In Korea, it is possible to raise a product liability claim under the Civil Act, the Commercial Act, the Product Liability Act (PLA), the Framework Act on Consumers, the Framework Act on the Safety of Products, the Motor Vehicle Management Act, the Chemical Substances Control Act (K-REACH) depending on the subject matter. Most product liability claims are raised under the PLA or the Civil Act tort clause. The PLA mainly governs product liability litigation in Korea. Pursuant to Article 3(1) of the PLA, a manufacturer is responsible for the compensation of damages to life, persons and property caused by product defect, except for the damages incurred to the product itself. In addition, the Serious Accidents Punishment Act, enacted on January 26, 2021, and which became effective on January 27, 2022, enabled holding a business operator liable for any severe accident caused by a product defect resulting to death, injury or disease of people. Product liability claims, including claims under PLA, is generally considered a strict liability offense, whereas a product liability claim under the Civil Act or the Commercial Act is fault-based.

Article 2 of the PLA defines “product” as movables which are industrially manufactured or processed, including movables incorporated into another movables or immovables. Real property or unprocessed agricultural and livestock products are excluded from the “products” under the PLA.

Whether software is a “product” for the purposes of the PLA is still disputed as there is no established precedent. The majority view is that software is not a movable but a type of service or information and, therefore, does not fall under the definition of “product” under the PLA. However, embedded software that is stored in a semiconductor or other storing medium may qualify as a “product”. Even in such case, not the software itself but the medium storing the software will be considered as a “product” subject to PLA.

The Supreme Court further explained that the “products” subject to PLA are movables manufactured or processed through design or processing of raw materials which are supplied for commercial distribution. The commercial distribution not only includes the distribution to an unspecified large number of consumers but also the supply of a custom-made product to a specific consumer. So there is no specific distinction between products sold to or intended to be used by consumers and those sold for use by professionals or businesses. An agreement excluding or limiting any liability for damages provided under the PLA is null and void, except where a person purchases a product to be used for his own business agrees to limit liability for damages caused by the product to his own business property (Article 6 of the PLA).

In principle, only a party who suffered damages to life, persons and property caused by product defect may bring a product liability claim. Of course, and heir of a diseased may also bring a product liability claim on behalf of of the diseased. In addition, if a regulation recognizes third party’s right to indemnity, such third party may bring a claim on behalf of the injured party. In Korea, it is common for an insurance company to pay the insurance money to an insured and bring an indemnity claim against the manufacturers. For example, there is a case pending before the appellate court where the National Health Insurance Service brought an indemnity claim against the tobacco manufacturers after paying the medical expenses to the smokers.

On the other hand, the Framework Act on Consumers provides for subrogation action by consumer organizations which is different from a class action. Specifically, consumer organizations that have received government approval or meet certain requirements may file a lawsuit in court if a business operator violates statutory labeling or advertising standards, directly infringing on consumers’ life, body, or property rights, and if the infringement continues. In order for a consumer organization to file a subrogation action, it must obtain the court’s approval. The purpose of the subrogation action is limited to seeking an injunction or cessation of the consumer rights infringement, and cannot include claims for damages. This differs from product liability lawsuits, which seek damages for harm caused by an infringement, as the subrogation action is aimed at preventing future infringements.

Under the PLA, a manufacturer is liable for damages to life, persons and property caused by product defect. Damage to the product itself is excluded from the ‘damage’ under the PLA. The PLA provides that the Civil Act provisions for the compensation of damages must apply in the assessment of damages. Under the Civil Act, one may seek compensation for direct damages (e.g., property damage and medical expenses), indirect damages (e.g., loss of expected benefits or wages), and emotional distress. In principle, the damage is measured by comparing the value of the property it would have been without the product defect. Punitive damage is generally not recognized in Korea and, therefore, no compensation is available under the PLA other than that for the damages to life, persons and property caused by a product defect. Provided, however, that with respect to the damage to life and persons caused by a product defect, the PLA allows courts to award exemplary damages not exceeding three times the amount of actual damages if the manufacturer was aware of the alleged product defect and failed to take appropriate measures to prevent the damage to life or serious bodily injuries to persons. In addition, under the Serious Accidents Punishment Act, which became effective on January 27, 2022, any business operator will be held liable for the damages suffered due to “Serious Civic Accident”. The liability of the business operator will be up to 5 times the actual damages suffered (please refer to our response to Question 30).

