Progressing the case

Typical procedural steps

What is the typical sequence of procedural steps in commercial litigation in this country?

Once a plaintiff files a complaint to the district court, the presiding judge first examines it for any defects or statements that need correction or clarification. The complaint is then served on the defendant along with summons designating the first date of oral argument, which is generally within 30 days of the date on which the complaint was filed. The defendant is usually required to submit an answer one week before the first oral argument. If the defendant disputes the allegations in the complaint, the case is then referred to a preparatory proceeding to resolve issues through the exchange of briefs and documentary evidence. At the end of the preparatory proceedings, based on the parties’ motion, the court decides fact witnesses and expert witnesses to be called upon in the trial, the order of their questioning and the time each party is given for questioning. Witnesses are examined in a courtroom open to the public. The parties then typically file their final briefs before the case is closed. The court usually renders its judgment within two months of the conclusion of the oral argument, but may take longer depending on the complexity of the case.

Bringing in additional parties

Can additional parties be brought into a case after commencement?

An additional party may be brought into a case after commencement if such party succeeded to a right or an obligation that is the subject matter of the litigation while the case is pending. A party may also effectively bring an additional party into the existing litigation by filing a separate lawsuit against such party and then request the court to consolidate both proceedings, although the court has discretion over whether to do so or not.

Consolidating proceedings

Can proceedings be consolidated or split?

Yes. A court may order the separation or consolidation of oral arguments. If the court has ordered the consolidation of oral arguments for cases involving different parties and a party requests the examination of a witness who has already been examined before the consolidation but whom the party had no chance to examine, that examination shall be carried out.

Court decision making

How does a court decide if the claims or allegations are proven? What are the elements required to find in favour, and what is the burden of proof?

A court decides a claim is proven if its elements provide the level of conviction that an ordinary person could not interject doubts regarding the veracity thereof. The plaintiff has the burden of proof as to the causes of action, and the defendant bears the burden with regard to its affirmative defence. The required elements vary depending on the nature of the claim. As an example, if a plaintiff claims damages for a breach of contract, it must prove:

  • conclusion of a contract;
  • breach of an obligation created by the contract;
  • occurrence of damage and the monetary value thereof; and
  • proximate causation between the breach and the damage.

How does a court decide what judgments, remedies and orders it will issue?

A court issues judgments, remedies and orders specifically requested by a party, and it may not issue judgments on any matter not raised by the parties or order remedies beyond the relief sought by the parties. For example, if a plaintiff requested ¥1 billion in damages, a court may award ¥1 billion or less, but it cannot order an amount above ¥1 billion even if it finds that the plaintiff is entitled to more.

Evidence

How is witness, documentary and expert evidence dealt with?

In the early stages of preparatory proceedings, parties are expected to submit relevant documentary evidence that corroborates their respective allegations. The court will identify important facts as well as issues that need to be proven by testimonial evidence. Typically, parties will submit written statements of witnesses they wish to have examined. Written statements effectively function as the detailed account of a witness’s testimony, and the party conducting direct examination is expected to focus its questions on matters that are important. For expert evidence, parties either request the court to appoint an expert to provide an expert opinion, or submit an expert opinion obtained from an expert privately retained by that party.

How does the court deal with large volumes of commercial or technical evidence?

For large volumes of commercial evidence, a court may ask a party’s counsel to submit a summary of large volumes of commercial evidence. A court may also ask a party to consider submitting an expert opinion analysing technical evidence to assist its understanding.

Can a witness in your jurisdiction be compelled to give evidence in or to a foreign court? And can a court in your jurisdiction compel a foreign witness to give evidence?

A witness in Japan cannot be compelled to give evidence in or to a foreign court because of Japan’s judicial sovereignty. Likewise, a Japanese court cannot compel a witness in a foreign jurisdiction to provide evidence for litigation in Japan. Arrangements for such witnesses to provide testimony in a foreign or a Japanese court will be governed by the Convention on Civil Procedure Convention (to which Japan is a signatory), bilateral consular conventions, reciprocal judicial aid arrangements or case-by-case agreements. Note that Japan is not a signatory to the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters.

How is witness and documentary evidence tested up to and during trial? Is cross-examination permitted?

Parties must submit an original, an authenticated copy or a certified transcript of a document before the document can be introduced into evidence. In practice, a court inspects the original document submitted by the party requesting its admission first, and then the other party will inspect it. The party denying the authenticity of a document is required to clarify his or her reasoning.

Before the examination, witnesses must swear to tell the truth according to the dictates of conscience, without hiding anything or adding anything. Witnesses are first examined by the party who has requested the examination (direct examination). The opposing party then has an opportunity to conduct cross-examination, which will be followed by the requesting party’s redirect examination. The opposing party is permitted to cross-examine a witness regarding matters mentioned in the direct examination and any matters related thereto, and matters concerning the credibility of the testimony.

Time frame

How long do the proceedings typically last, and in what circumstances can they be expedited?

Statistics show that in 2018, civil litigation in district courts took nine months on average to be completed; however, 6,822 cases had been pending for two to three years, and 292 cases for over five years. There are no special or fast-track proceedings under which a case can be processed more efficiently than normal proceedings.

Gaining an advantage

What other steps can a party take during proceedings to achieve tactical advantage in a case?

The CCP does not provide for a summary judgment or motion to strike a complaint, whether in whole or in part. Before the end of preparatory proceedings, courts often explore with the parties whether there is an opportunity for a settlement before commencing witness examination, and parties often get an insight into how the court is seeing the strengths and weaknesses of the case.

Impact of third-party funding

If third parties are able to fund the costs of the litigation and pay adverse costs, what impact can this have on the case?

As mentioned in question 15, third-party litigation funding is not common in Japan for commercial litigation. In some pro bono and consumer cases, crowd funding has been used as a mechanism to raise litigation costs from third parties, which may enhance the publicity of such cases.

Impact of technology

What impact is technology having on complex commercial litigation in your jurisdiction?

The CCP promulgated in 1996 provides several provisions incorporating the use of technology in litigation. A court may examine a witness residing in a remote location through audio and visual transmissions. A court may conduct preparatory proceedings by telephone if one of the parties is physically present. Apart from those, however, the current procedure relies heavily on paper. A complaint and other motions must be submitted on paper; other briefs must be submitted either in paper form or by facsimile. Case materials in court are not electronically accessible. Technology-assisted document reviews have not become an issue because broad pretrial discovery is not available in Japan.

In 2017, the government announced an initiative to promote the use of technology to digitalise the litigation procedure. In 2018, the government released a report describing the specifics of the initiative consisting of ‘3 e’s’: e-filing, e-court and e-case Management. The initiative will be executed in three phases, some requiring an amendment to the CCP. Currently, a paperless litigation procedure is expected to be implemented in 2023.

Parallel proceedings

How are parallel proceedings dealt with? What steps can a party take to gain a tactical advantage in these circumstances, and may a party bring private prosecutions?

Regulatory or criminal proceedings are in principle distinct from civil proceedings. A party may attempt to have an informal discussion with the competent authorities to coordinate its respective position in each of the proceedings. In Japan, public prosecutors have the exclusive authority to initiate a criminal prosecution, and a private party may file a criminal complaint to urge prosecutorial authorities to do so.