Background
A company without space to store its own products entrusts them to a specialist logistics warehouse. But if insects (pests) are found in the goods and they lose their commercial value, who bears that loss? Our client, a company, suffered a substantial loss when pests entered or developed in goods entrusted to a logistics warehouse operator, and Changchun represented the client in a damages claim against the warehouse operators.
The Obstacle — How Do You Prove It Was "the Warehouse's Fault"?
The greatest obstacle in disputes of this kind is proof. Warehouse operators routinely argue that "the problem existed when the goods arrived" or that "it has nothing to do with storage." Pests, moreover, disappear or change state over time, making it very difficult to establish the cause and the locus of responsibility once time has passed. The key was ① to establish scientifically the species of pest and how it arose or entered the goods, and ② to fix in evidence that this stemmed from the warehouse operator's fault in storage.
How Changchun Helped — Fixing the Facts Through Preservation of Evidence and Expert Appraisal
Ahead of the main action, Changchun (attorneys Jaesun Yoon and Donghwan Shin) used evidence preservation proceedings to secure the evidence that would otherwise vanish.
Application to preserve evidence: through the court's appraisal procedure, we fixed the pests and the state of storage exactly as they were, before they could deteriorate or change with time.
Marshalling the leading expert institutions: to establish objectively the species of pest, its cause and how it entered the goods, we proposed the leading institutions in each field as candidate appraisers — the national agriculture and plant pest research institutes, internationally accredited testing and inspection bodies, and specialist pest control firms — giving the case a scientific foundation. Rather than a vague assertion that "there were insects," we proved with data which pest arose, why, and at what stage.
The law of warehouse operators' liability: a warehouse operator holding goods (a bailee) has a duty to keep them with the care of a good manager, and where goods are lost or damaged in storage the operator is liable in damages unless it proves that it was not negligent (Commercial Act art. 160; Civil Act art. 374). Changchun tied the appraisal results precisely to that principle to establish liability.
Precise calculation of loss: we framed the claim item by item, covering the value of the damaged goods, disposal costs and more.
Outcome
The first instance court accepted a substantial part of Changchun's case and ordered the warehouse operators to pay approximately KRW 230 million in damages. Changchun has not stopped there, and has appealed to recover the remaining loss not allowed at first instance.
In disputes over damage to stored goods, who fixes the evidence first, and how, effectively decides the case. Changchun made active use of evidence preservation and expert appraisal to turn vague suspicion into scientific proof. As losses from spoilage and damage to goods entrusted to logistics warehouses become more common, an early strategy for securing evidence is decisive. (Outcomes may differ depending on the facts of each matter.)