University of Pennsylvania Law School

Penn Law: Legal Scholarship Repository

Faculty Scholarship

2014

No Alternative: Resolving Disputes Japanese Style

Eric Feldman
Univ of Penn Law School

Follow this and additional works at: http://scholarship.law.upenn.edu/faculty_scholarship

Part of the Asian Studies Commons, Comparative and Foreign Law Commons, Dispute
Resolution and Arbitration Commons, Law and Society Commons, Legal History Commons, Legal
Profession Commons, Public Law and Legal Theory Commons, and the Social and Cultural
Anthropology Commons

Recommended Citation
Feldman, Eric, "No Alternative: Resolving Disputes Japanese Style" (2014). Faculty Scholarship. Paper 1551.
http://scholarship.law.upenn.edu/faculty_scholarship/1551

This Article is brought to you for free and open access by Penn Law: Legal Scholarship Repository. It has been accepted for inclusion in Faculty
Scholarship by an authorized administrator of Penn Law: Legal Scholarship Repository. For more information, please contact
[email protected].
 chapter 5

No Alternative: Resolving Disputes Japanese Style1

Eric A. Feldman

1 Introduction

Alternative Dispute Resolution; I can think of nothing else in the legal lexi-
con that is as profoundly unhelpful as a tool for examining and analysing
the Japanese legal system. Indeed, if it were only unhelpful, it could be easily
ignored. But it is far worse than that. The words “alternative dispute resolution”
are misleading, allowing us to imagine that there is a dominant, non-alterna-
tive, mainstream way of resolving disputes—courts—that we comprehend,
as well as a different, alternative, almost subversive dispute resolution system
that exists alongside, or perhaps in opposition to, the mainstream approach.
To intone the mantra of ADR is to imply a certain sameness to the structure
and process of conflict across cultures—we may have different legal rules and
different court systems, but (or so implies the language of ADR) we have all
found ways to deal with our disputes by reference to both a mainstream and
an alternative set of norms and institutions.2
Embedded in the contrast between mainstream and alternative approaches
to conflict resolution are a host of related distinctions. Mainstream dispute res-
olution is state-centric, alternative is private. Mainstream is formal, alternative
is informal. Mainstream is slow and expensive, alternative is quick and cheap.
Mainstream is rigid, cold, and impersonal, alternative is flexible, responsive,
and human. None of these generalisations, I maintain, is terribly useful. Worse,
they contribute to, and perpetuate, a misunderstanding of conflict and its reso-
lution. The solution, I suggest, is to abandon not only the language of ADR, but
also the false conceptual distinctions that it propagates and perpetuates.

1 I am grateful to the University of Pennsylvania Law School for a Summer Research Grant that
funded this work, to Nozomu Hirano and Moritz Bälz for their valuable comments, and to
James Klima and Marika Mikuriya for research assistance.
2 For an excellent, nuanced overview of dispute resolution in the US, see Carrie Menkel-
Meadow, “Regulation of Dispute Resolution in the United States of America: From the
Formal to the Informal to the ‘Semi-formal’,” in: Felix Steffek et al., (eds), Regulation of Dispute
Resolution: ADR and Access to Justice at the Crossroads (Oxford, Hart Publishing, 2013).

© koninklijke brill nv, leiden, ���4 | doi ��.��63/9789004281172_�07

130-148_Zekoll_f7.indd 130 7/15/2014 5:05:57 PM

 Resolving Disputes Japanese Style 131

My definition of ADR is quite simple, though no more so than the defini-

tion generally used by those scholars who work in the field of dispute reso-
lution. Cornell Law School’s Legal Information Institute, for example, uses
ADR to refer to “any means of settling disputes outside of the courtroom”.3
Since without exception all people in all societies resolve only a small frac-
tion of their disputes in the courtroom, it is both odd and in tension with the
meaning of the word “alternative” to label the dominant method of resolving
disputes as an alternative approach. More problematic, in Japan and surely
many other places, the many settings relevant to the dispute resolution process
highlight the futility of the Cornell distinction between the interior and the
exterior of the courtroom. Surely, the courtroom is one venue where conflicts
are resolved, but, in most cases, what happens in the courtroom is intimately
linked to what occurs in the waiting room, the back room, the adjacent room,
perhaps even the bathroom—all distinct spaces within the courthouse. Ought
the courthouse and not the courtroom be the relevant space for distinguishing
between alternative and mainstream dispute resolution? Better yet, perhaps
the focus should be on the difference between public, governmental space ver-
sus private, non-state environments? Or should we be distinguishing between
the nature of the parties (individuals, businesses, states) rather than the nature
of the space in which they operate, or perhaps the types of procedures that are
followed?
Although the Cornell definition says nothing about the substantive rules
used to resolve disputes, much of the literature about ADR specifies or
assumes that the black letter law animating courtroom conflicts will give way
to a less rigid and more party- or case-specific resolution that is not strictly
wedded to the applicable legal principles. What one finds in Japan, in contrast,
is a conventional legal mindset dominating so-called ADR; legal profession-
als control many ADR institutions, legal procedures structure their operation,
and legal norms govern their outcomes. The specific setting may not be the
courtroom—though it may be just a few feet away, as discussed below—but
along many, if not most, other relevant dimensions, ADR parrots the “legality”
of mainstream dispute resolution.
Rather than a simple black/white categorisation of mainstream versus alter-
native dispute resolution, therefore, what we need is a cartography of dispute
resolution institutions that maps the full range of approaches and traces their
interaction. Although drawing such a map is well beyond the scope of this

3 “Alternative Dispute Resolution”, Legal Information Institute of Cornell University Law

School, (last accessed 19 November 2013), available at: http://www.law.cornell.edu/wex/
alternative_dispute_resolution.

