[edit] Supreme Court Decision 2001Da7834 delivered on September 18, 2001 [Compensation, etc.]

【Main Issues】

[1] The purpose and the effect of the provision of Article 48, Paragraph 1 of the Industrial Accident Compensation Insurance Act, which provides that in the event that the beneficiary has been paid or may be paid the insurance benefits under this Act, the insured shall be exempted from the liability for accident compensation as prescribed by the Labor Standards Act for the same insured event

[2] Where a beneficiary under the Industrial Accident Compensation Insurance Act instituted an administrative proceeding with respect to a previous disposition rejecting the payment of insurance benefits by negligently failing to exhaust a pre-trial administrative petition process and the administrative proceeding was dismissed therefor, thus the beneficiary was unable to receive the insurance benefits for which he or she was duly eligible, whether the employer should be exempted from the liability under the Labor Standards Act for accident compensation as such case should be deemed to be the one where the "beneficiary may be paid the insurance benefits" under Article 48, Paragraph 1 of the Industrial Accident Compensation Insurance Act

【Summary of Decision】

[1] Article 48, Paragraph 1 of the Industrial Accident Compensation Insurance Act provides that, in the event that the beneficiary has been paid or may be paid the insurance benefits under the Act, the insured shall be exempted from the liability for accident compensation as prescribed by the Labor Standards Act for the same insured accident. The purpose and the effect of this provision is to ensure that an employer be exempted from the liability to compensate for the same insured event under the Labor Standards Act in the event that an insurance benefit should duly be paid for the same insured event under the Industrial Accident Compensation Insurance Act as the employer is insured under the industrial accident compensation insurance, on the grounds that: the industrial accident compensation insurance carries a nature of liability insurance for accident compensation; it would not be disadvantageous to the employees to require the employees to claim the payment of the industrial accident compensation insurance benefits first; the employer would be unreasonably divested of the benefits of the industrial accident compensation insurance to which the employer is mandatorily subscribed and for which the employer has been paying the insurance premiums, if the employer were to provide accident compensation to the employee; and, even if an employer who pays for the accident compensation were to be able to subsequently seek reimbursement from the state, such procedures would complicate legal relationships among those involved.

[2] Where a beneficiary under the Industrial Accident Compensation Insurance Act instituted an administrative proceeding with respect to a previous disposition rejecting the payment of insurance benefits by negligently failing to exhaust a pre-trial administrative petition process and the administrative proceeding was dismissed therefor, thus the beneficiary was unable to receive the insurance benefits for which he or she was duly eligible, the employer should be exempted from the liability under the Labor Standards Act for accident compensation as such case should be deemed to be the one where the "beneficiary may be paid the insurance benefits" under Article 48, Paragraph 1 of the Industrial Accident Compensation Insurance Act.

【Reference Provisions】 [1] Article 48, Paragraph 1 of the Industrial Accident Compensation Insurance Act / [2] Article 48, Paragraph 1 of the Industrial Accident Compensation Insurance Act

Article 48 of the Industrial Accident Compensation Insurance Act (Relation with Other Compensation or Indemnity) (1) In the event that the beneficiary has been paid or may be paid the insurance benefits under this Act, the insured shall be exempted from the liability for accident compensation as prescribed by the Labor Standards Act for the same insured event.

(2)~(4) <omitted>

【Plaintiff-Appellee】Kim Myung-ja (Attorney Kim Il-jin, Counsel for plaintiff-appellee)

【Defendant-Appellant】 Sung-Il Bus Co., Ltd. (Attorneys Lee Kwan-hyung and 3 others, Counsel for defendant-appellant)

【Court of First Instance】 Daejon District Court Judgment 2000Gahap3662 delivered on July 13, 2000

【Court of Second Instance】 Daejon Hight Court Judgment 2000Na4171 delivered on January 10, 2001

【Disposition】 The judgment of the court below shall be reversed, and the case shall be remanded to Daejon High Court.

