What is "Capacity to Litigate" in Japan, and How Does it Affect My Business Case? (日本における「訴訟能力」とは何か、そしてそれが当社のビジネス案件にどう影響するのか？)

Japanese Attorney at Law - Bengoshi L.L.

• 8 min read

Beyond establishing whether an entity can be a party to a lawsuit in Japan (Tōjisha nōryoku 当事者能力) and whether it's the right party for a specific claim (Tōjisha tekikaku 当事者適格), another crucial procedural hurdle exists: "Capacity to Litigate," or Soshō nōryoku (訴訟能力). This concept refers to the ability of a party to validly perform procedural acts independently throughout the course of a lawsuit. A lack of Soshō nōryoku can have significant consequences, potentially invalidating actions taken in court and leading to delays or even dismissal if not properly addressed. For businesses, understanding this capacity is vital when they, or their counterparties, are involved in the Japanese legal system.

I. Understanding "Capacity to Litigate" (Soshō nōryoku) in Japanese Law

A. Definition and Purpose

Soshō nōryoku is the legal competence of a party (who already possesses Tōjisha nōryoku – the capacity to be a party) to independently and effectively perform procedural acts. These acts include initiating a lawsuit, filing pleadings, making motions, presenting evidence, entering into settlements, appointing legal counsel, and other actions necessary to pursue or defend a case.

The primary purposes of the Soshō nōryoku requirement are:

  • Protection of Incapacitated Persons: It safeguards individuals who may not fully understand the nature and consequences of litigation (e.g., minors, individuals with significantly impaired mental capacity) from making detrimental decisions in legal proceedings.
  • Ensuring Procedural Clarity and Stability: It promotes the orderly conduct of litigation by ensuring that procedural acts are performed by those legally capable of understanding and intending their effect.
  • Maintaining the Integrity of Judgments: It helps ensure that judgments are rendered against parties who were capable of meaningfully participating in the proceedings that led to those judgments.

B. Relationship with Substantive Legal Capacity to Act (Kōi nōryoku 行為能力)

Soshō nōryoku in procedural law generally corresponds to the "capacity to act" (kōi nōryoku 行為能力) in substantive civil law. Under the Japanese Civil Code (Minpō 民法), individuals are generally presumed to have the capacity to act upon reaching the age of majority (currently 18). Those who have not reached this age (minors) or whose capacity is limited due to mental disability (e.g., adults under guardianship) have restricted capacity to act under substantive law, and this restriction generally extends to their capacity to litigate.

C. Distinction from Other Key Procedural Capacities

It's crucial to distinguish Soshō nōryoku from:

  1. Capacity to Be a Party (Tōjisha nōryoku 当事者能力): This is the fundamental ability to be named as a plaintiff or defendant. For instance, a newborn infant has Tōjisha nōryoku but lacks Soshō nōryoku.
  2. Standing to Sue/Be Sued (Tōjisha tekikaku 当事者適格): This refers to whether the party is the correct entity to litigate the specific claim in question. A fully capable adult (Soshō nōryoku present) might still lack Tōjisha tekikaku if they are not the actual holder of the right being sued upon.