130-148_Zekoll_f7.indd 131 7/15/2014 5:05:57 PM

 132 Feldman

chapter, I will sketch a few tentative outlines by describing two examples of

conflict resolution in Japan. Neither can justly be called “alternative”, yet nei-
ther fits the mould of what might be called mainstream or classical dispute
resolution. One, judicial settlement, focuses on process; the other, compensat-
ing victims of the Fukushima disaster, engages a specific event. Together, they
help to illustrate why the term ADR is so unhelpful in our effort to classify and
analyse conflict domestically and cross-culturally, and provide some insight
into the rich array of methods that people use to settle their disputes.

2 Judicial Dispute Resolution

Among those who study the Japanese legal system, the analytical framework
of ADR versus court-centric dispute resolution has been influential.4 Much
time has been spent, and appropriately so, by scholars who are interested in
the selection of judges, how trials are conducted, how witnesses are called,
how evidence is accumulated, who wins and who loses legal conflicts, how
long trials take, the independence of the judiciary, and more.5 Many have also
looked at what are broadly called extra-judicial approaches to conflict, includ-
ing administrative compensation schemes for everything from car accidents
to vaccine-related injuries.6 In 2001, the government sought to remedy what it
considered a scarcity of ADR in Japan when the Justice System Reform Council
pressed for the expansion of so-called alternative means of conflict resolution

4 Takeyoshi Kawashima, “Dispute Resolution in Contemporary Japan”, in: Arthur Taylor von
Mehren (ed), Law in Japan: The Legal Order in a Changing Society, (Cambridge MA, Harvard
University Press, 1963), p. 41, at 41; John Owen Haley, Authority without Power: Law and the
Japanese Paradox, (Oxford, Oxford University Press, 1991); Daniel H. Foote, “Japan’s New ADR
System for Resolving Nuclear Damage Claims”, paper presented at the annual meeting of the
Law and Society Association (3 June 2012), on file with author; Eric Feldman, “Law, Culture,
and Conflict: Dispute Resolution in Postwar Japan”, Faculty Scholarship, Paper 148 (2007),
available at: http://scholarship.law.upenn.edu/faculty_scholarship/148.
5 See, for example, Mark J. Ramseyer and Eric B. Rasmusen, Measuring Judicial Independence:
The Political Economy of Judging in Japan, (Chicago IL, University of Chicago Press, 2003);
Haley, note 4 above; Shozo Ota, “Reform of Civil Procedure in Japan”, (2001) 49 American
Journal of Comparative Law, p. 561.
6 My work on conflict between tuna dealers in Tokyo’s Tsukiji Fish Market also fits into this
category. See Eric A. Feldman, “The Tuna Court: Law and Norms in the World’s Premier Fish
Market”, (2006) 94 California Law Review, p. 313.

130-148_Zekoll_f7.indd 132 7/15/2014 5:05:57 PM

 Resolving Disputes Japanese Style 133

for the Japanese populace.7 This led, in 2004, to the enactment of the Act to
Promote the Use of Alternative Dispute Resolution (effective 2007, the Act’s
primary goal appears to be the promotion of private mediation).8 During the
political debate over the Act, the Japan Federation of Bar Associations (JFBA)
argued (and continues to insist) that lawyers play a central role in all ADR
institutions.9 The idea that legal professionals and/or legal norms should be
central to both mainstream and alternative approaches to conflict resolution
is a theme in both of the case studies discussed below.
Despite the absence of a clear definition of ADR, one of its key features
is that it offers an alternative to judges adjudicating disputes in court. How
then should we categorise judicial dispute resolution, known as wakai (和解)
in Japan, a process that is driven by judges, uses government facilities and
resources, results in written judgments, consumes large amounts of court
resources, and is only superficially consensual (see below), but does not take
place in the courtroom, is not public, and has no formal precedential value?
For the past several years, the phenomenon of judicial dispute resolution has
been the focus of a sub-group of scholars who have been convening annu-
ally at the Annual Meeting of the Law and Society Association, and has led
to the publication of “The Multi-Tasking Judge: Comparative Judicial Dispute
Resolution”.10 But so far, this rather large wrinkle on the analytical fabric of
ADR has not been well acknowledged.11
In fact, Japanese judges spend a great deal of time—in some cases, the
majority of their time—not in the courtroom presiding over cases, but in the
backroom actively settling them.12 Out of public view, in a small room adjacent

7 See “Recommendations of the Justice System Reform Council for a Justice System to
Support Japan in the 21st Century” (12 June 2001), available at: http://www.kantei.go.jp/
foreign/judiciary/2001/0612report.html.
8 The Act on Promotion of Use of Alternative Dispute Resolution, Act No. 151 of 2004
(Japan).
9 As of June 2013, 126 ADR bodies had been certified under the new law. In almost all of
them, utilisation has been extremely low. See Kota Fukui, Chapter 8 in this volume.
10 Tania Sourdin and Archie Zariski, The Multi-Tasking Judge: Introduction to Comparative
Judicial Dispute Resolution, (Australia, Thomson Reuters, 2013).
11 There is, of course, a literature on judicial settlement in the US and elsewhere, but the
practice works somewhat differently in Japan. The German system of “Prozessvergleich”
may be a closer equivalent to wakai, though with different caucusing rules.
12 Indeed, the idea that what judges do is to write judgments, and that those who do it
well—or at least frequently—will be promoted more quickly and enjoy greater status
within the judiciary, has recently been bolstered by the empirical work of Mark Ramseyer,
who writes: “. . . [number of opinions issued per year] matters: judges who write many

