Can Indirect Victims Claim Damages for Torts Committed Against Others in Japan?

Tort law traditionally focuses on providing remedies to those who are directly harmed by a wrongful act. However, the repercussions of a tort can often extend beyond the immediate victim, causing losses to third parties. These individuals or entities are sometimes referred to as "indirect victims" (間接被害者 - kansetsu higaisha). The question of whether such indirect victims can claim damages from the original tortfeasor is a complex area in Japanese law, with different principles applying to various scenarios.

This article explores the main situations under which parties who suffer loss as a consequence of a tort committed against another may, or may not, be able to seek compensation in Japan. Generally, these situations can be grouped into three broad categories: "substitute damages," "typical incidental damages," and "corporate damages."

1. "Substitute Damages" or "Shoulder-Bearing Damages" (Katagawari Songai 肩代わり損害)

This category, also sometimes referred to as "reflected loss" (反射損害 - hansha songai), arises when an indirect victim incurs expenses that the direct victim would have otherwise had to bear and could have claimed from the tortfeasor.

Scenario: Imagine a child (A) is injured due to the negligence of a tortfeasor (Y). The child's parent (X), who is an indirect party to the tortious act against A, pays A's hospital and medical treatment bills.

General Legal Position: Japanese courts and legal scholars generally agree that the indirect victim (X, the parent) who has paid these "substitute" or "shoulder-borne" expenses can claim compensation from the tortfeasor (Y). There is precedent for such claims; for example, a Taishin-in (Great Court of Cassation) judgment on February 12, 1937 (Minshu 16-46) recognized a claim by a child who had paid their parent's medical expenses following a tort.

Theoretical Basis for the Claim:
The prevailing view in case law and among many scholars is to treat the indirect victim's loss as being within the scope of adequate causation flowing from the tortfeasor's original wrongful act. The expenditure by the indirect victim is seen as a foreseeable consequence of the injury to the direct victim.

However, a more structured theoretical approach has also been proposed to explain the basis for such claims, focusing on principles of unjust enrichment or subrogation:

• If the indirect victim had a legal duty to pay the expenses on behalf of the direct victim (e.g., a parent's duty to provide medical care for a minor child), their claim against the tortfeasor could be conceptualized as arising from an analogy to "subrogation by payer" (Article 422 of the Civil Code, 賠償者代位 - baishōsha daii). In this scenario, by fulfilling the direct victim's primary obligation (which was caused by the tort), the indirect victim essentially steps into the direct victim's shoes to claim that amount from the tortfeasor.
• If the indirect victim paid the expenses without such a pre-existing legal duty (e.g., an adult child voluntarily paying a parent's medical bills where no strict legal obligation to do so existed), the claim might be better understood through the principles of "subrogation by third-party performance" (Articles 499 and 500 of the Civil Code, 第三者弁済による弁済者代位 - daisansha bensai ni yoru bensaisha daii).

Regardless of the precise theoretical underpinning, the core idea is that the indirect victim has covered a loss that was, in the first instance, attributable to the direct victim as a result of the tort, and the law provides a mechanism for the payer to seek recovery from the ultimate wrongdoer.

2. "Typical Incidental Damages" (Teikeiteki Fuzui Songai 定型的付随損害)

This category concerns damages that typically and consequentially arise for third parties when a direct victim suffers harm. These are losses that are often a direct and foreseeable ripple effect of the primary tort.

Scenarios and Examples:

• Pecuniary Damages:
  • Travel Expenses: A close relative incurring significant travel costs to rush to the side of a family member who has been seriously injured in an accident. For instance, if a child studying abroad has to make an emergency return trip because a parent has been gravely injured by a tortfeasor, these travel costs have been recognized as compensable (Supreme Court, April 25, 1974, Minshu 28-3-447).
  • Loss of Financial Support: Dependents (e.g., spouse, children, elderly parents) suffering a loss of financial support when the family's primary earner is killed or so severely disabled by a tort that they can no longer provide.
• Non-Pecuniary Damages (Isharyō - Consolation Money):
  • The mental suffering experienced by close family members—typically defined by Article 711 of the Civil Code as parents, spouse, and children—when a loved one is killed or suffers very severe injuries due to a tort. While Article 711 grants these individuals their own claim, the situation is often discussed in the context of harm radiating from the tort against the primary victim.

Theoretical Basis:
While often grouped under "indirect victim" discussions, it is argued that many instances of "typical incidental damages" involve a direct infringement of the third party's own legally protected interests, rather than a purely reflected loss.

• For example, the loss of financial support infringes the dependent's own interest in that support.
• The mental suffering of a close relative due to a wrongful death is a harm personal to that relative.
• The travel expenses incurred are a direct financial outlay by the relative.

