[Contribution] Why the Coupang leak and the introduction of punitive damages cannot be postponed any longer

-Son Gye-jun, attorney at Daeryun Law Firm (Limited)

Damage amount to approximately 33 million. In fact, it is no exaggeration to say that the personal information of the majority of Korea's economically active population was leaked. The recent large-scale personal information leak at Coupang caused a huge shock to our society. What's even more shocking is that Coupang was completely unaware of the leak until five months had passed.

This incident is not an accidental accident due to technical limitations. This is the result of our companies completely ignoring the lessons they should have learned from the SKT personal information leak that occurred just a few months ago, and it is a predicted human disaster caused by complacency and thinking, “No way.” It is perhaps natural that the government and relevant authorities discussed strengthening fines and making a punitive damages system a reality using this incident as an opportunity.

Why do tragedies like this repeat? The fundamental cause is that companies do not recognize investments related to personal information security as an ‘essential requirement.’ Under the current domestic legal system, even if an information leak occurs, the fines or damages that a company must pay do not reach the level that would cause a fatal blow to the company's management. To put it bluntly, the incorrect calculation that it is economically more profitable to hire a law firm to defend and pay fines after an accident is widespread in business circles than to incur the astronomical cost of building a security system.

In order to eliminate this moral hazard, it is necessary to introduce a punitive damages system. This is also a key issue that Daeryun Law Firm emphasized while proceeding with the SKT lawsuit. Unless this system is established, which has the effect of both punishing and preventing recurrence by holding companies that have committed malicious or gross negligence responsible for a large amount of compensation beyond the actual cost of compensation for damages, a second SKT and a third Coupang incident will occur again at any time.

The need to introduce punitive damages becomes clearer when looking at the progress of the SKT class action lawsuit currently underway in Daeryun. Currently, SKT is avoiding mediation due to 'financial burden' and is showing an attitude of prolonging the matter. If a strong punitive damages system had already been introduced in Korea, would it have been possible to implement a delay strategy? If the compensation amount had snowballed as the lawsuit dragged on, they would have quickly sought relief for the damage a long time ago.

However, we cannot just wait until the system is reorganized. Even at this moment, leaked personal information can be misused for crimes, and victims' anxiety is growing. Daeryun represents the victims in the ongoing SKT-related lawsuit as well as the Coupang incident and will not back down until the end. In particular, Daeryun officially requested SJKP, a local corporation recently established in New York, to review the possibility of filing a class action lawsuit against Coupang's headquarters in the United States. Coupang's parent company is Coupang Inc, which is listed on the New York Stock Exchange. The United States is a country with a strong punitive damages system, and if this situation can be handled in a U.S. court, an astronomical amount of compensation liability that cannot be compared to that in Korea could be recognized.

The court should not sit back and forth in future Coupang-related disputes along with the SKT lawsuit, but should make a quick and strict ruling. Investigative agencies must also uncover the circumstances surrounding the leak and the suspicion of concealment through a thorough investigation without any suspicion. Daeryun will fight until the end together with the people who suffered damage at the front of the road. That is the calling we must fulfill as lawyers and as a national law firm.

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[Contribution] The Coupang leak and the introduction of punitive damages, why it can no longer be postponed (Shortcut)