A claimant must prove (i) existence of the defect, (ii) damages to life, persons or property, (iii) causation between defect and damages. The PLA defines the term ‘defect’ as the defect of any products in manufacturing, design or warning falling under any of the following items or lack of safety that the product ordinarily should provide (Article 2(2) of the PLA).

1. Manufacturing defect: defect caused by deviation from the originally intended design due to the failure in the manufacturing process or processing of the product, regardless of whether the manufacturer faithfully performs the duty of care and diligence with respect to the manufacturing or processing.
2. Design defect: failure by the manufacturer to adopt reasonable alternative design where the damages or risks caused by the product could otherwise have been reduced or prevented.
3. Warning defect: failure by a manufacturer to give reasonable explanations, instructions, warnings and other indications on the product, where the damages or risks caused by the product could otherwise have been reduced or prevented.

The claimant has the burden to prove defect. Once the claimant is able to prove certain circumstantial facts, it is presumed that the product in question had a defect at the time the manufacturer supplied such product and the damages were incurred due to the defect. Please refer to question 8 below for more details. Prior to the enactment of the PLA, a claimant was able to bring a product liability action by making a tort claim or a non-performance of liability claim under the Civil Act. In such case, the claimant had the burden to prove (i) the existence of defect, (ii) manufacturer’s intentional tort or negligence, (iii) damages, and (iv) causation between the defect and damages. Pursuant to the amendment to the PLA which became effective in 2018, the existence of the defect and the causation between the defect and the damages are presumed, in the absence of proof to the contrary (Article 3-2 of the PLA), if the claimant can prove that the accident: occurred from the use of the concerned product under its normal operating conditions; happened within the realm of the manufacturer’s exclusive control; and would not usually happen without the defect in the product.

As explained under Question 5 above, the PLA provides the definition of three types of defects in detail. Therefore, the court will determine whether a defect falls under one category of the defects or whether a product lacks safety that the product ordinarily should provide. The court determines whether a product is defective based on the technical analysis that the product in question has an inherent risk, whether the manufacturer satisfied its duty to warn under the applicable regulations, and whether it was possible to make any further warnings. It is also important to assess the damages, costs associated with recall, if any. Whether there is any other cause of damages also needs to be analyzed. The court does consider whether there is any breach of regulatory duty such as a breach of a product safety regulation, however, such consideration will be limited to the breaches that are found to have causal relationship with the damages.

The term manufacturer is defined as (Article 2(3) of the PLA): 1. a person who is engaged in the business of manufacturing, processing or importing any product; or 2. a person who presents him or herself as any person falling under (a) above by putting his or her name, firm name, trademark or any other distinguishable feature (his or her name) on the products, or a person who made a misleading indication that he/she is the person as described under (a) above. When a manufacturer is unidentifiable, the person who supplied the product for profit, in a form of sale or lease, etc., shall be liable for damages, if the supplier knows or could have known the manufacturer’s identity but fails to inform the injured party (or legal representative) of the manufacturer’s identity within a reasonable time (Article 3(3) of the PLA). Where there are two or more persons liable for the same damages, they must be liable jointly and severally for the damages (Article 5 of the PLA).

Possible defences include: (i) the risk within the permitted scope, (ii) cost-benefit analysis, (iii) nonexistence of reasonable alternative design, or (iv) nonspecific diseases to prove against causation. In addition, the defences under Article 4(1) of the PLA are also available to the manufacturer. A manufacturer can be relieved from its responsibility for damage compensation by proving that (i) the manufacturer did not supply the product, (ii) the existence of the defect was not discoverable by the state of science or technical knowledge at the time the manufacturer supplied the product, (iii) the defect was because of compliance with any act or subordinate statute at the time the manufacturer supplied the product, or (iv) in the case of raw materials or components, the defect was attributable to the design of the product in which any raw materials or components have been fitted or to the instructions concerning manufacturing given by the manufacturer of the product using them (Article 4(1) of the PLA).

