[Exclusive] Hyundai Department Store Files 1.5 Billion KRW Claim Lawsuit for Fire at Daejeon Outlet

Insurance Company Files Lawsuit Over 1.5 Billion KRW Loss
1 of 2 Cases Withdrawn by Settlement
"Will Strive for Amicable Resolution"

Hyundai Department Store has become embroiled in a lawsuit related to the Hyundai Premium Outlet Daejeon fire disaster, which resulted in the deaths of seven workers. The insurance company that compensated the affected tenant companies has filed a claim against Hyundai Department Store for the loss amount. Hyundai Department Store plans to settle the lawsuit early through an agreement with the insurance company.

According to industry sources on the 18th, Allianz Global Corporate filed a subrogation claim lawsuit against Hyundai Department Store after paying insurance benefits to the contractors affected by the Hyundai Premium Outlet Daejeon fire disaster. They first filed a complaint at the Daejeon District Court in June last year and additionally filed a lawsuit at the Seoul Central District Court in March this year. The subrogation claim amounts are 555 million KRW and 998 million KRW respectively, totaling 1.553 billion KRW.

The Hyundai Premium Outlet with black smoke billowing during the fire on September 26, 2022. [Image source=Yonhap News]

This lawsuit stems from the Hyundai Premium Outlet Daejeon fire disaster that occurred on September 26, 2022. Since the fire happened before the outlet’s opening, there were no visiting customers, but seven Hyundai Department Store employees working in the basement died and one was seriously injured. Allianz Global Corporate reportedly filed the complaint after compensating the affected tenant companies for the damages caused by the fire. They intend to hold Hyundai Department Store responsible for failing to properly manage the safety of the outlet where the fire broke out.

The fire started when high-temperature exhaust heat emitted from a 1-ton cargo truck, which was idling in the basement parking lot’s loading area, was transferred to cardboard boxes stacked underneath the vehicle. The investigation concluded that poor management, such as leaving waste paper boxes and scrap paper in the basement parking lot’s loading area, was the direct cause of the fire, clearly establishing Hyundai Department Store’s negligence. Five people, including the Hyundai Outlet safety manager and subcontractors responsible for fire prevention and security facilities, have been sent to criminal court on charges of professional negligence resulting in death and injury.

The scene of the Daejeon Hyundai Outlet fire captured on a car [Image source=Yonhap News]

Hyundai Department Store has also expressed deep remorse for the fire and is currently in discussions with Allianz Global Corporate for a settlement. Regarding the subrogation claim lawsuit for 998 million KRW filed at the Seoul Central District Court in March, the case was withdrawn last month through a settlement. Hyundai Department Store plans to also reach a settlement for the remaining case at the Daejeon District Court and conclude it before the verdict. A Hyundai Department Store official stated, "We will strive for an amicable settlement with the plaintiff regarding the subrogation claim lawsuit."

Earlier, Hyundai Department Store provided emergency living support funds and early payment of settlement amounts to the outlet’s partner companies, store management and sales staff, and subcontractors in relation to the Hyundai Premium Outlet Daejeon fire disaster. Compensation was also provided for products brought in by tenant companies that became unsellable due to the fire. At the time, Hyundai Department Store expressed, "We feel a heavy responsibility for the Daejeon outlet fire accident" and "We will prepare and implement various compensation measures."

The site of the fire at Daejeon Hyundai Outlet swept by the black flames [Image source=Yonhap News]

Meanwhile, the Hyundai Premium Outlet Daejeon, which closed in September 2022 due to the fire, reopened in June last year, overcoming the disaster.