JAPAN Law and Practice Contributed by: Shinichiro Yamashita and Naruku Okamoto, Hiratsuka & Co
5.5 AI-Driven Claims Volumes and Complaints It is unclear whether AI-generated or AI-assisted com- plaints have yet been used before Japanese courts. The number of litigation cases in Japan is relatively small, compared to other nations. There are various reasons for this, but no academics state that difficulty in drafting complaints is the reason. Therefore, it is not known whether AI-generated or AI-assisted com- plaints are resulting in increased claim volume. 6. Third-Party Claims and Defence Trends 6.1 Third-Party Claims and Direct Actions In principle, third parties may neither enforce an insur- ance contract nor sue an insurer in connection with an insurance contract. However, the first exception is the case where an insurance contract contains a clause that allows a direct claim by a third party against the insurer. In that case, a third party may claim for pay- ment against the insurer to the extent allowed by the clause. The second exception is under the Act on Securing Compensation for Automobile Accidents, which provides for compulsory automobile liability insurance. Under this insurance, a person who puts an automobile into operational use for their own benefit is included as an insured. When the person is liable to compensate for damage to a third party, that third party may directly claim against the insurer for pay- ment of damage up to the amount of the insurance coverage. The most common disputes are traffic accident cas- es, where third party victims claim against the liability insurer of the tortfeasor driver. 6.2 Emerging Liability and Defence Trends A victim’s civil claim against an insured is a claim for compensation for damage in many cases. In the claim, regulatory scrutiny, reputational risk and co-ordinated multi-claimant actions themselves have little effect on the examination of the merits of the claim. Insurers are responding in the usual manner, with no special activity.
With regard to claims patterns, the insured party sub- mits a claim for insurance benefits and, in doing so, must assert and prove the facts constituting the basis of the claim; in this respect, no apparent change in pattern can be observed.
5. Claims Against Insureds 5.1 Key Exposure Areas for Insureds
The principal number of claims being brought against insureds relate to automobile accidents. Legal expense cover is now often added in insurance poli- cies, and insureds utilise the cover once they become involved in a legal dispute. 5.2 Shifting Risk Landscape Judging from published court judgments, there has been no substantial change in the nature of claims being brought against insureds. In terms of tech- nology, product liability claims against insured may be relevant. However, defects are judged by taking account of the time of delivery of the product by the manufacturer, so the development of technology after the delivery date would not affect the judgment on a defect. 5.3 Defence Costs and Litigation Complexity Generally, defence costs increase and claims against insureds become complicated if there are multiple claimants, if the case has cross-border elements or if the claim amount is high. In particular, if it is a high- value claim, lots of issues are raised and both parties’ submissions tend to be lengthy, resulting in substan- tial defence costs and a very complicated case. 5.4 Cost Risk Management and Funding Solutions Legal expense cover is often added as an endorse- ment in automobile insurance. In cases of traffic inci- dents between two automobiles, the insureds may count on the cover to transfer litigation cost risk to the insurer. Third-party funding is not common in Japan, because careful examination of respective funding schemes is required for legitimate operation in rela- tion to the Attorneys Act and the Trust Act.
170 I NSURANCE L I T IGATI O N 2026
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