Modifying Claims or Filing Counterclaims in Japan: Fee Implications and Value Reassessment

Civil litigation is rarely a static process. As a case unfolds, new information may come to light, legal strategies may evolve, or the opposing party's actions might necessitate a response beyond a simple defense. Japanese civil procedure provides mechanisms for parties to adapt to these changing circumstances, notably through the amendment of existing claims (uttae no henkō) by the plaintiff and the filing of counterclaims (hanso) by the defendant. These mid-litigation procedural actions, while offering flexibility, have direct consequences for the "Sogaku" (訴額) – the value of the suit – and, consequently, for court filing fees. This article explores how modifications to the scope of litigation affect "Sogaku" and the associated fee obligations in Japan.

Amendment of Claim (訴えの変更 - Uttae no Henkō) in Japanese Civil Procedure

An amendment of claim allows a plaintiff to modify their initial assertions or requests made to the court after the lawsuit has commenced. This can involve various changes, such as altering the factual or legal basis of the claim (cause of action), changing the type or scope of relief sought, or increasing or decreasing the monetary amount claimed.

Permissibility of Amendments:

Amendments of claims are generally permissible under Article 143 of Japan's Code of Civil Procedure (Minji Soshō Hō, Act No. 109 of 1996), provided that:

1. There is a commonality in the basis of the claim (i.e., the amended claim is fundamentally related to the original dispute).
2. The amendment does not cause significant prejudice to the defendant's ability to defend themselves.
3. The amendment does not substantially delay the court proceedings.

The court has discretion in allowing amendments, balancing the plaintiff's need for flexibility with fairness to the defendant and the efficient administration of justice.

Impact on "Sogaku" and Court Fees:

The primary rule governing the fee implications of claim amendments is the "difference rule," outlined in Appended Table 1, Item 5 of the Act on Costs of Civil Procedure (Minji Soshō Hiyō tō ni Kansuru Hōritsu, "Costs Act").

• General Principle – Additional Fees for Increased "Sogaku": If an amendment results in an increase in the "Sogaku" of the plaintiff's action, additional court fees become payable. The amount of the additional fee is calculated as follows:
  Additional Fee = [Court Fee corresponding to the "Sogaku" of the Claim *After* Amendment] - [Court Fee corresponding to the "Sogaku" of the Claim *Before* Amendment (i.e., the fee already paid or assessed on the initial claim)]
• Calculating "Sogaku" After Amendment:
  • Quantitative Increase: If the amendment is a straightforward increase in a monetary demand (e.g., claiming a higher amount of damages), the new "Sogaku" is simply the new, higher total amount claimed.
  • Qualitative Change Affecting Value: If the amendment involves a change in the legal nature or basis of the claim that impacts its valuation (e.g., changing a claim for delivery of property based on a possessory right – typically valued at 1/3 of the property's value – to one based on ownership – typically valued at 1/2 of the property's value), the "Sogaku" of the claim after amendment must be recalculated according to the rules applicable to the new type of claim.
  • Joinder of New Claims Through Amendment: If the amendment involves adding new, distinct claims to the existing ones, the "Sogaku" of the entire lawsuit after amendment is determined by applying the rules for joinder of claims (aggregation, absorption, or exclusion of ancillary claims, as appropriate) to the newly configured set of asserted claims. The additional fee will then be based on the difference between the fee for this new total "Sogaku" and the fee for the original "Sogaku."
• No Fee Change for Reduction of Claim: If a plaintiff amends their claim to reduce its scope or monetary value, there is generally no refund of court fees that have already been paid. The court fee is based on the highest "Sogaku" that was properly before the court at that stage of the litigation.
• Amendments Not Affecting "Sogaku": It's possible for a plaintiff to amend their cause of action or aspects of their prayer for relief without altering the fundamental "Sogaku." For instance:
  • In an action for the surrender of land based on ownership, if the plaintiff initially sought the demolition of one unauthorized structure and later amends the claim to include the demolition of an additional minor structure on the same land, the "Sogaku" (primarily based on 1/2 of the land's value) might not change if the core claim remains the recovery of the land.
  • Adding a claim for ongoing delay damages (which are typically ancillary) to a principal monetary claim usually does not alter the initial "Sogaku" which was based on the principal sum.
• Exchange of Claims (訴えの交換的変更 - Uttae no Kōkanteki Henkō): This occurs when a plaintiff effectively withdraws an original claim and simultaneously substitutes it with a new, different claim. For fee purposes, the "Sogaku" of the new claim is compared to the "Sogaku" of the original (now withdrawn) claim.
  • If the new claim has a higher "Sogaku," additional fees are payable based on the difference.
  • If the new claim has the same or a lower "Sogaku," no additional fee is usually required, and no refund is given for the fee paid on the original, more highly valued claim.

