Japan: The International Comparative Legal Guide To: Product Liability 2016

1 Liability Systems

1.1 What systems of product liability are available (i.e. liability in respect of damage to persons or property resulting from the supply of products found to be defective or faulty)? Is liability fault based, or strict, or both? Does contractual liability play any role? Can liability be imposed for breach of statutory obligations e.g. consumer fraud statutes?

Multiple causes of action are available to individuals or legal entities ("Claimant(s)") harmed by a "defective" product. First, Claimants can seek recourse under the Product Liability Law (Law No. 85 of 1994, the "JPLL"). Additionally, prior to the enactment of the JPLL and still today, Claimants can sue in tort under the Civil Code of Japan (the "CCJ"). Further still, under certain circumstances, claims may be brought under breach of contract theories.

Under the JPLL, a "Manufacturer" (defined below in question 1.3) is liable for personal injury or property damage to a Claimant caused by a "Defect" existing in a product at the time it is produced domestically or imported by the Manufacturer (JPLL § 3). All "movable property manufactured or processed" (JPLL § 2(1)) is subject to the JPLL, while non-movables, such as real estate, energy or unprocessed and unharvested agricultural products, are excluded.

Under the JPLL, it is commonly understood that a "Defect" in a product is the absence of a degree of safety that a product ordinarily should possess, taking into consideration: (i) the characteristics and nature of the product; (ii) the ordinarily foreseeable uses of the product; (iii) the state of knowledge and technology at the time of manufacture and/or delivery; and (iv) any other relevant circumstances relating to the product. There are three broad types of Defects. First, failure to properly manufacture a product gives rise to a manufacturing Defect. Second, the design of the product fails to sufficiently consider safety risks relating to use, handling or storage of the product resulting in a design Defect. Third, failure to properly warn consumers of dangers not readily-apparent associated with use of the product or the failure to properly instruct the consumer on how to use, handle or store the product to avoid such dangers. A failure to warn gives rise to a warning Defect. Ultimately, whether a product has a Defect and is "Defective" is determined through a fact-specific inquiry which takes into account the handling, use and storage of the product by the Claimant.

The Manufacturer is strictly liable if found to have sold a Defective product, but the amount of damages ordered to be paid may be reduced if the court finds the Claimant's own negligence or misuse contributed to the damage suffered. Like similar statutes in other existed under tort claims for damages against manufacturers and importers of Defective products. Under the JPLL, a Claimant must only show that the product was Defective and that the Defect was the cause of the injuries suffered. The Claimant need not show that the manufacturer or importer owed and breached a duty of care to the Claimant.

Separately, under the CCJ, Claimants may assert a breach of contract or tort claim. For the former, where the Claimant and the seller of the defective product have a direct contractual relationship, breach of contract claims or implied statutory warranties may be brought for "Liability for Incomplete Performance of Obligations" (CCJ Article 415) and "Warranty against Latent Defects" (CCJ Article 570). Nevertheless, in typical consumer transactions, the consumer and manufacturer do not have a direct contractual relationship so breach of contract or warranty causes of action are not available by a consumer against a manufacturer. Conversely, in e-commerce transactions common today, because a consumer may have a direct contractual relationship with the importer and seller of a product, it may be possible to bring a breach of contract claim.

Similarly, the Consumer Contract Law (Law No. 61 of 2000 as amended, the "CCL") provides consumers protection in their dealings with merchants. However, the CCL does not provide a separate cause of action for defective products. Instead, the CCL limits a merchant's ability to disclaim warranties relating to a product and to restrict remedies available to the consumer.

Where a claim has failed under the JPLL and no contractual relationship exists, a Claimant may bring a tort claim. Tort claims in Japan are similar to tort actions in other jurisdictions. Under CCJ Article 709, a Claimant may bring a tort claim for violation of or infringement upon the Claimant's "legally protected interest" or "right". CCJ Article 709 provides that "[a] person who intentionally or negligently violates another's rights must make compensation for damage arising therefrom". Nonetheless, because the burden of proof for Claimants in tort to prove causation and damages based on alleged product defects is high, the chance for success in this context is low. Accordingly, Claimant's generally turn to Article 709 as a last resort.

