Temple
University Japan Significant Characteristics of the Regulatory System for Japanese lawyers
In order to provide the reader with a proper perspective on this subject, I would like to briefly outline certain characteristics of the Japanese legal system.
To begin with, I would like to emphasize that the Japanese legal profession has attained full-fledged independence from all governmental agencies. Here Japan is a leader. To my knowledge no country gives lawyers more autonomy than Japan.
Before World War II ended, Japanese lawyers were subjected to the strong control of the Ministry of Justice. Under such circumstances, Japanese lawyers are placed in an inferior status as compared to judges, public prosecutors and therefore could not be expected to act as a guardian for the public against abuses of the government power. This situation changed after World War II.
The post-War Constitution provides the basic principle that an independent judiciary and an independent legal profession are both fundamental to a free and democratic society. Therefore, the post-War Constitution freed attorneys from any governmental control and granted the Japan Federation of Bar Associations autonomous power for regulating the conduct of their members in every respect, from admission to supervision and also to discipline. The government has no role in such regulation, and the court''s only power is to decide cases where an individual attorney claims that a bar association unfairly disciplined or denied him or her membership.
I would like to summarize the self-regulatory powers of bar associations. First, membership in the Japan Federation of Bar Associations (Nichibenren) is compulsory for all attorneys. Bar associations decide who is qualified to join. Next, bar associations have general supervisory powers. They are responsible for ensuring that members obey laws and comply with the code of ethics by enforcing the code of ethics against those who violate that code.
Code of Ethics
The Japan Federation of Bar Associations has a Code of Ethics which was basically modelled after the American Bar Association's Canons of Professional Ethics. The present Code of Ethics was adopted by the JFBA in 1990. The present Code contains more detailed regulations than before. The significance of codified standards lies in the fact that such standards not only provides attorneys with precise guidelines on how to regulate their own conduct but also provide clients with an informed understanding of the legal rights and obligations as clients.
Like any set of regulations, the Code is not effective unless enforced. In Japan, unlike other countries such as the U.S., the basic power to discipline attorneys resides not in the Judiciary, but in the bar association itself.
This stems from the self-regulatory power given to the Bar Associations. In addition, there is a further justification to this. That is, the legal profession is best suited to identify the ethical attributes and technical skills necessary for the practice of law and, therefore, would be in a best position to judge whether the given set of facts constitute violation of the Code of Ethics.
Disciplinary Proceedings
I now turn to the subject of disciplinary proceedings. Please look at the chart below.
| Ethics Committee of Local Bar Association |
Disciplinary
Committee of Local Bar Association |
|||||||
| Complaints Received | Complaints Rejected | Proceeding Commenced |
Disposition | |||||
| Reprimand | Suspension (up to 2 yrs.) | Disbarment | Permanent Disbarment | Total | ||||
| 1989 | 255 | 188 | 32 | 7 | 17 | 2 | - | 26 |
| 1990 | 239 | 184 | 22 | 10 | 10 | 1 | 1 | 22 |
| 1991 | 310 | 218 | 37 | 5 | 15 | 1 | - | 21 |
| 1992 | 368 | 275 | 52 | 13 | 8 | - | 2 | 23 |
| 1993 | 439 | 278 | 54 | 12 | 4 | 4 | 3 | 23 |
| 1994 | 517 | 355 | 56 | 15 | 6 | 2 | 2 | 25 |
| 1995 | 576 | 422 | 50 | 17 | 15 | 5 | 2 | 39 |
| 1996 | 485 | 402 | 45 | 16 | 7 | 3 | 1 | 27 |
| 1997 | 488 | 381 | 61 | 11 | 23 | 1 | 3 | 38 |
Any person may request the initiation of a disciplinary proceeding against an attorney. The Ethics Committee of each local bar, which is composed only of attorneys, investigates each case and decides whether disciplinary proceedings should be initiated. If the Committee concludes that there are grounds to proceed with a case, the case is sent to the Disciplinary Committee of each bar. The Disciplinary Committee is composed of attorneys, judges, public prosecutors and academics. This Committee, therefore, tends to be more objective and impartial than the Ethics Committee. Available disciplinary measures include reprimand, suspension of business for up to two years, an order to leave the local Bar, and disbarment. The decision of the Disciplinary Committee can be appealed to the Japan Federation of Bar Associations, whose decision can be appealed to the Tokyo High Court.
Japanese Code of Ethics holds all attorneys to a high standard with respect to their duty to their client, to their profession, to the court and to the general public.
The Code can be divided into six major categories of responsibility.
