October 24, 1997, Geneva, Switzerland
Mediation in Japan and Mediations Cross-Cultural Viability
Professor Yasuhei Taniguchi
Faculty of Law, Kyoto University
1. Tradition of Mediation and Conciliation in Japan
It is widely known that East Asian culture frowns upon litigation in court. People prefer to settle a dispute by conciliation or by mediation. I use the term "conciliation" to mean resolution of a dispute by an agreement and the term "mediation" to mean the effort made by a third person to settle a dispute. Therefore, conciliation may be the result of negotiation between the disputing parties only, or of a successful mediation by somebody else. How, why and even whether the East Asian people are by nature non-litigious is a disputable and disputed subject. As to the Japanese, for example, Professor Haley of the University of Washington pointed out in his controversial article "The Myth of the Reluctant Litigant" that they are in fact just as litigious as Americans but are forced to settle out of court, because to sue in court is deliberately made prohibitively difficult in terms of money and time and ineffective in terms of enforcement. The debate is still going on across the Pacific and within the United States (1).
Whether or not the Japanese are litigious by nature, it seems true that we have a firm tradition of mediation and conciliation. Culture is a product of history. If we go back a little more than one hundred years, we can find a society where people were indoctrinated to consider the disputing as morally wrong and where, as soon as a dispute arose, an intensive social effort to settle it amicably was mobilized. It was the duty of senior and authoritative members of the society to keep peace within the boundaries of their social or political influence, and when necessary to make all possible effort to mediate (2). Litigation in court was socially and institutionally made the very last resort. This state of affairs lasted some 250 years, long enough to influence the thinking of people in a certain direction that can be called a tradition or a culture (3).
With a modernization movement starting from around 1870, Japan gradually introduced Western legal systems which, superficially, were completed by the turn of the century. The government, however, was said to have had no real intention to change the basic feudal structure of the society. The pre-modern tradition of mediation and conciliation was carried over into the next era along with the traditional social morals which supported it. People kept feeling a moral pressure to avoid disputes first of all and not to resort to litigation even when an effort for amicable settlement failed.
The defeat in the Pacific War brought about a fresh start in many respects. Legal systems were reformed under strong influence of American law. There was an effort, mostly imposed by the Occupation authority, to re-educate the general public and legal professionals toward a democratic legal system. But even during this period of post-War reform, there was little done in order to change the tradition of mediation and conciliation, because it was not considered as particularly repugnant to the ideology of the post-War reform.
As a matter of fact, the Japanese government, from the time of early modernization until today, has been engaged in a constant effort to strengthen the instrumentalities for mediation and conciliation, as explained below in detail. Probably, this is justifiable. The past 100 years in Japan, since the last quarter of the 19th century, have been an era of radical social, economic and political changes which were inevitably accompanied by conflicting values and life styles. Such social changes gradually undermined the traditional social structure which not only engendered an anti-dispute social pressure, but also supplied the personnel who had enough social authority to intervene and mediate informally. In order to cope with this change, the government had to introduce formal institutions such as the court-annexed mediation which took over the role of informal authorities. What was mediated by a neighborhood landlord had to be taken care of by the court through mediation. Another reason why the government relied on mediation rather than litigation was that it was more apt for resolving disputes efficiently and without causing much conflict. During the time of radical changes in legal rules, a straight application of new rules through the litigation process could have created a sense of animosity among the population and had adverse social repercussions. Supported by the popular feeling in favor of amicable settlement, mediation worked as a cushion to absorb the shock created by a new legislation (4).
As a result, the tradition of mediation and conciliation still persists today. But it is perhaps wrong to believe that most disputes in Japanese society are settled by conciliation or mediation. Statistics show that a considerably greater number of cases for litigation rather than mediation are brought to the court. In 1996, 443,619 civil actions (only 298,192 in 1992) were brought to first instance courts, while only 165,107 civil mediation cases (only 99,973 in 1992) were started in the same year (5). The statistics require careful analysis. But it seems clear first of all that court-annexed mediation is not the norm and there is no evidence that a large number of disputes are mediated elsewhere. As explained below, there are several other institutionalized mediation mechanisms. However, all of them handle only a relatively small number of cases. Secondly, a noticeable increase in litigation between 1992 and 1996 certainly reflects the worsening Japanese economy during the period. But the mediation cases did not show a comparable increase (6). We can infer that the bad economy added a large number of disputes, but they were rather brought for litigation than mediation.
