To qualify as a lawyer (bengoshi) with full rights to give legal advice and represent clients – and also to be appointed as a senior court judge or public prosecutor – candidates must pass the National Legal Examination (shiho shiken), and then be trained at the Legal Research and Training Institute (LRTI). University legal education still takes place primarily at the undergraduate level. Every year, about 45,000 students graduate with a Bachelor of Laws. However, most of them do not become lawyers, instead finding employment in governmental organs or private corporations, because it has been extremely difficult to pass the National Legal Examination. In 2004, while more than 40,000 people took the Examination, less than 1,500 examinees passed. The number of successful examinees is intentionally limited. The number was 500 in 1990, then gradually increased to 1,000 in 2000, and to around 1500 in 2004. It was expected rise to around 3,000 per annum in 2010, as part of a broader program of judicial reforms underway since 2001, but the recent election of a new President for the Japan Federation of Bar Associations now makes this very unlikely.
Another aspect of the agenda advanced by the Judicial Reform Council (JRC) related to the training of prospective legal professionals was the inauguration of 68 new postgraduate “Law Schools” from April 2004. However, although it is easier for their (carefully selected) students to pass a “New Legal Examination” (shin-shiho shiken), it remains one of the most difficult in Japan – with a pass rate of about 30%. The old shiho shiken, which could be attempted without any university degree, has been gradually phased out to allow the new Law Schools to get established, although (as recommended by the JRC in 2001) a small new scheme will be introduced to allow those unable to afford Law School to still qualify to become a bengoshi, prosecutor or Judge.
But what happens after this Examination and when one joins the almost 3,000-strong judiciary in Japan?
Author: Luke Nottage
Prof Luke Nottage (BCA, LLB, PhD VUW, LLM LLD Kyoto) is founding co-director of the Australian Network for Japanese Law (ANJeL), Associate Director (Japan) of the Centre for Asian and Pacific Law at the University of Sydney (CAPLUS), and Professor of Comparative and Transnational Business Law at Sydney Law School. He specialises in international dispute resolution, foreign investment law, contract and consumer (product safety) law.
Will Privately-Supplied ADR Keep Growing in Japan?
[Adapted on 10 April for the East Asia Forum blog]
The shift since the 1990s in the self-image of many bengoshi lawyers outlined in my previous posting, underpinned also by the slowly changing nature of their work generally as well as the emergence of corporate law firms, helps explain the quite swift enactment of the 2004 Law to Promote the Use of Out-of-Court Dispute Resolution Procedures (translated here), driven also by a Judicial Reform Council (JRC) recommendation in 2001. After a slow start, the Law also seemed to be gaining some traction in promoting privately-supplied ADR services.
However, Court-annexed mediation and recent improvements in the litigation process itself leave a formidable competitor. And the conservative backlash among bengoshi in electing their new JFBA President is likely to further dampen the emergence of private ADR services and institutions. Especially now, that only seems probable if and when private suppliers develop niche markets like more facilitative (not evaluative) forms of ADR – a characteristic of ADR in Australia that has impressed ANJeL Visiting Professor Tatsuya Nakamura (see his columns in Japanese reproduced here) – and if litigation costs balloon like they have in countries like Australia.
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Japan’s Legal Profession (and ADR and Legal Education) at a Crossroads
Japanese bengoshi lawyers, as the most influential group within the legal profession, stand at a crossroads. Overall, through the overarching Japan Federation of Bar Associations (JFBA), their work and attitudes have become more amenable to collaborating with the judiciary and even public prosecutors in implementing reforms to the litigation system; to increasing the numbers allowed to pass the National Legal Examination as the gateway to careers as a lawyer, judge or prosecutor; and even to allowing Japan’s many “quasi-lawyers” to expand their legal practice, as well as more promotion of privately-supplied ADR services. Reforms in all these areas were propelled by the Judicial Reform Council’s final recommendations to the Prime Minister in 2001, but they were consistent with the trajectory of bengoshi as a whole. However, the controversial election of a new JFBA President may derail all this, with implications also for related initiatives such as Japan’s new postgraduate “Law School” programs inaugurated in 2004.
