Products Liability Act and Transnational Litigation in Japan

Article excerpt

INTRODUCTION

On July 1, 1994, the Diet of Japan announced the adoption of the Products Liability Act (PLA),1 which applies to products as defined therein, delivered on and after July 1, 1995. Since the PLA was implemented, six lawsuits have been filed in Japanese courts alleging liability under the PLA, but none have reached judgment on the merits yet.2 In this article, we will summarize the various features of the PLA.3 In addition, we will analyze several selected issues concerning the transnational litigation aspects of products liability lawsuits in Japan-namely, service of process, jurisdiction to adjudicate, parallel litigation, and the recognition of foreign judgments. While the new Code of Civil Procedure of Japan (CCP)4 took effect on January 1, 1998, superseding the previous version of the Code of Civil Procedure (Old CCP),5 no material amendment was made with respect to issues concerning transnational litigation.6 Accordingly, case law and scholarly discussions under the Old CCP are still relevant under the CCP.

II. OUTLINE OF THE PRODUCTS LIABILITY ACT

A. History

Prior to the passage of the PLA, there was no specific statute or body of law governing questions of products liability in Japan. Instead, the law traditionally dealt with products liability and related issues of consumer protection under the Civil Code of Japan (Civil Code).7 Almost two hundred cases dealing with products liability in Japanese jurisprudence have developed on the theory of liability in contract (when a contractual relationship of some type exists between a plaintiff and a defendant) or on the theory of liability in tort under the Civil Code (in those instances when a contractual relationship does not exist between a plaintiff and a defendant).8 Under both theories, courts have generally required a finding of negligence to establish the defendant's liability.9 In cases where products liability is an issue, usually no contractual relationship exists, and therefore most cases are brought under the tort theory. However, in some cases based on tort theory, courts have imposed a very high duty of care on the defendant or have tentatively recognized a presumption of negligence.lo This especially occurs in cases involving food and medical products. Accordingly, the liability of the defendant in these cases has become akin to strict liability. "

On December 10, 1993, the Economic Welfare Council, an auxiliary organ of the Economic Planning Agency of Japan, released its 14th Report (EWC Report),12 which recommended that the Japanese government enact a products liability act. The PLA, which is the result of numerous draft versions debated over many years, is modeled closely on the Directive on Liability for Defective Products that the European Union (formerly the European Community) adopted in 1985 (Products Liability Directive),13 rather than on the substantial body of products liability law that has developed in the United States.

B. General Features of the PLA

The primary purpose of the PLA is to protect consumers against injuries caused by defective products, and thereby, to improve the national living standard and the development of the economy generally.'4 Key provisions include Article 2, which prescribes the range of products subject to the law, particularly manufactured or processed items of movable property,l5 and Article 3, which establishes the standard of strict liability.tfi Exemptions from liability are set forth in Article 4 and can be procured by proving that a product meets the "development risk" or "state-of-the-art" standard for such products, or that the product is a component or ingredient manufactured without negligence and according to specifications provided by the manufacturer of a product into which the components or ingredients are incorporated.17 Liability may also be limited under Article 5, which provides certain time limits within which a plaintiff must claim damages, and also stipulates special time limits for damages accumulated over long periods or that are discovered later. …