After the Verdict in Japan: Key Steps for Your Company Post-Judgment?

The pronouncement of a judgment (hanketsu - 判決) in a Japanese civil lawsuit is a significant milestone, marking the culmination of extensive legal arguments, evidence presentation, and judicial deliberation. However, it is rarely the final chapter. Whether the verdict is favorable, unfavorable, or mixed, a series of critical actions and strategic decisions must be undertaken promptly by your company and its Japanese legal counsel (bengoshi) to protect your interests, preserve rights, and plan the path forward.

This article outlines the key steps and considerations for businesses in Japan after a court renders its judgment, covering the immediate aftermath of the pronouncement, the process of receiving and analyzing the written judgment, understanding cost implications, and formulating strategic responses based on the outcome.

Understanding the Judgment Pronouncement (Hanketsu Iiwatashi - 判決言渡し)

1. The Moment of Legal Effect:
   Under Article 250 of the Japanese Code of Civil Procedure (CCP), a judgment legally takes effect upon its formal pronouncement (iiwatashi) in court by the judge(s). This is the point at which the court's decision becomes an official act.
2. Courtroom Procedure for Pronouncement:
   The pronouncement typically occurs on a pre-scheduled date. In most civil cases, particularly in busy courts, only the operative part (shubun - 主文) of the judgment—that is, the court's ultimate decision or order (e.g., "The defendant shall pay the plaintiff JPY X," or "The plaintiff's claim is dismissed")—is read aloud in open court. The detailed reasoning (riyū - 理由) is contained in the written judgment document, which is provided later.
3. Attendance Not Mandatory (CCP Art. 251(2)):
   It is not legally required for parties or their counsel to be physically present in court for the pronouncement of the judgment. Given that only the outcome is typically announced, many attorneys opt not to attend and instead confirm the result through other means.
4. Immediate Confirmation of the Outcome:
   Counsel can usually confirm the shubun (the core outcome) by telephoning the court clerk's office shortly after the scheduled pronouncement time. This allows for swift notification to the client.
5. Informing Your Company:
   Regardless of how the outcome is ascertained, the first priority for counsel is to promptly inform your company of the basic result (win, loss, partial win/loss). A detailed analysis of the judgment's reasoning and its implications will necessarily follow the receipt and review of the full written judgment. It's important for businesses to understand that this initial notification of the outcome is preliminary until the written judgment is thoroughly examined.

Receiving and Scrutinizing the Written Judgment (Hanketsu-sho - 判決書)

The written judgment (hanketsu-sho) is the comprehensive document detailing the court's decision, the facts it found to be established, and, crucially, the legal reasoning that led to its conclusion.

1. Formal Service (Sōtatsu - 送達) of the Written Judgment:
   The court will formally serve the written judgment on the parties or their counsel (CCP Art. 255(1)). This act of service is of critical legal importance because:
   • It triggers the start of the appeal period (kōso kikan - 控訴期間), which is typically a strict two weeks from the date of service of the written judgment (CCP Art. 285).
   • It is a prerequisite for initiating enforcement proceedings if the judgment is favorable and requires action from the losing party (Article 29 of the Civil Execution Act - 民事執行法, Minji Shikkō Hō).
     For a party that has lost or is unsatisfied with parts of the judgment, strategically managing the receipt of the formal service (or at least being aware of when their counsel officially receives it) is important for maximizing the time available to consider an appeal. Conversely, a winning party may wish for prompt service on the opponent to start the appeal clock or to proceed with enforcement if a declaration of provisional execution is included.
2. Thorough Review and Verification by Counsel and Client:
   Once the written judgment is received, it must be subjected to meticulous review:
   • Accuracy Check: Verify all formal details: correct case number, accurate spelling of party names and addresses, attorney details, and the precise wording of the operative part (shubun). Ensure that any referenced schedules, diagrams, or attachments are correctly included and correspond to the judgment text.
   • Understanding the Reasoning (Riyū - 理由): This is the most critical part of the analysis. Counsel must dissect the court's factual findings, its application of the law to those facts, and its overall legal reasoning to understand why the court reached its decision. This analysis is fundamental for advising the company on the merits of a potential appeal or the implications of the judgment.
   • Consistency and Completeness: Check for any internal inconsistencies in the reasoning or any failure by the court to address all claims or critical arguments made during the litigation.
3. Identifying Errors and Seeking Correction (Kōsei Mōshitate - 更正申立て):
   If the written judgment contains clear typographical errors, miscalculations, or other obvious mistakes that do not go to the substance of the decision but could affect its clarity or implementation (e.g., an incorrect party name spelling, a minor error in a monetary sum that is clearly a calculation slip), a party can file a motion with the same court for correction of the judgment (kōsei no mōshitate - 更正の申立て) under CCP Art. 257(1).
   • This is for correcting manifest errors, not for re-arguing the case or challenging the court's substantive findings, which must be done via an appeal.
   • A formal correction by the court might be necessary for the judgment to be properly enforceable or for related administrative procedures (like property registration). In some minor cases, with the agreement of both parties and the court, an informal reissuance of corrected pages might occur.