130-148_Zekoll_f7.indd 133 7/15/2014 5:05:57 PM

 134 Feldman

to their chambers, judges engage in a judicialised version of shuttle diplomacy,

alternatively talking to defendants and plaintiffs until they come to a meet-
ing of the minds.13 Despite the importance of judicial settlement, however, the
literature on the topic is extremely weak.14 One explanation for the slim aca-
demic attention focused on wakai is that it occurs behind closed doors, well out
of public view. To the best of my knowledge, no Japanese or American scholar
has had the opportunity to directly observe and write about wakai, which may
account for the fact that the scholarship on wakai mostly dates from the 1970s
and 1980s is either written by judges who are proselytisers, attorneys who are
critics, or scholars who have no direct or inside knowledge of the process.15
The wakai process differs dramatically from the archetype of “mainstream”
dispute resolution, featuring a neutral public servant engaged in a public pro-
cess of dispute resolution. But it is also in tension with the notion that ADR
occurs at or within a site other than the courthouse, and with different parties
than one encounters in court. In fact, wakai depends upon the same judges
who preside over courtrooms, even though during the years they spend getting
trained judges receive little formal instruction about how to settle cases. Like
lawyers and prosecutors, judges are required to spend time at the Supreme
Court of Japan’s Legal Training and Research Institute (LTRI) before they enter
professional practice. Yet there are no classes at the LTRI about how to be an
effective case settler. No one tells the students when they should broach the
idea of wakai, how hard they should push the parties to settle, or whether they
should reveal their own views of the merits of the legal claims.16 Nor is there

publishable opinions do better than those who write few. . . . [J]udges who are the most
prolific in writing published opinions for the cases that fail to settle are put in better post-
ings by the Secretariat.” [Table 3.4 on this page purports to demonstrate this proposition];
Ramseyer and Rasmusen, note 5 above, p. 54.
13 My focus in this chapter is District Courts. Settlement, which I used synonymously with
wakai, can happen in higher courts as well, but it is most common in District Courts.
14 There are various differences between wakai and chōtei, notably that chotei is a process of
conciliation under the control of the judiciary that is used in many civil and family cases
and precedes the start of a trial. It is usually overseen by conciliators rather than judges.
Katja Funken, “Comparative Dispute Management: Court-Connected Mediation in Japan
and Germany”, (2002) 3 German Law Journal, available at: http://www.germanlawjournal
.com/article.php?id=130.
15 Although my own experience is also limited, I have been able to attend a number of wakai
sessions in Tokyo and Kobe and to talk with the judges leading these sessions. Although
my sample is small and thus more anecdotal than scientific, it is a first step in filling
the significant gap in the literature about judicial settlement in Japan. See, also, Yoshiro
Kusano, “A Discussion of Compromise Techniques”, (1991) 24 Law in Japan, p. 138, at 138.
16 Because LTRI students spend ten of their twelve months doing rotating internships in
different areas of legal practice, they are likely to get at least some exposure to wakai

130-148_Zekoll_f7.indd 134 7/15/2014 5:05:57 PM

 Resolving Disputes Japanese Style 135

discussion of the legal and ethical issues involved in allowing judges both to
preside over cases in the courtroom and to oversee settlements outside of the
courtroom, to meet with parties individually, and to press parties to accept
particular settlement outcomes by signalling the likely result if the case were
to reach a final judicial determination. In short, the LTRI could potentially
train judges-to-be in the art of settlement, but no such training occurs. Instead,
professional legal education for judges, and for other legal professionals for
whom wakai will soon become a central element of their practice, is silent
about judicial settlement.17
None of this would much matter if wakai was used only infrequently. But
this is not the case. Close to 30 per cent of cases filed in Japan’s district courts
are settled through wakai. Another third of filed cases are contested and reach
a final judicial judgment. And a third of cases are dropped or result in default
judgments. In 2012, for example, of the 168,230 cases that reached a final dis-
position, 69,750 were concluded by judgments (22,442 default judgments and
47,308 contested), 36,234 were withdrawn, and 57,368 (34.1 per cent) were
resolved through the process of wakai.18 Consequently, in most years judges
spend more time brokering settlements and writing settlement agreements
than they do presiding over cases in court and writing legal opinions. In this
sense, it is not an exaggeration to say that wakai is the standard, mainstream
way of managing litigation in Japan, to which full-blown courtroom-based
litigation ending with a final verdict represents an alternative. Marc Galanter
made this point almost thirty years ago in his work on US trial courts:

The negotiated settlement of civil cases is not a marginal phenomenon;

it is not an innovation; it is not some unusual alternative to litigation. It is
only a slight exaggeration to say that it is litigation.19

From the perspective of judges, wakai appears to be appealing for two main
reasons. First, the literature on the Japanese judiciary (and judiciaries every-
where?) emphasises the importance of clearing the docket for a judge’s

during the time that they spend training in the judicial branch. But the training is neither
systematic nor detailed.
17 Judicial settlement has the full force of a binding judgment. Indeed, Article 136(1) of the
Code of Civil Procedure states that, “At any state of the court procedure in the case, the
court may admonish the parties to join the process of arrangement for settlement in
court presided over by judges . . .”.
18 See http://www.courts.go.jp/about/siryo/hokoku_05_hokokusyo/index.html. An addi-
tional 4,878 cases are categorised as ‘other’.
19 Marc Galanter, “ ‘. . . A Settlement Judge, not a Trial Judge:’ Judicial Mediation in the
United States”, (1985) 12 Journal of Law & Society, p. 1, at 1.

