Challenging an Alleged Debt in Japan: How is a Claim for Non-Existence of Debt Valued?

In the course of business or personal affairs, situations can arise where an individual or entity is confronted with a demand for payment of a debt they believe is invalid, already settled, or simply non-existent. In Japan, rather than passively waiting for the alleged creditor to initiate legal action, the potential debtor has a proactive legal remedy: an "action for a declaratory judgment of non-existence of debt" (債務不存在確認の訴え - saimu fusonzai kakunin no uttae). This type of lawsuit seeks a judicial confirmation that the specific alleged obligation does not bind the plaintiff. As with all civil actions in Japan, a crucial preliminary step is the determination of the "Sogaku" (訴額) – the value of the claim – which dictates court jurisdiction and filing fees. The valuation approach for these negative declaratory actions varies significantly depending on the nature of the alleged debt and how the claim is pleaded.

The Nature and Purpose of an Action for Confirmation of Non-Existence of Debt

An action for confirmation of the non-existence of a debt allows a party who is being pursued for an alleged debt, or who reasonably anticipates such pursuit, to take the initiative and seek a binding court declaration that the debt, in whole or in part, is not owed. The utility of such an action is manifold:

• Pre-emptive Resolution: It can resolve disputes over alleged obligations before the alleged creditor initiates a collection lawsuit, potentially saving costs and mitigating uncertainty.
• Legal Certainty: A favorable judgment provides legal certainty regarding the plaintiff's (non-)liability, which can be crucial for financial planning, creditworthiness, or business reputation.
• Defense Against Unfounded Claims: It serves as a shield against unfounded or erroneous claims, preventing potential future enforcement actions based on the alleged debt.

To maintain such an action, the plaintiff must generally demonstrate a "legal interest to seek confirmation" (確認の利益 - kakunin no rieki). This means there must be a genuine, present dispute or legal uncertainty concerning the alleged debt that a declaratory judgment can effectively resolve. A mere abstract fear or a hypothetical dispute is typically insufficient.

"Sogaku" for Confirmation of Non-Existence of Debt Based on Contract (Keiyaku ni Motozuku Saimu no Baai)

When the alleged debt arises from a contractual relationship (e.g., a loan agreement, sales contract, service agreement), the method for calculating the "Sogaku" is relatively straightforward.

General Rule: The Disputed Debt Amount

The "Sogaku" is the amount of the specific contractual debt whose non-existence the plaintiff asserts. The plaintiff's direct economic interest in obtaining a favorable judgment is the avoidance of having to pay this disputed sum.

• Specificity is Crucial: The plaintiff must generally identify the alleged contract and the precise amount of the debt they claim not to owe. For instance, a plaintiff might seek "a declaration that the plaintiff does not owe the defendant the sum of 10,000,000 yen allegedly due under a goods supply agreement dated [Date]." The Supreme Court of Japan, in a judgment dated December 25, 1952 (Minshu Vol. 6, No. 12, p. 1282), emphasized the necessity of specifying the amount in monetary claims, a principle that applies to both actions seeking to confirm the existence of a right (affirmative declaration) and those seeking to confirm its non-existence (negative declaration).
• Partial Non-Existence: If the plaintiff acknowledges a portion of the alleged debt but disputes the remainder, the "Sogaku" is the value of the disputed portion only. For example, if an alleged creditor claims 15,000,000 yen under a contract, but the plaintiff (potential debtor) believes only 5,000,000 yen is actually due and files an action for a declaration that no debt exists beyond 5,000,000 yen, the "Sogaku" for this action would be 10,000,000 yen (the disputed amount).
• No Deemed Value (Generally): Because the amount of an alleged contractual debt is typically specific or can be made specific by the plaintiff based on the creditor's demand or the contract terms, the "extremely difficult to calculate" rule (which can lead to a deemed "Sogaku" of 950,000 yen, as discussed below) generally does not apply to these cases. The economic interest is usually clear.

