Appeals court ordered to retry case after Supreme Court scraps 10 million won damages award

'Difficult to conclude remarks were malicious or grossly reckless,' court says

Supreme Court finds grounds to recognize justification defense against defamation claim

Democratic Party of Korea lawmaker Kim Nam-kuk (left) and Jang Ye-chan, former youth supreme council member of the People Power Party. [Yonhap]
Democratic Party of Korea lawmaker Kim Nam-kuk (left) and Jang Ye-chan, former youth supreme council member of the People Power Party. [Yonhap]

By Yang Geun-hyuk, The Herald Business

A damages lawsuit filed by Democratic Party of Korea lawmaker Kim Nam-kuk against Jang Ye-chan, the former People Power Party youth supreme council member who raised allegations of illegal virtual asset trading against him, will be retried at the appellate level.

The Supreme Court on Thursday overturned a lower court ruling that had ordered Jang to pay Kim 10 million won ($6,500) in damages and sent the case back to the Seoul Southern District Court for a new second-instance hearing. The court found that Jang's statements and posts amounted to political commentary aimed at scrutinizing a senior public official, making it difficult to establish the unlawfulness required for a defamation claim. The First Division of the Supreme Court, presided over by Justice Seo Gyeong-hwan, issued the ruling Thursday.

The court said Jang's posts and remarks could be viewed as political assertions by a politician raising questions about a public official's wealth accumulation — a matter of public interest. "It is difficult to conclude that the defendant's posts and statements in this case constitute malicious or grossly reckless attacks that have markedly lost their reasonableness," the court said, adding that grounds to recognize a justification defense against the defamation claim therefore exist. The court noted that Kim, as a member of the 21st National Assembly, qualifies as a senior public official and a public figure.

The court also said that even where some categorical language was used, "most people encountering such statements would dismiss them as political posturing and would not be expected to accept the claims as objective truth."

In May 2023, Jang posted on social media that Kim's "coin addiction appears to require treatment" and called on Lee Jae Myung, then the party leader, to "take political responsibility for having such a person as a close aide and for involvement in coin price manipulation."

In a radio current affairs program, Jang also said of Kim: "I'm not sure how long we have to keep paying this criminal's salary," and added that industry insiders had said Kim "would likely have known insider information about listings" and that his transactions showed "patterns suggesting possible money laundering."

Kim filed a civil lawsuit against Jang in September of that year, alleging that Jang had spread false information and damaged his reputation. Kim sought 50 million won in damages.

The first-instance court partially upheld the defamation claim and ordered Jang to pay 30 million won in damages, finding that his conduct "exceeded the limits of free expression permissible in legitimate political activity and constituted an illegal act that was malicious or grossly reckless and had markedly lost its reasonableness."

The second-instance court reduced the award to 10 million won. It found that Jang's social media post and radio remarks "constituted an unlawful act that infringed on the social evaluation of the plaintiff's personal worth," and that Kim's resulting mental distress was "self-evident under common experience," making Jang liable for damages.

However, the appellate court also noted that Jang had followed the remarks in question by calling on Kim to actively address the various allegations against him — a factor the court said could soften the factual character of the defamatory expressions, including the words "criminal," "use of insider information," and "money laundering." The court added that the statements could be viewed as serving the public interest by providing voters with material to assess a public official's fitness for office.

A Supreme Court official said the ruling reaffirmed existing legal doctrine holding that defamation cannot easily be established in cases involving political assertions by a party or criticism and oversight of a public official's ethics, integrity, or conduct in office — "unless the expression is evaluated as a malicious or grossly reckless attack that has markedly lost its reasonableness."


yg@heraldcorp.com