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 Court determined that NHIS could not recover costs because the disbursement of the insurance coverage (the damage suffered by NHIS) did not arise because of the tobacco defendant’s unlawful acts, but rather because of the “insurance relationship of becoming insured by the national health insurance.” In other words, the statutory obligation placed on NHIS under the National Health Insurance Act to pay for treating the smoking-related illnesses of insured patients was the proximate cause for the disbursement of insurance benefit costs and not the tobacco defendants’ conduct.

Further, the Court concluded that NHIS did not provide adequate evidence that the tobacco defendants’ unlawful acts caused the individuals’ diseases and rejected the assertion that epidemiologic evidence alone can prove causation of disease in individuals. Given this, the Court could not conclude that a causal relationship was present between the expended insurance expenses of NHIS and the tobacco defendants’ conduct.

All of NHIS’ claims were dismissed.