I would like now to turn to some of the basic provisions of the Code of Ethics in relation to the attorney-client relationship. It is in this area where the maintenance of the highest ethical standards is most required since the attorney-client relationship is the relationship in which attorneys categorically dominate over lay clients and therefore should shoulder special responsibility to protect their clients' welfare.
Advertisements
Article 10 of the Code provides that an attorney shall not advertise in a manner that would degrade his or her dignity as an attorney.
In Japan, the use by attorneys of public advertising to solicit clients was traditionally viewed as incompatible with the dignity of an attorney as a public servant. Therefore, for a long time attorneys were prohibited from publicly advertising their services. Over time, it become clearer that the public needed greater access to information regarding a lawyer's qualifications in order to enable members of the public to make an informed decision when selecting an attorney. Thus, the prohibition against advertisement was eventually abolished in 1987. Since then, Bar Associations have adopted regulations which permit advertisement, but at the same time limit advertising to certain kinds of public media, the frequency of advertisements and prohibit any statement to indicate that an attorney is a specialist in one or more particular fields of practice. Attorneys may, however, indicate the major area of law they practice, such as corporate law or litigation.
The challenge facing Japanese bars is to establish regulations that permit the full dissemination of information in a fair and accurate manner, but at the same time to prevent abuses of the public trust.
In-house Counsel
In Japan, there is also a long-standing policy against att orneys holding public office or holding positions within commercial entities. Public office was viewed as incompatible with the attorneys' role since attorneys are considered to be a guardian of the public against the abuses of government, and association with commercial entities, whether in a directorship or employee position, was similarly viewed as incompatible with the role of lawyers.
This policy is reflected in Article 30 of the Practicing Attorneys Law (Bengoshi-ho), which prohibits an attorney from engaging in any commercial activities whether an employee or a member of a Board of Directors of commercial entity unless the attorney first obtains an approval from the local bar association. In executing their discretion, local bar associations ensure that lawyers will not render services for any business that would degrade the integrity of lawyers, such as the debt collection business. In addition, in the case of in-house counsel, local bar associations requires employers to agree to permit the in-house counsel to continue to engage in activities conducive to the promotion of human rights and other public interests.
Confidentiality
Article 23 of the Law and Article 20 of the Code provides an obligation for an attorney to keep confidential any matter that he or she learned in the course of representing clients. This obligation also permits an attorney to continue to keep confidential his or her work product, even after the client waives any such right. This situation differs from the U.S. law concept of the attorney-client privilege.
Conflicts of interest
Article 24 of the Code prohibits an attorney from representing a new client if representation of that client will be adverse to another existing client. An attorney is also prohibited from acquiring a proprietary interest in the subject matter of litigation he or she is conducting for a client. Otherwise, a lawyer cannot be expected to exercise an independent professional judgement on behalf of cli ent. There is not any material difference between Japan and the U.S. as to the scope of these prohibitions. However, given the absence until recently of large, institutionalized law firms in Japan, no comprehensive guidelines have been developed with respect to conflicts among partners of the same law firm.
Fees
Articles 36 and 37 of the Code set out the basic principles that an attorney's fee must be reasonable and clear disclosure must be made as to the basis for charging fees.
A fee is considered to be reasonable if it is within the range of fees payable in accordance with the Standard Fee Schedule determined by the relevant bar association. For a long time, such schedules were predicated upon an antagonistic attitude towards contingent fees, which is entirely payable contingent on the outcome of the matter.
This antagonistic attitude was based on the assumption that a contingent fee system tends to promote speculative litigations by attorneys who may take advantage of clients who lack financial resources and knowledge of the law.
Normally, Standard Fee Schedules which is not mandatory, permit both an initiation fee, which is based on the value of the potential claim at stake, and a success fee, which is contingent on the outcome of the litigation. In my experience, litigation fees in Japan are not excessive. For example successful litigation involving a claim for 10 million yen would usually result in initiation fees and contingent fees conbined of approximately 1,770,000 yen or 17% of the total amount recovered.
But recently the public has come to recognize that contingent fee arrangements, if property regulated, can promote equal access to the legal system for those persons who lack financial resources to enforce their rights through litigation. This is reflected in the current fee schedule which permit the waiver of the initiation fees and, therefore, permit that entire fees can be payable contingent upon he outcome of the case. In any event, any conti ngent fee arrangement that gives the lawyer an exorbitant percentage of client's recovery would be null and void.
Prevention of Unauthorized Practice of Law
Under article 12 of the Code, it is prohibited against aiding the unauthorized practice of law, sharing fees with a non-lawyer and forming a partnership with a non-lawyer.
