Defective Product from Japan Caused Harm: Who is Liable and What Must Be Proven?

In an era of global commerce, products manufactured in one country often find their way to consumers and businesses across the world. When such a product turns out to be defective and causes harm, victims rightly seek compensation. If a product originating from Japan is implicated, understanding the Japanese legal framework for product liability is crucial. Japan has a specific Product Liability Act (製造物責任法 - Seizōbutsu Sekinin Hō, hereinafter "PLA"), enacted in 1994 and effective from July 1, 1995, which provides a distinct avenue for redress alongside general contract and tort law.

This article explores who can be held liable for harm caused by a defective product under Japanese law, what a claimant needs to prove under the PLA, the types of defects recognized, available defenses for manufacturers, and the applicable time limits for bringing a claim.

1. Who Can Be Held Liable for a Defective Product?

When a defective product causes harm, liability can potentially arise under several legal grounds and against different parties:

• A. Under the Product Liability Act (PLA - 製造物責任法, Seizōbutsu Sekinin Hō):
  The PLA primarily targets those involved in bringing the product to the market. According to Article 2, paragraph 3, the following entities can be held liable as "Manufacturer, etc." (製造業者等 - seizōgyōsha-tō):
  1. Actual Manufacturers/Processors/Importers: Any person who manufactured, processed, or imported the product as a business.
  2. Self-Represented Manufacturers: Any person who represents themselves as the manufacturer by putting their name, trade name, trademark, or other indication on the product (e.g., private branders). If a company affixes its name to a product suggesting it is the manufacturer, it can be held liable under this provision even if it outsourced the actual manufacturing, provided it caused that representation.
  3. De Facto Manufacturers: Any person who, in light of the manner of manufacturing, processing, importation or sales, and other circumstances concerning the product, can be recognized as its de facto manufacturer.
• B. Under General Contract Law (契約法 - Keiyakuhō):
  A direct buyer of a defective product can also pursue a claim against their immediate seller based on breach of contract, specifically for "non-conformity" (契約不適合 - keiyaku futekigō) of the goods with the contract terms (governed by Articles 562 et seq. of the Civil Code, following the 2020 reforms). Remedies under contract law include demanding cure (repair or replacement), price reduction, damages, and contract termination. This route is primarily available to the direct purchaser against their seller.
• C. Under General Tort Law (不法行為法 - Fuhōkōihō) (Civil Code, Article 709):
  A claim can also be made under general tort principles if it can be proven that someone (e.g., the manufacturer, or even the seller) intentionally or negligently infringed the victim's rights, causing damage. The PLA explicitly states in its Article 6 that its provisions do not prevent a victim from seeking remedies under the Civil Code. However, proving negligence on the part of a manufacturer in design or production can be very difficult for a plaintiff, which is one of the primary reasons the PLA was enacted (to establish a basis for liability without needing to prove such negligence).

This article will primarily focus on liability under the PLA, as it provides a specific regime for defective products.

2. What Must Be Proven by the Injured Party under the PLA?

To successfully claim damages under the PLA, the injured party (plaintiff) must prove the following key elements:

• The "Product" (製造物 - seizōbutsu):
  The item causing harm must be a "product" as defined in PLA Article 2, paragraph 1: "a movable which is manufactured or processed." This covers most tangible goods but excludes unprocessed agricultural products, real estate, and services. Software has been a debated area, but if integrated into a movable product in a way that it controls its function, the product as a whole may fall under the PLA.
• A "Defect" (欠陥 - kekkan) in the Product (PLA Article 2, paragraph 2):
  This is often the most critical and contentious element. A "defect" is defined as "a lack of safety that the product ordinarily should provide, taking into account the characteristics of the product, the ordinarily foreseeable manner of its use, the time at which the Manufacturer, etc. delivered the product, and other circumstances concerning the product."
  Japanese law generally recognizes three main types of defects:
  1. Manufacturing Defect (製造上の欠陥 - seizō-jō no kekkan): This occurs when a particular unit of a product deviates from its intended design specifications due to an error in the manufacturing process, making it unsafe. For example, a flaw in the assembly of a single car that makes its brakes fail.
  2. Design Defect (設計上の欠陥 - sekkei-jō no kekkan): This exists when the product's design itself is inherently unsafe, meaning all units manufactured according to that design pose an unreasonable risk of harm. Establishing a design defect often involves a complex risk-utility analysis, considering whether safer alternative designs were feasible and economically viable given the product's intended use and utility.
  3. Instruction or Warning Defect (指示・警告上の欠陥 - shiji/keikoku-jō no kekkan): This occurs when a product, even if designed and manufactured properly, is unsafe because the manufacturer failed to provide adequate instructions for its safe use or sufficient warnings about non-obvious dangers or risks associated with its foreseeable use or misuse. For instance, a household appliance that can overheat and cause a fire if placed too close to a wall, as illustrated in the PDF materials for item 163, might be deemed defective if the instruction manual lacks a clear warning about maintaining adequate ventilation space. The Supreme Court judgment of April 12, 2013 (Minshū Vol. 67, No. 4, p. 899), although a pharmaceutical case, provides important guidance on how factors such as the nature of potential harm, foreseeability of use, and clarity of warnings are comprehensively considered when determining if a product (including its labeling) is defective.
• Damage (損害 - songai):
  The plaintiff must have suffered actual damage. The PLA (Article 3) covers damages arising from an "infringement on the life, body, or property of another person."
  • Important Limitation on Property Damage (PLA Article 3, proviso): A significant limitation is that the PLA does not apply if the damage occurs only to the defective product itself. If a refrigerator simply stops working and the only loss is the refrigerator itself, the PLA does not provide a remedy; such a claim would typically be pursued under contract law against the seller (e.g., for non-conformity). The PLA is primarily concerned with consequential damages – harm caused by the defective product to other persons or property. For example, if the defective refrigerator in the PDF scenario catches fire and destroys the user's home and other belongings, as well as causing personal injury, those consequential damages are covered.
• Causation (因果関係 - inga kankei):
  The plaintiff must establish a causal link between the defect in the product and the damage suffered. This involves proving two aspects:
  1. The defect existed in the product at the time it was delivered by the "Manufacturer, etc." (e.g., when it left the factory or was imported).
  2. The defect was the cause of the plaintiff's damage.
     Proving causation, especially the existence of a defect at the time of delivery from the manufacturer, can be challenging, particularly if the product has been in use for some time or has been damaged in the incident itself. This often requires technical analysis and expert testimony. In some cases, courts may allow inferences of a defect or causation if, for example, a relatively new product malfunctions in an unexpected and dangerous way during ordinary use.

