Measure No. 9, ▲ the fact that the plaintiff was acquitted after retrial procedures but the Democratization Compensation Act's Article 18, Paragraph 2, which recognized the effect of judicial settlement for agreeing to compensation decisions related to democratization movements, existed and led to the confirmation of dismissal judgments in prior lawsuits, and ▲ the fact that the Constitutional Court's unconstitutional ruling remedied the procedural defect confirmed in the prior dismissal judgments.

A Supreme Court official said, "This ruling is significant in reaffirming that regarding the statute of limitations for rights arising from illegal acts based on Emergency Measure No. 9, there may be cases where obstacles prevent exercising rights until a series of legal and institutional changes are completed," adding, "Furthermore, this ruling recognizes that Article 18, Paragraph 2 of the Democratization Compensation Act, which acknowledged the effect of judicial settlement for agreeing to compensation decisions related to democratization movements, and the resulting prior dismissal judgments can be considered part of such obstacles."

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