Supreme Court Sides with Insurer: "Separate Medical Expenses Must Be Deducted from Liability Insurance"

If Treatment Periods or Items Differ, Deduction Must Apply
Established Legal Principle Reaffirmed
Appellate Court Criticized for Insufficient Review
Case Overturned Due to Misinterpretation of Liability Insurance Scope

In cases where an individual receives workers' compensation insurance treatment for injuries sustained in a traffic accident, the Supreme Court has ruled that the medical expenses paid by the perpetrator's insurance company to the victim should be excluded from the liability insurance payment that must later be paid to the Korea Workers’ Compensation and Welfare Service (the "Service").

According to the legal community on March 23, the First Division of the Supreme Court (Presiding Justice Ma Yongju) overturned the previous court’s decision, which had ruled in favor of the Service in a recourse claim lawsuit against Hyundai Marine & Fire Insurance, and remanded the case for further proceedings.

This case began when a quick service business owner was injured after colliding with a car while riding a motorcycle. The Service paid approximately 25.76 million won in workers’ compensation insurance medical benefits to the victim. The perpetrator’s insurance company also directly paid about 7.12 million won in medical expenses to the victim for the same accident. These medical expenses were not included in the medical benefit records paid by the Service.

Subsequently, the Service, exercising its subrogation rights to the victim’s claim for damages, filed a recourse claim against the insurance company. In response, the insurance company argued that the already paid medical expenses should be deducted from the liability insurance limit. The courts of first and second instance did not accept the insurer’s argument and partially ruled in favor of the Service.

However, the Supreme Court’s decision was different. The Supreme Court stated, “If the medical expenses paid by the insurer to the victim are different in terms of treatment period or items from the workers’ compensation benefits, they cannot be regarded as complementary to each other. In such cases, the corresponding amount should be deducted from the liability insurance payment to be made to the Service.”

The Court further explained, “This legal principle is already established in precedents related to health insurance and workers’ compensation insurance.” Despite this, the previous court did not sufficiently examine the relationship between the medical expenses and the workers’ compensation benefits, and instead, uniformly deducted the amount at the damage assessment stage within the liability insurance limit. The Supreme Court found this to be a misinterpretation of the legal principle regarding the scope of liability insurance. The Court also pointed out that, by not distinguishing between injury liability insurance and disability insurance when accepting the full claim amount, the previous court made it difficult to specify the exact amount of liability insurance.

This content was produced with the assistance of AI translation services.