Great Expectations: The Past, Present & Future of Product Liability Laws in Korea

The Product Liability Act (hereinafter, the "PL" Act) was entered into force in Korea on July 1, 2002. The purpose of the PL Act is to protect consumers against damages caused by defective products, and to contribute to the safety of citizens and the sound development of the national economy by regulating the liability of manufacturers for damages caused by the defective products. This paper reviews past relevant tort case decisions in order to predict the future development of product liability theory by the Korean courts. In reviewing decisions made before the enactment of the PL Act, it was found that the courts had applied the negligence principle instead of the concept of defects, which means the plaintiff had the 'burden of proof,' the obligation to prove the manufacturer's negligence. Another tendency held by the court was to deny liability for damages if no causation existed. As the cases show, negligence is difficult to prove, as most laypeople do not have the necessary expertise regarding the intricacies of the products, making it disadvantageous for the plaintiff. The courts, even before the enactment of the PL Act, recognized the need to improve laws related to torts by setting case precedents that gave remedy to the victims. Analysis of these milestone cases can be divided into three categories. First, the plaintiff would no longer bear the burden of proof while the defendant would be required to rebut presumed negligence, thereby strengthening consumer protection. Second, information representation could now be a cause for negligence, thus broadening the basis for the plaintiff's claim of negligence. Third, through reasoning by torts, the concept of defect was introduced by the Korean Supreme Court. The PL Act grants the following benefits to society. First, consumers are given the right to claim against manufacturers for losses caused by defective products. Second, comparing the economic efficiency of negligence rule with strict liability rule, the PL Act has proven to be more efficient because the manufacturer is imposed with a higher standard of due care, giving the manufacturer a voluntary incentive to reduce risks. Third, the legal scheme of product liability is to shift the risk or harm incurred to the unfortunate consumer to the manufacturer. The precedents set by the legal structure of other countries should also be considered, in which death and personal injury are covered by product liability while damages to property or economic loss are covered under warranties. Therefore, we should take into account the fact that the product liability cannot be expanded to include property losses when basing suits on product liability laws