Is a construction-machinery rental company a 'third party' against whom the Korea Workers' Compensation and Welfare Service may take over a worker's claim? Supreme Court Judgment 2022Da214040 on sharing the risk of the workplace

Question

Article 87(1) of the Industrial Accident Compensation Insurance Act provides that where the Service pays insurance benefits for an injury caused by the act of a third party, it takes over the beneficiary's claim for damages against that third party up to the amount of the benefits. It does not do so where two or more insured employers divide one business between them, each carrying on part of it at the same place, and the injury is caused by the act of a worker of one of the other employers. The Act does not specify who a 'third party' is or what it means to divide one business, so the question is what criterion determines the persons against whom the Service may take over the claim.

Judgment 2022Da214040 raises that question in the following case. Non-party 1 company had taken a subcontract from the principal contractor for the earthwork and structural works of section 8-1 of an expressway. For a bridge construction site within that work, it rented a 7t forklift from a sole proprietor running a construction machinery rental business and contracted for the proprietor's employee to provide the driving labour as well. On 27 February 2017, while that employee and a worker of Non-party 1 company were carrying out rebar transport work together, he injured the worker. The Service paid insurance benefits and sued the driver and the rental business as third parties.

Material to check

The first statute is Article 87 of the Industrial Accident Compensation Insurance Act. The judgment applies the version in force before the amendment of 26 May 2020 (Act No. 17326), and states that its content is the same as that of Article 58(1) of the former Act, removed by the whole amendment of 14 December 2007, and Article 54(1) of the former Act, removed by the whole amendment of 11 April 2007; the judgment refers to all of these as Article 87(1). Under Article 6, the Act applies to every business or workplace that uses workers, except businesses excluded by Presidential Decree. Article 91-15 defines the service provider, and Article 91-16 treats a service provider as a worker under the Act and the business receiving the labour as a business to which the Act applies. The judgment also cites Articles 2 and 83-5(2) of the Enforcement Decree of the Act. The former Article 125(2) and the former Article 9(1) of the Act are given here only as the judgment cites them. Article 9(1) of the Employment Insurance and Industrial Accident Compensation Insurance Premium Collection Act treats the main contractor as the employer to which the Act applies where a business prescribed by Presidential Decree, such as construction, is carried on through several successive contracts. Article 48-6(6) of the same Act divides the premium for a service provider equally between the employer and the provider, except that the employer bears it alone for occupations prescribed by Presidential Decree in view of the degree of subordination and similar factors. The judgment also refers to Article 3(2) of the Social Security Framework Act, Article 10(1) of the Automobile Liability Security Act, and Articles 682(1) and 724(2) of the Commercial Act.

The decisions are the judgment itself and the precedents it reviews: Decision 2003Da33691 (24 December 2004) on a co-worker employed by the same employer; Decision 2006Da32910 (10 April 2008), on a crane driver supplied with the machine, and Decision 2006Da27093 (15 May 2008), on a dump truck driver, both holding the driver to be a third party and to fall outside the proviso; Decision 2006Da44760 (29 May 2008), for which the texts consulted for this brief give only the case number; Decision 2008Da12408 (28 July 2011) on a worker employed by the principal contractor and a worker employed by a subcontractor; Decision 2014Da204666 (26 May 2016) on a subcontractor; and Decision 2021Da263748 (19 August 2022).

Possible readings

Under the case law the judgment describes and then departs from, 'third party' meant a person who, together with the insured employer, had no direct or indirect industrial accident insurance relationship with the injured worker, and who owed the worker damages in tort or under the Automobile Liability Security Act, the Civil Act or the State Compensation Act. The judgment explains that this test was understood as turning on who bore the premium for the wrongdoer: where the wrongdoer was a worker employed in the main contractor's business, or a subcontracting relationship was recognised, the main contractor bore the premium and an insurance relationship was recognised through it, whereas a machinery lessor was neither a worker of the main contractor nor a subcontractor, so no such relationship existed.

The judgment holds instead that the scope of subrogation under Article 87(1) is determined not by who bears the premiums but by whether the workers or service providers share a common risk of occupational injury in the same business or workplace. Even where the wrongdoer has no employment contract with the injured worker's employer, if the injury occurs while both are performing that employer's work under its direction and command, they share the risk inherent in the business, because the work of both is incorporated into, and forms part of, the business of the employer directing them. On that view the wrongdoer and the wrongdoer's employer are not third parties, and the Service bears the ultimate responsibility for compensation up to the amount of the benefits.

A third reading follows from the judgment's treatment of the proviso and of insurance. The judgment reads the proviso as itself turning on whether the same risk is shared, and holds that a single criterion fits both the main text and the proviso: where the parties work under the same direction and command, they fall outside the term 'third party', and where the employers differ and there is no such direction and command, they fall within the proviso's limit on subrogation. The judgment adds that a liability insurer directly liable to the victim under Article 10(1) of the Automobile Liability Security Act and Article 724(2) of the Commercial Act is a third party regardless of whether the wrongdoer is one.

