'Waste of Tax Money Controversy' Yongin Light Rail Residents' Lawsuit Wins After 12 Years

[Financial News] A Supreme Court ruling has determined that the former mayor of Yongin and the Korea Transport Institute bear compensation responsibility regarding the Yongin Light Rail project, which was embroiled in a tax waste controversy. This conclusion comes 12 years after the lawsuit was filed in 2013.
However, the part concerning the individual responsibility of researchers from the Transport Institute has been sent back for reconsideration to determine if illegal acts are recognized.
The Supreme Court's 2nd Division (Chief Justice Eom Sang-pil) overturned the original ruling, which partially favored the plaintiffs in a residents' lawsuit against Yongin City, and sent the case back to the Seoul High Court.
The Yongin Light Rail was completed in June 2010, but due to disputes between Yongin City and the Canadian company Bombardier over the Minimum Revenue Guarantee (MRG), it only opened in April 2013, three years later.
Yongin City lost in international arbitration, paying over 850 billion won including interest, and also paid 29.5 billion won in operating and labor costs by 2016. However, the number of light rail users fell far short of the Transport Institute's predictions, and Yongin City continued to incur deficits.
In response, citizens filed a residents' lawsuit in October 2013 against former Yongin mayors Lee Jeong-mun, Seo Jeong-seok, Kim Hak-gyu, three former and current Yongin City officials, former city council members, and the Transport Institute responsible for demand forecasting, claiming damages of 1.023 trillion won.
Initially, the first and second trials recognized the responsibility for small compensation of some officials like former Mayor Kim, but dismissed the rest, stating they were not subject to a residents' lawsuit. The reason was that the residents' lawsuit could only be filed after a residents' audit request, and the matters were not included in the audit request.
However, in 2020, the Supreme Court ruled that the subject of a residents' lawsuit does not necessarily have to be identical to the matters requested for a residents' audit, and sent the case back for reconsideration.
The Seoul High Court, which handled the remand, ruled that former Mayor Lee and the Transport Institute must pay 21.46 billion won to Yongin City. It confirmed the damage amount as 429.3 billion won, which Yongin City paid to the project implementer from 2013 to 2022, and calculated the responsibility ratio as 5%.
The Supreme Court mostly upheld the lower court's judgment. It explained, "In line with the remand ruling's intent that residents of the local government can pursue accountability through a residents' lawsuit for actions causing significant budget losses to the local government, most of the appeals were dismissed."
However, the part recognizing the individual responsibility of the Transport Institute was sent back for reconsideration. The Supreme Court pointed out, "It is necessary to be cautious about directly holding individuals, who are merely assistants, accountable for illegal acts," and emphasized the need for individual and specific scrutiny to determine whether their actions were unlawful in relation to Yongin City and against societal norms."

jisseo@fnnews.com Seo Min-ji Reporter