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Guest blog: “Learning from Toyota’s Troubles — Where’s the Board?”
Do Toyota’s woes indicate, as some have argued, the last nail in the coffin of the mass production based export model that had served the Japanese economy so well at least through to the 1980s? In other words, does Japan need to wind down even high-tech goods manufacturing and further expand its services sector? Are consumer product safety expectations both within Japan and abroad just too demanding nowadays? Or is Toyota similar to Mitsubishi Motors, an aberrant company which for years conducted clandestine recalls – taking consumers and regulators for a ride – until an employee blew the whistle in 2000 … almost destroying the Mitsubishi brand name? And does the Toyota saga suggest that Japan’s gradual transformation in corporate governance is, well, TOO gradual?
For one view on that last point, and to encourage public comments on any of these questions or others that have been raised by Toyota’s saga, I am pleased to reproduce (with permission) the following posting by an American ANJeL member on JURIST, the University of Pittsburgh’s blog:
JURIST Guest Columnist Professor Bruce Aronson of Creighton University School of Law says that Japanese automobile manufacturer Toyota’s current safety crisis – now the subject of Congressional hearings – should prompt the company to address its seriously flawed system of governance more than just its public image….
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Book Review: Hiroshi Oda, Japanese Law (3rd ed 2009, OUP)
This third edition textbook by University of London Professor Hiroshi Oda continues to fill an important niche in the ever-growing English-language (and even Western-language) literature on Japanese law.
It provides clear, succinct, up-to-date and comprehensive coverage. The effort to cover all major areas of law does mean some trade-off with contemporaneity, but this is largely unavoidable especially now that Japanese law has been changing so quickly and extensively since the mid-1990s. A brief Introduction is followed by parts on:
• The Basis of the System”: chapters on modern legal history, sources of law, administration of justice (including arbitration and ADR), legal profession, and human rights protection – ie the constitution); then
• “The Civil Code – The Cornerstone of Private Law”: general rules, law of obligations and contracts, property law, (only then) tort law, family law and inheritance;
• “Business-related Laws”: corporate law, insolvency law, securities (and financial instruments) law, anti-monopoly law, IP and labour law; and
• “Other Laws”: civil procedure, criminal law and procedure, international relations (eg nationality law, foreign exchange and trade law, transnational disputes).
To read the rest of this Book Review, contact me or see (from mid-2010) the Australian Journal of Asian Law.
2nd ANJeL Australia-Japan Business Law Update CLE Seminar: 13/02/10 in Tokyo
Happy New Year of the Tiger!
Registrations are now open for the 2nd ANJeL Australia Japan Business Law Update seminar: Saturday 13 February 2010 2-5.30pm at the Kasumigaseki building of Ernst & Young in Tokyo (http://shinnihon.vo.llnwd.net/o25/image/aboutus/eytax_access_mapE.gif).
Learn about post-GFC financial markets reg and (yes) the amended Australia-Japan double tax treaty. And even get 3 MCLD/PLD credits. Just A$200 – with no GST chargeable! At least some of us will follow up with an informal (PAYG) dinner.
For more details and registration please visit: http://www.usyd.edu.au/news/law/457.html?eventcategoryid=39&eventid=5139
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Comparing Product Safety Re-Regulation in Australia: The Never-Ending Story
Product Safety is one major theme for the 4th Consumer Law Roundtable, hosted this year at Sydney Law School on 4 December 2009. Others include unfair contract terms and consumer credit, and this Roundtable will have an Asia-Pacific focus. Professor Michelle Tan will join us again from Japan, and keynote speakers are Professor Tsuneo Matsumoto (chair of Japan’s new Consumer Commission, which he outlines here) and VUW’s Kate Tokeley (considering unfair contract terms from a New Zealand perspective). A major role of the new Consumer Affairs Agency – supervised by Commission – is to collect and analyse consumer product-related accident data, which Japanese suppliers need to disclose since amendments in 2006.
