Can You Rely on the Japanese Government's Word? The Principle of Good Faith in Administrative Law

In any developed legal system, citizens and businesses rightfully expect their government to act not only within the bounds of the law but also with a fundamental sense of fairness and reliability. This expectation is often encapsulated in the legal concept known as the "principle of good faith and fair dealing." In Japan, this principle, known as shingi-soku (信義則), originates in private law but has significant implications for administrative law, shaping how governmental bodies interact with the public and how their actions are judged by the courts. This article explores the role of shingi-soku in Japanese administrative law, particularly focusing on when and how it might prevent the government from asserting its strict legal rights if doing so would be unconscionable, using a poignant Supreme Court case concerning A-bomb survivors as a central illustration.

The Principle of Good Faith and Fair Dealing (Shingi-Soku) in Japanese Law

The principle of good faith and fair dealing is explicitly stated in Article 1, Paragraph 2 of the Japanese Civil Code (Minpō): "The exercise of rights and performance of duties shall be done in good faith." While its primary domain is private law, governing contractual and other civil relationships, shingi-soku has evolved into a foundational legal principle that permeates various branches of Japanese law, including administrative law.

In the administrative law context, shingi-soku serves as a general principle that can temper the rigid application of statutory provisions or administrative powers. It demands that administrative bodies act honestly, fairly, and consistently, and that they do not abuse their powers or act in a manner that would unjustly prejudice individuals or entities who have reasonably relied on governmental conduct or representations. It acts as a check on potential administrative arbitrariness and seeks to ensure that administrative actions align with broader notions of justice and equity.

Key Scenarios for Applying Good Faith in Administrative Law

The application of shingi-soku in administrative law is not a standalone doctrine but often manifests through related concepts or in specific factual scenarios. Some key areas include:

1. Protection of Legitimate Expectations (Shinrai Hogo no Gensoku - 信頼保護の原則): This is perhaps the most well-known emanation of good faith in administrative law. It concerns situations where an administrative body's prior conduct—such as explicit assurances, established administrative practices, or official guidance—has created a reasonable and legitimate expectation on the part of a private party, who then acts in reliance on that expectation. If the administrative body subsequently attempts to act contrary to this expectation in a way that would cause undue hardship, the principle of protection of legitimate expectations may be invoked. However, Japanese courts have traditionally been cautious in applying this principle, especially if it conflicts with the principle of legality (i.e., an unlawful administrative act generally cannot create a legally protected expectation). The bar for establishing a "legitimate" expectation that warrants legal protection, particularly against a later, lawful administrative action, is quite high. Landmark cases have involved, for example, local government inducements for factory locations that were later altered.
2. Prohibition of Contradictory Conduct (Mujun Kōi Kinshi no Gensoku - 矛盾行為禁止の原則) / Venire Contra Factum Proprium: Closely related to legitimate expectations, this principle prevents an administrative body from taking a position or action that contradicts its own prior conduct or statements, especially if a private party has relied on the earlier stance to their detriment. It emphasizes consistency and predictability in administrative behavior.
3. The "Clean Hands" Doctrine in an Administrative Context: A fundamental aspect of good faith is that a party should not be permitted to benefit from its own wrongdoing or inequitable conduct. In administrative law, this means that if an administrative body has acted unlawfully or unfairly, it may be precluded from asserting certain rights or defenses that it might otherwise have, if doing so would perpetuate or capitalize on its initial misconduct. The Supreme Court case discussed below is a prime example of this application.

The A-Bomb Survivors' Health Allowance Case (Supreme Court, February 6, 2007)

A powerful illustration of the principle of good faith operating in Japanese administrative law is the Supreme Court (Third Petty Bench) judgment of February 6, 2007 (Minshū Vol. 61, No. 1, p. 122). This case involved claims for unpaid health management allowances by A-bomb survivors (hibakusha) who resided outside Japan.

