Deals & Cases

General Civil Disputes 2019-10-04
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DR & AJU Represents an Automobile Manufacturer in the Defense of a Car Fire Suit

A fire started in the key box of a car as its owner turned on the engine. This damaged the building where the car was parked, causing approximately KRW 1 billion worth of damage. The insurance company (“Insurance Company”) indemnified the owner of the building and brought a reimbursement claim against the manufacturer of the automobile (“Manufacturer”), seeking to exercise the right of subrogation to file a claim for damages for illegal acts.

The Insurance Company cited the legal doctrine by which a claimant is relieved of the burden of proof in an action against the manufacturer for any illegal acts of the manufacturer relating to product defects and argued that the Manufacturer should be held liable for damages, since it could be inferred from the National Forensic Service’s report that the car from which the fire started was defective.

DR & AJU asserted that the Manufacturer should bear the burden of proving that the car could be inferred to be defective and that damages arose despite its normal use, even if the above legal doctrine applies. DR & AJU conducted an intensive analysis of the facts of the event and emphasized to the court that it was not certain which parts of the car caused the fire. Further, even if the National Forensic Service’s evaluation results were to be relied on, the car had been used for a long time, which made it difficult to conclude that the car was defective at the time of its manufacture. For example, the fire could have been caused due to poor maintenance of the car, rather than any defects in it. The court ruled that the fire cannot be seen to have been caused by any defect in the car and dismissed all indemnification claims against the Manufacturer.

DR & AJU successfully defended the Manufacturer, even though it is generally difficult to obtain court decisions that deny manufacturers’ liability, due to the legal doctrine that relaxes a claimant’s burden of proof in the case of a claim regarding a manufacturer’s illegal acts related to defective products.