Meanwhile, on 16 November the Australian Treasury initiated yet another public Consultation: “Regulatory Impact Statement – Australian Consumer Law – Best Practice Proposals and Product Safety Regime”. Before being considered for a Bill, a cost-benefit analysis (RIS) has been required for these proposals, based on consumer law reform recommendations from the Productivity Commission in 2008 other than those (especially unfair contract terms regulations) which were introduced as a separate Bill in July – without the extra hurdle of such a RIS analysis. Unfortunately, the Treasury did not publicise well this latest Consultation (eg not via their http://www.treasury.gov.au/consumerlaw/ portal) and required Submissions by 30 November. They wanted to report to the Ministerial Council of Consumer Affairs (MCCA), also scheduled for 4 December – alongside, incidentally, PM Rudd’s major conference on the Asia Pacific Community concept (see my revised blog on that here).
Despite this very tight deadline, I provided the following Submission in response to Part II (pp 82-98) of this consultation, regarding Product Safety (PS) re-regulation. I elaborated mainly on a few key points developed in my Submission to the first consultation on the Australian Consumer Law reform announced in February 2009. Hopefully Australia will finally join Japan and many other Asia-Pacific countries (China, Canada and the US) in adopting the new global standards for PS.
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Asia-Pacific Product Safety Regulation and Other Regional Architecture for a Post-FTA Era
Imagine an international regime with these institutional features:
1. Virtually free trade in goods and services, including a “mutual recognition” system whereby compliance with regulatory requirements in one jurisdiction (eg qualifications to practice law or requirements to offering securities to the public) basically means exemption from compliance with regulations in the other jurisdiction. And for sensitive areas, such as food safety, there is a trans-national regulator.
2. Virtually free movement of capital, underpinned by private sector and governmental initiatives.
3. Permanent residence available to nationals from the other jurisdiction (and strong pressure to maintain flexible rules about multiple nationality).
4. Treaties for regulatory cooperation, simple enforcement of judgments (a court ruling in one jurisdiction is treated virtually identically to a ruling of a local court), and to avoid double taxation (including a system for taxpayer-initiated arbitration among the member states).
5. Government commitment to harmonising business law more widely, eg now for consumer and competition law.
No, the answer is not the obvious one: I am NOT talking about the European Union (EU). I am referring to the Trans-Tasman framework built up between Australia and New Zealand, particularly over the last decade, sometimes through treaties (binding in international law) but sometimes in softer ways (eg parallel legislation in each country). And since both countries are actively pursuing bilateral and now some regional Free Trade Agreements (FTAs), especially in the Asia-Pacific region, can’t at least some of these Trans-Tasman initiatives become a template for a broader “Asia Pacific Community”?
This question is particularly timely as the new DPJ-led government in Japan, has declared its support not only for the WTO system but also for FTAs, particularly in the Asian region. It also advocates improvements in food and consumer product safety measures. Whether or not Australia is considered part of Asia, either by Japan or itself, the two countries are continuing bilateral FTA negotiations in the context of growing involvement in regional arrangements in the Asia-Pacific region. Such developments constitute one theme at the NZ Centre for International Economic Law conference, “Trade Agreements: Where Do We Go From Here?”, over 22-23 October 2009 in Wellington. Below is an edited introduction to my four-part paper, now available in further updated form as a Sydney Law School Research Paper. Powerpoint slides are also available in PDF here.
Australia and Japan: A New Economic [and Legal!] Partnership in Asia
Emeritus Professor Peter Drysdale recently presented in Sydney a preview of his now-published consultancy report for Austrade, which urges (p3):
“a paradigm shift in thinking about Australia’s relationship with the Japanese economy. The Japanese market is no longer confined to Japan itself. It is a huge international market generated by the activities of Japanese business and investors, especially via production networks in Asia. It is a market enhanced by the economic cooperation programs of the Japanese government throughout the developing world, particularly in the Asian and Pacific region. And it is a market in which Japanese business now plays an increasingly important role from an Australian base in manufacturing, agriculture and services.”
