Court rules against state health insurer in damages suit against big tobacco companies

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A Seoul court handed down a ruling Friday against the state health insurer in its smoking-related damages suit with three major tobacco companies, citing no direct "legal" links between its increased financial burden and their businesses.

The Seoul Central District Court rejected the compensation request filed by the National Health Insurance Service (NHIS) against KTG Corp., a leading South Korean cigarette producer with about a 63 percent market share, and the local units of two foreign companies -- British American Tobacco and Philip Morris.

The court said the agency's insurance spending represents the use of funds under a relevant law and is not attributable to any illicit acts by the defendants.

It added that it's hard to acknowledge direct connections between the insurer's expenditures and the tobacco firms' businesses.

The court also said the possibility can't be ruled out that diseases are caused by such other factors as individual lifestyle, genetic and job-related characteristics, rather than smoking.

The ruling came more than six years after the NHIS sued the three cigarette producers in April 2014, seeking compensation of 53.7 billion won (US$48 million).

Calling the decision "very shocking and regrettable," Kim Yong-ik, president of the NHIS, said the agency was considering whether to appeal.

"We've been trying to have a legal acknowledgement of apparent damages of smoking but were only reminded that it is not an easy journey," he said, adding that the agency will continue its efforts to publicize the harmful effects of smoking.

South Korea has not seen a successful legal case against tobacco companies. Less than a week before the NHIS filed the lawsuit, the Supreme Court threw out two damages suits brought on by 30 lung cancer patients and their families against the government and KTG Corp. (Yonhap)