S. Korean Court Nears Final Ruling on $35M Claim Against PMI, BAT, KT&G

Key points:

Background and scale of the case: The National Health Insurance Service (NHIS) of South Korea has filed a lawsuit since 2014 against KT&G, Philip Morris International (PMI) Korea (Philip Morris Korea), British American Tobacco Korea (BAT Korea), and others, seeking compensation of 533 billion Korean won (approximately 38 million US dollars). The reason for the lawsuit is that NHIS has paid for treatment expenses for patients suffering from smoking-related cancers.

First instance and second instance results: The first instance court found it difficult to confirm a direct causal relationship between smoking and cancer, supporting the tobacco company's position. In the second instance, the healthcare organization presented testimonies from an 86-year-old patient, asserting that there were no other contributing factors to their cancer besides a long history of smoking, in an attempt to strengthen the causal relationship.

Controversy over ingredients and court ruling: The first trial also involved a dispute over the responsibility of tar and nicotine in tobacco. The court believed that nicotine is a core attribute of tobacco products and cannot be used as a basis for establishing liability for infringement.

According to N. News, the South Korean National Health Insurance Service (NHIS) has entered the final stage of a lawsuit seeking approximately 500 billion Korean won (approximately 35 million US dollars) in compensation from multiple tobacco companies. The Chief Judge of the Civil 6-1 Division of the Seoul High Court will hold a final round of debates on May 22, after which the date for the ruling on the case will be determined.

The case has been ongoing for 11 years since it was filed in April 2014. NHIS is seeking a claim of approximately 533 billion Korean won from KT&G, Philip Morris International (PMI) Korea, and British American Tobacco Korea to reimburse the medical expenses paid by the organization from 2003 to 2013 for 3,465 patients with lung cancer (small cell carcinoma, squamous cell carcinoma) and throat cancer (squamous cell carcinoma).

The central dispute of the lawsuit focuses on the causal relationship between smoking and the development of cancer, as well as whether tobacco companies should be held legally responsible for this.

In November 2020, the Seoul Central District Court ruled in the first instance that it is difficult to establish a direct causal relationship between smoking and cancer, therefore rejecting all claims of NHIS. The court believed that cancer may be caused by genetics, lifestyle, or other environmental factors. In the first instance, NHIS also argued that tobacco companies did not effectively reduce tar and nicotine levels, but instead added flavor enhancers to enhance the taste. However, the court considered that consumers actively seek the pharmacological sedative effects of nicotine, so this component is inherent to tobacco products and it is difficult to hold tobacco companies accountable for it.

NHIS subsequently filed an appeal in December of the same year. In the second trial, NHIS submitted a statement from lung cancer patient A, who is over 80 years old, as additional evidence, attempting to prove that A's lung cancer had no other obvious causes besides smoking. The statement pointed out that A had been smoking for decades since his twenties, although he quit smoking in the late 1990s, he was diagnosed with lung cancer in 2010, and had no relevant family medical history.

Currently, South Korean judicial authorities tend to attribute the responsibility for diseases caused by smoking to individuals. In 2014, the South Korean Supreme Court ruled in a similar lawsuit filed by 30 patients against KT&G that smokers must bear the health consequences themselves and did not support their compensation claim.

In 1998, the government of all 50 states in the United States jointly filed a lawsuit against tobacco companies including Philip Morris International (PMI) and Reynolds Tobacco, eventually reaching a $246 billion settlement agreement. This result was partially influenced by the "Tobacco Industry Documents," released by internal researchers in 1994, prompting the public to reassess the addictive nature and harm of tobacco products.

NHIS believes that this lawsuit is not only legally significant but also helps to raise public awareness on smoking cessation. NHIS is currently promoting a "1 million national support signature campaign" in order to create public opinion support for the upcoming second trial judgment.

The tobacco company, on the other hand, stated that they will participate in the second appeal process "honestly".

It is reported that the National Health Insurance Service (NHIS) of Korea is a national public institution under the Ministry of Health and Welfare, responsible for the nationwide operation and management of health insurance. Its main duties include providing medical insurance services to the public, collecting insurance premiums, and overseeing settlements with medical institutions.