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Perspective

Asbestos Court Decision and Implications in Japan

July 17, 2016| By Shinichi Kitazawa | General Liability | English | Japanese

Region: Japan

On 29 January 2016, the District Court of Kyoto, Japan ordered nine manufacturers of construction materials containing asbestos to pay a total of JPY 112 million (approximately USD one million) to 23 workers and their families who died from or are suffering from asbestosis and/or lung cancer.1

The court maintained that the companies sold construction materials without proper warning labels in violation of the series of government regulations introduced in 1972, 1974, and 2002, respectively.2

The challenge facing the plaintiffs was that the workers may have been exposed over a number of years to asbestos produced by a myriad of companies. They were unable to establish direct causation and apportionment of responsibility among potentially liable parties.

The court established, however, that one could reasonably assume causation between illness and exposure to a product manufactured by a company that had greater than 10% market share at the corresponding time, if these two conditions were satisfied:

a) The company sold the products at the time the plaintiffs were in fact being employed as construction workers.

b) The company sold the products in the regions where the plaintiffs were in fact being employed as construction workers.

The court rejected the dispute by the defendant companies that one cannot establish whose products have indeed caused the plaintiffs’ illnesses.3

It appears, however, that courts in Japan are sharply divided over the question of whether the manufacturers can be held liable. Prior to the Kyoto ruling, district courts in Tokyo, Fukuoka, and Osaka held the national government liable for the health damage, but exempted the manufacturers of responsibility. The Yokohama district court exempted both the government and the manufacturers.

Can a district court set legal precedence in Japan? I am not sure yet. Generally speaking, it is the higher courts (the High Courts and the Supreme Court) that are considered to set legal precedence. I believe, however, that since the Kyoto district court has accepted a market share theory of liability, this could potentially trigger a paradigm shift in Japan where the legal environment is considered conservative and benign.4

While this case is about asbestos, I believe that from legal perspective it carries implications regarding the future of numerous chemicals surrounding us - workers and consumers alike. Some are known toxic chemicals while others are suspected toxic chemicals.

It is said that there are currently about 100,000 chemicals produced by man, but we only understand the toxicity of approximately 3,000 chemicals. We know very little about the toxicity of the majority of chemicals. Worse, our knowledge is very limited in the toxicity of chemicals that are produced by the interaction of multiple chemicals and by-products that are not even included in the list of 100,000 chemicals.

As science progresses, we will uncover more about toxicity of chemicals and the causation between chemicals and human health hazards.

While the amount of compensatory damages by the Kyoto district court may be small compared to what a court may award in other countries - in the U.S., for example - this case should prompt casualty underwriters in Japan to start thinking about the future of numerous suspected toxic chemicals within a legal context.

Changes in the legal environment may be slow at times and often subtle, but over time these changes could begin to have an impact on the way casualty underwriters look at risk. Although it may be challenging we must stay abreast of developments surrounding numerous suspected toxic chemicals.
 

Endnotes
  1. The group of plaintiffs also brought legal action against the national government and the court ordered the government to pay JPY 104 million to those for whom the government was responsible from a regulatory perspective.
  2. The government introduced a series of regulations for asbestos based on the usage.
  3. All the companies appealed to the High Court of Osaka by 02 February 2016.
  4. The Kyoto district court decision is the first case of market share theory for liability. In 2007, at the Tokyo High Court, an out-of-court settlement was reached that all of the seven truck manufacturers jointly fund a JPY3.3 billion (approximately USD 31 million) pool for the plaintiffs who were suffering from respiratory diseases allegedly caused by the exhausted gases from diesel trucks. This case was not considered market share theory. Instead, every single manufacturer existed then agreed to the settlement recommended by the court.

 

Sources
  1. The Nihon Keizai Shinbun (30 January 2016, the morning edition.)
  2. The Asahi Shinbun (30 January 2016, the morning edition; 04 February 2016, the morning edition.)
  3. The Japan Times (05 February 2016.)

 

 

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