Can My Company Join an Ongoing Lawsuit in Japan to Assist One of the Parties? Understanding "Intervention to Assist a Party"

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read

Often, a lawsuit primarily involves two opposing parties, but its outcome can have significant legal ramifications for third parties who are not directly named as plaintiffs or defendants. If your business finds itself in a situation where a pending lawsuit between other entities could adversely affect its legal rights or obligations, Japanese civil procedure offers a mechanism to get involved: "Intervention to Assist a Party," known as Hojo sanka (補助参加). This procedure allows a third party with a qualifying legal interest to join the lawsuit to support one of the existing litigants, thereby protecting its own interests indirectly.

I. Understanding "Intervention to Assist a Party" (Hojo sanka) in Japanese Civil Procedure

A. Definition and Purpose (Code of Civil Procedure, Art. 42)

Hojo sanka is a procedural device provided for in Article 42 of Japan's Code of Civil Procedure (Minji Soshō Hō 民事訴訟法). It allows "a third party who has a legal interest in the outcome of a suit" (soshō no kekka ni tsuite hōritsu-jō no rigai kankei o yūsuru dai-sansha 訴訟の結果について法律上の利害関係を有する第三者) to intervene in that suit to assist one of the parties (this party being assisted is called the "principal party" or hi-sanka'nin 被参加人).

The primary purposes of assistant intervention are:

  1. Protection of the Intervenor's Own Legal Interests: By helping the principal party win the case, the intervenor (hojo sanka'nin 補助参加人) aims to secure a favorable outcome that also benefits their own legal position, which is linked to the outcome of the main suit.
  2. Aiding the Principal Party: The intervenor can provide additional legal arguments, evidence, and resources to bolster the principal party's case.
  3. Contributing to a Comprehensive and Consistent Resolution: Involving all legally interested entities can lead to a more thorough examination of the issues and prevent inconsistent subsequent litigation.

B. Distinction from Becoming a Full, Independent Party
It is crucial to understand that an assistant intervenor does not become a primary party in the same way as the original plaintiff or defendant. They do not assert their own independent claims against the opposing party or defend against claims made directly against them within that intervention. Their role is, as the name suggests, to assist one of the existing litigants. (This differs from "Independent Party Intervention" - dokuritsu tōjisha sanka 独立当事者参加, another form of intervention where the third party asserts their own distinct claims related to the subject matter of the suit).

A. The Core Requirement of Article 42: "Legal Interest" in the Outcome
The gateway to assistant intervention is the existence of a "legal interest" (hōritsu-jō no rigai kankei 法律上の利害関係) in the outcome of the pending lawsuit. This is the most critical and often litigated element.

B. Interpreting "Legal Interest" (Hōritsu-jō no rigai kankei)
Japanese courts and legal scholarship have established that:

  • Not Merely a Factual, Economic, or Sentimental Interest: A purely commercial interest (e.g., "if Party A loses, my business with them might suffer") or an emotional connection to one of the parties is generally insufficient. The interest must be "legal" in nature.
  • Judgment's Direct or Indirect Legal Effect on the Intervenor: The prevailing view is that a "legal interest" exists if the judgment in the main suit will directly or indirectly affect the legal rights, duties, or overall legal position of the third party seeking to intervene. This often means that the intervenor's own legal relationship with the principal party (or even the opposing party) is such that it will be legally impacted by the court's decision in the main action.
  • Common Examples Where Legal Interest is Often Found:
    • Guarantors (hoshō'nin 保証人): A guarantor has a clear legal interest in assisting the principal debtor defend against a claim, as a judgment against the debtor could trigger the guarantor's liability.
    • Indemnitors: A party who has an obligation to indemnify one of the litigants for losses arising from the lawsuit has a legal interest.
    • Sub-lessees or Assignees: If a lessee is sued for eviction, a sub-lessee whose right to occupy depends on the main lease has a legal interest in assisting the lessee.
    • Parties in a Chain of Title or Obligation: Where liability or right might pass down a chain (e.g., a manufacturer whose component is part of a product for which a downstream seller is sued for defects).
    • Co-debtors or Joint Tortfeasors (in certain contexts): If not already parties, they might have an interest in the determination of liability of another co-debtor/tortfeasor.
  • Insufficient Interest: A general creditor of one of the parties usually does not have a sufficient "legal" interest to intervene merely because the outcome might affect the debtor's ability to pay. The impact is too indirect and economic.

