'Post-completion construction' Is the construction company or the developer responsible for the Busan Banyan Tree fire?

After expiration of the contractor's construction insurance, the developer signed insurance to cover losses.
The legal profession says, “Construction companies are more responsible”… Construction company: “Insurance has nothing to do with compensation for survivors”

Attention is focused on the legal responsibility of the construction company and developer regarding the fire accident at the new construction site of Banyan Tree in Busan, in which 6 people died and 27 were injured.

According to the Busan Police Agency on the 24th, Samjeong Enterprises, the contractor for Busan Banyan Tree, received approval for use of the building on December 19 of the same year, exceeding the construction company's responsibility completion deadline in November of last year.

Until the accident, two months after receiving approval for use equivalent to completion, approximately 780 workers from 35 subcontractors belonging to the construction company and developer were carrying out large-scale work simultaneously at the site.

Interior materials piled up here and there acted as kindling at the time of the fire and quickly spread the flames, making firefighting and rescue operations difficult.

The police have been conducting a large-scale investigation, including search and seizure of the construction company, developer, and subcontractors immediately after the accident, but the cause of the fire and who is responsible have not yet been clearly revealed. This fire resulted in significant casualties, including 6 deaths, and construction is delayed, so it is expected that a huge cost burden will be incurred to resolve the accident.

According to the industry, the site received approval for use from the Gijang County Office in December of last year, and the construction insurance signed up for in 2022 expired.

It is known that as the construction insurance was automatically cancelled, the developer, Rufentis, signed up related insurance to compensate for damage due to facility loss or fire accidents.

However, it is unclear whether insurance will be paid as there are conflicting opinions about who will manage the completed building.

The legal community predicted that the contractor who managed and supervised the construction site would be held more responsible for this fire accident.

Park Dong-il, CEO of Daeryun Law Firm, predicted, "In this case, the legal judgment is expected to vary depending on whether the construction company and the developer fulfill their safety management obligations." He added, "The specific facts will need to be carefully reviewed, but in general, it is highly likely that the construction company that directly hired the workers and actually managed and supervised the construction site will be singled out as the main responsible entity."

Attorney Lim Byeong-jin of Taesol Law Firm, who is the legal representative of one bereaved family, also said, "Based on the scale of the accident and related statements, it seems difficult for the construction company to avoid responsibility." He added, "Keeping in mind the possibility that the main contractor (Samjeong Enterprises) may evade responsibility by cutting corners by using subcontracting relationships, etc., we plan to respond so that it can take legal responsibility by applying the Serious Accident Punishment Act."

Depending on who is responsible, a legal battle may continue in the future over whether insurance money will be paid. If the insurance company pays the insurance premium first to resolve the accident, the insurance company can later claim the right to compensation from the person who caused the fire.

However, Samjeong Enterprises' position is that the insurance does not affect compensation for the bereaved family.

An official from Samjeong Enterprise explained, "The developer is the one responsible for operating and managing the completed building. The fire occurred on the 4th day of the fire self-inspection period (11 to 18 days), which is mandatory within 60 days after approval of completion. The developer also signed a contract with a fire safety and inspection company and was inspecting it."

He added, “Compensation for survivors from insurance or industrial accidents will be paid regardless of whether or not they are insured, and Samjeong plans to fulfill its responsibility to the survivors as the main body of construction.”

Separately from this, the bereaved families are guaranteed insurance costs of about 25 to 43 million won through the citizen safety insurance, which all citizens and residents are automatically enrolled in. Additionally, according to the Disaster Relief Act, funeral expenses can be subsidized up to a maximum of 15 million won.

Meanwhile, the police expect a report on the forensic results to be released within this week, and plan to brief the interim investigation results, including the cause of the fire, next week.

Reporter Jo Ah-seo (aseo@news1.kr)

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