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Japanese Small Claims Procedure: How Does It Work?

Author: Masayuki Yoshida BA, MA, PhD
Issue: Volume 11, Number 2 (June 2004)

Contents

Acknowledgement: Thanks to the generous help of Mel Lewis, Leon Wolff and Hiroko Inoue.

    Introduction

  1. Amongst Japanese and overseas legal scholars, there has been long-term debate on the question of whether the Japanese lack a ‘legal consciousness’ and whether any reluctance to bring civil litigation stems from cultural norms. On the one hand it is argued that the Japanese have a general inclination for avoiding resolution of disputes through court judgment machinery. The counter-argument to this is that the major cause of reluctance to use court procedures is rooted in more practical concerns such as a shortage of lawyers and judges, mal-functioning court procedures and the high costs of litigation. It is arguable that when the debate commenced in the 1960s legal consciousness was relatively low[1] and that judicial reform has increased the number of people utilising the courts for resolution of disputes.[2] However, there is still an attitude of detachment from the courtroom due to the disadvantages of the system, such as delay, high costs, complex procedures, rigorous formality and so forth. For these reasons, people are indisposed to seek civil justice in cases involving small claims.

  2. Those who have sought legal remedies in court have often been obliged to give up their legal claims. This is demonstrated by the expression ‘Niwari-Shiho’ (the 20% Judiciary), which indicates that the judicature is functioning at a bare 20% of its capacity. This led to widely reforming the Civil Procedure. Small Claims Procedure, a replication of the small claims procedure in the United States, commenced on 1 January, 1998. It aims ato enhance access to justice through the creation of a ‘people’s court’, where lay persons of law can be the primary participants in the resolution of legal disputes. The following types of disputes are assumed to be appropriate for summary jurisdiction: recovery of proceeds of goods sold; recovery of security deposits in landlord-tenant cases; unpaid part-time wages; recovery of expenses to repair cars involved in traffic accidents. The Small Claims Procedure has the advantages of simplicity, expeditiousness and low cost. Further, unlike tsujo-sosho (Normal Procedure), the proceedings are completed in one day (during which the players such as the plaintiff, the defendant, their lawyers and any witnesses meet together for resolution in a ‘Round Table Court’, furnished with a literally round or oval table).

  3. Despite the fact that more than six years has passed since its enactment, there is a dearth of English-language references to the Japanese Small Claims Procedure and there has been hardly any research or analysis in overseas journals.[3] Thus the purpose of this essay is to present a comprehensive overview of the Small Claims Procedure, how it works in practice and its shortcomings.[4]

    The Three Requirements of Small Claims Litigation

  4. The first requirement (in Art 368 (1) of the Code of Civil Procedure) is that the amount claimed by the plaintiff must be no more than 600,000 yen (whereas summary courts have summary jurisdiction for amounts up to 1,400,000 yen). The second requirement is that the claimant makes a statement for a trial when filing a Small Claims case (Art. 368 (2)). The statement may appear as follows: ‘I request this case to be tried by the Small Claims Procedure. I, the plaintiff, opted for this procedure twice this year in this summary court’. The third requirement is that the plaintiffs should not file more than ten actions a year in a single summary court (the plaintiff may be required to disclose the number of actions he or she has filed) (Art. 368 (3)).

    Restrictions on Small Claims Procedure

  5. The Small Claims Procedure carries some distinctive restrictions which do not apply to the Normal Procedure. These restrictions may be justified by the underlying purpose of the Small Claims Procedure. Without such restrictions, it would replicate the Normal Procedure.

    Amount

  6. The contested amount of claims is, as previously mentioned, required to be under a certain amount. This distinguishes Small Claims Procedure from Normal Procedure of the summary court, because the small amount enables judges to resolutely deal with law suits in terms of both the procedure and the judicature.