II. Who Possesses Capacity to Litigate?

A. Natural Persons (Shizenjin 自然人)

  1. General Rule: Persons with Full Capacity to Act:
    Individuals who have reached the age of majority (18 years old since April 1, 2022) and are not subject to an order of commencement of guardianship, curatorship, or assistance that restricts their capacity to perform legal acts generally possess full Soshō nōryoku. They can sue and be sued, and perform all procedural acts, in their own name.
  2. Minors (Miseinen-sha 未成年者):
    Under Article 31 of the Code of Civil Procedure, minors generally do not possess Soshō nōryoku. They must act through their "legal representative" (hōtei dairi'nin 法定代理人), who is typically the person(s) with parental authority (shinkensha 親権者) or a guardian for minors (miseinen kōken'nin 未成年後見人) if parental authority cannot be exercised. The legal representative performs procedural acts on behalf of the minor.
    • An exception exists if a minor is permitted to independently conduct a business; in such cases, the minor has Soshō nōryoku concerning that business (Code of Civil Procedure, Art. 31, proviso referring to Civil Code, Art. 6, Para. 1).
  3. Adults Under Guardianship (Seinen hikōken-nin 成年被後見人):
    Individuals who, due to mental disability, constantly lack the capacity to appreciate matters concerning themselves and have been placed under guardianship by a family court, also lack Soshō nōryoku (Code of Civil Procedure, Art. 31). They must be represented by their adult guardian (seinen kōken'nin 成年後見人).
  4. Persons Under Curatorship (Hihosa-nin 被保佐人) and Persons Under Assistance (Hihojo-nin 被補助人):
    These individuals have a degree of mental capacity but require support.
    • Persons Under Curatorship: They generally have Soshō nōryoku but require the consent of their curator (hosa'nin 保佐人) to perform certain significant procedural acts, such as initiating a lawsuit, reaching a settlement, or withdrawing an action (Civil Code, Art. 13, Para. 1, Item 4 lists "to institute a lawsuit" as an act requiring consent). If the curator does not consent where required, the procedural act can be voided.
    • Persons Under Assistance: Their Soshō nōryoku depends on the specific scope of assistance ordered by the family court. If "instituting a lawsuit" is one of the acts for which they require the assistant's (hojo'nin 補助人) consent, then such consent is necessary.

B. Corporations (Hōjin 法人)
A corporation, being an artificial legal person, acts through its natural person representatives. Thus, a corporation itself does not "perform" procedural acts in the same way an individual does. Instead, its Tōjisha nōryoku (capacity to be a party) is established, and then its Soshō nōryoku is exercised through its duly authorized legal representatives.

  • These representatives are typically designated by law and the corporation's articles of incorporation (e.g., a representative director - daihyō torishimariyaku 代表取締役 for a kabushiki kaisha; a director - riji 理事 for other types of incorporated associations or foundations).
  • The authority of these representatives to bind the corporation in litigation is paramount. Issues can arise if a representative acts beyond their scope of authority.

C. Foreign Nationals and Foreign Corporations (Code of Civil Procedure, Art. 33)
Article 33 of the Code of Civil Procedure is a noteworthy provision:
"A foreign national or foreign corporation that does not have the capacity to litigate under its national law shall be deemed to have such capacity if it has the capacity to litigate under Japanese law."
This means that even if a foreign person or entity would be considered to lack litigation capacity under their home country's rules (e.g., a 17-year-old who is a minor in their home country but would be considered an adult if certain conditions were met in Japan, though age of majority is now 18 in Japan too), if they meet the Japanese criteria for Soshō nōryoku, they can participate in Japanese litigation. This rule facilitates access to justice in Japan for foreign parties.

III. Consequences of Lacking Capacity to Litigate

If a party lacks Soshō nōryoku or if their representative lacks proper authority, it can lead to several procedural consequences:

  • Ineffectiveness of Procedural Acts: Procedural acts performed by a person lacking Soshō nōryoku (or by an unauthorized representative) are generally treated as void or, more commonly, voidable/ineffective until properly ratified.
  • Court's Measures (Code of Civil Procedure, Arts. 32, 34):
    • Order to Rectify the Defect (Hosei meirei 補正命令): Under Article 32, Paragraph 1, if a party lacks Soshō nōryoku, or if a legal representative lacks the necessary power of representation, the presiding judge must set a reasonable period and order that the defect be rectified. For example, ordering a minor plaintiff to have their legal representative pursue the action.
    • Dismissal of Action or Procedural Act: If the plaintiff lacks Soshō nōryoku and the defect is not rectified within the period set by the court, the court must dismiss the action (uttae kyakka) by a judgment (Art. 32, Para. 2). If procedural acts other than filing the complaint were performed by someone lacking capacity or proper authority, and not rectified, the court may dismiss those specific acts.
    • Stay of Proceedings: The court may also stay (suspend) the proceedings until the defect is cured, for instance, until a legal representative is appointed or ratifies the actions taken.
  • Ratification (Tsuinin 追認): Generally, procedural acts performed by a person without Soshō nōryoku or by a representative without proper authority can be subsequently ratified by a duly authorized legal representative or by the party themselves upon acquiring capacity (e.g., a minor reaching adulthood). Such ratification typically has retroactive effect, validating the previously defective acts (Art. 34, Para. 2).