1.2 Does the state operate any schemes of compensation for particular products?

The government of Japan operates special compensation schemes for products deemed to have specific risks and for pharmaceuticals. First, the Consumer Products Safety Law (Law No. 31 of 1973 as amended, the "CPSL") established the Consumer Product Safety Association (Seihin Anzen Kyoukai) (the "CPSA"). As part of the "SG-Mark" (safety goods mark) programme covering certain product-classes, the CPSA administers a consumer compensation scheme for persons injured by products carrying the SG-Mark. Only products that conform to safety specifications and requirements set by the CPSA may carry the SG-Mark. The CSPA funds the compensation programme in part through the sale of SG-Mark stickers to manufacturers and importers, to be attached to products meeting the SG-Mark standards. The programme provides a means by which a consumer may seek compensation in the event of an injury, but does not absolve a company of liability even if its product satisfies the SG-Mark standards. Compliance with the SG-Mark standards is voluntary, but commercial pressure all but compels adherence for many products. Claims must be brought within a prescribed period after purchase of the product, and depending on the severity of the injury, compensation from the CSPA can range up to 100 million yen. The CPSA bases compensation on numerous factors, and any contributory negligence on the part of the Claimant may act as a full or partial bar from compensation.

The Preventive Inoculation Law (Law No. 68 of 1948 as amended) compensates victims of injuries caused by inoculations. The Japanese government, without contribution by the private sector, provides all funding for this scheme. Meanwhile, a separate scheme provides compensation to individuals or their families in the event of illness, disability or death caused by side effects of pharmaceuticals. This scheme is administered by the Pharmaceuticals and Medical Devices Agency (the "MD Agency"), which was established under the Pharmaceuticals and Medical Devices Agency Law (Law No. 192 of 2002 as amended). Under the scheme, pharmaceutical companies pay one of two contribution types to the MD Agency. First, all companies that manufacture, import or market drugs make a general annual contribution based on sales revenue for the previous year. Second, companies involved in the manufacture, import or marketing of certain drugs, which actually caused injury and for which the victim received compensation from the fund during the previous year, must make a specific contribution.

1.3 Who bears responsibility for the fault/defect? The manufacturer, the importer, the distributor, the "retail" supplier or all of these?

First, any natural or legal person classified as a manufacturer can be liable under the JPLL. "Manufacturer" includes: (i) all persons who manufacture, process, or import the product as a business; (ii) all persons holding themselves out as a manufacturer of a product through labelling with a name, trade name, trademark or other feature on the product, and all persons who place their names, etc. on the product in a manner mistakable for the manufacturer's name; and (iii) all persons who affix their name to a product and who may be recognised as a manufacturer-in-fact, considering any relevant circumstances, such as how the product was manufactured, processed, imported or sold.

Moreover, liability may flow through the manufacturer and to subcontractors, suppliers of parts and providers of raw material who may, together with the manufacturer, be jointly and severally liable. However, subcontractors, parts suppliers and raw material suppliers may have available to them certain defences, discussed in question 3.1 below. In tort, under the CCJ, each manufacturer, subcontractor, raw material provider and part supplier may be liable. In contract, liability to the injured consumer will only be found where the party in privity of contract breaches a contractual duty.

1.4 In what circumstances is there an obligation to recall products, and in what way may a claim for failure to recall be brought?

The JPLL does not impose upon the manufacturer any recall or repair obligation even if a product is found to be defective in a product liability lawsuit. However, the CSPL grants government agencies the power to order product recalls or other remedial actions, in addition to powers to set standards applicable to specific product types and classes, to investigate complaints concerning products, and to compel the disclosure of information relating to allegedly unsafe products by manufacturers and importers. The Ministry of Economy, Trade and Industry ("METI") has concurrent regulatory oversight on the majority of consumer products together with the Consumer Affairs Agency.

