Korean Supreme Court Amends Method of Deducting Survivors’ Benefits from Damage Compensation

The Supreme Court of Korea, in an en banc decision, amended the method of deducting survivors’ benefits from damage compensation claims in the event of death of public officials or private university professors who are eligible to receive civil servant or private school pensions after retirement due to work-related accidents.

The Korean Supreme Court adopted the “deduction after inheritance” method, which mandates that compensation claims are first distributed to heirs and then deducted from the share of heirs who are eligible to receive survivors’ pensions, thus, increasing the amount necessary to be paid by defendants sued by survivors.

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The Korean Supreme Court’s Decision on Method of Deducting Survivors’ Pension Benefits 

The Korean Supreme Court overturned the original judgment of the lower court and legal precedent and remanded the case to the Seoul Central District Court in a lawsuit for damages (2021Da255853 ) filed by the bereaved family of a university professor A, who died in a traffic accident.

Mr. A, a former university professor, died in September 2016 from a motorcycle accident with a taxi. His spouse, Ms. B, and two children filed a claim for damages against the taxi association that insured the taxi driver. The Private School Teachers’ Pension Act provides for survivors’ benefits. 

The taxi association argued for a “deduction and inheritance” method, which first deducts survivors’ benefits from the entire retirement pension and distributes the remainder to the heirs. The argument was supported by the existing case law (93da57346).

However, the survivors countered with the “deduction after inheritance” method, which first divides the compensation claim equivalent to the retirement pension among the heirs and then deducts only from the claims of the heirs who received the survivors’ benefits.

The first trial court accepted the argument of the bereaved family and acknowledged the “deduction after inheritance” method and awarded around KRW 40,000,000 to be paid to each of the children of the deceased. However, the Appeals Court adopted the “inheritance after deduction” method. This led to no amounts that were necessary for the taxi association to pay to the survivors.

The Supreme Court unanimously accepted the argument of the bereaved family and overturned the decision of the Appeals Court and precedent. The Supreme Court of Korea ruled that “the claim for damages equivalent to the retirement pension and the survivor’s pension are essentially independent rights . . in order not to infringe on the rights of children who did not receive the survivor’s pension, the deduction should only be made on the claim of the spouse who received the survivor’s pension . . . existing ‘inheritance after deduction’ method results in exempting the tortfeasors.”

Sean Hayes is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw, and IPG Legal is consistently ranked Top Dispute Resolution Law Firm for our litigation services.