Background of the Case:
Japanese law, through acts such as the Act on Special Measures for Atomic Bomb Survivors (原子爆弾被爆者に対する特別措置に関する法律 - Genbaku Tokubetsu Sochi-hō) and the Act on Relief for Atomic Bomb Survivors (原子爆弾被爆者に対する援護に関する法律 - Hibakusha Engo-hō), provides for various benefits, including health management allowances, for individuals officially recognized as A-bomb survivors. These laws themselves did not contain provisions explicitly making Japanese residency a condition for receiving such allowances, nor did they stipulate that eligibility would be lost if a recognized survivor moved abroad.

However, in 1974, the Ministry of Health issued an administrative circular (known as the 402-gō tsūtatsu - 402号通達) which stated that A-bomb survivors residing outside Japan, or those who moved abroad after receiving their survivor's handbook, would lose their eligibility for these health allowances (shikken - 失権). This administrative guidance was later found by courts to be an incorrect interpretation of the law and therefore unlawful.

The plaintiffs in the 2007 Supreme Court case were A-bomb survivors who, due to this unlawful circular, had either not applied for or had their health management allowances discontinued upon residing or moving abroad. After subsequent court decisions affirmed the unlawfulness of the circular and it was eventually rescinded in 2003, these survivors sought payment of the allowances that had been unpaid for past periods. The government (in this instance, Hiroshima Prefecture, acting as the paying authority for state-funded benefits) defended against these claims by asserting that the right to claim the past allowances had been extinguished by the statute of limitations (prescription - 時効 jikō).

The Supreme Court's Decision on Good Faith:
The Supreme Court held that, under the specific and "extremely exceptional circumstances" (kiwamete reigaiteki na baai) of this case, the government's assertion of the statute of limitations defense violated the principle of good faith and fair dealing and was therefore impermissible.

The Court's reasoning centered on the following points:

• Government's Own Unlawful Act as the Cause: The primary reason the survivors had not claimed their allowances in a timely manner was the existence of the unlawful 402-gō tsūtatsu. This circular, issued by the responsible ministry, created a significant, officially sanctioned impediment that made it practically extremely difficult, if not impossible, for overseas survivors to expect that their claims would be honored.
• Culpability of the Administration: The circular concerned crucial rights (health allowances for A-bomb survivors) and had severe consequences (loss of eligibility). The Court noted that an administrative agency issuing such impactful guidance has a duty to exercise considerable care and diligence to ensure its legal correctness. The issuance and maintenance of an unlawful circular that deprived individuals of their statutory rights was a breach of this duty.
• Unconscionability of Asserting Prescription: Given that the government's own unlawful actions had prevented the timely exercise of rights, it would be contrary to good faith for the government to then take advantage of the passage of time—a delay it had itself caused—to evade its payment obligations. The Court stated that allowing the government to assert the statute of limitations in such a situation would be tantamount to allowing it to profit from its own illegal administrative practice.
• "Extremely Exceptional Circumstances": The Court repeatedly emphasized that this finding was based on the unique and extreme facts of the case, implying that the bar for setting aside a statute of limitations defense on good faith grounds is very high. It would require a situation where the government's actions actively and unlawfully obstructed the exercise of rights to such an extent that it would be patently unfair to allow the prescription defense.

Good Faith Overriding Statutory Provisions: The Local Autonomy Act Article 236(2)

A significant legal argument in the A-bomb survivor case revolved around Article 236, Paragraph 2 of the Local Autonomy Act (Chihō Jichi Hō). This provision generally states that for monetary claims owed to or by local public entities (and by extension, often applied to national government obligations managed by local entities), the invocation of prescription by the debtor is not necessary for the claim to be extinguished by the passage of time, and the benefit of prescription cannot be waived. The government argued that this statutory provision meant prescription applied automatically and could not be defeated by an appeal to the principle of good faith.

