Top Takeaways:

• South Korea’s NHIS again lost its ₩53.3 billion damages case against KT&G, Philip Morris Korea and BAT Korea.
• The Seoul High Court upheld the 2020 first-instance ruling, again rejecting NHIS’s causation and defect theories.
• NHIS said it would take the case to the Supreme Court.

South Korea’s National Health Insurance Service (NHIS) has again lost on appeal in its long-running damages lawsuit against KT&G, Philip Morris Korea, and BAT Korea, after a Seoul High Court panel upheld a lower-court ruling that rejected NHIS’s ₩53.3 billion (US$36 million) claim for smoking-related health costs.

According to Korean media reports of the ruling, the Seoul High Court said it was difficult to conclude that the first-instance decision — which dismissed NHIS’s claim — was unlawful.

NHIS filed the lawsuit in April 2014, seeking damages for medical treatment costs the insurer paid for 3,465 patients diagnosed with lung or laryngeal cancer who met long-term smoking criteria. The ₩53.3 billion figure was based on a single year of health insurance benefits paid between 2003 and 2012, according to the reports.

According to coverage of the case, the tobacco companies have argued that the decision to smoke rests with individuals and that manufacturers should not be held liable for NHIS’s costs.

A first-instance judgment issued in November 2020 dismissed NHIS’s claim. Court reporting said the lower court did not accept that NHIS could claim damages as a direct “victim” and did not recognize individual causation between smoking and cancer onset for the relevant patients. The lower court also found no defects in cigarette design or labeling and rejected allegations that the companies minimized or concealed addiction-related information, the reports said.

In its appeal, NHIS submitted additional evidence, including studies, expert opinions, and patient statements, but the appellate panel again found individual causation difficult to establish, even though epidemiological links between smoking and lung cancer are recognized. According to the decision, the court emphasized the need to consider variables such as pre-smoking health condition, disease status, and family history.

The appellate court also rejected claims that the cigarettes at issue had a design defect, the reports said.

Following the ruling, NHIS said it would seek review by South Korea’s Supreme Court, with NHIS head Jung Ki-seok saying the agency would prepare strategies for a final appeal, according to media reports.