130-148_Zekoll_f7.indd 135 7/15/2014 5:05:57 PM

 136 Feldman

r­ eputation and promotion. The goal is to process as many cases as possible as

quickly as possible. Judges whose backloads of cases increase are often seen as
less competent than judges who can manage the pile of cases that sits on the
desk of every trial court judge in Japan. And less competent judges lose out on
the rewards handed out by judicial administrators, who decide where a judge’s
next posting will be (they are rotated every few years) and thereby determine
whether a judge is tracked high or low, seen as sharp or dull, treated as a star
or a dud, gets to live in Tokyo or is exiled to a remote country village.20 Mark
Ramseyer illustrates this nicely in an article which analyses the factors that
lead judges to be appointed to the Supreme Court, where he notes that “the
Secretariat promotes judges according to their docket-clearance rates”.21 One
way in which judges can increase the rate at which they dispose of cases is
to try—whenever possible—to avoid presiding over trials and writing judicial
opinions. The longer it takes to conduct a trial and write a judgment, the less
time is left for the ensuing cases. In many instances, therefore, judges prefer to
engage in judicial settlement rather than to preside over a full trial and write an
opinion, since settlement is likely to be the quicker route to case disposition.22
Second, trial court judgments can be appealed and overruled. In contrast,
there is no appeal from wakai. Judges who settle cases are therefore judges
whose legal acumen is not directly challenged. As one commentator states:

writing a decision itself is rather burdensome to the judge. Moreover,

if his decision is quashed at the appellate level, he would not feel very
comfortable. However, through an in-court compromise, a dispute is

20 Of course, the evaluation and promotion of judges depends upon a variety of factors, not
only the ability to settle quickly cases.
21 J. Mark Ramseyer, “Do School Cliques Dominate Japanese Bureaucracies? Evidence
from Supreme Court Appointments”, p. 15 (Harvard Law and Econ., Discussion Paper
No. 687, 2011), available at: http://www.law.harvard.edu/programs/olin_center/papers/
pdf/Ramseyer_687.pdf. Tomoyuki Ohta and Tadao Hozumi made a similar point several
decades earlier: “Today, most judges are encouraged to eliminate delays in litigation or to
prevent any greater delays, while being allocated a considerable number of cases, which
inevitably causes increasing delays unless they work overtime. . . . . To seek a reduction
in time and mental burdens is a fundamental human instinct and, due to their excessive
workloads, it is natural that many judges and lawyers are strongly attracted to a means
of settling cases that takes less time and involves less of a psychological burden. . . . As a
result, judges gasping for breath under heavy workloads and busy lawyers are apt to aim
at settlement by compromise.”; Tomoyuki Ohta and Tadao Hozumi, “Compromise in the
Course of Litigation”, (1973) 6 Law in Japan, p. 97, at 105.
22 Shusuke Kakiuchi, “The Significance of Wakai in Lawsuits”, in: M. Ito et al., (eds), Issues in
the Code of Civil Procedure, (Tokyo, Yuhikaku, 2009), p. 248 (in Japanese).

130-148_Zekoll_f7.indd 136 7/15/2014 5:05:57 PM

 Resolving Disputes Japanese Style 137

finished, and there is no need for writing an opinion, nor is there any later
review . . .23

In fact, one judge has gone a step further, stating:

I’ve come to think that rendering a court decision indicates an inade-

quacy in the persuasive powers of the judge. In the past I had thought
that for a judge to make efforts at reaching a compromise was an indica-
tion of an inadequate ability to render a court decision and I occasionally
stated this publicly. I have now changed my mind 180 degrees.24

Some attorneys also appear to have a preference for wakai. Lawyers whose
cases settle are lawyers who do not lose, and avoiding loss, at least for many,
may be more compelling than chasing victory, because it enables them to
provide their clients with at least some satisfaction. In addition, attorneys
may have a financial incentive to pursue wakai rather than a court judgment.
Plaintiff’s lawyers in Japan get paid through an arrangement that involves
a mixture of retainers and contingency fees. An attorney who settles will
thus be better compensated than one who loses, and a steady income for an
attorney is better assured through settling cases than through all-or-nothing
litigation.
But not all lawyers are enthusiastic about wakai. Those who are most critical
generally cite what they consider to be an undue degree of manipulation by
judges as the source of their concern. Anecdotes about such manipulation are
common. One prominent lawyer describes a case involving a woman who sued
her obstetrician after her child was born with serious medical complications.25
The lawyer was confident that his evidence demonstrated that the obstetri-
cian had not met the standard of care, and requested 1.5m USD of damages for
his client. But when the judge suggested that the parties engage in settlement
discussions, the attorney felt that he had to co-operate, and during the settle-
ment discussion the judge made it clear that he or she believed the o­ bstetrician
had met the standard of care.26 Because the same judge would preside over

23 Tetsuya Obuchi, “Role of the Court in the Process of Informal Dispute Resolution in Japan:
Traditional and Modern Aspects, with Special Emphasis on In-Court Compromise”, (1987)
20 Law in Japan, at 87.
24 Shunkou Mutou, “Concerning Trial Leadership in Civil Litigation: Focusing on the Judge’s
inquiry and Compromise”, (1979) 12 Law in Japan, p. 23, at 24.
25 Confidential interview with senior Japanese attorney, conducted in Tokyo, Japan, 2010.
26 One crucial norm of the settlement process is that it is considered appropriate for judges
to share with parties their views on the merits of the case. By doing so, judges are strongly

130-148_Zekoll_f7.indd 137 7/15/2014 5:05:57 PM

 138 Feldman

the trial if the parties failed to settle, the attorney knew that his chances of a
court victory were slim. As a result, he says that he felt compelled to accept the
30,000 USD settlement suggested by the judge.27
The costs and benefits of wakai for parties is more difficult to discern,
though that has not stopped a wide array of commentators from declaring that
Japanese litigants have an almost innate cultural preference for wakai. Ohta
and Hozumi, for example, note the “so-called love for compromise” that “exists
among the Japanese”, and elaborate:

The reason the Japanese are fond of compromise is related to the fact
that in their social relations the boundary of one’s rights and duties are
only vaguely defined . . . Japanese favor a means of resolution that ‘washes
away’ the dispute without clarifying rights and duties.28

Shunkou Mutou, formerly a Tokyo District Court judge, concurs, declaring that:

There is no mistaking that the great majority of litigants usually desire a

compromise.29

Similarly, Tetsuya Obuchi notes that:

It is widely said that the Japanese are non-litigious and not legal-
conscious and that they prefer to resolve disputes through out-of-court
settlements.30

tipping their hand, since, by indicating how they are likely to rule if a case proceeds to
judgment, judges are telling the parties whether they are likely to win or lose a case and
what they can expect the case to be worth. Because judges generally do this with each
party separately, however, both plaintiffs and defendants may believe that the judge is
pressuring them to settle by overselling the strengths of their opponent’s case, thereby
getting each party to accept a less desirable outcome than they were seeking.
27 Even without undue coercion, the fact that the parties know that in the absence of
compromise the judge supervising wakai is the same judge who will render a final
judgment surely primes them for compromise. In fact, a 1999 survey of parties who
were involved in wakai indicates that the majority of them found the process less than
satisfactory. See M. Itō et al., “Wakai from the Perspective of the Parties: A Roundtable
Discussion of a Recent Survey”, 1008 Hanrei Times, p. 4, 15 October 1999 (in Japanese).
28 Ohta and Hozumi, note 21 above, at 100.
29 Mutou, note 24 above, p. 24.
30 Obuchi, note 23 above, p. 74, at 74.

130-148_Zekoll_f7.indd 138 7/15/2014 5:05:57 PM

 Resolving Disputes Japanese Style 139

And Oda and Takaishi observe that:

it is the custom in Japan both before and after the proceedings com-
mences to spend time trying to reach a compromise. Settlement is the
preferred way to resolve a dispute.31

Although little evidence for this alleged social preference has been offered, dis-
putants may value the fact that wakai can be faster and simpler than litigation,
as it requires no witnesses and less evidence, is cheaper than litigation, is more
flexible than litigation, since it is less strictly bound by legal rules and often
includes apology and other devices that may help to preserve and/or restore
relationships among parties; and leaves at least some disputants more satis-
fied than they would be with litigation, since the parties to a settlement have
at least some say in the outcome.32
Wakai invites us to consider the relative importance of the different values
that animate the process of dispute resolution. The time it takes to resolve a
conflict is clearly an important factor, as is the cost of the dispute resolution
process, the satisfaction of the parties, the legitimacy of dispute resolution
institutions, the reputation of judges, and more. How ought one to evaluate the
relative desirability of wakai versus trial/judgments, and what factors are most
essential to the crafting of a “just” outcome? To what extent are gaps between
the power and influence of the parties magnified or mitigated by the wakai
process? Are the advantages offered by “better” legal counsel remediated or
amplified by wakai?
Addressing such questions is critical for those interested in understanding
the costs and benefits of different dispute resolution institutions, but the blunt
analytical framework of “alternative” and “mainstream” dispute resolution
provides us with little assistance. Whether one considers wakai to be a form
of ADR, a sub-set of litigation, or something else, is far less interesting and
important than empirically studying wakai and carefully analysing its distinc-
tive features—a widely used process controlled by judges that occurs in the
courthouse, is shaped by but not strictly wedded to legal principles, and com-
bines voluntariness and coercion.

31 Joseph W.S. Davis, Dispute Resolution in Japan, (Dordrecht, Kluwer Law International,
1996), 301, 303.
32 Galanter, note 19 above, suggests that judicial settlement, and settlement more generally,
may bring parties together in a less oppositional way than litigation, thereby avoiding the
divisiveness of adversarialism and promoting the bonds of community.

130-148_Zekoll_f7.indd 139 7/15/2014 5:05:58 PM

 140 Feldman

3 Compensating Victims of the Nuclear Accident in Fukushima

The language of ADR posits the existence of a formal, state-centric, slow,

expensive, and impersonal system of dispute resolution to which parties seek
private, informal, fast, and flexible alternatives. Judicial dispute resolution in
Japan, known as wakai, collapses part of this dichotomy by highlighting the
indistinct boundary between “mainstream” and “alternative” dispute resolu-
tion and the many overlapping roles of judges, the ultimate “non-alternative”
dispute resolvers. Similarly, the system created to compensate the victims of
the 11 March 2011 triple-disaster in Japan is a good example of how a set of
linked institutions can offer the disputants a bouquet of approaches to manag-
ing conflicts that defy simple categorisation. Rather than a division between
the dominant and alternative modes of dispute resolution, Fukushima claim-
ants can present their demands for compensation in at least three different
fora, each with certain perceived advantages and disadvantages, all represent-
ing “alternatives” but none being truly an “alternative”. Perhaps unsurprisingly,
in light of the debate over the ADR Act of 2004, the three institutions han-
dling Fukushima-related claims are heavily dependent upon the organised
bar, which plays a key role in both determining the applicable compensation
norms and applying them to specific cases.

3.1 Litigation
The sheer number of potential claims in Fukushima would tax the limits of any
system of compensation. With close to 20,000 people dead, 27,000 injured,
and 300,000 living in temporary housing, as well as nearly 130,000 build-
ings destroyed and one million homes damaged, potential claimants quickly
discovered that they faced very different options. In a sense, the most demo-
cratic institution with the potential to resolve compensation claims is the
courts, open to all regardless of the type or extent of the injury experienced.
In fact, for those whose harms were not caused by the nuclear meltdown,
litigation is the only possible route to compensation. The Japanese govern-
ment has not offered financial compensation to victims of the earthquake
or tsunami, so only those whose harms can be traced to the meltdown of
the Tokyo Electric Power Company’s (Tepco) Fukushima Daiichi and Daini
reactors are eligible for compensation through out-of-court programmes. So
far, however, few claims for Fukushima-related compensation have reached
the courts, perhaps because of the scarcity of lawyers in the Fukushima region,
the difficulty of identifying the precise cause of one’s harms, and the chal-
lenge of finding viable defendants when one’s harms were caused by “natural”

130-148_Zekoll_f7.indd 140 7/15/2014 5:05:58 PM

 Resolving Disputes Japanese Style 141

events.33 If in December 2013 the legislature had not extended the statute
of limitations for filing claims related to the nuclear accident in Fukushima
to 10 years,34 litigation (unless there was a rush to the courthouse before
March 2014) would have ended up as a little-used approach to adjudicating
Fukushima compensation claims and the vast majority of those harmed by the
11 March 2011 triple disaster would have remained uncompensated.35