The CPSL classifies product accidents as either a "product accident" or a "serious product accident". For a "product accident", the company has discretion to determine whether and what on-going remedial steps to prevent future accidents are warranted. In the event of an accident, companies are strongly encouraged to take remedial measures appropriate to prevent the spread and future occurrence of an accident and to voluntarily notify the National Institute of Technology and Evaluation within 10 days after the accident. Generally stated, where an accident causes injury to a person, property or the product, the incident is deemed to be a product accident unless it is clear that the cause is not a defect. Specifically, any accident which could have been caused by using a product is a "product accident" even if the: (1) product accident has not caused death or physical harm to a consumer; or (2) product accident has not resulted in damage to or destruction of a consumer product or potentially causes life-threatening or bodily injury to a consumer.

A "serious product accident" is a "product accident" in which the injury that occurs or may occur is serious, and the nature of the accident, among those enumerated by regulation, causes: (1) fatalities; (2) permanent disfiguration or injuries that do not heal within 30 days; (3) fires; and (4) carbon monoxide poisoning. For a "serious product accident", under the CPSL, a company must take some form of remedial measures to stop such accidents from reoccurring. Such remedial measures might include investigating the nature and cause of the accident, reporting the accident to a government ministry, commencing a recall, repairing the product or making a public announcement to warn consumers.

Under the CPSL, companies must gather information regarding accidents involving their products, and retailers must report incidents of which they become aware during the chain of distribution. Additional obligations apply with respect to products where deterioration over time can lead to additional risks (such as kerosene heaters). For such product, manufacturers/importers must keep a database of the owners of such products, notify consumers that they may request the manufacturer/importer to inspect such product, and carry out such inspection when requested by a product owner. Furthermore, if applicable, manufacturers/importers must apply warning labels to products indicating that accidents can occur as such product wears out from prolonged use.

The manufacturer/importer must notify the Consumer Affairs Agency (the "CAA") within 10 days from recognition of the occurrence of a "serious product accident", using a form available on the CAA website. The CSPL grants the applicable ministry authority to order the remedial measures it deems necessary if it concludes that, in light of the foreseeable or potential dangers of the product, remedial measures taken by the company are lacking. Such measures include compelling the company to undertake a total or partial recall of the product, to offer repair/replacement services, or undertake a national media campaign warning of the dangers of the product. After consulting with the appropriate ministry (usually METI or the National Institute of Technology and Evaluation), the CAA may publicly announce the serious product accident. The CAA may order a company to improve its information gathering process and the applicable ministry may order a recall or some other remedial measure.

A violation of the CPSL or a ministry order can lead to criminal fines and criminal prosecution of the company and its directors, officers and employees, in addition to general civil liability for the failure to recall, repair/replace or warn consumers of a potentially dangerous product.

1.5 Do criminal sanctions apply to the supply of defective products?

Generally, Claimants under the JPLL, CCJ and CCL rely only on a civil cause of action and manufacturers et al are not subject to criminal liability. Nonetheless, if criminally negligent in the manner in which they designed, manufactured or supplied a defective product, a company's employees and/or directors could face criminal penalties. Moreover, a violation of the CPSL can lead to criminal sanctions (see question 1.4).

2 Causation

2.1 Who has the burden of proving fault/defect and damage?

Under the JPLL, a Claimant must prove that the product is defective and that such defect caused the Claimant's injuries.

Under CCJ Article 709, the Claimant must again prove that the injury was caused by a defect in the product, and must also show that the manufacturer negligently or intentionally breached a duty owed to the Claimant which caused damage to the Claimant. Under contract law, the Claimant must prove that the manufacturer breached the contract through the supply of a product that failed an express or implied warranty of the product, and such breach caused the Claimant's injuries.

