The National Health Insurance Service (NHIS), which is responsible for managing the national health insurance, filed a healthcare cost recovery action against the leading tobacco companies in Korea to seek reimbursement of the healthcare costs for 3,465 individuals who were long-term smokers of the tobacco defendants’ cigarettes and who were diagnosed with certain types of cancers. NHIS sought to recover ₩53 billion, (approximately $US 50 million in 2014) in healthcare insurance costs on the basis that the tobacco companies’ unlawful conduct such as designing a defective product and misleading consumers about the health risks of cigarettes, among other torts, caused financial damage to NHIS.   

The Seoul Central District Court denied NHIS’ complaint in its entirety, which the agency appealed. On appeal, the Seoul High Court affirmed the lower court’s ruling and dismissed NHIS’ claim in its entirety, finding that NHIS’ expenditures arose from its obligations as an insurer under the National Health Insurance Act, rather than from the tobacco companies alleged unlawful conduct. The Court found that the evidence was insufficient to establish the liability of the tobacco companies under applicable product liability, consumer protection, and general tort law. Further, the Court held that epidemiological evidence alone was insufficient to establish causation and that individual proof of causation was required to satisfy the applicable legal standard.