What is the "Principle of Good Faith and Trust" (信義則) and How Does It Impact Civil Litigation in Japan?

Japanese Attorney at Law - Bengoshi L.L.

• 8 min read

Beyond the specific articles of procedural law that dictate deadlines, filings, and hearings, Japanese civil litigation is underpinned by a fundamental, overarching principle: the "Principle of Good Faith and Trust," commonly referred to as Shingi-soku (信義則). This doctrine, explicitly stated in Article 2 of the Code of Civil Procedure, mandates that parties conduct themselves sincerely and in good faith throughout the entire litigation process. Far from being a mere ethical exhortation, Shingi-soku is a potent legal principle that can significantly influence procedural rights, the admissibility of claims or defenses, and even the court's overall assessment of a case. For businesses involved in or contemplating litigation in Japan, understanding the pervasive impact of Shingi-soku is essential.

I. Understanding the Principle of Good Faith and Trust (Shingi-soku) in Japanese Civil Litigation

A. Legal Basis: Article 2 of the Code of Civil Procedure (Minji Soshō Hō 民事訴訟法第2条)

Article 2 of the Code of Civil Procedure lays the foundation:
"Courts shall endeavor to ensure that civil procedure is conducted fairly and expeditiously, and parties shall pursue civil procedure in good faith and sincerity."
(原文：「裁判所は、民事訴訟が公正かつ迅速に行われるように努め、当事者は、信義に従い誠実に民事訴訟を追行しなければならない。」)

While the first part of the article addresses the court's duty, the latter part imposes a direct obligation on the litigants. This duty to act "in good faith and sincerity" (shingi ni shitagai seijitsu ni 信義に従い誠実に) is the essence of Shingi-soku in the procedural context.

B. Origins and Rationale

The concept of Shingi-soku is not unique to procedural law; it has deep roots in Japanese private law, most notably in Article 1, Paragraph 2 of the Civil Code, which states that "the exercise of rights and performance of duties must be done in good faith." Its application in civil procedure serves several key purposes:

  1. Ensuring Fairness: To prevent parties from exploiting procedural rules for unfair advantage or engaging in conduct that undermines the equitable resolution of disputes.
  2. Preventing Abuse of Procedural Rights: To act as a check on the formal exercise of rights when such exercise is contrary to the spirit of justice.
  3. Promoting Efficient Dispute Resolution: To discourage tactics aimed at undue delay or obfuscation, thereby contributing to the expeditious conduct of litigation.
  4. Maintaining Trust in the Judicial System: To ensure that litigation is perceived and conducted as a fair and reliable means of resolving conflicts.

C. A General Clause with Broad and Flexible Application

Shingi-soku functions as a "general clause" (ippan jōkō 一般条項). This means it is a broad principle that is not exhaustively defined by specific rules but is applied by courts flexibly to diverse factual situations. Its abstract nature allows it to adapt to new and unforeseen procedural scenarios where a party's conduct, while perhaps not violating a specific black-letter rule, nonetheless contravenes the underlying expectations of fairness and sincerity in litigation.

II. Key Manifestations of Shingi-soku in Procedural Conduct

The broad principle of Shingi-soku finds concrete expression in several recognized legal doctrines and influences various aspects of party conduct:

A. Prohibition of Abuse of Procedural Rights (訴権の濫用 - Soken no ran'yō)

This is one of the most significant applications of Shingi-soku. Even if a party has a formal legal right to initiate a lawsuit, make a motion, or take some other procedural step, the exercise of that right can be deemed an "abuse of rights" (kenri no ran'yō 権利の濫用) if it is undertaken for an improper purpose that is grossly inconsistent with the objectives of the judicial system.

  • Criteria for Abuse: Courts look for factors such as:
    • The lawsuit or procedural act serving no legitimate purpose other than to harass or inflict damage on the opponent.
    • The claim being entirely baseless and brought with knowledge of its lack of merit, solely to exert pressure.
    • The means employed being grossly disproportionate to the legitimate end sought.
    • Repeatedly filing and withdrawing similar claims to vex the defendant.
  • Consequences: If an act is found to be an abuse of procedural rights, the court may:
    • Dismiss the lawsuit or motion.
    • Refuse to admit the abusive procedural act.
    • Potentially consider such conduct in the allocation of litigation costs.
      A notable Supreme Court case (July 17, 1987, Minshu Vol. 41, No. 5, p. 835) discussed the dismissal of a claim due to abuse of the right to sue where the primary purpose was found to be harassment.

B. Doctrine of Estoppel (Kinhangen no hōri - 禁反言の法理)

Shingi-soku underpins the doctrine of estoppel (often referred to as Kinhangen no hōri), which prevents a party from taking a legal position or making an assertion that contradicts their own prior statements, conduct, or representations, particularly if the opposing party has reasonably relied on that prior position to their detriment.

  • Elements Typically Required:
    1. A prior act, statement, or representation by Party A.
    2. Reasonable reliance on that act/statement/representation by Party B.
    3. A subsequent act, statement, or assertion by Party A that is inconsistent with their prior position.
    4. Prejudice or detriment to Party B if Party A is allowed to assert their new, contradictory position.
  • Purpose: To protect good faith reliance and promote consistency and fairness in dealings between parties, both before and during litigation. For example, if a party consistently treats a contract as valid for years and then, when sued under it, suddenly claims it was never validly formed, estoppel might prevent such a contradictory assertion if the other party relied on the presumed validity.

C. Doctrine of Laches or Loss of Right due to Delay (Shikken no hōri - 失権の法理)

Closely related to estoppel and also grounded in Shingi-soku is the doctrine of Shikken no hōri (sometimes translated as forfeiture or laches). This doctrine can bar a party from exercising a right if they have unreasonably delayed in asserting it, and this delay, coupled with other circumstances, has led the opposing party to reasonably believe that the right would no longer be exercised, causing prejudice to the opponent if the right were now enforced.

