Mercedes-Benz EV fire lawsuits snowball as courts upgrade cases to full panels

This image is unrelated to the article. [Provided by Mercedes-Benz]

The court handling damage claims filed by owners of Mercedes-Benz electric vehicles has upgraded the case from a single-judge panel to a three-judge collegiate panel, after the Korea Fair Trade Commission ruled that Mercedes had engaged in false advertising — prompting plaintiffs to raise their total claim amounts. More owners have since signaled plans to file additional suits, widening the legal battle.

Seoul Central District Court's Civil Division 904, presided over by Judge Kim Ji-hyang, transferred the case on June 30 — in which 24 EQE owners, including a plaintiff surnamed Park, are suing Mercedes-Benz's German parent company and Mercedes-Benz Korea — to the court's Civil Division 17, headed by Chief Judge Jang Ji-hye.

Park and the other plaintiffs filed an amended claim on June 4, raising their total demand from 200 million won ($129,000) to approximately 1.7 billion won. A separate suit filed in November 2024 by 27 plaintiffs, including one surnamed Jung, was also transferred on June 30 after presiding Judge Park Jeong-woo of Civil Division 921 reviewed a similar amendment application.

The litigation stems from a fire that broke out in August 2024 in the underground parking garage of an apartment complex in Cheongna, Incheon, involving a Mercedes-Benz EQE electric vehicle. The Incheon Metropolitan Police Agency, which investigated the incident, said it could confirm only the possibility that an external impact on the battery pack ignited the fire, and could not determine the exact cause.

The fire heightened consumer scrutiny of battery information in electric vehicles. Hyundai Motor Company, Kia and other major automakers subsequently disclosed the battery specifications of their EVs, and the Ministry of Land, Infrastructure and Transport moved to establish a system requiring mandatory disclosure of EV battery information.

The 24 plaintiffs — owners of Mercedes-manufactured vehicles — filed suit in October of that year, alleging that Mercedes had concealed the fact that most EQE models were fitted with batteries made by Chinese manufacturer Farasis Energy, while falsely representing that all its EVs used cells supplied by CATL, the world's top battery maker.

Hearings in the first damages suit were held in May, July and October last year, and again in March this year. Mercedes argued in the proceedings that it needed to be clearly established which of the defendants — the manufacturer, the importer or the dealers — was responsible for the allegedly false battery advertising.

Vehicles burned in an electric vehicle fire that broke out in the underground parking garage of an apartment complex in Cheongna International City, Incheon, on Aug. 1, 2024. [Yonhap]

The trajectory of the litigation shifted in March, when the Fair Trade Commission imposed a fine of 11.24 billion won on Mercedes-Benz's German parent and Mercedes-Benz Korea and referred both entities to prosecutors. The commission found that Mercedes had deceived consumers by concealing and omitting information about the battery cells installed in its vehicles.

The Fair Trade Commission said Mercedes "created vehicle sales guidelines stating that all its EVs were equipped with cells from CATL, the world's No. 1 battery cell manufacturer, and distributed those guidelines to dealers for use in sales — all while concealing and omitting the fact that Farasis battery cells were installed in a significant number of EQE and EQS electric vehicle models, thereby deceiving consumers."

Article 109 of the Monopoly Regulation and Fair Trade Act stipulates that a business operator or business association that causes harm through a violation of the law is liable for damages to the injured party. The commission said it expects the sanctions to help affected vehicle owners seek redress by filing damage claims in court based on its ruling.

Acting on the commission's finding, Park and the other 24 plaintiffs expanded their total claim from 200 million won to approximately 1.7 billion won and filed an amended application. Under Supreme Court rules governing civil jurisdiction, civil cases with a claim value exceeding 500 million won are heard at first instance by a collegiate panel.

The 27 plaintiffs in the second suit, including Jung, similarly expanded their total claim from 250 million won to approximately 2.4 billion won and filed an amended application; the presiding court issued a transfer order. That case is also expected to be reassigned to a collegiate panel shortly, meaning both suits will now be heard by three-judge panels.

Other Mercedes owners are expected to file an additional suit around mid-July in response to the commission's ruling, further broadening the legal front for the automaker. Ha Jong-sun, a senior attorney at law firm Naru representing the vehicle owners, said in a phone interview that "10 vehicle owners plan to file a third lawsuit around mid-July."

Because this marks the first time the Fair Trade Commission has sanctioned an automaker for deceiving consumers by concealing or omitting information about EV battery cell manufacturers, close attention is being paid to how the courts will rule in all three cases. Civil Division 17 of Seoul Central District Court, which received the first damages suit on transfer, is expected to schedule a hearing date soon.

Meanwhile, Mercedes is now under criminal investigation following the commission's referral to prosecutors. The commission referred both Mercedes-Benz's German parent and Mercedes-Benz Korea to the Supreme Prosecutors' Office on charges of violating the Fair Trade Act by improperly inducing competitors' customers to do business with them. The Supreme Prosecutors' Office assigned the case to the Fair Trade Investigation Division of the Seoul Central District Prosecutors' Office, headed by Chief Prosecutor Na Hee-seok. That division is currently reviewing the commission's records.

bell@heraldcorp.com