The continual outbreak of fires has fired up controversy among the owners of BMW vehicles. Due to the continual reports of cars catching on fire, the Representative Director and Chairman of BMW Korea Kim Hyo-joon released an official statement of apology for “causing inconvenience due to a series of fires.” Kim continues, “Our deepest regrets go out for drivers who have experienced accidents.” The company set up a research team to inquire into the cause of such accidents and concluded that the Exhaust Gas Recirculation (EGR) valve has provoked the engine fires.

 

 

With a closer inspection of the impaired vehicles, the BMW owners came to the conclusion that some damaged cars were not part of the list that the company had initially announced were qualified for a recall service. Moreover, diverse claims have pointed out that the cause of fire comes not only from the malfunctioning of hardware such as the EGR but also from its software. Due to such a divergence of opinions, the owners of the problematic vehicles have decided to send an official letter to German Chancellor Angela Merkel and the United States (U.S.) President Donald Trump to demand an investigation by the German and U.S. authorities.

 

Furthermore, a noticeable part of the BMW affair is that it has reignited the need to reassess regulations regarding the punitive damages system. The punitive damages system is defined as a process of giving financial aid to the victims in amounts that are more than the expected damage if the producers are found to have intentionally committed an illegal act. The Ministry of Land, Infrastructure and Transport (MOLIT) mentioned that they will add the Punitive Damages Act to the Automobile Management Act along with the Fair-Trade Commission this month. Moreover, Prime Minister Lee Nak-yeon expressed the importance of taking further action for the incident, which is considered to be included in the punitive damages system.

 

 

 

Since doubts have been raised that BMW is attempting to conceal and downplay the severity of the defects, both the government and the victims are trying to increase the intensity of the investigation. As a stronger penalty for the company, the ministry came up with the Korean version of the lemon law in July. A lemon law is a consumer protection law that requires the manufacturer to exchange, refund or compensate the consumer if the vehicles or electronic products were to become defective. Nevertheless, critics are requiring stronger measures such as the punitive damages system.

 

Since victims of the fires believe that the BMW company is holding their design deficiency back from them, they hold on to the belief that the punitive damages system could be applied in this case. Professor Ko Se-il from Chungnam National University (CNU) School of Law mentioned, “Just like the case of Volkswagen’s Dieselgate, if BMW had already known about the car problem and it was trying to hide it on purpose, the case would most likely meet the punitive damages requirement.”

 

One of the biggest dilemmas with applying the punitive damages system to the incident at hand is that no one has been physically harmed by the engine fires yet. Under the current law, in order for victims to be subject to the punitive damages system, they should suffer from physical harm. Whether it is misfortune or luck, no victims have been reported physically injured by the fires so far. This means that burnt BMWs are not compensated by the punitive damages system because the fires have triggered only property losses.

 

 

Although the BMW fire accidents are not covered by the punitive damages system for now, many demand the expansion in the spectrum of incidents which the system covers. People’s Solidarity for Participatory Democracy (PSPD) pointed out BMW’s malicious actions – recalling the vehicles not by themselves, but by the government’s action. The company did not even cooperate with the government’s request for technical data and made an insufficient recall report. PSPD believes the rights and interests of consumers are being infringed due to the slow and improper response given by the company, which could partly be explained by the lack of the punitive damages system in the nation.

 

 Government officials are also with the movement of introducing the new system. Prime Minister of MOLIT, Kim Hyeon-mi stated that the government will actively push for the introduction of punitive damages by consulting with the relevant agencies in order to strengthen the system. Furthermore, Shin Chang-hyeon from the ruling Democratic Party proposed a new bill that includes property damages as a qualification for the application of the punitive damages system.

 

Negative voices for the introduction of the punitive damages system certainly do exist. Professor Ko expressed concerns that even though companies pay punitive damages on the issue, it is highly likely that the financial burden will eventually pass on to the rest of the consumers. Furthermore, according to the National Assembly’s Legislation and Judiciary Committee, the new policy could violate the principle of double punishment of the Constitution. Law violations that are dealt with by the punitive damages system will also be subject to criminal punishment, resulting in double sanctions on one illegal act. Moreover, some people believe there will be a higher possibility of excessive litigation due to the expectations for windfall profits.

 

Nevertheless, the unresolved BMW crisis demonstrates the need of a stronger policy that keeps big companies from potentially inducing harm upon consumers. It goes against justice to burden the consumers with the responsibility to prove the defects of the vehicles. “Laws are one of the necessary elements of society. However, we must strengthen morality and ethics, rather than focusing exclusively on laws. I believe that making sure that there are no problems with businesses in the first place seems to be a desirable situation,” said Professor Ko.