2.2 What test is applied for proof of causation? Is it enough for the claimant to show that the defendant wrongly exposed the claimant to an increased risk of a type of injury known to be associated with the product, even if it cannot be proved by the claimant that the injury would not have arisen without such exposure? Is it necessary to prove that the product to which the claimant was exposed has actually malfunctioned and caused injury, or is it sufficient that all the products or the batch to which the claimant was exposed carry an increased, but unpredictable, risk of malfunction?

The JPLL does not contain a specific test for causation. Instead, a court will employ the CCJ's standard test for causation: would the injury not have been suffered but-for the Defect? A manufacturer is not liable for damages for only having wrongly exposed a Claimant to an increased risk of injury known to be associated with the product. The Claimant must prove actual physical or mental injury. However, courts have held that it is sufficient to show a high probability of causation even if the causation has not been scientifically proven. Where all products in a batch are generally recognised to cause injury, burden of proof shifts to the manufacturer to show that some other factor was the cause of the Claimant's injury.

2.3 What is the legal position if it cannot be established which of several possible producers manufactured the defective product? Does any form of market-share liability apply?

Japan does not use market-share liability. Suits under the JPLL, CCJ or CCL must designate a specific manufacturer responsible for the defective product.

2.4 Does a failure to warn give rise to liability and, if so, in what circumstances? What information, advice and warnings are taken into account: only information provided directly to the injured party, or also information supplied to an intermediary in the chain of supply between the manufacturer and consumer? Does it make any difference to the answer if the product can only be obtained through the intermediary who owes a separate obligation to assess the suitability of the product for the particular consumer, e.g. a surgeon using a temporary or permanent medical device, a doctor prescribing a medicine or a pharmacist recommending a medicine? Is there any principle of "learned intermediary" under your law pursuant to which the supply of information to the learned intermediary discharges the duty owed by the manufacturer to the ultimate consumer to make available appropriate product information?

The JPLL does not specifically provide for product defect types, but courts have recognised that failing to provide adequate instructions or warnings can be classed as one of the three types of defects. Such a defect can arise when the manufacturer fails to provide reasonable instructions or warnings that could reduce or avoid the foreseeable risks of harm posed by the product. Notwithstanding the absence of a recognised "learned intermediary" defence in Japanese statutory law, the Supreme Court recently held that an anti-cancer drug did not have a warning defect with respect to its possible side effects. The Supreme Court provided that the user of the drug could have been aware of its potential side effects as warnings were printed on the packaging, and the users of the drug were doctors engaged in cancer treatment.

Nor does the CCJ impose an obligation on manufacturers to warn of a product found to be defective. Thus, failure to warn does give rise to direct tort liability. Nonetheless, in a product liability case, when the court determines that a manufacturer is liable to the Claimant, the court can consider failure to warn as a substantial factor against the manufacturer.

3 Defences and Estoppel

3.1 What defences, if any, are available?

After a Claimant makes an initial claim that a product is defective and that it caused injury or property damage under the JPLL, the manufacturer may shift part or all of the liability to another party, or even avoid liability altogether, by asserting one or more of the following defences:

• the claim is barred by the statute of limitations (three or tenyear, see question 5.2);
• there was no defect when the manufacturer delivered the product;
• the Claimant's unforeseeable misuse in handling, use or storage of the product means the product is not defective under the circumstances;
• presence of the defect could not have been known in light of the scientific or technical knowledge at the time when the manufacturer delivered the product;
• in an instance of failure to warn of the defect, the Claimant is knowledgeable and experienced in the use of the product;
• defective components or raw materials supplied by a subcontractor caused the defect; or
• for a subcontractor, the subcontractor was not negligent with respect to the occurrence of the defect and the components or raw materials allegedly causing the defect met specifications and instructions given by the final manufacturer.