A question arises, therefore, how the Japanese settle their disputes normally. One possible answer is that they somehow settle their disputes with the help of some kind of mediator outside of any formal mechanism. But as mentioned before, there are fewer eligible personalities today to act as effective mediators. It is certainly possible and does occur that an influential relative intervenes in a family dispute, or a bank or a trading company does so in a commercial dispute. But we know that this kind of intervention has become increasingly infrequent and ineffective.
If so, the likelihood is that the parties themselves negotiate and settle disputes without any outside mediator. The total of the above-quoted numbers of litigation and mediation cases together is much smaller than the number of first instance civil actions in other industrialized countries. If the hypothesis that a certain level of economic development creates a certain number of disputes in any human society is correct, the Japanese society must have as many disputes as any other country with a comparable economic development. If so, we must assume that a much greater number of disputes are settled in Japan solely by the parties negotiation than elsewhere.
But this hypothesis is not convincing in view of the relatively small number of formal mediation cases brought to the court. Large commercial disputes admittedly do not go to the court for mediation, but the number of such cases is relatively small anyway (7). My hypothesis is rather that the total number of disputes in Japanese society is much smaller than elsewhere. This proposition is difficult to prove. It is interesting to note that the increase in litigation and mediation during the past 50 years has not been as much as the increase in population and size of economy during the same period. These numbers in 1955 were 143,065 (litigation) and 123,064 (mediation). As quoted earlier, these numbers became 298,192 and 99,973 respectively in 1992. As of 1955, it was only three years after the Allied Occupation was over and Japans economy was still very small. An immediate conclusion is that tremendous economic development in the period did not give rise to disputes proportionately. If the total disputes are less, it is no wonder that the number of lawsuits is also less. In any event, this subject requires a more scientific analysis. Another interesting aspect of this comparison is that even the number of mediation cases decreased. We can draw an overall inference that the total number of disputes in society did not increase radically as the size of the economy expanded.
However, there is an interesting difference between Japanese lawsuits and those in some other countries. That is the rate of settlement. In the United States, for example, over 95% of lawsuits are settled before trial. In Japan, the rate of settlement is only about 35% (8). Americans negotiate after having brought an action. Japanese negotiate first and, only after it has failed, bring an action. This can be partly explained by a relatively high filing fee (about 1/400th of the amount claimed) in Japan. In the United States, the filing fee is nominal. But this is probably not the only explanation. I think the tradition of avoiding litigation is certainly working here. The Japanese try to avoid litigation until the last moment, but once a litigation becomes necessary they tend to fight an uncompromising war. Japanese litigation is often more emotionally involved. It is well-known how embarrassed Hitachi was when IBM offered a joint venture with it while IBM was suing Hitachi in America for a large sum of damages. To the Japanese mind, it would be unthinkable to fight with the left hand and to shake with the right at the same time (9).
2. Institutions for Mediation and Conciliation
From the early period of legal modernization in the second half of the last century, the Japanese government has expressly and constantly taken a policy to implement institutions for mediation and conciliation (10). In the 1870s when the new government was eager to introduce a French legal system, it adopted conciliation preliminary to litigation. On the surface, they emulated the then French system of conciliation préliminaire, but in fact they continued the centuries-old tradition. It is reported that the practice of this procedure was very similar to that under the pre-modern regime where authoritarian judges practically forced the parties to settle (11). With promulgation of the German-styled Code of Civil Procedure in 1890, the preliminary conciliation was abolished. A possibility of mediation in court was included within the litigation process where the judge was free to advise the parties to settle and, if necessary, hold an informal settlement conference. This practice has been prevalent until today (12).
When the good economy after World War I collapsed and social unrest resulted, the government quickly responded by creating a court-annexed mediation system ("Chotei", often translated as "conciliation") in certain areas where the need for swift dispute resolution was felt most urgent, such as land or house tenancy disputes (1922) and agricultural tenancy disputes (1924). Similar legislation followed for commercial disputes (1926), money loan disputes (1932), mining pollution disputes (1939), etc. (13) After World War II, all these special legislations were consolidated with certain amendments into the comprehensive Civil Conciliation Law of 1951 for handling all kinds of civil disputes, except disputes among family members, which were now entertained by the newly created Family Court under the name of Family Mediation. Before suing in the District Court (for example, for divorce), one must go for mediation in the Family Court. Both Civil and Family Conciliation are handled by a three-member conciliation committee consisting of one judge and two conciliators. Conciliators work on a part-time basis and are recruited from the bar or other professions like accountants, land surveyors, judicial scriveners, architects, engineers and ordinary citizens of various occupations, or who are retired. In Family Conciliation, half of them are women and mostly housewives.