The "Sogaku" of an amended claim is assessed based on the circumstances and relevant valuation rules prevailing at the time the amendment is formally made or permitted by the court.

Filing a Counterclaim (反訴 - Hanso) in Japanese Civil Procedure

A counterclaim allows the defendant in an ongoing lawsuit to assert their own claim against the plaintiff within the same proceeding, rather than initiating a separate lawsuit.

Permissibility of Counterclaims:

Under Article 146 of the Code of Civil Procedure, a defendant may file a counterclaim provided that:

1. The counterclaim is related to the plaintiff's main claim or to the means of defense against it.
2. Filing the counterclaim does not significantly delay the court proceedings.
   The court has discretion to allow or disallow a counterclaim based on these criteria.

"Sogaku" Calculation for a Counterclaim:

For the purpose of determining its own "Sogaku," a counterclaim is treated as if it were a new, independent action being filed by the defendant (now acting as the counterclaim plaintiff). The value of the interest asserted in the counterclaim is calculated according to the standard "Sogaku" valuation rules applicable to that type of claim.

Court Fees for a Counterclaim – The General Rule and a Key Exception:

• General Rule: The defendant, as the counterclaim plaintiff, must typically pay a separate court filing fee for their counterclaim, based on its individually calculated "Sogaku."
• The Deduction Rule for Counterclaims with the "Same Object" (Mokuteki o Onajiku Suru):
  This is a significant exception provided in Appended Table 1, Item 6, proviso of the Costs Act. If the defendant's counterclaim is deemed to have the "same object" as the plaintiff's main claim (or a distinct part of it), a deduction is made when calculating the fee payable for the counterclaim.
  • What Constitutes the "Same Object"? This specific legal term does not require the main claim and the counterclaim to be identical mirror images. It generally applies to situations where the two claims are mutually exclusive and address the same core legal issue or subject matter from opposing perspectives. If the plaintiff succeeds on their main claim, the defendant's counterclaim concerning that same object must necessarily fail, and vice-versa. The dispute essentially revolves around a single, indivisible legal right or status contested by both parties.
    • Example 1 (Common Subject Matter): Plaintiff A sues Defendant B for a declaration of A's ownership of a specific piece of land. Defendant B files a counterclaim against A, seeking a declaration of B's ownership (or, perhaps, a valid leasehold right that negates A's claim to unencumbered possession) of the same piece of land. These claims directly conflict regarding the primary rights to the same property.
    • Example 2 (Mutually Exclusive Monetary Claims): Plaintiff A sues Defendant B for payment of a 5,000,000 yen debt. Defendant B counterclaims for a declaration that this same 5,000,000 yen debt does not exist (or has already been paid).
  • Calculation of the Counterclaim Fee with Deduction: When this "same object" condition is met, the fee for the counterclaim is calculated as follows:
    Counterclaim Fee = [Fee that would be due for the Counterclaim if filed independently, based on its "Sogaku"] - [Fee that corresponds to the "Sogaku" of that part of the Plaintiff's Main Claim which has the "same object" as the Counterclaim]
    If the result of this subtraction is zero or a negative number, then no court fee is payable for filing the counterclaim.
  • When the Deduction Does Not Apply: If the counterclaim, even if related to the general dispute, does not share this specific "same object" relationship with the main claim, then no fee deduction is made. The defendant must pay the full filing fee calculated on the counterclaim's "Sogaku."
    • Example 1 (Different Obligations): Plaintiff A (a contractor) sues Defendant B (a client) for an unpaid contract price for construction work performed. Defendant B files a counterclaim against A for damages due to alleged defects in that same construction work. While related to the same project, the main claim concerns payment for services rendered, while the counterclaim concerns compensation for defective performance. These are distinct legal obligations and potential liabilities. The success of one does not automatically negate the other (e.g., payment might be due, but damages for defects might also be awarded). Thus, no fee deduction typically applies to the counterclaim.
    • Example 2 (Separate Issues): Plaintiff A sues Defendant B for eviction from a property based on the termination of a lease. Defendant B counterclaims for the return of a security deposit paid under that lease. Although arising from the same landlord-tenant relationship, the eviction claim and the security deposit claim address separate rights and obligations that are not mutually exclusive in the "same object" sense.