Separately, any contributory negligence or assumption of the risk by the Claimant may be a complete or partial defence under CCJ Article 722.

For breach of contract claims, customary defences to breach are available. See also question 3.6.

3.2 Is there a state of the art/development risk defence? Is there a defence if the fault/defect in the product was not discoverable given the state of scientific and technical knowledge at the time of supply? If there is such a defence, is it for the claimant to prove that the fault/defect was discoverable or is it for the manufacturer to prove that it was not?

Under the JPLL, a manufacturer may avail itself of a "state of scientific or technical knowledge" defence. The manufacturer will be found not to be liable if the manufacturer can show that in light of the scientific and technical knowledge available at the time of delivery of the products the defect was undiscoverable or unknowable. However, courts have narrowly interpreted this defence, requiring the manufacturer to show that no suggestion or knowledge that such a danger might have existed could be found in any of the established knowledge or technology relevant to the product. Thus, scientific or technical knowledge is deemed to include all scientific and/or technical knowledge at the time and is not limited to the knowledge held by the manufacturer. The high evidentiary burden placed on manufacturers by the courts has been reinforced by the Quality-of-Life Policy Council established under the Prime Minister's Cabinet Office, which has taken the position that technical and/or scientific knowledge must be determined by the highest standards of technology available at the time.

3.3 Is it a defence for the manufacturer to show that he complied with regulatory and/or statutory requirements relating to the development, manufacture, licensing, marketing and supply of the product?

Under the JPLL and the CCJ, a manufacturer may argue that the product complies with pertinent safety standards, such as the SGMark standard or some other regulation or guideline, to show that a product is not defective. This defence is not dispositive as to whether a defect exists, and while the defence may be persuasive to a court, the manufacturer may nevertheless be found to have delivered a defective product.

3.4 Can claimants re-litigate issues of fault, defect or the capability of a product to cause a certain type of damage, provided they arise in separate proceedings brought by a different claimant, or does some form of issue estoppel prevent this?

There is no issue estoppel defence available because each claim under the JPLL is in respect of a specific factual incident. Thus, different Claimants injured by the same product may bring claims that involve claims and issues litigated previously for a product.

3.5 Can defendants claim that the fault/defect was due to the actions of a third party and seek a contribution or indemnity towards any damages payable to the claimant, either in the same proceedings or in subsequent proceedings? If it is possible to bring subsequent proceedings is there a time limit on commencing such proceedings?

In a product liability suit, the manufacturer can seek indemnification from a third party for damages that may be incurred if such manufacturer is liable for the delivery of a defective product. The manufacturer can file suit against such third party and then seek to combine the proceedings with the original product liability proceedings. Whether or not the two (or more) proceedings are combined is at the discretion of the court. If the manufacturer does not or is unable to add such third party as a third party defendant in the original suit, the manufacturer can instead take action against the third party following determination of the underlying product liability suit.

The time limitation for claims against a third party differs depending on the nature of the claim. Claims under the JPLL and tort claims under the CCJ must be filed within three years from when the Claimant learns of the damages and the third party responsible therefor, or (a) for claims under the JPLL, within 10 years from delivery of the product, and (b) for tort claims under the CCJ, within 20 years from the third party's tortious act. If indemnification is based on a theory of breach of contract, such indemnification action must be filed within 10 years from payment of court-ordered damages by the manufacturer.

3.6 Can defendants allege that the claimant's actions caused or contributed towards the damage?

Yes, under the CCJ. Article 722 paragraph 2 of the CCJ permits courts to consider a Claimant's own negligence in the calculation of damages. Consequently, CCJ Article 722 permits a court to reduce damages to be paid to an injured party in a product liability suit under the JPLL where the Claimant was contributorily negligent. For contract claims, where the Claimant has been negligent, courts have the power to relieve a manufacturer of liability under CCJ Article 418.

4 Procedure

4.1 In the case of court proceedings is the trial by a judge or a jury?

Civil trials are presided over only by judges.