"Sogaku" for Confirmation of Non-Existence of Damages Liability Based on Tort (Fuhō Kōi ni Motozuku Songai Baishō Saimu no Baai)

The valuation of "Sogaku" becomes more nuanced when the plaintiff seeks a declaration of non-liability for damages allegedly arising from a tort (an unlawful act causing harm). The approach often depends on whether the plaintiff (the alleged tortfeasor) specifies a monetary amount in their claim.

A. When the Plaintiff Specifies the Amount of Non-Existent Tort Liability

If the plaintiff in the non-existence action seeks a declaration that they are not liable for a specific, quantified amount of tort damages (e.g., "a declaration that the plaintiff is not liable to the defendant for 30,000,000 yen in damages allegedly arising from [a specific incident]"), the "Sogaku" is that specified monetary amount (in this example, 30,000,000 yen). This situation is analogous to the contractual debt scenario where the disputed sum is clear.

B. When the Plaintiff Does Not Specify the Amount – The 950,000 Yen Deemed Value Rule

It is common in tort situations for the alleged victim (the potential creditor, and thus the defendant in the non-existence action) not to have formally quantified their damages claim at the time the alleged tortfeasor decides to proactively seek a declaration of non-liability. The alleged tortfeasor might genuinely believe they committed no tort or are not at fault, but the extent of any potential damages, should liability be found, could be unknown or highly speculative.

• Rationale for Non-Specification by Plaintiff: In such circumstances, it would be unreasonable and impractical to require the plaintiff (alleged tortfeasor) to arbitrarily state a high monetary figure for the liability they deny, merely to initiate the action. Their primary legal interest lies in obtaining a declaration that no liability exists at all for the alleged tortious act, irrespective of the potential quantum of damages.
• Application of "Extremely Difficult to Calculate" Principle: When a plaintiff seeks such a general declaration of non-liability for tort damages without specifying a monetary amount (or asserting non-liability for "any and all damages"), the "Sogaku" is considered extremely difficult to calculate within the meaning of Article 8, Paragraph 2 of the Code of Civil Procedure.
• Deemed "Sogaku" of 950,000 Yen: Consequently, for the purpose of calculating court filing fees, Article 4, Paragraph 2 (latter part) of the Act on Costs of Civil Procedure comes into play, and the "Sogaku" for such an action is deemed to be 950,000 yen.
• Potential for Later Reassessment: This deemed value provides a practical entry point for litigation. However, if, during the course of the proceedings, the defendant (the alleged tort victim) makes their damages claim specific by, for example, filing a counterclaim for a quantified sum of damages, or by otherwise clearly articulating the amount they are seeking, the court may then reassess the "Sogaku" of the plaintiff's non-existence claim. If the defendant's specified claim significantly exceeds 950,000 yen, the plaintiff might be required to pay additional court fees based on the newly clarified or established higher value of the dispute.

C. Valuation in Scenarios with Multiple Parties (Typically when Amount is Unspecified)

The 950,000 yen deemed "Sogaku" rule for unspecified tort liability non-existence claims also has implications when multiple parties are involved.

