Product liability civil claims are determined by professional judges in national courts. No jury system exists for civil litigation.
Alternative dispute resolution (ADR) procedures also play an important role in resolving civil product liability claims in Japan. Some industries have established their own 'product liability centres' intended to resolve product liability civil claims through ADR. For example, the Electric Home Appliances PL Centre and the Automotive Dispute Resolution Centre are two such institutions. Furthermore, the National Consumer Affairs Centre of Japan also manages an ADR procedure that deals with product liability matters.ii Burden of proof
During civil proceedings, plaintiffs must prove each required element of a product liability claim. With respect to the issue of how much proof is necessary for the judges to be persuaded (the degree of proof), in Miura v. Japan, a medical malpractice case, the Supreme Court of Japan has defined the required degree of proof. In that case, the Supreme Court found causation of a patient's injury owing to the negligence of a doctor based on the following standard: 'Proving causation in litigation, unlike proving causation in the natural sciences (which permits no doubt at any point), requires proof of a high degree of probability that certain facts have induced the occurrence of a specific result by taking into necessary and sufficient account that the judge has been persuaded of the truthfulness to a degree where an average person would have no doubt.' It is difficult to express the required degree of persuasion using a numerical formula under the standard of 'proof of a high degree of probability'. It is certainly higher than a preponderance of evidence, but less than beyond reasonable doubt.iii Defences
If a claim is brought under the PL Act, the defendant may be exempt from liability if the defendant successfully proves that the defect in the product could not have been discovered given the state of scientific or technical knowledge at the time the product was delivered (this is called a 'development risk' or 'state of the art' defence). Furthermore, where the product is used as a component or raw material of another product, the manufacturer of the component or raw material that is named as the defendant may be exempt from liability if the defendant successfully proves that the defect has occurred primarily owing to compliance with the instructions concerning the design given by the manufacturer of the finished product, and the defendant is not negligent with respect to the occurrence of the defect.
In addition, the PL Act provides for limitations of the period in which a claim under the PL Act will extinguish:
- if the victim does not exercise his or her claim within three years of the time when he or she becomes aware of the damage and the party liable for damages; or
- 10 years have elapsed from the time the product was delivered.
This 10-year period is calculated from the time of the occurrence of the damage if the damage is caused by substances that become harmful to human health when they accumulate in the body, or if the symptoms that represent the damage appear after a certain latent period. As for tort claims under the CC, the prescription period is three years from the time the victim becomes aware of the damage and the identity of the perpetrator. A tort claim also cannot be brought when 20 years have elapsed from the time of the tortious act.
The prescription period for the claim under the PL Act explained above was revised when the Civil Code was overhauled in 2017, and the revision will be implemented in 2020. The revision has extended the prescription period for a right to seek damages when the defect in the product infringes upon life or body, which was originally three years, to five years. The revised prescription period explained above is not applicable where the original three year period has passed at the time the amended law is implemented in 2020.
Comparative negligence is available with respect to the determination of the amount of damage to be compensated and can be asserted in defending a product liability claim either under the PL Act or as a tort under the CC.
Compliance with applicable regulations is considered one of the important factors in determining whether there is a defect in a product; however, non-compliance or compliance with applicable regulations by itself will not automatically give rise to liability or preclude liability.
