The Costs of Enforcement: Who Pays for Execution Proceedings and Procedural Fees in Japan?

Undertaking legal action to enforce a judgment or other title of obligation in Japan, like anywhere else, incurs costs. These can range from court filing fees and expenses for official valuations to the fees of court execution officers. A critical question for any creditor considering or embarking on civil execution is: who ultimately bears these financial burdens? While the general principle in Japan is that the debtor is responsible for the costs of their own non-compliance, the practicalities of how these costs are advanced, recovered, and distinguished from other legal expenses, such as attorney's fees, require careful understanding.

What Constitutes "Execution Costs" (Shikkō Hiyō) in Japan?

In the context of Japanese civil execution, "execution costs" (shikkō hiyō, 執行費用) refer to those expenses that are directly necessary for initiating and carrying out compulsory execution based on an enforceable title of obligation (Article 42, paragraph 1, Civil Execution Act - 民事執行法 Minji Shikkō Hō). These are the costs intrinsically linked to the enforcement process itself.

Examples of recoverable execution costs typically include:

1. Petition Fees (申立手数料 - Mōshitate Tesūryō): These are official fees paid to the execution court or a court execution officer when filing the petition for execution. For instance, initiating a real estate auction involves a standard petition fee (e.g., JPY 4,000 per creditor, debtor, and property combination). Fees for petitioning for seizure of monetary claims or movables are also prescribed.
2. Advance Payments/Deposits (Yonōkin, 予納金): This is often the most substantial upfront cost for the creditor. It's a sum of money deposited by the petitioning creditor with the court (for real estate or monetary claim execution) or the court execution officer (for movables execution) to cover anticipated expenses during the procedure. The amount of yonōkin varies significantly depending on the type and complexity of the execution:
   • For Real Estate Auctions: The yonōkin can be considerable, ranging from several hundred thousand yen to millions of yen, particularly for high-value properties or complex cases. It covers anticipated costs such as property appraisal fees by court-appointed experts, expenses for public notices, travel expenses for court officials, fees for preparing the "three-piece set" of property information documents, and other administrative costs.
   • For Movables Execution: This covers the court execution officer's fees for conducting the on-site seizure, transportation and storage of seized goods (if necessary), and costs associated with conducting an auction of the movables.
   • For Monetary Claim Execution (Garnishment): This typically involves lower yonōkin, primarily covering postal and service fees for the seizure order to the third-party debtor (garnishee) and the debtor, and costs related to any "demand for statement" from the third-party debtor.
3. Expenses for Seizure, Custody, Valuation, and Sale of Property: These are costs directly associated with the physical acts of identifying, securing, valuing, and liquidating the debtor's assets. This can include locksmith fees if entry needs to be forced (under lawful authority), insurance premiums for seized goods in custody, specific auctioneer fees if an external auctioneer is used (though less common for court auctions), and expenses for transporting goods to a sale venue.
4. Travel Expenses and Daily Allowances for Court Officials: If court execution officers or other court personnel need to travel as part of the execution process (e.g., for on-site investigations or seizures).
5. Document Preparation and Submission Costs (Limited Scope): Costs incurred for obtaining necessary official certificates directly required for the execution petition itself (e.g., certified copies of real estate registers, corporate registration certificates to identify the debtor or property). However, costs related to preparing the legal arguments or general legal advice for the execution petition are typically considered part of attorney's fees, not direct execution costs.

Distinguishing Execution Costs from Other Legal Expenses

It is crucial to differentiate "execution costs" from other types of legal expenses, as their recoverability and the rules governing them differ:

• Costs of the Main Action (本案訴訟費用 - Hon'an Soshō Hiyō): These are the expenses incurred during the underlying lawsuit that resulted in the judgment or title of obligation being enforced (e.g., court filing fees for the original lawsuit, fees for witness testimony, costs for expert opinions sought during the trial). The allocation of these main action costs is determined by the court at the conclusion of that lawsuit, usually based on the principle of "loser pays" to some extent, as governed by the Code of Civil Procedure. These costs are not automatically bundled into or recovered as "execution costs" in the subsequent enforcement phase.
• Attorney's Fees (弁護士費用 - Bengoshi Hiyō): This is a particularly important distinction for parties accustomed to legal systems with broader fee-shifting rules. In Japan, attorney's fees incurred by the creditor for either the main action or for the execution proceedings themselves are generally not considered recoverable "execution costs" that can be automatically collected from the debtor as part of the standard execution process. Each party is typically expected to bear its own attorney's fees.
  • Limited Exceptions: While not recoverable as execution costs, attorney's fees might be claimable as part of damages in a separate tort action if the debtor's conduct that necessitated the enforcement was itself tortious (e.g., fraudulent concealment of assets to obstruct a known obligation). However, this is a substantive claim and distinct from the procedural recovery of execution costs. Contractual agreements for fee indemnification are also separate.
• "Procedural Costs" (Tetsuzuki Hiyō, 手続費用) as a Broader Concept:
  As highlighted in Column 16 of the referenced PDF, "procedural costs" is a more encompassing term that can include all expenses related to a legal procedure, covering both the costs of the main action and the costs of execution. Execution costs are, therefore, a specific subset of broader procedural costs. The rules for the allocation and recovery of main action costs are primarily found in the Code of Civil Procedure, while execution costs are governed by the Civil Execution Act.

