Open Decision Ledger · Civil obligations & remedies
Starting Point of the Short-Term Extinctive Prescription for a Market Manipulation Victim's Right to Claim Damages under Employer's Liability, and the Determination of Actual Awareness
Translated from the Korean original. Read the Korean
Supreme Court, Sept. 13, 2018, 2018Da241403 (judgment)
No holding summary · checked against points at issue. The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Case name: 손해배상청구의소
Official text on the National Law Information Center
Question
Around the time when the financial authorities announced the results of their investigation, the prosecution brought prosecution, and the media reported on the matter, can an individual investor who was the victim of market manipulation be deemed to have actually and specifically recognized the elements of the tort (unlawful act) and the employment relationship?
Holding
No. Citing the specialized nature of market manipulation, the defendants' denial of the allegations, the fact that the criminal and civil first-instance judgments were not pronounced until more than four years later, and the fact that defendant Deutsche Bank was excluded from the targets of sanctions and prosecution, the Supreme Court reversed the court below, which had taken that time as the starting point of extinctive prescription.
Points at issue, verbatim
위법한 가해행위의 존재, 가해행위와 손해의 발생 사이에 상당인과관계가 있다는 사실이나 사용관계 등 불법행위의 요건사실을 현실적·구체적으로 인식하였다고 볼 수 없는데도
Unofficial English translation
even though it cannot be regarded that the existence of the unlawful harmful act, the fact that there is adequate causation between the harmful act and the occurrence of the damage, or the facts constituting the requirements of a tort, such as the employment relationship, was actually and specifically recognized
Disposition
Reversed and remanded Stated in the decision
원심판결을 파기하고, 사건을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed, and the case is remanded to the Seoul High Court.
Form of the test
Existing test applied Stated in the decision
소멸시효 기산점에 관한 법리오해의 잘못이 있다고 한 사례
Unofficial English translation
a case in which it was held that legal principles concerning the commencement date of extinctive prescription were misapprehended
Factors
- 손해 및 가해자를 안 날
- 사용자책임의 경우
- 위법한 가해행위의 존재
- 가해행위와 손해의 발생 사이에 상당인과관계가 있다는 사실
- 사용관계 등 불법행위의 요건사실
Unofficial English translation
• the date on which the damage and the tortfeasor became known
• in cases of employer's liability
• the existence of the unlawful harmful act
• the fact that there is adequate causation between the harmful act and the occurrence of the damage
• the facts constituting the requirements of a tort, such as the employment relationship
Relation to precedent
Follows earlier decisions Stated in the decision
대법원 2008. 4. 24. 선고 2006다30440 판결
Unofficial English translation
Supreme Court Decision 2006Da30440 decided April 24, 2008
Decisions referred to
[1] 대법원 1989. 11. 14. 선고 88다카32500 판결(공1990, 31), 대법원 2008. 4. 24. 선고 2006다30440 판결(공2008상, 770)
Burden of proof
Not addressed Not in the decision
Open question and revisit condition
If the announcement of the investigation results and the time of prosecution are not the starting point, which date should be taken as the date on which the victim learned the elements of the facts: the pronouncement of the criminal first-instance judgment, or the pronouncement of the civil first-instance judgment that recognized employer's liability?
We will re-examine this reading if a subsequent decision clarifies a standard peculiar to losses from unfair trade practices in the capital market regarding the starting point of the short-term extinctive prescription under Article 766 (1) of the Civil Act.
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Lower-court contrast & scope of application
Lower-court reading vs. Supreme Court holding
Lower-court context: The court below held that the plaintiffs recognized, no later than the announcement of the investigation results by the Financial Services Commission and others and the media coverage on February 23, 2011, or at the latest around May 31, 2011, when the business suspension order became final, the existence of the unlawful market manipulation and the adequate causation (proximate cause) between that conduct and the occurrence of their loss, and that there was no impediment to the filing of the action. On that basis, it accepted the defendants' defense that the action received on January 26, 2016, more than three years later, was extinguished by prescription, and dismissed the claim.
