JAPAN Law and Practice Contributed by: Hiroki Wakabayashi, Kenichi Sadaka and Kei Akagawa, Anderson Mori & Tomotsune
of the proceedings in the second instance may be rejected by the court (Article 157 of the CCP). 10.5 Court-Imposed Conditions on Granting an Appeal When the Supreme Court grants a petition to accept a case (see 10.2 Rules Concerning Appeals of Judgments ), it may determine which grounds for the petition are to be reviewed. Oth- er grounds are excluded from the court’s review (Article 318 of the CCP). 10.6 Powers of the Appellate Court After an Appeal Hearing Once the court of second instance closes the oral proceedings, it may render a judgment either reversing the judgment in the first instance or dismissing the appeal. When reversing the judgment, the court may adjudicate the case by itself or may remand the case to the lower court. It may also encourage the parties to settle the case at any time before rendering a judgment (Article 89 of the CCP). 11. Costs 11.1 Responsibility for Paying the Costs of Litigation “Court costs” paid to the court and “legal fees” paid to lawyers are clearly distinguished from each other. Court costs are subject to the CCP rules and are composed of out-of-pocket expenses, such as revenue stamps put on a complaint, document translation costs (if a doc- ument written in a language other than Japanese is submitted as evidence), etc. Court costs shall be borne, in principle, by the defeated party. In other words, the winning party is entitled to recuperate these costs from the defeated party. However, legal fees are not treated as part of court costs. Thus, legal fees are not subject to
the CCP rules, and shall be borne, in principle, by each party respectively, regardless of the result of the lawsuit. If a plaintiff wants to recover a certain portion of its legal fees, the plaintiff should explicitly include them in the complaint as additional dam- ages to be compensated. However, this is not generally granted by the court even if the plain- tiff wins the other portions of the claim, except in certain types of tort cases where the plain- tiff seeks damages compensation arising from patent infringement, medical malpractice, car accidents, etc. Furthermore, even if “legal fees” are granted as additional damages to be com- pensated, the amount is usually 10% or less of the amount of the damages sought other than “legal fees”. 11.2 Factors Considered When Awarding Costs In principle, the defeated party bears the court costs. For example, if 70% of a plaintiff’s claim is granted, the plaintiff and the defendant will be ordered to bear the court costs on a 30:70 basis, respectively. 11.3 Interest Awarded on Costs Regarding court costs, in principle, no interest is awarded. As to legal fees, if they are granted in the judgment, 3% per annum will be awarded in principle. However, if they are considered to have started to accrue before 1 April 2020 (ie, before the amendments to the Civil Code took effect; see 3.2 Statutes of Limitations ), then 5% per annum will be awarded. On the other hand, the current rate of 3% per annum will be reviewed as of 1 April 2026 and every three years thereafter.
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