Supreme Court: Lawsuit Claiming Damages Against the State Before Compensation Decision Is Finalized Is Incorrect

Supreme Court, Seocho-dong, Seoul.

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[Asia Economy Reporter Choi Seok-jin, Legal Affairs Specialist] The Supreme Court has ruled that filing a party lawsuit against the state to claim damages before the decision to pay death compensation for a soldier who died in the line of duty is finalized is incorrect.

According to the legal community on the 25th, the Supreme Court's Second Division (Presiding Justice Cho Jae-yeon) overturned the lower court's ruling that deemed the party lawsuit filed by B, the mother of deceased soldier A, against the Republic of Korea for death compensation payment as lawful, and remanded the case to the Seoul High Court.

The court stated, "The lower court judged this case as a party lawsuit and then ruled on the merits. This judgment involved a misunderstanding of the legal principles concerning the concept of administrative disposition, appeal lawsuits, and party lawsuits under the Administrative Litigation Act, resulting in insufficient necessary examination, which affected the judgment."

An appeal lawsuit is a lawsuit challenging an illegal administrative disposition.

A, who enlisted in the Army in May 2014, was transferred to a combat support company of a certain regiment and served as a communications soldier, cook, and clerk before taking an extreme step in July of the same year.

The Army Headquarters' Ordinary Meritorious Service Review Committee conducted a review of A in December 2014 but decided not to recognize A as having died in the line of duty, ruling it as a 'general death' due to the lack of a significant causal relationship between A's death and official duties.

In response, A's mother B and father C filed a damages claim lawsuit against the Ministry of National Defense. The court recognized that despite A showing a high risk of suicide during various examinations and interviews conducted by the Military Manpower Administration and after enlistment, the commanders of A's unit failed to take necessary measures to prevent A's suicide, ordering compensation of approximately 46 million KRW each, totaling about 93 million KRW.

Based on this ruling, B requested a re-examination of the meritorious service in July 2016, and the Ministry of National Defense's Meritorious Service Review Committee decided in April the following year that A qualified as 'Line of Duty Death Type III.'

As the representative of the bereaved family, B filed a claim for death compensation in May 2017. However, the Gyeonggi Southern Veterans Affairs Office, entrusted by the Minister of National Defense with the payment duties under the former Military Pensions Act, deducted the entire 93 million KRW already received through the damages claim lawsuit and paid only about 14 million KRW. B then filed a lawsuit demanding full payment of the death compensation, arguing that the legal nature of death compensation under the Military Pensions Act and damages compensation are different.

Two main issues arose during the trial.

The first was whether, after receiving state compensation related to a soldier's death accident, the entire amount of state compensation should be deducted from the compensation benefits claimed under the Military Pensions Act, or only the lost earnings (the loss of future income due to death) should be deducted.

The second issue was whether a party lawsuit directly claiming compensation benefits without filing an appeal lawsuit against the application and disposition results of the compensation benefits under the Military Pensions Act is permissible.

Regarding the first issue, the first trial court ruled that the state compensation amount could not be deducted from the compensation benefits under the Military Pensions Act and ordered the Ministry of National Defense to pay the entire 93 million KRW deducted.

However, the second trial court reversed the first trial's ruling, stating that the lost earnings portion of the state compensation has the same nature as the compensation benefits under the pension law and should be deducted. The court ordered payment of the remaining approximately 23 million KRW plus interest after deducting about 70 million KRW of lost earnings from the 93 million KRW state compensation.

The Supreme Court also agreed with this second trial ruling.

Meanwhile, regarding the second issue, both the first and second trial courts judged that the party lawsuit was lawful, considering that the Ministry of National Defense's decision to pay about 107 million KRW in death compensation was finalized.

However, the Supreme Court's judgment differed.

The court stated, "Even if there was a decision that the deceased qualifies as a 'line of duty death' and the plaintiff qualifies as a recipient of death compensation, since the Gyeonggi Southern Veterans Affairs Office, which received the claim for death compensation from the plaintiff, paid only a partial amount, it is difficult to see that the plaintiff's specific rights regarding the remaining death compensation under the former Military Pensions Act have arisen."

Furthermore, "The Gyeonggi Southern Veterans Affairs Office only internally approved a document indicating the intention to pay a partial amount of death compensation under the former Military Pensions Act and paid only that partial amount, without officially expressing such administrative intent externally. Therefore, it is difficult to consider that a disposition by the Gyeonggi Southern Veterans Affairs Office exists regarding the plaintiff's claim for death compensation," the court pointed out.

The court concluded, "Therefore, the plaintiff cannot seek payment of death compensation through a party lawsuit against the defendant. If no explicit disposition was made, the plaintiff should have filed a lawsuit confirming the illegality of inaction against the Gyeonggi Southern Veterans Affairs Office regarding the claim for death compensation. If a disposition was already made, the plaintiff should have filed an annulment lawsuit against that disposition."

Finally, the court stated, "The lower court should have exercised its right to request clarification on whether to change the lawsuit from a party lawsuit to an appeal lawsuit so that the plaintiff could have the proper form of litigation. If the plaintiff changed the lawsuit to a lawsuit confirming the illegality of inaction and the Gyeonggi Southern Veterans Affairs Office made a disposition, the court should also have exercised its right to request clarification on whether to change the lawsuit to an annulment lawsuit against that disposition." The court added, "The lower court's judgment that this case was lawful as a party lawsuit involved a misunderstanding of the legal principles concerning the concept of disposition, appeal lawsuits, and party lawsuits under the Administrative Litigation Act, resulting in insufficient necessary examination, which affected the judgment," explaining the reason for reversal and remand.

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