Shorter or Longer Waits? A Guide to the Revised Prescription Periods for Various Claims Under Japan's New Civil Code

The 2020 amendments to the Japanese Civil Code brought about a significant overhaul of the rules governing extinctive prescription (shōmetsu jikō - 消滅時効), particularly concerning the duration for which various claims remain enforceable. A primary objective of these reforms was to simplify a historically complex system of varying prescription periods and to create a more unified, predictable, and fair framework. For businesses, understanding whether these changes result in shorter or longer periods to assert or defend against claims is paramount for effective legal and financial management.

This article provides a comprehensive guide to the revised prescription periods under Japan's new Civil Code, examining the abolition of certain special short-term prescriptions and detailing the new durations applicable to general and specific categories of claims.

The New General Rule: A Dual System (A Brief Recap)

Before diving into specific claim types, it's essential to recall the new general framework for extinctive prescription of claims established by the amended Civil Code (Article 166(1)). Most claims are now subject to a dual-track system, being extinguished upon the expiry of whichever of the following periods concludes earlier:

1. Five years from the time the creditor became aware that the right could be exercised (subjective starting point).
2. Ten years from the time the right could objectively be exercised (objective starting point).

This dual system is the new baseline against which specific changes and special provisions must be understood.

Key Simplifications: Abolition of Special Short-Term Prescriptions

One of the most impactful aspects of the reform was the streamlining of the prescription system through the abolition of several anachronistic or overly specific short-term prescription periods. This was driven by a desire to reduce complexity, eliminate distinctions that lacked clear modern justification, and unify the rules under a more coherent framework.

1. End of Profession-Specific Prescriptions (職業別の短期消滅時効の廃止 - Shokugyō-betsu no tanki shōmetsu jikō no haishi)
The old Civil Code (former Articles 170-174) contained a list of special short prescription periods (ranging from one to three years) for claims arising from specific professions or services. These included:

• Fees for medical diagnosis, treatment, and dispensing of medicine (3 years).
• Fees for work performed by artisans, and design or supervision of construction work (3 years from completion of work).
• Fees for lawyers, notaries, and bailiffs (2 years from the conclusion of the case).
• Charges for tuition and boarding by schools (2 years).
• Charges for services by barbers, innkeepers, restaurateurs, and transporters (1 year).
• Salaries of employees hired for periods of one year or less (1 year).

These distinctions were often criticized for being arbitrary, difficult to apply consistently (e.g., defining the scope of a "profession"), and lacking a compelling rationale in contemporary society. The 2020 reform abolished all these profession-specific short-term prescriptions. Consequently, claims for such professional fees and services now fall under the new general dual prescription rule (5 years from awareness / 10 years from objective exercisability). This significantly simplifies the landscape for service providers and their clients.

2. Abolition of Short-Term Prescription for Periodic Installment Claims (定期給付債権の短期消滅時効の廃止 - Teiki kyūfu saiken no tanki shōmetsu jikō no haishi)
Former Article 169 of the Civil Code stipulated a five-year prescription period for "claims for money or other things to be delivered at fixed times in yearly or shorter installments". This typically applied to claims like rent, interest, salaries (if not covered by even shorter rules), and similar recurring payments.

The reform abolished this specific five-year rule. The rationale was that the new general subjective five-year prescription period (starting from the creditor's awareness of their ability to exercise the right) would adequately and more rationally cover most situations previously governed by former Article 169. Thus, individual installments of rent, interest, etc., are now generally subject to the new 5-year (from awareness) / 10-year (from objective exercisability) rule.

3. The Demise of Commercial Prescription (Shōji Jikō - 商事消滅時効の廃止)
A cornerstone of Japanese commercial law for many years was Article 522 of the Commercial Code, which provided a general five-year extinctive prescription period for claims arising from "commercial acts" (shōkōi - 商行為). This meant that many business-to-business claims were subject to a shorter prescription period than general civil claims (which were 10 years under the old Civil Code).

The 2020 reforms abolished this separate commercial prescription rule. Several reasons underpinned this significant change:

• The new general five-year subjective prescription period in the Civil Code largely aligns with the duration of the former commercial prescription, making a separate rule for commercial claims less necessary.
• The distinction between "civil acts" and "commercial acts" could sometimes be complex and lead to uncertainty regarding the applicable prescription period.
• Unifying the rules under the Civil Code promotes simplification and coherence in the legal system.

As a result, claims that would previously have been governed by the five-year commercial prescription now fall under the general prescription rules of the amended Civil Code (typically 5 years from awareness / 10 years from objective exercisability). This change means businesses no longer need to differentiate between civil and commercial claims for general prescription purposes, though the nature of the transaction can still be relevant for other legal aspects.

Revised Special Prescription Periods for Specific Claim Categories

While simplification was a key theme, the reforms also recognized the need for tailored prescription periods for certain types of claims due to their unique nature or the specific policy considerations involved.

1. Enhanced Protection for Claims Involving Infringement of Life or Body (人の生命又は身体の侵害による損害賠償請求権 - Hito no seimei matawa shintai no shingai ni yoru songai baishō seikyūken)
The amended Civil Code provides significantly longer prescription periods for claims for damages arising from the infringement of a person's life or physical integrity, reflecting the paramount importance of these legal interests.