4.2 Does the court have power to appoint technical specialists to sit with the judge and assess the evidence presented by the parties (i.e. expert assessors)?

A judge may order the appointment of an "expert commissioner" to provide the court with "explanations" based on his/her technical expertise. Such expert commissions do not, however, assess the probative value of factual evidence (although they may "sit" with a judge in some situations).

4.3 Is there a specific group or class action procedure for multiple claims? If so, please outline this. Is the procedure 'opt-in' or 'opt-out'? Who can bring such claims e.g. individuals and/or groups? Are such claims commonly brought?

Under the Act on Special Provisions of Civil Procedure for Collective Recovery of Consumer's Property Damage (Law No. 96 of 2013), Japanese civil procedure allows for opt-in consumer collective actions that can be brought by certain consumer organisations. The scope of such claims is limited and does not include claims under the JPLL. In some circumstances, Claimants with related claims against the same Manufacturer may join the same law suit.

4.4 Can claims be brought by a representative body on behalf of a number of claimants e.g. by a consumer association?

There are no provisions under the JPLL which allow a representative body to bring claims on behalf of individuals. Under the CCL, certain recognised and authorised consumer groups can seek injunctions to stop companies violating certain clauses of the CCL on behalf of consumers in general.

4.5 How long does it normally take to get to trial?

Courts must schedule the first hearing within 30 days after a suit is filed. However, the court's scheduling conflicts often cause delays. In general, oral arguments are rare and trials are conducted primarily through the parties' submission of written material. Instead of a concentrated, continuous "trial" seen in many common law jurisdictions, the parties can submit new documents and evidence to the court through numerous consecutively scheduled hearings. Depending on whether witness testimony will be presented, among other factors, such hearings may be as short as 10 minutes or last several hours. In this regard, although parties quickly appear in court and "go to trial", depending on the complexity of the factual and legal issues, a judgment in the first instance may take up to two years.

4.6 Can the court try preliminary issues, the result of which determine whether the remainder of the trial should proceed? If it can, do such issues relate only to matters of law or can they relate to issues of fact as well, and if there is trial by jury, by whom are preliminary issues decided?

A court may close trial proceedings and make a final judgment at any time. That said, there is no motion practice under Japanese civil procedure so issues of fact or law are not determined as preliminary issues. For example, there is no equivalent motion for dismissal or summary judgment.

4.7 What appeal options are available?

Upon a final judgment in the first instance, a party has the right to bring an appeal to an appeals court. Appeals court sits de novo over the lower court's judgment. In some cases, a subsequent appeal may be made to the Supreme Court of Japan, but only if the question raises a serious procedural error or interpretation of law or a constitutional issue. The Supreme Court typically refuses to hear appeals for other issues. The Supreme Court does not make factual determinations but only considers matters of law.

4.8 Does the court appoint experts to assist it in considering technical issues and, if not, may the parties present expert evidence? Are there any restrictions on the nature or extent of that evidence?

A court can appoint an "expert commissioner" who, based on such commissioner's technical expertise, provides the court with explanations. Moreover, the court can seek expert opinions at the request of a party. The prevailing view is that courts should not seek expert opinions sua sponte, although it may happen. The court can use its discretion to select an appropriate expert and there are no strict restrictions for such expert's qualifications. Expert opinions, prepared by an expert retained by a party, can be submitted with such party's written submissions and the party may call an expert to a hearing to testify as a witness.

4.9 Are factual or expert witnesses required to present themselves for pre-trial deposition and are witness statements/expert reports exchanged prior to trial?

Japanese civil procedure does not expressly dictate the form of witness statements. In practice, the parties will typically prepare written witness statements which are exchanged prior to examination of the witness at a hearing.

4.10 What obligations to disclose documentary evidence arise either before court proceedings are commenced or as part of the pre-trial procedures?