IV. Appointment of a Special Representative (Tokubetsu dairi'nin - 特別代理人)

Article 35 of the Code of Civil Procedure provides for the appointment of a "special representative" (tokubetsu dairi'nin 特別代理人) by the court. This can occur if:

  • A legal representative does not exist for a person lacking Soshō nōryoku.
  • An existing legal representative is unable to exercise their authority (e.g., due to illness, absence, or a conflict of interest between the representative and the incapacitated person).
    The special representative is appointed upon the petition of an interested person and is authorized to perform procedural acts for the specific litigation.

V. Proving and Verifying Capacity to Litigate

  • Court's Ex Officio Examination: The court has the authority to investigate Soshō nōryoku and the authority of legal representatives on its own initiative, as these are crucial for the validity of the proceedings.
  • Proof of Representative Authority (Code of Civil Procedure, Art. 34, Para. 1): A legal representative (e.g., a parent of a minor, a guardian of an adult, a representative director of a corporation) must prove their authority in writing. This is typically done by submitting official documents such as:
    • For individuals: A certified copy of the family register (koseki tōhon 戸籍謄本), certificate of guardianship, etc.
    • For corporations: A certificate of registered matters (tōki jikō shōmeisho 登記事項証明書) which lists the current representative directors.
    • For foreign corporations: Equivalent corporate registry documents from their home jurisdiction, often requiring translation and notarization/apostille, and proof of their representative's authority.
  • Power of Attorney for Appointed Counsel: While legal representatives act based on their statutory status, if a party (with Soshō nōryoku) or their legal representative appoints a lawyer (bengoshi 弁護士) to conduct the litigation, the lawyer's authority is typically evidenced by a power of attorney (ininjō 委任状).

VI. Practical Implications for Businesses

  • Dealing with Counterparties of Questionable Capacity: If a business is aware that a contractual counterparty is a minor or may have impaired mental capacity, it should be cautious. If litigation ensues, the counterparty's lack of Soshō nōryoku will necessitate dealing with their legal representative, which can add complexity.
  • Verifying Corporate Representation:
    • When Suing a Corporation: Ensure the lawsuit correctly names the corporation and that service of process reaches its proper representative.
    • When a Corporation is Suing/Being Sued: It's essential that the individuals signing pleadings, making court appearances, or entering into settlements on behalf of the corporation have the legitimate authority to do so. Challenges to a representative's authority (e.g., if a director acted without board approval where required) can complicate or derail proceedings. Regularly updated corporate registrations are key.
  • Foreign Businesses Operating in Japan:
    • Article 33 CCP can be beneficial, allowing a foreign entity to litigate in Japan based on Japanese capacity standards even if its home country's laws are stricter.
    • However, proving the authority of a representative of a foreign corporation in a Japanese court often requires submitting official corporate documents from the home jurisdiction, which may need to be translated, notarized, and possibly apostilled or consularized, adding to the procedural burden.
  • Internal Corporate Governance: For a company involved in litigation, ensuring that internal decisions to litigate, settle, or appeal are made according to its articles of incorporation and internal rules is important to validate the actions of its representatives in court.

Conclusion

Capacity to Litigate, or Soshō nōryoku, is a fundamental procedural requirement in Japan that ensures parties can meaningfully and validly participate in the legal process. It acts as a safeguard for those who might be vulnerable and contributes to the overall fairness and reliability of court proceedings. For businesses, whether domestic or foreign, a clear understanding of these rules is essential when they or their counterparties are involved in the Japanese legal system. Proper attention to Soshō nōryoku, and the authority of those acting for legal entities, helps prevent procedural dismissals, avoids the invalidation of procedural acts, and ensures that legal rights can be effectively pursued or defended.