Incidental Claims in Japanese Litigation (Interest, Damages, Penalties, Costs): Are They Included in the "Value of Suit" for Fee Calculation?

Japanese Attorney at Law - Bengoshi L.L.

• 6 min read

When filing a lawsuit in Japan, plaintiffs often seek not only the primary relief related to their main grievance but also other associated remedies such as interest, damages for delay, contractual penalties, or the recovery of expenses incurred. A crucial question for litigants is whether these "add-on" claims, often termed incidental claims (附帯請求 - futai seikyū), contribute to the overall "value of suit" (訴額 - so'gaku). The so'gaku, as we know, is the foundation for calculating court filing fees and can also influence which court has jurisdiction. Japanese law, specifically Article 9, Paragraph 2 of the Code of Civil Procedure (CCP), provides a guiding principle for this issue, though its application requires careful understanding.

The General Rule: Exclusion of Incidental Claims from So'gaku (CCP Art. 9(2))

Article 9, Paragraph 2 of the CCP states: "When a claim for fruits, damages, a penalty, or expenses is the incidental object of the suit, the value thereof shall not be included in the value of the suit."

This provision means that if claims for these specified categories are genuinely subordinate and ancillary to a principal claim being litigated, their monetary value is disregarded when calculating the lawsuit's total so'gaku.

Rationale for the Exclusion:
The primary purposes behind this rule are:

  1. Simplification: It simplifies the calculation of the so'gaku, preventing often smaller, dependent amounts from complicating the valuation of the main dispute.
  2. Cost Management: It helps to ensure that the initial court fees are primarily based on the value of the core subject matter of the litigation, rather than being unduly inflated by secondary claims that are contingent upon the success of the principal one.
  3. Jurisdictional Stability: It prevents incidental claims from disproportionately affecting the determination of subject-matter jurisdiction (i.e., whether a case goes to a Summary Court or a District Court).

Defining an "Incidental Claim" for So'gaku Purposes

For a claim to be considered "incidental" under CCP Art. 9(2) and thus excluded from the so'gaku calculation, several criteria must generally be met:

  1. Dependence on a Principal Claim: The claim must be legally subordinate to, and arise in connection with, a principal claim that forms the main subject of the lawsuit. It cannot stand entirely on its own as the primary object of litigation.
  2. Concurrent Pursuit in the Same Lawsuit: Both the principal claim and the allegedly incidental claim must be litigated together in the same procedural framework, by the same plaintiff against the same defendant. If a claim that might otherwise be incidental (like a claim for interest) is sued upon independently, or alongside a different, unrelated principal claim, it loses its incidental character for so'gaku purposes and is valued as a principal claim itself.
  3. Transformation upon Termination of the Principal Claim: If the principal claim is withdrawn, dismissed, or otherwise resolved during the litigation while the "incidental" claim remains active, the latter typically sheds its incidental status and becomes a principal claim for the ongoing proceedings. Its value would then need to be assessed for so'gaku purposes. The rationale is that the element of dependency, crucial for incidental status, has ceased.

A Closer Look at the Categories in CCP Article 9(2)

Let's examine the specific types of claims mentioned in the statute:

1. Fruits (果実 - Kajitsu)

"Fruits" in a legal sense can be either natural or legal:

  • Natural Fruits (天然果実 - tennen kajitsu): These are products derived from the natural use of property, such as agricultural produce from land.
  • Legal Fruits (法定果実 - hōtei kajitsu): These are monies or other things received as consideration for the use of property, such as interest, rent, or usage fees.

When a claim for legal fruits like interest or standard usage fees is directly tied to and dependent on a principal monetary claim (e.g., interest on an unpaid loan that is the subject of the suit), such interest is typically considered incidental and excluded from so'gaku.

Controversy Regarding Rent and Common Area Maintenance Fees:
A significant point of debate, and one where practice sometimes diverges from a strict interpretation of "incidental," concerns claims for unpaid rent when joined with a lawsuit for the possession or eviction from the leased property. While common practice may sometimes treat such accrued rent as incidental to the eviction claim, critical legal analysis suggests this might be incorrect. Rent arises from the lease agreement as a primary obligation of the tenant and is not necessarily a "fruit" derived from the landlord's claim for possession; rather, it's a core component of the contractual exchange. From this perspective, a claim for unpaid rent, even when joined with an eviction suit, should arguably be treated as a distinct principal claim with its own so'gaku.
Similarly, claims for unpaid common area maintenance fees (共益費 - kyōekihi) in condominium or apartment building disputes, when joined with claims for possession or other primary relief, are often also based on separate (though related) contractual obligations and may not fit the narrow definition of "fruits" of the main claim for exclusion from so'gaku.

