This article was published in a slightly different form in the 2008 issue of Global Legal Group Ltd.

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?

Persons and legal entities (hereinafter “Claimants”) may seek compensation for having been injured by a “defective” product through one of several legal avenues. Traditionally, such claims were brought as tort claims under the Civil Code of Japan (the “CCJ”), but since 1996, claims have been able to be brought under the Product Liability Law (Law No. 85 of 1994, the “JPLL”). Claims may also be brought under breach-of-contract theories and, depending on the nature of the product involved, there may exist publicly or privately funded insurance schemes.

Under the JPLL, a Claimant may seek compensation for damages caused by a “defective” product. The JPLL, like its counterparts around the world, alleviated the evidentiary burdens that were placed on Claimants who were forced to bring tort claims for damages against manufacturers and importers of defective products. Under the JPLL, a Claimant is relieved of the burden of proving that the manufacturer or importer owed a duty to the Claimant and negligently or intentionally injured the Claimant. Instead, under the JPLL, the Claimant need only prove that the product was defective and that the defect was the cause of the injuries suffered.

Simply stated, the JPLL imposes liability on a “Manufacturer” (defined in question 1.3 below) of a “Product” for personal injury or property damage caused by a “Defect” existing in the “Product,” regardless of whether it was domestically produced or imported by the Manufacturer (JPLL § 1). A “Product” is defined to include any “movable property manufactured or processed” (JPLL § 2(1)) so the scope of the JPLL excludes non-movables such as real estate, energy or unprocessed and unpicked agricultural products.

The JPLL defines a “Defect” as a lack of safety which ordinarily a product 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. Defects can be broadly categorised into three groups. A design defect arises when the design of the product does not sufficiently consider safety issues relating to use, handling or storage of the product. A warning defect arises when the Manufacturer does not properly warn consumers of the not readily apparent dangers associated with use of the product and does not properly instruct the consumer on how to use, handle or store the product to avoid such dangers and risks. A manufacturing defect arises when a product is improperly manufactured. Whether a product is defective is determined on a case-by-case basis and is fact-specific to the Claimant’s own handling, use and storage of the product.

Liability of the Manufacturer is strict once it is held that they sold a defective product, but the amount of damages ordered to be paid may be reduced if the court finds that the injured Claimant’s own negligence or misconduct played a part in the amount of damage suffered.

Besides the JPLL, a Claimant may bring breach-ofcontract or tort claims under the CCJ. Provided a direct contractual relationship exists between the injured party and the seller of the defective product, breachof- contract claims or implied statutory warranties may be brought under CCJ Article 415 (Liability for Incomplete Performance of Obligation) and CCJ Article 570 (Warranty against Latent Defect). In most modern consumer transactions, the consumer does not typically have a contractual relationship with the Manufacturer, so the foregoing causes of action by a consumer against a Manufacture is not typically possible in today’s world of e-commerce, having a direct contractual relationship with the importer and seller of a product has become more common.

If no contractual relationship exists and if a claim brought under the JPLL is unsuccessful, an injured party may bring a tort claim under CCJ Article 709. CCJ Article 709 allows Claimants to claim that a third party has committed an “illegal” or “unwanted” act. This Article is akin to a traditional The tort action in Common Law jurisdictions. CCJ Article 709 provides that “[a] person who violates intentionally or negligently the right of another is bound to make compensation for damage arising therefrom.” But while this general right of remedy is available to any person injured by a person or thing, the burdens of proof placed on Claimants are high in the case of a product liability suit, making the chance for success in a product liability context low. As such, Article 709 is viewed as a last resort for persons injured by a defective product.

Finally, the Consumer Contract Law (Law No. 61 of 2000 as amended, the “CCL”) protects consumers in their dealings with merchants. However, while this law limits the extent to which a seller of a product may disclaim warranties relating to a product or restrict the remedies available to a purchaser injured by a product sold by the seller, this law does not offer a cause of action for damages caused by defective products.

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

Yes. The Japanese government operates compensation schemes for pharmaceuticals and for products that are deemed to have specific risks. One such scheme is the Preventive Inoculation Law (Law No. 68 of 1948 as amended), which compensates the victims of injuries caused by inoculations. This scheme is entirely funded by the Japanese government without contribution by the private sector. Another scheme is the Pharmaceuticals and Medical Devices Agency Law (Law No. 192 of 2002 as amended) which established the Pharmaceuticals and Medical Devices Agency (the “MD Agency”). Under this scheme, compensatory payments covering medical and funeral expenses are made to individuals or their families in the event of illness, disability or death caused by side effects of pharmaceuticals. To administer the scheme, the MD Agency charges pharmaceutical companies a contribution amount (kyoshutsu-kin). There are two types of contributions: One is a general contribution that is charged annually to all companies that manufacture, import or market drugs, based on sales revenue. A second contribution is made by specific companies involved in the manufacture, import or marketing of drugs that are discovered to be dangerous or cause injury.

