[THE KOREA TIMES_김동욱 변호사] Issue of punitive damages over BMW fiasco

This BMW 520d caught fire on an expressway near Mungyeong in North Gyeongsang Province, Monday. / Courtesy of Mungyeong Fire Department

e27be1810e244812bbdc66f5b504f11cBy Kim Dong-uk

Diesel-fueled BMW cars have been catching fire repeatedly in Korea this summer, and some car owners have filed damages claims against the German manufacturer and its Korean agents.

A product recall is being carried out because the problem is not just isolated instances of damage caused by accidental and short-term defects, but the destruction of a large number of vehicles due to systematic defects in certain parts.

Because of this case, some argue that it is necessary to introduce punitive damages in Korea. Korean law does not yet admit punitive damages, so many people know it only as an abstract concept that functions as a policy to punish bad companies.

Punitive damages is a system in which a defendant in a lawsuit is liable for the compensation for not only actual damages but also an additional criminal element, if the defendant has committed illegal acts for the purpose of causing property or body damages to the victim(s) “maliciously” or “indiscriminately.”

The system was introduced in the U.S., the U.K. and other countries that have an Anglo-American legal system. It is aimed at imposing sanctions against malicious or antisocial acts of the defendant based on public outrage about damages caused by illegal acts, and to prevent similar acts.

However, it is not easy to introduce punitive damages in countries that have a Continental legal system such as Korea. Under such a system, compensation is based on the principle of compensatory damages (the liability of the defendant is limited to the range of the actual damages inflicted).

For these reasons, many Koreans know that there is no provision for punitive damages under the Korean legal system. However, even though the requirements are different compared to punitive damages in the U.S., there are provisions in some individual Korean acts, so that a person or company being sued can be liable for compensation to victim(s) at no more than three times the monetary value of the actual damages.

The laws that introduced this system are special acts that mainly regulate cases in which the number of victims is large, or where a defendant can exploit his or her more powerful position. There is a punitive element and purpose to prevent similar actions, similar to the punitive damages of the Anglo-American legal system.

However, even if punitive damages are introduced to the Korean legal system broadly, it is not clear whether they could be applied in the BMW case, because punitive damages are not applied to cases that have arisen merely due to public sentiment or outrage; there are strict legal requirements that must be satisfied.

Nevertheless, the issue of BMW diesel-fueled cars spontaneously combusting has provided an opportunity to think about the role of legal compensation and the reasonable legal scope of compensation.

Tech & Comms team

The thoughts and opinions expressed in this column are those of its author and do not necessarily reflect those of HMP Law.

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