In addition to this general scheme of mediation in court, the government created various institutions for mediation of specific kinds of disputes. They include the Labor Relations Commission for the conciliation of industrial disputes, Pollution Disputes Adjustment Commission for pollution disputes, Construction Dispute Examination Commission for construction disputes, and the Equal Opportunity Conciliation Commission for womens employment disputes, etc.
The private sector also created some systems with or without the support of the government. Most successful is the Automobile Accident Dispute Settlement Center established in a joint effort by insurance companies, academics and willing members of the bar. More recently, some local bar associations created what is called a Bar Association Arbitration Center. Despite its naming, they process more mediations than arbitrations. More recently, when the new Product Liability Law was enacted in 1993, the government advised manufacturers associations (like the Automobile Manufacturers Association, the Association of Pharmaceutical Companies, etc.) to establish a system for settling product liability disputes arising from their products. Most industries have established a "center" which receives claims from aggrieved consumers. It is usually members of the bar who serve as part-time mediators (14).
Thus, it is not just the tradition that has kept alive the practice of mediation. The role of government in keeping the tradition alive cannot be ignored. Such effort on the part of the government has been criticized as reactionary and dispensing cheap justice at sacrifice of the constitutionally guaranteed rights of people (the politics of informal justice!). But such politics, if they exist, must be considered as nothing but a result of the tradition.
3. Implications of Tradition for Arbitration and Litigation
Litigation and arbitration require a confrontation of disputing parties. There is an admitted tendency among the Japanese to avoid a confrontation. Scientific surveys and experiments have endorsed it. A socio-psychological study of negotiation style by an international group of researchers studied the negotiation styles in several countries including Brazil, Canada (Anglophones and Francophones), China (northern, southern and Taiwan), the Czech Republic, France, Germany, Hong Kong SAR of China, Japan, Korea, Mexico, the Philippines, the Russian Federation, Slovakia, the United Kingdom and the United States. They determined that the Japanese negotiation style was unique (15). It was distinctively different even from that of other East Asians. For example, the Japanese showed less frequency in gazing at the negotiation partner during negotiation. Another empirical study has found out that the Japanese want to participate in a decision-making process by a third person like a judge or arbitrator, but their attitude is not confrontational - it is merely one of passively watching the decision maker so that he behaves properly (16).
Supposing that such a non-confrontational attitude prevails, one can easily imagine that litigation or equally confrontational arbitration is the last choice for ordinary Japanese. But it is also true that nowhere in the world is litigation the first choice in resolving a dispute. As mentioned before, Americans use litigation frequently, but they do not seem to have the intention to have their dispute ultimately decided by a final judgment. They sue to negotiate. My suspicion is that in the United States it may be necessary to start a court action in order to force the opponent to come to the negotiation table. Such situations are not inexistent in Japan either. But most Japanese are willing to negotiate without being so forced by a lawsuit. This is because of the tradition as explained above. And because of that same tradition, litigation is the last resort. As a result, most litigation cases are brought to the court in a late stage of disputing. They have become not only complex, but also often emotionally involved and no longer easy to settle. Hence the lower rate of settlement.
The implication of this for arbitration is important. Arbitration has become increasingly adversarial. In my view, this is unavoidable. Being different from litigation, an arbitration case can be an amiable composition to be decided ex aequo et bono. But the use of this possibility seems insignificant. Especially in international commercial disputes, arbitration has become a legal fight similar to litigation, and lawyers participate in it as important players and for a good reason. In an international or cross-cultural dispute, the parties want to have an objective standard by which a decision is to be made. They draw up a detailed contract and agree upon a national law of their choice as the governing law with which they are familiar. They agree to use an arbitral institution whose procedure is known to them as fair and predictable. The application of pre-set laws and rules guarantees the parties a full opportunity to participate in the decision-making process, which gives the parties a sense of being treated fairly (17).