Another scheme is found under the Consumer Products Safety Law (Law No. 31 of 1973 as amended, the “CPSL”). The CPSL established the Consumer Product Safety Association (Seihin Anzen Kyoukai) (the “CPSA”) which administers a “safety-goods mark” or SG-Mark programme for certain classes of products together with a related consumer compensation programme for persons injured by products carrying the SG-Mark. To carry the SG-Mark, a company must have its products conform to the safety specifications and requirements promulgated by the CPSA. The compensation programme is funded by the CPSA through, among other means, the sale of SG-Mark stickers which are attached by the company to all products that meet the SG-Mark standard. Adherence to the SG-Mark standards is voluntary, but for many products, commercial pressures compel adherence. Adherence to an SG-Mark standard does not absolve a company of liability; it only provides a means by which a consumer may seek compensation in the event of an injury. The CPSA will compensate a person up to 100 million yen, depending on the severity of the injury, for claims brought within a defined number of years after purchase of the product by the consumer. The CPSA bases payment on various factors. For example, the CPSA will not pay any compensation in the event that the injured party was contributorily negligent.

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

Under the JPLL, the classes of persons and entities that may be liable for injuries caused by a defective product include: (i) any person who manufactures, processes or imports the product as a business; (ii) any person holding himself out to be a manufacturer of a product by putting his name, trade name, trademark or other feature on the product, or any person who puts his name, etc. on the product in a manner mistakable for the manufacturer’s name and (iii) apart from any person mentioned in the preceding subsections, any person who affixes his name to a product and who may be recognised as a manufacturer-in-fact, taking into consideration the manner in which the product was manufactured, processed, imported or sold, or any other relevant circumstances (hereinafter, the “Manufacturer”). In addition, liability may pass through the final Manufacturer and include subcontractors, raw material providers and parts supplies. In such cases, subcontractors, raw material providers and part manufactures may be jointly and severally liable with the Manufacturer for damages. Nevertheless, subcontractors, raw material providers and parts manufacturers have defences to liability. See question 3.1 below.

1.4 Under 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 contain a provision that expressly obligates a Manufacturer to recall or repair a product found to be defective in a product liability lawsuit. However, the aforementioned CPSL grants government ministries the power to promulgate standards applicable to specific classes and types of products, to investigate complaints relating to particular products, compel manufacturers and importers to disclose information relating to allegedly unsafe products, and order product recalls or other remedial actions. For the majority of consumer products, the ministry that has regulatory oversight is the Ministry of Economy, Trade and Industry (METI).

Under the recently revised CPSL, a company is legally obligated to take some form of remedial action if their product causes a “serious product accident” to stop such accidents from further arising or spreading. Such action includes 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. A “product accident” is defined as any accident that is either: (1) a product accident that damages the life or body of a consumer or (2) a product accident in which a consumer product is destroyed or damaged, potentially causing life-threatening or bodily injury to a consumer and (3) which could have been caused by a product defect. In other words, in the case where an accident causes injury to person, property or the product, unless it is clear that the cause is not due to a defect, the incident is deemed to be a product accident. A “serious product accident” means those product accidents in which the injury that occurs or may occur is serious, and the nature or appearance of the accident fulfils the criteria laid down by regulation. Criteria have since been promulgated by METI to include: (1) fatal accidents; (2) product accidents causing injuries with aftereffects that take more than 30 days to heal; (3) fires and (4) carbon monoxide poisoning.

In the event of a product accident, whether and what steps the company might take are within the discretion of the company, but companies are strongly encouraged to file a report to METI and institute remedial actions that are appropriate under the circumstances.

Under the powers granted in the CPSL, if at anytime a Ministry such as METI concludes that the remedial actions being taken by the company are insufficient in light of the potential or foreseeable danger associated with the product, such Ministry may order the remedial actions it deems necessary. Such actions could include ordering the company to conduct a total or partial recall of the product, offer all purchasers component replacement or repair service, or place advertisements in national media to warn consumers of the danger.

Aside from possible civil liability stemming from the failure to recall, repair or warn consumers of a potential danger, violation of the CPSL or a Ministry order carries with it possible criminal fines and criminal prosecution of the company and its directors, officers and employees.