3.2 Tepco’s ‘Direct’ Route to Compensation

Like other developed nations that depend upon nuclear facilities to provide
at least some of their energy, Japan has a regulatory scheme that governs the
management of compensation in the event of a nuclear accident. The Nuclear
Damage Compensation Act explicitly provides that compensation be paid by
the nuclear operator whose reactor has caused harm, and charges the Dispute
Reconciliation Committee for Nuclear Damage Compensation (under the aus-
pices of the Ministry of Education, Sports, Culture, Science and Technology
(MEXT)) with the task of drafting guideless to help the operator determine

33 There have been a number of lawsuits alleging a link between the nuclear accident and
suicide, and in June 2013, Tepco for the first time agreed to settle one such suit, involving
a farmer unable to sell his produce in the aftermath of the meltdown. See “Tepco Admits
Culpability in Fukushima Farmer’s Suicide”, The Japan Times, 7 June 2013, available at:
http://www.japantimes.co.jp/news/2013/06/07/national/tepco-admits-culpability-in-
fukushima-farmers-suicide/#.UiUAUvPD_DA. In addition, there appear to be a grow-
ing number of claims brought by those who were not satisfied with the payments they
received via ADR or directly from Tepco and who want to use the courts to underscore
the failures and responsibilities of Tepco and the government. One class action was filed
on behalf of 40 plaintiffs in December 2012; four on behalf of 1,700 plaintiffs in March
2013; another on behalf of 26 plaintiffs in May 2013. Ryuichi Yoshimura, “Fukushima
Genpatsu Jiko Higai no Kyūsai,” (Remedying the Harms from the Fukushima Disaster)
Hōritsu Jihō, 85(10), 2013, (in Japanese). As of September 2013 a total of 3,800 people
are said to have filed suit. See http://sankei.jp.msn.com/west/west_affairs/news/130930/
waf13093018120016-n1.htm.
34 See http://www.asahi.com/articles/TKY201312040561.html.
35 The statute of limitations for Fukushima-related tort claims originally was 3 years
and would thus have expired on 11 March 2014. See “Deadline for Fukushima Victims”,
The Japan Times, 21 August 2013, available at: http://www.japantimes.co.jp/opinion/
2013/08/21/editorials/deadline-for-fukushima-victims/#.UiT_bvPD_DA; http://ajw.asahi
.com/article/0311disaster/fukushima/AJ201309210059. Those who bring claims to the
ADR process can file lawsuits within one month of the termination of their claims. See
http://www.mext.go.jp/a_menu/genshi_baisho/jiko_baisho/detail/1335890.htm; http://
www.nhk.or.jp/kaisetsu-blog/400/161228.html.

130-148_Zekoll_f7.indd 141 7/15/2014 5:05:58 PM

 142 Feldman

what constitutes appropriate compensation.36 The committee created in the

aftermath of Fukushima has ten members, six of whom are legal experts and
four with expertise in medicine and science. To facilitate what is known as
the “direct” route to compensation, the Committee, chaired by a prominent
legal scholar, quickly focused on the creation of compensation guidelines,
which the Chair described as embodying the “essence of court precedent”.37
After a series of meetings, the Committee issued Interim Guidelines in August
2011, which were intended to serve as a template for those engaged in evaluat-
ing the merits of the submitted claims and determining the size of compensa-
tion awards.
Tepco faced several challenges in handling claims that were potentially
eligible for compensation through the “direct” route. Most immediately, the
Nuclear Damage Compensation Act requires the owners/operators of nuclear
facilities to carry 120 billion yen of insurance.38 It also makes them strictly lia-
ble for the cost of accidents, which, in the case of Fukushima, will amount to
trillions of yen, far more than the total value of Tepco’s assets. Because Tepco
lacked the financial means to cover the costs of compensation, the govern-
ment stepped in by loaning large sums of money to Tepco via the Nuclear
Damage Liability Facilitation Fund.39 Compensation payments are thus chan-
nelled through Tepco, but are now entirely state funds.40
Tepco’s second significant challenge was more bureaucratic. Evaluating
claims and awarding compensation is a labour-intensive task that requires a

36 Act on Compensation for Nuclear Damage, No. 147 of 1961, pt. 5, sec. 18 (Japan).
37 See X. Vasquez-Maignan, “Fukushima: Liability and Compensation”, NEA News 29.2,
available at: http://www.oecd-nea.org/nea-news/2011/29-2/nea-news-29-2-fukushima-e
.pdf (noting that the first compensation guidelines were adopted on 28 April 2011 and
that the second guidelines were adopted shortly thereafter, on 31 May 2011).
38 More technically, Section 7 of the Act states that “. . . financial security shall be provided
by the conclusion of a contract of liability insurance for nuclear damage or by a deposit
approved by the Minister of Education, Sports, Culture, Science and Technology (MEXT)
as an arrangement that makes available for compensation JPY 120 billion . . .”.
39 The Act states that the government may pay for compensation that exceeds JPY 120 bil-
lion “when the Government deems it necessary in order to attain the objectives of this
Act,” and “to the extent that the Government is authorized to do so by decision of the
National Diet.” Section 16, Nuclear Damage Compensation Act. As of November 2013,
Tepco had received 3.8 trillion yen from the Fund, which is currently limited to 5 trillion
yen but is widely expected to require a higher limit. See “State Considers Loaning TEPCO
Additional 3 Trillion Yen”, The Asahi Shimbun, 11 November 2013), available at: http://ajw
.asahi.com/article/economy/business/AJ201311110038.
40 Hatsuru Morita, “Rescuing Victims and Rescuing TEPCO: A Legal and Political Analysis of
the TEPCO Bailout”, (2012) 17 Journal of Japanese Law, p. 34.