Supreme Court standard: The Supreme Court found it difficult to conclude categorically that the plaintiffs, who were individual investors, knew everything that the financial authorities and the prosecution knew. It also cited the fact that the defendants strongly denied the allegations, and that the criminal first-instance conviction was not pronounced until January 25, 2016, and the civil first-instance judgment recognizing employer's liability not until around November 26, 2015. It further pointed out that a determination of unlawfulness requires specialized knowledge, and that defendant Deutsche Bank was excluded from the targets of sanctions and prosecution. On these grounds, it reversed the court below, holding that the plaintiffs cannot be deemed to have actually and specifically recognized the elements of the facts and the employment relationship around February 23, 2011 through August 19, 2011.
Distinguishing conditions
- A case in which the victim was a professional financial investment business operator, or was able to access information in the possession of the supervisory or investigative authorities
- A case in which the perpetrator admitted the allegations, or in which no specialized knowledge was needed to determine unlawfulness and causation, so that the elements of the facts became clear at the time of the announcement
- A case in which the employer itself was a target of sanctions or prosecution, so that the employment relationship and its connection with the execution of duties were revealed together in the announcement of the investigation results
Record verification notes
Before asserting the same conclusion, we check whether the victim, at the time of the announcement of the investigation results or the prosecution, knew that other victims had filed damages actions and was actually able to pursue a claim, and whether the employment relationship between the employer and the actor had already been disclosed in public materials.
From the official text
Points at issue
[1] 불법행위로 인한 손해배상청구권의 단기소멸시효 기산점인 민법 제766조 제1항에서 정한 ‘손해 및 가해자를 안 날’의 의미와 판단 방법 / 사용자책임의 경우 ‘피해자가 가해자를 안다’는 것의 의미 [2] 갑 외국은행의 직원인 을 등과 갑 은행이 국내에서 금융투자업을 수행하기 위하여 설립한 병 증권회사의 직원인 정의 시세조종행위로 피해를 본 무 등이 갑 은행과 병 회사를 상대로 사용자책임을 구한 사안에서, 무 등이 금융위원회 등의 조사결과 발표, 검찰의 기소, 언론보도 등이 이루어질 무렵에 위법한 가해행위의 존재, 가해행위와 손해의 발생 사이에 상당인과관계가 있다는 사실이나 사용관계 등 불법행위의 요건사실을 현실적·구체적으로 인식하였다고 볼 수 없는데도, 이와 달리 본 원심판결에는 불법행위로 인한 손해배상채권의 소멸시효 기산점에 관한 법리오해의 잘못이 있다고 한 사례
Unofficial English translation
[1] The meaning of and method for determining 'the date on which the damage and the tortfeasor became known' as provided in Article 766, paragraph (1) of the Civil Act, which is the commencement date of the short-term extinctive prescription for the right to claim damages arising from a tort / the meaning of the fact that 'the victim knows the tortfeasor' in cases of employer's liability [2] In a case where E and others, who suffered damage from the market manipulation of B and others, employees of foreign bank A, and D, an employee of securities company C, which bank A established to conduct financial investment business in Korea, sought to hold bank A and company C liable as employers, where it cannot be regarded that E and others actually and specifically recognized, at around the time when the results of the investigation by the Financial Services Commission, etc. were announced, prosecution was instituted by the prosecutors, and media reports were made, the existence of the unlawful harmful act, the fact that there is adequate causation between the harmful act and the occurrence of the damage, or the facts constituting the requirements of a tort, such as the employment relationship, yet the judgment of the court below, holding otherwise, is a case in which it misapprehended the legal principles concerning the commencement date of extinctive prescription for a claim for damages arising from a tort
Summary of the holding
The official text publishes no summary of the holding for this decision. The quotation and factors in this record are copied verbatim from the points at issue; the evidence for each axis is taken from the points at issue, the order and the reasons.
Order
원심판결을 파기하고, 사건을 서울고등법원에 환송한다.
Unofficial English translation
The judgment of the court below is reversed, and the case is remanded to the Seoul High Court.
Provisions referred to
[1] 민법 제756조, 제766조 제1항 [2] 민법 제756조, 제766조 제1항
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