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

The JPLL provides only for a civil cause of action for injured persons or entities and does not carry criminal sanctions. However, in addition to the possible criminal sanctions previously mentioned in regards to the CPSL, under Japanese law generally, it is possible that a company’s directors and employees could face criminal penalties if they were criminally negligent in the manner by which they designed, manufactured or supplied a defective product.

2 Causation

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

Under the JPLL, the Claimant has the burden of proving that the product is defective and that the defect was the cause of the Claimant’s injuries. The Manufacturer has the burden to prove any defences. See answers to questions 3.1 and 3.2 below.

For claims brought under CCJ Article 709, again, the Claimant bears the burden of proof and must show that the injury was caused by a defect in the product and that the Manufacturer negligently or intentionally breached a duty owed to the Claimant and this breach of duty caused damage to the Claimant.

Under contract law, the Claimant must make a showing that the Manufacturer breached the terms of the contract by supplying a product that failed to meet an express or implied warranty of the product and that the breach caused the injury to the Claimant.

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?

The JPLL does not provide a specific test for causation, so a court will use the standard test for causation found under the CCJ by asking whether, but for the defect, the injury would not have been suffered. A Manufacturer is liable only to the extent that the damages were generally foreseeable or specifically foreseeable to the Manufacturer based on information known to the Manufacturer. A Manufacturer would not be liable for damages for only having wrongly exposed the Claimant to an increased risk of injury known to be associated with the product unless the Claimant can prove some sort of physical or mental 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?

Market-share liability does not exist in Japan. When filing suit under the JPLL, it is necessary to specify the Manufacturer that is responsible under the JPLL for the defective product.

2.4 Does a failure to warn give rise to liability and, if so, under 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?

As mentioned above, a Defect may be found in a case where a Manufacturer fails to properly warn consumers of the latent dangers and risks associated with the product. Japanese courts do not recognise a “learned intermediary” defence whereby distributing a product through an intermediary or warning users through an intermediary would absolve the Manufacturer of liability. Warnings must be communicated to the people that will be exposed to the danger of the product.

3 Defences and Estoppel

3.1 What defences, if any, are available?

Under the JPLL, once a Claimant makes a showing that the product is defective, the Manufacturer may assert one or more of the following defences to either avoid liability or shift part or all of the liability to another party:

  • The claim was brought beyond the three or ten-year statute of limitations.
  • The product is not defective because the manner in which Claimant handled, used or stored the product was, under the circumstances, unforeseeable misuse.
  • The product is not defective because its design and manufacture meets or exceeds published safety guidelines and standards (such as the SG-Mark).
  • The state of scientific or technical knowledge at the time when Manufacturer delivered the product was such that the existence of the Defect identified by Claimant could not have been known.
  • The defect did not exist at the time the product was delivered by the Manufacturer.
  • In the case of a failure-to-warn defect, Claimant is an experienced and knowledgeable user of the product.
  • The Defect was caused by defective components or raw materials supplied by a subcontractor.
  • (In the case of a subcontractor), the components or raw materials that are said to have caused the defect were supplied pursuant to the specifications and instructions given by the final manufacturer and that the subcontractor was not negligent with respect to the occurrence of the defect.
  • The Claimant’s injuries were not caused by the defective product.

Under CCJ Article 722, Claimant’s own contributory negligence or assumption of the risk may be a partial or complete defence to liability.

In respect to breach-of-contract claims, standard defences to breach-of-contract claims would be 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?

A “state of scientific or technical knowledge” defence exists under the JPLL. If the Manufacturer can prove that a defect in a product was undiscoverable or unknowable by the scientific and technical knowledge available at the time of delivery to Claimant, the product will not be found to be defective. However, this defence is narrowly interpreted by the courts. Courts require a showing by the Manufacturer that none of the established knowledge or technology relevant to the product provided any suggestion or knowledge that such a danger might have existed. As a result, scientific or technical knowledge is not limited to the knowledge held by the individual Manufacturer, but is deemed to include all scientific and/or technical knowledge at the time. The Quality-of-Life Policy Council under the Prime Minister’s Cabinet Office has taken the position that scientific and/or technological knowledge must be judged based on the highest standards of technology available at the time; thus placing on Manufacturers a heavy evidentiary burden.

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?

To counter Claimant’s showing that a product is defective, a Manufacturer may argue that the product complies with relevant safety standards such as the SG-Mark standard or some other government regulation or guideline. While such a defence may be persuasive to a court, it is not dispositive that no Defect exists and the Manufacturer may nonetheless be held liable for having 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?

Because claims brought under the JPLL are specific to a particular factual incident involving injury, injuries involving different Claimants injured by the same product may be brought in separate proceedings and involve claims and issues litigated previously.