130-148_Zekoll_f7.indd 142 7/15/2014 5:05:58 PM

 Resolving Disputes Japanese Style 143

significant staff with skills quite different than those of most Tepco employees.
Tepco sought to meet the challenge by creating a large dispute resolution infra-
structure, using approximately three thousand of its own employees, hiring
temporary workers, and contracting with legal professionals to build a bureau-
cracy of more than 13,000 people charged with administering Fukushima
compensation claims. As of 15 November 2013, it had received 723,000 claims
from businesses and individuals who were subject to mandatory evacuation,
656,000 of which have been resolved at a total cost of almost 3.0 trillion yen,
more than twenty times the 120 billion yen liability limit specified in the
Nuclear Damage Compensation Act.41
Predictably, the Dispute Reconciliation Committee for Nuclear Damage
Compensation, along with the entire structure of the “direct” route for compen-
sation administered by Tepco, has come under attack. Critics have bemoaned
what they believe is the excessively long claim form, which was originally
60 pages (eventually cut back to 32 pages), the lack of a mechanism for
electronic filing, the fact that the Fukushima victims seeking compensation
through this system are forced to submit claims to the very party (Tepco) that
many of them blame for their harms, the overly narrow scope of compensation
categories and the low levels of compensation, and the limited availability of
legal representation for victims.
Stepping back from these specific criticisms, it seems clear that the pro-
cess of adjudicating claims created by Tepco under the Nuclear Damage
Compensation Act satisfies many, if not all, of the traditional criteria for
a system of alternative dispute resolution. The process exists outside of the
courtroom, appears to be relatively informal, is meant to be swift and inexpen-
sive, and is designed to be flexible and responsive. Clearly, however, it is not
an alternative; it is the dominant institution for resolving Fukushima-related
damage claims. Moreover, what one finds at the core of the system is not a
set of alternative norms but a carefully-reasoned framework of rules that are
meant not simply to approximate, but to mimic—whenever possible—appli-
cable civil law principles. Other features of the compensation system, includ-
ing its approach to evidence and the importance that it accords to precedent,
are also closely aligned to the traditional legal system.

41 See Records of Applications and Payouts for Indemnification of Nuclear Damage, Tokyo
Electric Power Company (as of 11 November 2013), available at: http://www.tepco.co.jp/
en/comp/images/jisseki-e.pdf. The data are somewhat misleading, since an additional
1,295 million claims have been submitted by individuals who were not subject to the gov-
ernment’s mandatory evacuation orders but evacuated nonetheless. No information is
available on how many of those claims have been compensated.

130-148_Zekoll_f7.indd 143 7/15/2014 5:05:58 PM

 144 Feldman

3.3 ADR the Fukushima Way: The Nuclear Damage Claim Dispute
Resolution Centre
The creation of what is functionally a publicly-funded private court (albeit not
an objective, neutral body) with Tepco at the helm has triggered the birth of yet
another approach to adjudicating Fukushima claims, also provided for in the
Nuclear Damage Compensation Act.42 Not only can claimants choose between
litigation and Tepco-administered compensation, but they can also utilise
what has been dubbed an “ADR” route to compensation, the Nuclear Damage
Claim Dispute Resolution Centre.43 The Centre, created in August 2011, is
run by the Ministry of Education, Culture, Sports, Sciences, and Technology
(MEXT), which is responsible for regulating the nuclear power industry in
Japan.44 Although there are no formal criteria that channel compensation
claims either to Tepco or to the Centre, the expectation of those administering
the Centre is that it will cater to the kinds of claims that are not clearly covered
by the guidelines that govern Tepco’s approach to compensation—particu-
larly those involving young children, pregnant women, complex damages, and
claimants who bridle at the idea of directly negotiating with Tepco.
Similar to the challenge faced by Tepco in staffing its compensation pro-
gramme, MEXT has also needed to rely on outside experts, mostly legal experts,
for its key personnel. Heading the secretariat, for example, is a high court judge
who was seconded to MEXT from the Ministry of Justice, and under him are
200 mediators and almost as many research clerks (the total size of the staff
is just under 500 people), all of whom are experienced licensed attorneys sec-
onded to MEXT from the Japan Federation of Bar Associations.45
The Dispute Resolution Centre is in fact six linked centres, with a main
office in Tokyo and five branches in the Fukushima area. In contrast to
Tepco’s application for compensation, the Centre created a claim form of only
7 pages, though it too accepts only forms submitted in person or by mail, not

42 Act on Compensation for Nuclear Damage, No. 147 of 1961, pt. 5, sec. 18 (Japan).
43 According to Foote, note 4 above, the Centre was modelled in part on the United Nations
Compensation Commission for Iraq, and also on Japan’s system for auto accident
compensation.
44 See “Ensuring Safety of Nuclear Energy and Radiation Uses”, Ministry of Education,
Culture, Sports, Sciences, and Technology, 19 November 2013, available at: http://www
.mext.go.jp/english/science_technology/1303794.htm.
45 Joel Rheuben and Luke Nottage, “Now that the (Radioactive) Dust Has Settled: Resolution
of Claims from the Fukushima Nuclear Disaster”, (2013) 3 Asian Dispute Review, p. 126.
Most of the support staff was seconded from MEXT and the Ministry of Justice.