The PLA provides for a 10-year long-term statute of limitations and a three-year short-term statute of limitations, and the statute of limitations expires when either of the statute of limitations expires. More specifically, a claim under the PLA must be brought the earlier of (i) 10 years from the delivery of the defective product or (ii) three years from the claimant’s discovery of damages and relevant liabilities. For the damages caused by harmful substances or the damages that become apparent after a certain latent period, the long-term statute of limitation will be calculated from the date the damage occurred.

First, consumers can only bring product liability claims against manufacturers before the applicable statute of limitations expires. In a tort claim, the court must take into account any contributory negligence on the part of a claimant in determining the liability of the manufacturer and the amount of damages (Articles 763 and 396 of the Civil Act). The principle of contributory negligence also applies to product liability claims under the PLA (Article 8 of the PLA), provided that contributory negligence is not recognized if the claimant’s negligence is ordinary and foreseeable, but is recognized if there is gross negligent on the part of the claimant or it is found that the claimant used the product knowing the defect in the product.

There are no specific limitations on the territorial scope of claims.

Prior to the enactment of the PLA, a claimant was able to bring a product liability action by making a tort claim or a non-performance of liability claim under the Civil Act. In such case, the claimant had the burden to prove (i) the existence of defect, (ii) manufacturer’s intentional tort or negligence, (iii) damages, and (iv) causation between the defect and damages.

In Korea, it is unusual to bring a product liability claim in negligence for tort without bringing a claim under the PLA. A claim under the PLA is favourable to a claimant in that the claimant does not need to prove the intention or negligence of the other party. However, there are cases where it is unclear whether the defect would fall under one of the three types of defects defined under the PLA, in which case the claimant will consider bringing a product liability claim for tort. For example, a claimant may bring a product liability claim for tort arguing that there is a breach of regulatory duty, such as illegal advertising activities, in addition to a claim under the PLA.

The Civil Act categorises the damages caused by intentional or negligent torts into ordinary damages and extraordinary damages. Ordinary damages are normally expected to incur by an instance of illegal conduct, while extraordinary damages may incur owing to the extraordinary circumstances of the injured and can be compensated only if the offender could have foreseen such extraordinary circumstances. Punitive damage is generally not recognized in Korea.

If two or more persons caused damages to another by their joint unlawful acts, they are jointly and severally liable for the damages (Article 760(1) of the Civil Act). Among the joint tortfeasors, the liability is apportioned in proportion to their degree of negligence. In case one tortfeasor has compensated an amount exceeding its proportion of liability, such tortfeasor is entitled to seek contribution from other tortfeasors by exercising its right to indemnity.

The defences under the PLA are also available for tort claims under the Civil Act. Please refer to our response to Question 9 for more details. In addition, unlike product liability claims under the PLA, manufacturer may also be relieved from liability by proving there was no intentional or negligent tort.

The limitation period lapses on the earlier of (i) three years from the date on which the injured party or his/her legal representative becomes aware of such damage and of the identity of the person who caused it, or (ii) ten years from the time the unlawful act was committed (Article 766 of the Civil Act).

First, consumers can only bring product liability claims against manufacturers before the applicable limitation period lapses. Pursuant to the principle of contributory negligence, the court must take into account any contributory negligence on the part of a claimant in determining the liability of the manufacturer and the amount of damages (Articles 763 and 396 of the Civil Act).

No. A contractual term favourable to consumers, such as liquidated damages clause for product defects, will be held enforceable. Any ambiguous terms in a contract will be resolved pursuant to the PLA.  Although the law does not require including certain terms or conditions imposing liability in a situation where a product has caused damages, an agreement to exclude or limit any liability for damages recognized under the PLA is null and void, except where a person purchases a product to be used for his own business agrees to limit liability for damages caused by the product to his own business property (Article 6 of the PLA).

A claimant can hold the other party liable for product defects pursuant to the terms of a contract. As explained above, a contractual term less favourable than the terms under PLA is null and void, in which case the claimant may bring a claim under the PLA.

Unless the contract provides for a liquidated damages clause, the damage to be compensated is measured the same way as the case of a non-contractual claim. That is, a manufacturer is liable for damages to life, persons and property caused by product defect, and one may seek compensation for direct damages (e.g., property damage and medical expenses), indirect damages (e.g., loss of expected benefits or wages), and emotional distress. In principle, the damage is measured by comparing the value of the property it would have been without the product defect. It is also possible to include a penalty clause in a contract, provided that the court may find such clause to be partly or entirely unenforceable in case the penalty is excessive.