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?

A Manufacturer in a product liability suit may seek indemnification from a third party for losses that might be incurred in the future if such Manufacturer is found liable for having delivered a defective product. The Manufacturer could accomplish this by filing a suit against such third party and then seeking to combine the proceedings. Combination of the two proceedings is at the discretion of the court.

If the third-party was not brought in as a third-party defendant in the original suit, a Manufacturer could file a suit against the third party after the underlying product liability law suit was decided against the Manufacturer.

If indemnification is sought under a breach-ofcontract theory, the law suit for indemnification must be filed within ten years from the date when the Manufacturer paid the court-ordered damages to the injured party.

3.6 Can defendants allege that the claimant’s actions caused or contributed to the damage?

Yes. CCJ Article 722, paragraph 2, empowers courts to take a Claimant’s own negligence into account when calculating damages. While not expressly provided in the JPLL, CCJ Article 722 would likewise permit a court to reduce a Claimant’s damages in a product liability suit in the case where the Claimant was partially negligent. In relation to contract claims, CCJ Article 418 grants courts the additional power to relieve a Manufacturer of any liability where the Claimant has been negligent.

4 Procedure

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

Trials are by judges only.

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 court may, sua sponte or upon petition of one of the parties, appoint an expert to testify and provide evidence, but experts never “sit” with the judge. The judge alone has the authority to decide factual and legal matters at issue in litigation.

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?

Japanese civil procedure does theoretically allow class-action suits where a single Claimant represents other injured parties, but the requirements for the class are so stringent that forming a class is exceedingly difficult in the vast majority of situations and rarely accomplished. However, Claimants with related claims against the same Manufacturer may join the same law suit in some circumstances.

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

The JPLL itself does not allow representative bodies to sue on behalf of individuals. However, since June 7, 2007, consumer groups recognised and authorised by the Japanese government may, on behalf of consumers in general, seek injunctions to stop companies from violating certain clauses of the CCL.

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

Under Japanese Civil Procedure, a court must schedule the first hearing within 30 days of the filing of the law suit, but this is often delayed due to scheduling conflicts of the court. Trials in Japan are primarily conducted by written submission of the parties and oral arguments are rare. There is no continuous “trial” as one might see in a Common Law country, such as the US or the UK, but rather interspaced hearings, typically lasting less than 30 minutes, are held primarily to afford the parties opportunity to submit new documents and evidence to the court. As a result, “getting to trial” happens very quickly, but reaching a judgment in the first instance may take a few years, depending on the complexity of the matter.

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 a trial by jury, by whom are preliminary issues decided?

Japanese civil procedure does not provide for motion practice, so issues of fact or law may not be decided as preliminary issues. For example, there is no motion for summary judgment or dismissal. However, a court may close the trial proceedings and make a final judgment at any time.

4.7 What appeal options are available?

A dissatisfied party may appeal to an appeals court as a matter of right. The appeals court sits de novo over the lower court’s judgment. A further appeal may be made to the Supreme Court of Japan, but if the issue involves subject matter other than a constitutional issue or a serious procedural or factual error, it is likely that the appeal will be denied by the Supreme Court. The Supreme Court will only consider matters of law and will not make any factual determinations.

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 may, sua sponte or upon petition of one of the parties, appoint an expert to testify. Additionally, parties may introduce expert testimony as part of their briefs and submissions to the courts. Expert testimony may be introduced as evidence at trial by any of the following methods. First, under the Kantei system, a party may make a request to the court for an expert opinion and the court may appoint an expert to testify. Second, each party may provide expert testimony from an expert of their own choosing either by examining the expert as a witness (Shounin-jinmon) at a court hearing or by submitting documentary evidence from the expert (Shoshou). While each party is free to challenge the qualifications of the expert, the court does not have a Daubert-like gatekeeper duty to exclude unreliable expert testimony, as in the case, and is free to consider or disregard any evidence submitted by a party.

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?

If a witness is presented at a hearing, whether they be a fact or expert witness, the party presenting such witness is required to give to the other party written notice containing a summary of the matter about which the witness will be called upon to discuss. The non-calling party will also have a chance to cross-examine at the hearing.