    Subject Matter

  7. The subject matter of Small Claims Procedure is limited to monetary claims. Even in cases where the amount of a claim is no more than 600,000 yen and non-monetary, claims such as those for delivery of good or transfer of title are not amenable to this procedure. As for the subject matter of suits, both objective joint claims and subjective ones can be made in this procedure. However, where a joint claim is presumed to be improper for the Small Claims Litigation, the claim is to be conducted by the Normal Procedure (Art. 373 (3) (iv)). An objective joint claim refers to the situation where, for example, a plaintiff brings an action against a defendant for a monetary claim of a 200,000 yen loan and simultaneously brings another claim for a 300,000 yen payment. It is a strict requirement that the joint claim be for an amount less than 600,000 yen. On the other hand, a subjective joint claim refers to the situation where, for example, a plaintiff sues defendant A for a claim of a 100,000 yen loan and simultaneously sues defendant B for another monetary claim caused by surety. However, even if a claim to confirm a debt is related to a monetary claim, it is deemed unsuitable for the Small Claims Procedure.

    Frequency

  8. The Small Claims Procedure may not be used by any one plaintiff at a given summary court more than 10 times a year (Art. 368). The ground for this restriction is the need to give citizens equal opportunity to utilise the procedure. In addition, the restriction serves to prevent the procedure from being monopolised by financial companies seeking to collect money lent to individual consumers. As a matter of fact, once one sits in the gallery of the courtroom and observes the on-going reality of lawsuits, one can easily perceive that regular plaintiffs such as consumer credit companies bring a large number of lawsuits into regular summary courts and as a result availability of claims is restricted for ordinary citizen plaintiffs. Where a plaintiff submits a false notice with respect to the number of times he or she has used the procedure, a non-penal fine of less than 100,000 yen applies (Art. 381 (1)).

    Examination of Evidence

  9. In accordance with the one day trial principle of the procedure (Art. 370), evidence may only be examined if it is possible to do so immediately (Art. 371). Litigants and witnesses may be required to state allegations, submit all of the relevant documents and produce all evidence prior to or at the time of the first hearing. The hearing is often completed at the level of examining the written documents in the possession of the producing party and witnesses who attend on the hearing date. Therefore, this restriction may make it impossible to obtain an expert opinion or to permit requests for an order to examine out of court. The examination of a witness may be made without an oath (Art. 372 (1)) and in the order which the residing judge deems proper (Art. 372 (2)). It is possible to examine witnesses by communicating simultaneously by transmission and reception of voice (Arts. 372 (3)).[5] A party who requests examination of a witness must pay a day allowance and necessary travel expenses. The charge for the telephone call is paid in advance at a rough estimate. A witness’ statement?need not be put into the court record. However, by the judge’s orders or the litigant’s request prior to the examination, the court clerk may make an audio recording of a witness statement for the purposes of utilising it in the lawsuit. It is advised that even in cases where tape recording is deemed unnecessary, parties who wish to produce evidence at the objection stage in the same court take advantage of the recording service.

    Objection

  10. A judgment in this procedure cannot be appealed to any other court (Art. 377). Jokoku appeal is not available except in extraordinary cases where the objection involves a violation of the constitution. The only remedy for a party who is unsatisfied with the final judgment is to make an objection to the same summary court (Art. 378). It is not possible to object to the final judgment on the grounds of any grace period or payment in instalments which the court granted to the defendant, nor to the lost of interest of limitation or any exemption of the defendant’s obligation to pay indemnification of damage for delay occurring subsequent to filing the suit. Any such objections will be dismissed by the court without oral pleadings. There is no alternative to an objection which the party can make to the same court which rendered the judgment (Art. 378 (1)).

    Relation with Normal Procedure

  11. Under the principle of fairness of litigation, the defendant can make a statement setting forth that the litigation is to be transferred to the Normal Procedure (Art. 373 (1)). When the statement is made, the litigation is to be transferred to the Normal Procedure (Art. 373 (2)). In some cases where the plaintiff has opted to use the Small Claims Procedure, the court can make a ruling that the trial be conducted under the Normal Procedure (Art. 373 (3) (i-iv)). No appeal against the foregoing ruling may be made (Art. 373 (4)). This applies in the following cases:

    Other Features of Small Claims Procedure

    Expeditiousness of Pronouncement of Judgement

  12. In principle, a judgment is to be rendered ‘immediately’ after the court closes oral proceedings. Despite this rule, there may be a temporary delay in the delivery of judgments due to time-consuming procedural matters relating to judgment production (such as reviewing the text of judgment or obtaining opinions from judicial committee persons). If the judge considers it improper to render the judgment on that day, he or she can appoint another day on which to do so. The delivery of the judgment need not be founded upon the original paper of judgment (Art. 374 (2)). The text of the judgment is put into the court record by the court clerk, and a copy is given to the parties.