The determination of "legal interest" is made on a case-by-case basis, considering the specific legal relationships involved.

III. The Procedure for Intervention

A. Application for Intervention (Sanka no mōshide - 参加の申出) (Code of Civil Procedure, Art. 43)
A third party wishing to intervene as an assistant must file a written "application for intervention" (sanka no mōshide 参加の申出) with the court where the main lawsuit is pending.

  • The application must clearly state:
    • The pending suit they wish to join.
    • The party they intend to assist.
    • The nature of their legal interest in the outcome of the suit (i.e., the grounds for intervention).

B. Court's Decision or Parties' Objections (Code of Civil Procedure, Art. 44)

  1. Permission by Court: The court reviews the application.
  2. Objections by Existing Parties: The original plaintiff and defendant can file an objection to the third party's intervention within a period specified by the court.
  3. Court Ruling on Intervention: If an objection is filed, the court will issue a judicial ruling (kettei 決定) either permitting or denying the intervention. This ruling itself can be appealed via an "immediate appeal" (sokuji kōkoku 即時抗告). If no objection is raised, the intervention is generally allowed.

IV. Status and Powers of an Assistant Intervenor (Hojo sanka'nin) (Code of Civil Procedure, Art. 45)

Once intervention is permitted, the assistant intervenor (hojo sanka'nin) acquires certain procedural rights and powers, though subject to important limitations.

A. General Powers (Art. 45, Para. 1):
An assistant intervenor can perform most procedural acts to support the principal party they are assisting. This includes the right to:

  • Make allegations and legal arguments.
  • Submit evidence and make evidentiary motions.
  • File motions (e.g., for clarification, for challenging witnesses).
  • Participate in the examination of witnesses and experts.
  • File an appeal against the judgment (even if the principal party they assisted does not appeal, provided the judgment is adverse to the principal party and affects the intervenor's interests).
  • File a request for a retrial under certain conditions.
    Essentially, the intervenor can take any procedural action that the principal party could take, as long as it is consistent with the stage of the litigation.

B. Key Limitations on the Intervenor's Powers (Art. 45, Paras. 1 & 2):
The intervenor's actions are not entirely independent; they are subsidiary to the principal party they are assisting.

  1. Cannot Contradict the Principal Party's Acts (Art. 45(1), Proviso):
    Any procedural act performed by the assistant intervenor is ineffective if it conflicts with an act performed by the principal party. The strategy and actions of the party being assisted take precedence. For example, if the principal party admits a fact, the intervenor cannot effectively deny it. If the principal party decides not to present certain evidence, the intervenor generally cannot force its presentation if it would contradict the principal's litigation stance.
  2. Cannot Perform Acts the Principal Party Cannot or Will Not Do (Art. 45(2)):
    The assistant intervenor generally cannot perform procedural acts that are solely within the personal disposition of the principal party, such as:
    • Withdrawing the claim (if assisting the plaintiff).
    • Admitting the opponent's claim (if assisting the defendant).
    • Entering into a settlement agreement, unless the principal party also agrees.
    • Waiving rights that only the principal party can waive.

C. Timing of Intervention:
Intervention can generally occur at any stage of the lawsuit as long as the suit is pending and the intervenor can still meaningfully perform procedural acts. However, intervening very late in the proceedings might limit the practical ability to influence the outcome.

V. The Effect of the Judgment on the Assistant Intervenor: "Effect of Intervention" (Sankateki kōryoku - 参加的効力) (Code of Civil Procedure, Art. 46)

This is one of the most significant consequences of assistant intervention.
A. The Binding Nature:
Article 46 states: "A judicial decision rendered with regard to the suit (excluding a decision to dismiss the action without prejudice on the grounds that it is unlawful, or a decision to dismiss an appeal without prejudice on the grounds that it is unlawful) shall also be effective against an assistant intervenor."

B. Scope and Interpretation of the Effect:
This "effect of intervention" (sankateki kōryoku) is generally understood to mean that if the principal party whom the intervenor assisted loses the case, the assistant intervenor is, in principle, bound by the findings and outcome of that judgment. In any subsequent lawsuit between the assistant intervenor and the principal party they assisted (e.g., a guarantor suing the principal debtor for reimbursement after paying the creditor, or vice versa), the intervenor generally cannot argue that:

  • The judgment in the main suit was incorrect on its merits.
  • The principal party conducted the litigation poorly.
  • Facts were different from what was found by the court in the main suit.

