Although there is no definition of the term “mediation” under Japanese law, when the term “mediation” is used in Japan, it generally refers to civil mediation, in which a court and a mediation committee negotiate to reach an agreement in order to resolve a dispute between private parties. In addition to civil mediation involving the courts, Japan also has procedures in which non-judicial administrative bodies (e.g., National Consumer Affairs Center, prefectural labor bureaus) and private organizations (e.g., bar associations, product liability centers) mediate the resolution of disputes, but the procedures and the composition of each mediation body are highly individualized. The following chapter, therefore, focuses on civil mediation involving the courts.

As a premise, under Japanese law, mediation is often conducted by a mediation commissioner who organizes a mediation committee to mediate the resolution of disputes. For this reason, the following explanation is based on the premise that the mediation commissioner is a “mediator.”

The mediator, as a member of the mediation committee, is responsible, together with the judge, for resolving the dispute by mediating an agreement between the two parties in their discussions. Mediation does not decide which party’s side is right, so the mediator proceeds with the mediation by fully listening to the parties’ arguments and feelings in order to work with the parties to find a solution that is appropriate to the precise situation of the dispute. Specifically, the mediation committee sets a date for the mediation, summons the parties involved in the case, hears their arguments about the dispute and considers what direction to take to resolve the dispute. In some cases, the mediation committee holds several dates to determine the point at which the case can be resolved. If the parties agree, a record of the mediation is drawn up and approved by the judge and the court clerk.

Mediation differs significantly from arbitration in that it is a method of dispute resolution premised on agreement between the parties, whereas arbitration is a method of dispute resolution premised on the arbitral tribunal making a certain decision based on the parties’ claims and evidence. Mediation also differs in that it is not necessary to obtain the consent of the other party to initiate the procedure, whereas arbitration is premised on the existence of an arbitration agreement between the parties. However, as discussed below, Questions 17 and 19, it can be said that mediation and arbitration have elements in common in the sense that the consent of the other party is required for the selection of the means of dispute resolution, since it is difficult in practice to resolve disputes through mediation if the other party to the mediation does not agree to the resolution of the dispute through mediation and does not cooperate in the course of the proceedings.

Regarding the differences between mediation and litigation, mediation is a closed procedure, whereas litigation is a public procedure, which is a major difference. In addition, similar to the differences to arbitration, mediation is based on an agreement between the parties, whereas litigation is based on the premise that a judgment or decision will be made by a court based on the allegations and evidence of the parties to resolve the dispute. However, the court in which the case is pending can, at any time while the case is pending, make a recommendation for settlement and, if the parties agree, the settlement may be made in court. In addition, courts in civil cases tend to favor the resolution of disputes by way of a settlement, as it allows for a more flexible resolution than a judgment, depending on the way in which the terms of settlement are set out. In practice, therefore, a significant proportion of disputes are resolved by settlement, even in litigation.

The Civil Mediation Act defines the procedures for mediation, the role of the mediator and the effects of the mediation. The Civil Mediation Act also provides for sanctions in cases where the other party to a civil mediation claim does not appear on the date of the civil mediation or where the mediation commissioner divulges a secret learned in the course of their duties, as discussed below, Questions 7 and 15.

The courts and the government encourage dispute resolution through mediation. To this end, the courts provide information on their website (www.courts.go.jp/saiban/syurui/syurui_minzi/minzi_04_02_10/index.html) on the forms required to apply for mediation and how to prepare them, as well as useful guidance so that applications can be made without the need for a lawyer. The government also presents civil mediation as an alternative dispute resolution method to litigation on its promotional website (www.gov-online.go.jp/useful/article/201408/3.html). The reasons for this are thought to be that it is inexpensive and can resolve disputes in a shorter time than litigation. In general, Japanese civil litigation is often conducted with lawyers, but there are certain obstacles, such as that the parties have to bear high legal fees in such cases. In addition, in many cases, it often takes one to two years to obtain a first-instance judgment in Japanese civil litigation. Therefore, the courts and the government recommend the use of mediation as a means of dispute resolution that can compensate for these shortcomings in litigation.