The Supreme Court, however, rejected this argument. It acknowledged the purposes of Article 236, Paragraph 2—such as ensuring the proper and uniform handling of public finances and the equal treatment of residents. However, it concluded that these purposes did not extend to permitting the assertion of prescription in "extremely exceptional cases" where doing so would fundamentally violate the principle of good faith.

The Court reasoned that:

• The obligation of local public entities to manage their affairs in compliance with the law (Local Autonomy Act, Article 2, Paragraph 16) is a most fundamental principle.
• When a public entity, in breach of this fundamental duty, unlawfully and actively obstructs the exercise of an individual's important, concretely established rights, making it extremely difficult for the individual to claim them, and as a result, the claim becomes time-barred, the very basis for affording the public entity the benefit of automatic prescription (without invocation or possibility of waiver) is lost.
• In such exceptional cases, disallowing the assertion of prescription would not conflict with the principle of equal treatment of citizens and would not unduly hinder administrative operations.

Thus, the Supreme Court established that even a statutory provision like Article 236, Paragraph 2 of the Local Autonomy Act, which appears to create a strict and automatic prescription effect, can be overridden by the principle of good faith in circumstances of serious governmental wrongdoing that directly causes the failure to exercise rights. The supplementary opinion by Justice Tokiyasu Fujita further elaborated on this point, suggesting that the Local Autonomy Act's provision should not be interpreted to allow a public body to benefit from its own unlawful conduct that prevents citizens from asserting their rights.

The Scope and Limits of Good Faith in Administrative Law

The 2007 A-bomb survivor case is a powerful affirmation of the role of good faith in Japanese administrative law. It demonstrates that courts are willing to invoke this principle to prevent manifest injustice, even if it means setting aside a typically strong defense like the statute of limitations, particularly when the government's own unlawful actions are the root cause of the problem.

However, the judgment also underscores the exceptional nature of such an intervention. The Supreme Court was careful to limit its holding to "extremely exceptional cases." This suggests that the mere existence of an unlawful administrative act or erroneous guidance will not automatically preclude the government from relying on prescription or other legal defenses. Several factors are likely to be crucial in determining whether the threshold for a good faith violation is met:

• Nature and Seriousness of Government Misconduct: Was the government action merely a technical error, or was it a more serious, culpable deviation from legal obligations, such as issuing and maintaining unlawful guidance that directly denied established rights?
• Causal Link to Non-Exercise of Rights: Did the government's conduct directly and significantly impede the private party's ability to know about or exercise their rights?
• Nature of the Rights at Stake: Are fundamental rights or entitlements essential for welfare and dignity involved, as in the case of A-bomb survivor benefits?
• Balancing of Interests: The courts will likely balance the individual's interest in obtaining relief against public interests such as legal stability, the sound management of public finances, and the principle of legality itself (which generally dictates that administration should conform to statutes, including those setting limitation periods).

The application of shingi-soku thus involves a delicate balancing act. While it serves as a vital safeguard against governmental overreach and unfairness, its invocation to override clear statutory provisions or established legal defenses remains reserved for situations where the equities overwhelmingly favor the private party due to significant and causative wrongdoing by the administrative body.

Conclusion: The Enduring Expectation of Governmental Fairness

The principle of good faith and fair dealing, or shingi-soku, acts as an essential, albeit carefully applied, corrective to the strictures of positive law in Japanese administrative practice. It reflects the fundamental expectation that governmental power should be exercised not only legally but also equitably and reliably.

The Supreme Court's 2007 judgment in the A-bomb survivors' case stands as a critical precedent. It clearly signals that the government cannot hide behind legal technicalities like the statute of limitations if its own unlawful actions have prevented citizens from asserting their legitimate claims. While the threshold for invoking good faith to defeat such defenses is high and confined to "extremely exceptional circumstances," the decision powerfully affirms that the state itself is bound by fundamental principles of fairness and cannot be seen to profit from its own illegal impediments to the exercise of rights. This serves as an important reminder of the judiciary's role in upholding not just the letter but also the spirit of justice in the relationship between the state and its people.