An agreement excluding or limiting any liability for damages provided under the PLA is null and void, except where a person purchases a product to be used for his own business agrees to limit liability for damages caused by the product to his own business property (Article 6 of the PLA). Again, consumers can only bring product liability claims against manufacturers before the applicable limitation period lapses. In the context of a contractual claim, a 5-year limitation period applies to commercial claims (claims arising from commercial activities as defined under the Commercial Act), and a 10-year limitation period applies to other civil claims. Pursuant to the principle of contributory negligence, the court must take into account any contributory negligence on the part of a claimant in determining the liability of the manufacturer and the amount of damages (Article 396 of the Civil Act).

The other party may assert any defences available under the contract. In addition to the defences provided under the contract, it would also be possible to assert defences under the PLA.

Korea does not have a discovery system similar to the system in the U.S. It is, however, possible to make a request to the court to order the other party to produce specific documents or make an application for inquiry of facts. It is possible for a party who possesses the documents in question to refuse to produce the documents claiming that they contain trade secrets. Failure to comply with the court’s order to produce documents without justifiable cause may result in the court accepting the other party’s claim regarding the contents of the documents to be true.

The legal costs are generally funded by the claimant. Unless it is proven that a party has no chance of winning the case, upon the request by a party or at its own discretion, the court may grant legal aid to a party unable to pay for the litigation costs. A party applying for legal aid must submit to the court the evidence of its financial status. Legal aid includes deferred payment of court fees and attorneys’ fees and exemption from the deposit for court fees. In addition, Korea Legal Aid Corporation, a public organisation, provides legal assistance (including representation during trial) to individuals with financial difficulties at a minimal fee or free of charge. There is no law or regulation specifically prohibiting third-party litigation funding in Korea. In principle, in a lawsuit where the property right is disputed, an entrustment of the litigation to a third party by the person who owns the respective property right or who has the authority to manage or dispose of such property rights is not allowed as arbitrary entrustment of litigation. Entrustment of litigation may be allowed in limited circumstances where there are reasonable needs or reasons. In any event, entrustment of litigation must not take place in order to avoid the principle of representation by attorneys or in violation of the Trust Act. Contingency or conditional fee arrangements are permitted in Korea and there is no legal restriction on the maximum amount of such fee. It is not required for a party to inform the other party of such fee arrangement.

In principle, the unsuccessful party bears the costs of a litigation. If only part of a claim has been recognized by the court, the court decides the cost distribution ratio taking into account the ratio of the claim recognized. However, not all costs may be recovered as the amount of legal fees that can be recovered will be determined based on the ratio set forth under the court rules. It is possible for lawyer to charge a percentage uplift on their costs.

Although the Securities-Related Class Action Act (Act No. 7074 of 20 January 2004, as amended), which may apply to certain illegal acts (e.g., false or insufficient filing of securities reports or business reports, etc.), has been effective since January 2005, there is no general class action system in civil proceedings in Korea (including product liability cases). The ‘appointed-party’ system in Korea has some similarities with the class action system but is different in that, under the ‘appointed-party’ system, only those participating in the trial are entitled to the benefit of the court’s findings and award. In addition, if the rights and obligations subject to a lawsuit are relevant to two or more persons or an identical factual or legal cause gives rise to a claim, it may be possible for several persons to become the plaintiffs or defendants to a lawsuit (there are not many cases where there are several plaintiffs or defendants because it is difficult to satisfy the requirements under the law). The court’s decision on such case only applies to the parties to the lawsuit which is different from a class action or group action. In practice, in case there are several victims to a product liability case, it is common for the victims to appoint one legal representative to represent them in the lawsuit.

Agent Orange case: Starting early 2020, Vietnam War Veterans and the widows of the veterans refiled the Agent Orange case before the Korean courts. Two additional cases have been filed in 2022 and two more in 2024. The cause of action is similar to that of the cases previously filed.

Indemnity claim by the National Health Insurance Service (NHIS): As for the tobacco case filed by the NHIS against the tobacco companies, the trial court dismissed the claims made by NHIS on November 20, 2020. The court found that there is no legal basis for NHIS to make a direct claim against the tobacco companies and no sufficient ground to find causation between smoking and lung cancer. NHIS appealed the decision of the court of appeal, and issues including the hazard or risks of additives are being intensely disputed among the parties.