2. Damages (損害賠償 - Songai Baishō)

The term "damages" in the context of CCP Art. 9(2) is interpreted narrowly. It primarily refers to damages for delay in performance (遅延損害金 - chien songaikin) of the principal obligation. For example, if the principal claim is for the payment of a ¥5,000,000 debt, the interest claimed for the period the debt has been overdue would be considered incidental damages for delay and its value would not be added to the ¥5,000,000 so'gaku.

However, it is crucial to distinguish this from:

  • Compensatory Damages for Substantive Breach (填補賠償 - tenpo baishō): Damages claimed to compensate for the failure of performance itself (e.g., damages for non-delivery of goods, or for defective performance) are not considered incidental. Their value is a core part of the plaintiff's claim and is included in the so'gaku.
  • Liquidated Damages (損害賠償額の予定 - songai baishōgaku no yotei): If a contract stipulates a pre-agreed amount as damages for a specific type of breach (other than mere delay), this amount, if claimed, generally forms part of the principal claim's value and is included in the so'gaku.

3. Penalty (違約金 - Iyakukin)

Similar to "damages," a "penalty" under CCP Art. 9(2) typically refers to a contractual stipulation for an amount payable due to delay in fulfilling the main obligation. If the penalty clause in a contract is essentially a pre-estimate of damages for delay, it's treated as incidental.
However, if a contractual penalty is structured as liquidated damages for a substantive breach of contract (not just delay), its value, if claimed, would be included in the so'gaku.

4. Expenses (費用 - Hiyō)

"Expenses" excluded from so'gaku under this provision are those costs incurred by the plaintiff in the direct preparation for, or exercise of, the principal right being asserted in the lawsuit.
Examples include:

  • Costs of sending a formal demand letter to the defendant before initiating the suit.
  • Notary fees for protesting a bill of exchange, if the bill itself is the subject of the principal claim.
  • Costs incurred in a prior, related mediation procedure concerning the same dispute.

It is vital to distinguish these pre-litigation or right-assertion expenses from the "costs of the suit" (訴訟費用 - soshō hiyō) themselves. The latter, which include the court filing fees and other procedural expenses of the current litigation, are determined and allocated by the court at the conclusion of the case (often under the "loser-pays" principle) and are not part of the initial so'gaku calculation.
Furthermore, expenses such as fees for expert witnesses hired to prove the merits of the principal claim (e.g., to demonstrate a product defect or quantify complex financial losses) are generally considered part of the substantive damages or the value of the principal claim itself, not "incidental expenses" to be excluded under CCP Art. 9(2).

Claims Not Covered by the Exclusion: When Value IS Included

It's essential to reiterate that if a claim for items like "damages" or a "penalty" does not meet the strict criteria of being truly "incidental" to a concurrently pursued principal claim – particularly if it represents a substantive part of the redress sought rather than merely compensation for delay or costs of pursuit – its value will be included in the calculation of the so'gaku. For example, a claim for damages due to a product defect is a principal claim, not an incidental one to a claim for the product's price refund.

Incidental Claims and Appeals

The characterization of a claim as incidental can shift if the litigation proceeds to an appeal. If a first-instance judgment resolves the principal claim, and a party appeals only with respect to the court's decision on what was treated as an incidental claim (e.g., appealing only the amount of delay interest awarded, while not challenging the judgment on the principal debt), that "incidental" claim becomes the principal claim for the purpose of calculating the so'gaku of the appeal. The appellate court fees will then be based on the value of this (formerly) incidental claim that is now the sole subject of the appeal.

Conclusion: Strategic Awareness is Key

Article 9, Paragraph 2 of the Japanese Code of Civil Procedure provides a significant rule for streamlining the calculation of the "value of suit" by excluding genuinely incidental claims related to fruits, delay damages, delay penalties, and pursuit expenses. This aims to keep court fees focused on the core dispute. However, the scope of what is considered "incidental" is specific and legally defined. Claims for substantive damages, penalties for primary breaches, or primary contractual obligations such as rent (despite some prevailing practices that are subject to scholarly critique) are generally included in the value of suit. Litigants and their counsel must carefully analyze the nature of each component of their claim to accurately determine which elements are truly incidental and which will contribute to the so'gaku, thereby affecting initial court fees and potentially the jurisdictional path of their lawsuit in Japan.