In a majority of US states, the 'learned intermediary doctrine' has been recognised. The 'learned intermediary doctrine' means that a manufacturer of prescription medications and devices is released of its duty to warn users of the risks associated with its products, by warning the prescribing physician of the proper use and risks of the manufacturer's product. The Supreme Court, in re Iressa, in denying the defective instructions or warnings, stated that 'it was known at least among physicians engaged in anti-cancer therapy targeting lung cancer that when interstitial pneumonia occurred owing to the administration of these drugs, including anti-cancer drugs, it could be fatal'. This ruling of the Supreme Court is similar to the 'learned intermediary doctrine' above, in that the Court considered the knowledge of the addressee of the information in determining the defective instructions or warnings in the product.iv Personal jurisdictionNo provision for product liability claims
The Code of Civil Procedure, Law No. 109 of 1996 (CCP), provides a set of both domestic and international jurisdiction rules applicable to litigation in Japanese courts, but it does not include an express provision for product liability claims. Under the prevalent view, product liability claims are classified as tort claims for the purpose of determining their jurisdiction. With respect to international jurisdiction of tort claims, the CCP provides that the Japanese court has jurisdiction if the place where the tort took place is located in Japan, unless the result of a wrongful act committed in a foreign country occurred in Japan and the occurrence of such a result in Japan was ordinarily unforeseeable. The jurisdiction of international product liability claims will be determined pursuant to this provision. The stream-of-commerce doctrine, discussed in the US courts, was not introduced when the CCP was revised in 2011 to include international jurisdiction provisions.The place where the tort took place
This phrase generally includes the place of the wrongful act and the place of the result. The place of the wrongful act includes the place where the product was manufactured. Unless advertisement on the internet constitutes part of the wrongful act, the act by itself does not constitute the basis for the jurisdiction of Japanese courts. On some occasions, allowing international jurisdiction at the place of the result will cause substantial difficulties for the defendants. In such circumstances, the prevalent view recognises exceptions where Japanese courts do not have international jurisdiction over the defendants.The place of secondary loss or economic loss
Whether the place of secondary loss or economic loss is included in the 'place of the loss' has also been discussed in Japan. If it is included, courts within the consumers' place of residence will almost always have jurisdiction over the product liability claim and the result will be too harsh for businesses. Therefore, some lower court decisions have rejected this theory.v Expert witnesses
The CCP has a set of provisions providing procedures for the examination of court appointed expert witnesses. Where the issues to be determined by judges are highly specialised and difficult to determine, the court can appoint expert witnesses to assist fact finding by the judges. After an expert witness has provided his or her opinion to the court in writing or orally, both parties have an opportunity to examine the expert witness before the judges for the purpose of impeaching an unfavourable opinion, or to restore the credibility of a favourable opinion. A court may, when it finds it necessary, request that a Japanese or foreign government agency or public office, or a juridical person that has adequate equipment, give its expert opinion.
In Japanese litigation practice, parties to a litigation frequently find their own private experts and have them author expert opinions addressed to the court. The parties may also request to examine experts before courts. Technically speaking, these private experts are classified as 'witnesses' rather than 'expert witnesses' under the CCP, because they are not appointed by judges. However, these private experts also perform an important role.
The court may require assistance from experts not only for fact-finding, but also in the process of clarifying issues and conducting proceedings efficiently. To enable the court to obtain such assistance, the court may appoint an expert commissioner in the proceedings.vi Discovery
No extensive discovery system (as in the United States) exists in Japan and only limited discovery is permitted. The Japanese discovery system explained below is far from being an effective tool for litigants to request useful evidence from the other party or third parties.Request for document production order
The party may request a document production order (DPO) against the other party or third parties. The CCP provides that the possessors of the documents shall not refuse to produce the documents in the following circumstances:
- (1) as a party, the possessor has cited the document in his or her arguments in the action; (2) the party applying for the DPO was otherwise entitled under the law to possess or inspect the document; (3) the document was executed for the benefit of the petitioner; or (4) the document was executed with respect to a legal relationship between the petitioner and the possessor; and
- the document does not fall under any exemptions provided in the CCP.
The exemptions provided for in (b) above are as follows:
- a document containing information with respect to which the possessor would have the right to refuse to testify, as self-incriminating or incriminating one's family;
- a document containing a secret in relation to a public officer's duties;
- a document containing professional secrets, including documents obtained by lawyers and doctors through performance of their duties;
- a document containing technical secrets or secrets useful for occupations;
- a document held by the possessor exclusively for his or her own use; and
- a document relating to criminal proceedings or juvenile delinquency proceedings.
Courts may decide not to examine documentary evidence if they deem it to be unnecessary, and courts are strict when considering the necessity for issuing the DPO. If the court finds that the fact that the party seeks to establish a DPO is unnecessary for resolution of the dispute, the court will decline to issue the DPO.
Japanese evidence law does not have strict rules on excluding evidence (as in the United States) where there is a danger of the evidence being unfairly prejudicial, confusing the issues, misleading the judges, etc. Therefore, whether a judge orders the DPO regarding 'other similar incidents' of a product defect, for example, depends on the judge's interpretation of the 'necessity' of such evidence to decide the issues in the case before him or her. Two of the authors had an actual case where the court was convinced and declined to issue the DPO.Interrogatory
A party, before the lawsuit is instituted, or while the lawsuit is pending, may inquire with the opponent to request information regarding the matters necessary for preparing allegations or proof. This system is analogous to the US interrogatory, but this is not frequently used in Japan in practice.Deposition
No deposition of parties, witnesses or experts exists in Japan.Evidence preservation proceedings
If the party establishes that any circumstances exist where it will be difficult to examine evidence, including where the other party may spoil the evidence, it may request that the court issue an order to preserve the evidence. The order is granted for an ex parte hearing of the petitioner and the other party is notified of such an order only an hour or an hour and a half before the judge executes the preservation order, which is issued to avoid another party spoiling the evidence.vii Apportionment
When multiple entities are involved in a product liability case, the entities are jointly and severally liable for liability under the PL Act or in tort. A named defendant that has compensated the victim in excess of the damages that it is required to bear may seek indemnification from other entities. The portion of the burden that should be borne by each entity is determined on a case-by-case basis, considering the fair burden of damages and taking into account various circumstances such as the situation in which the act occurred and the connection between the act and the damage.
