PDF An Overview of the Japanese Legal System

Northwestern Journal of International Law & Business

Volume 5 Issue 3 Fall Fall 1983

An Overview of the Japanese Legal System

Elliott J. Hahn

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Elliott J. Hahn, An Overview of the Japanese Legal System, 5 Nw. J. Int'l L. & Bus. 517 (1983-1984) This Article is brought to you for free and open access by Northwestern University School of Law Scholarly Commons. It has been accepted for inclusion in Northwestern Journal of International Law & Business by an authorized administrator of Northwestern University School of Law Scholarly Commons.

An Overview of the Japanese Legal System*

Elliott . Hahn**

I. INTRODUCTION

Trade between the United States and Japan is growing at such a rapid pace' that it is incumbent on those involved in private international law to be well-versed in the Japanese legal system. This Article is intended to be of service to one seeking an overview of that system. The basic lesson for the reader is that the legal system of Japan differs significantly from that of the United States. This difference arises from the disparate views of Americans and Japanese as to the fundamental purpose of a legal system. Upon reflection, it is perhaps not surprising

* ? Copyright 1984, Elliott J. Hahn. ** Associate Professor of Law, California Western School of Law. J.D., University of Penn-

sylvania School of Law, 1974; LL.M. in Japanese law, Columbia University School of Law, 1980. This article is excerpted from the author's forthcoming book, JAPANESE BUSINEss LAW AND LEGAL SYsTEM, to be published in 1984 by Quorum Books, Greenwood Press, Westport, Conn. Editor's Note: Throughout this Article, the author has relied on various source materials for which no English translations are available. In such cases, the Journalhas relied upon the author's expertise in place of the Journalr independent verification of the citation.

I See Yearbook of .S.-JapaneseEconomicRelationsin 1981 at Ill app. 26 (E. Lincoln ed. 1981).

U.S. Trade with Japan,1976- 1981

(in millions of dollars, f.a.s. value basis, seasonally unadjusted)

Year

Exr ts*

Change Over Year-Earlier

Period

Imports

Change Over Year-Earlier

Period

1977

$10,529

3.8%

$18,550

1978

12,885

22.4

24,458

1979

17,579

36.4

26,243

1980

20,790

18.3

30,714

1981

21,823

5.0

37,612

* Domestic and foreign merchandise, including Department of Defense shipments.

19.6% 31.8 7.3 17.0 22.5

Northwestern Journal of International Law & Business

5:517(1983)

that Americans and Japanese perceive the purpose to be so different. This perception arises from a history and culture that in each country's case is strikingly dissimilar. As a result, Japanese legal practitioners perform functions far different from those performed by practitioners in the United States. Consequently, Japanese legal training does not at all parallel legal training in the United States. In fact, law itself plays a

far different role in Japanese society than in the United States. This author hopes that heightened awareness of these differences will help Americans achieve a better understanding of the people and practices in Japan, and will help improve and increase the transnational relations of the two nations.

II. DEVELOPMENT OF THE JAPANESE LEGAL SYSTEM: A MIXTURE

OF THE OLD AND THE NEw

Even before the beginning of what most historians term "modem" Japan, i.e., the Meiji Era in 1868,2 Japan had developed a system of commercial law based almost entirely on custom.3 Despite the influence of traditional Chinese law on other areas of its legal system, such as public and criminal law,' Japan's commercial law system was almost entirely indigenous. These customs were known and used by the Japanese commercial sector; whenever a problem arose, commercial customs were enforced by various self-regulatory guilds, trade associations and, ultimately, by the courts.5

Until the Meiji Era, there were no lawyers in Japan, at least as we use the term in the United States.6 Nor was there any specialized legal training in counseling others or in representing them in court. In fact, the legal and political systems in concert with Japanese social values exerted a strong, virtually overwhelming, pressure on the people to resolve their problems by themselves and without the aid of a third party.

2 The Japanese group their periods of history since 1868 by the name of the ruling emperor.

Thus, the title Meiji Era denotes the period of history when the Emperor Meiji was the ruler of Japan. The current period in Japan is the Showa Era.

3 Stevens, Japanese Law and the Japanese Legal Systetm Perspectivesforthe American Buriness Lawyer, 27 Bus. LAW. 1259 (1972).

4 The importation of Chinese ideas by the Japanese legal system has been described by one commentator as one of the "great watersheds in the development of Japanese law." George, The Right of Silence in Japanese Law, in THE CONSTITUTION OF JAPAN, ITS FIRsT TWENTY YEARS, 1947-67 257 (D. Henderson ed. 1968).

5 See, e.g., Stevens, supra note 3, at 1259. 6 There were people, though, who became experienced in the ways of the courts and who did

counsel litigants. These were the inn-keepers of Tokyo (then called Edo) who listened to the tales of the litigants who had journeyed to Edo to have their cases heard and gradually developed an expertise in this area. Brown, A Lawyer By Any OtherName: LegalAdvisors in Japan,in LEoAL ASPECTS OF DOING BusINEss IN JAPAN 201, 222 (1983).

