Policy and Politics in Contract Law Reform in Japan

Abstract

Japan is proceeding apace with its first-ever comprehensive overhaul of the contract law provisions in the Civil Code, originally enacted in 1896 with strong influence from German law. Interim recommendations were published in February 2013, after almost three and a half years of official law reform deliberations within the Ministry of Justice's Legislative Council, and amendments may be introduced into Parliament by the end of 2014. Most of the interim recommendations track those from a semi-private “Reform Commission” published in 2009, after 260 meetings since 2006 and mainly involving legal academics. Yet, as explained in the first half of this paper, tensions remain in the underlying policy behind these contract law reform proposals. Despite shifts towards giving greater priority to the parties’ agreement, partly influenced by international contract law instruments, some proposals envisage greater protection for weaker parties or leave considerable discretion to judges. Two remarkable changes of government, in 2009 and 2012, have not impacted significantly on this major law reform project in Japan. Far more important than such “macro-politics” has been “micro-politics”. The second half of this paper therefore presents an interest group analysis of the Civil Code reform process. Key academics -- assisted by one legal publisher in particular -- have been able to mobilise a powerful “bureaucratic coalition”, comprising Ministry of Justice officials and judges seconded by the Supreme Court of Japan, despite pockets of opposition from other academics, smaller law firms and certain business sectors. This analysis therefore presents some significant parallels with recent contract law reform initiatives and debates within the European Union. Very different concatenations of interest groups arguably exist in common law jurisdictions such as the US (where major Uniform Commercial Code reforms have foundered) or Australia (where the government commenced in 2012 a consultation into whether and how to reform contract law). Comprehensive reform in those jurisdictions therefore seems unlikely, reducing the potential for the world-wide harmonisation of contract law. A shorter version of this paper is adapted for Maurice Adams and Dirk Thilbaut (eds) The Method and Culture of Comparative Law, Hart, 2014.