Strict Product Liability Reform Legislation in Japan: Learning from "Design Defects" in the American and European Legal Systems

* The globalization of the international trading market creates a possibility that product liability laws can operate as real and substantial barriers to trade, innovation, and economic growth. * In adopting a strict liability system, Japan should draw from the collective experience of the United States and the European Economic Community as a first step toward ensuring that the movement to reform international product liability practice creates no more barriers than necessary. Key Results * Japanese Reform legislations should learn from American and European Design Defects Introduction Among industrialized democracies, the United States has had by far the most substantial, and most controversial, experience with the legal doctrine of strict product liability for injuries caused by defective products. The European Economic Community adopted its own version of strict liability in 1985, a version largely modeled upon American law. The prospect of a similar reform in Japan raises the obvious question of what Japan can learn from the European and American experiences. In Sections I and II, this article discusses the benefits and drawbacks of the American and the EC product liability systems respectively. Part III reviews current product liability law in Japan and pending proposals for reform. Finally, Part IV suggests six strategies Japanese reformers should consider in drafting product liability legislation that will be responsive to and effective within Japanese legal and socio/economic systems. The United States Product Liability System: A Peculiarly American System The American product liability system evolved more by default than by design in the courts of the 50 states in response to a number of peculiarly American legal, social, and political traditions. For example, the American legal culture is permised upon an entrepreneurial contingent fee claimants' bar, a constitutional right to trial by jury, the widespread acceptance of the legal fiction that money damages may serve as compensation for pain and suffering, and the idea that lawyers working for a contingent fee serve societal purposes by acting as private attorneys general. The social and political culture which fostered this doctrine included an absence of any comprehensive social insurance for disability or injury, a central government which at the time played only a minimal role in issues of product safety, and a widespread public belief in the efficacy of litigation as a suitable means of pressing and resolving grievances. The Development of the American Strict Liability System The doctrine of strict product liability gained currency in American courts in the late 1950s and early 1960s.(1) Initial application of the doctrine was largely limited to cases involving so-called "manufacturing defects", which are defects caused by a peculiar flaw in one unit of a manufactured product which differs, because of the flaw, from all other similarly manufactured units. The scope and reach of strict liability principles soon were broadened to apply to so-called "defective designs" and "inadequate warnings" which substantially increased the potential exposure for manufacturers. Because the law was developed by courts on a case-by-case basis, no single set of objective rules or principles was ever set forth to provide clear guidance to manufacturers as to what was or was not defective. Hence, it was not uncommon to have situations develop in which different juries and courts reached different results with respect to the same product and the same manufacturer.(2) Just as important, the lack of any objective or clearly defined limits on the reach of the strict liability principle allowed aggressive plaintiff's lawyers and activist courts to apply strict liability principles in circumstances where the doctrine had not originally been thought to apply, such as workplace injuries or diseases; chronic diseases which implicate lifestyle choices; and property damage. …