JapaneseLegal System 5:517(1983)

The Tokugawa governments7 adopted Confucianism, and its doctrines of social hierarchy and wa (harmony), as a state orthodoxy in an effort to prevent commercial disputes from reaching any formal stage. Confucianism imposes a duty on individuals to serve their superiors and on all society to maintain social harmony.' The Tokugawa governments used these tenets as societal pressures to force potential litigants to settle their problems by themselves, refrain from litigation and preserve the harmony of society.9 To have one's own rights emphasized in court meant telling another that he or she had erred. The Tokugawa system abhorred such judgements. By viewing the pursuit of individual rights in court as a disruption of societal harmony, the system strongly discouraged litigation. Thus, conciliation dominated civil procedure in the Tokugawa period.10 Societal harmony was the all-important objective and the rights of the individual mattered little. In fact, the concept of individual rights was so alien to the Japanese of the Tokugawa era that they had no word to express it. And, in addition the Japanese certainly could not evision individual rights against the state itself."

Although at first glance a vestige of an earlier age, the Tokugawa society's emphasis on the settlement of disputes by the parties themselves without resort to litigation has important ramifications today.

7 The years 1503 to 1868 are known in Japanese history as the Tokugawa era. In 1503 Toku-

gawa Ieyasu unified rule in Japan and, as the shogun, exercised political domination. This era continued under his family's rule until the Meiji Restoration in 1868. See G. SANSOM, HISTORY OF JAPAN 1334-1615 (1961); G. SANsoM, HISTORY OF JAPAN 1615-1867 (1963).

8 Professor Dan Fenno Henderson has dramatically shown how this societal pressure not to take one's disputes to court worked in a typical case. 1D. HENDERSON, CONCILIATION AND JAPANESE LAW: TOKUGAWA AND MODERN 127-70 (1965).

9 Id. 10 Id. 11 Not only could the Japanese during the Tokugawa era not envision the concept of individ-

ual rights, but incredibly enough, no word in the Japanese language at the time expressed the concept of individual rights. Noda, Nihon-JinNo Seikaku To sono Ho-Kannen (The Characterof the Japanese People and Their Conceptionof Law), 140 Misuzu 2, 14-26 (1971), translatedand quoted in THE JAPANESE LEGAL SYSTEM: INTRODUCTORY CASES AND MATERIALS 305 (H. Tanaka ed. 1976) [hereinafter cited as Tanaka]. Thus, when Rinsho Mitsukuri was commissioned to translate the French Civil Code into Japanese for possible adoption in Japan, he was at a loss as to how the French expression droitscivil could be translated into Japanese. Mitsukuri described the situation as follows:

Whereupon at that time I translated the words droits civil as minken [people's powers or authority] there was an argument over what did I mean by saying that the people have power [ken]. Even though I tried to justify it as hard as I could, there was an extremely furious argument... Mukai and Toshitani, The ProgressandProblems of Compilingthe Civil Code in the Early Meyi Era, 1 LAw IN JAPAN: AN ANNUAL 25, 38 n.23 (1967). Mitsukuri's recitation of this episode indicates how difficult it was for many Japanese to accept the concept of people having "rights." Kenri,the word that Mitsukuri eventually decided to use as the Japanese equivalent of droitscivil, has retained the meaning given it by Mitsukuri. Tanaka, supra, at 305.

Northwestern Journal of International Law & Business

5:517(1983)

Many Japanese still hold this traditional precept. As a result, the American who wishes to maintain a successful long-term business relationship with the Japanese must put aside his or her Western law-oriented emphasis on the rights and duties of the parties delineated by a contract. For the Japanese, determining whose rights are at stake in a dispute is not nearly as important as preserving the wa, the harmony between the parties.12 Whereas Americans resolve disputes by looking to the language of the contract itself to define the rights and duties, many Japanese think the contract language is secondary to the spirit of trust between the parties. The Japanese believe that parties should work out problems amicably-in a spirit of trust and cooperation that often disregards what the contract says and sometimes even contradicts explicit contract language.

Traditional Japanese contracts are strange animals, indeed, to American lawyers. The documents are short, often one page recitals of the parties' rights and obligations, in which the parties broadly agree to negotiate in good faith any problem that may arise.13 Just as the Japanese of the Tokugawa era believed that the importance of the harmony of society overrode the rights of the individual, so today many Japanese still believe that vindication of one's rights in a contract dispute causes a rending of the atmosphere of trust in the business relationship. Japanese therefore emphasize negotiation of the dispute in a spirit of harmony to ensure maintenance of an atmosphere of trust. They sacrifice individual rights of the parties in business relations in order to continue and strengthen the harmony inherent in a successful business

relationship.

Americans should note, however, that the larger Japanese companies-such as Mitsui, Mitsubishi and Sumitomo-have "learned" from their American counterparts how important contractual language may be for defining party duties. With regard to international contracts, the Japanese have changed their attitudes somewhat. They have moved from their traditional reliance on wa, and relegating of the contract

12 See Hahn, Negotiating Contracts With the Japanese, 14 CASE W. REs. J. INT'L LAW 377

(1982). 13 Kawashima, The Legal Consciousnessof Contractin Japan, 7 LAW IN JAPAN: AN ANNUAL

1, 15-16 (1974). One Japanese professor has observed that in Japan, "[n]ot only are there many instances where written agreements are not drafted, but even when written agreements are drafted, their contents are generally very simple and in many cases include only the most important elements." Id. The Chinese are similar in their traditional antipathy toward lengthy contracts. One American lawyer has commented that "the Chinese are always asking why we want so much detail .... They say, 'Can't we just shake hands? If we have a problem, we'll work it out."' Ross, S.F FirmsMake Presence Felt in Chinese Capital, Los Angeles Daily J., Nov. 3, 1981, at 1, col. 2.

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