Establishing Objective Standards for Damage Assessment
Utilizing Economics, Psychology, and Neuroscience
Urgent Need for New Guidelines
The Daegu District Court Pohang Branch ruled that a coffee shop at a drive-thru (a method where customers purchase food and beverages while remaining in their vehicles) must pay approximately 5.8 million KRW to Mr. A, who suffered second-degree burns on his buttocks and leg after hot coffee spilled onto his left thigh while receiving coffee in January 2023 (case number 2022gadan100293). Mr. A filed a lawsuit demanding over 22 million KRW in damages, but only 80% of the property damage and compensation for emotional distress were recognized. In January 2024, the Seoul Eastern District Court ordered a doctor to pay over 24 million KRW to Mr. B, a man who suffered an injury resulting in amputation during genital enlargement surgery. Of this amount, 20 million KRW was recognized as compensation for the man's mental suffering. Mr. B had claimed over 57 million KRW in damages in this case.
In similar cases, the United States recognizes much higher compensation for emotional distress. According to CNN and other sources on March 14 (local time), a California Superior Court jury awarded $50 million (approximately 72.7 billion KRW) to a delivery driver who suffered burns to his lower body after hot beverages spilled on him while receiving a drink from a Starbucks employee. In 2020, the delivery driver visiting a Starbucks drive-thru in Los Angeles was burned when hot beverage spilled on his knee while receiving the drink from a Starbucks employee. The accident caused third-degree burns on the inner thigh and nerve damage to the genitals, resulting in severe injuries. During the trial, the Garcia side stated, "Since the accident, he has suffered physical and mental pain as well as post-traumatic stress disorder (PTSD)."
Compensation for Emotional Distress: Over 100 Times Difference Compared to Overseas
South Korea’s compensation for emotional distress is significantly lower compared to advanced judicial countries overseas. Even for similar injuries, the amount recognized by U.S. courts can be more than 100 times higher.
In the U.S., there are occasional rulings ordering astronomical amounts of compensation for emotional distress. American companies make efforts to prevent accidents in advance because they may be liable for high compensation due to gross negligence. A lawyer in Seocho-dong, Seoul, said, "The Starbucks case in the U.S. likely recognized higher compensation due to severe burns and genital injuries, but in South Korea, the amount is generally fixed at around 100 million KRW in fatal cases, making it difficult for courts to approve higher amounts. Because the compensation amount is significantly low, even when some amount is recognized, the physical and mental damages of the parties are not fully compensated, and in some cases, the mental shock may even increase."
Compensation for emotional distress, considered a core part of non-pecuniary damages, affects not only civil cases but also related criminal cases, yet there has been virtually no additional discussion over the past decade. For example, in traffic accidents, according to the "Appropriate Compensation Calculation Method by Type of Illegal Act" prepared by the Court Administration Office in 2016, compensation for emotional distress for deceased victims is calculated by multiplying a base amount of 100 million KRW by the loss of earning capacity rate and reflecting 80% of the victim’s fault. If there are special aggravating factors, the base amount can be increased up to 200 million KRW. In February 2017, the Seoul Central District Court’s Traffic and Industrial Accident Practice Research Group raised the base compensation amount for emotional distress in cases of death caused by drunk driving or hit-and-run traffic accidents to 150 million KRW.
Utilizing Compensation Tables in the UK and France
Professor Park Hye-jin (44, Judicial Research and Training Institute class 37) at Hanyang University Law School said, "Health economics estimates the value of life by measuring how much people are willing to pay to reduce the risk of death, called the 'Value of Statistical Life (VSL).' It is possible to gauge whether the current compensation amount is appropriate by comparing the compensation derived using 'Quality Adjusted Life Years (QALY),' which quantifies the value of living one year in a specific health state affected by injury or illness, with the actual compensation amount."
The UK has guidelines that courts can refer to. These guidelines provide a range of damages for a total of 255 types of injuries and are periodically revised by the Judicial Studies Board (JSB). French courts classify injuries into pre-consolidation, consolidation date, and post-consolidation stages and determine compensation amounts based on the severity of injuries graded from 1 to 7.
Courts Begin Research on Improvement Plans
The courts also sympathize with the need to update compensation for emotional distress and have actively started preparing improvement plans. The Damages Litigation Research Association was established in September 2023 to review and improve the practical validity of damage levels, compensation calculation methods, and amounts. Initially a small research group led by young judges within the court, it was promoted to an official court research association within a year of its launch. The Judicial Policy Research Institute (Director Lee Seung-ryeon) is also conducting research on compensation calculation methods. A chief judge at a metropolitan court said, "Continuous research and improvement considering inflation rates and social changes, rather than one-off studies and improvements, will help build trust in the judiciary."
Reporter Han Su-hyun, Legal News
※This article is based on content supplied by Law Times.
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