Under Japanese law, the successor of an entity, for example, by way of merger, will be liable for its predecessor's liability.viii Mass tort actions
In Japan, there is no legislation creating a US-style class action for a mass tort. In practice, plaintiffs bringing mass tort actions have been solicited through announcements on the internet and by other methods. However, a new law relating to mass tort actions was promulgated in 2013: the Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Property Damage Incurred by Consumers, Law No. 93 of 2013 (the Collective Redress Act). The Act was implemented on 1 October 2016 and organisations certified by the Prime Minister of Japan pursuant to the Consumer Contract Act, Law No. 61 of 2000 (the certified organisations) may bring a claim in relation to consumer contracts against business operators for recovery of damages suffered by consumers with respect to:
- performance of a contract;
- unjust enrichment;
- a claim for damages owing to breach of contract;
- warranty against defects; and
- a claim for damages arising out of tort.
As explained above, the Civil Law was overhauled in 2017 and will be implemented in 2020. Owing to this overhaul, warranty against defects claims, explained in (d) above, was eliminated from the list, as such claims are merged into claims for damages owing to breach of contract in the revised Civil Code. However, damage to property other than the subject matter of the consumer contract, lost profits, personal injury, pain and suffering are expressly excluded from the scope of a claim that can be brought under the Collective Redress Act. The Collective Redress Act adopts a two-stage process. This legislation is modelled after the Brazilian class action system, and it adopts a European type opt-in method. It is opposed to a US-style opt-out method.
As explained above, the proceedings provided in the Collective Redress Act are a two-stage process. During the first stage, the certified organisation files a lawsuit with the court against a business operator for a declaratory judgment, with respect to property damage suffered by numerous consumers in relation to a consumer contract, on whether the business operator owes an obligation to pay monies to the consumers owing to common factual cause or common legal cause. Issues that would be decided during this first stage are: validity of contracts between consumers and the business operator; illegality of the acts conducted by the business operator; and the intent or negligence of the business operator. The result of the first stage proceedings binds the consumers who participate in the second stage proceedings explained below. This declaratory judgment at the first stage is appealable.
If the court finds that the business operator is liable or that the business operator has acted illegally and makes a decision upholding a claim during the first stage, the same certified organisation then files a proceeding to commence the second stage, in which consumers may participate (i.e., opt-in). During the second stage, following the denial and admission process by each party, the specific amount of compensatory damages for each consumer will be determined by the court's summary ruling only by documentary evidence. The party or relevant consumer who objects to the court's summary ruling may make an objection to request a formal judgment process from the court, and the compensatory damages will be determined in the formal judgment process. After the determination of the specific amount of compensatory damages for the consumer become final, the certified organisation collects monies from the business operators and the monies collected will be distributed to each consumer. As explained above, in this process, certified organisations have a significant role, and, as of January 2019, there are three certified organisations under the Collective Redress Act.ix Damages
Recovery for economic damage, including lost profits and non-economic damage such as pain and suffering, is permitted in product liability cases under Japanese law, regardless of whether the claim is for breach of contract, tort or under the PL Act. In general, the remedy for damage is monetary compensation. The amount of damages is determined by the judge because no jury system exists in Japan as explained in Section IV.i. There is no law limiting the amount of damages that may be ordered. Japanese law does not allow punitive damages. Punitive damages awarded in foreign litigation or arbitration will not be recognised in Japan because they infringe upon the public policy of Japan.
The PL Act limits its application to claims for damage arising from the infringement upon life, body or property caused by the defect in the product. Damage that occurs only with respect to the defective product is excluded from the scope. However, such damage can be pursued in claims under the PL Act together with other types of damage.
With respect to criminal liability, if death or injury is caused because of a failure to exercise due care in pursuit of social activities, a criminal penalty may be imposed under the Penal Code, Law No. 45 of 1907.