In principle, parties are free to choose the means of dispute resolution and are not legally obliged to conduct mediation before filing a lawsuit. However, this is not the case for all types of disputes, for example, mediation must be conducted before filing a lawsuit in cases involving a claim for an increase or decrease in land rent, and in cases involving divorce and a claim for a reduction in the estate. In these cases, if a lawsuit is filed without mediation, the case may be referred to mediation at the discretion of the court.

Under the Civil Mediation Act, if a person involved in a case who has been summoned by the court or the mediation committee fails to appear without just cause, the court shall impose a fine of up to JPY 50,000. However, in practice, this fine is rarely imposed. This is because the court can expect to incur costs of more than JPY 50,000 in collecting said fine of JPY 50,000. Also, because civil mediation is a means of resolving disputes by mutual agreement by definition, forcing mediation by imposing a fine even when the other party does not wish to resolve the dispute through mediation is contrary to the purpose of mediation.

Mediation is possible at any time. In practice, the possibility of resolving the dispute through mediation is considered before filing a lawsuit, and if it is judged that there is such a possibility, mediation is chosen. If it is judged that there is virtually no chance of this happening, the lawsuit is filed immediately without applying for mediation. Conversely, if a lawsuit is filed without mediation, and while the lawsuit is pending the possibility of a resolution through discussion is found, and it is judged that the possibility of resolution would be higher if, not only the court, but also a mediation committee with specialist knowledge of the issues in dispute is involved in the discussion, the lawsuit proceedings may be suspended and the case referred to mediation.

Civil mediation is considered to be most effective when the parties are willing to resolve their dispute through discussion but are unable to reach an agreement because neither party is willing to give up their terms. This is because mediation is a means for the parties to resolve disputes through discussion, so even if one party is willing to discuss the matter, it will not be possible if the other party is not willing to come to the table in the first place. In addition, because the mediator acts as a facilitator and aims to reconcile the interests of the parties and propose the most appropriate solution, there is a possibility that discussions that cannot be resolved by the parties alone can be solved in mediation.

In addition, as discussed above, Question 3, mediation is a closed procedure, so if the dispute is highly confidential, it may be more effective to choose mediation rather than litigation, which is a public procedure.

Any civil dispute between private parties can be subject to mediation. However, as it is extremely rare for an investigation of evidence to be carried out to establish the facts in mediation proceedings, it is considered difficult to resolve complex cases with disputed facts through mediation. In such cases, it is common practice to opt for litigation. After both parties have exhausted their arguments and evidence, the parties to the litigation resolve the dispute through judicial settlement discussions based on the court’s preliminary view of the case during the case.

These types of clauses are not common. This is because, under the Civil Mediation Act, there is no practical benefit in obliging the parties to civil mediation to mediate beforehand in a contract, as they are obliged to appear in person. If the parties wish to choose a closed procedure as a means of dispute resolution, it is common in practice to oblige them to resolve their disputes by arbitration by concluding an arbitration agreement, rather than to obligate them to mediate (and, despite the existence of a contractual arbitration agreement, if the parties file a lawsuit, the party against whom the lawsuit is filed can raise the existence of the arbitration agreement as a defense and seek dismissal of the lawsuit).

Mediation concluded in accordance with the Civil Mediation Act has the same effect as a judicial settlement and the record of the mediation concluded is treated as a title of obligation, which enables compulsory execution to be carried out. In other words, if a person who owes an obligation under the terms of a concluded mediation clause fails to perform, the person to whom the obligation is owed may enforce the content of the obligation by means of compulsory execution.

Mediation usually provides for a confidentiality clause and a liquidation clause (a clause confirming that there are no rights and obligations between the parties other than those set out in the mediation clause). Confidentiality clauses are stipulated because it is reasonable to impose a duty of confidentiality on the parties as to the process and outcome of the mediation, as long as the mediation is conducted in private. Liquidation clauses are also included in order to prevent disputes from being reopened after the mediation and to ensure a one-off settlement.