3. Key Differences from General Tort Law (Negligence)

The primary advantage of bringing a claim under the PLA, as opposed to a general tort claim under Civil Code Article 709, is that the PLA establishes a form of liability closer to strict liability (though not absolute liability, as defenses are available).

Under the PLA, the plaintiff does not need to prove negligence (fault) on the part of the Manufacturer, etc., concerning the existence of the defect itself. If a defect is proven to have existed at the time of delivery and to have caused the damage, the Manufacturer, etc., is liable, regardless of whether they were negligent in designing, manufacturing, or warning about the product. This significantly eases the plaintiff's burden of proof compared to a traditional negligence claim, where proving a specific negligent act or omission by the manufacturer can be very difficult.

However, it's important to reiterate that the plaintiff under the PLA still bears the substantial burden of proving (1) the product was defective, (2) they suffered damage (other than to the product itself), and (3) the defect caused the damage.

4. Defenses Available to the Manufacturer, etc. (PLA Article 4)

While the PLA imposes liability without requiring proof of negligence regarding the defect, it is not absolute liability. Manufacturers and other potentially liable parties have certain statutory defenses:

1. Development Risk Defense (開発危険の抗弁 - kaihatsu kiken no kōben) (PLA Article 4, item 1):
   This is a significant defense. The Manufacturer, etc., is not liable if they prove that "the defect in the product could not have been discovered given the state of scientific or technical knowledge at the time when the Manufacturer, etc. delivered the product." This defense aims to avoid stifling innovation by holding manufacturers liable for unforeseeable risks based on later scientific advancements. However, the threshold for establishing this defense is very high, and it is interpreted narrowly by courts. The "state of scientific or technical knowledge" refers to the highest level accessible at the relevant time, not just average industry knowledge.
2. Component Part / Compliance with Design Instructions Defense (PLA Article 4, item 2):
   If the product was used as a component or raw material in another product, and the defect arose solely because of compliance with design instructions given by the manufacturer of that other (finished) product, the component/material supplier is not liable, provided they were not negligent with respect to the occurrence of the defect (e.g., they did not know the instructions were faulty and failed to warn).

5. Time Limits for Claims (PLA Article 5)

The right to claim damages under the PLA is subject to specific time limitations (prescription periods):

• The right is extinguished if not exercised within three years (or five years in cases involving loss of life or personal injury, due to PLA Article 5, paragraph 1, referencing the amended Civil Code Article 724-2) from the time the victim (or their legal representative) became aware of:
  • The damage, AND
  • The identity of the party liable for damages (the Manufacturer, etc.).
• Independently of the above, the right is also extinguished if not exercised within ten years from the time the Manufacturer, etc., delivered the product (e.g., when it first entered the stream of commerce). This 10-year period is an absolute "period of repose" and cannot be extended, even if the victim was unaware of the damage or the liable party.

There are special rules for damages that accumulate over time due to substances stored in the body or for latent injuries that manifest long after exposure.

Conclusion: A Specialized Regime for Product-Related Harm

Japan's Product Liability Act provides a vital legal avenue for individuals and businesses harmed by defective products. Its primary contribution is the shift away from requiring proof of manufacturer negligence concerning the defect, thereby making it somewhat easier for victims to obtain redress. However, claimants still face the often-significant challenge of proving the existence of a defect at the time the product left the manufacturer's control and establishing a causal link between that defect and the ensuing damage. For businesses involved in manufacturing, importing, or selling products with a Japanese connection, a thorough understanding of the PLA's requirements, the scope of recoverable damages (particularly the exclusion of damage only to the product itself), and the available defenses is indispensable for managing product safety and liability risks.