From this perspective, a special framework of "indirect victim damages" might not be strictly necessary for this category; these individuals could be seen as direct victims concerning their own distinct losses that are consequentially linked to the primary tort. The traditional approach in Japanese law often handles these claims under the general principles of adequate causation (and by analogy, Article 416 of the Civil Code, which deals with the scope of damages in contract breaches) to determine if the third party's loss is a legally recognized and compensable consequence of the tort committed against the primary victim.

3. "Corporate Damages" (Kigyō Songai 企業損害)

This category deals with situations where a business entity suffers financial loss because one of its key employees, officers, or representatives is injured or killed by a tort.

Scenario: A company experiences a significant drop in operating income or incurs other financial setbacks because a crucial employee, whose skills or knowledge were vital to a project or the company's operations, is incapacitated or killed due to a tortfeasor's actions.

General Legal Position: Usually Not Recoverable as "Indirect Harm"
The central question here is whether the tortfeasor owed a specific duty of care to protect the company's particular economic interests from this type of harm. Generally, the answer is no. Financial losses incurred by a company due to injury or death of its personnel are typically considered inherent business risks that the company itself should anticipate and manage, for example, through key person insurance, succession planning, or diversification of skills within its workforce. Imposing a duty on a general tortfeasor to protect against such specific corporate financial losses is usually not deemed appropriate or foreseeable in the ordinary course of events.

The True Nature of the Claim: Direct Infringement of the Company's Own Rights?
It is argued that framing this purely as an "indirect victim" issue might be misleading. Instead, the more pertinent question is whether the company itself has suffered a direct infringement of its own legally recognized rights or interests, such as its "business rights" (営業権 - eigyōken) or "business profits/interests" (営業利益 - eigyō rieki). If such a direct infringement can be established, then the company would be claiming as a direct victim, not merely as an indirect one.

Exceptional Circumstances: The "One-Man Company" or Economically Integrated Entity
An exception to the general rule of non-recoverability for corporate damages (when framed as indirect harm to personnel) may exist in very specific circumstances, particularly where the company is, in essence, the alter ego of an individual—often referred to as a "one-man company" (個人会社 - kojin kaisha).

• If the company's operations are almost entirely dependent on a specific individual (e.g., the owner-operator), who is virtually irreplaceable as an "organ" of the company, and if the individual and the company are so closely intertwined as to be economically inseparable, then the company's financial losses resulting from harm to that key individual might be recoverable.
• The Supreme Court, in a judgment on November 15, 1968 (Minshu 22-12-2614), recognized such a claim where a company was found to be a mere shell for its owner-operator, with no real distinct existence or operational capacity without him.
• However, it's important not to over-generalize the specific criteria from this case (such as "irreplaceability" and "economic integration") as universally applicable requirements for all claims of corporate loss due to harm to personnel.

Broader Context: Infringement of Business Rights and Profits (Eigyōken / Eigyō Rieki Shingai)
The issue of corporate damages due to harm to employees is just one facet of the broader legal field concerning the infringement of business rights or profits. Such infringements can arise from various scenarios:

• Unfair competition or antitrust violations by competitors.
• Poaching of key employees by rivals.
• Damage to business reputation or operations due to false rumors, defamatory statements, or unjustified boycotts spread by media, customers, or other third parties.
• Disruption of business operations due to accidents affecting facilities or infrastructure (e.g., utility failures, environmental disasters like nuclear plant accidents impacting local businesses).

In these broader contexts, the guiding principle is that while businesses are constitutionally entitled to freedom of operation, they also assume ordinary operational risks, including a certain level of market fluctuation and interference. These foreseeable risks, including the impact of general public opinion or market competition, should typically be managed by the business itself.

However, damages may be recoverable if the harm to business rights or profits stems from "special dangers" or extraordinary interferences that are unforeseeable and for which the business could not reasonably be expected to have implemented advance risk mitigation measures. The mere fact that a business could have theoretically found alternative ways to operate or source supplies does not automatically negate a claim if the interference itself was beyond the scope of ordinary business risk.

Conclusion

Japanese law recognizes that the impact of a tort can extend beyond the direct victim, and it does provide avenues for "indirect victims" to claim damages in certain, fairly well-defined circumstances.

• For "substitute damages," where a third party shoulders expenses that were primarily the direct victim's responsibility due to the tort, recovery is generally permitted, often conceptualized through principles akin to subrogation or as a direct consequence of the tort.
• For "typical incidental damages," such as a close relative's travel expenses or loss of support, the harm is often best understood as a direct infringement of the third party's own legally protected interests, linked causally to the primary tort.
• Claims for "corporate damages" due to harm to personnel are the most restricted. Recovery is exceptional and typically requires showing either that the company is an alter ego of the injured individual or that the company has suffered a direct infringement of its own business rights due to harm extending beyond ordinary business risks, such as that caused by a "special danger."

In each type of case, the specific facts, the nature of the relationship between the direct and indirect victim, and the foreseeability and directness of the loss play crucial roles in determining whether an indirect party can successfully claim damages from the tortfeasor.