Who Bears the Execution Costs? The General Principle and Practical Application

• Primary Responsibility of the Debtor (Article 42, paragraph 1, Civil Execution Act): The fundamental principle enshrined in Japanese law is that the execution costs are ultimately to be borne by the debtor. These costs are viewed as an additional consequence and burden on the debtor for their failure to voluntarily satisfy the obligation established by the title of obligation.
• Creditor's Advance Payment: Despite the debtor's ultimate liability, in practice, the executing creditor must initially advance most, if not all, of these execution costs to the court or the court execution officer. Without this upfront payment (particularly the yonōkin), the execution proceedings will generally not commence or proceed. The courts and execution officers do not typically operate on credit from the creditor.
• Recovery from Execution Proceeds:
  • If the execution is successful and assets are seized and liquidated (e.g., property sold at auction, garnished funds collected), the advanced execution costs are given top priority for recovery from the sale proceeds. These costs are reimbursed to the creditor before any funds are applied to satisfy the creditor's principal claim, interest, or the claims of other participating creditors (Article 63, paragraph 1, item 1, Civil Execution Act, regarding the priority of "costs for the common benefit of creditors" in distribution procedures).
  • The executing agency (the court for real estate/monetary claim execution, or the court execution officer for movables execution) typically handles this recovery of advanced costs automatically from the collected funds. The creditor does not need a separate title of obligation to recover these specific advanced execution costs.

Procedure for Determining the Amount of Execution Costs

• Court Determination of Execution Costs (執行費用の額の確定手続 - Shikkō Hiyō no Gaku no Kakutei Tetsuzuki - Article 42, paragraph 2, Civil Execution Act): While execution costs are often recovered directly from proceeds, if there is a dispute about the amount of recoverable costs, or if the creditor needs a formal judicial determination of the exact amount of execution costs they are entitled to recover (e.g., if the execution was only partially successful and they need to pursue the debtor for the remaining unrecovered costs, or if the debtor wishes to challenge the amount claimed), the creditor can petition the execution court. The court will then issue a formal decision (kettei) determining the specific amount of execution costs to be borne by the debtor.
• This court decision determining the amount of execution costs can itself serve as a title of obligation for the recovery of those costs, if they were not fully recovered from the initial execution proceeds.

What if Execution is Unsuccessful or Proceeds are Insufficient?

The creditor's advance payment of costs carries an inherent risk:

• If the execution yields no seizable assets (e.g., an "execution impossible" - shikkō funō, 執行不能 - declaration in a movables execution due to lack of valuable assets).
• If a real estate auction is cancelled because there is no prospect of a surplus after satisfying prior encumbrances and procedural costs (mujoyo, 無剰余).
• If the proceeds from the sale of assets are insufficient to cover even the advanced execution costs.

In such scenarios, the creditor who advanced those costs generally bears the loss. The advanced costs become an unrecoverable expense for the creditor from that particular execution attempt. Their only recourse would be to try and locate other assets of the debtor and initiate new execution proceedings, potentially including a claim for these previously unrecovered (and formally determined) execution costs.

Costs in Different Types of Execution

The nature and amount of execution costs can vary significantly depending on the type of assets being targeted:

• Real Estate Auctions: Generally the most expensive due to the need for professional property appraisals, higher petition fees (especially considering the registration license tax for seizure), potentially lengthy public notice periods, and significant yonōkin deposits.
• Movables Execution: Costs are usually lower than for real estate but can still include the court execution officer's fees for the on-site visit, seizure, transportation (if any), storage (if any), and conducting the auction. Given that recovery rates from the sale of used movables are often low, the risk of the creditor not recouping their advanced costs can be relatively high.
• Monetary Claim Execution (Garnishment): Typically involves the lowest direct execution costs, mainly consisting of petition fees to the court and postal/service costs for serving the seizure order on the third-party debtor and the debtor.

A Brief International Comparison

The allocation of enforcement costs, particularly attorney's fees, varies across jurisdictions:

• United States: While court costs and certain direct enforcement expenses (e.g., sheriff's fees for levy and sale) are often recoverable from the debtor, the "American Rule" generally means each party bears its own attorney's fees unless a contract or specific statute provides otherwise.
• United Kingdom (England & Wales): The "loser pays" principle for attorney's fees is more established in litigation and can extend to some recoverable costs of enforcement. Fees for High Court Enforcement Officers are also typically recoverable.

The Japanese system's general non-recoverability of the creditor's own attorney's fees as execution costs (without specific contractual provisions or statutory exceptions related to the underlying claim itself) is a significant financial consideration for creditors when budgeting for and deciding upon the pursuit of enforcement actions.

Conclusion

In Japan, while the legal principle dictates that the debtor is ultimately liable for the direct costs incurred in the civil execution process aimed at satisfying their defaulted obligation, the practical reality is that the executing creditor must typically front these expenses. These "execution costs"—which pointedly exclude the creditor's own attorney's fees—are given top priority for reimbursement from any proceeds generated by the successful execution. However, the creditor faces the risk of these advanced costs becoming unrecoverable if the execution proves fruitless or if the proceeds are insufficient.

A clear understanding of what constitutes recoverable execution costs, the distinction from other litigation-related expenses (especially attorney's fees), and the procedures for their determination and collection is therefore crucial for any party involved in civil enforcement proceedings in Japan. For creditors, this knowledge is essential for making informed decisions about the financial viability and potential net recovery when pursuing execution against a debtor's assets.