Japanese civil procedure does not provide a disclosure obligation or right of discovery. Claimants in product liability cases face a difficult situation in that manufacturers likely hold the evidence needed to show that a product is defective and that such evidence is not easily discoverable. In Japan, many practitioners believe that this treatment of evidence is a key aspect of why product liability lawsuits are less common than in other jurisdictions. In the absence of discovery obligations, generally a party might obtain documentary evidence from the other side through one or more of the following: (i) a motion for the preservation of evidence; (ii) a court-ordered document production; (iii) a request via a bar association; or (iv) an inquiry by a party. Further, challenging a party's ability to obtain evidence, a responding party can refuse production in many cases, including where: (i) the holder (or closely related person) of evidence could refuse to testify about the contents of the document; (ii) the holder owes a professional duty of confidentiality regarding the contents of the document; (iii) production of the document would adversely and materially affect the functioning of public duties or is contrary to public interest, and the document is related to a governmental matter; or (iv) the document relates to a criminal or juvenile delinquency matter or was made specifically for the purposes of the holder.

4.11 Are alternative methods of dispute resolution required to be pursued first or available as an alternative to litigation e.g. mediation, arbitration?

For product liability claims, there is no obligation or requirement to pursue alternatives to litigation. Through a voluntary application at the local district court, civil litigants can agree to have their case referred to civil conciliation (chotei). Conciliation occurs behind closed-doors, before a conciliation board of one judge and no less than two conciliators. If and when the parties reach an agreement, the agreement is recorded and becomes enforceable in the same manner as a judgment of the court. On the other hand, if the parties are unable to reach an agreement the conciliation fails and in order to pursue his/her claim the plaintiff must file a suit.

Separately, both parties can voluntarily agree to arbitration (chusai), including agreeing to be bound by an arbitrator's decision. Arbitration can be an expedient and economical method for settling disputes. Only once an arbitration agreement is recorded with the court does it become enforceable as the judgment of the court. The parties can also reach a negotiated settlement (wakai) at any time before or during court proceedings. A number of organisations promote and specialise in product liability and product defectrelated claims settlements, generally grouped into product types. Some such organisations include the Consumer Product Safety Association, the Centre for Housing Renovation and Dispute Settlement Support, the Pharmaceutical PL Centre, the Association for Electric Home Appliances, the General Merchandise PL Centre, and the Automobile Product Liability Consultation Centre.

4.12 In what factual circumstances can persons that are not domiciled in your jurisdiction, be brought within the jurisdiction of your courts either as a defendant or as a claimant?

A Claimant may file a product liability lawsuit or tort lawsuit with a Japanese court against any manufacturer whose principal office is in Japan. Separately, if the relevant tortious act occurred in Japan, then a Claimant can file a suit in Japan against the manufacturer even if such manufacturer's principal office is not in Japan. The tortious act is deemed to occur both where the tortious act was committed and where the results thereof occurred. However, a Japanese court will not exercise jurisdiction if the tortious act was committed abroad and the occurrence the results of such tortious act in Japan was not ordinarily foreseeable.

5 Time Limits

5.1 Are there any time limits on bringing or issuing proceedings?

Yes, there are time limits.

5.2 If so, please explain what these are. Do they vary depending on whether the liability is fault based or strict? Does the age or condition of the claimant affect the calculation of any time limits and does the Court have a discretion to disapply time limits?

Under the JPLL, generally claims must be brought within three years after the Claimant becomes aware of the damage and the responsible manufacturer or, if the injury or the manufacturer is unknown to the Claimant, within 10 years after the manufacturer delivered the product. Similarly, claims under CCJ Article 709 must be made within three and 20 years, respectively. Contract claims must generally be made within 10 years, but can vary in light of the nature of the contract and identity of the parties.

5.3 To what extent, if at all, do issues of concealment or fraud affect the running of any time limit?

In light of any fraud or concealment of evidence by the manufacturer, a court could toll the statute of limitations.