• Multiple Defendants (Alleged Victims of a Single Tortious Act):
  If a single plaintiff (the alleged tortfeasor) files an action against multiple individuals who claim to be victims of the same single tortious event (e.g., a factory emission affecting several neighbors), and the plaintiff seeks a general declaration of non-liability without specifying amounts owed to each victim:
  For the efficiency of initial filing, court practice often leans towards accepting a single deemed "Sogaku" of 950,000 yen for the entire group of defendants collectively, rather than multiplying 950,000 yen by the number of defendants. This is because the plaintiff's core interest is in obtaining a declaration of non-liability concerning the single originating event. This initial valuation may, however, be subject to review if the defendants later individualize and quantify substantial separate claims.
• Multiple Plaintiffs (Alleged Joint Tortfeasors Seeking Non-Liability):
  If several parties who are alleged to be joint tortfeasors (e.g., multiple companies involved in a project that allegedly caused harm) collectively file an action for a declaration of their non-liability for an unspecified amount of damages:
  The economic interest of each alleged joint tortfeasor in avoiding personal liability is often seen as common or shared, particularly if they are united in denying the tortious act itself or their causal connection to it. In such cases of "non-genuine joint and several liability" (fu-shinsei rentai saimu), where each tortfeasor could be independently liable for the whole damage but payment by one discharges the others, a single deemed "Sogaku" of 950,000 yen for the entire group of co-plaintiffs is often considered appropriate at the filing stage. The Supreme Court's reasoning in cases like the judgment of March 4, 1982 (Hanrei Jihō No. 1042, p. 87), concerning the nature of liability among joint tortfeasors, supports the idea of a unified underlying interest in such contexts.
• Plaintiff Alleged Tortfeasor and Their Insurer as Co-Plaintiffs:
  It is also common for an alleged tortfeasor and their liability insurer to jointly file an action seeking a declaration that no tort liability (for an unspecified amount) exists towards a third party.
  Although the alleged tortfeasor's potential liability stems from tort law and the insurer's potential obligation from the insurance contract, both share a paramount economic interest in a finding that no underlying tort liability exists on the part of the insured. The insurer's duty to indemnify is typically contingent upon the insured's liability being established.
  Therefore, similar to the joint tortfeasor scenario, a single deemed "Sogaku" of 950,000 yen for both the insured and the insurer as co-plaintiffs is generally applied when the amount of potential liability is unspecified. This shared interest is often reinforced by provisions in liability insurance policies and relevant statutes (such as the Automobile Liability Security Act, if applicable) that link the insurer's obligations closely to the insured's liability.

Strategic Considerations for Plaintiffs

When contemplating an action for a declaration of non-existence of debt in Japan, several strategic points related to "Sogaku" emerge:

• Precision for Contractual Debts: If challenging a contractual debt, clearly specifying the exact amount whose non-existence is asserted is crucial, as this will directly form the "Sogaku." Ambiguity could lead to disputes over valuation.
• Understanding the Deemed Value in Tort Cases: For unspecified tort liability claims, be aware that while the initial "Sogaku" (and fee) will likely be based on the 950,000 yen deemed value, this can be revised upwards if the alleged victim subsequently makes a quantified, substantial claim. This potential for future fee adjustments should be factored into litigation planning.
• Multiple Party Dynamics: The general tendency to apply a single deemed "Sogaku" for groups of plaintiffs or defendants in unspecified tort cases (at the initial filing stage) is a practical approach. However, the court ultimately retains discretion, and the specific facts and the way claims are pleaded can influence the outcome.
• Establishing "Legal Interest to Confirm": Beyond "Sogaku," ensure that the conditions for bringing a declaratory action are met, particularly the existence of a genuine legal dispute or uncertainty that warrants judicial clarification. A premature or purely hypothetical claim may be dismissed.

Conclusion: Proactive Defense and Value Assessment

Actions for a declaratory judgment of the non-existence of debt offer a valuable proactive tool in the Japanese legal system for those who believe they are being wrongly pursued for an obligation. The calculation of "Sogaku" for these actions is clearly bifurcated: for alleged contractual debts, the "Sogaku" is typically the specific monetary amount in dispute. For alleged tortious liability where the plaintiff (the potential debtor) does not specify a monetary sum for the non-existent liability, a deemed "Sogaku" of 950,000 yen is generally applied due to the inherent difficulty in objectively valuing an unquantified potential claim from the plaintiff's perspective.

This framework provides a degree of predictability for determining court jurisdiction and initial filing fees. However, particularly in tort cases involving unspecified amounts or multiple parties, the initial "Sogaku" might be subject to later judicial reassessment as the contours of the dispute become clearer. Therefore, careful drafting of the claim and consultation with experienced Japanese legal counsel are essential to effectively navigate the valuation rules and procedural requirements associated with challenging an alleged debt in Japan.