The Australian Financial Review now confirms that Japan has led China and other Asian investors into Australia over the last year (“What Crisis? Asian Investors rush to our shores”, 24 September 2009). But many probably remain unaware of these facts highlighted by Drysdale’s report (pp 3-4):
“The stock of Japanese investment in Asia amounted to A$ 180 billion out of Japan’s global investment of A$ 772 billion at end-2008. The flow of export and import trade which Japanese business generates in Asia each year was US$ 690 billion in 2008. Procurements through Japanese corporate subsidiaries in Asia amount to A$ 1.2 trillion annually. In addition, Japan spent A$ 11 billion (901 billion yen) in Asia on Overseas Development Assistance programs and procurement through economic cooperation programs. Japanese business has now also established a platform for export to the region from Australia, with diversified investments across food, manufacturing as well as resources, that already delivers A$ 6 billion in Australian sales to Asian markets other than Japan. These are all large new elements in the economic relationship with Japan beyond the A$ 51 billion export trade and A$ 20 billion import trade that Australia already does each year with Japan itself.”
These pervasive economic ties are underpinned by very wide-ranging and stable relations between Australia and Japan at all sorts of levels: governmental, judicial, educational, working holidays, and so on. As pointed out in another recent report “Australia and Japan: Beyond the Mainstream”, by Manuel Panagiotopolous and Andrew Cornell for the Australia Japan Foundation, the GFC has led policy-makers as well as businesspeople to look again more favourably on relationships that combine lower risk with less return, compared to high risk/return ventures.
We can take advantage of these strong and still very profitable Australia-Japan bilateral relationships, as well as the investment and trading links each country (especially Japan) has developed in other parts of Asia particularly since the 1990s, by more actively joining Australian and Japanese partners for ventures throughout Asia. This spreads the risks typically associated with the possibility of higher returns, and also allows each partner to contribute goods or services in which that country has more of a comparative advantage. Thus, for example, Drysdale suggests (p25):
“partnership with Australian services firms in finance, legal services and engineering could be mutual productive. … In FTA talks with Japan the Rudd Government is trying to open the way for professional and financial services firms to set up in Japan, encouraging wider recognition of qualifications and the removal of barriers to obtaining licences in Japan”.
As an example of “legal and consultancy services”, Drysdale mentions that several Australian law firms have long experience in the Asian region, and gives the example of Mallesons Japan. But he concludes that “if we are serious about joining global supply chains and capturing service industry opportunities in Asia then Australian firms need to be there on the ground to capture the business”.
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Legal Education and the Profession in Australia, Japan, and Beyond
Following on from my previous report on Mr Akira Kawamura’s talk in Sydney about the significant transformations impacting on the legal profession in Japan, East Asia and world-wide, let us briefly consider also some inter-related changes to legal education in our region. ANJeL Judges-in-Residence Program Convenor Stacey Steele is co-editing, with Kathryn Taylor, “Legal Education in East Asia: Globalisation, Change and Contexts” (forthcoming in December from Routledge: ISBN 978-0-415-49433-5) to commemorate the late Professor Mal Smith, who did so much for ANJeL, Australia-Japan relations, and legal education particularly in the Asia-Pacific region. ANJeL Co-director Kent Anderson and Competitions Program Convenor Trevor Ryan have contributed a very useful chapter on “Gatekeepers: A Comparative Critique of Admission to the Legal Profession and Japan’s New Law Schools”, which they and Stacey have kindly shared with me in manuscript form.
Hopefully without stealing too much of their thunder, I would like to extend it to locate especially Australian legal education. Below are my opening remarks for a co-authored National Report on Topic I.D “The Role of Practice in Legal Education” for the 18th International Congress of Comparative Law, held four-yearly in different venues – this time from 25 July 2010 in Washington DC. Through the Sydney Centre for International Law, Professor Cheryl Saunders, Justice James Douglas and I have arranged for many other National Reporters on diverse topics selected for the Congress. We can also expect there many National Reports from Japan, although it remains to be seen whether anyone has volunteered one for the same Legal Education topic. There remains considerable uncertainty about Japan’s new postgraduate “Law School” programs and their relationship to the National Legal Examination system, as I explained in a paper first presented a conference organised by Stacey in Melbourne where the “gatekeeper” framework was first unveiled.
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