  • Key Factors:
    • A significant and unreasonable period of inaction by the rights-holder.
    • The creation of a reasonable expectation on the part of the opposing party that the right will not be asserted.
    • Prejudice or disadvantage to the opposing party if the right is now allowed to be exercised (e.g., loss of evidence, changed financial position).
  • Balancing Act: The court balances the interest of the rights-holder against the need for legal stability and fairness to the party who has relied on the apparent abandonment of the right.

D. Rejection of Belated Means of Offense or Defense (時期に遅れた攻撃防御方法の却下 - Jiki ni okureta kōgeki bōgyo hōhō no kyakka) (Code of Civil Procedure, Art. 157)

Article 157 of the Code of Civil Procedure, which allows a court to reject offensive or defensive means (allegations or evidence) submitted too late in the proceedings due to a party's intention or gross negligence if it would delay the conclusion of litigation, is considered a specific statutory manifestation of Shingi-soku. It obliges parties to present their case in a timely manner to ensure efficient proceedings.

E. Duty of Truthfulness (Shinjitsu gimu - 真実義務)

While Japanese civil procedure does not have a rule identical to Rule 11 of the U.S. Federal Rules of Civil Procedure regarding sanctions for frivolous pleadings, Shingi-soku strongly implies a "duty of truthfulness" (shinjitsu gimu).

  • Expectation: Parties are expected not to knowingly make false factual allegations or submit fabricated evidence.
  • Consequences of Breach:
    • Damage to Credibility: Deliberate falsehoods can severely damage a party's credibility in the eyes of the judge.
    • Consideration in the "Entirety of Oral Arguments" (Benron no zen shushi 弁論の全趣旨): The judge, under the Principle of Free Evaluation of Evidence, considers the overall conduct and sincerity of the parties. A perceived lack of truthfulness can negatively influence this assessment.
    • Potential for Adverse Inferences: In egregious cases, it might contribute to adverse inferences being drawn.
    • In very rare and extreme cases of perjury or fabrication of evidence, criminal sanctions could theoretically apply, though this is separate from the civil procedural consequences.

F. Duty to Negotiate Sincerely (Seijitsu kōshō gimu - 誠実交渉義務) in Settlement Contexts

Japanese courts actively encourage settlement (wakai 和解). While parties are not obligated to reach a settlement, if they do engage in settlement discussions, particularly those facilitated by the court, they are expected to do so in good faith. Engaging in sham negotiations or using settlement discussions merely as a delaying tactic could be viewed as contrary to Shingi-soku and might be noted by the court, potentially affecting its overall view of a party's cooperativeness.

III. How Shingi-soku Influences Judicial Discretion and Fact-Finding

Shingi-soku is not just a rule for parties; it also subtly guides judicial practice.

  • Interpretation of Procedural Rules: In cases of ambiguity in procedural statutes or rules, courts may interpret them in a manner consistent with the principles of fairness and good faith.
  • Evaluation of Evidence and Party Conduct: As mentioned, a party's adherence to (or deviation from) the standards of good faith can be a factor in the judge's overall assessment of the case and the credibility of their claims and evidence. This is part of considering the "entirety of oral arguments" under the Principle of Free Evaluation of Evidence (jiyū shinshō-shugi 自由心証主義).
  • Basis for Limited "Issue Preclusion" (Sōten-kō - 争点効): Shingi-soku is often cited by Japanese courts as a basis for recognizing a limited form of issue preclusion (preventing re-litigation of specific issues already thoroughly debated and decided in a prior case, even if res judicata doesn't strictly apply to that issue), if allowing re-litigation would constitute an abuse of process or be profoundly unfair.

IV. Practical Implications for Businesses in Japanese Litigation

Adherence to Shingi-soku is not just about avoiding sanctions; it's about effective advocacy.

  • Maintain Consistency: Ensure that statements made and positions taken, both before and during litigation (including in communications with the opposing party), are consistent. Contradictory behavior can be used against you under the estoppel doctrine.
  • Act Promptly and Diligently: Unreasonable delays in asserting rights or making necessary procedural submissions can be viewed negatively and could even lead to forfeiture of rights under the shikken doctrine or rejection of belated submissions.
  • Be Truthful and Transparent (within strategic advocacy): While robustly advocating your position, avoid any statements or evidence that you know to be false. Misleading the court, even unintentionally through gross negligence, can severely damage your credibility and case.
  • Engage in Proceedings Fairly and Cooperatively: Avoid tactics designed purely for harassment or undue delay. Cooperate with reasonable procedural requests from the court.
  • Document Key Communications and Actions: Good record-keeping of pre-litigation dealings and important procedural steps can be vital if questions of prior conduct, reliance, or delay arise.
  • Consider the "Spirit" of the Law: Beyond literal compliance with rules, consider whether your litigation conduct aligns with the broader principles of fairness and good faith that Shingi-soku represents.

Conclusion

The Principle of Good Faith and Trust, or Shingi-soku, as enshrined in Article 2 of Japan's Code of Civil Procedure, is a cornerstone of the Japanese adjudicative process. It serves as a vital ethical and legal guide, shaping the conduct of litigants and influencing how courts manage proceedings and evaluate claims. By prohibiting abuse of rights, underpinning doctrines like estoppel and laches, and demanding sincere engagement, Shingi-soku aims to ensure that civil litigation in Japan is not merely a game of procedural chess but a fair, efficient, and trustworthy means of resolving disputes. For businesses, embracing this principle through consistent, timely, and truthful conduct is fundamental to credible and effective participation in the Japanese legal system.