The National Health Insurance Service lost again on appeal in a damages suit of more than 50 billion won it brought against tobacco companies, saying it suffered losses by paying insurance benefits after policyholders developed cancer from smoking.
The Seoul High Court Civil Division 6-1 (Presiding Judges Park Hae-bin, Kwon Sun-min, Lee Kyung-hun) said it was hard to find illegality in the first-trial ruling that the plaintiff lost in the 53.3 billion won damages suit the health insurance service filed against three tobacco companies—KT&G, Philip Morris Korea, and BAT Korea.
Earlier, the health insurance service filed a damages suit of about 53.3 billion won against tobacco companies in April 2014, saying it would hold manufacturers, importers, and sellers of cigarettes socially responsible for the harms of smoking. It also intended to prevent leakage from health insurance and improve public health. It was the first suit filed by a public institution in Korea against tobacco companies.
The health insurance service sought 53.3 billion won in damages for annual health insurance medical expenses paid from 2003 to 2012 for 3,465 patients who either smoked a pack a day for more than 20 years or had smoked for more than 30 years and were diagnosed with lung or laryngeal cancer.
The first-trial ruling came out in Nov. 2020, six years after the suit was filed. The first-trial panel dismissed the service's damages claim. It said the health insurance service, as a non-victim, could not claim damages and could exercise only a right of indemnity for the insurance benefit expenditure.
It also did not recognize causation between smoking and cancer onset or design and labeling defects in cigarettes. It said lung and laryngeal cancers can occur due to factors other than smoking. The court also rejected the claim that tobacco companies downplayed or concealed the addictiveness of cigarettes.
The service appealed. It submitted the latest studies, expert opinions, and statements from smoking victims as evidence. It also waged a public campaign, including a "national support signature drive." Jung Ki-seok, a pulmonologist and the health insurance service's president, said in the final argument that "not stopping smoking is 'abetting suicide.'"
The second-trial ruling, delivered a little over five years after the first, sided with the tobacco companies. The appellate panel said, "It is difficult to see illegality in the first-trial ruling that did not recognize the plaintiff's direct claim." In effect, it found the health insurance service cannot bring a damages suit against tobacco companies.
The appellate panel also found that even if an epidemiological causal relationship between smoking and lung cancer is recognized, it is hard to recognize an individual causal relationship between a person's smoking and that person's lung cancer. It said factors such as prior health status, disease status, and family history must also be examined. As in the first trial, it did not find that the cigarettes manufactured by the tobacco companies had design defects.
The health insurance service said it will seek a Supreme Court ruling. After the appellate verdict, President Jung told reporters at the courthouse, "We will prepare a variety of strategies with the resolve to try the case anew at the Supreme Court and give it a proper go."