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A traffic accident involving a dump truck

When calculating how much money should be paid in damages after car accidents, not only the cost of repairs but also the depreciation of the value of the car resulting from parts that cannot be restored to their original condition must also be included, South Korea’s Supreme Court has ruled.

On July 21, the first panel of the Supreme Court overturned a ruling by a lower court that had denied the request of an individual surnamed Kim to be compensated for the reduced trade-in value of a vehicle and remanded the case to a panel of the Chuncheon District Court. After a traffic accident between dump trucks at a four-way stop in the Hyundai Steel factory in Dangjin, South Chungcheong Province, in which his vehicle was damaged, Kim had sued “T” Fire and Marine Insurance to compensate him for the damage.

“Normal damage resulting from illegal behavior includes not only the cost of repairs but also the reduction in trade-in value when it is impossible for damage to be repaired,” the court explained in its ruling. “When there is a major accident in which important parts of the vehicle’s frame are damaged, there are typically still parts that cannot be repaired or restored to their original condition even after the technically possible repairs have been completed. Such damage that causes the vehicle’s value to decrease also counts as normal damage.”

“Even after repairs were completed on his damaged vehicle, Kim argued that he had suffered a loss because the trade-in value of the vehicle at the time of sale decreased as a result of several kinds of damage recorded in the vehicle’s performance and condition inspection log. The lower courts ought to have determined whether those kinds of damage were major problems with the vehicle’s frame and whether Kim had suffered a loss when the value of his vehicle fell because it could not be repaired or restored to its original state.”

The lower court and appeals court acknowledged that Kim should be compensated for the repairs and for the loss of income resulting from the interruption of his work, but they rejected Kim’s request to be paid 15 million won (US$1,340) for the reduced trade-in value of his vehicle, citing “a lack of concrete evidence.”

By Yeo Hyeon-ho, senior staff writer

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