6 Remedies

6.1 What remedies are available e.g. monetary compensation, injunctive/declaratory relief?

Under the JPLL and CCJ, only monetary compensation is available. However, under the CCL, relief could include court orders to invalidate existing contracts with consumers and prospective orders to prevent illegal solicitation of new business.

6.2 What types of damage are recoverable e.g. damage to the product itself, bodily injury, mental damage, damage to property?

Under the JPLL, a manufacturer is not liable if the damage is to the product alone, but if bodily injury or property damage is found, the manufacturer is liable for damages to the life, limb or property of the victim, as well as the damaged product itself. Medical expenses and lost wages are also recoverable and the court can, and commonly does, use its discretion to order compensation for mental damages (pain and suffering) (isharyou) due to the injury caused by the defective product.

6.3 Can damages be recovered in respect of the cost of medical monitoring (e.g. covering the cost of investigations or tests) in circumstances where the product has not yet malfunctioned and caused injury, but it may do so in future?

No. Recovery is only possible for damages caused by a defective product.

6.4 Are punitive damages recoverable? If so, are there any restrictions?

Japanese law does not permit punitive damages.

6.5 Is there a maximum limit on the damages recoverable from one manufacturer e.g. for a series of claims arising from one incident or accident?

There is no maximum limit on the damages recoverable.

6.6 Do special rules apply to the settlement of claims/ proceedings e.g. is court approval required for the settlement of group/class actions, or claims by infants, or otherwise?

There are no applicable special rules.

6.7 Can Government authorities concerned with health and social security matters claim from any damages awarded or settlements paid to the Claimant without admission of liability reimbursement of treatment costs, unemployment benefits or other costs paid by the authorities to the Claimant in respect of the injury allegedly caused by the product. If so, who has responsibility for the repayment of such sums?

Japanese social welfare organisations have no claim to any portion of the compensation received by a Claimant in a product liability suit.

7 Costs / Funding

7.1 Can the successful party recover: (a) court fees or other incidental expenses; (b) their own legal costs of bringing the proceedings, from the losing party?

The non-prevailing party generally bears court costs such as filing fees, the prevailing party's travel expenses and document preparation fees, etc. For other costs, each party generally covers its own expenses. The court may, at its discretion, award a reasonable portion of the prevailing party's attorneys' fees as part of the damages, but awards of attorney fees are not generous when compared to those of the U.S. or the U.K.

7.2 Is public funding e.g. legal aid, available?

Some Claimants may get assistance with attorneys' fees and court costs from the Japan Legal Support Centre (Nihon Shihou Shien Sentaa), a public entity.

7.3 If so, are there any restrictions on the availability of public funding?

The requesting party must have financial resources less than the applicable threshold, have some chance of winning its suit, and show that receiving support furthers the purpose of such aid in order to obtain public funding from the above-mentioned source.

7.4 Is funding allowed through conditional or contingency fees and, if so, on what conditions?

Under Japanese Bar Association rules, Japanese lawyers may structure their fees so that a portion of compensation is to be paid on a contingency basis.

7.5 Is third party funding of claims permitted and, if so, on what basis may funding be provided?

Third party funding is not prohibited per se, but even if a Claimant's lawyer works on a success fee basis, the Claimant would still have to pay the appropriate court costs as they became due. Moreover, claims cannot be bought and assigned as in some jurisdictions.

7.6 In advance of the case proceeding to trial, does the Court exercise any control over the costs to be incurred by the parties so that they are proportionate to the value of the claim?

The court generally does not exercise any control regarding the cost of proceedings. In response to an application made by Claimants struggling financially, the court may postpone the payment of filing fees, ordinarily paid upon filing, until the end of the procedure and conditioned upon winning the suit.

8 Updates

8.1 Please provide, in no more than 300 words, a summary of any new cases, trends and developments in Product Liability Law in your jurisdiction.

Previously published by Global Legal Group

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.