Mediators are selected by the Supreme Court and are preferred to be individuals with a wealth of knowledge, experience and expertise in social life, in order to reflect the common sense of the general public in mediation. Specifically, they are generally between the ages of 40 and 70 and are selected from various sectors of society, including lawyers, doctors, university professors, accountants, real estate appraisers, architects and other professionals, as well as people who have worked extensively with the local community. Therefore, to become a mediator in Japan, one must meet these qualifications and be recognized by the Supreme Court.

The Supreme Court, as the governing body, has the power to appoint and dismiss mediators.

Mediators are subject to the Civil Mediation Act. In particular, a mediator is liable to criminal sanctions if, without just cause, they disclose the course of the proceedings or their content, or if, without just cause, they divulge the secrets of a person which they have learned in the course of their duties (Articles 37 and 38 of the Civil Mediation Act).

The main stages of a mediation process are: the application for mediation; the setting of a date for the mediation; the summoning of the parties; the discussion on the date of the mediation; and the conclusion or failure to conclude the mediation.

First, a person who wishes to resolve a dispute through mediation submits an application for mediation to the court and files a request for mediation. When submitting the application for mediation, the purpose of the request and the main points of the dispute must be clarified.

The court that accepts the application for mediation will then scrutinize the same, and if there are no problems, the court will serve the application and other court documents on the other party and set a date for mediation.

The parties then appear on the mediation date and aim to resolve the dispute through discussion. Even if there is a chance of a solution through discussion, the mediation is rarely concluded on a single mediation date; in most cases, two or three mediation dates are held.

If the parties are able to reach an agreement, the mediation is concluded. However, if the parties are unable to reach an agreement, or if the other party does not cooperate with the mediation process, the mediation may fail as there is no prospect of a successful outcome.

Mediation is considered to be easier than litigation. This is because the forms required to apply for mediation are available on the court’s website and do not require detailed proof of claims, as the aim is to resolve the dispute through discussion between the parties. In the case of litigation, the plaintiff must legally structure their claim and must allege and prove the facts on which the claim is based, which requires a certain level of legal knowledge. On the other hand, mediation does not necessarily require legal knowledge, because even if a claimant’s claim is legally difficult to construct, it is not immediately dismissed on that basis.

The main obstacle to resolving disputes through mediation is that the dispute cannot be resolved unless both parties reach an agreement (if one party does not respond sincerely to a request for mediation, it is difficult to resolve the dispute through mediation). This is natural as the process of mediation is based on an agreement between the parties, but generally the parties to a dispute are often emotionally conflicted and often have disputed facts, which makes it difficult to choose mediation as a means of dispute resolution in such cases.

In Japan, there is not always sufficient awareness and understanding of the benefits of mediation. Since mediation is a judicial process, it may be thought that it cannot be concluded without the use of a lawyer, when it can actually be used even without legal knowledge, as sufficient support is provided by the court and the mediator. It is also understood in Japan that dispute resolution methods involving the courts are time-consuming (indeed, in many cases it can take one to two years to obtain a first-instance judgment in litigation), but there are many cases where a dispute can be resolved in around three months in mediation.

As already mentioned, the first advantage of mediation is that it is easier than litigation and can be concluded without the use of a lawyer. Needless to say, if a lawyer is retained to file a lawsuit, they have to pay high legal fees, but if mediation is chosen, the cost of legal fees may be reduced and the purpose of the dispute resolution may be achieved. In addition, mediation has the advantage of being quicker than litigation, and confidential. In particular, the fact that the proceedings are private can be a significant advantage in the case of disputes between companies involving highly confidential information.

On the other hand, as mentioned above, the main disadvantage of mediation is that it does not lead to a resolution of the dispute unless an agreement is reached between the parties. Therefore, if there is no expectation that the other party will reach an agreement on the resolution of the dispute, mediation cannot be chosen in the first place.

Mediations can take place remotely; a person can participate in the mediation by means of teleconference or web conference.

In Japan, there has been no significant change in the number of cases using mediation since 2020, with generally between 30,000 and 34,000 new cases filed each year.

At present, AI is not believed to be used in mediation in Japan.