CONTENTS
- 1. The Insurance Proceeds Litigation: What Were the Detailed Circumstances?
- - The Insurance Proceeds Litigation: What Are the Relevant Statutes and Precedents?
- 2. The Insurance Proceeds Litigation: What Were the Lower Courts' Determinations?
- 3. The Insurance Proceeds Litigation: What Was the Supreme Court's Determination?
- 4. The Insurance Proceeds Litigation, Daeryun's Strategy
1. The Insurance Proceeds Litigation: What Were the Detailed Circumstances?
A, the plaintiff who brought the insurance proceeds litigation, lost his wife, B, several years ago.
At the time of her death, B was under severe stress due to an overwhelming workload and childcare difficulties, among other things.
She considered taking parental leave so that she could care for her children with peace of mind, but her workload within the company surged, and she ultimately withdrew her own application for parental leave.
Unable even to sleep properly because of her depressed state, B eventually took her own life the day after giving up the parental leave, after returning home from working overtime.
A then claimed survivors' benefits and funeral expenses from the Korea Workers' Compensation and Welfare Service, and the Service granted A's claim, finding that B appeared to have been driven to suicide in a state in which her ordinary capacity for judgment had been impaired by reasons arising out of her work.
The Service determined that there was a substantial causal relationship between B's death and her work, so that it should be regarded as an “industrial accident.”
A subsequently requested payment of insurance proceeds from the insurance company, but the request was refused.
The terms of the insurance contract that B had entered into provided that “if the insured intentionally harms himself or herself, the insurer in principle does not pay the insurance proceeds; however, if the insured harms himself or herself in a state in which he or she is unable to make a free decision due to a loss of mental capacity or the like, the insurance proceeds shall be paid.”
The insurer took the position that it was difficult to find that A's wife had been driven to suicide in a state in which she was unable to make a free decision due to a loss of mental capacity.
Dissatisfied with this, A filed suit against the insurer.
The Insurance Proceeds Litigation: What Are the Relevant Statutes and Precedents?
▶ Relevant Statutes
Article 659 of the Commercial Act (Grounds for the Insurer's Exemption)
(1) Where an insured event has arisen due to the intentional act or gross negligence of the policyholder, the insured, or the insurance beneficiary, the insurer is not liable to pay the insured amount.
Article 37 of the Industrial Accident Compensation Insurance Act
(2) An injury, disease, disability, or death caused by a worker's intentional act, self-injurious act, or criminal act, or arising therefrom, shall not be regarded as an industrial accident. However, where such injury, disease, disability, or death results from an act done in a state in which the normal cognitive capacity or the like has been markedly diminished, and there are grounds prescribed by Presidential Decree, it shall be regarded as an industrial accident.
▶ Relevant Precedents
“Even where an insurance contract that treats death as the insured event provides suicide as a ground for the insurer's exemption, this does not extend to a case in which the insured brings about the result of death in a state in which he or she is unable to make a free decision due to a mental illness or the like. Accordingly, if the direct causal act by which the insured brought about the result of death in a state in which he or she was unable to make a free decision was attributable to an external factor, that death may constitute an accidental event not caused by the insured's intent, and thus may amount to death as the insured event.” (See Supreme Court, Decision of June 23, 2015, 2015 Da 5378, among others).
“With respect to whether the insured died in a state in which he or she was unable to make a free decision due to a mental illness or the like, if a medical opinion has been submitted as evidence to the effect that the deceased reached a state in which he or she was unable to make a free decision due to major depressive disorder and thereby committed suicide, such opinion may not be lightly rejected; and in order to determine the existence of a causal relationship contrary to that medical opinion, the court must make a careful determination on the basis of other medical and expert materials.” (See Supreme Court, Decision of February 4, 2021, 2017 Da 281367, among others).
2. The Insurance Proceeds Litigation: What Were the Lower Courts' Determinations?
In the insurance proceeds litigation, the determinations of the first-instance and the appellate courts diverged.
