JAPAN Law and Practice Contributed by: Shingo Yamada, Yugo Komori, Yasuhiro Akita and Takuma Inoue, Oh-Ebashi LPC & Partners
2.15 Available Funding in Product Liability Claims In Japan, there are no rules for litigation funding specific to product liability cases; general rules are applied. In general, the arrangement of legal fees is typically either an initial retainer combined with a success fee or a time-based fee arrangement, although a fully con - tingent fee arrangement is not prohibited. With respect to litigation funding by a third party, there is a public scheme, the civil legal aid scheme, in which the Japan Legal Support Centre advances legal fees. Users repay them after the resolution of the case. Recently, some business operators provide services where they advance legal fees and are repaid by receiving a certain proportion of any recovery as a success fee upon resolution of the case; however, there is debate as to whether third-party litigation funding, depending on the structure of the arrange - ment, may fall foul of the prohibition on unauthorised legal practice under the Attorneys Act or the prohibi - tion on litigation trusts under the Trust Act. Crowdfunding is also available, and several platforms have been established. It is often used particularly in the fields of administrative litigation, criminal trials and public interest litigation. Donation-based crowd - funding, where financial returns to supporters are not anticipated, is the predominant model; investment- based crowdfunding, where investors receive a share of any recovery, has not been widely adopted. 2.16 Existence of Class Actions, Representative Proceedings or Co-Ordinated Proceedings in Product Liability Claims In Japan, there is a form of opt-in collective proceed - ings under the Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Damage Incurred by Consumers. This procedure is often referred to as the Japanese-style class action. The procedure under this Act operates in two stages: • in the first stage, a designated consumer organisa - tion brings proceedings against a business opera - tor, in which it is determined whether the business
The same applies to guidelines and industry stand - ards voluntarily established by trade associations. 2.14 Rules for Payment of Costs in Product As a general rule, litigation costs are borne by the losing party. In the event of partial success by both parties, the court has discretion to determine the pro - portion of costs borne by each party. Liability Claims Litigation Costs Litigation costs primarily include the court filing fee, travel expenses, daily allowances and accommoda - tion costs incurred in attending hearings, the costs of preparing and filing documents submitted to the court, and the travel expenses and daily allowances of witnesses and court-appointed experts. Litiga - tion costs do not include the cost of preparing pri - vate expert opinions or remuneration paid to private experts retained by a party. The recoverable amounts as costs are prescribed by law on a standardised basis. In order to recover costs, a prevailing party must initi - ate proceedings to determine the amount of the costs after the judgment becomes final and binding. Given the complex and administrative burden of this proce - dure, prevailing parties often refrain from undertaking it in practice. Legal Fees As a general rule, the costs for which the losing party is liable do not include the legal fees incurred by the other party; accordingly, legal fees are in principle borne by the party that incurred them. However, in claims under the Product Liability Act or in tort claims under the Civil Code, a portion of the prevailing party’s legal fees (generally in the order of 10% of the damages awarded) may be included in the award of damages. In the context of contractual claims, it is not usual for legal fees to be included as part of the damages awarded to the prevailing party.
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