Can One Lawyer Represent Multiple Clients in the Same Case in Japan? Understanding the Risks of "Fukusu Tojisha Juken"

In the realm of legal representation, the question of whether a single lawyer or law firm can represent multiple clients in the same case—a scenario referred to in Japan as fukusū tōjisha kara junin suru jiken (複数当事者から受任する事件, "cases received from multiple parties")—is laden with ethical complexities. While not absolutely prohibited in Japan, such arrangements demand extraordinary caution due to the inherent risk of conflicts of interest (rieki-sōhan, 利益相反) and the paramount importance of a lawyer's duties of loyalty and confidentiality to each client.

This article explores the Japanese ethical framework governing these situations, focusing on the obligations lawyers must fulfill and the potential pitfalls that clients, including businesses involved in multi-party litigation or transactions, should understand.

The Governing Principles: Identifying and Managing Conflicts

The core concern when a lawyer considers representing multiple clients in a single matter is the potential for their respective interests to diverge, either from the outset or as the case progresses. The Japanese Basic Rules of Professional Conduct for Lawyers (弁護士職務基本規程, Bengoshi Shokumu Kihon Kitei) provide specific guidance.

A conflict of interest in this context is determined by the objective legal nature and substance of the case, rather than merely by emotional disagreements or personal friction between the clients. Situations where such multiple representations might arise include:

• Multiple plaintiffs jointly bringing a lawsuit (e.g., in a collective consumer rights action).
• Co-defendants whose defenses are aligned.
• Family members who initially seek joint counsel in an inheritance matter, believing their interests to be common.

However, even if interests appear aligned initially, the potential for future conflict is a significant ethical consideration.

Pre-Engagement Obligations: The Crucial Duty to Explain (Basic Rules Art. 32)

Before a Japanese lawyer accepts an engagement to represent multiple clients in the same case, Article 32 of the Basic Rules of Professional Conduct imposes a critical obligation:

"When undertaking a case for multiple clients where there is a risk of conflict of interest arising among them, the lawyer, upon accepting the engagement, must explain to each client the possibility of having to withdraw and other potential disadvantages."

This pre-engagement explanation is not a mere formality. It must be thorough and enable each prospective client to give genuinely informed consent to the joint representation. The lawyer should clearly articulate:

1. The specific nature of potential future conflicts: How might their interests diverge as the case develops? For example, in a case involving multiple creditors pursuing a single debtor with limited assets, a conflict will arise when it comes to distributing those assets.
2. The consequences of a conflict materializing: Crucially, clients must understand that if an actual conflict arises, the lawyer will likely be ethically required to withdraw from representing all of them. This can leave clients needing to find new counsel mid-case, potentially causing delays and additional costs.
3. Limitations on loyalty and confidentiality: While the lawyer owes a duty of loyalty and confidentiality to each client, in a joint representation, information shared by one client relevant to the common matter will generally be shared with the other jointly represented clients. Secrets cannot typically be kept "from each other" within the scope of the joint representation. If one client wishes to share information that they do not want the other co-clients to know, that client may need separate counsel.
4. Other potential disadvantages: This could include difficulties in formulating a unified strategy if clients later develop different priorities, or challenges in settlement discussions if clients have differing views on acceptable outcomes.

Only after such comprehensive explanations and after obtaining the informed consent of each prospective client can the lawyer ethically proceed with the joint representation.

Post-Engagement Obligations: Addressing Actual Conflicts (Basic Rules Art. 42)

Even with the best intentions and thorough upfront discussions, conflicts can still emerge after the engagement has begun. Article 42 of the Basic Rules of Professional Conduct addresses this scenario:

"If, after undertaking a case for multiple clients where there is a risk of conflict of interest arising among them, a conflict of interest actually arises between the clients, the lawyer must promptly inform each client of the circumstances and take appropriate measures, such as withdrawal."

The term "appropriate measures" almost invariably means the lawyer must withdraw from representing all of the jointly represented clients involved in the conflict. Once interests become directly adverse, a lawyer cannot:

• Favor one client over another.
• Effectively advocate for conflicting positions.
• Maintain the trust and confidence of all parties.

Attempting to "mediate" an actual conflict between existing clients is generally not permissible, as the lawyer cannot simultaneously act as a zealous advocate for each and a neutral intermediary. Continued representation of even one client, when their interests have become directly adverse to another jointly represented client in the same matter, would typically breach the duty of loyalty.

