Damages awards like the 2008 order for USEN Corporation to pay ¥2,052 million to Can System Corporation raise questions about how damages awards are assessed and how they connect to allegations in Japanese courts. Currently, the Code of Civil Procedure 248 permits courts to determine award amounts without employing scientific methods when it is not feasible for plaintiffs to calculate damages in a scientific manner, regardless of the amount. As scientific approaches tie damages awards to the facts of a case, increasing the use of these methods in Japanese courts could lead to more equitable damage award amounts.

In a new discussion paper, “An Introduction to Economic Approaches to Damages in a Japanese Context,” NERA Associate Director Dr. Ling Ling Ang, along with external experts and counsel, introduce a framework used for calculating actual (lost-based) and restitution (gains-based) damages in the United States and other countries and some of the practicalities and resources involved in implementing an economic approach to damages. This discussion paper was submitted to the Japan Fair Trade Commission’s Competition Policy Research Center (CPRC).

Dr. Ang and her coauthors discuss how damages are currently assessed in Japan, and opportunities to employ economic approaches. This paper may be compelling for parties interested in affirmatively proposing or challenging damages amounts in Japanese courts, such as defendant or plaintiff decision-makers and their counsel. Additionally, Japanese firms may be exposed to lawsuits in other jurisdictions, including US courts, so understanding an approach used abroad may be helpful in navigating legal landscapes and litigation risk outside of Japan.