[Supreme Court Decision 2017Da46274, June 15, 2023]
 

In a case where an employer filed a claim for damages against union members who participated in the labor union’s unlawful industrial acts, the Supreme Court ruled that individual liability should be determined by considering the totality of the circumstances, including the union member’s status and role within the labor union, the context and degree of his/her participation in the industrial action, the degree of his/her contribution to the damages sustained by the employer, the union member’s actual wage level and the amount of damages claimed.
 
Generally, in cases where the determination of tort liability is an issue, a Korean court usually renders its decision based on the following process:
 

In principle, pursuant to Supreme Court precedents, where there are cases involving joint tortfeasors, they are jointly and severally liable for damages. However, in certain types of cases, individual liability of joint tortfeasors may be exceptionally limited in light of the “principle of equity.”
 
In other words, the Supreme Court has held that, it is possible to limit the liability of each joint tortfeasor from an equity standpoint depending on various circumstances such as the context and development of a tortious act, the predictability of risks involved and whether the tortfeasor was aware of such risks (e.g., Supreme Court Decision No. 2012Da82220 rendered on April 10, 2014).
 
On one hand, it could be argued that the above Supreme Court decision followed the existing general legal principles on liability, but on the other hand, the Supreme Court’s decision is noteworthy considering that the Court explicitly held that the individual liability of union members could be assessed differently on an exceptional basis in consideration of the unique nature of labor dispute cases and that the Court specified for the first time particular factors to be considered in assessing the degree of liability for each union member.
 

[Supreme Court Decision No. 2018Da41986, June 15, 2023]
 

In this case, the issue in question was whether the presumption of damages equivalent to a decrease in sales or fixed costs could be refuted if it is established that additional production was carried out through the workers’ cooperation after the end of the industrial action, and thus any shortfall was recovered within a reasonable period of time.
 
Previously, in similar cases, the Supreme Court has presumed the occurrence of damages based on the following rationale:

• The manufacturer must prove the occurrence of damages (i.e., decrease in production and decrease in sales) as well as causation.

• If production decreases, it is presumed that damages will be sustained as a result of a decrease in sales and fixed costs.

• However, if it is proven by indirect counter-evidence that the product is not profitable, or that there is no possibility of sales due to the recession or defect in the product, it may refute the presumption of damages taking place.
   

However, in this case, the Supreme Court ruled for the first time that, “if it is proven that, considering the characteristics of the product, production and sales methods, etc. after the end of the industrial action, a decrease in production is compensated through additional production within a reasonable period of time and therefore a decrease in production as a result of the industrial action did not result in a decrease in sales, the presumption that the damages equivalent to fixed costs and decrease in sales have been incurred will be refuted.”
 
This Supreme Court’s decision is noteworthy in that the Supreme Court added/specified another ground for refuting the presumption of damages equivalent to fixed costs or decrease in sales by holding that the presumption of occurrence of damages may be refuted if “special circumstances show that a decrease in production did not lead to a decrease in sales.”

[Korean Version]