Humidifier disinfectant case: In August 2014, the victims who suffered lung-related injuries and deaths after using humidifier disinfectants containing PHMG and PGH between 2008 and 2011, filed a claim for compensation of damages against the humidifier disinfectant manufacturers. The trial court awarded damages to the victims recognizing the liability of the manufacturers but denying the liability of the government of Korea. However, in February 2024, the court of appeal found the government of Korea liable, stating that “it was illegal for the government, including the Minister of the Environment, to make an announcement that [the humidifier disinfectants were] not toxic as if guaranteeing the general safety of the product, by hastily quoting from an inadequate chemical toxicity evaluation of the humidifier disinfectants, and neglecting it for nearly 10 years.” The appellate court’s decision has been affirmed by the Korea Supreme Court in June 2024.

Due to the fast technology development in Korea and increasing focus on the circular economy, there are increasing concerns on the safety of consumers which lead to new legislations. Recently, a bill for the amendment of the PLA was proposed so that the manufacturers or the processors of products that require high degree of technical skills (e.g. motor vehicles) are held liable for product defects unless the manufacturers or the processors can prove lack of intention or negligence.

In addition, a recent bill has been proposed that would allow the court to order the submission of documents from the opposing party upon the request of a party, in cases where such documents are essential for proving defects or calculating damages, which is different from a document production request.

One other example is the heavy regulation on the chemical substances. In order to balance technology development and consumer protection, the Regulatory Reform Committee continuously monitors the market and how the regulations are implemented. On January 26, 2020, the Serious Accidents Punishment Act was introduced. The initial bill was proposed in response to repeated workplace accidents. However, the concept of “Serious Civic Accident” was introduced last minute as a subcategory of “Serious Accident”. “Serious Civic Accident” refers to accident caused by product defect resulting in (i) death of one or more persons or (ii) injury or disease of 10 or more persons. The Serious Accidents Punishment Act requires the business operator to take protective safety measures. The business operator may be subject to criminal sanctions (incarceration of up to 7 years or fine of up to KRW 5 billion) or may be held liable for compensatory damages for an amount not exceeding 5 times the actual damages for failure to comply with the obligations under the Serious Accidents Punishment Act. The issues surrounding the Serious Accidents Punishment Act and how it would affect the businesses of the companies operating in Korea are still the most hotly debated legal issues in Korea.

The recent trend has been to implement more consumer friendly regulations, such as presumption of defect or alleviation of the burden to prove causation, which can also be found in court decisions. There is increased concern on consumer safety which is expected to lead further legislations and court decisions to such direction. There is a possibility that an amendment to the PLA imposing the burden to prove product defect on the manufacturer or allowing group action in product liability case may be proposed. Although the burden to prove causation will stay with the claimant, it is possible that the legislation or the courts accept the presumption of causation or statistical causation analysis in the future.

The Korea Department of Justice once proposed a class action bill which was under review by the Ministry of Government Legislation in 2020. However, the bill lost momentum with the arrival of the new president and administration in 2022, and whether the bill will pass still remains to be seen. According to the class action bill proposed by the Department of Justice, a group of 50 or more people would be eligible for class action regardless of the industry. It will further alleviate the victims’ burden of proof and introduce discovery system which is similar to the discovery in the U.S. Once passed, the class action bill is expected to bring a legal environment favourable to the victims. The Department of Justice also proposed an amendment to the Commercial Code which will broaden the applicability of punitive damage clause. According to the proposed amendment, a person involved in business or trade who causes damages to another wilfully or gross negligently, will be liable for compensation up to 5 times the actual damages. This may also be applicable to a product liability case.

With the advent of the AI era, autonomous vehicles, and the expansion of the Internet of Things (IoT) and robotics, active discussions are taking place regarding product liability caused by software. Currently, under existing laws and case law, software itself is not recognized as a product, but product liability may be recognized in cases where software is embedded in a medium or device such as automobile. In 2017, a bill was proposed to include software as a product, but it was discarded due to the expiration of the legislative term. At present, no related bills are pending in the National Assembly. However, considering that the National Assembly is analyzing the European Product Liability Directive, which defines software as a product, we anticipate that there will be future amendments to product liability laws concerning software.