What the decisions held

Supreme Court Judgment 2022Da214040 (22 January 2026, en banc) held that whether an injury is caused by a third party's act or falls within the proviso is decided by shared risk in the business or workplace, and that a driver who provides driving labour on a construction site under the direction of the main contractor or a subcontractor shares the risk with the injured worker, so the machinery lessor and the driver are not third parties. The judgment overruled Decision 2006Da32910, Decision 2006Da27093, Decision 2006Da44760 and other Supreme Court judgments to the same effect, insofar as they are inconsistent with it.

On the facts, the judgment found that the driver operated the forklift under the direction of Non-party 1 company, working alongside that company's employee on rebar transport, and that the accident resulted from the concurrent fault of the driver, the company and the injured worker. The injured worker suffered injuries including a cervical spinal cord injury and was treated until about May 2020. The Service had paid medical benefits of 267,889,990 won and suspension-of-work benefits of 135,425,960 won and was paying a disability pension (equivalent to 233,552,722 won as a lump-sum disability benefit). The court below, the Daegu District Court (13 January 2022, 2021Na311355), had held that the Service could exercise the right under Article 87(1) against the defendants. Deciding the case itself under Article 437 of the Civil Procedure Act, the Supreme Court set aside the part of that judgment against the defendants, dismissed all of the plaintiff's appeals concerning the part of the claims additionally granted below, set aside the first-instance judgment insofar as it had granted the claims and dismissed those claims, and ordered the plaintiff to bear the total costs of the litigation.

Justices Oh Seok-jun and Seo Kyung-hwan concurred in the result but not in the reasoning: they would retain the previous test of a direct or indirect insurance relationship and apply to construction machinery lessors and similar parties, by analogy, the provision in the main text of Article 9(1) of the Premium Collection Act that applies the Act to a contracted business as a whole, so that the main contractor bears the premium and an insurance relationship is formed. Justice Noh Tae-ak added a supplementary opinion supporting the majority's new reading of 'third party'.

Points left open

The judgment overrules the earlier decisions 'insofar as inconsistent' with it but does not state how far the new criterion reaches. The separate opinion of Justices Oh Seok-jun and Seo Kyung-hwan refers in general terms to worker dispatch, and to contracts for machinery rental with driving labour in industries other than construction, as wider cases that the majority appears to be seeking to resolve in advance. The supplementary opinion of Justice Noh Tae-ak gives specific examples: an accident between a dispatched worker and a worker of the user company, and a manufacturer that enters into a contract for machinery rental with driving labour. The judgment itself does not decide those cases.

The judgment also leaves unresolved the boundary of the shared-risk test itself. The separate opinion notes that 'direction and command' is a concept on which dispatch disputes already arise and that the criterion may reduce predictability in the Service's practice, and it raises the case of this very record, where the former Enforcement Decree excluded construction machinery rental businesses with fewer than one regular worker, that former provision applied to the 2017 accident, and there was no sufficient evidence that the lessor was insured, so that under the majority's reasoning the outcome differs according to which party injured which. Neither point is settled by the judgment.

When to reconsider

This brief will be revised if the Supreme Court, in a later decision, states the reach of the shared-risk criterion or decides a case of worker dispatch or of machinery rental outside construction, or if Article 87(1) of the Industrial Accident Compensation Insurance Act is amended.

Statutes referred to

• 산업재해보상보험법 제6조, 제87조, 제91조의15, 제91조의16
• 구 산업재해보상보험법 제125조, 제58조, 제54조, 제9조
• 산업재해보상보험법 시행령 제2조, 제83조의5
• 구 산업재해보상보험법 시행령 제125조
• 고용보험 및 산업재해보상보험의 보험료징수 등에 관한 법률 제9조, 제48조의6
• 고용보험 및 산업재해보상보험의 보험료징수 등에 관한 법률 시행령 제7조
• 사회보장기본법 제3조
• 자동차손해배상 보장법 제10조
• 상법 제682조, 제724조

Decisions referred to

• 대법원 2026. 1. 22. 선고 2022다214040 전원합의체 판결 · Decision ledger
• 대법원 2004. 12. 24. 선고 2003다33691 판결
• 대법원 2008. 4. 10. 선고 2006다32910 판결
• 대법원 2008. 5. 15. 선고 2006다27093 판결
• 대법원 2011. 7. 28. 선고 2008다12408 판결

Verification status

The statutes and precedents were read at the National Law Information Center on 24 October 2026, and the judgment in its published holdings, reasons, separate opinions and supplementary opinion. For the cited decisions, the holdings and summaries were read, except for Decision 2006Da44760, whose text could not be opened.