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Waning economy, increasing numbers of lawyers fuel litigation in Japan

Mark Reutter, Business & Law Editor


CHAMPAIGN, Ill. — It’s a cliché that has outlasted its value – the picture of Japan as a culturally harmonious country whose inhabitants value peace and consensus over the clash of lawsuits and lawyers.

The 1980s and 1990s saw a burst of litigation, which undercut the notion once shared by many Western observers that Japan had pioneered a system of “capitalism without lawyers” that gave the country an economic edge over America.

“From 1986 to 2001, the Japanese civil litigation rate increased by 29 percent,” write two University of Illinois scholars in a forthcoming article in the Journal of Legal Studies. The question of why Japanese citizens now litigate more has been the subject of much theorizing by scholars, including the lament by some writers that Western-style modernization has caused the surge in lawsuits.

Subjecting the question to empirical study, Tom Ginsburg, an Illinois professor of law, and Glenn Hoetker, an Illinois professor of business administration, report that Japan’s turn to litigation can best be attributed to an increase in the number of judges and lawyers and the economic downturn that struck the country after 1990.

The researchers base their evidence on an analysis of lawsuits filed in each of the country’s 47 prefectures between 1986 and 2001 and other data. Ginsburg and Hoetker also examined changes in the total number of lawyers and judges in each prefecture following new laws that encouraged greater use of the legal system for resolving civil disputes.

They conclude that institutional changes played a large part in the increase in litigation. “Taken together, civil procedure reform and the expansion of the bar and judiciary account for over 20,000 additional cases per year, an almost 20 percent increase over the number of cases that would otherwise have been predicted,” they wrote.

In addition, economic activity affected the number of lawsuits filed. “During downturns in which the prefectural income has declined since the previous year, litigation increases. This is consistent with the literature that finds litigation is counter-cyclical, as bad times mean more broken contracts and a willingness to break relationships.”

At the same time, the scholars found no evidence that residents in urban prefectures were more willing to file lawsuits than their rural counterparts, thereby disputing the “cultural and sociological theories” that assume that urbanization and its proxy, modernization, automatically increase litigation rates.

Their forthcoming paper is titled, “The Unreluctant Litigator? An Empirical Analysis of Japan’s Turn to Litigation.”