New system would seek threefold compensation from companies that make harmful products

Posted on : 2017-01-06 15:00 KST Modified on : 2019-10-19 20:29 KST
After cases of deaths and illness caused by humidifier disinfectant, FTC also seeking to ease burden of proof requirements
Victims and their families and members of civic groups condemn the concealment of evidence by UK company Oxy
Victims and their families and members of civic groups condemn the concealment of evidence by UK company Oxy

A new punitive damage system would require compensation up to three times greater from manufacturers of products that result in a large human toll, as with a recent case involving deaths and injuries from the use of humidifier disinfectant.

The South Korean government is also considering steps to loosen some restrictions in the so-called Kim Young-ran Act to combat corruption.

“A strong economy” was the theme of operational reports by five economy-related agencies - including the Ministry of Strategy and Finance (MOSF), the Ministry of Trade, Industry and Energy (MTIE), and the Fair Trade Commission (FTC) - held on Jan. 5 under Acting President and Prime Minister Hwang Kyo-ahn. FTC chairperson Jeong Jae-chan presented an operational plan for “creating a vital market together with companies and consumers.”

“We are amending the Product Liability Act to institute a punitive damage system that would assign liability for up to three times the [current] damages in cases of deliberate causing of grievous harm to consumers’ lives and physical health,” Jeong said.

Punitive damage systems currently operate under only limited circumstances according to the Subcontracting Act and Personal Information Protection Act.

“Simply instituting a punitive damage system will have a substantial warning effect that will reduce legal violations by companies,” Jeong predicted.

The FTC also said it plans to loosen burden of proof requirements for consumer damages due to product flaws. While victims are currently required to provide direct proof of product defects and their causal link with damages, the new institutional changes would allow for broader recognition of both in cases where damages occurred during normal use of a product.

Amendment of the Kim Young-ran Act, which entered effect in late Sep. 2016, was also mentioned in the reports. Korea Development Institute (KDI) senior economist Kim Joo-hoon said the current cap of 30,000 won (US$25.40) on paying for meals “needs to be made more realistic in light of inflation and other factors.” The government plans to consult the suggestions in amending the act’s enforcement decree.

By Kwack Jung-soo, business correspondent and Kim Kyung-rok, staff reporter

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