Growing virus-driven disputes

Government should step in to offer guidelines

With the coronavirus ravaging the country, Gyeonggi Province has intervened to mediate in disputes between customers and business operators, including travel agencies. The mediation is necessary, considering the huge costs arising from a lack of dispute-settlement standards and guidelines when social disasters such as the coronavirus outbreak occur.

In fact, a growing number of disputes have been reported as the spread of COVID-19 has caused meetings and reservations to be cancelled. The state-funded Korea Consumer Agency received 4,729 customer petitions related to the outbreak from Jan. 20 to March 5. Overseas travel topped the list of disputes with 2,069, followed by wedding ceremonies (649), flight tickets (632), dining-out (584) and hotel reservations (229). Most of the disputes were related to cancellation fees and prepaid deposits.

Customers claim that it is unfair for them to have to pay cancellation fees or lose their deposits at a time when there is no other choice but to cancel meetings and tours owing to the natural disaster-like incident. Companies, for their part, argue that customers should bear the brunt of contract cancellations, saying written contracts usually stipulate cancellation terms and refund policies.

Although finding solutions is not easy, the government should step in before it's too late. The consumer agency can intervene but has limitations in its authority to mediate disputes because it cannot compel compulsory mediation and its dispute-settlement findings are not legally binding.

The Korea Fair Trade Commission has recently presented an opinion to view the coronavirus outbreak as an "emergency situation tantamount to a natural disaster" and advised companies to settle disputes amicably. But this is not enough, given that the suggestion is intended to shift the responsibility from customers to companies.

The government should offer guidelines after referring to past cases. This is certainly a good time to clarify responsibilities for infectious disease-related disputes in several ways, including through corporate contractual terms and conditions.