    Reconciling Judgment

  13. A judgment of the court is a ‘once and for all settlement’ of a reconciliatory nature (Art. 375 (1)). This is exemplified by the provision of grace periods or payment in instalments. When considering whether to grant a grace period, the court will take into account the following: the defendant’s income, life situation and debts; the plaintiff’s intention; and the extent of emergency in realising the plaintiff’s right. Any grace period or payment in instalments cannot exceed three years. If the defendant completes payments within the specified time, the court can exempt him or her from any obligation to pay the monetary damages for delay occurring after the commencement of the action.

    Declaration of Provisional Execution

  14. When the judge accepts all or a portion of the plaintiff’s claim, the rendered judgment must be accompanied by declaration of kari-shikko (provisional execution) (Art. 376).

    Claim Form Available

  15. For lay persons in law to conduct proceedings with ease, filing forms which formulate typical claims are available at the service counter of summary courts.

    Oral Filing of Suit

  16. Suits can be filed orally instead of in writing (Art. 271) and it is sufficient to clearly state the points of the dispute (Art. 272). These provisions meet the ideal of ‘open courts’ for citizens.

    Positive Participation

  17. In a normal action, lawyers receive fees from their clients and provide their expertise in exchange. In Small Claims Litigation, the court clerk has a duty to provide useful and practical advice, to instruct how to complete a form for the suit, or to arrange for other services. At the reception and advisory centre of the Summary Court, there is a legal service available, neutrally provided by the court clerk.

    Filing Fees

  18. See Table 1. Between 1 and 2% of the amount claimed is payable. In comparison with present consumer tax in Japan, which is 5% of the sale price, the filing fees for the Small Claims Procedure are reasonable. In addition to the fee, a deposit for postage is required. The amount of unused postage is returned to the plaintiff at the end of the case.

    Table 1. Filing Fees List

     

    Amount Claimed

    Fees

    Less than 100,000 yen

    1,000 yen

    100,001 to 200,000 yen

    2,000 yen

    200,001 to 300,000 yen

    3,000 yen

    300,001 to 400,000 yen

    4,000 yen

    400,001 to 500,000 yen

    5,000 yen

    500,001 to 600,000 yen

    6,000 yen

    Outlook of Using Small Claims Procedure

  19. This new civil procedure has been touted, by newspapers and television programmes since its commencement as an accessible institution. The number of newspaper articles has increased in proportion with its use. As a result, its availability has been enhanced. Between 1998 (the year the procedure began) and 2002 the number of cases utilising the Small Claims Procedure was 20% per annum. It has doubled in the past five years. If the rate of increase remains the same, approximately 20,000 cases will be heard in 2003.

    Table 2. New Cases Accepted as Small Claims Cases 1998-2003

     

    Year

    Number

    1998

    8,348

    1999

    10,027

    2000

    11,128

    2001

    13,504

    2002

    17,181

    2003

    20,000

    Source: Hoso Jiho 2003

  20. The fact that there has been a rapid growth in the number of new cases accepted in Small Claims Procedure indicates that people are adopting a positive attitude towards legal solutions by the judicature. The ideal of Small Claims Litigation is that lay persons resolve their legal disputes without the help of lawyers. The percentage of DIY litigation in Small Claims Procedure (see Table 3) shows that 94.9% of the litigants attend the court without a lawyer and that indicates that the procedure is in fact an important means of dispute resolution.

    Table 3. The Percentage of DIY Litigation in Small Claims Procedure

     

    Both litigants without a lawyer

    94.9%

    Both litigants with a lawyer

    0.3%

    Plaintiff with a lawyer

    2.3%

    Defendant with a lawyer

    2.5%

    Source: Shiho-tokei-nenpo 2003
    Note: excluding cases which were transferred from Small Claims Procedure to the Normal Procedure.

  21. Undoubtedly the Small Claims Procedure has enhanced the efficiency of proceedings. The average of length of actions in district courts is 8.8 months, compared with 1.5 months in the Small Claims Procedure.

    Other Issues

  22. Thus Small Claims Procedure can be said to be supported by the ideal basis of DIY litigation, which hardly existed in the Japanese traditional legal system. However, there are several negative points in Small Claims Procedure to be considered.