Understanding and Dealing with Court Costs (Soshō Hiyō - 訴訟費用)

1. Court's Allocation of Costs:
   The judgment will include a ruling on which party (or parties, and in what proportion) is to bear the "court costs" (soshō hiyō) of the litigation (CCP Art. 67). Typically, the losing party is ordered to bear these costs, but in cases of partial success, costs may be divided.
2. What "Court Costs" Typically Include (and Exclude):
   It is crucial for businesses, especially those accustomed to legal systems where attorneys' fees can be recoverable by the prevailing party, to understand what "court costs" means in the Japanese context. Generally:
   • Included: Statutory filing fees (revenue stamps paid when filing the complaint and other applications), legally stipulated witness travel expenses and daily allowances, fees for court-appointed experts, and other prescribed procedural costs.
   • Generally Excluded: Attorneys' fees are, as a rule, not included in the "court costs" recoverable from the losing party. Each party bears its own attorneys' fees regardless of the outcome. The main exception is in certain tort cases (like some traffic accidents or defamation cases) where a portion of the successful plaintiff's attorney fees might be recognized as a component of their damages. This is a significant difference from U.S. "loser pays" systems for attorney fees and must be clearly communicated to business clients from the outset of any Japanese litigation.
3. Procedure for Fixing the Recoverable Amount (Soshō Hiyōgaku Kakutei Tetsuzuki - 訴訟費用額確定手続):
   The judgment itself only determines who bears the costs. If a party is awarded costs and wishes to recover them from the opponent, they must then file a separate application with the court clerk for a "procedure to fix the amount of litigation costs" (CCP Art. 71). This involves submitting a detailed calculation and supporting documentation (e.g., receipts for filing fees, witness expense records). The opponent has an opportunity to object to the claimed amounts before the clerk issues a final order determining the recoverable sum. Whether to undertake this often administratively burdensome procedure for relatively small amounts is a practical decision.

Crucial Post-Judgment Consultation with Your Company and Legal Counsel

Once the written judgment is received and analyzed, immediate and thorough consultation between your company's decision-makers and your Japanese bengoshi is essential.

1. Analyzing the Outcome and Full Implications: Discuss the judgment's reasoning in detail. Understand why the court ruled as it did, what factual findings were pivotal, and how the law was applied.
2. Assessing Strategic Options: This is when critical decisions for the next phase are made:
   • Accept the judgment.
   • File an appeal (kōso - 控訴).
   • Initiate enforcement proceedings (if a prevailing party with an enforceable award).
   • Seek a stay of execution (if a losing party facing provisional execution).
   • Explore possibilities for post-judgment settlement negotiations.
3. Urgency, Especially for a Losing Party: The two-week appeal period from the date of service of the written judgment is extremely short and strictly enforced. There is no room for delay in making the appeal decision. This underscores the importance of having had preliminary discussions about potential outcomes and responses before the judgment was even pronounced.

Strategic Responses Based on the Judgment Outcome

The appropriate post-judgment strategy will depend heavily on whether your company largely won or lost, and the specifics of the judgment.

A. If Your Company Achieved a Favorable Judgment (Full or Substantial Victory):

1. Monitor for Appeal by the Opponent: Even with a win, the judgment is not truly "final and binding" (kakutei - 確定) until the opponent's appeal period expires without an appeal being filed, or until any appeals they file are fully resolved. Your counsel will monitor for any notice of appeal.
2. Provisional Execution (Kari-Shikkō Sengen - 仮執行宣言): If your favorable judgment (typically a monetary award) includes a "declaration of provisional execution," your company can, in principle, initiate enforcement proceedings immediately, even if the opponent indicates an intent to appeal or has already filed an appeal.
   • Strategic Decision: The decision to enforce provisionally requires careful thought. While it allows for quicker recovery, there's a risk: if the judgment is overturned or modified on appeal, your company would be liable to return any amounts collected, potentially with interest, and could also face a claim for damages caused by wrongful execution (CCP Art. 260(2)). Factors to consider include the opponent's financial stability (risk of them becoming insolvent during an appeal), the strength of the first-instance judgment, and the perceived likelihood of success on appeal.
3. Preparing for an Opponent's Appeal: If the opponent files an appeal, your company will need to file responsive briefs and participate in the appellate proceedings.
4. Considering a Cross-Appeal (Futai Kōso - 附帯控訴): If your company won on some claims but was unsuccessful on others (a partial victory), and the opponent appeals the part they lost, your company might consider filing a cross-appeal concerning the claims it initially did not win. A cross-appeal can be filed even after your own initial appeal period has expired, provided it is in response to the opponent's timely appeal.