【Reasoning】 1. In the case at bar, Kim Chang-soo, who was employed at the defendant company as a bus driver, died on duty; Kim's wife, the plaintiff in this case, submitted to the Korea Labor Welfare Corporation (KLWC) a request for payment of a lump-sum compensation for the surviving family members and funeral expenses under the Industrial Accident Compensation Insurance Act ("IACIA") but the request was rejected; then, the plaintiff, without going through administrative petition process, promptly instituted an administrative proceeding in which she sought to either revoke or nullify the disposition rejecting her request for payment; the administrative court rejected the plaintiff's claim for revocation on the ground that the plaintiff had failed to exhaust the remedy of administrative petition process in violation of law, and also rejected the plaintiff's claim for nullification on the ground that no material or clear error lied in the disposition below rejecting the payment, which decision became final and conclusive; in the meantime, the plaintiff brought a separate judicial action against the defendant, arising out of the same accident, seeking the payment from the defendant of the compensation for the surviving family and funeral expenses as part of accident compensation prescribed in the Labor Standards Act. Based on the foregoing facts, the court below held that the defendant should be held liable for the accident compensation since Kim's death should be deemed as an accident on duty. With respect to the defendant's assertion that it should be exempted from the liability for accident compensation pursuant to Article 48, Paragraph 1 of the IACIA, the court below concluded that, even if the plaintiff lost in its administrative litigation due to her negligent failure to exhaust the remedy of administrative petition process, this should not be regarded as the case where a beneficiary may be paid insurance benefits under Article 48, Paragraph 1 of the IACIA for the following grounds: the case where a beneficiary may be paid insurance benefits as prescribed in Article 48, Paragraph 1 of the IACIA should be understood to mean the case where a beneficiary may obtain a decision on payment if it files a request for payment of insurance benefits with the KLWC in accordance with the relevant regulations of this Act and its enforcement decree, rather than to mean the case where the beneficiary may be able to obtain a decision for the payment of accident compensation when the KLWC decides not to pay such accident compensation and then the beneficiary undertakes procedures to challenge the KLWC's decision for its unlawfulness or unreasonableness by such means as a request for examination, an application for reexamination and an administrative litigation, etc.

2.However, Article 48, Paragraph 1 of the Industrial Accident Compensation Insurance Act provides that in the event that the beneficiary has been paid or may be paid the insurance benefits under the Act, the insured shall be exempted from the liability for accident compensation as prescribed by the Labor Standards Act for the same insured accident. The purpose and the effect of this provision is to ensure that an employer be exempted from the liability to compensate for the same accident under the Labor Standards Act in the event that an insurance benefit should duly be paid for the same accident under the Industrial Accident Compensation Insurance Act as the employer is insured under the industrial accident compensation insurance, on the grounds that: the industrial accident compensation insurance carries a nature of liability insurance for accident compensation; it would not be disadvantageous to the employees to require the employees to claim the payment of the industrial accident compensation insurance benefits first; the employer would be unreasonably divested of the benefits of the industrial accident compensation insurance to which the employer is madatorily subscribed and for which the employer has been paying the insurance premiums, if the employer were to provide accident compensation to the employees; and, even if an employer who pays for the accident compensation were to be able to subsequently seek reimbursement from the state, such procedures would complicate legal relationships among those involved. The same applies when a beneficiary becomes unable to receive the insurance payment due to the beneficiary's own fault such as a failure to exhaust pre-administrative litigation remedies as in the case at bar while the beneficiary was otherwise duly eligible for the payment of such insurance benefits. Therefore, since the court below held that the death of Kim Chang-soo should be deemed as an accident on duty, in the case at bar, the plaintiff was duly eligible for and would have been able to receive the payment of the insurance benefits under the IACIA had the plaintiff not erred by failing to exhaust pre-administrative litigation processes, and the defendant therefore should be deemed to be exempted from the liability to compensate for the same accident under the Labor Standards Act, pursuant to Article 48, Paragraph 1 of the IACIA. Nonetheless, the court below rejected the defendant's argument that it should be exempted from the liability for compensation, on the ground that the plaintiff's situation in the case at bar did not fall within the definition of the case where the plaintiff "may be paid insurance benefits" under the IACIA as prescribed in Article 48, Paragraph 1 of the IACIA. The above rejection of the court below resulted from a misinterpretation of Article 48, Paragraph 1 of the IACIA thereby adversely affecting the court below's judgment, which constitutes a violation of relevant law. Therefore, we conclude that the relevant part of the ground for appeal has merit.

3. Accordingly, we hereby reverse the judgment of the court below without further reviewing the remaining grounds for appeal, and remand the case to the court below.

It is so ordered per Disposition.

Justices Bae Ki-won(Presiding Justice)

Suh Sung(Justice in charge)

Yoo Ji-dam

Park Jae-yoon

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