C. Rationale: Estoppel-like Effect / Preclusion of Contradictory Assertions:
The underlying rationale is that since the assistant intervenor was given a full opportunity to participate in the original lawsuit, present arguments, submit evidence, and assist the principal party to the best of their ability, they should not be allowed to subsequently contradict the outcome of that proceeding in a later dispute related to the same underlying issues, especially in a dispute with the party they assisted. It prevents the intervenor from having "two bites at the apple."

D. Exceptions to the Binding Effect (Art. 46, Proviso):
The binding effect of Sankateki kōryoku is not absolute. The intervenor is not bound by the judgment if they can prove any of the following:

  1. They were prevented from performing necessary procedural acts due to obstructive actions of the principal party they assisted.
  2. The principal party failed to perform procedural acts that the assistant intervenor was unable to perform (e.g., acts requiring the principal party's personal knowledge or authority that were critical but omitted).
  3. The principal party, to the detriment of the assistant intervenor, maliciously failed to perform procedural acts that they could have performed.

E. Distinction from Res Judicata (Kihan-ryoku):
Sankateki kōryoku is distinct from Kihan-ryoku (res judicata). Kihan-ryoku applies primarily between the formal parties to the litigation (plaintiff and defendant) regarding the subject matter of the suit. Sankateki kōryoku is a specific binding effect on the assistant intervenor concerning the preclusive effect of the findings in the main suit, mainly in their relationship with the party they assisted. It does not make the intervenor a full party for all res judicata purposes against the opposing litigant.

VI. Special Case: Intervention with Co-Litigant Status (Kyōdō soshō-teki hojo sanka - 共同訴訟的補助参加)

In certain specific situations, the assistant intervenor's legal position is so closely intertwined with that of the principal party that a unified judgment is essentially required for both. This is termed "intervention with co-litigant status" or "intervention similar to necessary co-litigation" (kyōdō soshō-teki hojo sanka).

  • Condition: This typically arises when the judgment in the main suit will, by its very nature or by substantive law, necessarily and directly determine the legal position of the intervenor in the same way it determines the principal party's position (i.e., a separate, inconsistent outcome for the intervenor would be legally impossible or untenable).
  • Enhanced Powers: In such cases, some of the limitations on an ordinary assistant intervenor's powers may be relaxed. For instance, they might be able to perform procedural acts even if they conflict with those of the principal party, because their own legal interest is so directly at stake and requires independent protection.
  • Example: A director of a company intervening to assist another director who is being sued in a shareholder derivative action, where the finding of liability against the sued director could automatically establish or strongly prejudice the liability of the intervening director due to their joint actions.

VII. Strategic Considerations for Businesses

  • When to Consider Intervening:
    • If your company is a guarantor, surety, or indemnitor for one of the parties.
    • If your company is a sub-contractor, supplier, licensor, or licensee whose contractual rights or obligations are directly contingent on the outcome of the main lawsuit.
    • If a judgment against a related party (e.g., a subsidiary or primary obligor) will have unavoidable adverse legal consequences for your company.
  • Benefits of Intervention:
    • Allows your company to actively present arguments and evidence to protect its interests.
    • Provides access to case files, information, and ongoing developments.
    • Offers the ability to influence the outcome and potentially prevent an unfavorable judgment that would later bind you via sankateki kōryoku.
    • In some cases, allows the intervenor to file an appeal even if the principal party they assisted chooses not to.
  • Downsides and Costs:
    • Intervention incurs legal costs (attorney fees, court fees for intervention are usually minimal).
    • The intervenor becomes bound by the judgment if the assisted party loses (subject to exceptions).
    • The intervenor's actions are generally subsidiary to, and cannot conflict with, those of the principal party they are assisting (unless it's kyōdō soshō-teki hojo sanka).
  • Assessing the "Legal Interest": This is the critical first step. A purely commercial or indirect economic interest will generally not suffice. Consult with legal counsel to determine if your company's interest meets the "legal interest" threshold.

Conclusion

Assistant intervention, or Hojo sanka, in Japanese civil procedure provides a structured way for third parties with a direct legal stake in a pending lawsuit to actively participate in protecting their interests by supporting one of the litigants. While it does not make the intervenor a full party asserting their own claims, it offers a valuable opportunity to influence the proceedings and be heard. However, businesses considering this option must carefully evaluate the "legal interest" requirement, understand the scope and limitations of an intervenor's powers, and be aware of the significant binding "effect of intervention" (sankateki kōryoku) that the final judgment will have on them.