First, the court of first instance ruled in favor of A.
Considering all the evidence, the reason was that it was reasonable to find that A's wife, B, had been, if only momentarily, in a state in which she was unable to make a free decision at the time of the suicide.
The court noted that, at the time, in addition to the accounting work she ordinarily handled, B had taken on additional tasks such as preparing for a prosecutorial investigation of the company and a detailed audit by the Financial Supervisory Service, so that her workload had surged.
B's overtime hours recorded over five months alone exceeded 533 hours, and her confirmed overtime in the week before her death also reached 44 hours.
In addition, B was concurrently performing other tasks, such as developing the computer system, and was increasingly subject to reprimands, which was found to have caused her severe stress.
B had also resolved to apply for parental leave in order to care for her child, who was entering elementary school at the time, but as the excessive workload continued, she went so far as to withdraw her parental leave application herself.
The court of first instance found it highly likely that, owing to the volume of work she had to handle at the company and the resulting stress, B had momentarily fallen into a state of mental panic at the time of her death.
The appellate court, however, reached a different determination.
It found that B appeared to have taken her own life intentionally, aware that she was ending her life, and that it was difficult to find this a case in which she had harmed herself in a state in which she was unable to make a free decision due to a mental illness or a loss of mental capacity.
The appellate court added that B had not received any treatment relating to a mental illness before her death, and that, even assuming she had depression, that circumstance alone could not by itself conclusively establish that the suicide had occurred in a state in which she was unable to make a free decision.
It also offered a different view regarding the Korea Workers' Compensation and Welfare Service's recognition of B's death as an “industrial accident.”
The court pointed out that the Service had focused only on the causal question of “whether she had been driven to suicide by reasons arising out of her work,” and had not specifically explained matters relating to “whether she had been in a state of diminished normal capacity for judgment.”
Against this reversed appellate judgment, A filed a final appeal.
3. The Insurance Proceeds Litigation: What Was the Supreme Court's Determination?
The Supreme Court reversed the appellate judgment and remanded the case to the lower court.
It thus aligned itself with the court of first instance, which had ruled in favor of A.
The Supreme Court held that, even where there is no circumstance showing that the deceased was diagnosed with major depressive disorder or received related treatment during his or her lifetime, the court must closely examine that person's age and disposition, the course of events leading up to the suicide, and all the attendant circumstances.
At the time, B was raising three children, and she had repeatedly told A and her coworkers that she wanted to die, showing a psychologically and emotionally unstable state, and she also experienced symptoms of decreased appetite and sleep disturbance.
The Supreme Court determined that the symptoms B exhibited were similar to those shown by patients suffering from major depressive disorder.
For that reason, the court should have conducted its hearing on the basis of all the circumstances, including objective materials revealing B's condition before her death and statements from her bereaved family and others around her; yet, the court pointed out, the appellate court had not gone through such a process.
It explained that the lower judgment was flawed in that it had misunderstood the legal principles concerning the interpretation of the exception to the ground for exemption under the insurance contract's terms and had failed to conduct the necessary hearing, and that the judgment was therefore reversed and remanded.
4. The Insurance Proceeds Litigation, Daeryun's Strategy
Until now, where a person with no medical records relating to a mental illness has taken their own life, the courts have, for the most part, dismissed insurance proceeds claims brought by the bereaved family.
On this occasion, however, the Supreme Court rendered a relatively progressive judgment, holding that insurance proceeds may be paid by taking into account the deceased's psychological state and surrounding circumstances at the time, even in the absence of related medical records.
This Supreme Court judgment is expected to have a considerable effect on the many insurance proceeds cases currently pending before the lower courts.
Daeryun Law Firm LLP has many attorneys experienced in handling insurance proceeds litigation.
If you have any inquiries regarding insurance proceeds claims, you are welcome to reach out to Daeryun Law Firm LLP at any time.