For the Japanese, therefore, arbitration becomes a means of last resort just like litigation in court. A small number of domestic arbitrations in Japan can be explained this way. If both litigation and arbitration are available, however, most Japanese would be more likely to choose litigation rather than arbitration. The reasons may be multiple. Unfamiliarity with the institution is certainly a reason. Related to it is a lower degree of faith in arbitration than in litigation. There are not many established arbitrators. People trust a professional judge better than an arbitrator (18). For the aforementioned reasons, Japanese have become more or less determined to pursue a substantively "just" solution and no longer ready to make a compromise. With such a state of mind, the unavailability of appeal from an arbitral award is an important deterring factor. So, even at the time of contracting, Japanese businessmen are not eager to include an arbitration clause.
The same attitude is carried over to international business relations. Japanese businessmen sign a contract with an arbitration clause when pressed by a foreign party, but with little knowledge of arbitration and with a belief that a dispute will be settled without using arbitration. When a dispute arises, they are generally hesitant to initiate an arbitration. They tend to become respondents. They persistently try to negotiate and if the foreign party starts an arbitration they feel betrayed and offended. If this is true, would a well-designed mediation mechanism meet their needs?
4. Cross-Cultural Viability of Mediation and Conciliation
As mentioned earlier, a group of American and Asian social psychologists determined through a series of empirical studies that the parties view the procedure as fair when they are allowed to participate in the process (19). In particular, the outcome of mediation is best accepted by the parties to a dispute as just and fair (20). Therefore, we are assured that even Americans are glad to accept mediation. If so, there must be a good prospect for its use in settling international business disputes. Various arbitral institutions offer mediation and conciliation services, but we do not hear that they are very successful in this kind of activity (21). This seems to contradict the theoretical viability of mediation.
There may be many reasons and explanations for that. Too much legalization of international business is certainly one of the reasons. It requires participation of more lawyers. Lawyers participation is necessary to protect the interests of the parties. But one of the above-mentioned psychological studies suggested that the parties own participation was essential. An author pointed out, "Lawyers are often surprised when they present their clients with what they regard as a favorable settlement, only to be met by anger and hostility."(22) The same kind of result was obtained in a survey conducted in Japan by a Japanese legal sociologist (23). These studies convince us that human beings are human beings whether they are in America, Europe or Japan. The question is whether mediation could easily lend itself to already much legalized international business disputes (24).
Moreover, one must be aware that there might be a cultural difference in the perception of what a fair procedure should be. Both American and Japanese surveys show that the parties value their participation as an essential factor of fair procedure. As mentioned earlier, however, a Japanese researcher suggested that the meaning of participation might be different between the two nations (25). The implication of this suggestion cannot be ignored. If, as the researcher argues, Americans value a "confrontational" participation while Japanese favor a "non-confrontational passive" one, the appropriate mediation technique may be different (26). Mediation would not be successful in a cross-cultural situation with mediators who are not sensitive about such subtle differences. The mediator is not mediating merely a dispute, but a cultural difference. There is much stereotypy in the discourse concerning Eastern and Western cultures. The problems are not so simple. We can safely start with the proposition that everybody is human, yet we must know the subtleties in every human society.
We should not be too optimistic in the cross-cultural use of mediation, while we can be more optimistic about arbitration because it is easier to follow legal rules. Legal rules are a simplified version of rules for human conduct. But mediation is formless. We must look for the original and natural rules of conduct without being disturbed by simplifications of law. Nobody has yet developed enough knowledge and technique for it. Perhaps we have to develop more theories through more practice in mediation. It is likely that we will realize how much more difficult mediation is than arbitration. But the value of this method has been affirmed. We need more experience and training.
1. John O. Haley, "The Myth of the Reluctant Litigant", 4 Journal of Japanese Studies 359 (1978). A traditional cultural explanation of the Japanese non-litigiousness was first articulated in English in the now classical article by the late Professor Kawashima. Takeyoshi Kawashima, "Dispute Resolution in Contemporary Japan," in: Von Mehren ed., Law in Japan 39 (1963). Professor Haleys article presented a startling anti-thesis to it. More recently, some post-modernist theorists have come up with still another explanation. J. Mark Ramseyer, "Reluctant Litigant Revisited: Rationality and Disputes in Japan," 14 Journal of Japanese Studies 111 (1988); J. Mark Ramseyer & M. Nakazato, "The Rational Litigant: Settlement Amounts and Verdict Roles in Japan," 18 Journal of Legal Studies 263 (1987); Takao Tanase, "The Management of Disputes: Automobile Accident Compensation in Japan," 24 Law & Society Review 651 (1990).