B. If Your Company Received an Unfavorable Judgment (Full or Substantial Defeat):

1. The Appeal Decision (Kōso - 控訴): This is the most immediate and critical consideration.
   • Grounds for Appeal: A detailed analysis of the judgment is needed to identify potential errors of fact-finding (though appeal courts are generally deferential to the trial court's factual findings unless clearly erroneous) or, more commonly, errors in the application or interpretation of law.
   • Likelihood of Success on Appeal: A realistic and objective assessment of the chances of overturning or modifying the judgment in the High Court. This involves considering appellate standards of review.
   • Costs and Time Commitment: Appeals involve additional legal fees, court costs (stamp duty for filing an appeal is 1.5 times the first-instance fee), and further time investment.
   • The Critical Appeal Period: The notice of appeal (kōsojō - 控訴状) must be filed with the original trial court (not the appellate court) within two weeks of the date your company (or its counsel) was formally served with the written judgment (CCP Art. 285). This deadline is absolute and strictly enforced. Careful calculation, especially accounting for weekends and public holidays, is vital.
2. Stay of Provisional Execution (Shikkō Teishi - 執行停止): If the adverse judgment includes a declaration of provisional execution, and your company decides to appeal, it is crucial to immediately consider applying for a stay of execution (CCP Art. 403(1)(iii)).
   • This application is typically made to the appellate court (though sometimes initially to the trial court).
   • Requirements: The appellant generally needs to demonstrate prima facie grounds suggesting the original judgment might be altered or revoked on appeal, or that immediate execution would cause irreparable harm.
   • Posting Security (Tanpo - 担保): The court will almost invariably require the appellant (your company) to provide a substantial security deposit as a condition for granting the stay. The amount can be significant (often a large percentage, e.g., 60-80%, of the judgment amount) and its availability is a critical practical factor.

C. Continuing Legal Representation on Appeal:

• An attorney's mandate for the first instance does not automatically extend to an appeal (this is known as the principle of shinkyū dairi - 審級代理, or representation by court level). A new Power of Attorney (soshō ininjō) is generally required for the appeal, unless the original retainer agreement explicitly covered appellate work (CCP Art. 55(2)(iii)).
• Open discussions with your current bengoshi are necessary regarding their willingness and terms to handle the appeal (often involving new retainer/success fees), or whether a change in counsel for the appeal is considered. Smooth and timely handover of the case file is essential if new counsel is engaged.

Obtaining Necessary Post-Judgment Certificates

Regardless of the outcome, and especially if enforcement or appeal is contemplated, counsel should promptly arrange to obtain certain official certificates from the court clerk:

1. Certificate of Service of Judgment (Sōtatsu Shōmei-sho - 送達証明書): Official proof of the date the judgment was served on each party, crucial for calculating appeal deadlines.
2. Certificate of Final and Binding Judgment (Kakutei Shōmei-sho - 確定証明書): Once the judgment is no longer subject to appeal (either because the appeal period has expired without any appeal being filed, or all appeals have been finally resolved), this certificate confirms its finality and binding nature. It is essential for definitive legal closure and is often required for various other legal or administrative purposes.
3. Writ of Execution (Shikkō-bun - 執行文): If your company has a favorable monetary judgment (or other enforceable order) and needs to initiate compulsory execution proceedings because the opponent is not complying voluntarily, this writ, issued by the court clerk and typically attached to the judgment, formally empowers the judgment creditor to proceed with enforcement.

It is generally advisable to obtain these certificates relatively soon after the judgment becomes final or when needed, while the case records are still readily accessible to the trial court's administrative staff.

Conclusion: Strategic Action is Key Beyond the Verdict

The pronouncement of a judgment in a Japanese civil lawsuit is a pivotal moment, but it often ushers in a new phase requiring further strategic decisions and prompt actions rather than marking the absolute end of the legal matter. Whether your company has won, lost, or achieved a mixed result, immediate and thorough consultation with your Japanese legal counsel is indispensable. Analyzing the judgment's full implications, understanding the strict procedural timelines for post-judgment actions (especially for appeals and stays of execution), and making informed decisions on the next steps—be it enforcement, appeal, seeking a stay, or even re-engaging in settlement discussions—are all critical for effectively protecting and advancing your company's interests in the aftermath of a Japanese court's ruling.