Legal Briefing

Product recall/liability in Japan

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Product Liability | 03 May 2019

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In Japan, there are a number of laws and regulations related to recalls. The following are notable examples.

  1. Automobiles and related equipment (child seats, car navigation systems, etc): Road Transport Vehicle Act.
  2. Pharmaceuticals, quasi-drugs, cosmetics, medical devices, etc: Act on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics.
  3. Food: Food Sanitation Act.
  4. Consumer products: Consumer Products Safety Act (CPSA).

However, there are not many instances where a recall is legally required. Whether or not a product is recalled when it is found to be or suspected of being defective should be determined by the business operator. For consumer products, recall guidances are established for each product category under laws and regulations or government guidelines, and business operators also voluntarily recall consumer products based on these guidances.

In practice, consumer product recalls are conducted based on the Consumer Products Recall Handbook (latest version published in 2016) published by the Ministry of Economy, Trade and Industry (METI).

Recall order by government

The CPSA, which regulates a wide range of consumer products, excluding automobiles, pharmaceuticals and food, requires manufacturers or importers to make efforts to implement recalls and co-operate with retailers in conducting recalls. However, a failure to fulfill these obligations to ‘make efforts’is not subject to sanction.

Furthermore, the CPSA provides that the competent minister may order manufacturers or importers of consumer products to recall products when the lives or health of general consumers has been seriously harmed or the occurrence of such safety hazard is considered imminent, and it is particularly necessary to prevent the occurrence and minimise the risk thereof (Hazard Prevention Order). However, only four hazard prevention orders (including emergency order prior to amendment in 2006) have been issued under the CPSA to date.

Reporting and publication of product incident

Reporting to the authorities may be required in certain instances, such as when an incident involving a product has occurred. The following describes only consumer products (ie, it excludes vehicles, medicine, food, etc).

The CPSA defines the terms ‘product incident’and ‘serious product incident’, and an obligation to report to the Consumer Affairs Agency (CAA) is stipulated for the latter while no such obligation is stipulated for the former. Additionally, a serious product incident is required to be reported to the National Institute of Technology and Evaluation (NITE) in accordance with the notification by METI.

When examining the necessity and method of reporting, it is necessary for business operators to refer to the Explanation of the System for Reporting and Publishing Product Incident Information Based on the CPSA – Handbook for Business Operators 2018 issued by the CAA and METI.

‘Product incident’and ‘serious product incident’

Product incident and serious product incident are defined as follows.

Product incident means incidents falling under item (i) or (ii) below that are caused due to the use of consumer products, other than those apparently not caused by a defect of a consumer product.

  1. Incidents that endanger the lives or health of general consumers; or
  2. Incidents in which consumer products are lost or damaged and incidents that are found to be likely to endanger the lives or health of general consumers.

In practice, when it is unclear whether an incident was caused by a product defect, it falls under ‘product incident’. Additionally, even if one’s life or health has not actually been endangered, an event that is found to be likely to endanger one’s life or health falls under the category of product incident.

Serious product incident means a product incident falling under any of items (1) through (4) below:

  1. fatal accidents;
  2. injuries and illnesses involving a medical treatment period of 30 days or more;
  3. carbon monoxide poisoning accidents; and
  4. fire accidents (in which consumer products are lost or damaged).

Reporting obligations for a serious product incident

Any manufacturer or importer of consumer products who becomes aware that a serious product incident has occurred in relation to the relevant consumer products shall report the outline of the incident and other related matters to the CAA within ten days from when it became aware of such an incident. If the manufacturer or importer fails to submit the report, the director-general of the CAA may order it to establish a system necessary for the collection, management, and provision of information on the serious product incident. According to the METI’s report, CAA received 813 serious product incident reports in 2018.

Reports on product incidents (non-serious product incidents)

For a product incident other than a serious product incident (non-serious product incidents), there are no laws or provisions requiring such incidents to be reported. However, according to METI’s notification, manufacturers, importers etc are basically required to report any non-serious product incident to the NITE.

Publication

When a serious product incident or a non-serious product incident are reported, certain matters are made public by the CAA and the NITE. Whether the name of the company or the name of the product is disclosed depends on factors such as the type of product and whether the incident was caused by the product.

Product liability

The Product Liability Act (PLA) came into force on 1 July 1995.

Under the Civil Code, an injured person must establish that the manufacturer intentionally or negligently caused the harm or manufactured or sold a defective product. On the other hand, under the PLA, if an injured person establishes that ‘a manufacturer manufactured defective products (except for land, buildings or services) and such products caused harm’, without establishing that the manufacturer acted intentionally or negligently, the party will be awarded damages. However, there is no reduction in or shifting of the burden of proof in respect of the other factors, such as the causal relationship between the defect of the product and the harm, and the existence of the harm; these elements must be established by the injured party. In addition, the PLA is not applicable where the damage was caused only to the product itself; it is only applicable where there is other resulting harm (eg, bodily injury or loss of life, or damage to other property).

Although over 20 years have passed since the PLA came into force and the PLA itself seems widely known to the public, and the courts seem familiar with this area of law, there have not been many product liability actions, nor have such actions been increasing. However, the PLA has had a significant impact on business activities, as the establishment and enforcement of the PLA have encouraged manufacturers to take out product liability insurance and/or enhance labelling practices.

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