Current Japanese laws provide no system comparable to the class action system in the United States. If a group of people suffers harm arising from a single cause of action and seeks to recover damages, all of the members of the group are required to either file individual suits or to jointly file a lawsuit. To improve consumer protection, the Japanese government is now in the process of drafting and passing legislation to introduce a new class action-like system. The Japanese government issued a summary of the proposal and is currently preparing the draft bill.
Although the details of the system might be changed when the bill is ultimately implemented, as it stands now, the new system would only allow a qualified organization (called a Specified Qualified Consumer Organization) to file an action on behalf of a class.
The proposed class action-like system consists of two stages. In the first stage, the qualified organization brings the lawsuit. A court conducts fact finding and makes a decision on issues which are common to all consumers who suffered harm. If a court finds that the defendant is liable for damages, the plaintiff organization gives notice to each individual consumer to join. At this point, the second stage commences with the involvement of the individual consumers to determine damages. Even if the plaintiff organization does not succeed in the first stage, consumers can still bring their own action.
Because plaintiffs are limited to the qualified organizations and consumers who actively participate in the procedure, the impact of this new system may be quite limited in comparison to the U.S. class action system. Nevertheless, the number of consumer damage cases in Japan will likely increase considerably.