Thus a multi-disciplinary partnership (MDP) is prohibited in Japan. By MDPs, I refer to the profit sharing partnership between legal profession and another professions (usually accountants) which offers clients a broad range of professional services from within the one firm. Recently, International Bar Association adopted a resolution against MDP on the ground that the creation of MDPs threatens essential elements of legal practice, that is, duty to keep confidentiality, duty to prevent conflicts of interests, and maintenance of independence in protecting clients and rule of law.
Civil Liability of Attorney for Malpractice
If an attorney deviates from the professional standards of the Code, he or she may be subject to disciplinary proceedings as I previously discussed, but such proceedings do not compensate an aggrieved client. Clients must go to court for such compensation. Therefore, civil malpractice actions provide another redress to the public for violation of the Code of Ethics.
In this regard, an attorney who fails in his duty and causes actual loss to a client is liable for the damages sustained by the client. As an attorney is under an obligation to exercise a reasonable degree of care in discharging his duties, the failure to exercise such care would give rise to civil liability for attorney malpractice. An action against an attorney for malpractice may be based either on breach of contract or torts law.
For example, a lawyer will be held liable for the consequences of his ignorance or nonobservance of applicable laws and regulations. An attorney is similarly responsible for negligence in initiating and conducti ng litigation, in filing timely papers for appeal, and in handling collections. A lawyer will also be held liable to third parties for his or her gross negligence or willful acts, if such negligence or acts give rise to damages to such third party.
In Japan, however, the number of civil malpractice cases are not as great as compared to the United States due to the fact that clients are generally reluctant to sue lawyers who are considered to have a superior status in Japanese society and also due to the fact that Japanese attorneys tend to be reluctant to sue fellow attorneys.
CONCLUSION
I would like to leave you with a few general reflections. The question presented is why is the legal profession in Japan given so much autonomy? One thing is clear that such privileges are not given just to protect lawyers, but mainly to protect the public and the interests of clients as a whole. Lawyers must live up to the expectations of the public and use these privileges to fulfil their public duties.
The paramount public duty of lawyers in a democratic society is the duty to promote and uphold the rule of law. This means that the legal profession should assure access to justice by all segments of society at affordable costs.
In Japan, the legal profession carries out this obligation particularly through the organized bar, or the Japan Federation of Bar Associations, a compulsory members organization.
For example, the JFBA established Legal Aid Association and currently provides 80% of the funding, which is the only national institution that provides legal aid services to those people in need. Similarly, the JFBA has volunteered to provide legal services to criminal suspects during the pre-indictment period. This legal services is guaranteed by the constitution but the government fails to provide. In order to perform such services, the JFBA established a "duty attorney system" modeled on that of the United Kingdom. Now over 42% of all registered attorneys in Ja pan have become members of the duty attorney system.
The Legal Aid Association and the duty attorney system are but two examples of how the Japanese legal profession plays an indispensable role in providing access to justice.
The JFBA also plays an indispensible role is ensuring compliance with the Code of Ethics
I would like to introduce some of the efforts of the JFBA to implement stringent enforcement of the Code of Ethics. First, the JFBA is striving hard to shorten the period between the initiation and the closing of disciplinary proceedings. Second, the JFBA now discloses to the public the identity of any attorney subject to discipline and the kind of discipline imposed on him or her. The local bar associations are also taking necessary steps to fortify enforcement of the Code of Ethics. For example, the three Bar Associations in Tokyo established a "hot-line" between the citizens and bar associations so that speedy redress can be obtained for aggrieved citizens.
In conclusion, I would like to emphasize that the legal profession in Japan is facing challenges in connection with the Code of Ethics. The challenges are twofold: The first challenge is how to establish stronger and more effective enforcement of the Code of Ethics to satisfy the public expectation of the profession and to overcome criticism that bar associations have difficulty in disciplining fellow members who are incompetent and dishonest. If the Japanese legal profession fails to meet this challenge, it will not only lose its professional reputation but also the privilege of autonomy, which is so vital to preserve democratic society.
Our second challenge requires us to carefully and continually review the provisions of the Code of Ethics so that appropriate changes can be made to reflect the reality of contemporary public needs, such as advertisement, contingent fees and Multi-Disciplinary Practices. The future of the Japanese legal profession depends upon the degree to which JFBA will be successful in responding to those challenges. While this remains to be seen, I can state with confidence from my experience as former Chairman of the International Human Rights Committee that the Japan Federation of Bar Association will be able to live up to the expectation of the public by implementing the strong enforcement of the Code of Ethics and by assuring access to justice to all segment of the public at affordable costs.
© 1998, Toshiro Nishimura, Partner, Nishimura & Partners, Ark Mori Bldg, 29F, 1-12-32 Akasaka, Minato-ku, Tokyo 107
(translation by Vicki L. Beyer)
Temple
University Japan