Japan litigation guide
Mugi Sekido
Mori Hamada & Matsumoto
Tel: +81 3 6212 8330; Website: www.mhmjapan.com
Civil litigation in Japan is decided by professional judges in the absence of a jury. These professional judges have an extensive training system whereby senior judges share their skills and experiences with junior judges. Generally speaking, Japanese judges are diligent, honest and reliable, and they do not treat foreign individuals and companies unfavourably.
Compared with the US, Japanese civil procedure does not result in time intensive trials. Rather, proceedings are generally conducted at a series of periodic hearings, typically once a month. The judge(s) attends all of the hearings and organises the proceedings, and lawyers will often recognise tentative ideas of the judges from their conversation at hearings. In many cases they can predict final judgments with some real certainty, and this enables us to find an efficient strategy for the resolution of disputes.
Japanese civil procedure does not involve extensive discovery, like in the US, and this substantially reduces costs. Although its absence may raise concerns as to potential difficulties faced by plaintiffs in proving their cases, experience suggests that such proof is possible with evidence within plaintiffs’ hands – supported by inferences based on such evidence and undisputed facts. The continuous involvement of judges, which enables efficient case management, is essential for Japanese civil litigation to remain relatively cost-efficient.
Monetary awards in Japan tend to be less than in the US, partly because Japanese courts do not impose punitive damages – admitting only compensatory damages – and partly because Japanese civil procedure does not provide for a class action system. However, Japanese courts have recently begun to demonstrate a change in attitude, and monetary awards are increasing.
Enforceability of foreign judgments
Foreign judgments can be enforced in Japan. They are not limited to final judgments and include summary judgments. However, Japanese courts do not enforce foreign judgments from jurisdictions that do not have a reciprocal enforcement policy for Japanese judgments. An example would be the People’s Republic of China. In addition, in cases where foreign judgments award punitive damages, Japanese courts do not enforce that part of the awards corresponding to the punitive damages.
Arbitration
The revised Arbitration Act came into effect in 2004 and is based on the Model Law of UNCITRAL. In addition, Japan is a party to the New York Convention (the Convention on the Recognition and Enforcement of Foreign Arbitral Awards). Japanese courts are respectful to both foreign arbitration awards and arbitration proceedings.
The Japan Commercial Arbitration Association is the permanent commercial arbitral institution in Japan and provides extensive administrative support for arbitrations in Japan.
Mediation
Japanese courts provide mediation services, so it is not necessary to find a private mediator. Although there are filing fees that vary depending on the amounts in dispute, there is no hourly fee. In addition, there is no need to negotiate with the opposing parties because Japanese courts designate proper mediators.
Two or three mediators are designated to each case. In two mediator cases, one of them is an experienced lawyer and the other is a specialist – such as an architect or an engineer. In three mediator cases, a professional judge will be added to the panel. Each mediator contributes within his or her respective specialty to the promotion of a settlement.
Mediation dates are held periodically, typically once a month, like hearing dates at civil litigation. Each date will typically last around one hour. If a party is absent from a date without a fair reason, it may be ordered to pay a small fine by the court. Each party usually attends the mediation dates even when they may be reluctant to settle. A party can make use of court mediation in Japan to force the other party to participate in settlement discussion.
There are two types of courts that provide mediation in Japan. One is a district court, and the other is a summary court. Generally speaking, district court mediations have greater involvement of professional judges. Settlement discussions at district courts tend to be based on the application of laws. On the other hand, summary courts tend to promote settlements focusing on the interests of each party. District court mediations are relatively close to civil litigation, while summary court mediations tend to be closer to the concept and character of business negotiation.
District court mediations are only possible when both parties consent to the mediation, or when the contractual relationship designates the district court as a place of dispute resolution. Summary court mediations are possible without such mutual consent or contract obligation. The success rate of mediation in Japan is substantial.