Half of the Convictions Under the Serious Accident Punishment Act Are for Medium-Sized Vulnerable Businesses with Fewer Than 50 Employees

Even Court Documents Show Difficulty in Hiring Large Law Firms
Concerns Over Punitive Focus on Small Businesses

During the 31 months since the enforcement of the Serious Accidents Punishment Act (SAP Act), more than half of the companies convicted in the first trial were small construction sites with fewer than 50 regular employees. It appears that concerns about small and medium-sized construction companies lacking the capacity to prepare for the SAP Act, unlike large construction firms, have materialized. These companies were found to have responded by hiring small and medium-sized law firms or individual lawyers based in their respective regions rather than large law firms during the trial process.

According to courts and prosecutors, among the 22 companies convicted of violating the SAP Act in the first trial from January 2022, when the Act was enforced, until the end of last month, 12 were workplaces with fewer than 50 regular employees.

The SAP Act, which came into effect in January 2022, was primarily applied to workplaces with 50 or more regular employees or construction projects worth 5 billion KRW or more. Although the 12 companies had fewer than 50 regular employees, the construction sites where serious accidents occurred exceeded the 5 billion KRW project value threshold, leading to charges of violating the SAP Act.

There were a total of 13 construction and management companies (service industry) convicted under the SAP Act. Nine manufacturers were convicted, all with more than 50 regular employees. Among manufacturers, two had 50?99 employees, four had 100?300 employees, and three had over 300 employees. The largest company was Gwangin Industry, which had about 2,400 regular employees at the time of the serious accident.

Among the 22 companies, only three hired one of the top 10 large law firms during the trial. Duseong Industry hired the law firm Hwawoo, Taeseong General Construction hired Yulchon, and Samgang S&C hired Sejong to handle their trials. Additionally, Mandeok Construction hired Pyeongsan, and LDS Industrial Development hired Haegwang. Many construction and manufacturing companies hired local law firms or network law firms in regions such as Changwon, Daegu, and Busan, where the serious accident incidents occurred. Law firm Saram & Smart defended the Onyu Partners case and the International Alert Industry case, which were the first SAP Act violation rulings, uniquely handling more than one case.

Meanwhile, according to the Supreme Prosecutors' Office, 141 cases of SAP Act violation charges were referred to prosecutors until the end of last month since the Act's enforcement. Among these, 60 cases were prosecuted, and 18 were dismissed without indictment.

A former chief prosecutor turned lawyer stated, “It is time to review whether the SAP Act is being operated according to its intended purpose. Large corporations can invest heavily in safety measures, so proving violations of the SAP Act even if accidents occur will be difficult.” He added, “Although the law was created with good intentions, in practice, punishments may be concentrated on small-scale workplaces. The government should focus on accident prevention and pay attention to managing small businesses.”

Reporter Lim Hyun-kyung, Law Times

※This article is based on content supplied by Law Times.