JAPAN Trends and Developments Contributed by: Yuki Kuroda, Takahiro Nakayama, Takuya Uehara and Nanoko Sasaki, Oh-Ebashi LPC & Partners
To address these issues, Japan’s consumer law includes a consumer organisation lawsuit sys - tem, which allows consumer organisations certi - fied by the Prime Minister to file lawsuits against businesses on behalf of consumers. The con - sumer organisation lawsuit system includes both injunctive relief and damage recovery systems. Injunctive relief system The injunctive relief system allows consumer organisations to seek the cessation of improper acts by businesses to protect the interests of unspecified numerous consumers (Article 12 of the Consumer Contract Act). However, the system’s scope is limited to acts violating the Consumer Contract Act and does The damage recovery system – sometimes referred to as a “Japanese Class Action” – allows consumer organisations to seek col - lective recovery through litigation on behalf of consumers when numerous consumers have suffered a common financial loss due to a busi - ness’s improper acts. Unlike the injunctive relief system, there are no limitations on the types of acts covered. However, damage from APPI violations typically involves mental distress rather than “financial loss”. Recovery of mental distress damages through the damage recovery system is possible only when combined with financial loss claims or when caused by intentional act of businesses (Article 3, Para 2, Item 6 of the Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Property Damage Incurred by Consumers). Therefore, mental dis - tress suffered by data subjects due to negligent not cover APPI violations. Damage recovery system
data breaches cannot be recovered indepen - dently through the damage recovery system. Consideration of new rights protection systems As outlined above, the current consumer organ - isation lawsuit system is incomplete from the perspective of protecting data subjects from acts violating APPI or otherwise infringing their rights related to personal data, including privacy. Therefore, the Study Group is considering estab - lishing: • a system allowing consumer organisations to seek injunctive relief against acts violating the APPI; and • a system allowing consumer organisations to seek collective recovery through the courts for mental distress suffered by unspecified numerous data subjects in cases of negligent data breaches. Regarding the first system being considered, the Study Group proposes limiting its scope to acts with a high likelihood of infringing individual rights and interests. Specifically, in addition to violations of Articles 18, 19, 20 and 27 being considered for administrative monetary penal - ties (see above), the Study Group is also consid - ering adding violations of Article 28, which stip - ulates that, when providing personal data to a third party in a foreign country, businesses must either obtain prior consent from the data subject for such provision or ensure that the recipient implements protection equivalent to the APPI. While the PPC currently publishes guidelines on what constitutes a violation of these provisions, some aspects remain unclear. If the two systems are established, court decisions are expected to provide clearer guidance on what acts by a busi -
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