[dropcap]B[/dropcap]usinesses operate globally. In the US, it is expected that conversations with counsel are protected by what is known as Attorney-Client privilege. In many parts of the world this type of legal framework does not exist. As a Japanese Attorney and recent Columbia Law School graduate and NY lawyer, I can unequivocally tell you that in my home country, Attorney-Client privilege does not exist. This can have significant impact on businesses who have become accustomed to having such frank and open conversation with their counsel, both in-house and outside counsel. This article explores the current the notion of Attorney-client privilege, or the lack thereof.
Is there Attorney-client Privilege in Japan?
Disappointingly, the answer is “No”. There is no attorney-client privilege (or lawyer-client privilege) in Japan as in Western countries, where the principle is established to protect such communications from disclosure in civil, criminal, and administrative proceedings as well as in alternative dispute resolution proceedings such as arbitration. Under Japanese law, there are some provisions which protect the confidentiality of communications between a client and an attorney, but such protection is not over-arching and does not belong to the client.
The Japan Federation of Bar Associations is concerned about this issue, saying it causes clients to be hesitant to carry out full and frank consultation with attorneys, which ultimately deteriorate the clients’ right to candid and effective legal advice. Moreover, in international legal cases, this creates a significant disadvantage for a company which has been forced to disclose its confidential information under Japanese laws as mentioned below.
2. Insufficient Protection under the Current Framework
As mentioned above, the laws and regulations of Japan protect communications between client and attorney to a certain extent, but there are loopholes.
2.1. Civil and Criminal Proceedings
An attorney generally has the right and obligation to protect the confidentiality of his or her communications with a client, the violation of which may lead to liability in civil, criminal and disciplinary proceedings.1
In civil and criminal proceedings, an attorney has the privilege and obligation to refuse to testify on confidential facts obtained in the course of one’s duties, though it is a common view that clients cannot refuse to testify what they have consulted with their lawyers. This is because the right belongs to the lawyer, not the client. 2
Confidential communications between attorney and client are guaranteed to some extent in criminal defense cases for those in detention.3 However, letters between lawyers and defendants may be inspected for security reasons. In addition, this protection does not extend to criminal suspects or defendants who are not detained. Further, police sometimes interrogate suspects or defendants about what they discussed with their lawyer.
2.2. Administrative Proceedings
Regarding administrative proceedings, there is no provision on the confidentiality of communications between client and lawyer.
There are cases of on-site inspections under Antitrust Law, where officials require a company to disclose communications with their lawyers. Additionally, in 2009, the Financial Services Agency made it mandatory for a subject company to obtain its prior permission to consult with lawyers regarding financial and securities inspections.
There is no case law directly recognizing attorney-client privilege. On the other hand, there is a decision by the Tokyo District Court (the most prestigious among district courts) which states, “the court cannot recognize such legal principles [i.e., attorney-client privilege] and it cannot be said that such concept of a specific right or benefit has come to be an opinio juris sive necessitatis.”4
3. Detrimental Effects of Not Having the Privilege
Japanese civil procedure does not provide for discovery or disclosure proceedings, in which parties have the obligation to disclose evidence or information at hand to the other party. That is why the necessity of such privilege has not been clearly recognized.
This insufficient protection of confidentiality has serious detrimental effects on international cases, including antitrust cases as well as civil lawsuits and arbitration cases.
Suppose a company is involved in a lawsuit in Japan and is forced to disclose certain communications with lawyers in the course of the proceedings. The communication is not protected under Japanese law. Meanwhile, if there is an antitrust investigation going on in the United States and the said communication is in question, the company can be thought to have waived its privilege and lose confidentiality protection/privilege in the US.
This is applicable to other countries which have attorney-client privilege. Thus, Japanese antitrust lawyers follow the practice of giving advice orally only, and not in writing.
4. The Japanese Government Decided Not to Establish the Privilege
In 2014, the government set up a council at the Cabinet Office to deliberate on the issue concerning antitrust proceedings. After 10 months of consideration, the council concluded that the concern that such privilege would interfere with findings of fact cannot be erased, and that it was inappropriate to introduce it at the time.
5. Proposal from the Japan Federation of Bar Associations
In 2016, the Japan Federation of Bar Associations (JFBA) published a proposal to create such privilege to protect the client’s right to consult freely with a lawyer and to prevent harmful effects in international cases. The JFBA submitted the report to the relevant agencies, including the Supreme Court of Japan and the Japan Fair Trade Commission.5
The 52-page report includes analysis of the current situation as summarized above, the situation in foreign countries, a proposal to create the confidential privilege with specific elements, and criteria to be applied. As of now, there is no formal response from the Japanese government.
Regrettably, it seems that Japan will continue to lack attorney-client privilege for the foreseeable future. Corporations which have branches in Japan, or have transactions with Japanese businesses or customers, should be aware that there is a risk forced disclosure of their documents and communications with lawyers in the event of a lawsuit, or more importantly, in administrative inspections or investigations including antitrust cases, and take measures to prevent to avoid the assumption that they have waived such privilege in other jurisdictions.
- Article 134 of the Penal Code; Article 23 of the Attorney Act; Article 23 of the Basic Rules of Attorney Profession.
- Article 197, Paragraph 1, Item 2 [Right of Refusal to Testify] and Article 220, Item 4 (c) [Right of Refusal to Submit Documents] of the Code of Civil Procedure; Articles 105 [Right to Refuse Seizure] and 149 [Right of Refusal to Testify] of the Code of Criminal Procedure.
- Article 39, Paragraph 1 of the Code of Criminal Procedure [Right of a Detained to Communicate with his Lawyer Without Officer Present].
- Decision of the Tokyo District Court of January 31, 2013, Sogetsu Vol. 60, No. 3, p546.