    Mental Burdens

  23. In Small Claims Litigation, parties involved are obliged to settle their dispute in ‘one date hearing’. To those who are unfamiliar with civil law and its practice, it may be difficult and cumbersome to go through legal proceedings, even though judges or court clerks use plain language instead of legal jargon. The fact that litigants cannot make any appeal against the final judgment, except for questioning constitutional issues, may cause a mental burden. Also, litigants may often feel nervous about the court audience, depending on their level of experience with lawsuits, knowledge of law, and oratorical skills.

  24. The court allows the audience to observe settlements in the courtroom in order to realise the ideal of the court which is open court to the public. However, given the mental burden this may cause, it is arguable that permission should be sought from litigants. Another potential burden on the plaintiff is that once parties are defeated, they cannot file the same action to the court or appeal it to any appellate court. In order to reduce these risks, it is advisable to consult Shiho-shoshi, a legal expert, who may charge about 50,000-60,000 yen. Therefore, when one considers the risk of the ‘one date hearing’, one should consider the Normal Procedure which has two kinds of appeal.

    Distorting Facts

  25. Parties are not always faithful to the facts. There may be those who conceal facts which are disadvantageous to themselves, or who attempt to impede the investigation through sophistic refutation and deceit. Moreover, witnesses or people concerned may attempt to deviate from the truth and intentionally support the arguments of either the plaintiff or the defendant.

    Excluded Disputes

  26. Complicated legal disputes are unsuitable for resolution in Small Claims Litigation. Cases are deemed ‘complicated’ where, for example, explanation of the subject matter will be time consuming, where it is anticipated that a number of witnesses will need to be questioned, where expert opinions are required, where the presiding judge needs to visit the scene, and finally when a counter-claim is filed by the defendant. This means that access to civil justice is still a significant problem.

    Transference

  27. The transference of the Small Claims Procedure to the Normal Procedure may be problematic. A plaintiff may decide to utilise the Small Claims Procedure and the procedure may later be transferred to the normal one by the presiding judge’s order or the defendant’s request. As a result, the plaintiff’s time and costs may exceed what he or she expected.

    Problems Relating to Judges

  28. It is also worth considering the problems in relation to the judge who guides the conduct of lay persons in the court. Hence it is possible that the framework of legal resolution which the judge holds may be given priority over the litigants’ arguments or allegations. That is the reason why the final judgment often results in conciliation.

  29. The presiding judge analyses documents which are provided by litigants to prove their allegations and highlight points of controversy. The judge questions both sides and then reaches the decision. However, he or she may feel reluctant to write the final judgment and may recommend conciliation to both sides. In most cases this is a half and half compromise. Therefore, a plaintiff seeking a 100% return of credit from a defendant may be dissatisfied with the compromise.

  30. The judges who handle Small Claims Litigation are appointed differently to those who handle the Normal Procedure. The judges of Small Claims Procedure are generally senior and conservative. Since they are likely to prefer conventional values and hesitate to settle ‘once and for all’ (kuro-shiro wo tsukeru), they sometimes provoke the litigants who desire to obtain a ‘one and for all’ decision. Such conservative inclinations lead to a loss of opportunity for settlement.

  31. The character or ability of the presiding judge profoundly influences the management of the trial in the courtroom. It is not uncommon for judges to be high-handed in an attempt to resolve the dispute as soon as possible. Litigants often show dissatisfaction, alleging that ‘the judge turned a deaf ear to my allegation’ or ‘things were one-sided’. There is also a risk of arbitrary transference of proceedings. These attitudes run counter to the aims of the Small Claims Procedure.

    Geographical Issues

  32. The location of the court should also be taken into consideration. Where the plaintiff’s residence is remote from the court venue, travel time and costs must be taken into account.

    Amount Claimed

  33. Currently, litigants can claim no more than 600,000 yen. However, litigants may desire to increase the limit because, for instance, claims for returnable housing deposits have recently begun to exceed 600,000 yen, especially in urban areas.

    Cross-Action

  34. The counter-claim (Art. 369) may be a problem. This special claim is not allowed because it is against the principle of a ‘one-date hearing’. It refers to a claim where the defendant brings a counter-claim to the same court before the completion of oral proceedings and joins the main defence with the counter-action (Art. 146). For example, a defendant who is sued for 100,000 yen sues the plaintiff for 50,000 yen. As an independent case, each has to be filed in Small Claims Procedure. The problem of costs remains unsolved.

