View from Tokyo: Liable to delay

WHEN in doubt, procrastinate. In the US, this translates as 'passing the buck'. In Japan? Form another committee in the ongoing search for a mutually satisfactory consensus view. And this is precisely what a panel established by the government to decide on product liability laws has just done.

Japan has no product liability legislation. Consumers who have suffered as a result of faulty goods can only sue manufacturers if they can establish negligence in the manufacturing process. This is extremely difficult to prove in court, and in the past 40 years only 150 such cases have been won by consumers.

European and American law is far more generous to the consumer, making manufacturers liable for a wide range of accidents or injuries caused by their products. The issue has been debated for 17 years in Japan. Not surprisingly consumer groups and lawyers have strongly supported the introduction of product liability legislation, and big industry has opposed it.

This week, a subcommittee of the Social Policy Council, set up to decide the issue by the end of this year, announced it could not reach a judgement, and recommended that another panel be set up and given another 12 months to mull over the issue and search for that elusive consensus view.

In its report, the subcommittee, chaired by Akio Morishima, said a majority of the panel actually supported the introduction of a new law. However, Mr Morishima said, panel members from industry opposed the law, and therefore more 'consultation' was needed. According to one of the panel members, the main objectors were representatives from drug companies, and car and home appliance manufacturers.

All three industries have been horrified by the huge lawsuits launched against companies in their respective lines of business in the US. They ridicule the excesses of US litigiousness, (one of their favourite horror stories is of the consumer who won an award for suffering a heart attack while using a lawnmower). And they argued that product liability legislation in Japan would let loose a similar craze for litigation.

However the panel rejected this argument - Japanese are generally slow to go to the courts for anything. Nor did the panel accept that such legislation would drastically increase the inflation rate, if manufacturers had to pass on the costs of new liability insurance premiums - at most the new costs would push up the price index by a mere 0.3 per cent. At the root of the problem, Mr Morishima hinted, was big industry's reluctance to give up its power to set its own safety standards and instead submit to the judgments of courts of law.

Saburo Abe, head of the Japan Federation of Bar Associations, angrily protested at the hijack of the panel by big industry, and said the postponement 'should be attacked by other nations'.

As Mr Abe knows, often the only way of effecting change in Japan is through the application of gaiatsu, or foreign pressure. As Mr Abe also knows, the lack of product liability legislation in Japan has been one of the issues under attack by US trade negotiators, who claim it gives Japanese companies an unfair competitive advantage over US and European companies, who must be more responsive to consumers. Pass the buck to Washington.

(Photograph omitted)