Supreme Court: "Accident Surcharge Is a Matter Between Insurer and Driver... No Impact on Right of Recourse"
Court Rejects Deduction of Accident Surcharge
in Calculation of Recourse Between Insurers
The Supreme Court has ruled that, in the case of a joint tort resulting from drunk driving, an insurance company that has paid the full amount of damages is not required to deduct the accident surcharge received from the offending driver when exercising its right of recourse against the other joint tortfeasor's insurer.
According to the legal community on the 21st, the Supreme Court's Third Division (Presiding Justice Noh Kyungphil) dismissed the defendant's appeal and upheld the lower court's ruling in the recourse claim lawsuit filed by Hyundai Marine & Fire Insurance against DB Insurance.
The case dates back to August 2021, when driver A, insured by Hyundai Marine & Fire Insurance, caused an accident while driving under the influence with a blood alcohol level of 0.122%. At the time, A's vehicle collided with a vehicle driven by B, who was insured by DB Insurance and was changing lanes on a road in Gwanak-gu, Seoul. The accident resulted in fatalities, including a passenger in A's vehicle and a motorcycle driver.
Hyundai Marine & Fire Insurance paid a settlement of 750 million won to the victims' heirs and then filed a lawsuit against DB Insurance, demanding payment corresponding to B's share of liability.
The courts of both the first and second instances recognized the internal allocation of responsibility between A and B as 50% each. The court explained that if the insurer bearing liability for damages due to a joint tort has compensated the entire loss and thus released the other joint tortfeasors from liability, that insurer may exercise a direct right of recourse against the insurer(s) responsible for the other joint tortfeasors' share.
The key issue in the trial was whether Hyundai Marine & Fire Insurance should deduct the accident surcharge it received from its own insured, who was the drunk driver, from the recourse claim. The accident surcharge is an amount the offending party must pay to the insurer when causing an accident due to drunk or unlicensed driving. DB Insurance argued that the amount received or to be received by Hyundai Marine & Fire Insurance from the offending party as the accident surcharge should be excluded from the recourse claim.
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However, the Supreme Court did not accept this argument. The Court held that there is no reason to deduct the accident surcharge from the recourse claim that DB Insurance must pay to Hyundai Marine & Fire Insurance. The Supreme Court explained that the accident surcharge is money claimed by the insurer from the insured who is legally liable for damages, after the insurer has compensated the victim. The Court further stated that, in relation to the accident surcharge the insured must pay to their own insurer for causing the accident, the insurer of the joint tortfeasor has no grounds to assert any rights or demand any settlement.
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