• Objective Period Extended to 20 Years: For claims for damages due to the infringement of life or body (whether arising from breach of contract or tort), the objective prescription period—running from the time the right could be exercised (or from the time of the tortious act)—is now 20 years (amended Civil Code Article 167; amended Civil Code Article 724, item 2 for torts). This is a substantial extension from the general 10-year objective period.
• Subjective Period for Tort Claims Extended to 5 Years: Specifically for tort claims involving the infringement of life or body, the subjective prescription period—running from when the victim or their legal representative became aware of the damage and the perpetrator—is now 5 years (amended Civil Code Article 724-2). This is longer than the 3-year subjective period applicable to other types of tort claims.

The combined effect is that claims for damages for personal injury or death are generally subject to a 5-year prescription from awareness and a 20-year prescription from the wrongful act/objective exercisability, creating a more protective regime for victims.

2. Reformed Rules for Periodic Payment Claims (Base Right) (定期金債権 - Teikikin saiken)
The term "periodic payment claims" (teikikin saiken) in this context refers to a base right that entitles the holder to receive a series of payments at regular intervals, such as an annuity or certain types of support payments (distinct from individual installments of rent or salary which fell under the now-abolished former Article 169).

The amended Civil Code (Article 168(1)) stipulates that the base right for periodic payments is extinguished if:

• The creditor fails to exercise the right to claim individual installments for ten years from the time the creditor became aware that they could exercise the right to each such installment (subjective element applied to the base right via its components).
• Or, if the creditor fails to exercise the right to claim individual installments for twenty years from the time the creditor could objectively exercise the right to each such installment (objective element applied similarly).
  This reform provides a clearer and more consistent approach to the prescription of the underlying right to receive a stream of periodic payments.

3. Rights Confirmed by Final Judgment (判決で確定した権利 - Hanketsu de kakutei shita kenri)
The principle that rights confirmed by a final and binding court judgment (or other equivalent instruments like a court settlement or mediation) are subject to a new, uniform prescription period remains largely unchanged in substance, though renumbered as Article 169 of the amended Civil Code (formerly Article 174-2).

• Such judicially confirmed rights have a prescription period of ten years from the time the judgment or equivalent instrument becomes final and binding.
• This 10-year period applies even if the original prescription period for the underlying claim was shorter (e.g., a claim that would have prescribed in 5 years under the new general rules gets a fresh 10-year lease of life once confirmed by a judgment).
• An important exception is that this 10-year rule does not apply to claims that are not yet due at the time the judgment becomes final.
  The rationale for this special 10-year period is that once a right has been formally adjudicated and confirmed by a court, the evidentiary difficulties that prescription partly aims to address are largely resolved, and the legal relationship is considered newly stabilized, justifying a clear and reasonably long period for enforcement. The reform maintained this 10-year period without introducing a shorter subjective component, emphasizing the certainty provided by a final judgment.

Comparative Overview: Old vs. New Periods for Common Claims

To illustrate the practical shifts, here's a comparison for some common claim types, drawing from the general principles and examples:

This table highlights the significant unification under the new 5/10 year general rule for many claims previously subject to disparate shorter periods.

Impact of These Changes on Business Practices

The revisions to prescription periods have several important implications for businesses:

1. Reduced Complexity but New Vigilance: The abolition of numerous special short-term prescriptions and the commercial prescription simplifies the system, reducing the risk of overlooking an obscure, shorter period. However, the introduction of the five-year subjective period for general claims means that if a business (as a creditor) is promptly aware of its rights, the effective time to act may be shorter than the old general 10-year civil or 5-year commercial periods if awareness was delayed under those regimes. Diligent tracking of when "awareness" occurs is now crucial.
2. Impact on Specific Industries:
   • Industries dealing with claims for personal injury or loss of life (e.g., manufacturing, transportation, healthcare (for contractual liability aspects)) need to be aware of the extended 20-year objective prescription period for these liabilities.
   • Professional service providers (doctors, lawyers, consultants) will see their fee claims generally subject to the new 5/10 year rule, which might be longer than the previous specific short prescriptions, potentially affecting their cash flow management and bad debt provisioning.
3. Unification of Commercial and Civil Claim Periods: Businesses no longer need to distinguish between "commercial acts" and "civil acts" for determining the general prescription period, simplifying legal analysis for many common B2B transactions.
4. Contractual Considerations: While parties cannot agree to extend prescription periods beyond the statutory limits in advance (due to Article 146 of the Civil Code prohibiting prior waiver of prescription benefits), the baseline periods inform how parties might structure payment terms, notice periods for defects, and dispute resolution clauses.
5. Transitional Management: For a considerable time, businesses will operate under a dual system, as pre-reform claims continue to be governed by the old rules regarding their prescription periods. Careful dating and categorization of claims will be necessary.

Conclusion

The 2020 Civil Code reform has significantly reshaped the landscape of prescription periods in Japan, largely moving towards a more unified and simplified system. The abolition of various profession-specific and commercial short-term prescriptions, coupled with the introduction of a general dual-track system (5 years from awareness / 10 years from objective exercisability), aims to enhance legal predictability and fairness. Concurrently, the law provides extended protection for critical claims, such as those involving personal injury or loss of life. Businesses must familiarize themselves with these revised durations and the underlying rationales to effectively manage their rights and obligations, adapt their internal processes, and navigate the evolving Japanese legal environment.