Other Mid-Litigation Actions Potentially Affecting Fees

Beyond amendments and standard counterclaims, a few other procedural steps taken during litigation can have "Sogaku" and fee implications:

• Intervention by Parties (Tōjisha Sanka), Successors in Interest (Shōkei Sanka), or Co-litigants (Kyōdō Soshō Sanka):
  • When a third party intervenes in an ongoing lawsuit as a plaintiff (e.g., an independent intervener under Article 47 of the Code of Civil Procedure asserting their own claim related to the dispute), they must generally calculate a "Sogaku" for their independent claim and pay the corresponding court filing fee.
  • However, if a party intervenes merely to assist an existing defendant (e.g., a joint obligor intervening to support the main defendant's case without asserting their own separate claim against the plaintiff), this type of intervention usually does not require a separate "Sogaku" calculation and fee payment by the intervener.
• Petition under Article 260, Paragraph 2 of the Code of Civil Procedure:
  • This provision allows a defendant to make a claim for restitution of property or compensation for damages if a provisional execution (enforcement of a judgment before it becomes final and binding) carried out by the plaintiff based on a first-instance judgment later loses its legal basis (e.g., if the first-instance judgment is overturned or modified on appeal).
  • If such a petition is made by the defendant within the ongoing appellate proceedings (rather than as a separate new lawsuit), it is treated similarly to a counterclaim for court fee calculation purposes. Its "Sogaku" would be assessed based on the value of restitution or damages claimed, and fees would be payable accordingly (potentially with appellate multipliers if in an appeal court).

Strategic Implications for Litigants

The rules surrounding "Sogaku" and fees for mid-litigation claims have important strategic implications:

• Cost-Benefit of Amendments: Before seeking to amend a claim in a way that significantly increases its "Sogaku," litigants should carefully weigh the potential benefits of the amendment against the additional court fees that will be incurred.
• Formulating Counterclaims: When considering a counterclaim, understanding whether it is likely to qualify for the "same object" fee deduction can be a significant factor. If the deduction is unlikely, the cost of pursuing the counterclaim as if it were a separate action must be fully budgeted.
• Timing and Procedural Efficiency: The timing of amendments or counterclaims can also interact with the overall progress of the litigation. Courts may be less inclined to permit substantial changes late in the proceedings if they would cause undue delay.
• Negotiation and Settlement: The potential costs associated with expanding the scope of litigation through amendments or counterclaims can sometimes act as an incentive for parties to explore settlement options.

Conclusion: Adapting to Litigation's Flow While Managing Costs

The Japanese civil justice system provides parties with essential tools to adapt their legal positions as a lawsuit progresses, through mechanisms like the amendment of claims and the filing of counterclaims. However, these procedural actions are not without consequence for the "Sogaku" of the litigation and the associated court filing fees. Generally, amendments that increase the value of the dispute will necessitate the payment of additional fees based on that increase. Counterclaims, while an important right for defendants, also typically require their own fee, though a crucial deduction rule applies if the counterclaim shares the "same object" as the plaintiff's main claim, mitigating costs in situations of directly opposing claims on a single issue.

These rules aim to strike a balance: offering procedural flexibility to ensure that the true scope of a dispute can be adjudicated, while also ensuring that court fees remain proportionate to the evolving economic interests at stake. For businesses and individuals involved in litigation in Japan, a clear understanding of how these mid-stream actions impact "Sogaku" and fees is vital for informed decision-making, effective cost management, and overall strategic conduct of their case. Given the technical nature of these rules and their potential financial impact, seeking guidance from experienced Japanese legal counsel when contemplating such procedural steps is always highly advisable.