    Objection

  35. Is there a problem with making an objection to the judgment? Sometimes the procedure is likely to be ineffective. Once an objection is accepted, the hearing is conducted in the same court, and therefore the same judge may preside over the objection case. As long as there is no new evidence in the objection case, such rehearing lacks substance.

    Conclusion

  36. The Small Claims Procedure was originally set up for summary courts, which were not able to deal with the growth in the number of new cases such as claims for small deposit and credits. The court’s real intention was not to enhance access to the court. Speed and convenience of proceedings were necessary for the court. It was a coincidence that the desire of citizens seeking relief of monetary disputes matched the effect of court’s real intention to enhance the ability and capability of summary courts.

  37. So far as the current statistics of Small Claims Procedure demonstrate, it appears that the procedure is having a more positive effect on the judicial system than expected. It is true to say that the institution has gradually increased the legal consciousness of the Japanese who were thought to lack it. It can be expected that the judicial efficiency prompted by methods such as ‘dialogue-styled hearings’, ‘intensive hearings’ and ‘collective hearings’ will have a good influence on other courts and the people concerned in order to correct the chronic defects immanent in the Japanese judicial system.

Notes

[1] See Meryll Dean (2002) Japanese Legal System: Text, Cases and Material (2nd ed., London: Cavendish), for more information on the debate over ‘Japanese legal consciousness’.

[2] See http://www.japanesestudies.org.uk/discussionpapers/Yoshida.html, where I briefly reviewed the traditional competing positions.

[3] For a detailed explanation of the Small Claims Procedure in Japan, see T. Hattori and D. F. Henderson (2000) Civil Procedure in Japan (2nd ed., Yonkers, N. Y.: Juris Pub, Ch. 10). For a briefer explanation, see H. Oda (1999) Japanese Law (2nd ed., London: Butterworths, 411-2), and ‘Special Procedure in Summary Courts’ at <http://tinyurl.com/322wy>.

[4] As Japanese-language references used in this paper, see Yomatsu Hinagata (1999) ‘Shogaku-sosho no riyo-jyokyo’ (The Utility State of Small Claims Procedure), in Tsutomu Shiozaki (ed.), Shogaku-sosho: riron to jitsumu (Small Claims Procedure: Its Theory and Practice), Tokyo: Keizai Horei Kenkyukai; Katsuya Hara and Yasuto Takeuchi (2000) ‘Shogaku-sosho riyo no susume: shogaku-sosho riyosha anketo bunseki wo motoni (Recommending the Use of Small Claims Procedure: Based on the Analysis of Questioning Users of the Institution), Juristo (Jurist), 1172: 140-156; Tsuneo Niki (2001) Shogaku-sosho no taiwa-katei (Discourse Process in Small Claims Courtrooms), Tokyo: Shinzansha; Hiromi Okada (2001) ‘Tokyo Kan’i-saibansho no jun-shogaku-sosho-tetsuzuki ni saiban no genten wo mita’ (We Saw the Origin of Judicature in the Quasi-Small Claims Procedure of Tokyo Summary Court), Hanrei-jiho, 1757 33-35; Takaaki Shimozato and Kazumi Tatewaki (2001) ‘Yori riyoshiyasui ippan-shimin-kan no funso-kaiketsu-shisutemu wo motomete: Tokyo-Osaka kaku kan’i-saibansho ni okeru kokoromi’ (Seeking More Accessible Resolution System of Disputes between General Citizens: An Attempt in Tokyo and Osaka Summary Courts), Hanrei-jiho, 1747: 8-19; Naoo Aihara (2001) shogaku-sosho no jitsumu oboegaki’ (A Memorandum on the Practice of Small Claims Procedure), Hanrei-taimuzu (Hanrei Times), 1047: 39-47; and a series of ‘Ganbare! Shogaku-sosho!’ (Cheer Up! Small Claims Procedure!), Gekkan (Monthly) Shiho-shoshi, from July 2000 to March 2001.; Minoru Ishizaki (2002) ‘Shogaku-sosho-un’ei no gaikyo: shiko-go sannen wo hete’ (The Outline of Small Claims Procedure: Three Years Passed after the Enactment), Minji-sosho-zasshi, and so forth.

[5] See Art. 226 (1) of the Rules of Civil Procedure.

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