Illustrative Scenarios and Their Inherent Risks

The application of these principles can be seen in various common scenarios:

• Multiple Creditors Pursuing a Single Debtor:
  • Initial Alignment: Clients' interests are often aligned in establishing the debtor's liability and identifying assets. Joint representation can offer cost savings and a stronger united front.
  • Potential Conflict: If the debtor's assets are insufficient to satisfy all claims, a conflict arises over the distribution of those limited funds. Each creditor will want to maximize their own recovery, potentially at the expense of others.
  • Lawyer's Role: The lawyer must, from the outset (Art. 32), explain this potential for conflict during enforcement or settlement. If the conflict materializes (e.g., during negotiations for a lump-sum settlement from the debtor to be divided among creditors), the lawyer must withdraw from all (Art. 42).
• Representing a Principal Debtor and a Joint Guarantor:
  • High Risk: This scenario is often fraught with inherent conflicts unless their positions are perfectly identical and there is no possibility of dispute between them (e.g., regarding the validity of the debt or the apportionment of responsibility).
  • When Permissible (Rarely): If both the debtor and guarantor unequivocally deny the debt entirely or assert it has been fully paid, their interests might align sufficiently for initial joint representation, but only after extremely thorough disclosure of the high risk of future conflict and the consequences of such.
  • Likely Conflict: If the creditor is likely to succeed, the guarantor, upon paying, will have a right of recourse against the principal debtor, creating direct adversity.
• Inheritance Matters (e.g., Multiple Heirs):
  • Initial Consultation: A lawyer might initially consult with multiple heirs who believe their interests are aligned. Some may even attempt a form of informal mediation if all parties consent and are fully aware of the lawyer's role (which should be clarified as not representing any one party against another in such a mediative context).
  • High Risk of Conflict: Disputes over asset valuation, distribution, or the interpretation of a will can easily arise, quickly turning aligned interests into adverse ones.
  • Best Practice: It is often more prudent for a lawyer to clearly represent only one heir from the beginning, or for each heir with potentially distinct interests to seek independent counsel, especially if any disagreement is foreseeable. If joint representation is attempted, the Art. 32 and Art. 42 requirements are paramount.
• "Instantaneous Settlements" (Sokketsu Wakai) and Dual Agency:
  • Under Japanese law, a lawyer representing one party in an "instantaneous settlement" procedure (a simplified court-annexed settlement process under Article 275 of the Code of Civil Procedure) cannot also act as the lawyer for the opposing party. This would be a prohibited form of dual agency (Civil Code, Art. 108). Similarly, a lawyer for one party should not select or appoint the lawyer for the opposing party in such proceedings.

Confidentiality in Multiple Representation

A significant challenge in representing multiple clients is managing confidential information. The duty of confidentiality is owed to each client.

• Generally, in a joint representation concerning a common matter, information shared by one client that is material to the representation is presumed to be shared with all other jointly represented clients. There is typically no "secret" kept from one co-client on behalf of another regarding the common subject matter.
• If one client discloses information to the lawyer that they wish to keep confidential from the other co-clients, this creates an immediate problem. The lawyer cannot use that information to the detriment of the disclosing client, but withholding material information might also breach their duty to keep the other clients adequately informed (Basic Rules, Art. 36).
• This tension underscores why clear understandings about information sharing must be established at the outset of any joint representation.

Why Withdrawal from All Clients is Often the Outcome

When an actual conflict of interest emerges among jointly represented clients, the lawyer's ability to fulfill their ethical duties to each client is compromised.

• Duty of Loyalty: The lawyer can no longer provide undivided loyalty to clients with adverse interests.
• Duty of Confidentiality: As discussed, managing confidential information becomes problematic.
• Duty to Provide Competent and Diligent Representation: Advocacy for one client may require actions detrimental to another.

Therefore, the "appropriate measure" under Article 42 of the Basic Rules most often necessitates the lawyer's withdrawal from representing all the clients involved in that specific conflict. It is generally not permissible to simply drop one client and continue representing another once their interests have become directly adverse in the subject matter of the joint representation.

Comparison with U.S. Practices

While the underlying principles of avoiding harmful conflicts are similar, there can be differences in emphasis and procedure compared to the U.S.

• ABA Model Rule 1.7 governs conflicts of interest with current clients and permits concurrent representation of clients with conflicting interests in certain circumstances, provided each affected client gives informed consent, confirmed in writing. The standard for "informed consent" is rigorous.
• U.S. practice, particularly in litigation, often sees parties with potentially divergent (even if not yet directly adverse) interests obtaining separate counsel from the outset more readily than might sometimes occur in Japan. The emphasis on "zealous advocacy" for each individual client can make joint representation more complex to navigate.
• The use of "joint defense agreements" or "common interest agreements" is a more formalized practice in the U.S. to allow separately represented clients with common interests to share information without waiving privilege against third parties. This differs from the Japanese scenario under discussion, which primarily concerns multiple clients retaining the same lawyer.

Conclusion

Representing multiple clients in the same case in Japan (fukusū tōjisha juken) is not a step to be taken lightly by lawyers or clients. While there can be benefits in terms of efficiency and cost, the ethical risks, primarily centered on conflicts of interest and challenges to maintaining duties of loyalty and confidentiality to each client, are substantial.

Japanese ethical rules, particularly Articles 32 and 42 of the Basic Rules of Professional Conduct, mandate a highly cautious approach. This includes exhaustive upfront explanations of potential conflicts and their consequences, the obtaining of truly informed consent from all parties, and a clear understanding that if interests do diverge to the point of actual conflict, the lawyer will almost certainly be required to withdraw from representing all clients involved. For businesses, especially foreign entities, entering into such joint representation arrangements with Japanese counsel requires a thorough understanding of these rules and a proactive dialogue with their lawyers to ensure their interests are, and will remain, adequately protected throughout the engagement.