Background
A luxury retail (multi-brand store) company sued its former employees (our clients), claiming more than KRW 600 million in damages on allegations that during their employment they ▲ caused loss by breaching the company's purchasing standards (occupational breach of trust), ▲ diverted products and gift certificates the company had entrusted to their custody (occupational embezzlement), and ▲ thereby drove the company out of business (the claim was expanded on appeal). Changchun represented the former employees (the defendants).
The Issue — Is the Basis of the Claim Actually "Proven"?
The company's claim ran along several tracks: ① breach of trust through "violation of purchasing standards," ② embezzlement of products based on the company's electronic inventory records, ③ embezzlement of gift certificates, and ④ loss from closing the business. The key was whether each claim was supported by objective evidence — above all, the probative value of the internal standards and electronic records the company relied on.
How Changchun Helped — Dismantling the Claim Item by Item
Changchun (attorneys Donghwan Shin and Jonghwa Kim) took the KRW 600 million claim apart with precision, item by item.
① Cutting off the premise of "breach of trust" (about KRW 130 million): we showed that the company's "purchasing standards" document could not be treated as a concrete directive binding on employees, breaking the premise that "violating the standards = breach of trust."
② Impeaching the reliability of the electronic records (about KRW 210 million): we proved that the electronic inventory records the company relied on as the basis of embezzlement could not be regarded as objective material guaranteeing accurate entry and protection against subsequent alteration, and most of the embezzlement claims built on them were rejected.
③ Cutting off the business-closure loss (KRW 300 million): we had this dismissed in full on the ground that neither causation nor loss between the employees' conduct and the closure had been proven.
④ Confining the gift certificate and other embezzlement claims: allegations concerning gift certificates received as promotional gifts and other products were not accepted, for want of evidence and because custodial status was not established.
⑤ Extinguishing the balance by deposit for repayment: as to the very small amount partially recognized in the criminal proceedings, we extinguished the obligation by deposit for repayment, carrying the point on the principle that a deposit remains valid under the doctrine of good faith even where it falls very slightly short of the total obligation (Supreme Court, May 10, 2002, 2002Da12871, among others).
Outcome
As a result, of a claim exceeding KRW 600 million only about KRW 500,000 was allowed, with the remainder dismissed in full, and the company (the plaintiff) was ordered to bear the total costs of the litigation — in substance a complete win for our clients.
Even a large claim for damages founded on breach of trust and embezzlement can be largely dismantled by contesting, item by item and with precision, the binding force of internal standards, the objectivity of electronic records, causation and proof of loss. This case is about pressing to the end on the gaps in proof rather than being impressed by the size of the sum claimed. (Outcomes may differ depending on the facts of each matter.)