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

Unlike Common Law countries such as the US or the UK, there is neither a disclosure obligation nor right of discovery in Japan. There are, generally, four ways a party may be able to obtain documentary evidence: (1) preservation of evidence motion; (2) request through an attorney bar association; (3) court-ordered production of documents and (4) an inquiry by a party. However, a party may refuse to produce documentary evidence where: (1) the document contains information regarding which the holder (or people that are closely related to the holder) has a right to refuse to testify about; (2) the document contains information on which the holder owes a professional duty of confidentiality; (3) the document is related to governmental affairs and the production of the document is against public interest or will materially affect the functioning of public duties or (4) the document was made specifically for the purposes of the holder or relates to a criminal or juvenile delinquency matter. One of the greatest hurdles facing Claimants in product liability cases is that the evidence needed to prove that a product is defective is held by the Manufacturer and is not easily discoverable. It is believed by many practitioners that this is an important factor as to why product liability lawsuits are not more common in Japan.

4.11 Are alternative methods of dispute resolution available, e.g., mediation, arbitration?

Potential civil litigants may agree to refer their case for closed-door civil conciliation (chotei) by applying at the local district court. A conciliation board consists of one judge and at least two conciliators. When an agreement is reached, it is recorded and becomes enforceable in the same manner as a judgment of the court, but if the conciliation fails, the plaintiff will have to file a law suit to pursue his/her claim.

Arbitration (Chusai) is a speedy and economical method for settling disputes, but both parties must agree in advance to be bound by the arbitrator’s decision. The arbitrator’s decision is enforceable as the judgment of the court.

Negotiated settlement (wakai) may be reached by the parties before or during court proceedings. There are organisations which specialise in promoting settlements of product liability and product defectrelated claims in a certain product area such as the Centre for Housing Renovation and Dispute Settlement Support, the Association for Electric Home Appliances, the Automobile Product Liability Consultation Centre, the Pharmaceutical PL Centre, the General Merchandise PL Centre and the Consumer Product Safety Association. Only once an arbitration agreement is recorded with the court does it become enforceable as the judgment of the court.

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 faultbased 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?

Generally, claims under the JPLL must be brought within a period of three years from the time when the injured person becomes aware of the damage and the responsible Manufacturer or a period of ten years from the time when the Manufacturer delivered the product in the case where the injury or the Manufacturer is unknown to the Claimant. Claims under CCJ Article 709 follow a similar prescription of three and 20 years, respectively. Generally, contract claims must be brought within ten years, but this period varies with the identity of the parties and nature of the contract.

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

A court could toll the statute of limitations if it found that doing so is in the interests of justice in view of fraud or concealment of evidence by the Manufacturer.

6 Remedies

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

Under the JPLL, only monetary compensation is available as a remedy in civil product liability law suits.

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

The JPLL provides that a Manufacturer shall be liable for damages to the life, limb or property of the victim. A Manufacturer is not liable for damage to the product alone. In addition to physical injuries, compensation for mental damages (pain and suffering) (isharyou) caused by the injury caused by the defective product are also recoverable within the discretion of the court and are commonly awarded. Medical expenses and lost wages are also recoverable.

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. The JPLL only permits recovery for injuries actually caused by a defective product.

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

Punitive damages are not recoverable in Japan.

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?

No special rules apply.

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 government social welfare organisations may not claim a portion of damage compensation that a Claimant receives as the result of a product liability law 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?

As a general rule, court costs, such as filing fees, the prevailing party’s travel expenses and document preparation fees, etc., are borne by the loser of the suit. Otherwise, each party covers its own expenses. It is within the discretion of the court to award a reasonable portion of the prevailing party’s attorneys’ fees as part of the damages. By US or UK standards, awards of attorneys’ fees are not generous.

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

There exists a public entity called the Japan Judicial Support Center (Nihon Shihou Shien Sentaa) that may assist with attorneys’ fees and court costs for some Claimants.

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

To receive public funding from the source mentioned above, there must be some possibility of the requesting party winning the suit.

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

The Japanese Bar Association allows Japanese lawyers to structure their fees so that a portion of compensation to be paid at the conclusion of the suit is dependent on the outcome of the law suit. However, lawyers are not allowed to bear litigation costs of their clients until a judgment is entered.

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

A third party is not prohibited from providing funds to a Claimant in order to commence a product liability law suit, however, the Claimant’s lawyer may not fund the claim, but may work on a success fee basis. In the case of working on a success fee basis, the Claimant would have to pay his/her share of court costs as they arose and were due.

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 Japan.

The most notable, recent development in the field of product safety has been the considerable revision of the CPSL which went into effect on May 14, 2007. While not creating a private cause of action for injured persons, the revised CPSL does place on all companies a duty to collect information about accidents involving their products, report such accidents under certain circumstances to the government, and to undertake remedial measures to eliminate any unsafe conditions or properties of their product. There is also a duty placed on retailers to report up the distribution chain any incidents that come to their attention.