130-148_Zekoll_f7.indd 144 7/15/2014 5:05:58 PM

 Resolving Disputes Japanese Style 145

­electronically.46 The percentage of claimants represented by legal counsel is

relatively low but increasing, with fewer than 20 per cent having lawyers in
2011 and less than 40 per cent in 2013.47 Although there was an expectation
when the Centre was created that cases would be managed by a panel of three
mediators and would be resolved within three months, the unexpectedly large
number of cases brought to the Centre has led to cases being heard by individ-
ual mediators in a time frame that is often more than twice as long as expected.
The Centre had received 8,617 applications for mediation as of late November
2013, of which 6,114 had been resolved (4,779 were settled, 673 withdrawn, 661
terminated without an agreement, and 1 rejected), and is currently receiving
approximately 500 new cases per month.48
The slow pace of claims resolution at the Centre is also the result of a con-
scious decision made by the Centre administration, which decided that the
compensation process, and the awards resulting from it, should in certain ways
resemble both in form and substance a conventional legal conflict. Although
proceedings of the Centre are private, the lawyers running the system appreci-
ate the importance of articulating clear and open standards to facilitate settle-
ment not only for their ADR cases but also for those brought directly to Tepco
or filed in court.49 In a revealing article written by the former Deputy Chief of
the Centre’s Secretariat, he describes the Centre as engaged in “rule-oriented
ADR”, applying standards from the Interim Guidelines of August 2011 (cre-
ated for Tepco’s “direct” route for compensation) and adopting what he calls
“General Standards” that describe and quantify typical categories of harm so
that mediators hearing similar claims will reach similar results.50 According
to the former Deputy Chief, “both Interim Guidelines and General Standards
are based on tort law and these are a crystallization of the interpretation of

46 In fact, few official documents can be electronically submitted in Japan, and no exception
has been made for Fukushima-related claims.
47 Legal fees were initially a 10,000 yen retainer and 5 per cent of the value of the compensa-
tion award, but that has shrunk to 3 per cent. It is not clear whether claimants with legal
representation get higher awards, nor is it clear to what degree lawyers are attracted to
representing clients in this process for financial gain.
48 See http://www.mext.go.jp/a_menu/genshi_baisho/jiko_baisho/detail/1329118.htm. See,
also, Naoki Idei, The Nuclear Damage Claim Dispute Resolution Center, 28 Japan Com­
mercial Arbitration Association Newsletter, p. 2, September 2012, available at: http://www
.jcaa.or.jp/e/arbitration/docs/newsletter28.pdf.
49 For information about the detailed criteria being used in the ADR process, see http://www
.mext.go.jp/a_menu/genshi_baisho/jiko_baisho/detail/1329129.htm; http://www.mext.go
.jp/component/a_menu/science/detail/__icsFiles/afieldfile/2013/02/08/1329116_010.pdf.
50 Idei, note 48 above, at 2.

130-148_Zekoll_f7.indd 145 7/15/2014 5:05:58 PM

 146 Feldman

tort law applicable to damage claims of such massive scale”. He goes on to say
that “mediation proceedings tend to be like a mini-arbitration aiming at giving
the mediator’s non-binding ruling, rather than mediation seeking compromise
and agreement among parties”.51
Being consistent and following precedent is not easy in this “ADR” context,
in part because submitted claims, documents, and records are kept as paper
rather than as digital files, which makes it difficult for mediators to keep track
of the decisions of their peers. They have tried to manage this by conducting
regular internal case discussions, and also through a relaxed disclosure policy
that makes it relatively easy to publicise case details and outcomes. In addi-
tion, the Centre has taken a page from US mass tort litigation, using what it
calls the Champion Method to identify and settle what it thinks are represen-
tative cases so as to speed up and regularise the resolution of other similar
cases.52 Ideally, in the view of the Centre administrators, the Centre’s inability
to handle a large number of claims can only be alleviated if it can effectively
aggregate cases and set standards for settlement that will be applied by other
institutions, especially Tepco, which is handling the vast majority of claims.53
Although the Centre was initially expected to handle a relatively small num-
ber of claims, particularly those that were an uneasy fit with Tepco’s compensa-
tion process, it has instead emerged as an important component of the overall
Fukushima compensation effort. Described by its architect as a form of ADR,
with the implication that it can handle compensation claims more flexibly,
informally, and quickly than other institutions, the Centre has instead come
to resemble a standard-setting court which endeavours to articulate generalis-
able legal principles that can serve as precedents for other Fukushima-related
claims. Ironically, at least from the perspective of the literature on alternative
dispute resolution, Fukushima’s so-called ADR institution is deeply wedded
to black letter tort law, and has explicitly embraced the idea that it can and
should enunciate standards that incorporate tort principles and can be applied
by other institutions.

4 Conclusion

This article has described two approaches to dispute resolution—wakai, and

the management of Fukushima-related compensation claims—in order to

51 Ibid.
52 Ibid., at 3.
53 Ibid., at 4.

130-148_Zekoll_f7.indd 146 7/15/2014 5:05:58 PM

 Resolving Disputes Japanese Style 147

illustrate the broad spectrum of methods one finds for managing conflict in
Japan. Wakai is orchestrated by judges within the courthouse but sidesteps the
need for a full trial and a judicial opinion. Fukushima victims, at least those
affected by the nuclear accident, have their choice of three venues to air their
claims. The vast majority of claims have been brought through one of the two
schemes designed specifically for victims of nuclear accidents, while courts
have been infrequently utilised.
How ought one to categorise these two different approaches to dispute reso-
lution? Both are heavily dependent upon legal professionals, are attentive to
conventional legal procedures, and are substantively driven by the black-letter
law of the civil code. Yet both are different from the archetype of litigation, with
its courtrooms confrontations and all-or-nothing judicial decisions. Clearly,
neither of these approaches fits the standard definition of “mainstream” dis-
pute resolution, but just as clearly the term “alternative dispute resolution” is
of little use in helping us to analyse and understand these different forms of
disputing.
This chapter argues that it is time to abandon the widely-used taxonomy
of disputing and its overly facile distinction between “mainstream” and “alter-
native”, which falls far short of capturing what is interesting and important
about the many different ways in which conflicts are resolved in Japan and
elsewhere. To enhance our understanding of conflict and its management, we
would be far better served if we were carefully to examine the different forms
and norms of disputing within and across borders and eschew overly simple
classifications.

130-148_Zekoll_f7.indd 147 7/15/2014 5:05:58 PM

130-148_Zekoll_f7.indd 148 7/15/2014 5:05:58 PM