• About
  • Offices
  • Careers
  • Students
  • Alumni
Background Image
Bennett Jones Logo Bennett Jones
  • People
  • Expertise
  • Resources
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z All

FEATURED AREAS

Energy
Funds & Finance
Mining
Capital Projects
Governmental Affairs & Public Policy
All Industries
All Practices
Global Reach
Insights
Events
Media
Recent Work
Subscribe
Anti-Spam Learning Centre
Kickstart
Client Extranet Login
People
Featured Areas
All Practices
All Industries
About
Offices
Insights
Events
Search
Search
 

Blog

Class Actions Now Available in Japan

October 24, 2016

 
Subscribe
Print
Share
Share
Twitter
LinkedIn
Email

Japan has enacted its first class actions legislation, following an international trend seen in the European Union and some other countries in Asia. The new class actions law (the Act on Special Measures Concerning Civil Court Proceedings for the Collective Redress for Property Damage Incurred by Consumers) came into force on October 1.

Two-stage process

The new class actions law is distinct from the class action legislation we are familiar with in Canada, and instead contains some features seen in class action legislation in European countries, such as France. The Japanese law is a two-stage procedure and does not allow for individuals to commence class actions themselves. Instead, first, a "Special Qualified Consumer Organization" (which must obtain certification from the Prime Minister) commences litigation under the Act against the company, seeking a declaration that the company is liable for common obligations owed to a "considerable number" of aggrieved consumers. There is no definition of "considerable number" but it is likely that tens of consumers may suffice. If the court finds that the company is liable at the first stage, then the second stage is for consumers to "opt-in" and join the litigation, where a court will determine what damages each consumer is entitled to recover.

Limitations Inherent in the Legislation

Unlike the broader class actions legislation seen in Canada and the U.S., the Japanese law is narrower likely trying to prevent or circumscribe the large number of class actions that was seen in the U.S. after its legislation was enacted. First, in Japan, a consumer organization must commence the litigation. Second, claims must fall within certain actions relating to a consumer contract, such as the default of a consumer contract or liability for a product defect under a consumer contract. And third, consumers can only claim for damages directly related to their claim; consequential losses and damages for pain and suffering are excluded. However, once liability is determined under the new legislation, it is possible consumers may commence separate individual proceedings claiming such losses. Therefore, it is possible that liability under the new Act could potentially open up a company to greater liability from individual claims seeking larger amounts of damages.

Looking Forward

Consumer protection has been a large concern for many countries, resulting in class actions legislation being developed across the European Union and now in Asia. Some Asian countries, such as Hong Kong, still do not have any such legislation and it remains to be seen if they will follow suit. Companies with a presence in Japan should be aware of the legislation and the potential implications it could have for their business. As the types and amount of litigation this law may present are currently unknown, it may be beneficial to pre-emptively consider and set out potential responses to such litigation should it be commenced. In addition, the law does not apply retroactively so companies should review all current and future consumer contracts to try and decrease their exposure to class actions litigation. While the Japanese class action regime appears to be far more restrictive than those that exist in North America (and only time will tell), it does have the potential to significantly expand the exposure of many companies doing business in Japan.

Subscribe
Share
Share      
 
Twitter
LinkedIn
Email
 

Authors

  • Preet K.  Bell Preet K. Bell, Partner
  • Michael A. Eizenga L.S.M. Michael A. Eizenga L.S.M., Partner

Looking Forward: Class Actions in 2019

Download now

Related Links

  • Insights
  • Media
  • Subscribe

Recent Posts

Blog

Freehold Mineral Owners in Saskatchewan May Face Changes [...]

December 09, 2019
       

Blog

ACO Authority Confirmed—Duty to Consult Not Triggered [...]

December 03, 2019
       

Blog

Displacing Coal in Asia with North American LNG

November 28, 2019
       

Blog

Federal Court Issues Site-Blocking Order for ISPs

November 25, 2019
       

Blog

ILPA's Model Limited Partnership Agreement for Private Funds

November 20, 2019
       

The firm that businesses trust with their most complex legal matters.

  • Privacy Policy
  • Disclaimer
  • Terms of Use

© Bennett Jones LLP 2019 All rights reserved. Bennett Jones refers collectively to the Canadian legal practice of Bennett Jones LLP and the international legal practices and consulting activities of various entities which are associated with Bennett Jones LLP

Bennett Jones Bennett Jones