2. For an informative description of the pre-1868 Japanese justice system, see John H. Wigmore, A Panorama of the Worlds Legal Systems, pp. 479-520 (1936), in which "the principle of conciliation" is mentioned as one of the most salient elements of the then Japanese law (at pp. 488 et seq.).
4. A certain "resonance" effect has been suggested between the traditional inclination and a modern need to settle disputes. Zentaro Kitagawa, "Resonance Theory - A Tentative Approach to the Dispute Settlement Mechanism," in Lüke, Ress & Will, Hrsg., Rechtsvergleichung, Europarecht und Staatenintegration 393 (1983).
5. The number of mediation cases here excludes that of family mediation cases handled by Family Courts. In 1996, family mediations numbered 100,097. But for the purpose of comparison, it is not proper to add this to civil mediation cases because only 7,505 family litigation cases (divorce, paternity, etc.) were brought in the same year.
7. The reason why large commercial cases do not use court-annexed mediation is not fully explained. Probably, business people do not trust the mediators provided by the court. The judiciary has been trying to recruit experts and professionals in various fields as mediators, but they tend to be technical experts such as engineers, architects, surveyors and lawyers, and not commercial people.
8. Thirty-two percent of the civil cases disposed of in 1996 were by formal settlement, and 14.7% by withdrawal (voluntary dismissal). Some of the withdrawals must have resulted from an out-of-court settlement. Formal settlement does not take the form of a judgment (as a consent judgment), but is given by the law the same effect as a judgment.
12. For the active role of the judge in promoting a settlement, 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," 20 Law in Japan, An Annual 74 (1987); Shunko Muto, "Concerning Trial Leadership in Civil Litigation: Focusing on the Judges Inquiry and Compromise," 12 Law in Japan, an Annual 23 (1979).
13. For the political aspect of the development during this period, see John O. Haley, "The Politics of Informal Justice: The Japanese Experience 1922-1941," in Abel ed., The Politics of Informal Justice, 125 (1982).
14. For the various ADR mechanisms in the early 1980s, Yasuhei Taniguchi, "Extra-Judicial Disputes Settlement in Japan," in Kötz & Ottenhof eds., Les Conciliateurs - La Conciliation, une étude comparative, 109 (1983).
16. Yoshiyuki Matsumura, "Nihonjin to Funsoukaiketsu ni okeru Tetudukiteki Kousei (Japanese and Procedural Fairness in Dispute Resolution"), in Miyazawa & Kaminaga eds., Hoshakaigaku Korokiumu (Colloquium in Sociology of Law) 247 (in Japanese, 1996).
17. A psychological relationship between participation and sense of fairness has been established by a series of studies by socio-legal psychologists. See generally, Thibaut & Walker, Procedural Justice, A Psychological Analysis (1975); Lind & Tyler, The Social Psychology of Procedural Justice (1988). A similar result was obtained in East Asia (Hong Kong and Japan): Leung & Lind, "Procedural Justice and Culture: Effects of Culture, Gender and Investigator Status on Procedural Preferences," 50 Journal of Personality & Social Psychology 1134 (1986); Sugawara & Huo, "Disputes in Japan: A Cross Cultural Test of the Procedural Justice Model," 7 Social Justice Research 415 (1994). Matsumura supra n.16 was inspired by these studies and specifically directed to the Japanese. Thus, the social psychologist confirms the proposition previously advanced by legal theorists. Cf. Fuller, "Forms and Limits of Adjudication," 92 Harvard Law Review 353 (1978).
23. Wada, Minji Funso Koushou Katei Ron, Theory of Civil Dispute Settlement Process, 92 et seq. (1991). According to this study, the parties to a civil action who are not represented by an attorney showed a greater satisfaction with the outcome than those with an attorney irrespective of whether the outcome is favorable or not.
24. According to a survey as to why the mediatory method is not used more, Americans think there is a need for it but feel that there is not enough information and there is a lack of legal framework, while Germans do not feel much need for it and also feel concern about the lack of legal framework. Bühring-Uhle, supra n.21 at 331.
26. In Japan, the so-called "caucusing" is the norm in which the mediator hears one party without the presence of the other. In the United States, caucusing has been introduced but does not seem a standard. Interestingly, however, a Japanese Family Court judge has recently advocated "confrontational" mediation and succeeded in settling more disputes than otherwise.